exhibit101.htm


    


    


    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:

    


    
      	
               

            	
              (a)

            	
              The
                existing definition of “Applicable Rate” in Section 1.02 is
                deleted in its entirety and the following is inserted in lieu
                thereof:

            


    

    


    “ ‘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

            	
              Commitment

              Fee

            	
              Eurodollar
                Rate Loans

              ––––––––––

              Letter
                of Credit

              Fee

            	
              Base
                Rate

              Loans

            
	
              1

            	
              Less
                than 2.00x

            	
              0.175%

            	
              0.875%

            	
              0.000%

            
	
              2

            	
              Greater
                than or equal to 2.00x but less than 2.50x

            	
              0.225%

            	
              1.125%

            	
              0.000%

            
	
              3

            	
              Greater
                than or equal to 2.50x but less than 3.00x

            	
              0.300%

            	
              1.500%

            	
              0.250%

            
	
              4

            	
              Greater
                than or equal to 3.00x but less than 3.50x

            	
              0.375%

            	
              1.875%

            	
              0.625%

            
	
              5

            	
              Greater
                than or equal to 3.50x

            	
              0.500%

            	
              2.250%

            	
              1.000%

            


    

    


    “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.”


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    


    
      	
               

            	
              (b)

            	
              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.

            


    

    


    
      	
               

            	
              (c)

            	
              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.

            


    

    


    
      	
               

            	
              (d)

            	
              The
                existing definition of “Security Instrument” in Section 1.02 is deleted in
                its entirety and the following is inserted in lieu
                thereof:

            


    

    


    “ ‘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.”

    


    
      	
               

            	
              (e)

            	
              The
                following definitions are added to Section 1.02 in the appropriate
                alphabetical locations therein:

            


    

    


    “ ‘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


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    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.”

    


    
      	
               

            	
              (f)

            	
              The
                following Section 2.05(d) is inserted after Section
                2.05(c):

            


    

    


    “(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.”

    


    
      	
               

            	
              (g)

            	
              Section
                4A.01 is deleted in its entirety and the following is inserted in
                lieu
                thereof:

            


    

    


    “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).”

    


    
      	
               

            	
              (h)

            	
              Section
                4A.04 is deleted in its entirety and the following is inserted in
                lieu
                thereof:

            


    

    


    “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.”

    


    
      	
               

            	
              (k)

            	
              The
                following Section 6.22 is inserted after Section
                6.21:

            


    

     

    “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.”


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    


    
      	
               

            	
              (l)

            	
              Section
                7.01 is deleted in its entirety and the following is inserted in
                lieu
                thereof:

            


    

    


    “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

            	
              Consolidated

              Leverage
                Ratio

            
	
              First
                Amendment Effective Date through June 29, 2008

            	
              4.00
                to 1.00

            
	
              June
                30, 2008 through December 30, 2009

            	
              3.50
                to 1.00

            
	
              December
                31, 2009 and at all times thereafter

            	
              3.25
                to 1.00

            


    

    


    “(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

            	
              Consolidated
                Fixed

              Charge
                Coverage Ratio

            
	
              First
                Amendment Effective Date through June 29, 2008

            	
              1.00
                to 1.00

            
	
              June
                30, 2008 through December 30, 2009

            	
              1.15
                to 1.00

            
	
              December
                31, 2009 and at all times thereafter

            	
              1.25
                to 1.00”

            


    

     

    
 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    
      	
               

            	
              (m)

            	
              Section
                7.02 is deleted in its entirety and the following is inserted in
                lieu
                thereof:

            


    

    


    “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.”

    


    
      	
               

            	
              (n)

            	
              Section
                7.04(d) is deleted in its entirety and the following is inserted in
                lieu thereof:

            


    

    


    “(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;”

    


    
      	
               

            	
              (o)

            	
              Section
                7.08 is deleted in its entirety and the following is inserted in
                lieu
                thereof:

            


    

    


    “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.”


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    (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.”

    


    
      	
               

            	
              (q)

            	
              Section
                9.10 is deleted in its entirety and the following is inserted in
                lieu
                thereof:

            


    

    


    “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 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

                     
        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.”

    


    
      	
               

            	
              (r)

            	
              Section
                10.01(g) is deleted in its entirety and the following is inserted in
                lieu thereof:

            


    

    


    “(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;”

    


    
      	
               

            	
              (s)

            	
              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.

            


    

    


    
      	
               

            	
              (t)

            	
              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.

            


    

    


    
      	
               

            	
              (u)

            	
              Exhibit
                D to the Credit Agreement is deleted in its entirety and Exhibit
                D attached hereto as Annex IV is inserted in lieu
                thereof.

            


    

    


    
      	
               

            	
              (v)

            	
              Exhibit
                J to the Credit Agreement attached hereto as Annex V is
                inserted after the last page of Exhibit
                I.

            


    

     

            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 Scudder 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.

            


    

    


    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:

            
	 	 
	 	
              COVENANT
                ASSET MANAGEMENT, INC., a Nevada corporation

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Joey B. Hogan

            
	 	
              Name:

            	
              Joey
                B. Hogan

            
	 	
              Title:

            	
              Vice
                President

            


    

    


    
      	 	
              PARENT:

            
	 	 
	 	
              COVENANT
                TRANSPORTATION GROUP, INC., a Nevada
                corporation

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Joey B. Hogan

            
	 	
              Name:

            	
              Joey
                B. Hogan

            
	 	
              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/
                Joey B. Hogan

            
	 	
              Name:

            	
              Joey
                B. Hogan

            
	 	
              Title:

            	
              President
                and Chief Operating Officer

            


    

    


    
      	 	
              SOUTHERN
                REFRIGERATED TRANSPORT, INC.

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Joey B. Hogan

            
	 	
              Name:

            	
              Joey
                B. Hogan

            
	 	
              Title:

            	
              Vice
                President

            


    

    


    
      	 	
              HAROLD
                IVES TRUCKING CO.

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Joey B. Hogan

            
	 	
              Name:

            	
              Joey
                B. Hogan

            
	 	
              Title:

            	
              Vice
                President

            


    

    


    
      	 	
              COVENANT.COM,
                INC.

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Joey B. Hogan

            
	 	
              Name:

            	
              Joey
                B. Hogan

            
	 	
              Title:

            	
              Vice
                President

            


    

    


    
      	 	
              CIP,
                INC.

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Joey B. Hogan

            
	 	
              Name:

            	
              Joey
                B. Hogan

            
	 	
              Title:

            	
              Vice
                President

            


    

    


    
      	 	
              COVENANT
                TRANSPORT SOLUTIONS, INC.

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Joey B. Hogan

            
	 	
              Name:

            	
              Joey
                B. Hogan

            
	 	
              Title:

            	
              Vice
                President

            


    

    



    
      
        
          Covenant
            Asset Management, Inc.

          
            Amendment
              No. 1 to Second Amended and Restated Credit Agreement

            Signature
              Page

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	 	
              STAR
                TRANSPORTATION, INC.

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Joey B. Hogan

            
	 	
              Name:

            	
              Joey
                B. Hogan

            
	 	
              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/
                Anne M.
                Zeschke

            
	 	
              Name:

            	
              Anne
                M. Zeschke

            
	 	
              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/
                Phillip J. Lynch

            
	 	
              Name:

            	
              Phillip
                J. Lynch

            
	 	
              Title:

            	
              Vice
                President

            


    

    


    


    



    
      
        
          Covenant
            Asset Management, Inc.

          
            Amendment
              No. 1 to Second Amended and Restated Credit Agreement

            Signature
              Page

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	 	
              SUNTRUST
                BANK

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Kap Yarbrough

            
	 	
              Name:

            	
              Kap
                Yarbrough

            
	 	
              Title:

            	
              Vice
                President

            


    

    



    
      
        
          Covenant
            Asset Management, Inc.

          
            Amendment
              No. 1 to Second Amended and Restated Credit Agreement

            Signature
              Page

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	 	
              NATIONAL
                CITY BANK

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Kevin L. Anderson

            
	 	
              Name:

            	
              Kevin
                L. Anderson

            
	 	
              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. Andrew Beam

            
	 	
              Name:

            	
              R.
                Andrew Beam

            
	 	
              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/
                Robert T. Lusk

            
	 	
              Name:

            	
              Robert
                T. Lusk

            
	 	
              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/
                Chris Hursey

            
	 	
              Name:

            	
              Chris
                Hursey

            
	 	
              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. Walter Robinson

            
	 	
              Name:

            	
              W.
                Walter Robinson

            
	 	
              Title:

            	
              Senior
                Vice President

            


    

    



    
      
        
          Covenant
            Asset Management, Inc.

          
            Amendment
              No. 1 to Second Amended and Restated Credit Agreement

            Signature
              Page

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	 	
              SOVEREIGN
                BANK

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Brian Gallagher

            
	 	
              Name:

            	
              Brian
                Gallagher

            
	 	
              Title:

            	
              SVP

            


    

    
 

      Covenant
        Asset Management, Inc.

      
        Amendment
          No. 1 to Second Amended and Restated Credit Agreement

        Signature
          Page

      

    

     

     

    Back
      to Form 10-Q