| | On October 23, 2020, Covenant Logistics Group, Inc., a Nevada corporation (the “Company”), and substantially all of its direct and indirect wholly owned subsidiaries, entered into an Eighteenth Amendment to Third Amended and Restated Credit Agreement (the “Eighteenth Amendment”) with Bank of America, N.A., as agent (the “Agent”) and lender, and JPMorgan Chase Bank, N.A., as lender, which amended that certain Third Amended and Restated Credit Agreement, dated September 23, 2008, by and among the Company, substantially all of its direct and indirect subsidiaries, the Agent, and the lenders from time to time party thereto, as amended from time to time (the “Credit Agreement”). Among other changes, the Eighteenth Amendment: (i) increased the maximum line of credit from $95 million to $110 million; (ii) extended the maturity date to October 23, 2025; (iii) increased the advance rate on eligible accounts receivable from 85% to 87.5%, subject to further adjustments provided in the Credit Agreement; (iv) decreased the interest rate applicable at each specified level of borrowing availability by 0.25% per annum; (v) updated the definition of EBITDA used in the fixed charge coverage ratio financial covenant to add back (A) up to $5 million for certain internal restructuring expenses and reserve adjustments incurred in fiscal 2020 and (B) future indemnification payments to Triumph Bancorp, Inc. and related entities in connection with the previously disclosed agreements with such entities, to the extent such payments are funded with borrowings on the previously disclosed line of credit with TBK Bank, SSB; (vi) added increased flexibility to prepay third party debt, make acquisitions or investments, and pay dividends if certain borrowing availability and fixed charge coverage ratio tests are met; (vii) reset the permitted stock repurchase limit to $40 million after the effective date of the Eighteenth Amendment; (viii) added certain parcels of real property back to the borrowing base formula in order to provide additional borrowing availability, as previously the Company’s real property had amortized out of the borrowing base; (ix) increased the letter of credit subline (i.e., the portion of the total $110 million facility that can be used for letters of credit) from $95 million to $105 million, with sublimits of $95 million and $15 million for standby and commercial letters of credit, respectively; (x) decreased the borrowing availability threshold at which the fixed charge coverage ratio is tested from borrowing availability of less than 15% of the total line of credit (or $14.25 million) to borrowing availability of less than 10% of the total line of credit (or $11 million); and (xi) made certain other updates to the definitions, affirmative covenants, negative covenants, and events of default to reflect changes in the Company’s circumstances and more recent precedent credit agreements in the industry. The foregoing summary of the terms and conditions of the Eighteenth Amendment does not purport to be complete and is qualified in its entirety by reference to the complete text of the Eighteenth Amendment, a copy of which will be filed with the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2020. |
| | The information in Items 2.02 and 9.01 of this report and the exhibit hereto may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements are made based on the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. Actual results or events may differ from those anticipated by forward-looking statements. Please refer to the italicized paragraph at the end of the attached press release and various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission for information concerning risks, uncertainties, and other factors that may affect future results. |
