Nevada
|
000-24960
|
88-0320154
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
400
Birmingham Hwy., Chattanooga, TN
|
37419
|
(Address
of principal executive offices)
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(Zip
Code)
|
[
]
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
[
]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
[
]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
[
]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive Agreement
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Amendment
to Securitization Facility
Covenant
Transport, Inc., a Nevada corporation (the "Company"), is a party
to an
accounts receivable securitization facility. On October 20, 2006,
the
Company and certain of its subsidiaries, including CVTI Receivables
Corp.
("CVTI Receivables"), a wholly-owned subsidiary of the Company and
a
bankruptcy-remote, special purpose entity, entered into certain amendments
to the securitization facility, including (i) Amendment No. 11 to
Loan
Agreement, dated October 20, 2006, among Three Pillars Funding LLC,
as
lender, SunTrust Capital Markets, Inc., as administrator, CVTI
Receivables, as borrower, and the Company, as master servicer, and
(ii)
Amendment and Joinder Agreement to Receivables Purchase Agreement,
dated
October 20, 2006, among Covenant Transport, Inc., a Tennessee corporation
("Covenant"), Southern Refrigerated Transport, Inc., an Arkansas
corporation ("Southern Refrigerated"), CVTI Receivables, Covenant
Transport Solutions, Inc., a Nevada corporation ("Solutions"), and
Star
Transportation, Inc., a Tennessee corporation ("Star") (together,
the
amendments described in clauses (i) and (ii), the "Securitization
Facility
Amendments").
Under
the securitization facility, the Company, through certain of its
subsidiaries, sells accounts receivable as part of a two-step process
that
provides funding similar to a revolving credit facility. Prior to
entering
into the Securitization Facility Amendments, CVTI Receivables purchased
accounts receivable solely from Covenant and Southern Refrigerated,
as
originators, and funded these purchases with money borrowed under
a credit
facility with Three Pillars Funding, LLC. Pursuant to the Securitization
Facility Amendments, Solutions and Star joined the securitization
facility
as additional originators, permitting CVTI Receivables to purchase
accounts receivable from these subsidiaries of the Company as well
as from
Covenant and Southern Refrigerated. The Securitization Facility Amendments
also effected an increase in the amount that the Company, through
CVTI
Receivables, can borrow under the securitization facility, from $62
million to $70 million, subject to eligible receivables. CVTI Receivables
pays interest on such borrowings based on commercial paper interest
rates,
plus an applicable margin, and a commitment fee on the daily, unused
portion of the facility. The borrowings are secured by, and paid
down
through collections on, the accounts receivable purchased by CVTI
Receivables from the originators. The securitization facility is
reflected
as a current liability because the term, subject to annual renewals,
runs
until December 5, 2006.
The
securitization facility requires that certain performance ratios
be
maintained with respect to accounts receivable and that CVTI Receivables
preserve its bankruptcy remote nature. The securitization facility
includes usual and customary events of default for facilities of
this
nature and provides that, upon the occurrence and continuation of
an event
of default, payment of all amounts under the securitization facility
may
be accelerated and the lender's commitments may be
terminated.
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Amendment
to Company's Credit Facility
On
October 20, 2006, the Company entered into Amendment No. 4, Consent
and
Limited Waiver to Amended and Restated Credit Agreement, dated October
20,
2006 (the "Company Credit Facility Amendment"), with Bank of America,
N.A.
and the other banks signatory thereto (collectively, the "Lenders"),
amending the Company's revolving credit facility. Pursuant to the
Company
Credit Facility Amendment, the Lenders (i) consented to the Securitization
Facility Amendments, (ii) waived the default that otherwise would
have
occurred under the Company's revolving credit facility as a result
of the
Company's incursion of approximately $3 million of purchase money
liens in
excess of what otherwise would have been permitted under the Company's
revolving credit facility, and (iii) waived the default that otherwise
would have occurred because of the Company's failure to cause Solutions
to
timely join the Company's other subsidiaries as a guarantor of the
Company's revolving credit facility and to pledge Solution's stock
as
additional collateral in support of the Company's obligations under
the
Company's revolving credit facility.
Amendment
to Star's Credit Facility
In
connection with the Securitization Facility Amendments, Star entered
into
a Fourteenth Amendment, Consent and Limited Waiver to Loan Agreement
and
Amendment to Security Agreement (the "Fourteenth Amendment"), which
amended that certain Loan Agreement dated March 1, 2000, between
Star and
Bank of America, N.A. (the "Star Loan Agreement"). Pursuant to the
Fourteenth Amendment, Bank of America, N.A. released its lien on
the
accounts receivable and related collateral to be sold by Star to
CVTI
Receivables under the securitization facility. Bank of America, N.A.
also
waived the default that otherwise would have occurred under the Star
Loan
Agreement because of an advance made by Bank of America, N.A. to
Star in
the amount of approximately $807 thousand, which amount was repaid
in
connection with the Fourteenth Amendment.
This
description of the Securitization Facility Amendments, the Company
Credit
Facility Amendment, and the Fourteenth Amendment does not purport
to be
complete and is qualified in its entirety by reference to the full
text of
the Securitization Facility Amendments, the Company Credit Facility
Amendment, and the Fourteenth Amendment, which will be filed with
the
Company’s Form 10-K for the fiscal year ending December 31,
2006.
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||
Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
|
|
The
information set forth in Item 1.01 of this Current Report on Form
8-K
concerning the Company's obligations under its securitization facility
is
incorporated by reference into this Item 2.03.
The
description of the Securitization Facility Amendments does not purport
to
be complete and is qualified in its entirety by reference to the
full text
of the Securitization Facility Amendments, which will be filed with
the
Company’s Form 10-K for the fiscal year ending December 31,
2006.
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COVENANT
TRANSPORT, INC.
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||
Date:
October 24, 2006
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By:
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/s/ Joey B. Hogan
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Joey
B. Hogan
Executive
Vice President and Chief Financial
Officer
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