AMENDMENT AND JOINDER AGREEMENT TO RECEIVABLES PURCHASE AGREEMENT
Exhibit
10.27
AMENDMENT
AND
JOINDER
AGREEMENT TO
THIS
AMENDMENT AND JOINDER AGREEMENT TO RECEIVABLES PURCHASE AGREEMENT, dated as
of
October 20, 2006 (this “Amendment
and Joinder Agreement”),
is by
and among COVENANT
TRANSPORT, INC. (“Covenant
Tennessee”),
SOUTHERN REFRIGERATED TRANSPORT, INC. (“Southern
Refrigerated”
and,
together with Covenant Tennessee,
the
“Original
Originators”
and
each, an “Original
Originator”),
CVTI
RECEIVABLES CORP (the “Purchaser”),
COVENANT TRANSPORT SOLUTIONS, INC. (“Transport
Solutions”)
and
STAR TRANSPORTATION, INC. (“Star
Transport”
and,
together with Transport Solutions,
the
“New
Originators”
and
each, a “New
Originator”,
and
together with the Original Originators, the “Originators”
and
each, an “Originator”).
Capitalized terms not otherwise defined herein shall have the meanings given
to
such terms in the Original Agreement, as defined below.
WHEREAS,
the Original Originators and the Purchaser entered into that certain Receivables
Purchase Agreement, dated as of December 12, 2000, as amended, restated,
supplemented or otherwise modified to the date hereof (the “Original
Agreement”
and,
together and as amended by this Amendment and Joinder Agreement, the
“Agreement”);
and
WHEREAS,
the Original Originators and the Purchaser desire to add the New Originators
as
Originators under the Original Agreement;
WHEREAS,
the Original Originators and the Purchaser have requested the Lender and the
Administrator to consent to the addition of the New Originators as Originators
under the Original Agreement;
WHEREAS,
the Lender and the Administrator have agreed to consent to the addition of
the
New Originators as Originators under the Original Agreement;
NOW
THEREFORE, in consideration of the premises and the other mutual covenants
contained herein, the parties hereto agree as follows:
Section
1. Amendments.
(a) Section
1.1 of the Original Agreement is amended by adding the following defined terms
in alphabetical order:
Non-Owner
Originator:
Each of
Covenant Transport Solutions, Inc. and Star Transportation, Inc.
Originator
Note Limit:
On any
day, the lesser of (a) $1,860,000 and (b) 3% of the Facility Limit.
Owner
Originator:
Each of
Covenant Transport, Inc. and Southern Refrigerated Transport, Inc.
(b) Sections
2.1(a), (b) and
(c) of the Original Agreement are each replaced with the following:
(a) Each
Originator hereby sells, absolutely assigns, transfers and conveys to the
Purchaser on each Purchase Date, on the terms and subject to the conditions
specifically set forth herein, all of its respective right, title and interest,
in, to and under (i)
all
Receivables (other than Contributed Receivables), now existing or arising
hereafter and prior to the Purchase Termination Date, and all payment and
enforcement rights (but not any obligations) to, in and under the related
Contracts, (ii)
all
Collections and other monies due or to become due with respect to the foregoing,
(iii)
all
Related Security for the Receivables, (iv)
all
lockboxes and accounts to which Collections are sent, and all funds and
investments from time to time therein, (v)
all
books and records related to the foregoing and (vi)
all
proceeds of the foregoing, including, without limitation, insurance proceeds
relating thereto (collectively, the “Purchased
Assets”).
(b) In
consideration of the capital stock of the Purchaser issued to Covenant Tennessee
and Southern Refrigerated, each Owner Originator agrees to contribute, and
does
hereby contribute to the Purchaser, and the Purchaser hereby accepts from such
Originator, all of such Owner Originator’s right, title and interest in and to
(i)
Receivables, and all of the rights described in clauses
(ii)
through
(vi)
of
Section
2.1(a)
related
thereto, starting with the oldest such Receivable such that the aggregate Unpaid
Balance of all such Receivables shall be as close as possible to, but not less
than, $2,000,000 (the “Initial
Contributed Receivables”)
and
(ii)
all
other Contributed Receivables.
(c) On
each Purchase Date,
all of such Originator’s right, title and interest in and to the newly created
Receivables (other than, in the case of an Owner Originator, Receivables
indicated on a Purchase Report as having been contributed by such Owner
Originator to the Purchaser (such Receivables, together with the Initial
Contributed Receivables, the “Contributed
Receivables”))
and
the other Purchased Assets shall be sold, absolutely assigned, transferred
and
conveyed to the Purchaser by the sale, absolute assignment, transfer and
conveyance set forth in paragraph
(a)
of this
Section 2.1 and, in the case of each Owner Originator, paragraph
(b)
of this
Section 2.1, without any further action by such Originator or the Purchaser;
all
Contributed Receivables (other than the Initial Contributed Receivables) of
such
Owner Originator shall be contributed to the Purchaser on the date they are
created without further action by such Originator or the Purchaser.
2
(c) Section
2.3 (b) of the Original Agreement is replaced with the following:
(b) On
each Purchase Date
falling after the Closing Date until the Purchase Termination Date, on the
terms
and subject to the conditions of this Agreement, the Purchaser shall pay to
such
Originator the Purchase Price for the Receivables and other Purchased Assets
purchased from such Originator on such Purchase Date as follows:
(i) First,
(a) if
Receivables and Purchased Assets to be acquired by the Purchaser are sold by
both any Non-Owner Originator and any Owner Originator, by paying (I) to each
such Non-Owner Originator a portion of the Purchase Price due by depositing
into
such account as such Non-Owner Originator shall specify immediately available
funds from monies held by or on behalf of the Purchaser solely to the extent
that such monies do not constitute Collections that are required to be
segregated and held by the Master Servicer or distributed to the Administrator
or the Lender pursuant to the Loan Agreement on the next Distribution Date
or
required to be paid to the Master Servicer as the Servicer’s Fee on the next
Distribution Date, or otherwise necessary to pay current expenses of the
Purchaser (in its reasonable discretion) (such available monies, the “Available
Funds”), subject to the terms of the Loan Agreement, and (II) if any Available
Funds remain after making such payment to the Non-Owner Originators from whom
Receivables and Purchased Assets are to be acquired by the Purchaser on such
day, then to each such Owner Originator a portion of the Purchase Price due
by
depositing Available Funds into such account as such Non-Owner Originator shall
specify, (b) if Receivables and Purchased Assets to be acquired by the Purchaser
are sold only by one or more Non-Owner Originators, by paying to each such
Non-Owner Originator a portion of the Purchase Price due by depositing Available
Funds into such account as such Non-Owner Originator shall specify and (c)
if
Receivables and Purchased Assets to be acquired by the Purchaser are sold only
by one or more Owner Originators, by paying to each such Owner Originator a
portion of the Purchase Price due by depositing Available Funds into such
account as such Owner Originator shall specify . Any Collections that have
been
paid to an Originator during any Due Period shall be credited towards the
Purchaser’s obligation pursuant to this clause first; provided, however, that,
if Collections paid to any Originator exceed the Purchase Price for Receivables
and the other Purchased Assets purchased from such Originator for such Due
Period, or, absent a cash payment, the Purchaser shall not have sufficient
cash
to meet its payment obligations pursuant to the Loan Agreement, such Originator
shall turn over such excess to the Purchaser; and
(ii) Second,
if the
aggregate of the principal amounts outstanding under the Originator Notes shall
be less than the Originator Note Limit and if on such Purchase Date (A) only
one
or more of the Non-Owner Originators is selling to the Purchaser any Receivables
and other Purchased Assets, by increasing the principal amount outstanding
under
the Originator Notes issued to such Non-Owner Originators up to an amount such
that after giving effect to such increases the aggregate of the principal
amounts outstanding under the Originator Notes
3
shall
not
exceed the Originator Note Limit, (B) any combination of Owner Originators
and
Non-Owner Originators are selling to the Purchaser any Receivables and other
Purchased Assets, then first,
by
increasing the principal amount outstanding under the Originator Notes issued
to
the Non-Owner Originators, up to an amount such that after giving effect to
such
increases the aggregate of the principal amounts outstanding under the
Originator Notes shall not exceed the Originator Note Limit and second,
if
after giving effect to any increases on such Purchase Date in the aggregate
of
the principal amounts outstanding under the Originator Notes issued to the
Non-Owner Originators, the aggregate of the principal amounts outstanding under
the Originator Notes shall not exceed the Originator Note Limit, by increasing
the principal amount outstanding under the Originator Notes issued to the Owner
Originators up to an amount such that after giving effect to all increases
in
the aggregate of the principal amounts outstanding under the Originator Notes
on
such Purchase Date, such aggregate principal amount shall not exceed the
Originator Note Limit or (C) only one or more of the Owner Originators is
selling to the Purchaser any Receivables and other Purchased Assets, by
increasing the principal amount outstanding under the Originator Notes issued
to
such Owner Originators up to an amount such that after giving effect to such
increases the aggregate of the principal amounts outstanding under the
Originator Notes shall not exceed the Originator Note Limit; and
(iii) Third,
unless
the Purchase Termination Date has occurred, at the option of an Owner Originator
who is selling Receivables and other Purchased Assets on such Purchase Date,
by
accepting a contribution to the Purchaser’s capital in an amount equal to the
remaining unpaid balance of such Purchase Price payable to such Owner Originator
in exchange for the capital stock of the Purchaser issued to such Owner
Originator making such contribution.
To
the
extent that (x) the amount due pursuant to Section
2.2
with
respect to all Receivables created or originated by such Originator that arose
during the corresponding Due Period is exceeded by (y) the amount paid to such
Originator during such Due Period pursuant to the foregoing sentences for such
Receivables, and such excess is not turned over to the Purchaser pursuant to
clause
first
above,
such excess shall be treated as a reduction in the principal amount of the
Originator Note, effective as of the last day of the related Due Period;
provided,
however,
that if
at any time the unpaid principal amount of the Originator Note has been reduced
to zero, such Originator shall pay the Purchaser the remainder owed with respect
thereto in immediately available funds.
Section
2. Joinder
of New Originator.
Each
New Originator hereby agrees to assume the duties, and to be bound by each
of
the obligations, of an Originator under the Original Agreement, effective as
of
the Effective Date. Each New Originator hereby agrees that each provision of
the
Original Agreement applicable to an Originator is applicable to it and agrees
to
abide by each provision of the Original Agreement applicable to an Originator.
The Purchaser hereby agrees that as of the Effective Date each New Originator
shall be an Originator for all purposes under the Agreement.
4
Section
3. Representations
and Warranties of the New Originators.
Each
New Originator hereby makes, as of the date hereof, as of the Effective Date
and
as of each date provided for in the Agreement, each of the representations
and
warranties made by the Original Originators under the Agreement (including
without limitation each of the representations and warranties set forth in
Sections 4.1 and 4.2 of the Original Agreement) as if each such representation
and warranty was set forth herein, mutatis mutandis.
Each
New Originator hereby represents and warrants that: (a) it is a corporation
formed under the laws of its jurisdiction of formation, as set forth in
Schedule
II
hereto,
(b) it has not been incorporated or otherwise existing under any the law of
any
other jurisdiction, (c) it has not taken any action, corporate or otherwise,
to
re-incorporate or otherwise re-form under the law of any jurisdiction, (d)
except as set forth on Schedule
II
hereto,
it has no trade names that it has used during the preceding six (6) years,
(e)
that its legal name, as set forth on the records of its jurisdiction of
formation is as set forth in Schedule
II
hereto
and that it has had no other names except as set forth in Schedule
II
hereto,
(f) that all records relating to the Purchased Assets are maintained by it
at
the location(s) set forth in Schedule
I
hereto,
(g) that the names of each of its responsible officers is set forth on
Schedule
III
hereto
and (h) the address to which any notice hereunder or under the Agreement shall
be sent in accordance with Section 10.2 of the Agreement is set forth on
Schedule
IV
hereto.
Section
4. Covenants
and
Agreements of the New Originators.
Each
New Originator hereby makes each of the covenants and agreements made by the
Original Originators under the Original Agreement (including without limitation
each of the covenants and agreements set forth in Articles V, VI, VIII and
IX
and Section 10.6 thereof), as if each such covenant and agreement was set forth
herein, mutatis mutandis.
Section
5. Agreement
in Full
Force and Effect as Amended.
Except
as specifically amended hereby, the Agreement shall remain in full force and
effect. All references to the Agreement shall be deemed to mean the Agreement
as
modified hereby. This Amendment and Joinder Agreement shall not constitute
a
novation of the Original Agreement, but shall constitute an amendment thereof.
The parties hereto agree to be bound by the terms and conditions of the Original
Agreement, as amended by this Amendment and Joinder Agreement, as though such
terms and conditions were set forth herein.
Section
6. Consent
To Amendment to Receivables Sale Agreement.
Effective as of the date hereof, the Lender and the Administrator each consents
to the amendment of the Original Agreement by this Amendment and Joinder
Agreement.
Section
7. Conditions
to
Effectiveness of This Amendment and Joinder Agreement.
This
Amendment and Joinder Agreement shall become effective on the first date (the
“Effective
Date”)
on
which each New Originator shall deliver to the Administrator the following
documents and instruments, all of which shall be in form and substance
acceptable to the Administrator:
5
(i) Certificates
of the Secretary or Assistant Secretary or similar officer of such New
Originator, each dated the date of this Amendment and Joinder Agreement,
certifying (A) the names and true signatures of the incumbent officers of such
Person authorized to sign this Amendment and Joinder Agreement and the other
documents to be delivered by it hereunder (on which certificate the Purchaser,
the Administrator and Lender the may conclusively rely), (B) that the copy
of
the certificate of incorporation (or other applicable formation document or
documents) of such New Originator attached thereto is a complete and correct
copy and that such certificate of incorporation has not been amended, modified
or supplemented and is in full force and effect, (C) if such Person is a
corporation, that the copy of the bylaws of such Person attached thereto is
a
complete and correct copy and that such by-laws have not been amended, modified
or supplemented and are in full force and effect, and (D) the resolutions of
such Person’s board of directors or other similar management body approving and
authorizing the execution, delivery and performance by such Person of this
Amendment and Joinder Agreement and the documents related hereto;
(ii) Copies
of
good standing certificates for such New Originator, issued by the Secretary
of
State of the State (or other appropriate government official) of formation
of
such New Originator and the state where such Person’s principal place of
business is located;
(iii)
Acknowledgment
copies (or other evidence of filing reasonably acceptable to the Administrator
)
of proper financing statements under the applicable UCC, in such form as the
Administrator may reasonably request, naming such New Originator as the debtor
and the Purchaser as secured party and purchaser thereof and the Purchaser
as
assignee of the Receivables and the other Purchased Assets or other, similar
instruments or documents, as may be necessary or, in the opinion of the
Administrator desirable under the UCC or any comparable law of all appropriate
jurisdictions to perfect the transfer by such New Originator to the Purchaser
of
the Receivables and the other Purchased Assets;
(iv)
Search
reports provided in writing to the Administrator, (A) listing all effective
financing statements that name such New Originator as debtor and that are filed
in the jurisdictions in which filings were made pursuant to subsection (iii)
above
and in such other jurisdictions that the Administrator shall reasonably request,
together with copies of such financing statements (none of which (other than
any
of the financing statements described in subsection (iii)
above)
shall cover any Receivables or other Purchased Assets, and (B) listing all
tax liens and judgment liens (if any) filed against such New Originator in
the
jurisdictions described above and showing no such Liens;
(v) The
Subordinated Note of the Purchaser, dated as of the date hereof, duly executed
by the Purchaser;
(vi) Favorable
opinions of the Xxxxxxx Law Firm, counsel to such New Originator, as to such
matters and in form and substance satisfactory to the Company including, without
limitation, the following:
6
(A) such
New Originator is
(1) a corporate entity or limited liability company, as the case may be,
organized, existing and in good standing under the laws of its jurisdiction
of
organization, with all necessary power and authority to own its properties
and
conduct its business as currently conducted, (2) qualified to do business as
a
foreign corporate entity or limited liability company, as the case may be,
in
good standing in each jurisdiction in which the conduct of its business requires
such qualification;
(B) such
New
Originator has and had at all relevant times full power, authority and legal
right to exercise, deliver and perform its obligations under this Amendment;
and
has or had at all relevant times full power, authority and legal right to
acquire, own and transfer the Receivables and the other Purchased
Assets;
(C) this
Amendment and Joinder Agreement and each other document related hereto or
thereto to which such New Originator is a party has been duly authorized,
executed and delivered by such New Originator and is a valid and binding
agreement, enforceable against it in accordance with its respective terms,
except to the extent that enforcement thereof may be limited by (1) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in
effect relating to creditors’ rights generally and (2) general principles of
equity (regardless of whether enforceability is considered in a proceeding
at
law or in equity);
(D) the
transfer of the Receivables and the other Purchased Assets by such New
Originator to the Purchaser pursuant to the Agreement, the compliance by such
New Originator with all of the provisions of the Agreement and the consummation
of the transactions contemplated the Agreement and each other document
contemplated hereby and thereby or thereby to which such New Originator is
a
party will not (1) conflict with or result in a breach of any of the terms
or
provisions of, or constitute a default under, any indenture, mortgage, deed
of
trust, loan agreement or other agreement or instrument known to such counsel
to
which it is a party or by which it is bound or to which any of its property
or
assets is subject, (2) result in any violation of the provisions of any order
known to such counsel of any court or governmental agency or body having
jurisdiction over it or any of its properties or (3) result in any violation
of
the provisions of its articles of incorporation, other formation documents
or
the by-laws or any statute or any rule or regulation of any governmental agency
or body having jurisdiction over it or any of its properties;
(E) no
authorization,
approval, consent or order of, or filing with, any court or governmental
authority or agency is required by such New Originator, the Purchaser or any
other party to any of the Transaction Documents in connection with the
consummation of the transactions contemplated in the Agreement or any other
document contemplated hereby or thereby to which such Person is a party, except
such as have been obtained;
7
(F) to
the best of such
counsel’s knowledge and information without independent inquiry, there are no
legal or governmental proceedings pending or threatened (1) asserting the
invalidity of the Agreement or any other document contemplated hereby or thereby
to which such New Originator is a party, (2) seeking to prevent the consummation
by such New Originator of any of the transactions contemplated by this Agreement
or any other document contemplated hereby or thereby to which it is a party
or
(3) which might materially adversely affect the rights of the Purchaser, the
Administrator or the Lender hereunder, under the Agreement or any other
agreement contemplated hereby or thereby;
(G) the
provisions of the Agreement are effective to create a valid security interest
in
the Receivables and the other Purchased Assets and the proceeds thereof in
favor
of the Purchaser and such security interest has been perfected under all
applicable laws and is prior to all other creditors of such New Originator
and
the provisions of the Loan Agreement are effective to create a valid security
interest in the Receivables and the other Purchased Assets and the proceeds
thereof of such New Originator owned by the Purchaser and the proceeds thereof
in favor of the Lender and such security interest is perfected under all
applicable laws;
(H) neither
such New
Originator nor the Purchaser is required to be registered as an “investment
company” under the Investment Company Act of 1940, as amended;
(I) the
inapplicability of
the doctrine of substantive consolidation to the Purchaser and each of the
owners of the shares of stock of the Purchaser, including such New
Originator;
(J) the
existence of a “true
sale” of the Receivables and the other Purchased Assets from such New Originator
to the Purchase under the Agreement; and
(K) such
other matters as the
Administrator may reasonably request;
(vii) A
copy of
this Amendment and Joinder Agreement, executed by each of the parties hereto
and
consented to by each of the Lender and the Administrator; and
(viii) Such
other agreements,
instruments, certificates, opinions and other documents as the Administrator
may
reasonably request; and
8
Section
8. Miscellaneous.
(a) This
Amendment and Joinder Agreement may be executed in any number of counterparts,
and by the different parties hereto on the same or separate counterparts, each
of which shall be deemed to be an original instrument but all of which together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this Amendment and Joinder Agreement by facsimile shall
be effective as delivery of a manually executed counterpart of this Amendment
and Joinder Agreement.
(b) The
New
Originators, jointly and severally, agree to pay all reasonable expenses of
the
parties hereto, the Administrator and the Lender incurred in connection with
the
negotiation, preparation, execution and delivery of this Amendment and Joinder
Agreement and the documents executed in connection herewith, including but
not
limited to (A) the legal fees of Hunton & Xxxxxxxx LLP, counsel to the
Administrator, (B) expenses incurred in connection with any due diligence audit
and (C) out-of-pocket expenses of the Administrator and its agents, all such
amounts to be paid within ten days after presentation of an invoice
therefor.
(c) The
descriptive headings
of the various sections of this Amendment and Joinder Agreement are inserted
for
convenience of reference only and shall not be deemed to affect the meaning
or
construction of any of the provisions hereof.
(d) This
Amendment and
Joinder Agreement may not be amended or otherwise modified except as provided
in
the Agreement.
(e) THIS
AMENDMENT AND
JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
[remainder
of page intentionally left blank]
9
IN
WITNESS WHEREOF, the parties have caused this Amendment and Joinder Agreement
to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
|
CVTI
RECEIVABLES CORP.
|
||
|
By:
|
/s/ Xxxx X. Xxxxx | |
|
Name:
|
Xxxx X. Xxxxx | |
|
Title:
|
Treasurer & CFO | |
|
COVENANT
TRANSPORT, INC.
|
||
|
By:
|
/s/ Xxxx X. Xxxxx | |
|
Name:
|
Xxxx X. Xxxxx | |
|
Title:
|
CFO | |
|
SOUTHERN
REFRIGERATED TRANSPORT, INC.
|
||
|
By:
|
/s/ Xxxx X. Xxxxx | |
|
Name:
|
Xxxx X. Xxxxx | |
|
Title:
|
Treasurer & CFO | |
|
STAR
TRANSPORTATION, INC.
|
||
|
By:
|
/s/ Xxxx X. Xxxxx | |
|
Name:
|
Xxxx X. Xxxxx | |
|
Title:
|
Executive Vice President & Treasurer | |
|
COVENANT
TRANSPORT SOLUTIONS, INC.
|
||
|
By:
|
/s/ Xxxx X. Xxxxx | |
|
Name:
|
Xxxx X. Xxxxx | |
|
Title:
|
Vice President | |
[signatures
continued on following page]
Consented
to this 20th day of October, 2006:
|
THREE
PILLARS FUNDING LLC
|
|
|
By:
|
/s/ Xxxxx X. Xxxxx |
|
Name:
|
Xxxxx X. Xxxxx |
|
Title:
|
Vice President |
|
SUNTRUST
CAPITAL MARKETS, INC.
|
|
|
By:
|
/s/ Xxxxxxx X. Xxxx |
|
Name:
|
Xxxxxxx X. Xxxx |
|
Title:
|
Managing Director |
[end
of
signatures]
[signature
page to Joinder Agreement - Covenant]
