AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is made as of June 6, 2000, by and among COVENANT TRANSPORT, INC.,
a Tennessee corporation ("CTI"), COVENANT ASSET MANAGEMENT, INC. (formerly known
as Covenant Leasing, Inc.), a Nevada corporation ("CAM"), the banks signatory
hereto (the "Banks"), any assignees that may become "Banks" as provided in the
Credit Agreement (hereinafter defined), and ABN AMRO BANK N.V., as Agent (the
"Agent"). Capitalized terms not otherwise defined herein shall be ascribed the
meanings set forth in the Credit Agreement.
WHEREAS, CTI has heretofore entered into that certain Credit Agreement,
dated as of January 17, 1995, with the banks signatories thereto, the banks
serving as letter of credit banks thereunder, and ABN AMRO Bank N.V. as Agent,
as amended by a number of amendments and as further amended and restated by that
certain Amended and Restated Credit Agreement dated as of June 18, 1999 among
CAM, CTI, the Agent and the Banks (as so amended and restated, the "Credit
Agreement"), pursuant to which the Agent, the Banks and the Banks serving as
letter of credit banks thereunder have agreed to provide a revolving credit,
term loan and letter of credit facility for the benefit of CAM and CTI; and
WHEREAS, CAM and CTI have requested that the Agent and the Banks: (i)
acknowledge name changes made with respect to certain of the direct and indirect
Subsidiaries of the Parent (all of the Parent's Subsidiaries, together with the
Parent, are collectively, the "Credit Parties"); (ii) consent to a proposed
reorganization of the corporate structure of the Credit Parties and waive
certain provisions of the Credit Agreement that could prohibit such
reorganization; (iii) consent to certain proposed future intercompany loans,
dividends, and distributions and waive certain provisions of the Credit
Agreement that could prohibit such activities; (iv) amend the Credit Agreement,
inter alia, to (a) remove CTI as a direct borrower under the Credit Agreement
and (b) add CTI as a guarantor of the Obligations under the Credit Agreement;
(v) modify the provisions of the Credit Agreement and the Security Documents to
provide, for the benefit of the Agent and the Banks (and the holders of the
Senior Notes to the extent required under the Intercreditor Agreement),
presently effective, perfected, first priority security interests in (a) all
Capital Securities of all direct and indirect Subsidiaries of the Parent and (b)
all Intercompany Notes (defined hereafter); (vi) consent to the investment by
the Parent in Xxxxxxxxxx.xxx, an entity to be formed by the Parent, X.X. Xxxx
Transport Services, Inc., M.S. Carriers, Inc., Swift Transportation Co., Inc.,
U.S. Xpress Enterprises, Inc. and Xxxxxx Enterprises, Inc. ("Xxxxxxxxxx.xxx");
and (vii) consent to the distribution by the Parent of up to 100% of its
interest in Xxxxxxxxxx.xxx to the shareholders of the Parent.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Acknowledgment of Name Changes. Subject to the terms and conditions
of this Amendment, the Agent and the Banks acknowledge that prior
to the execution and
delivery of this Amendment the following Credit Parties have changed
their names as reflected below:
Prior Name Present Name
---------- ------------
Covenant Leasing, Inc., a Nevada Covenant Asset Management, Inc., a
corporation Nevada corporation
Intellectual Property Co., a CIP, Inc., a Nevada corporation
Nevada corporation
Covenant Acquisition Co., a Xxxxxxxx.xxx, Inc., a Nevada
Nevada corporation corporation
Except as expressly set forth in this Amendment, this acknowledgment of
name changes does not amend or waive any obligation, duty or
requirement of the Credit Parties (including, without limitation, those
Credit Parties whose names have changed) under the Credit Agreement,
the Guaranty Agreements or the other Loan Documents. The Credit Parties
whose names have changed shall execute and deliver to the Agent (or the
Collateral Agent, if directed by the Agent) all such replacement
documentation as the Agent may reasonably require to evidence the
continuing obligations of such Credit Parties under their respective
new names.
2. Consent to Reorganization; Limited Waiver of Specified Credit Agreement
Provisions. The Parent, CAM and CTI have each represented to the Agent
and the Banks that a reorganization of the corporate structure of the
Credit Parties is in the best interest of the Credit Parties and that
the proposed reorganization will be comprised solely of the following
transactions (collectively, the "Reorganization"):
(a) Existing intercompany loans made by CTI to Southern
Refrigerated Transport, Inc. ("SRT"), and Terminal Truck
Broker, Inc. ("TTB") in an aggregate principal amount of
$15,340,453, will be evidenced by promissory notes in the form
attached hereto as Exhibit B (or in such other form as may be
acceptable to the Agent in its sole discretion) (the "Existing
Debt Notes").
(b) CTI will declare a dividend to the Parent in the amount of
$115,340,453 and will pay that dividend to the Parent by (i)
delivery to the Parent of a promissory note in the amount of
$100,000,000 in the form attached hereto as Exhibit C (or in
such other form as may be acceptable to the Agent in its sole
discretion) (the "Dividend Note"); and (ii) endorsement (with
recourse) to the Parent, and delivery to the Parent, of the
Existing Debt Notes. The Dividend Note and the Existing Debt
Notes shall be deemed to be "Intercompany Notes" as that term
is defined in this Amendment.
(c) The Parent will endorse (with recourse) and deliver the
Dividend Note and the Existing Debt Notes to CAM as a capital
contribution.
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(d) The Parent will contribute 100% of the Capital Securities
of each of CIP, Inc. (formerly known as Intellectual Property
Co.), and Xxxxxxxx.xxx, Inc. (formerly known as Covenant
Acquisition Co.), to CTI as a capital contribution.
(e) CTI, as owner of 100% of the capital stock of CIP, Inc., will
contribute all of its Patents, rights to license agreements,
internally developed software, and certain know-how conducive
to the operation of a trucking company to CIP, Inc. (the
"Intellectual Property"), as a capital contribution.
(f) CIP, Inc., will enter into written licensing agreements, in
form and substance acceptable to the Agent (the "Licensing
Agreements"), with CTI and certain of the other Credit Parties
pursuant to which the Credit Parties will have the right to
use the Intellectual Property and shall pay royalties to CIP,
Inc., in amounts established by the Licensing Agreements.
(g) All of the computer programming and computer service personnel
currently employed by CTI will cease to be employees of CTI
and will become employees of Xxxxxxxx.xxx, Inc. and some or
all computer and telecommunications equipment held by CTI may
be transferred from CTI to Xxxxxxxx.xxx, Inc.
(h) Xxxxxxxx.xxx, Inc., will enter into written servicing
agreements, in form and substance acceptable to the Agent (the
"Servicing Agreements"), with CTI and certain of the other
Credit Parties pursuant to which Xxxxxxxx.xxx, Inc., will
provide management information system services to such
entities for a fee determined by the Servicing Agreements.
(i) In connection with the above steps in the Reorganization, the
Parent may, in its discretion, make capital contributions to
the following Credit Parties in amounts no greater than as set
forth below:
Entity Name Permitted Capital Contribution
----------- ------------------------------
Xxx Xxxxx Truck Lines, Inc. $25,000,000
Southern Refrigerated $9,516,391
Transport, Inc.
(j) Xxx Xxxxx Truck Lines, Inc. ("BMTL") shall be merged into CTI.
Subject to the terms and conditions of this Amendment, the Agent and
the Banks consent to the Reorganization so long as such Reorganization
is consummated no later than June 30, 2000 (the "Reorganization
Deadline") and the Credit Parties deliver to the Agent by the
Reorganization Deadline notice that the Reorganization has been
completed. The date of consummation of the last of the transactions
constituting part of the Reorganization shall be the "Reorganization
Date." The Agent and the Banks waive any
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violation of Sections 5.6(iii), 5.7, 5.10, 5.11, 5.15 or 5.17 of the
Credit Agreement that may be caused by the timely consummation of the
Reorganization (the "Reorganization Waiver"). This Reorganization
Waiver is expressly limited to the consummation of the transactions
constituting the Reorganization and shall not be considered a general
waiver of any provision of the Credit Agreement nor shall it be
construed as a continuing waiver of any covenant, representation or
warranty of any Credit Party under the Credit Agreement or any other
Loan Document.
3. Consent to Permitted Activities; Waiver of Specified Credit Agreement
Provisions. The Parent, CAM and CTI have each represented to the Agent
and the Banks that certain intercompany loans, dividends and
distributions and repurchases of capital stock are in the best interest
of the Credit Parties and that such proposed activities will be
comprised solely of the following transactions (together, the
"Permitted Activities"):
(a) From time-to-time, the direct or indirect Subsidiaries of the
Parent may borrow from CAM amounts that do not, in an
aggregate principal amount, exceed at any time $130,000,000
plus amounts that have actually been paid to CAM in cash under
the Existing Debt Notes and Dividend Note, all interest
actually paid to CAM in cash under the Future Debt Notes, and
all future cash capital contributions under Section 3(c)
below. Such borrowing shall be evidenced by promissory notes
in the form attached hereto as Exhibit D with a grid attached
showing draws and repayments under the notes in form and
substance acceptable to the Agent (the "Future Debt Notes"),
which shall be pledged to the Collateral Agent and promptly
delivered, duly endorsed (with recourse) by CAM, to the
Collateral Agent pursuant to the provisions of Section 5.21(b)
of the Credit Agreement as additional security for the
repayment of the Obligations. CAM shall provide the Agent
quarterly updates of the grid on all Future Debt Notes. The
Future Debt Notes shall constitute Intercompany Notes;
(b) From time-to-time, any direct or indirect Subsidiary of the
Parent may pay a dividend or make a distribution to its sole
stockholder so long as such dividend or distribution is passed
up to Parent and Parent contributes it as capital to CAM; and
(c) From time-to-time the Parent may make capital contributions to
CAM.
The Agent and the Banks waive any violation of Sections 5.6(iii), 5.7,
5.10, 5.11, 5.15 or 5.17 of the Credit Agreement that may be caused by
the performance of the Permitted Activities (the "Activities Waiver").
The Activities Waiver is expressly limited to the performance of the
Permitted Activities and shall not be considered a general waiver of
any other provisions of the Credit Agreement.
4. Consent to Permitted Investment and Distribution; Waiver of Specified
Credit Agreement Provisions. The Parent, CAM and CTI have each
represented to the Agent and the Banks that the investment of
$5,000,000 cash and the non-asset based
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transportation logistics business of TTB, which consists of customer
lists, office furniture, computer hardware and software, leases, trade
names, trademarks, goodwill, know-how, employee relationships, and all
other assets except cash, accounts receivable and other assets Parent
may negotiate to hold back (the "Contributed Assets"), the value of
which non-cash Contributed Assets shall not exceed $2,000,000, in
Xxxxxxxxxx.xxx and the distribution of all or a portion of the acquired
equity interest in Xxxxxxxxxx.xxx directly or indirectly, in one or
more transactions, and through one or more intermediary entities, to
the shareholders of the Parent is in the best interest of the Credit
Parties and that the proposed investment and distribution will be
comprised generally of the following transactions (collectively, the
"Permitted Investment and Distribution"):
(a) The Parent may borrow from CAM, or will receive from CTI a
dividend equal to, $5,000,000 plus the Parent's share of any
start-up expenses, not to exceed $100,000, of Xxxxxxxxxx.xxx;
(b) The Parent, directly or indirectly, may cause TTB to either
(i) dividend the non-cash Contributed Assets to the Parent,
for contribution by the Parent to Xxxxxxxxxx.xxx or (ii)
contribute the non-cash Contributed Assets directly to
Xxxxxxxxxx.xxx, or (iii) contribute the non-cash Contributed
Assets to a Subsidiary of Parent for subsequent contribution
by such Subsidiary to Xxxxxxxxxx.xxx;
(c) The Parent may, but shall not be required to, cause a new
Subsidiary to be formed to hold all or a portion of the
Xxxxxxxxxx.xxx equity interests and may contribute, or cause
to be contributed, to such new Subsidiary all or a portion of
the Xxxxxxxxxx.xxx equity interests;
(d) The Parent may, but shall not be required to, distribute all
or any portion of one or more classes of equity interests of
Xxxxxxxxxx.xxx, or, if applicable, the new Subsidiary
referenced above, to the Parent's stockholders;
(e) The Parent, directly or indirectly, may cause the liquidation
of the new Subsidiary referenced above which has no property
other than the equity interests of Xxxxxxxxxx.xxx and any
proceeds thereof;
(f) Neither the Banks nor the Collateral Agent as agent for the
Banks shall have a Lien in or to any of the equity interests
of Xxxxxxxxxx.xxx or any new Subsidiary which has no property
other than equity interests of Xxxxxxxxxx.xxx and any proceeds
thereof; and
(g) The Banks and the Collateral Agent as agent for the Banks
hereby release any Lien in or to any of the Contributed Assets
and acknowledge that they have no interest in any products or
proceeds thereof.
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The Agent and the Banks waive any violation of Sections 5.1(ii),
5.6(iii), 5.7, 5.11, 5.15 and 5.17 of the Credit Agreement that may be
caused by the Permitted Investment and Distribution (the "Investment
Waiver"). The Investment Waiver is expressly limited to the above
enumerated activities undertaken in executing the Permitted Investment
and Distribution and shall not be considered a general waiver of any
other provisions of the Credit Agreement.
5. Removal of CTI as a Borrower. Subject to the terms and conditions of
this Amendment, the Credit Agreement and all other Loan Documents shall
be deemed amended such that CTI shall no longer be a "Borrower" under
the Credit Agreement. All references to "Borrowers", "either Borrower",
"any Borrower" or phrases of similar import in the Credit Agreement or
any Loan Documents shall be deemed to be references solely to CAM.
6. Other Amendments to the Credit Agreement. Subject to the terms and
conditions of, and upon the effectiveness of, this Amendment, the
Credit Agreement shall be deemed amended as follows:
(a) Section 4.11 of the Credit Agreement is amended and restated
in its entirety as follows:
Section 4.11 Solvency. (i) The Parent, the Borrower and each
of their respective Subsidiaries (after giving due
consideration to any rights of contribution among such
Persons), have each received fair consideration and reasonably
equivalent value for the incurrence of its obligations
hereunder and under the Loan Documents, (ii) after giving
effect to the incurrence of such obligations, (A) the present
fair salable value of the Parent's, the Borrower's and each of
their respective Subsidiaries' assets exceeds its liabilities,
and (B) the Parent, the Borrower and their respective
Subsidiaries each retain sufficient capital to meet the
reasonably anticipated needs and risks of its ongoing
business, and (iii) after giving effect to the incurrence of
such obligations and the acquisition of such rights, (A)
neither the Parent, the Borrower nor any of their respective
Subsidiaries has incurred, nor is it obligated for, debts
beyond its ability to pay such debts as they mature, and (B)
the present fair salable value of their respective assets is
greater than that needed to pay their respective probable
existing debts as they become due.
(b) Section 5.3 of the Credit Agreement is amended and restated in
its entirety as follows:
Section 5.3 Use of Proceeds. Use the proceeds of any Extension
of Credit only to refinance the Debt listed on part A of
Schedule 4.9, for working capital purposes, the issuance of
standby letters of credit permitted hereunder, to pay costs
associated with this Agreement and the other Loan Documents,
for financing or refinancing Revenue Equipment, for
non-hostile acquisitions and for general
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corporate purposes. The Borrower may loan proceeds of any
Extension of Credit to any direct or indirect Subsidiary of
the Parent (and such Subsidiary may further loan such proceeds
to its Subsidiaries) provided that such extension of credit
shall be (i) used for a purpose permitted in the immediately
preceding sentence and (ii) evidenced by an Intercompany Note
(or series of Intercompany Notes) which shall be pledged to
the Collateral Agent and promptly delivered to the Agent
pursuant to the provisions of Section 5.21(b) hereof as
additional security for the repayment of the Obligations. No
Extension of Credit and none of the proceeds thereof shall be
used to purchase or carry, or to reduce or retire or refinance
any credit incurred to purchase or carry, any margin stock
(within the meaning of Regulations U and X) or to extend
credit to others for the purpose of purchasing or carrying any
margin stock. If requested by the Agent, the Borrower will
furnish to the Agent statements in conformity with the
requirements of Federal Reserve Form U1 referred to in
Regulation U and will take all other action necessary or
desirable to ensure that the Banks and the Extensions of
Credit are at all times in compliance with Regulations U and
X.
(c) Section 5.12 of the Credit Agreement is amended and restated
in its entirety as follows:
Section 5.12 Minimum Consolidated Tangible Net Worth.
Permit Consolidated Tangible Net Worth at any date to be less
than $136,000,000 plus the aggregate of 50% of positive
Consolidated Net Income for each fiscal quarter commencing
after December 31, 1999 (provided that, for any fiscal quarter
in which Consolidated Net Income is a deficit figure,
Consolidated Net Income for such fiscal quarter shall be
deemed to be zero), plus the net proceeds of any issuance of
Capital Securities of the Parent.
(d) Section 5.15 of the Credit Agreement is amended and restated
in its entirety as follows:
Section 5.15 Restricted Payments.
(a) Generally. Declare or make any Restricted
Payment, except that this Section 5.15 shall not prohibit any
Restricted Payment if: (i) at the time of the declaration or
making thereof, and immediately after giving effect thereto,
no Default would exist, and (ii) such Restricted Payment,
singly or when aggregated with all other Restricted Payments
made over the term of this Agreement, does not exceed the sum
of $20,000,000 plus 50% of the aggregate of Consolidated Net
Income for each fiscal quarter commencing after December 31,
1999 (provided that such aggregate Consolidated Net Income
shall be reduced by 100% of any deficit for any period in
which Consolidated Net Income is a deficit figure).
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(e) Section 5.18 of the Credit Agreement is amended and restated
in its entirety as follows:
Section 5.18 Additional Subsidiaries. Create or acquire any
Subsidiary; provided that, if notwithstanding this Section the
Parent shall desire to acquire or create any Subsidiary, such
Subsidiary shall be acquired or created so as to be a direct
Subsidiary of CTI or one of CTI's Subsidiaries and the
Borrower shall immediately cause such Subsidiary to guarantee
the Obligations hereunder and to become a party to the
Security Agreement and to pledge its assets specified as
Collateral therein, in each case, to secure the Obligations.
In addition, the Parent and CTI (or its Subsidiary, as
appropriate) shall immediately pledge, or cause to be pledged,
100% of the capital stock of such Subsidiary to the Collateral
Agent for the ratable benefit of the Banks, the Letter of
Credit Banks, Noteholders and the Agent, to secure the
Obligations.
(f) The text of existing Section 5.21 of the Credit Agreement is
hereby redesignated as clause (a) of Section 5.21 and there is
added immediately thereafter a new clause (b) of Section 5.21
reading in its entirety as follows:
(b) Notwithstanding anything to the contrary in Section
5.21(a) above, the Parent and each of its Subsidiaries that
owns capital stock in any Person shall be deemed to have given
in favor of the Collateral Agent, for the ratable benefit of
the Agent, the Banks and the Letter of Credit Banks (and, to
the extent required by the Intercreditor Agreement, the
holders of the Senior Notes) a presently effective, first
priority: (i) pledge of all of the issued and outstanding
capital stock of all of the Subsidiaries of the Parent; and
(ii) security interest in all Intercompany Notes, whether now
existing or hereafter created. The Parent and its Subsidiaries
shall execute such documents and instruments as may be
reasonably required by the Agent or the Required Banks to
further effect such pledge and security interest, including,
without limitation, delivering to the Agent for further
delivery to the Collateral Agent: (i) original stock
certificates and stock powers executed in blank; and (ii)
original Intercompany Notes endorsed (with recourse) over to
the Collateral Agent. To the extent required to give effect to
the provisions of this Section 5.21(b), the Security Documents
evidencing the pledge of stock of the Parent's Subsidiaries
and the pledge of the Intercompany Notes that are held in
escrow by the Collateral Agent are deemed to be presently
effective notwithstanding the absence of any Default or Event
of Default. In the event that the Collateral Agent desires to
resign from its position under the Intercreditor Agreement, or
if the Intercreditor Agreement is terminated or the
obligations represented by the Senior Notes are extinguished,
the Collateral Agent shall be entitled to assign all of its
duties and responsibilities to the Agent with respect to the
Loan Documents (including the Security Documents) and the
Collateral (including the pledged capital stock and the
Intercompany Notes). Should the Agent succeed to the
Collateral Agent's responsibilities with respect to the Loan
Documents (including the Security Documents) and the
Collateral, the
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Agent shall be entitled to all benefits and rights afforded to
the Collateral Agent under the Loan Documents.
(g) In Section 10.1 of the Credit Agreement, the definitions of
"Eligible Account" and "Eligible Revenue Equipment" are
revised so that such terms may be applied to the Accounts and
Revenue Equipment of all direct and indirect Subsidiaries of
the Parent, not just the Accounts and Revenue Equipment of the
Borrower and its Subsidiaries.
(h) Section 10.1 of the Credit Agreement is amended by inserting
the following definitions in alphabetical order within Section
10.1:
"CTI" means Covenant Transport, Inc., a Tennessee corporation.
"Existing Guaranty Agreements" means, collectively, the
following documents:
(i) Amended and Restated Parent Guaranty Agreement
dated as of June 6, 2000 by the Parent in favor of the Banks
and the Agent amending and restating the Guaranty Agreement
dated as of January 17, 1995 by the Parent in favor of the
Banks and the Agent;
(ii) Consolidating Amended and Restated Guaranty
Agreement dated as of June 6, 2000 by the direct and indirect
Subsidiaries of the Parent in favor of the Banks and the Agent
consolidating, amending and restating (a) the Guaranty
Agreement dated as of March 31, 1997 by C&F Acquisition Co.
(now known as Xxxxxxxx.xxx, Inc.), a Nevada corporation, and
Intellectual Property Co. (now known as CIP, Inc.), a Nevada
corporation, in favor of the Banks and the Agent, (b) the
Joinder Agreement dated as of December 31, 1997 by Xxx Xxxxx
Truck Lines, Inc., a Minnesota corporation, in favor of the
Banks and the Agent, (c) the Joinder Agreement dated as of
November 13, 1998 by Southern Refrigerated Transport, Inc., an
Arkansas corporation, and Xxxx Xxxxx Trucking, Inc., an
Arkansas corporation, in favor of the Banks and the Agent, and
the Joinder Agreement dated as of November 16, 1999 by Xxxxxx
Xxxx Trucking Co., and Arkansas corporation and Terminal Truck
Broker, Inc., an Arkansas corporation.
and each as the same may be further amended, supplemented,
restated or replaced, from time to time.
"Existing Security Documents" means, collectively, the
following documents:
(i) Amended and Restated Borrower Security
Agreement dated as of June 6, 2000 by Covenant Asset
Management, Inc. (formerly known as Covenant Leasing, Inc.), a
Nevada corporation, amending and restating the Security
Agreement dated as of June 18, 1999 by Covenant Leasing, Inc.
(now known as
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Covenant Asset Management, Inc.) a Nevada corporation, in
favor the Collateral Agent;
(ii) Consolidating Amended and Restated Guarantor
Security Agreement dated as of June 6, 2000 consolidating,
amending and restating: (a) Security Agreement dated as of
January 17, 1995 by CTI in favor of the Agent, (b) Security
Agreement dated as of October 15, 1995 by CTI in favor of the
Collateral Agent, as amended by the First Amendment to
Security Agreement dated as of March 31, 1997, (c) separate
Security Agreements each dated as of March 31, 1997 by
Intellectual Property Co. (now known as CIP, Inc.), a Nevada
corporation, and CLI in favor of the Collateral Agent, (d)
Security Agreement dated as of December 31, 1997 by Xxx Xxxxx
Truck Lines, Inc., a Minnesota corporation in favor of the
Collateral Agent, (e) Security Agreement dated as of November
13, 1998 by Southern Refrigerated Transport, Inc., an Arkansas
corporation and Xxxx Xxxxx Trucking, Inc., an Arkansas
corporation in favor of the collateral Agent (f) Security
Agreement dated as of November 16, 1999 by Xxxxxx Xxxx
Trucking Co., an Arkansas corporation and Terminal Truck
Broker, Inc., an Arkansas corporation in favor of the
collateral Agent;
(iii) Amended and Restated Trademark Security
Agreement dated as of June 6, 2000 by CIP, Inc. (formerly
known as Intellectual Property Co.), a Nevada corporation, in
favor of the Collateral Agent amending and restating the
Trademark Security Agreement dated as of March 31, 1997 by
Intellectual Property Co. (now known as CIP, Inc.), a Nevada
corporation, in favor of the Collateral Agent;
(iv) Amended and Restated Parent Stock Pledge and
Security Agreement dated as of June 6, 2000 by the Parent in
favor of the Agent, together with required stock certificates
and duly executed stock powers, amending, restating and
consolidating: (a) Stock Pledge and Security Agreement dated
as of January 17, 1995 by the Parent in favor of the Agent,
(b) Stock Pledge and Security Agreement dated as of October
15, 1995 by the Parent in favor of the Collateral Agent, and
(c) Stock Pledge and Security Agreement dated as of March 31,
1997 by the Parent in favor of the Collateral Agent, as
amended by the First Amendment to Stock Pledge and Security
Agreement dated as of December 31, 1997 as further amended by
the Second Amendment to Stock Pledge and Security Agreement
dated as November 13, 1998, in each case together with the
required stock certificate(s) and duly executed stock
power(s);
(v) Amended and Restated Guarantor Stock Pledge and
Security Agreement dated as of June 6, 2000 by CTI in favor of
the Collateral Agent together with the required stock
certificate(s) and duly executed stock power(s) amending and
restating Stock Pledge and Security Agreement dated as of
November 16, 1999 by the CTI in favor of the Collateral Agent
together with the required stock certificates and duly
executed stock powers.
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and each as the same may be further amended, supplemented,
restated or replaced, from time to time.
"Intercompany Notes" means promissory notes in form
of Exhibits B, C or D hereto, as applicable, (or in such other
form as may be acceptable to the Agent, in its sole
discretion) made by the Parent or one of its direct or
indirect Subsidiaries payable to the Parent or one of its
direct or indirect Subsidiaries, which promissory notes
evidence intercompany obligations.
"Intercreditor Agreement" means the Amended and
Restated Master Collateral and Intercreditor Agreement among
the Agent, the holders of the Senior Notes and the Collateral
Agent, dated as of June 6, 2000, amending and restating the
Master Collateral and Intercreditor Agreement among the Agent,
the holders of the Senior Notes and the Collateral Agent,
dated as of October 15, 1995, as amended by the First
Amendment to Master Collateral and Intercreditor Agreement
dated as of March 31, 1997, and as further amended by the
Second Amendment to Master Collateral and Intercreditor
Agreement dated as of June 18, 1999 (and as the same may be
further amended, supplemented, restated or replaced, from time
to time).
"Security Agreement" means the Amended and Restated
Borrower Security Agreement between the Borrower and the
Collateral Agent dated as of June 6, 2000 amending and
restating: (a) the Security Agreement dated as of January 17,
1995 by CTI in favor the Agent, (b) the Security Agreement
dated as of October 15, 1995 by CTI in favor of the Collateral
Agent, as amended by the First Amendment to Security Agreement
dated as of March 31, 1997 and (c) the Security Agreement
dated as of June 18, 1999 by Covenant Leasing, Inc. (now known
as Covenant Asset Management, Inc.) a Nevada corporation, in
favor the Collateral Agent, and any other security agreement
executed by a Subsidiary in favor of the Collateral Agent as
security for the Obligations (and as the same may be further
amended, supplemented, restated or replaced, from time to
time).
(i) The Credit Agreement is amended by adding a new Section 5.18A
to read in its entirety as follows:
5.18A Licensing Agreements and Servicing Agreements. Amend or
terminate any of the provisions of any Licensing Agreement or
any Servicing Agreement without the prior written consent of
the Agent and the Required Banks.
(j) Forms of Existing Debt Note, Dividend Note and Future Debt
Note in the form attached hereto as Exhibits B, C and D,
respectively, are added to the Credit Agreement as Exhibits B,
C and D thereto.
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(k) All references to "Senior Note" or "Senior Notes" or phrases
of similar import in the Credit Agreement or any Loan
Documents shall be deemed to be references to the CAM Senior
Notes as defined in paragraph 10 hereof.
7. Delivery of Additional Loan Documents. Simultaneously with the
execution and delivery of this Amendment, but to be effective at the
time the provisions of Sections 3, 5 and 6 of this Amendment become
effective, the following additional Loan Documents shall be executed
and delivered to the Agent: (i) replacement Revolving Notes evidencing
Base Rate Loans, Alternate Base Rate Loans and Eurodollar Loans, duly
executed by CAM and payable to the order of each Bank (collectively,
the "Replacement Notes") and (ii) a Guaranty Agreement of the
obligations of CAM under the Credit Agreement, duly executed by CTI
(the "CTI Guaranty"). CTI acknowledges that all security interests
previously granted by CTI under the Credit Agreement as a borrower,
remain in full force and effect and remain continuing obligations of
CTI as security for its obligations under the CTI Guaranty.
8. Representations and Warranties. CTI and CAM each hereby represents and
warrants to the Agent and the Banks that (a) this Amendment has been
duly authorized, executed and delivered by each of CTI and CAM, (b) no
Default or Event of Default has occurred and is continuing as of this
date, and (c) all of the representations and warranties made by CTI and
CAM in the Credit Agreement are true and correct in all material
respects on and as of the date of this Amendment (except to the extent
that any such representations or warranties expressly referred to a
specific prior date). Any breach by CTI or CAM of the representations
and warranties contained in this Section shall be an Event of Default
for all purposes under the Credit Agreement and the other Loan
Documents.
9. Ratification. CTI and CAM each hereby ratifies and reaffirms each and
every term, covenant and condition set forth in the Credit Agreement
and all other documents delivered by CTI or CAM in connection therewith
(including without limitation the other Loan Documents to which CTI or
CAM is a party), effective as of the date hereof.
10. Estoppel. To induce the Agent and the Banks to enter into this
Amendment, CTI and CAM each hereby acknowledges and agrees that, as of
the date hereof, there exists no right of offset, defense or
counterclaim in favor of CTI or CAM as against the Agent, any Bank or
any Letter of Credit Bank with respect to the obligations of CTI or CAM
to any of such parties under the Credit Agreement or the other Loan
Documents, either with or without giving effect to this Amendment.
11. Effectiveness of this Amendment. All of the provisions of this
Amendment, excepting Section 4, shall be effective immediately upon the
delivery to the Agent of this Amendment executed by all parties hereto
(including, without limitation, the parties to the Guarantor Consent
attached hereto as Exhibit A); provided, however, that (i) the
provisions of Section 2 shall not be effective until the Senior Notes
and the documents related thereto (collectively, the "Senior Note
Documents") have (with the consent of the holders of the Senior Notes)
been terminated and replaced with senior notes issued by
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CAM and other documents related thereto executed by CAM and its
affiliates and all other relevant parties on substantially the same
terms as the Senior Notes and in form and substance acceptable to the
Agent and the Required Banks in their sole discretion (the "CAM Senior
Notes" and, together with the related senior note documents, the "CAM
Senior Note Documents"), which CAM Senior Note Documents shall
specifically allow CAM and its affiliates to consummate the
Reorganization and conduct the Permitted Activities; and (ii) the
provisions of Sections 3, 5 and 6 shall not become effective until the
satisfaction (or written waiver approved and executed by the Agent and
the Required Banks, in their respective discretion) of each of the
following conditions:
(a) The Reorganization Date shall have occurred by the
Reorganization Deadline and CAM shall have given the Agent
written notice of the Reorganization Date by the
Reorganization Deadline.
(b) The Agent shall have received the Replacement Notes, duly
executed by CAM.
(c) The Agent shall have received the CTI Guaranty, duly executed
by CTI.
(d) The Agent shall have received executed originals of the
Dividend Note and the Existing Debt Notes (and all other then
existing Intercompany Notes), all duly endorsed (with
recourse) by the holders thereof in favor of the Collateral
Agent.
(e) The Agent shall have received such additional Security
Documents or modifications of the existing Security Documents
as may be requested by the Agent, duly executed by the
appropriate Credit Parties (and, if appropriate, the Agent and
the Collateral Agent), in each case in form and substance
satisfactory to the Agent.
(f) The Agent shall have received evidence (satisfactory to the
Agent and the Required Banks) that the Senior Note Documents
have been replaced by the CAM Senior Note Documents and that
the CAM Senior Note Documents are in full force and effect and
that no default or event that with notice or the passage of
time would constitute default shall have occurred thereunder.
(g) The Agent shall have received an amendment to the
Intercreditor Agreement, duly executed by all parties to the
Intercreditor Agreement reflecting the Reorganization (and
approved in form and substance by the Agent and the Required
Banks). The Intercreditor Agreement must continue to provide
that all of the Credit Parties' obligations to the holders of
the Senior Notes and to the Banks shall be maintained on a
pari passu basis.
(h) The Agent shall have received a certificate of the Secretary
or an Assistant Secretary of each of the Credit Parties, in
form and substance satisfactory to the Agent, with respect to
(i) the certificate of incorporation and by-laws of such
Credit Party, (ii) the resolutions authorizing the
Reorganization and the execution, delivery and performance of
this Amendment, the CTI Guaranty, the
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Replacement Notes and all documents executed and delivered to
the Agent in connection with any of the foregoing
(collectively, the "Amendment Documents"), and (iii) the
incumbency of officers of such Credit Party authorized to
execute and deliver the Amendment Documents.
(i) The Agent shall have received a certificate of good standing,
issued as of a recent date, with respect to each Credit Party
from its jurisdiction of incorporation (and, with respect to
each Credit Party whose name has changed as recited in Section
1 hereof, such certificate shall reflect the new name of such
Credit Party).
(j) The Agent shall have received a certificate duly executed by
the chief financial officer of the Parent attesting to the
solvency of the Credit Parties, in form and substance
satisfactory to the Agent.
(k) The Agent shall have received an opinion of counsel to the
Credit Parties regarding (i) the consummation of the
Reorganization, (ii) the due authorization and execution of
the Amendment Documents, (iii) the enforceability of the
Amendment Documents, (iv) the perfection of the security
interests in the Capital Securities of the Parent's
Subsidiaries and in the Intercompany Notes, and (v) such other
matters as may be requested by the Agent or the Required
Banks, all in form and substance satisfactory to the Agent and
the Required Banks.
(l) The Agent shall have received such other documents,
certificates, instruments and opinions as the Agent may
reasonably request.
(m) The Agent shall have received all fees and expenses incurred
by the Agent in connection with negotiation, preparation and
execution of the Amendment Documents and the consummation of
the Reorganization including, without limitation, the legal
fees and other out of pocket expenses of the Agent.
12. Effectiveness of Section 4 of this Amendment. The provisions of Section
4 of this Amendment shall not be effective until the satisfaction (or
written waiver approved and executed by the Agent and the Required
Banks, in their respective discretion) of each of the following
conditions:
(a) The Agent shall have received documentation (in form and
substance satisfactory to the Agent) evidencing that all
appropriate and necessary corporate, antitrust (including
Xxxx-Xxxxx-Xxxxxx) and regulatory approvals have been obtained
with respect to the Permitted Investment and Distribution.
(b) The Agent shall have received documentation (in form and
substance satisfactory to the Agent) evidencing the approval
of the Permitted Investment and Distribution by all parties to
the Intecreditor Agreement.
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(c) The Agent shall have received a certificate of the Secretary
or an Assistant Secretary of each of the Credit Parties, in
form and substance satisfactory to the Agent, with respect to
(i) the certificate of incorporation and by-laws of such
Credit Party, (ii) the resolutions authorizing the Permitted
Investment and Distribution and the execution, delivery and
performance of this Amendment and the Amendment Documents, and
(iii) the incumbency of officers of such Credit Party
authorized to execute and deliver the Amendment Documents.
(d) The Agent shall have received an opinion of counsel to the
Credit Parties regarding (i) the Permitted Investment and
Distribution and (ii) such other matters as may be requested
by the Agent or the Required Banks, all in form and substance
satisfactory to the Agent and the Required Banks.
(e) The Agent shall have received such other documents,
certificates, instruments and opinions as the Agent may
reasonably request.
(f) The Agent shall have received all fees and expenses incurred
by the Agent in connection with the evaluation of the
Permitted Investment and Distribution and the consummation
thereof including, without limitation, the legal fees and
other out of pocket expenses of the Agent.
13. Reimbursement of Expenses. Each of CTI and CAM agrees, jointly and
severally, that it shall reimburse the Agent on demand for all costs
and expenses (including, without limitation, attorney's fees) incurred
by such parties in connection with the negotiation, preparation and
execution of the Amendment Documents, the evaluation of the
Reorganization and the transactions contemplated hereby and thereby,
whether or not the transactions contemplated hereby or thereby are
consummated. The reimbursement obligations under this Amendment shall
constitute Obligations under the Credit Agreement.
14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA FOR CONTRACTS TO BE
PERFORMED ENTIRELY WITHIN SAID STATE.
15. Severability of Provisions. Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof
or affecting the validity or enforceability of such provision in any
other jurisdiction. To the extent permitted by Applicable Law, each of
CAM and CTI hereby waives any provision of law that renders any
provision hereof prohibited or unenforceable in any respect.
16. Counterparts; Facsimile Delivery. This Amendment may be executed in any
number of counterparts, each of which shall be deemed to be an original
but all of which together shall be deemed to be one instrument. This
Amendment shall be binding upon all parties
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hereto, their successors and permitted assigns. This Amendment may be
delivered by facsimile transmission with the same effect as if
originally executed counterparts of this Amendment were delivered to
all parties hereto.
17. Entire Agreement. The Credit Agreement and the other Loan Documents, as
amended by this Amendment and the other Amendment Documents, embodies
the entire agreement between the parties hereto relating to the subject
matter hereof and supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed by their respective officers thereunto duly authorized, as of the date
first above written.
COVENANT TRANSPORT, INC., COVENANT ASSET MANAGEMENT, INC.,
a Tennessee corporation a Nevada corporation (formerly
known as Covenant Leasing, Inc.)
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx Name: Xxxx X. Xxxxx
Title: Chief Financial Officer Title: Chief Financial Officer
ABN AMRO BANK N.V., as Agent ABN AMRO BANK N.V., as a Bank
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Group Vice President Title: Group Vice President
By: /s/ Xxxxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxxx Name: Xxxxxxxx X. Xxxxxxxxx
Title: Corporate Banking Officer Title: Corporate Banking Officer
BANK ONE, NA (Main Office Chicago), BANK OF AMERICA, N.A. (formerly
as a Bank known as NationsBank, N.A.), as
a Bank
By: /s/ Xxxxx Xxxxxxx By: /s/
Name: Xxxxx Xxxxxxx Name:
Title: Officer Title:
FIRST AMERICAN NATIONAL BANK, as a Bank SUNTRUST BANK (successor in
interest to SunTrust Bank,
Chattanooga, N.A.), as a Bank
By: /s/ By: /s/ Xxx X. Xxxx
Name: Name: Xxx X. Xxxx
Title: Title: Vice President
-17-
EXHIBIT A
FORM OF GUARANTOR CONSENT
CONSENT
Reference is made to that certain Credit Agreement, dated as of January
17, 1995, among Covenant Transport, Inc., a Tennessee corporation ("CTI"), with
the banks signatories thereto, the banks serving as letter of credit banks
thereunder, and ABN AMRO Bank N.V. as Agent (the "Agent"), as amended by a
number of amendments, and as further amended and restated by that certain
Amended and Restated Credit Agreement dated as of June 18, 1999 among CTI,
Covenant Leasing, Inc., a Nevada corporation (now known as Covenant Asset
Management, Inc.) ("CAM"), the Agent and the Banks (as amended and restated, the
"Credit Agreement"). Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Credit Agreement.
Each of the undersigned (collectively, the "Guarantors") has guaranteed
in favor of the Agent, the Banks and the Letter of Credit Banks (collectively,
the "Guaranteed Parties") all of the obligations of CTI and CAM under the Credit
Agreement pursuant to one or more Guaranty Agreements (including, without
limitation, the Existing Guaranty Agreements).
Each of the undersigned hereby consents to and approves of the
execution and delivery by CAM and CTI of that certain Amendment to Amended and
Restated Credit Agreement (the "Amendment") and to all other Amendment Documents
(as defined in the Amendment) and to the consummation of all of the transactions
contemplated thereby (including, without limitation, the Reorganization, as
defined in the Amendment). Each Guarantor acknowledges and agrees that the
consummation of the Reorganization, the execution and delivery of the Amendment
and the other Amendment Documents shall not diminish, impair, alter, discharge
or otherwise affect in any manner whatsoever the duties, obligations and
liabilities of the Guarantor under the Guaranty Agreements including, without
limitation, the obligation of each Guarantor for the payment of the
"Obligations" (as that term is defined in any Guaranty Agreement or the Credit
Agreement).
Each Guarantor hereby ratifies, confirms and approves the Guaranty
Agreements to which it is a party and all of the terms and provisions thereof,
and agrees that such Guaranty Agreements constitute the valid and binding
obligation of such Guarantor, enforceable by the Guaranteed Parties in
accordance with their respective terms.
IN WITNESS WHEREOF, each Guarantor has executed this consent, as of the
___ day of ____________, 2000.
SOUTHERN REFRIGERATED TRANSPORT, INC., an Arkansas corporation
COVENANT TRANSPORT, INC., a Nevada corporation
XXXX XXXXX TRUCKING, INC., an Arkansas corporation
CIP, INC., a Nevada corporation
XXXXXXXX.XXX, INC., a Nevada corporation
TERMINAL TRUCK BROKER, INC., an Arkansas corporation
XXXXXX XXXX TRUCKING CO., an Arkansas corporation
By:____________________________
Name: Xxxx X. Xxxxx
Title: Treasurer
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EXHIBIT B
FORM OF EXISTING DEBT NOTE
PROMISSORY NOTE
$_________________________ ___________________, 2000
FOR VALUE RECEIVED, ________________________. a ______________
corporation (the "Borrower"), promises to pay to the order of Covenant
Transport, Inc., a Tennessee corporation ("Lender"), or order, on demand, the
principal sum of ______________________ Dollars ($____________), plus interest
compounding quarterly on the average unpaid balance during such quarter at the
annual rate equal to the prime interest rate set forth in the Wall Street
Journal on the first business day of such calendar quarter. Interest will be
calculated on a 360-day basis and be payable in arrears on the first business
day immediately following each calendar quarter. Absent manifest error, the
Lender's records will be conclusive evidence of the principal and accrued
interest owing hereunder.
Presentment, notice of dishonor, and protest are hereby waived by all
makers, sureties, guarantors, and endorsers hereof. This Note shall be the joint
and several obligation of all makers, sureties, guarantors, and endorsers, and
shall be binding upon them and their successors and assigns. This Note will be
governed by the substantive laws of the State of Tennessee.
BORROWER'S ADDRESS: [BORROWER NAME]
_____________________ a ______________ corporation
_____________________
By:_____________________
Name:
Title:
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EXHIBIT C
FORM OF DIVIDEND NOTE
PROMISSORY NOTE
$_________________________ ___________________, 2000
Covenant Transport, Inc., a Tennessee corporation (the "Borrower"),
promises to pay to the order of Covenant Transport, Inc., a Nevada corporation
("Lender"), or order, on demand, the principal sum of ______________________
Dollars ($____________), plus interest compounding quarterly on the average
unpaid balance during such quarter at the annual rate equal to the prime
interest rate set forth in the Wall Street Journal on the first business day of
such calendar quarter. Interest will be calculated on a 360-day basis and be
payable in arrears on the first business day immediately following each calendar
quarter. Absent manifest error, the Lender's records will be conclusive evidence
of the principal and accrued interest owing hereunder.
Presentment, notice of dishonor, and protest are hereby waived by all
makers, sureties, guarantors, and endorsers hereof. This Note shall be the joint
and several obligation of all makers, sureties, guarantors, and endorsers, and
shall be binding upon them and their successors and assigns. This Note will be
governed by the substantive laws of the State of Nevada.
BORROWER'S ADDRESS: COVENANT TRANSPORT, INC.
a Tennessee corporation
_____________________
_____________________
By:_____________________
Name:
Title:
EXHIBIT D
FORM OF FUTURE DEBT NOTE
_______________________________, 2000
REVOLVING PROMISSORY NOTE
The undersigned borrower ("Borrower') promises to pay to the order of
Covenant Asset Management, Inc., a Nevada corporation ("Lender"), at its offices
located at ___________ _________________, ________________________ Dollars
($_______________), or so much thereof that may be advanced from time to time
together with interest on the outstanding balance in accordance with the terms
set forth in the Credit and Security Agreement dated ________________, 1999,
between Borrower and Lender (the "Agreement").
Notwithstanding anything to the contrary in the Agreement or in the
Note, Lender shall have the absolute unconditional right, in its sole
discretion, to require Borrower to pay the outstanding principal balance on
demand, together with accrued and unpaid interest. If Lender elects to exercise
the right to demand payment, Lender will provide Borrower thirty (30) days from
the date of Lender's written notice of demand to make payment.
Presentment, demand, protest and notice of dishonor are hereby waived
by the undersigned.
This promissory note shall be governed under and construed by the laws
of the State of Nevada.
BORROWER:
COVENANT TRANSPORT, INC.
a Tennessee corporation
By:_____________________________
Name:
Title:
