Exhibit 10.14.1
THIRD MODIFICATION AGREEMENT
BY THIS THIRD MODIFICATION AGREEMENT (the "Agreement"), made and entered
into as of the 13th day of February, 2003, XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as administrative agent (the "Administrative Agent") for the Banks
listed in the hereinafter defined Credit Agreement (the "Banks") and as the
Issuing Bank and the Swing Line Lender, and KNIGHT TRANSPORTATION, INC., an
Arizona corporation (the "Company") and all present and future Significant
Subsidiaries of the Company (with the Company, the "Borrower"), in consideration
of the mutual covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
hereby confirm and agree as follows:
SECTION 1. RECITALS; ACKNOWLEDGEMENTS.
1.1 The Borrower and the Administrative Agent and the Banks entered into
that Credit Agreement dated April 6, 2001 (as amended from time to time, the
"Credit Agreement") to provide financial accommodations to the Borrower as
provided therein. The Credit Agreement was previously amended by that
Modification Agreement dated as of June 5, 2001 and that Second Modification
Agreement dated as of November 19, 2001.
1.2 Borrower and the Administrative Agent, with the consent of the Banks,
desire to modify the Credit Agreement as set forth herein.
1.3 All undefined capitalized terms used herein shall have the meaning
given them in the Credit Agreement.
SECTION 2. CREDIT AGREEMENT.
2.1 The following definitions in Section 1.1 of the Credit Agreement are
hereby amended to read as follows:
"Letter of Credit Commitment" shall mean $10,000,000.00.
"RLC Maturity Date" shall mean June 15, 2004.
2.2 Section 2A.1(a) of the Credit Agreement is hereby amended to read as
follows:
(a) Provided that the Borrower has satisfied the conditions precedent
contained in Section 2A.1(b) hereof, the Issuing Bank agrees, from time to
time, to issue and/or renew Letters of Credit on behalf of the Borrower so
long as (i) upon such issuance or renewal, an issuance fee is paid by
Borrower to the Issuing Bank in an amount equal to ninety basis points
(0.9%) per annum (computed on the basis of the actual number of days
elapsed in a year of 360 days) of the amount of each Letter of Credit,
which issuance fee shall be allocated pro rata among the Banks in
accordance with their respective Commitments, (ii) the Letter of Credit
Balance, after giving effect to such Letter of Credit, will not exceed the
Letter of Credit Commitment, and (iii) the outstanding aggregate principal
amount of all Borrowings made by all Banks pursuant to their Revolving
Loan, together with the Swing Line Balance and the Letter of Credit
Balance, after giving effect to such Letter of Credit, will not exceed the
Maximum RLC Commitment.
2.3 Section 5.2 of the Credit Agreement is hereby amended to read as
follows:
SECTION 5.2 INSURANCE. Maintain adequate insurance by financially
sound and reputable insurers of all properties of a character usually
insured by companies engaged in the same or a similar business operating on
a similar economic scale as the Borrower and its Subsidiaries against loss
or damage resulting from fire, flood, property damage, workers
compensation, or other risks insured against by extended coverage and of
the kind customarily insured against by such companies, and maintain in
full force and effect public liability insurance against claims for
personal injury, death or property damage occurring upon, in, about or in
connection with the use of any properties occupied or controlled by it and
its Subsidiaries in such amounts as shall be customary among companies
engaged in the same or similar businesses and similarly situated and
maintain such other insurance as may be required by law with deductibles
not in excess of $2,000,000.00 per occurrence for personal injury and
property damage liability, cargo liability and collision and comprehensive,
and not in excess of $500,000.00 per occurrence for worker's compensation.
2.4 Section 5.11(a) of the Credit Agreement is hereby amended to read as
follows:
(a) Its Tangible Net Worth of not less than $170,000,000.00 plus 50%
of positive net income and not reduced for any net losses plus 100% of any
proceeds from any equity stock offering, measured quarterly commencing
December 31, 2002, with "Tangible Net Worth" defined as total stockholders'
equity less its intangible assets, plus its Subordinated Debt.
2.5 Section 6.2(d) of the Credit Agreement is hereby amended to read as
follows:
(d) Capital purchases not to exceed $65,000,000.00, including
operating leases, capital leases and debt.
2.6 Section 6.6 of the Credit Agreement is hereby amended to read as
follows:
SECTION 6.6 ERISA LIABILITIES. Create or suffer to exist ERISA
Liabilities in an aggregate amount for all Plans in excess of
$2,500,000.00.
2.7 Section 6.9 of the Credit Agreement is hereby amended to read as
follows:
SECTION 6.9 DIVIDEND, DISTRIBUTIONS. Declare or pay any dividend or
distribution in excess of fifty percent (50%) of Borrower's net income in
any fiscal year either in cash, stock or any other property on Borrower's
stock now or hereafter outstanding, nor redeem, retire, repurchase in
excess of $30,000,000.00 in any 12 month period effective as of the date of
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this Agreement, or otherwise acquire any shares of any class of Borrower's
stock now or hereafter outstanding.
2.8 Exhibit "F" of the Credit Agreement is hereby amended to read as
attached hereto.
SECTION 3. OTHER MODIFICATIONS, RATIFICATIONS AND AGREEMENTS.
3.1 All references to the Credit Agreement in the other Loan Documents are
hereby amended to refer to the Credit Agreement as hereby amended.
3.2 Borrower hereby reaffirms to the Banks each of the representations,
warranties, covenants and agreements of Borrower set forth in the Credit
Agreement, with the same force and effect as if each were separately stated
herein and made as of the date hereof.
3.3 Borrower hereby ratifies, reaffirms, acknowledges, and agrees that the
Notes and the Credit Agreement represent valid, enforceable and collectible
obligations of Borrower, and that there are no existing claims, defenses,
personal or otherwise, or rights of setoff whatsoever with respect to any of
these documents or instruments. Borrower further acknowledges and represents
that no event has occurred and no condition exists that, after notice or lapse
of time, or both, would constitute a default under this Agreement, the Notes or
the Credit Agreement.
3.4 All terms, conditions and provisions of the Credit Agreement are
continued in full force and effect and shall remain unaffected and unchanged
except as specifically amended hereby. The Credit Agreement, as amended hereby,
is hereby ratified and reaffirmed by Borrower, and Borrower specifically
acknowledges the validity and enforceability thereof.
SECTION 4. GENERAL.
4.1 This Agreement in no way acts as a release or relinquishment of those
rights securing payment of the Loans. Such rights are hereby ratified,
confirmed, renewed and extended by Borrower in all respects.
4.2 The modifications contained herein shall not be binding upon the Banks
until the Administrative Agent shall have received all of the following:
(a) An original of this Agreement fully executed by the Borrower.
(b) An executed consent from each Bank.
(c) Such resolutions or authorizations and such other documents as the
Administrative Agent may require relating to the existence and good
standing of the Borrower and the authority of any person executing this
Agreement or other documents on behalf of the Borrower.
4.3 Borrower shall execute and deliver such additional documents and do
such other acts as the Banks may reasonably require to fully implement the
intent of this Agreement.
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4.4 Borrower shall pay all costs and expenses, including, but not limited
to, reasonable attorneys' fees incurred by the Administrative Agent in
connection herewith, whether or not all of the conditions described in Paragraph
4.2 above are satisfied. Banks, at their option, but without any obligation to
do so, may advance funds to pay any such costs and expenses that are the
obligation of the Borrower, and all such funds advanced shall bear interest at
the highest rate provided in the Notes and shall be due and payable upon demand.
4.5 Notwithstanding anything to the contrary contained herein or in any
other instrument executed by Borrower, the Administrative Agent or the Banks, or
in any other action or conduct undertaken by Borrower, the Administrative Agent
or the Banks on or before the date hereof, the agreements, covenants and
provisions contained herein shall constitute the only evidence of the Banks'
consent to modify the terms and provisions of the Credit Agreement. Accordingly,
no express or implied consent to any further modifications involving any of the
matters set forth in this Agreement or otherwise shall be inferred or implied by
the Banks' consent to this Agreement. Further, the Banks' consent to this
Agreement shall not constitute a waiver (either express or implied) of the
requirement that any further modification of the Credit Agreement shall require
the express written consent of the Banks; no such consent (either express or
implied) has been given as of the date hereof.
4.6 Time is hereby declared to be of the essence hereof of the Credit
Agreement, and Banks require, and Borrower agrees to, strict performance of each
and every covenant, condition, provision and agreement hereof, of the Credit
Agreement.
4.7 This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their heirs, personal representatives, successors and
assigns.
4.8 This Agreement is made for the sole protection and benefit of the
parties hereto, and no other person or entity shall have any right of action
hereon.
4.9 This Agreement shall be governed by and construed according to the laws
of the State of Arizona.
IN WITNESS WHEREOF, these presents are executed as of the date indicated
above.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Its: Assistant Vice President
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ADMINISTRATIVE AGENT
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KNIGHT TRANSPORTATION, INC.
By: /s/ Xxx Xxxx
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Name: Xxx Xxxx
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Its: CFO, Secretary
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QUAD-K LEASING, INC., an Arizona corporation
By: /s/ Xxx Xxxx
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Name: Xxx Xxxx
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Its: CFO, Secretary
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BORROWER
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CONSENT OF THE BANKS
Re: Knight Transportation, Inc.
The following:
(a) is a Bank named in that Credit Agreement dated April 6, 2001 between
Knight Transportation, Inc., an Arizona corporation (the "Company"), all present
and future Significant Subsidiaries of the Company (the "Borrower"), Xxxxx Fargo
Bank, National Association, as administrative agent for the Banks (the
"Administrative Agent"), and the Banks; and
(b) consents to that Third Modification Agreement dated February 13, 2003
entered into between the Borrower and the Administrative Agent.
THE NORTHERN TRUST COMPANY, an Illinois
banking corporation
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Its: Vice President
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"Bank"
CONSENT OF THE BANKS
Re: Knight Transportation, Inc.
The following:
(a) is a Bank named in that Credit Agreement dated April 6, 2001 between
Knight Transportation, Inc., an Arizona corporation (the "Company"), all present
and future Significant Subsidiaries of the Company (the "Borrower"), Xxxxx Fargo
Bank, National Association, as administrative agent for the Banks (the
"Administrative Agent"), and the Banks; and
(b) consents to that Third Modification Agreement dated February 13, 2003
entered into between the Borrower and the Administrative Agent.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Its: Assistant Vice President
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"Bank"
EXHIBIT "F"
QUARTERLY COMPLIANCE CERTIFICATE
FOR FISCAL QUARTER ENDING
________________, 20__
XXXXX FARGO BANK, NATIONAL ASSOCIATION
As Administrative Agent for the Banks
000 Xxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Arizona RCBO Date:_________________
Dear Ladies and Gentlemen:
This Quarterly Compliance Certificate refers to the Credit Agreement dated
as of April 6, 2001 (as it may hereafter be amended, modified, extended or
restated from time to time, the "Credit Agreement"), among KNIGHT
TRANSPORTATION, INC., an Arizona corporation, and its Significant Subsidiaries
(collectively, "Borrower"), the Banks named therein, XXXXX FARGO BANK, NATIONAL
ASSOCIATION as Administrative Agent for the Banks, and THE NORTHERN TRUST
COMPANY, an Illinois banking corporation, as a Bank. Capitalized terms used and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.
Pursuant to Section 5.4 of the Credit Agreement, the undersigned, a
Financial Officer of Borrower, certifies that:
1. Enclosed are the required financial statements for the [quarter] [fiscal
year] (the "Reporting Period") ending for Borrower as required under Section 5.4
of the Credit Agreement.
2. To the best of the undersigned's knowledge, no "Event of Default" or
Potential Default has occurred [or if so, specifying the nature and extent
thereof and any corrective actions taken or to be taken].
3. As of the last day of the Reporting Period, the computations below were
true and correct:
I. SECTION 5.11(a) Tangible Net Worth
Initial Amount $170,000,000.00
+50% of positive net income $______________
+100% of stock offering proceeds $______________
since December 31, 2002
=Tangible Net Worth Limitation $______________
Actual Tangible Net Worth: $______________
II. SECTION 5.11(b) EBITDA Coverage Ratio
(calculated on a rolling 4 quarter basis)
Numerator: Net Profit before Tax _______________
+Depreciation & Amortization Exp. _______________
+Interest Expense (net of capitalized
interest expense)
_______________
=EBITDA A
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Divided by
Denominator: Interest expense _______________
Current maturity of long-term
debt (prior period) _______________
+Current maturity of subordinated
debt (prior period)
+Dividends/distributions _______________
=Payment Requirement B
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Equals: A/B
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Minimum Required: 3.00X
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III. SECTION 5.11(c) Funded Debt to EBITDA Ratio
(calculated on a trailing 4 quarter basis)
Numerator: Indebtedness _______________
+Letter of Credit Balance _______________
=Funded Debt A
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Divided by
Denominator: EBITDA B
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Equals: A/B
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Maximum Permitted: 1.50X
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IV. SECTION 5.11(d) (i) Net Income after Tax: actual $______________
Requirement => $1.00
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(ii) Pre-Tax Profit: actual $______________
Requirement => $1.00
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V. SECTION 5.11(e) Minimum Asset Coverage
Numerator: Cash
+Net accounts receivable _______________
+real estate BV (<= $25,000,000.00) _______________
+rolling stock NBV _______________
=Assets A
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Divided by:
Denominator: Accounts Payable _______________
+Outstanding Indebtedness
+Unfunded but committed Indebtedness _______________
=Total B
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Equals A/B
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Minimum Required 120.0%
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KNIGHT TRANSPORTATION, INC., an Arizona
corporation
By:
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Name:
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Its:
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