CONSENT AND SECOND AMENDMENT TO AMENDED AND RESTATED NOTES PURCHASE AGREEMENT
Exhibit 10.8
CONSENT AND SECOND AMENDMENT TO
AMENDED AND RESTATED NOTES PURCHASE AGREEMENT
AMENDED AND RESTATED NOTES PURCHASE AGREEMENT
This CONSENT AND SECOND AMENDMENT TO THE AMENDED AND RESTATED NOTES PURCHASE AGREEMENT (this
“Amendment”), dated as of December 11, 2009 (the “Effective Date”), is made by and
among Roadrunner Transportation Services, Inc. (f/k/a Roadrunner Xxxxx Freight Systems, Inc.), a
Delaware corporation, Xxxxxxx Trucking, Inc., a Maine corporation, Big Rock Transportation, Inc.,
an Indiana corporation, Midwest Carriers, Inc., an Indiana corporation, Xxxxx Truck Brokers, Inc.,
a Maine corporation, and B&J Transportation, Inc., a Maine corporation (collectively, the
“Issuers”), and the undersigned Security Holders.
W I T N E S S E T H:
WHEREAS, the undersigned Security Holders and Issuers are parties to that certain Amended and
Restated Notes Purchase Agreement (as amended or otherwise modified from time to time, the
“NPA,”and capitalized terms used herein without definition shall have the meanings ascribed
to such terms in the NPA) dated as of March 14, 2007;
WHEREAS, the Parent desires to form a new subsidiary, Bullet Transportation Services, Inc., a
Delaware corporation (“Bullet Transportation”) for the purpose of acquiring certain assets
(the “Bullet Acquisition”) of Bullet Freight Systems, Inc., a California corporation (the
“Seller”), pursuant to that certain Asset Purchase Agreement (the “Asset Purchase
Agreement”), dated as of even date herewith, by and among the Parent, Bullet Transportation,
the Seller, and the Owners (as defined therein);
WHEREAS, to provide a portion of the financing for the Bullet Acquisition, (i) the Parent and
the Issuers desire to (x) issue Junior Subordinated Notes due February 28, 2013 (the “Junior
Notes”) in the aggregate original principal amount of $16,500,000, and (y) provide unsecured
guaranties of such subordinated debt, in each case pursuant to that certain Securities Purchase
Agreement, dated as of even date herewith, by and among the Parent, the Issuers, Bullet
Transportation, and the purchasers party thereto (the “SPA”); and (ii) the Parent and
certain of the Issuers desire to issue that certain Junior Subordinated Note due February 28, 2013,
in the aggregate original principal amount of $3,000,000, which shall be in form identical in all
material respects to the Junior Notes (the “Seller Note”), purchased by the Seller;
WHEREAS, absent the prior written consent of the Required Security Holders, the consummation
of the Bullet Acquisition, the execution, delivery, and performance of the SPA, and the issuance of
the Junior Notes and Seller Note would result in a breach of Sections 8.4, 8.5 and 8.18 of the NPA
and separate Events of Default under Section 10.4 of the NPA; and
WHEREAS, the Issuers have requested that the Required Security Holders (i) consent to the
consummation of the Bullet Acquisition, (ii) consent to the execution, delivery, and performance of
the SPA, (iii) consent to the issuance of the Junior Notes and Seller Note, and
(iv) amend the NPA
in certain respects as set forth herein to give effect to the foregoing, and the
Required Security Holders are willing to do so, subject to the terms and conditions contained
herein.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the undersigned Security Holders and
Issuers hereby agree as follows:
1. Consents.
(a) Subject to the satisfaction of the conditions set forth in Section 3 below and in reliance
on the representations and warranties set forth in Section 4 below, the undersigned Security
Holders hereby consent to the (i) consummation of the Bullet Acquisition, (ii) execution, delivery,
and performance of the SPA, and (iii) issuance of the Junior Notes and Seller Note. The foregoing
consent is expressly intended to be limited in scope and, except as otherwise expressly provided
herein, shall not be construed as a waiver, consent, or as an amendment or modification of the NPA.
(b) Except as expressly provided herein, the execution and delivery of this Amendment and the
consents and modifications effected hereby shall not: (i) constitute an extension, modification,
waiver, or consent of or with respect to any aspect of the NPA or the other Securities Documents;
(ii) extend the terms of the NPA or the due date of any of the Note Obligations; (iii) give rise to
any obligation on the part of any Security Holder to extend, modify, waive or consent to any term
or condition of the NPA or any other Securities Document; or (iv) give rise to any defenses or
counterclaims to any Security Holder’s right to compel payment of the Note Obligations or to
otherwise enforce its rights and remedies under the NPA and the other Securities Documents.
2. Amendments to the NPA.
(a) The second sentence of Section 3.2.4.3 of the NPA is hereby amended and restated in its
entirety as follows:
“After the repayment in full in cash of all Obligations under the Senior Credit Agreement and
the termination of all commitments thereunder, promptly, and in any event not more than ten (10)
Business Days following delivery of the calculation of Excess Cash Flow provided for in the
preceding sentence, the Issuers shall make an offer to use, if the Leverage Ratio, determined as of
the last day of such fiscal year (excepting the fiscal year ending on December 31, 2009), is equal
to or greater than 2.50 to 1.00, 50% of such Excess Cash Flow less any voluntary prepayments during
such fiscal year (excepting the fiscal year ending on December 31, 2009) of the Notes, to purchase
a principal amount of Notes such that such amount of Excess Cash Flow less such voluntary
prepayments equals the principal amount of such Notes plus the Applicable Premium thereon.”
(b) The fourth sentence of Section 5.2 of the NPA is hereby amended and restated in its
entirety as follows:
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“The Parent has no Subsidiaries other than Xxxxxxx LLC, Roadrunner, International Holdings,
and Bullet Transportation and has no equity investments in any Person.”
(c) The definition of “EBITDA” set forth in Appendix I to the NPA is hereby amended
and restated in its entirety, as follows:
“EBITDA” means, for any period, Consolidated Net Income for such period plus,
to the extent deducted in determining such Consolidated Net Income, Interest Expense, income tax
expense, depreciation, amortization for such period, transaction expenses incurred during such
period attributable to the Related Transactions (not exceeding $1,500,000 in the aggregate for all
such expenses), transaction expenses incurred during such period attributable to the Second
Amendment and the transactions (including without limitation the Bullet Acquisition) contemplated
therein (not exceeding $500,000 in the aggregate for all such expenses), cash expenses incurred
following September 30, 2006, not to exceed $1,250,000 in the aggregate, in connection with the
integration of the businesses of Roadrunner and Xxxxxxx LLC and other non-cash charges required by
GAAP (including, without limitation, those resulting from purchase accounting and the grant by
Parent of stock options and other equity-related incentives); provided, that (i) EBITDA for
each period set forth below shall be deemed to be the amount set forth below opposite such period:
| Month | Amount | |
April 1, 2006 through and including
June 30, 2006
|
$8,301,000 | |
July 1, 2006 through and including
September 30, 2006
|
$7,612,000 | |
October 1, 2006 through and
including December 31, 2006
|
$2,576,000 | |
January 1, 2007 through and
including January 31, 2007 and
February 1, 2007 through and
including February 28, 2007
|
Actual reported EBITDA of the Issuers for such months, subject to adjustments that are reasonably acceptable to the Purchasers and are consistent with the adjustments reflected in the EBITDA amounts specified above by dollar amounts. |
; and (ii) for each period set forth below, EBITDA for such period, as calculated in accordance
with the foregoing definition, shall further be increased by the amount set forth below for such
period:
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| Period | Amount | |
January 1, 2009 through and including March 31, 2009
|
$2,154,000 | |
April 1, 2009 through and including June 30, 2009
|
$2,153,000 | |
July 1, 2009 through and including September 30, 2009
|
$2,048,000 | |
October 1, 2009 through and including December 11, 2009
|
Actual reported EBITDA of Bullet Seller for such period, subject to adjustments that are reasonably acceptable to the Purchasers and are consistent with the adjustments reflected in the EBITDA amounts specified above by dollar amounts. |
| (d) | The definition of “Fixed Charge Coverage Ratio” set forth in Appendix I to the NPA is hereby amended and restated in its entirety, as follows: |
“Fixed Charge Coverage Ratio” means, for any Computation Period, the ratio of (a) the
total for such period of EBITDA plus Rental Expense minus the sum of income taxes
paid in cash by the Loan Parties and all unfinanced Capital Expenditures to (b) the sum for
such period of (i) cash Interest Expense plus (ii) regularly scheduled payments of
principal of Funded Debt (including the Term Loan but excluding (in each case, to the extent
otherwise included) the Revolving Loans and the Xxxxxxx Earn-out) plus (iii) Rental Expense
plus (iv) the aggregate amount distributed by Parent in connection with the repurchase of equity
securities of Parent plus (v) payments of dividends on the Preferred Stock;
provided, that, for purposes of this definition, (x) Rental Expenses, income taxes paid in
cash, unfinanced Capital Expenditures, cash Interest Expense and regularly scheduled payments of
principal of Funded Debt for each period set forth below shall be deemed to be the amount set forth
below for such period:
| Rental | Cash Income | Unfinanced Capital | ||||||||||
| Period | Expense | Taxes | Expenditures | |||||||||
April 1, 2006 through
and including June
30, 2006
|
$ | 2,489,000 | $ | (1,747,000 | ) | $ | 360,000 | |||||
July 1, 2006 through
and including
September 30, 2006
|
$ | 2,582,000 | $ | 148,000 | $ | 236,000 | ||||||
October 1, 2006
through and including
December 31, 2006
|
$ | 2,430,000 | $ | 84,000 | $ | 174,000 | ||||||
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| Cash Interest | Regularly Scheduled | |||||||
| Period | Expense | Payments of Principal | ||||||
April 1, 2006 through and
including June 30, 2006
|
$ | 2,406,000 | $ | 0 | ||||
July 1, 2006 through and
including September 30, 2006
|
$ | 2,363,000 | $ | 0 | ||||
October 1, 2006 through and
including December 31, 2006
|
$ | 2,731,000 | $ | 0 | ||||
; provided, further, that for each period set forth below, Rental Expenses, income
taxes paid in cash, unfinanced Capital Expenditures, cash Interest Expense and regularly scheduled
payments of principal of Funded Debt for such period, as calculated in accordance with the
foregoing definition, shall further be increased by the amount set forth below for such period:
| Rental | Cash Income | Unfinanced Capital | ||||||||||
| Period | Expense | Taxes | Expenditures | |||||||||
January 1, 2009
through and
including March 31,
2009 |
$ | 255,000 | $ | 0 | $ | 35,000 | ||||||
April 1, 2009
through and
including June 30,
2009 |
$ | 255,000 | $ | 0 | $ | 35,000 | ||||||
July 1, 2009
through and
including September
30, 2009 |
$ | 255,000 | $ | 0 | $ | 35,000 | ||||||
October 1, 2009
through and
including December
11, 2009 |
Applicable Proration | $ | 0 | $ | 35,000 | |||||||
| Cash Interest | Regularly Scheduled | |||||||
| Period | Expense | Payments of Principal | ||||||
January 1, 2009 through
and including March 31,
2009 |
$ | 157,500 | $ | 350,000 | ||||
April 1, 2009 through and
including June 30, 2009 |
$ | 157,500 | $ | 350,000 | ||||
July 1, 2009 through and
including September 30,
2009 |
$ | 157,500 | $ | 350,000 | ||||
October 1, 2009 through
and including December 11,
2009 |
Applicable Proration | $ | 350,000 | |||||
For purposes of the foregoing table, “Applicable Proration” means, with respect to any
column entry in such table (i.e. “Rental Expense” and “Cash Interest Expense”), the product of (i)
the dollar amount set forth in the cell immediately above the “Applicable Proration” reference
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multiplied by (ii) the ratio of (x) the number of days in the period for which the
Applicable Proration is measured over (y) ninety (90).
(e) The definition of “Maximum Senior Debt Amount” set forth in Appendix I to the NPA
is hereby amended by (i) replacing the “$90,000,000” set forth in clause (a) thereof with: “the
sum of (i) $90,000,000 plus (ii) the original principal amount of the Incremental Term Loan” and
(ii) replacing the “$9,000,000” set forth in clause (b) thereof with: “$5,000,000”.
(f) The definition of “Total Debt” set forth in Appendix I to the NPA is hereby
amended and restated in its entirety, as follows:
“Total Debt” means all Debt of the Parent and its Subsidiaries, determined on a
consolidated basis, excluding (a) contingent obligations in respect of Contingent Obligations
(except to the extent constituting Contingent Obligations in respect of Debt of a Person other than
the Parent and its Subsidiaries), (b) Hedging Obligations, (c) contingent obligations in respect of
undrawn letters of credit, and (d) the Specified Subordinated Debt.
(g) Appendix I to the NPA is hereby amended to add the following definitions in their
appropriate alphabetical order:
“Bullet Seller” means Bullet Freight Systems, Inc., a California corporation.
“Bullet Transportation” means Bullet Transportation Services, Inc., a Delaware
corporation.
“International Holdings” means International Transportation Holdings, Inc., a
Delaware corporation.
“Second Amendment” means that certain Consent and Second Amendment to the Amended and
Restated Notes Purchase Agreement, dated December 11, 2009, by and among the Issuers and the
Security Holders party thereto.
“Specified Subordinated Debt” means Debt of the Parent and its
Subsidiaries arising under (i) that certain Securities Purchase Agreement, dated as of December 11,
2009, among the Parent, its Subsidaries, and the “Purchasers” identified therein, as in effect on
such date, and (ii) that certain Junior Subordinated Note, dated as of December 11, 2009, in the
original principal amount of $3,000,000 executed by certain of the Parent and its Subsidiaries in
favor of Bullet Seller and/or one or more of its shareholders, as in effect on such date.
(h) The Schedules to the NPA are hereby amended and restated in their entirety as set forth on
Exhibit A attached hereto. Any references in the NPA to disclosures on the Schedules being
made as of the Closing Date shall be deemed to be made as of the date of this Amendment.
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3. Conditions. The effectiveness of this Amendment is subject to the satisfaction of
the following conditions precedent (unless specifically waived in writing by the undersigned
Security Holders):
(a) the Issuers shall have delivered to the undersigned Security Holders each of the fully
executed documents, agreements, and instruments listed on Exhibit B attached hereto,
together with such other documents, agreements, and instruments as the undersigned Security Holders
may require or reasonably request;
(b) the Bullet Acquisition shall have been consummated in accordance with the terms of the
Asset Purchase Agreement and in compliance with applicable law;
(c) the Issuers shall have issued the Junior Notes and the Seller Note;
(d) the Issuers shall have paid to each Security Holder who executes this Amendment on or
before December 11, 2009, a fee equal to 25 basis points of the sum of the outstanding principal
balance of the Notes owing to such Security Holder, which shall be paid in cash and fully earned
and non-refundable when paid;
(e) the Issuers shall have satisfied in full all unpaid costs and expenses (including, without
limitation, attorney fees and expenses, including reasonable fees of in-house counsel of American
Capital, Ltd.) incurred by the undersigned Security Holders in connection with the Securities
Documents (including, without limitation, all costs and expenses incurred by the undersigned
Security Holders in connection with the preparation, due diligence, administration and enforcement
of all documentation contemplated by this Amendment); and
(f) no Default or Event of Default shall have occurred and be continuing.
4. Representations and Warranties. To induce the undersigned Security Holders to
enter into this Amendment, each Issuer hereby represents and warrants to the undersigned Security
Holders that:
(a) the execution, delivery and performance by each Issuer of this Amendment and each of the
other agreements, instruments and documents contemplated hereby are within each Issuer’s corporate
power, have been duly authorized by all necessary corporate action, have received all necessary
governmental approval (if any shall be required), and do not and will not contravene or conflict
with any provision of law applicable to any Issuer, the certificate of formation, operating
agreement, and any other organizational document of any Issuer, any order, judgment or decree of
any court or governmental agency, or any agreement, instrument or document binding upon any Issuer
or any of its property (including, without limitation, the Senior Credit Documents);
(b) each of the NPA and the other Securities Documents, as amended by this Amendment and the
documents and agreements contemplated thereby, are the legal, valid and binding obligation of the
Issuers, enforceable against the Issuers in accordance with its terms;
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(c) except to the extent amended hereby, the representations and warranties contained in the
NPA and the other Securities Documents are true and accurate as of the Effective Date with the same
force and effect as if such had been made on and as of the Effective Date; and
(d) the Issuers have performed all of their obligations under the NPA and the other Securities
Documents to be performed by the Issuers on or before the Effective Date, and as of the Effective
Date, the Issuers are in compliance with all applicable terms and provisions of the NPA and the
other Securities Documents to be observed and performed by the Issuers and no Event of Default or
other event which upon notice or lapse of time or both would constitute an Event of Default has
occurred.
5. Counterparts. This Amendment may be executed in any number of counterparts and by
the different parties on separate counterparts, and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the same Amendment.
Receipt by telecopy or electronic transmission of any executed signature page to this Amendment
shall constitute effective delivery of such signature page.
6. Continued Effectiveness. The undersigned Security Holders and the Issuers hereby
agree that all references to the NPA which are contained in any of the Securities Documents shall
refer to the NPA as amended by this Amendment. Except as specifically set forth herein, the NPA
and each of the Securities Documents shall continue in full force and effect according to its and
their respective terms.
7. Costs and Expenses. Each Issuer hereby agrees that all expenses incurred by the
undersigned Security Holders in connection with the preparation, negotiation, and closing of the
transactions contemplated hereby, including, without limitation, reasonable attorneys’ fees and
expenses, shall be part of the Note Obligations.
8. Severability. Any provision of this Amendment that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.
[signature pages follow]
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IN WITNESS WHEREOF, this Amendment has been executed as of the day and year first written
above.
| ROADRUNNER TRANSPORTATION SERVICES, INC. | ||||||
| By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Vice President | |||||
| XXXXXXX TRUCKING, INC. | ||||||
| By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Vice President | |||||
| BIG ROCK TRANSPORTATION, INC. | ||||||
| By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Vice President | |||||
| MIDWEST CARRIERS, INC. | ||||||
| By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Vice President | |||||
| XXXXX TRUCK BROKERS, INC. | ||||||
| By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Vice President | |||||
| B&J TRANSPORTATION, INC. | ||||||
| By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Vice President | |||||
| REQUIRED SECURITY HOLDERS: | ||||||
| SANKATY CREDIT OPPORTUNITIES, L.P. | ||||||
| By: | /s/ Xxxxxxx Xxxxx | |||||
| Name: | Xxxxxxx Xxxxx | |||||
| Title: | Managing Director | |||||
| SANKATY CREDIT OPPORTUNITIES II, L.P. | ||||||
| By: | /s/ Xxxxxxx Xxxxx | |||||
| Name: | Xxxxxxx Xxxxx | |||||
| Title: | Managing Director | |||||
| RGIP, LLC | ||||||
| By: | /s/ X. Xxxxxxxx Malt | |||||
| Name: | X. Xxxxxxxx Malt | |||||
| Title: | Managing Member | |||||
| REQUIRED SECURITY HOLDERS: | ||||||
| ACAS BUSINESS LOAN TRUST 2005-1, a Delaware statutory trust. | ||||||
| By: | American Capital, Ltd., its Servicer | |||||
| By: | /s/ Xxxxxx Xxxxx | |||||
| Name: | Xxxxxx Xxxxx | |||||
| Title: | Vice President & Principal | |||||
| AMERICAN CAPITAL, LTD. | ||||||
| By: | /s/ Xxxxxx Xxxxx | |||||
| Name: | Xxxxxx Xxxxx | |||||
| Title: | Vice President & Principal | |||||
