AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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:
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(a)
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The
existing definition of “Applicable Rate” in Section 1.02 is
deleted in its entirety and the following is inserted in lieu
thereof:
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“ ‘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
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Commitment
Fee
|
Eurodollar
Rate Loans
––––––––––
Letter
of Credit
Fee
|
Base
Rate
Loans
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1
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Less
than 2.00x
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0.175%
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0.875%
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0.000%
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2
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Greater
than or equal to 2.00x but less than 2.50x
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0.225%
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1.125%
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0.000%
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3
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Greater
than or equal to 2.50x but less than 3.00x
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0.300%
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1.500%
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0.250%
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4
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Greater
than or equal to 3.00x but less than 3.50x
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0.375%
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1.875%
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0.625%
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5
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Greater
than or equal to 3.50x
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0.500%
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2.250%
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1.000%
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“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.”
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(b)
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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.
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(c)
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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.
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(d)
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The
existing definition of “Security Instrument” in Section 1.02 is deleted in
its entirety and the following is inserted in lieu
thereof:
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“ ‘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.”
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(e)
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The
following definitions are added to Section 1.02 in the appropriate
alphabetical locations therein:
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“ ‘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
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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.”
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(f)
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The
following Section 2.05(d) is inserted after Section
2.05(c):
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“(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.”
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(g)
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Section
4A.01 is deleted in its entirety and the following is inserted in
lieu
thereof:
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“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).”
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(h)
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Section
4A.04 is deleted in its entirety and the following is inserted in
lieu
thereof:
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“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
4
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;
5
“(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.”
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(k)
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The
following Section 6.22 is inserted after Section
6.21:
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“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) with
respect to the Security Agreement that the Administrative Agent or the
Collateral Agent may deem necessary or desirable in order to perfect the Liens
on the Certificate-of-Title Collateral; provided that, with respect to
the Sale Collateral, within one hundred eighty (180) days of the First Amendment
Effective Date, the Borrower shall comply with the requirements of this
provision with respect to any Sale Collateral which has not been sold or
transferred during such period.”
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(l)
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Section
7.01 is deleted in its entirety and the following is inserted in
lieu
thereof:
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“7.01 Financial
Covenants.
“(a) Consolidated
Tangible Net Worth. Permit Consolidated Tangible Net Worth to be
less than (i) $115,000,000 from the First Amendment Effective Date until (but
excluding) the last day of the fiscal quarter that includes the First Amendment
Effective Date (the “First Amendment Quarter”), and (ii) as at the last
day of each fiscal quarter of the Parent ending after the First Amendment
Effective Date and until (but excluding) the last day of the next following
fiscal quarter of the Parent, the sum of (A) the amount of Consolidated Tangible
Net Worth required to be maintained pursuant to this Section 7.01(a) as
at the end of the immediately preceding fiscal quarter (or, in the case of
the
First Amendment Quarter, required to be maintained as of the First Amendment
Effective Date), plus (B) 50% of Consolidated Net Income (with no reduction
for
net losses during any period) for the fiscal quarter of the Parent ending on
such day (including within “Consolidated Net Income” certain items otherwise
excluded, as provided for in the definition of “Consolidated Net Income”), plus
(C) 100% of the aggregate amount of all increases in the stated capital and
additional paid-in capital accounts of the Parent resulting from the issuance,
sale or exchange of equity securities or other capital investments.
“(b) Consolidated
Leverage Ratio. Permit the Consolidated Leverage Ratio as of the
end of any Four-Quarter Period ending during the periods set forth below at
any
time to be greater than the ratio set forth below opposite each such
period:
Date
of Determination
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Consolidated
Leverage
Ratio
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First
Amendment Effective Date through June 29, 2008
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4.00
to 1.00
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June
30, 2008 through December 30, 2009
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3.50
to 1.00
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December
31, 2009 and at all times thereafter
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3.25
to 1.00
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“(c) Consolidated
Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge
Coverage Ratio as of the end of any Four-Quarter Period ending during the
periods set forth below at any time to be less than the ratio set forth below
opposite each such period:
Date
of Determination
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Consolidated
Fixed
Charge
Coverage Ratio
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First
Amendment Effective Date through June 29, 2008
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1.00
to 1.00
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June
30, 2008 through December 30, 2009
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1.15
to 1.00
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December
31, 2009 and at all times thereafter
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1.25
to 1.00”
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7
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(m)
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Section
7.02 is deleted in its entirety and the following is inserted in
lieu
thereof:
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“7.02 Acquisitions. Enter
into any agreement, contract, binding commitment or other arrangement providing
for any Acquisition, or take any action to solicit the tender of securities
or
proxies in respect thereof in order to effect any Acquisition, provided
that the Borrower, the Parent and the Subsidiaries shall be permitted to enter
into any such agreement, contract, binding commitment or other arrangement
providing for any Acquisition, or take any action to solicit the tender of
securities or proxies in respect thereof in order to effect any Acquisition,
if
after giving pro forma effect to such Acquisition and any transaction related
thereto, the Consolidated Leverage Ratio is less than or equal to 2.75 to 1.00,
so long as (i) the Person to be (or whose assets are to be) acquired does not
oppose such Acquisition and the line or lines of business of the Person to
be
acquired are closely related to one or more line or lines of business conducted
by the Borrower, the Parent, or its Subsidiaries, (ii) no Default or Event
of
Default shall have occurred and be continuing either immediately prior to or
immediately after giving effect to such Acquisition, (iii) the Person acquired
shall be a wholly-owned Subsidiary, or be merged into the Parent or a
wholly-owned Subsidiary of the Parent, immediately upon consummation of the
Acquisition (or if assets are being acquired, the acquiror shall be the Parent
or a wholly-owned Subsidiary of the Parent), and (iv) after giving effect to
such Acquisition, the aggregate Costs of Acquisition incurred in any Fiscal
Year
(on a noncumulative basis, with the effect that amounts not incurred in any
Fiscal Year may not be carried forward to a subsequent period) shall not exceed
twenty percent (20%) of Consolidated Total Assets as of the end of the
immediately preceding Fiscal Year.”
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(n)
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Section
7.04(d) is deleted in its entirety and the following is inserted in
lieu thereof:
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“(d) purchase
money Indebtedness not to exceed an aggregate outstanding principal amount
at
any time equal to the sum of (1) $40,000,000 plus (2) the
aggregate amount of reductions of the Aggregate Commitments pursuant to
Section 2.06 on and after the First Amendment Effective
Date;”
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(o)
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Section
7.08 is deleted in its entirety and the following is inserted in
lieu
thereof:
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“7.08 Restricted
Payments. Make any Restricted Payment or apply or set apart
any of their assets therefor or agree to do any of the foregoing, other than
the
following, (i) Permitted Share Repurchases and (ii) cash dividends declared
by the board of directors of the Parent and paid thereby to its stockholders;
provided that the sum of (i) and (ii) from the Closing Date until the
Maturity Date, shall not exceed the sum of
$25,000,000 plus 50% of the Consolidated Net Income for
each fiscal quarter commencing with the fiscal quarter ending December 31,
2006
(such amount reduced by 100% of the amount of any negative Consolidated Net
Income during any such period); providedfurther that at the time
of making such Restricted Payment and after giving pro forma effect thereto
and
any related transaction, the Consolidated Leverage Ratio is less than or equal
to 2.75 to 1.00.”
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(p) Section
7.13 is deleted in its entirety and the following is inserted in lieu
thereof:
“7.13 Limitations
on Sales and Leasebacks. Subject to Section 2.05(d),
enter into any arrangement or arrangements with any Person providing for the
leasing by the Borrower, the Parent or any Subsidiary of either of real or
personal property, whether now owned or hereafter acquired in a single
transaction or series of related transactions, which has been or is to be sold
or transferred by the Borrower, the Parent or any of their Subsidiaries to
such
Person or to any other Person to whom funds have been or are to be advanced
by
such Person on the security of such property or rental obligations of the
Borrower, the Parent or any of their Subsidiaries, in connection with (i) the
Synthetic Lease Obligations, (ii) any sale and leaseback arrangement
relating to the real property where the present value (calculated at a
reasonable discount rate acceptable to the Administrative Agent) of the
aggregate amount of all future lease payments incurred, acquired or assumed
by
the Borrower, the Parent or any of their Subsidiaries does not at any time
exceed $60,000,000 less the sum of (A) the outstanding principal amount of
all Indebtedness secured by real property and (B) the outstanding principal
amount of all Indebtedness arising under Synthetic Lease Obligations, and (iii)
the truck and trailer leasing program in an aggregate amount not to exceed
in
any Fiscal Year the sum of (A) $25,000,000 plus (B) 50% of the
aggregate amount of Consolidated Net Income for each fiscal quarter commencing
with the fiscal quarter ended December 31, 2006 (such amount reduced by 100%
of
the amount of any negative Consolidated Net Income during any such fiscal
quarter), as presently conducted and disclosed to the Administrative Agent
and
Lenders and hereafter conducted in accordance with such past practices;
provided that not later than ten (10) Business Days prior to any
additional truck or trailer sale and leaseback occurring after the First
Amendment Effective Date, the Parent and the Borrower shall deliver (1) an
adjusted Borrowing Base Certificate giving pro forma effect to such sale and
leaseback, and (2) a Compliance Certificate of a Responsible Officer
demonstrating (x) pro forma compliance with the financial covenants contained
in
Sections 7.01(a) and (c), and (y) the Consolidated Leverage Ratio
is less than or equal to 2.75 to 1.00, the covenant calculations in which shall
be determined on a historical pro forma basis as of the Four-Quarter Period
most
recently ended and shall give pro forma effect to all lease payments incurred,
acquired or assumed in connection with such transaction calculated as if all
such lease payments had been incurred as of the first day of such Four-Quarter
Period.”
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(q)
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Section
9.10 is deleted in its entirety and the following is inserted in
lieu
thereof:
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“9.10 Collateral
and Guaranty Matters. The Lenders and the L/C Issuer
irrevocably authorize the Administrative Agent, at its option and in its
discretion,
“(a) to
release any Lien on any property granted to or held by the Administrative Agent
under any Loan Document (i) upon termination of the Aggregate Commitments and
payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit,
(ii) that is sold or to be sold as part of or in connection with any sale
permitted hereunder
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or under any other Loan Document, or (iii) subject to Section 10.01, if
approved, authorized or ratified in writing by the Required
Lenders;
“(b) to
subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property that
is
permitted by Section 7.03(f), (g), (h) or
(i);
“(c) to
release any Guarantor from its obligations under the Subsidiary Guaranty if
such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder; and
“(d) on
or after the date on which a Compliance Certificate is delivered by the Borrower
pursuant to Section 6.01(a)(ii) or 6.01(b)(ii) which evidences
that the Consolidated Leverage Ratio for the corresponding fiscal quarter is,
and for the immediately two preceding fiscal quarters was, less than or equal
to
2.00 to 1.00, to release the Liens on the Certificate-of-Title Collateral
granted to or held by the Administrative Agent under the Loan
Documents.
“Upon
request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Subsidiary Guaranty pursuant to
this Section 9.10.”
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(r)
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Section
10.01(g) is deleted in its entirety and the following is inserted in
lieu thereof:
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“(g) release
all or substantially all of the Guarantors, or, notwithstanding Section
9.10(d), release all or substantially all of the Collateral in any
transaction or series of transactions without the written consent of each
Lender;”
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(s)
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Schedules
1.02A and 1.02B to the Credit Agreement attached hereto as
Annex I and Annex II, respectively, are inserted after
Schedule 1.02.
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(t)
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Schedule
4A.04 to the Credit Agreement is deleted in its entirety and
Schedule 4A.04 attached hereto as Annex III is inserted in
lieu thereof.
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(u)
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Exhibit
D to the Credit Agreement is deleted in its entirety and Exhibit
D attached hereto as Annex IV is inserted in lieu
thereof.
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(v)
|
Exhibit
J to the Credit Agreement attached hereto as Annex V is
inserted after the last page of Exhibit
I.
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2. Conditions
Precedent. This Amendment and the amendments to the Credit
Agreement provided in Paragraph 1 shall be effective as of the date
hereof upon the satisfaction of the following conditions precedent:
(a) The
Administrative Agent shall have received each of the following documents or
instruments in form and substance reasonably acceptable to the Administrative
Agent:
10
(i) a
counterpart of this Amendment and the Security Agreement, duly executed by
the
Parent, the Borrower, the Administrative Agent, each Subsidiary Guarantor,
and
each of the Lenders;
(ii) Uniform
Commercial Code search results showing only those Liens as are acceptable to
the
Administrative Agent and the Collateral Agent;
(iii) proper
financing statements in form appropriate for filing under the Uniform Commercial
Code of all jurisdictions that the Administrative Agent and the Collateral
Agent
may deem necessary or desirable in order to perfect the Liens created under
the
Security Agreement, covering the Collateral described in the Security
Agreement;
(iv) evidence
of the completion of all other actions, recordings and filings (except for
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 with respect to Liens on the Certificate-of-Title Collateral to
be
completed pursuant to Section 6.22) of or with respect to the Security
Agreement that the Administrative Agent may deem necessary or desirable in
order
to perfect the Liens created thereby;
(v) a
favorable opinion of Xxxxxxx Law, P.C., L.L.O., counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, as to the matters
concerning the Loan Parties and the Loan Documents as the Administrative Agent
or the Required Lenders may reasonably request;
(vi) such
other documents, instruments, opinions, certifications, undertakings, further
assurances and other matters as the Administrative Agent shall reasonably
request.
(b) The
Borrower shall have paid the fees in the amounts and at the times specified
in
the letter agreement, dated as of August 16, 2007, among the Borrower, the
Parent and the Administrative Agent.
(c) All
fees and expenses payable to the Administrative Agent (including the fees and
expenses of counsel to the Administrative Agent) accrued to date shall have
been
paid in full to the extent invoiced prior to or on the effective date of this
Amendment, but without prejudice to the later payment of accrued fees and
expenses not so invoiced.
3. Consent
of the Guarantors.
|
(a)
|
The
Parent. The Parent has joined in the execution of this
Amendment for the purposes of consenting hereto and for the further
purpose of confirming its guaranty of the Obligations of the Borrower
pursuant to the Parent Guaranty to which the it is a party, and its
obligations under each other Loan Document to which it is a
party. The Parent hereby consents, acknowledges and agrees to
the amendments to the Credit Agreement set forth herein and hereby
confirms and ratifies in all respects the Parent Guaranty and each
other
Loan Document to
|
11
which
it
is a party and the enforceability of such Parent Guaranty and each such other
Loan Document against the Parent in accordance with its terms.
|
(b)
|
Subsidiary
Guarantors. Each of the Subsidiary Guarantors has joined in the
execution of this Amendment for the purposes of consenting hereto
and for
the further purpose of confirming its guaranty of the Obligations
of the
Borrower pursuant to the Subsidiary Guaranty to which such Subsidiary
Guarantor is party, as applicable, and its obligations under each
other
Loan Document to which it is a party. Each Subsidiary Guarantor
hereby consents, acknowledges and agrees to the amendments to the
Credit
Agreement set forth herein and hereby confirms and ratifies in all
respects the Subsidiary Guaranty and each other Loan Document to
which
such Subsidiary Guarantor is a party and the enforceability of such
Subsidiary Guaranty and each such other Loan Document against such
Subsidiary Guarantor in accordance with its
terms.
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4. Representations
and Warranties. In order to induce the Administrative Agent and
the Lenders party hereto to enter into this Amendment, each of the Parent and
the Borrower represent and warrant to the Administrative Agent and such Lenders
as follows:
(a) The
representations and warranties made by the Parent and the Borrower in Article
V of the Credit Agreement (after giving effect to this Amendment) and by
each Loan Party in each of the other Loan Documents to which it is a party
are
true and correct in all material respects on and as of the date hereof, except
to the extent that such representations and warranties expressly relate to
an
earlier date;
(b) Since
the date of the most recent financial reports of the Parent delivered pursuant
to Section 6.01 of the Credit Agreement, no act, event, condition or
circumstance has occurred or arisen which, singly or in the aggregate with
one
or more other acts, events, occurrences or conditions (whenever occurring or
arising), has had or could reasonably be expected to have a Material Adverse
Effect;
(c) The
Persons appearing as Guarantors on the signature pages to this Amendment
constitute all Persons who are required (as of the date hereof) to be Guarantors
pursuant to the terms of the Credit Agreement and the other Loan Documents,
including without limitation all Persons who became Subsidiaries or were
otherwise required to become Guarantors after the Closing Date as a result
of
any merger, acquisition or other reorganization, has executed and delivered
a
Subsidiary Guaranty;
(d) This
Amendment has been duly authorized, executed and delivered by the Parent, the
Borrower and the Subsidiary Guarantors party hereto and constitutes a legal,
valid and binding obligation of such parties, except as may be limited by
general principles of equity or by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditors’
rights generally; and
(e) No
Default or Event of Default, other than those addressed herein, has occurred
and
is continuing immediately prior to the effectiveness of this Amendment and
no
Default or Event of Default is continuing immediately after the effectiveness
of
this Amendment.
12
5. 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 relative to such subject matter. No promise, condition,
representation or warranty, express or implied, not herein set forth shall
bind
any party hereto, and no party hereto 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. None of the terms or conditions of this
Amendment may be changed, modified, waived or canceled orally or otherwise,
except as permitted pursuant to Section 10.01 of the Credit
Agreement.
6. Full
Force and Effect of Amendment. Except as hereby specifically
amended, modified or supplemented, the Credit Agreement and all other Loan
Documents are hereby confirmed and ratified in all respects by each party hereto
and shall be and remain in full force and effect according to their respective
terms.
7. Counterparts. This
Amendment may be executed in any number of counterparts, each of which shall
be
deemed an original as against any party whose signature appears thereon, and
all
of which shall together constitute one and the same
instrument. Delivery of an executed counterpart of a signature page
of this Amendment by telecopy shall be effective as a manually executed
counterpart of this Amendment.
8. Governing
Law. This Amendment shall in all respects be governed by, and
construed in accordance with, the laws of the state of Tennessee.
9. Enforceability. Should
any one or more of the provisions of this Amendment be determined to be illegal
or unenforceable as to one or more of the parties hereto, all other provisions
nevertheless shall remain effective and binding on the parties
hereto.
10. References. All
references in any of the Loan Documents to the “Credit Agreement” shall mean the
Credit Agreement, as amended hereby.
11. Successors
and Assigns. This Amendment shall be binding upon and inure to
the benefit of the Parent, the Borrower, the Administrative Agent and each
of
the Subsidiary Guarantors and Lenders, and their respective successors, assigns
and legal representatives; provided, however, that neither the
Parent, the Borrower nor any Subsidiary Guarantor, without the prior consent
of
the Required Lenders, may assign any rights, powers, duties or obligations
hereunder.
12. Expenses. The
Parent and the Borrower agree to pay to the Administrative Agent all reasonable
out-of-pocket expenses of the Administrative Agent (including the fees and
expenses of counsel to the Administrative Agent) incurred or arising in
connection with the negotiation and preparation of this Amendment.
[Signature
pages follow.]
13
IN
WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed as of the date
first above written.
BORROWER:
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||
COVENANT
ASSET MANAGEMENT, INC., a Nevada corporation
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||
By:
|
/s/
Xxxx X. Xxxxx
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
Vice
President
|
PARENT:
|
||
COVENANT
TRANSPORTATION GROUP, INC., a Nevada
corporation
|
||
By:
|
/s/
Xxxx X. Xxxxx
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
Senior
Executive Vice President, Chief Operating
Officer
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
SUBSIDIARY
GUARANTORS:
|
||
COVENANT
TRANSPORT, INC.
|
||
By:
|
/s/
Xxxx X. Xxxxx
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
President
and Chief Operating Officer
|
SOUTHERN
REFRIGERATED TRANSPORT, INC.
|
||
By:
|
/s/
Xxxx X. Xxxxx
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
Vice
President
|
XXXXXX
XXXX TRUCKING CO.
|
||
By:
|
/s/
Xxxx X. Xxxxx
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
Vice
President
|
XXXXXXXX.XXX,
INC.
|
||
By:
|
/s/
Xxxx X. Xxxxx
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
Vice
President
|
CIP,
INC.
|
||
By:
|
/s/
Xxxx X. Xxxxx
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
Vice
President
|
COVENANT
TRANSPORT SOLUTIONS, INC.
|
||
By:
|
/s/
Xxxx X. Xxxxx
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
Vice
President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
STAR
TRANSPORTATION, INC.
|
||
By:
|
/s/
Xxxx X. Xxxxx
|
|
Name:
|
Xxxx
X. Xxxxx
|
|
Title:
|
Vice
President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
ADMINISTRATIVE
AGENT:
|
||
BANK
OF AMERICA, N.A., as Administrative Agent
|
||
By:
|
/s/
Xxxx X.
Xxxxxxx
|
|
Name:
|
Xxxx
X. Xxxxxxx
|
|
Title:
|
Assistant
Vice President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
BANK
OF AMERICA, N.A., as a Lender, L/C
Issuer
and Swing Line Lender
|
||
By:
|
/s/
Xxxxxxx X. Xxxxx
|
|
Name:
|
Xxxxxxx
X. Xxxxx
|
|
Title:
|
Vice
President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
SUNTRUST
BANK
|
||
By:
|
/s/
Xxx Xxxxxxxxx
|
|
Name:
|
Xxx
Xxxxxxxxx
|
|
Title:
|
Vice
President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
NATIONAL
CITY BANK
|
||
By:
|
/s/
Xxxxx X. Xxxxxxxx
|
|
Name:
|
Xxxxx
X. Xxxxxxxx
|
|
Title:
|
Sr.
Vice President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
BRANCH
BANKING AND TRUST COMPANY
|
||
By:
|
/s/
R. Xxxxxx Xxxx
|
|
Name:
|
R.
Xxxxxx Xxxx
|
|
Title:
|
Senior
Vice President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
FIRST
TENNESSEE BANK NATIONAL ASSOCIATION
|
||
By:
|
/s/
Xxxxxx X. Xxxx
|
|
Name:
|
Xxxxxx
X. Xxxx
|
|
Title:
|
Senior
Vice President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
LASALLE
BANK NATIONAL ASSOCIATION
|
||
By:
|
/s/
Xxxxx Xxxxxx
|
|
Name:
|
Xxxxx
Xxxxxx
|
|
Title:
|
Vice
President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
REGIONS
BANK, SUCCESSOR BY MERGER
TO
AMSOUTH BANK
|
||
By:
|
/s/
W. Xxxxxx Xxxxxxxx
|
|
Name:
|
W.
Xxxxxx Xxxxxxxx
|
|
Title:
|
Senior
Vice President
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page
SOVEREIGN
BANK
|
||
By:
|
/s/
Xxxxx Xxxxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxxxx
|
|
Title:
|
SVP
|
Covenant
Asset Management, Inc.
Amendment
No. 1 to Second Amended and Restated Credit Agreement
Signature
Page