Execution Version PHX 332633099v6 INVESTMENT AGREEMENT dated as of March 1, 2018 by and among Roadrunner Transportation Systems, Inc., Elliott Associates, L.P. and Brockdale Investments LP
Execution Version
PHX 332633099v6
INVESTMENT AGREEMENT
dated as of March 1, 2018
by and among
Roadrunner Transportation Systems, Inc.,
Xxxxxxx Associates, L.P.
and
Brockdale Investments LP
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PHX 332633099v6
Table of Contents
Page
ARTICLE I
PURCHASE; CLOSING
Section 1.1 Purchase .............................................................................................................................. 1
Section 1.2 Closing ................................................................................................................................ 1
Section 1.3 Closing Conditions ............................................................................................................. 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 2.1 Organization and Authority ................................................................................................ 3
Section 2.2 Capitalization ...................................................................................................................... 4
Section 2.3 Authorization ...................................................................................................................... 5
Section 2.4 Sale and Status of Securities ............................................................................................... 6
Section 2.5 SEC Documents; Financial Statements .............................................................................. 6
Section 2.6 Undisclosed Liabilities ....................................................................................................... 7
Section 2.7 Brokers and Finders ............................................................................................................ 7
Section 2.8 Litigation ............................................................................................................................. 7
Section 2.9 Taxes ................................................................................................................................... 7
Section 2.10 Permits and Licenses .......................................................................................................... 8
Section 2.11 Environmental Matters ....................................................................................................... 8
Section 2.12 Title ..................................................................................................................................... 9
Section 2.13 Intellectual Property ............................................................................................................ 9
Section 2.14 Employee Benefits/Labor ................................................................................................... 9
Section 2.15 Intentionally Omitted ........................................................................................................ 10
Section 2.16 Registration Rights ........................................................................................................... 11
Section 2.17 Compliance with Laws ..................................................................................................... 11
Section 2.18 Absence of Changes .......................................................................................................... 11
Section 2.19 Anti-Corruption ................................................................................................................ 11
Section 2.20 Trade Controls .................................................................................................................. 12
Section 2.21 Listing and Maintenance Requirements ............................................................................ 12
Section 2.22 Material Contracts ............................................................................................................. 12
Section 2.23 Insurance ........................................................................................................................... 13
Section 2.24 No Additional Representations ......................................................................................... 13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Section 3.1 Organization and Authority .............................................................................................. 14
Section 3.2 Authorization .................................................................................................................... 14
Section 3.3 Purchase for Investment .................................................................................................... 14
Section 3.4 Financial Capability .......................................................................................................... 15
Section 3.5 Brokers and Finders .......................................................................................................... 15
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ARTICLE IV
COVENANTS
Section 4.1 Filings; Other Actions ....................................................................................................... 15
Section 4.2 Reasonable Best Efforts to Close ...................................................................................... 16
Section 4.3 Confidentiality .................................................................................................................. 16
Section 4.4 State Securities Laws ........................................................................................................ 16
Section 4.7 Tax Matters ....................................................................................................................... 16
ARTICLE V
MISCELLANEOUS
Section 5.1 Survival ............................................................................................................................. 17
Section 5.2 Reserved............................................................................................................................ 17
Section 5.3 Amendment; Waiver ......................................................................................................... 17
Section 5.4 Counterparts; Electronic Transmission ............................................................................. 18
Section 5.5 Governing Law ................................................................................................................. 18
Section 5.6 WAIVER OF JURY TRIAL ............................................................................................. 18
Section 5.7 Notices .............................................................................................................................. 18
Section 5.8 Entire Agreement .............................................................................................................. 19
Section 5.9 Assignment ....................................................................................................................... 19
Section 5.10 Interpretation; Other Definitions ....................................................................................... 19
Section 5.11 Captions ............................................................................................................................ 26
Section 5.12 Severability ....................................................................................................................... 26
Section 5.13 No Third Party Beneficiaries ............................................................................................ 26
Section 5.14 Public Announcements ..................................................................................................... 26
Section 5.15 Specific Performance ........................................................................................................ 27
Section 5.16 Termination ....................................................................................................................... 27
Section 5.17 Effects of Termination ...................................................................................................... 27
Section 5.18 Non-Recourse ................................................................................................................... 28
Section 5.19 Disclosure Letter ............................................................................................................... 28
Exhibit A: Form of Certificate of Designations
Schedule A: Purchaser Allocations
PHX 332633099v6
INVESTMENT AGREEMENT, dated as of March 1, 2018 (this “Agreement”), by and among
Roadrunner Transportation Systems, Inc., a Delaware corporation (the “Company”), Xxxxxxx
Associates, L.P., a Delaware limited partnership, and Brockdale Investments LP, a Delaware limited
partnership (each a “Purchaser,” and collectively, the “Purchasers”).
RECITALS:
WHEREAS, on or prior to the date hereof, the Company has adopted and filed with the Secretary
of State of the State of Delaware a Certificate of Designations, Preferences and Rights in respect of the
Company’s Series E-1 Cumulative Redeemable Preferred Stock in the form attached hereto as Exhibit A
(the “Certificate of Designations”), in order to create a series of preferred stock, par value $0.01 per share,
designated as Series E-1 Cumulative Redeemable Preferred Stock (the “Preferred Stock”);
WHEREAS, the Company proposes to issue and sell to the Purchasers (or to their assignees
pursuant to Section 5.9), in accordance with the percentages set forth on Schedule A, shares of Preferred
Stock subject to the terms and conditions set forth in this Agreement; and
WHEREAS, capitalized terms used in this Agreement have the meanings set forth in Section
5.10.
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows:
ARTICLE I
PURCHASE; CLOSING
Section 1.1 Purchase. On the terms and subject to the conditions herein, from time to time
on each Closing Date, the Company agrees to sell and issue to the Purchasers (or their assignees), and the
Purchasers agree to purchase (or to cause their assignees to purchase) from the Company in accordance
with the percentages set forth on Schedule A, an aggregate of up to 54,750 shares of Preferred Stock (the
“Purchased Shares”) at a purchase price of $1,000 per share for the first 17,500 Purchased Shares, $960
per share for the next 18,228 Purchased Shares, and $920 per share for the final 19,022 Purchased Shares,
free and clear of any Liens (other than restrictions arising under the Certificate of Incorporation (as
defined below), restrictions arising under applicable securities Laws and restrictions set forth in the
Stockholders’ Agreement).
Section 1.2 Closing.
(a) Each closing of a purchase by the Purchasers of Purchased Shares pursuant to this
Agreement (each, a “Closing”) shall take place remotely via the electronic exchange of documents and
signatures at 10:00 a.m. New York time on the fifth (5th) business day after delivery of the relevant Put
Notice, subject to the satisfaction or waiver of the conditions set forth in this Agreement, including in
Section 1.3 (other than those conditions that by their nature are to be satisfied by actions taken at such
Closing, but subject to their satisfaction) or at such other date, time and place as the Company and the
Purchasers agree (each, a “Closing Date”).
(b) Subject to the satisfaction or waiver at or prior to each Closing of the applicable
conditions to the Closing in Section 1.3, at each Closing:
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(1) the Company will deliver to each Purchaser (i) certificates representing the
Purchased Shares purchased by such Purchaser and (ii) all other documents, instruments and
writings required to be delivered by the Company to such Purchaser pursuant to this Agreement;
and
(2) each Purchaser will deliver or cause to be delivered (i) to one or more bank
accounts designated by the Company in writing at least two (2) business days prior to the
applicable Closing Date, such Purchaser’s share of the Purchase Price (as determined in
accordance with the percentages set forth on Schedule A) by wire transfer of immediately
available funds and (ii) all other documents, instruments and writings required to be delivered by
such Purchaser to the Company pursuant to this Agreement.
Section 1.3 Closing Conditions.
(a) The obligation of the Purchasers, on the one hand, and the Company, on the other hand,
to effect each Closing is subject to the satisfaction or waiver by the Purchasers and the Company at or
prior to the Closing of the following condition: no temporary restraining order, preliminary or permanent
injunction or other judgment or order issued by any Governmental Entity, and no Law shall be in effect
restraining, enjoining, making illegal or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement.
(b) The obligation of the Purchasers to effect each Closing is also subject to the satisfaction
by the Company or waiver by the Purchasers at or prior to the Closing of the following conditions:
(1) (i) the representations and warranties of the Company set forth in Article II
hereof (other than Sections 2.1, 2.2, 2.3(a), 2.4, 2.7 , 2.9(e), 2.21, and 2.22(d)) shall be true and
correct (disregarding all qualifications or limitations as to materiality or Company Material
Adverse Effect) as of the date of this Agreement and as of the applicable Closing Date as though
made on and as of such date (except to the extent that any such representation or warranty speaks
to an earlier date, in which case such representation or warranty shall be true and correct as of
such earlier date), except where the failure of such representations and warranties to be so true
and correct would not, individually or in the aggregate, have a Company Material Adverse Effect,
and (ii) the representations and warranties of the Company set forth in Sections 2.1, 2.2, 2.3(a),
2.4, 2.7, 2.9(e), 2.21 and 2.22(d) shall be true and correct in all but de minimis respects as of the
date of this Agreement and as of the applicable Closing Date as though made on and as of such
date (except to the extent that any such representation or warranty speaks to an earlier date, in
which case such representation or warranty shall be true and correct as of such earlier date);
(2) the Company shall have performed in all material respects all obligations
required to be performed by it pursuant to this Agreement prior to the Closing;
(3) each Purchaser shall have received a certificate signed on behalf of the Company
by a duly authorized senior executive officer of the Company, certifying to the effect that the
conditions set forth in Sections 1.3(b)(1) and (2) have been satisfied; and
(4) each condition set forth in paragraphs (a), (c), (d), and (e) of Section 2 of the
Commitment Letter.
(c) The obligation of the Company to effect each Closing is also subject to the satisfaction by
the Purchasers or waiver by the Company prior to the Closing of the following conditions:
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(1) the representations and warranties of the Purchasers set forth in Article III hereof
shall be true and correct as of the date of this Agreement and as of the applicable Closing Date as
though made on and as of such date (except to the extent that any such representation or warranty
speaks of an earlier date, in which case such representation or warranty shall be true and correct
as of such date), except where the failure of such representations and warranties to be so true and
correct would not, individually or in the aggregate, reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated by this Agreement or the
ability of the Purchasers to fully perform their covenants and obligations under this Agreement;
(2) the Purchasers shall have performed in all material respects all obligations
required to be performed by them pursuant to this Agreement prior to the Closing; and
(3) the Company shall have received a certificate signed on behalf of each Purchaser
by a duly authorized officer of such Purchaser certifying to the effect that the conditions set forth
in Section 1.3(c)(1) and (2) have been satisfied.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as expressly disclosed in the SEC Documents publicly available before the date of this
Agreement (but excluding any disclosure set forth in any risk factor section, any disclosures in any
section relating to forward-looking statements and any other disclosures included therein to the extent
they are predictive or forward-looking in nature) or as set forth in a correspondingly identified section of
a letter provided to the Purchasers by the Company on the date hereof (such letter, collectively, the
“Disclosure Letter”), the Company represents and warrants to each Purchaser, as of the date hereof and as
of each Closing Date (except to the extent made only as of a specified date, in which case as of such
date), that:
Section 2.1 Organization and Authority.
(a) The Company is a corporation duly organized and validly existing under the laws of the
State of Delaware, has all requisite corporate power and authority to own its properties and conduct its
business as presently conducted, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so
qualified and where failure to be so qualified would, individually or in the aggregate, have a Company
Material Adverse Effect. True and accurate copies of the certificate of incorporation of the Company (the
“Certificate of Incorporation”) and the bylaws of the Company (the “Bylaws”), each as in effect as of the
date of this Agreement, have been made available to the Purchasers prior to the date hereof.
(b) Each Company Subsidiary is duly organized and validly existing under the laws of its
jurisdiction of organization, has all requisite corporate or other applicable entity power and authority to
own its properties and conduct its business as presently conducted, is duly qualified to do business and is
in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and where failure to be so qualified would, individually or in the
aggregate, have a Company Material Adverse Effect. As used herein, “Subsidiary” means, with respect
to any person, any corporation, partnership, joint venture, limited liability company, or other entity (i) of
which such person or a subsidiary of such person is a general partner or (ii) of which a majority of the
voting securities or other voting interests, or a majority of the securities or other interests which have by
their terms ordinary voting power to elect a majority of the board of directors or persons performing
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similar functions with respect to such entity, is directly or indirectly owned by such person and/or one or
more subsidiaries thereof; and “Company Subsidiary” means any Subsidiary of the Company.
Section 2.2 Capitalization.
(a) The authorized capital stock of the Company consists of 105,000,000 shares of Common
Stock and 15,005,000 shares of preferred stock, par value $0.01 per share, 5,000 of which shares of
preferred stock are designated as Series A Redeemable Preferred Stock, 155,000 of which shares of
preferred stock are designated as Series B Preferred Stock, 55,000 of which shares of preferred stock are
designated as Series C Preferred Stock, 100 of which shares of preferred stock are designated as Series D
Preferred Stock, 90,000 of which shares of preferred stock are designated as Series E Preferred Stock,
54,750 of which shares of preferred stock are designated as Series E-1 Preferred Stock, and 240,500 of
which shares of preferred stock are designated as Series F Preferred Stock. As of the close of business on
February 22, 2018 (the “Capitalization Date”), there were: 38,423,391 shares of Common Stock issued
and outstanding and no shares of Series A Redeemable Preferred Stock issued and outstanding, 155,000
shares of Series B Preferred Stock issued and outstanding, 55,000 shares of Series C Preferred Stock
issued and outstanding, 100 shares of Series D Preferred Stock issued and outstanding, 37,500 shares of
Series E Preferred Stock issued and outstanding, no shares of Series E-1 Preferred Stock issued and
outstanding, and no shares of Series F Preferred Stock issued and outstanding. As of the close of business
on the Capitalization Date, (i) 1,249,533 shares of Common Stock were reserved for issuance upon the
exercise of stock options outstanding on such date that were granted pursuant to the Company’s 2010
Incentive Compensation Plan (the “2010 Incentive Compensation Plan”), the Company’s Key Employee
Equity Plan and the Group Transportation Services Holdings, Inc. Key Employee Equity Plan (“Company
Stock Options”), of which 907,336 were then unvested, (ii) 357,629 shares of Common Stock were
reserved for issuance upon the vesting of restricted stock units outstanding on such date that were granted
pursuant to the 2010 Incentive Compensation Plan (“Company RSUs”), (iii) 71,829 shares of Common
Stock were reserved for issuance pursuant to vested Company RSUs, (iv) 361,152 shares of Common
Stock were reserved for issuance upon the vesting of performance-based restricted stock units outstanding
on such date that were granted pursuant to the 2010 Incentive Compensation Plan (“Company PRSUs”)
(at “target” levels of performance), (v) 558,956 shares of Common Stock were available for future awards
under the 2010 Incentive Compensation Plan, (vi) 379,572 shares of Common Stock were reserved for
issuance upon the exercise of warrants outstanding on such date that were granted to the Purchasers
pursuant to the Warrant Agreement dated as of May 2, 2017 (the “Company Warrants”) and (vii) no
shares of Common Stock were held by the Company in its treasury. All of the issued and outstanding
shares of Common Stock have been duly authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights. From the Capitalization Date through and as of the date of this Agreement,
no other shares of Common Stock or preferred stock have been issued other than shares of Common
Stock issued in respect of the exercise of Company Stock Options or in respect of the vesting of Company
RSUs or Company PRSUs in the ordinary course of business. Section 2.2(a) of the Disclosure Letter sets
forth as of the Capitalization Date a complete and correct list of all outstanding (w) Company Stock
Options, (x) Company RSUs, (y) Company PSRUs, and (z) Company Warrants, the number of shares of
Common Stock issuable thereunder or with respect thereto and the exercise price (if any), and the
Company has granted no other such awards since the Capitalization Date. The Company does not have
outstanding shareholder purchase rights or a “poison pill” or any similar arrangement in effect.
(b) Section 2.2(b) of the Disclosure Letter sets forth the name and jurisdiction of
organization of each Company Subsidiary. All of the issued and outstanding shares of capital stock or
other equity interests of each Company Subsidiary (x) have been duly authorized, are validly issued and
are fully paid, nonassessable and free of preemptive rights and (y) are owned by the owners thereof as set
out in Section 2.2(b) of the Disclosure Letter free and clear of any Liens. No Company Subsidiary has or
is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any
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character calling for the purchase or issuance of any shares of capital stock, any other equity security or
any Voting Debt (as defined below) of each such Company Subsidiary or any securities representing the
right to purchase or otherwise receive any shares of capital stock, any other equity security or Voting
Debt of each such Company Subsidiary.
(c) No bonds, debentures, notes or other Indebtedness having the right to vote (or convertible
into or exchangeable for securities having the right to vote) on any matters on which the stockholders of
the Company may vote (“Voting Debt”) are issued and outstanding. Except (i) pursuant to any cashless
exercise provisions of any Company Stock Options or Company Warrants or pursuant to the surrender of
shares to the Company or the withholding of shares by the Company to cover tax withholding obligations
under Company Stock Options, Company RSUs or Company PRSUs, and (ii) as set forth in Section
2.2(a), the Company does not have and is not bound by any outstanding options, preemptive rights, rights
of first offer, warrants, calls, commitments or other rights or agreements calling for the purchase or
issuance of, or securities or rights convertible into, or exchangeable for, any shares of Common Stock or
any other equity securities of the Company or Voting Debt or any securities representing the right to
purchase or otherwise receive any shares of capital stock of the Company (including any rights plan or
agreement).
Section 2.3 Authorization.
(a) The Company has the corporate power and authority to enter into this Agreement and the
other Transaction Documents and to carry out its obligations hereunder and thereunder. The execution,
delivery and performance of this Agreement and the other Transaction Documents by the Company and
the consummation of the transactions contemplated hereby and thereby have been duly authorized by the
board of directors of the Company (the “Board of Directors”). This Agreement has been, and (as of the
first Closing) the other Transaction Documents will be, duly and validly executed and delivered by the
Company and, assuming due authorization, execution and delivery by the Purchasers, this Agreement is,
and (as of each Closing) each of the other Transaction Documents will be, a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms (except as enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors’ rights or by general equity
principles). No other corporate proceedings are necessary for the execution and delivery by the Company
of this Agreement or the other Transaction Documents, and no other corporate proceedings (except to the
extent set forth in the other Transaction Documents) are necessary for the performance by the Company
of its obligations hereunder or thereunder or the consummation by it of the transactions contemplated
hereby or thereby. The total number of directors on the Board of Directors is 12.
(b) Neither the execution and delivery by the Company of this Agreement or the other
Transaction Documents, nor the consummation of the transactions contemplated hereby or thereby, nor
compliance by the Company with any of the provisions hereof or thereof, will (i) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of, or result in the creation of
any Lien upon any of the properties or assets of any Company Group Member under any of the terms,
conditions or provisions of (x) the Certificate of Incorporation, the Certificate of Designations, the
Bylaws or the certificate of incorporation, charter, articles of association, bylaws or other governing
instrument of any Company Subsidiary or (y) any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which any Company Group Member is a party or by
which it may be bound, or to which any Company Group Member or any of the properties or assets of any
Company Group Member may be subject, or (ii) violate any law, statute, ordinance, rule, regulation,
permit, franchise or any judgment, ruling, order, writ, injunction or decree applicable to any Company
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Group Member or any of its respective properties or assets, except in the case of clauses (i)(y) and (ii) for
such violations, conflicts and breaches as would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(c) Other than the securities or blue sky laws of the various states, no notice to, registration,
declaration or filing with, exemption or review by, or authorization, order, consent or approval of any
Governmental Entity, nor expiration or termination of any statutory waiting period, is necessary for the
consummation by the Company of the transactions contemplated by this Agreement or the other
Transaction Documents except as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole.
Section 2.4 Sale and Status of Securities.
(a) Subject to the accuracy of the representations made by the Purchasers in Section 3.3, the
offer, sale and issuance of the Purchased Shares (i) has been and will be made in compliance with
applicable exemptions from the registration and prospectus delivery requirements of the Securities Act
and (ii) will have been registered or qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable material blue sky laws.
(b) The rights, preferences, privileges and restrictions of the Preferred Stock are as stated in
the Certificate of Incorporation and the Certificate of Designations.
Section 2.5 SEC Documents; Financial Statements.
(a) Except as set forth on Section 2.5 of the Disclosure Letter, the Company has filed all
required reports, proxy statements, forms, and other documents with the Securities and Exchange
Commission (the “SEC”) since January 1, 2016 (collectively, the “SEC Documents”). Each of the SEC
Documents, as of its respective date, complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents and, except as set forth on Section 2.5 of the
Disclosure Letter, or to the extent that information contained in any SEC Document has been revised or
superseded by a later filed SEC Document filed and publicly available prior to the date of this Agreement,
none of the SEC Documents contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) Except as set forth on Section 2.5 of the Disclosure Letter, the Company (i) has
implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Exchange Act) that are reasonably designed to ensure that material information relating to the Company
Group is made known to the individuals responsible for the preparation of the Company’s filings with the
SEC and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the
Company’s outside auditors and the Board of Director’s audit committee (A) any significant deficiencies
and material weaknesses in the design or operation of internal controls over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act) that are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report financial information and (B) any fraud,
whether or not material, that involves management or other employees who have a significant role in the
Company’s internal controls over financial reporting.
(c) There is no transaction, arrangement or other relationship between the Company and/or
any of its Subsidiaries and an unconsolidated or other off-balance sheet entity that is required to be
disclosed by the Company in its SEC Documents and is not so disclosed.
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(d) The Company has delivered to the Purchasers a copy of the Company’s audited financial
statements as of and for the year ended December 31, 2016 and the Company will deliver to the
Purchasers as soon as reasonably practicable a copy of the Company’s audited financial statements as of
and for the year ended December 31, 2017 (the “Company Financial Statements”). The Company
Financial Statements present fairly in all material respects the Company’s consolidated financial
condition, results of operations and cash flows for the dates or periods indicated thereon. The Company
Financial Statements have been prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”) applied in all material respects on a consistent basis throughout the periods
indicated.
Section 2.6 Undisclosed Liabilities. Except as set forth on Section 2.6 of the Disclosure
Letter and except for (i) those liabilities that are reflected or reserved for in the Company Financial
Statements, (ii) liabilities incurred since December 31, [2016] in the ordinary course of business
consistent with past practice (it being agreed that a violation of Law in any material respect or a material
litigation or other adverse proceeding shall not be deemed ordinary course), (iii) liabilities incurred
pursuant to the transactions contemplated by this Agreement and the Transaction Documents and (iv) (x)
liabilities that would be required to be included on a balance sheet prepared in accordance with GAAP
that would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a
whole, and (y) other liabilities that would not, individually or in the aggregate, have a Company Material
Adverse Effect, the Company Group does not have any liabilities or obligations of any nature whatsoever
(whether accrued, absolute, contingent or otherwise).
Section 2.7 Brokers and Finders. No Company Group Member and none of their respective
officers, directors, employees or agents has employed any broker or finder or incurred any liability for
any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has
acted directly or indirectly for the Company in connection with this Agreement or the transactions
contemplated hereby.
Section 2.8 Litigation. Except as set forth on Section 2.8 of the Disclosure Letter, there is no
action, suit, proceeding or investigation pending or, to the Knowledge of the Company, threatened in
writing (including “cease and desist” letters or invitations to take patent license) against, nor any
outstanding judgment, order, writ or decree against, any Company Group Member or any of its respective
assets before or by any Governmental Entity which in the aggregate are, or if adversely determined,
would reasonably be expected to be, materially adverse to the Company Group, taken as a whole. Except
as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a
whole, no Company Group Member is in default with respect to any judgment, order or decree of any
Governmental Entity.
Section 2.9 Taxes.
(a) Except as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole:
(1) Each Company Group Member has duly and timely filed (taking into account
applicable extensions) all Tax Returns required to have been filed, such Tax Returns were
accurate in all material respects, and all Taxes due and payable by the Company Group (whether
or not shown on any Tax Return) have been timely paid, except for Taxes which are being
contested in good faith and by appropriate proceedings and for which adequate reserves have
been established in accordance with GAAP;
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(2) All Taxes required to be withheld, collected or deposited by or with respect to
each Company Group Member have been timely withheld, collected or deposited as the case may
be and, to the extent required, have been paid to the relevant taxing authority except with respect
to matters for which adequate reserves have been established in accordance with GAAP; and
(3) There are no liens or encumbrances for Taxes upon the assets of any Company
Group Member except for statutory liens for current Taxes not yet due or liens for Taxes that are
being contested in good faith and by appropriate proceedings and in respect of which adequate
reserves have been established in accordance with GAAP.
(b) Except as set forth on Section 2.9 of the Disclosure Letter, no unresolved material
deficiencies for any Tax Returns referred to in Section 2.9(a)(1) have been proposed or assessed against
or with respect to any Company Group Member (and there is no outstanding audit, assessment, dispute or
claim concerning any material Tax liability of any Company Group Member pending or raised) in each
case by any taxing authority in writing to any Company Group Member, except with respect to matters
for which adequate reserves have been established in accordance with GAAP.
(c) No Company Group Member has engaged in, or has any material liability or material
obligation with respect to, any “listed transaction” within the meaning of Treasury Regulations Section
1.6011-4(c).
(d) The Company has not been a “distributing corporation” or a “controlled corporation” in
any distribution occurring during the last two (2) years intended to qualify under Section 355 of the Code.
(e) Each Company Group Member is not and does not expect to become a “passive foreign
investment company” within the meaning of Section 1297 of the Code.
Section 2.10 Permits and Licenses. The members of the Company Group possess all
certificates, authorizations, approvals, licenses and permits issued by each Governmental Entity necessary
to conduct their respective businesses as presently conducted (the “Permits”), except where the failure to
possess any such Permits would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole. All material Permits are valid and in full force and effect, and no
Company Group Member is in default under, or the subject of a proceeding for suspension, revocation or
cancellation of, any of the Permits, except where the failure to possess any such Permits, individually or
in the aggregate, would not reasonably be expected to be materially adverse to the Company Group, taken
as a whole. The completion of the transactions contemplated by this Agreement will not result in any
material Permit ceasing to be valid and in full force and effect, nor shall it result in any material Permit
becoming liable for revocation, termination or cancellation.
Section 2.11 Environmental Matters. The Company Group is, and since December 31, 2014
has been, in compliance with all applicable Environmental Laws, except where failure to be in such
compliance would not, individually or in the aggregate, be materially adverse to the Company Group,
taken as a whole. Since December 31, 2014, no Company Group Member has received from any person
any written notice alleging that such Company Group Member is not in compliance with, or has material
liability under, any Environmental Law, including any investigative, corrective or remedial obligation,
other than any such violation or liability that has been fully and finally resolved and for which there are
no additional obligations. There have been no Releases of or exposure to Hazardous Substances at any
location that would reasonably be expected to result in material liability to the Company Group, taken as
a whole.
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Section 2.12 Title. Each Company Group Member (i) has good and marketable title to its
property that is owned real property, (ii) has valid leases to its property that is leased real property and
(iii) has good and valid title to or a valid leaseholder interest in all of its other property, other than
negligible assets not material to the operations of any Company Group Member, in each case, except as
would not, individually or in the aggregate, have or reasonably be expected to have a Company Material
Adverse Effect.
Section 2.13 Intellectual Property. Except as would not, individually or in the aggregate, be
materially adverse to the Company Group, taken as a whole:
(a) the Company Group exclusively owns, free and clear of all Liens (other than licenses of
Intellectual Property and any restriction or covenant associated with any license of Intellectual Property),
(i) all Intellectual Property for which registrations and applications have been filed in their names that are
not expired or abandoned, which registrations are subsisting and unexpired, and valid and enforceable,
and (ii) all of the other proprietary Intellectual Property used in the conduct of the business of the
Company Group that is not used pursuant to a license;
(b) the Company Group owns or has a valid right to use all Intellectual Property necessary
and sufficient to conduct the business of the Company Group as presently conducted;
(c) the conduct of the business of the Company Group does not infringe, dilute,
misappropriate or otherwise violate the Intellectual Property of any third party, and, to the Knowledge of
the Company, no person is infringing, diluting, misappropriating or otherwise violating any Intellectual
Property owned by any Company Group Member; and
(d) neither the Company Group nor any third Person working on behalf of them, has had a
breach of security or an incident of unauthorized access, disclosure, use, corruption, destruction or loss of
any data or non-public information that the Company Group (or a third Person on behalf of them)
collects, stores, uses, maintains or transmits.
Section 2.14 Employee Benefits/Labor.
(a) Except as would not, individually or in the aggregate, have a Company Material Adverse
Effect, (i) each Plan complies with, and has been operated and administered in compliance with, its terms
and all applicable Laws (including ERISA and the Code and similar provisions of non-U.S. Law), (ii) the
Company Group has filed all reports, returns, notices, and other documentation required by applicable
Law (including ERISA and the Code and similar provisions of non-U.S. Law) to be filed with any
Governmental Entity with respect to each Plan, (iii) with respect to any Plan, no actions, Liens, lawsuits,
claims or complaints (other than routine claims for benefits, appeals of such claims and domestic relations
order proceedings) are pending or, to the Knowledge of the Company, threatened, and, to the Knowledge
of the Company, no facts or circumstances exist that would reasonably be expected to give rise to any
such actions, Liens, lawsuits, claims or complaints, (iv) (x) none of the Plans are presently under audit or
examination, nor is a potential audit or examination reasonably anticipated, by the Internal Revenue
Service, the Department of Labor or any other Governmental Entity and (y) no event has occurred with
respect to a Plan which would reasonably be expected to result in a liability of any Company Group
Member to any Governmental Entity, and (v) all contributions and premiums required to have been paid
by any Company Group Member to any Plan under the terms of any such plan or its related trust,
insurance contract or other funding arrangement, or pursuant to any applicable Law (including ERISA
and the Code and similar provisions of non-U.S. Law) have been paid within the time prescribed by any
such plan, agreement or applicable Law.
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(b) No Plan is an unfunded pension plan or other unfunded retirement or termination plan,
whether or not subject to minimum funding standards under applicable Law. No Company Group
Member maintains or contributes to, or has in the past sponsored, maintained or contributed to, any
pension plan subject to Title IV of ERISA, including a Multiemployer Plan. Except as would not,
individually or in the aggregate, be materially adverse to the Company Group, taken as a whole, no
Company Group Member has incurred any unsatisfied liability (including withdrawal liability) in respect
of any Multiemployer Plan. Except as would not, individually or in the aggregate, be materially adverse
to the Company Group, taken as a whole, no liability under Title IV or Sections 302, 303 or 304 of
ERISA or Sections 412, 430 or 431 of the Code or similar provisions of non-U.S. Law has been incurred
by any Company Group Member, and no condition exists that would reasonably be expected to present a
risk to any Company Group Member of incurring any such material liability, including as a consequence
of being considered a single employer with any other person under Section 414 of the Code or Title IV of
ERISA or a similar provision of non-U.S. Law.
(c) Except as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole, none of the execution of, or the completion of the transactions
contemplated by, this Agreement, will result in (i) severance pay or an increase in severance pay upon
termination after Closing to any current or former employee of any Company Group Member, (ii) any
payment or benefit becoming due, or increase in the amount of any payment or benefit due, to any current
or former employee, director or independent contractor of any Company Group Member, (iii) acceleration
of the time of payment or vesting or result in funding of compensation or benefits to any current or former
employee, director or independent contractor of any Company Group Member, (iv) any new material
obligation under any Plan, (v) any limitation or restriction on the right of any Company Group Member to
merge, amend, or terminate any Plan, or (vi) any payments which would not be deductible under Section
280G of the Code or subject to Tax under Section 4999 of the Code. No Plan provides for reimbursement
or gross-up of any excise tax under Section 409A or Section 4999 of the Code.
(d) Except as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole, no Company Group Member is a party to or is otherwise bound by
any collective bargaining agreement or similar agreement, and there are no labor unions or other
organizations or groups representing, purporting to represent or attempting to represent any employees
employed by the Company Group Member. Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, (i) no labor strike, slowdown, work stoppage, picketing, dispute,
lockout, concerted refusal to work overtime or other labor controversy is in effect or, to the Knowledge of
the Company, threatened in writing with respect to employees of any Company Group Member, and no
Company Group Member has experienced any such labor controversy within the past two (2) years,
(ii) no action, complaint, charge, inquiry, proceeding or investigation by or on behalf of any current or
former employee, labor organization (including any union or works council) or other representative of the
employees of any Company Group Member (including persons employed jointly by such entities with
any other staffing or other similar entity) is pending or, to the Knowledge of the Company, threatened in
writing and (iii) the Company Group is in compliance with all applicable Laws, agreements, contracts,
policies, plans and programs relating to employment, employment practices, compensation, benefits,
profit sharing, wage and hours, terms and conditions of employment and termination of employment,
including workplace discrimination, harassment, workers’ compensation, classification of workers
(including classification as exempt or non-exempt or as employees or independent contractors), unlawful
retaliation, the provision of meal and rest breaks, withholding of taxes, immigration, employee leave
issues, plant closings and mass layoffs, occupational safety and health, fair labor standards.
Section 2.15 Intentionally Omitted.
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Section 2.16 Registration Rights. Except as set forth on Section 2.16 of the Disclosure Letter
and except as provided in the Registration Rights Agreement, the Company has not granted or agreed to
grant, and is not under any obligation to provide, any rights to register under the Securities Act any of its
presently outstanding securities or any of its securities that may be issued subsequently.
Section 2.17 Compliance with Laws. Except as set forth on Section 2.17 of the Disclosure
Letter and except as would not, individually or in the aggregate, be materially adverse to the Company
Group, taken as a whole, no Company Group Member is, or since December 31, 2014 has been, in
violation of any applicable Law. No Company Group Member is being investigated with respect to any
applicable Law, except for such of the foregoing as would not, individually or in the aggregate, be
materially adverse to the Company Group, taken as a whole.
Section 2.18 Absence of Changes. Since January 1, 2018, each Company Group Member has
operated in the ordinary course of business consistent with past practice.
Section 2.19 Anti-Corruption.
(a) Each Company Group Member and each of its respective officers, directors, employees,
agents, distributors and other Persons acting for or on behalf of any Company Group Member
(collectively, the “Relevant Persons”) have not directly or indirectly violated or taken any act in
furtherance of violating any provision of the U.S. Foreign Corrupt Practices Act of 1977 (as amended),
the U.K. Xxxxxxx Xxx 0000 or any other anti-corruption or anti-bribery Laws applicable to any Company
Group Member except for such of the foregoing as would not, individually or in the aggregate, be
materially adverse to the Company Group, taken as a whole.
(b) Except as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole, the Relevant Persons have not directly or indirectly taken any act in
furtherance of any payment, gift, bribe, rebate, loan, payoff, kickback or any other transfer of value, or
offer, promise or authorization thereof, to any Person, including any Government Official, for the purpose
of: (i) improperly influencing or inducing such Person to do or omit to do any act or to make any
decision in an official capacity or in violation of a lawful duty; (ii) inducing such Person to influence
improperly his or her or its employer, public or private, or any Governmental Entity, to affect an act or
decision of such employer or Governmental Entity, including to assist any Person in obtaining or
retaining business; or (iii) securing any improper advantage.
(c) None of the officers, directors, employees or other Persons acting for or on behalf of any
Company Group Member is a Government Official or consultant to any Government Official, and there is
no existing family relationship between any officer, director or, to the Knowledge of the Company, any
employee or other Person acting for or on behalf of any Company Group Member and any Government
Official.
(d) None of the executive officers or directors of the Company nor any of the other Relevant
Persons have, directly or indirectly: (i) circumvented the internal accounting controls of any Company
Group Member; (ii) falsified any of the books, records or accounts of any Company Group Member; or
(iii) made false or misleading statements to, or attempted to coerce or fraudulently influence, an
accountant in connection with any audit, review or examination of the financial statements of any
Company Group Member.
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Section 2.20 Trade Controls.
(a) The Relevant Persons have not in the course of their actions for, or on behalf of, any
Company Group Member engaged directly or indirectly in transactions: (i) connected with any of North
Korea, Crimea, Cuba, Iran, Syria, Myanmar or Sudan; or (ii) connected with any government, country or
other entity or Person that is the target of U.S. economic sanctions administered by the U.S. Treasury
Department Office of Foreign Assets Control (“OFAC”) or by Her Majesty’s Treasury in the U.K., or the
target of any applicable U.N., E.U. or other international sanctions regime, including any transactions
with specially designated nationals or blocked persons designated by OFAC or with persons on any U.N.,
E.U. or U.K. assets freeze list; or (iii) that is prohibited by any law administered by OFAC, or by any
other economic or trade sanctions law of the U.S. or any other jurisdiction.
(b) None of the Company’s executive officers or directors nor, to the Knowledge of the
Company, any other Relevant Person is a person whose property or interests in property are blocked or
frozen under the economic sanctions laws of the U.S., the E.U. or any other jurisdiction; and no Relevant
Person is designated as a denied person by the U.S. Commerce Department Bureau of Industry and
Security or as a debarred party by the U.S. State Department’s Directorate of Defense Trade Control.
Section 2.21 Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act and the Company has taken no action designed to, or
which to the Knowledge of the Company is reasonably likely to, have the effect of terminating the
registration of the Common Stock under the Exchange Act nor has the Company received since
December 31, 2014 any written notification that the SEC intends to terminate such registration or from
the NYSE that it intends to delist the Company.
Section 2.22 Material Contracts.
(a) Except as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole, each Material Contract is in full force and effect and constitutes a
legal, valid and binding agreement of the Company or a Company Subsidiary (as applicable) enforceable
against the Company or a Company Subsidiary (as applicable) and, to the Knowledge of the Company,
the other parties thereto in accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency, moratorium and other requirement of applicable Law affecting creditor’s rights
generally and by general principles of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(b) Except as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole, neither the Company nor any Company Subsidiary nor, to the
Knowledge of the Company, any other party to any Material Contract is in breach or default under any
such Material Contract, and no event has occurred that, with the giving of notice or the lapse of time or
both, would constitute a breach or default under any such Material Contract by the Company or any
Company Subsidiary that would permit the other party to terminate such Material Contract.
(c) True and complete copies of each Material Contract relating to Indebtedness have been
made available to the Purchasers prior to the date hereof. Except as provided in the Credit Agreement, no
such Material Contract imposes any limitation on the payment of dividends at the Minimum Dividend
Rate (as defined in the Certificate of Designations) as contemplated to be paid under the terms of the
Certificate of Designations.
(d) No “Default” (as such term is defined in the Credit Agreement) or “Triggering Event” (as
such term is defined in the Preferred Stock CODs) (i) has occurred and is continuing or (ii) would result
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from the execution and delivery by the Company of this Agreement or the other Transaction Documents,
the consummation of the transactions contemplated hereby or thereby or compliance by the Company
with any of the provisions hereof or thereof. The Company has received all applicable approvals required
under the Credit Agreement in connection with the execution and delivery by the Company of this
Agreement and the other Transaction Documents, the consummation of the transactions contemplated
hereby and thereby and compliance by the Company with the provisions hereof and thereof.
Section 2.23 Insurance.
(a) Except as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole, (i) the third party insurance policies of the Company Group are in full
force and effect in accordance with their terms and no Company Group Member is in default under the
terms of any such policy and (ii) to the Knowledge of the Company, as of the date hereof, there is no
threatened termination of, or threatened premium increase with respect to, any of such policies.
(b) Except (i) as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole, or (ii) as set forth in Section 2.23(b) of the Disclosure Letter, (x) there
is no claim pending under any of the Company Group’s insurance policies that has been denied, rejected,
questioned or disputed by any insurer or as to which any insurer has made any reservation of rights or
refused to cover all or any portion of such claims and (y) since December 31, 2014, all claims, actions,
suits, proceedings, arbitrations, mediations or investigations, whether civil, criminal, administrative or
investigative, covered by the Company Group’s insurance policies have been properly reported to and
accepted by the applicable insurer.
Section 2.24 No Additional Representations. Except for the representations and warranties
made by the Company in this Article II, neither the Company nor any other person makes any express or
implied representation or warranty with respect to any Company Group Member or their respective
businesses, operations, assets, liabilities, employees, employee benefit plans, conditions or prospects in
connection with the transactions contemplated hereby, and the Company hereby disclaims any such other
representations or warranties. In particular, without limiting the foregoing disclaimer, neither the
Company nor any other person makes or has made any representation or warranty to the Purchasers, or
any of their Affiliates or representatives, with respect to (i) any financial projection, forecast, estimate,
budget or prospect information relating to any Company Group Member or its respective business, or
(ii) except for the representations and warranties made by the Company in this Article II, any oral or
written information presented to the Purchasers or any of their Affiliates or representatives in the course
of their due diligence investigation of the Company, the negotiation of this Agreement or in the course of
the transactions contemplated hereby. Notwithstanding anything to the contrary herein, nothing in this
Agreement shall limit the right of each Purchaser and its Affiliates to rely on the representations,
warranties, covenants and agreements expressly set forth in this Agreement or in any certificate delivered
pursuant hereto, nor will anything in this Agreement operate to limit any claim by such Purchaser or any
of its Affiliates for fraud.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby represents and warrants to the Company, as of the date hereof and as of
each Closing Date (except to the extent made only as of a specified date, in which case as of such date),
that:
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Section 3.1 Organization and Authority. Such Purchaser is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business
and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and where failure to be so qualified would reasonably be expected
to materially and adversely affect such Purchaser’s ability to perform its obligations under this Agreement
or consummate the transactions contemplated hereby on a timely basis, and such Purchaser has the power
and authority and governmental authorizations to own its properties and assets and to carry on its business
as it is now being conducted.
Section 3.2 Authorization.
(a) Such Purchaser has the power and authority to enter into this Agreement and to carry out
its obligations hereunder. The execution, delivery and performance of this Agreement and the other
Transaction Documents by such Purchaser and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all requisite action on the part of such Purchaser, and no further
approval or authorization by any of its stockholders, partners, members or other equity owners, as the
case may be, is required. This Agreement has been, and (as of the first Closing) the other Transaction
Documents will be, duly and validly executed and delivered by such Purchaser and, assuming due
authorization, execution and delivery by the Company, this Agreement is, and (as of each Closing) each
of the other Transaction Documents will be, a valid and binding obligation of such Purchaser enforceable
against such Purchaser in accordance with its terms (except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors’ rights or by general equity principles).
(b) None of the execution, delivery and performance by such Purchaser of this Agreement or
the other Transaction Documents, the consummation of the transactions contemplated hereby or thereby,
or compliance by such Purchaser with any of the provisions hereof or thereof, will (i) violate, conflict
with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of, or result in the creation of
any Lien upon any of the properties or assets of such Purchaser under any of the terms, conditions or
provisions of (x) its governing instruments, (y) any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which such Purchaser is a party or by which it may
be bound, or to which such Purchaser or any of the properties or assets of such Purchaser may be subject
or (z) any rule of the NYSE applicable to the Company, or (ii) subject to compliance with the statutes and
regulations referred to in the next paragraph, violate any law, statute, ordinance, rule or regulation,
permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to
such Purchaser or any of its respective properties or assets except in the case of clauses (i)(y) and (ii) for
such violations, conflicts and breaches as would not reasonably be expected to materially and adversely
affect such Purchaser’s ability to perform its respective obligations under this Agreement or consummate
the transactions contemplated hereby on a timely basis.
(c) Other than the securities or blue sky laws of the various states, no notice to, registration,
declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any
Governmental Entity, nor expiration or termination of any statutory waiting period, is necessary for the
consummation by such Purchaser of the transactions contemplated by this Agreement.
Section 3.3 Purchase for Investment. Such Purchaser acknowledges that the offer and sale of
the Purchased Shares have not been registered under the Securities Act or under any state securities laws.
Such Purchaser (i) acknowledges that it is acquiring the Purchased Shares pursuant to an exemption from
registration under the Securities Act solely for investment with no present intention to distribute any of
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PHX 332633099v6
the Purchased Shares to any person in violation of applicable securities laws, (ii) will not sell or otherwise
dispose of any of the Purchased Shares, except in compliance with the registration requirements or
exemption provisions of the Securities Act and any other applicable securities laws, (iii) without limiting
the representations and warranties in Article II hereof has such knowledge and experience in financial and
business matters and in investments of this type that it is capable of evaluating the merits and risks of its
investment in the Purchased Shares and of making an informed investment decision, (iv) is an “accredited
investor” (as that term is defined by Rule 501 of the Securities Act), (v) is a “qualified institutional buyer”
(as that term is defined in Rule 144A of the Securities Act), and (vi) without limiting the representations
and warranties in Article II hereof (A) has been furnished with or has had full access to all the
information that it considers necessary or appropriate to make an informed investment decision with
respect to the Purchased Shares, (B) has had an opportunity to discuss with management of the Company
the intended business and financial affairs of the Company and to obtain information (to the extent the
Company possessed such information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to it or to which it had access and (C) can bear the
economic risk of (x) an investment in the Purchased Shares indefinitely and (y) a total loss in respect of
such investment.
Section 3.4 Financial Capability. Such Purchaser currently has, and at each Closing will
have, available funds necessary to consummate the Closing on the terms and conditions contemplated by
this Agreement. Such Purchaser is not aware as of the date hereof of any reason why the funds sufficient
to fulfill its obligations under Article I will not be available on the applicable Closing Date.
Section 3.5 Brokers and Finders. Neither such Purchaser nor its Affiliates or any of their
respective officers, directors, employees or agents has employed any broker or finder for which the
Company will incur any liability for any financial advisory fees, brokerage fees, commissions or finder’s
fees, and no broker or finder has acted directly or indirectly for such Purchaser in connection with this
Agreement or the transactions contemplated hereby.
ARTICLE IV
COVENANTS
Section 4.1 Filings; Other Actions. Promptly after the date hereof, each of the Purchasers, on
the one hand, and the Company, on the other hand, will cooperate and consult with the other and use
reasonable best efforts to prepare and file all necessary documentation, to effect all necessary
applications, notices, petitions, filings and other documents, and to obtain all necessary permits, consents,
orders, approvals and authorizations of, or any exemption by, all third parties and Governmental Entities,
and the expiration or termination of any applicable waiting period, necessary or advisable to consummate
the transactions contemplated by this Agreement, and to perform the covenants contemplated by this
Agreement; provided that all expenses associated with any of the foregoing shall be borne by the
Company. Each party shall execute and deliver both before and after each Closing such further
certificates, agreements and other documents and take such other actions as the other parties may
reasonably request to consummate or implement such transactions or to evidence such events or matters.
The Purchasers and the Company will have the right to review in advance, and to the extent practicable
each will consult with the others, in each case subject to applicable laws relating to the exchange of
information, all the information relating to such other party, and any of their respective Affiliates, which
appears in any filing made with, or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this Agreement. In exercising the foregoing
right, each of the parties hereto agrees to act reasonably and as promptly as reasonably practicable. Each
party hereto agrees to keep the other party reasonably apprised of the status of matters referred to in this
Section 4.1. Each Purchaser shall promptly furnish the Company, and the Company shall promptly
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PHX 332633099v6
furnish each Purchaser, to the extent permitted by Law, with copies of written communications received
by it or its Subsidiaries from any Governmental Entity in respect of the transactions contemplated by this
Agreement. Notwithstanding anything herein to the contrary, under no circumstances shall any Company
Group Member or any Purchaser be required to (x) make any payment to any person to secure such
person’s consent, approval or authorization (excluding any applicable filing fees or other de minimis
expenses that are required to be paid by the Company) or (y) proffer to, or agree to, license, dispose of,
sell or otherwise hold separate or restrict the operation of any of its assets, operations or other rights.
Section 4.2 Reasonable Best Efforts to Close. Promptly after the date hereof, the Company
and the Purchasers will use reasonable best efforts in good faith to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary under applicable laws so as to permit consummation
of the transactions contemplated hereby as promptly as practicable and otherwise to enable consummation
of the transactions contemplated hereby and shall cooperate reasonably with the other party hereto to that
end, including in relation to the satisfaction of the conditions to each Closing set forth in Sections 1.3(a),
(b) and (c) and cooperating in seeking to obtain any consent required from Governmental Entities;
provided that neither Purchaser shall be obligated to undertake any monetary obligation or waive or
modify any term of this Agreement in connection with the foregoing.
Section 4.3 Confidentiality. Each party to this Agreement will hold, and will cause its
respective Affiliates and their respective directors, managers, officers, employees, agents, consultants and
advisors to hold, in strict confidence, unless disclosure to a regulatory authority is necessary in connection
with any necessary regulatory approval, examination or inspection, or unless disclosure is required by
judicial or administrative process or by other requirement of law or the applicable requirements of any
regulatory agency or relevant stock exchange (in which case, other than in connection with a disclosure in
connection with a routine audit or examination by, or document request from, a regulatory or self-
regulatory authority, bank examiner or auditor, the party disclosing such information shall provide the
other party with prior written notice of such permitted disclosure), all non-public records, books,
contracts, instruments, computer data and other data and information (collectively, “Information”)
concerning the other party hereto furnished to it by or on behalf of such other party or its representatives
pursuant to this Agreement (except to the extent that such information can be shown to have been
(a) previously known by such party from other sources, provided that such source was not known by such
party to be bound by a contractual, legal or fiduciary obligation of confidentiality to the other party, (b) in
the public domain through no violation of this Section 4.3 by such party or (c) later lawfully acquired
from other sources by the party to which it was furnished), and neither party hereto shall release or
disclose such Information to any other person, except its auditors, attorneys, financial advisors, financing
sources and other consultants and advisors. Notwithstanding the foregoing, each Purchaser may disclose
Information to the extent provided by the Stockholders’ Agreement.
Section 4.4 State Securities Laws. During the Pre-Closing Period and during the period prior
to each Closing after the first Closing, the Company shall use its reasonable best efforts to (a) obtain all
necessary permits and qualifications, if any, or secure an exemption therefrom, required by any state
securities laws prior to the offer and sale of the Purchased Shares and (b) cause such authorization,
approval, permit or qualification to be effective as of the relevant Closing.
Section 4.5 Tax Matters.
(a) The Company shall pay any and all documentary, stamp and similar issue or transfer tax
due upon the issuance of the Purchased Shares, and the Company will, at its own expense, file all
necessary Tax returns and other documentation with respect to all such Taxes and fees and, if required by
law, each Purchaser will, and will cause its Affiliates to, join in the execution of any such Tax returns and
other documentation.
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(b) Unless required as a result of a change in law, (i) the Company shall not treat the
Purchased Shares as giving rise to dividends for U.S. federal income tax purposes pursuant to Section 305
of the Code prior to the time that any such dividends are actually declared by the Company (other than the
accrual of an amount equal to the excess of the redemption price over the issue price of the Purchased
Shares), (ii) for so long as Brockdale Investments LP (as holder of a majority of the Preferred Stock) has
the ability to appoint two or more people to the Board of Directors, the Company shall treat Brockdale
Investments LP as directly owning at least 10% of the voting stock of the Company for purposes of the
tax treaty between the U.S. and Luxembourg, and (iii) unless the Purchasers and their Affiliates, in the
aggregate, own 50% or more of the Company’s common stock (as measured by value), the Company
shall treat amounts paid to each Purchaser (other than the amount equal to the excess of the redemption
price over the issue price of the Purchased Shares that had not previously been accrued) in partial or
complete redemption of each class of Preferred Stock as a payment in exchange for such Preferred Stock
pursuant to Section 302 of the Code.
(c) As and when reasonably requested by any Purchaser, the Company agrees to provide
prompt assistance (including, if applicable, by providing withholding certificates) in connection with
determinations by such Purchaser of whether specified shares of Common Stock or shares of Preferred
Stock that such Purchaser holds or has held constitute a “United States real property interest” under
Section 897 of the Code.
(d) At the time of any distribution with respect to or redemption of Preferred Stock, if
requested by a Purchaser the Company shall provide the Purchasers with a good faith estimate of the
Company’s (i) accumulated earnings and profits for U.S. federal income tax purposes for prior taxable
years and (ii) expected earnings and profits for the taxable year in which such distribution or redemption
occurs. The Company shall provide each Purchaser with the Company’s good faith estimated calculation
of the current and accumulated earnings and profits of the Company for U.S. federal income tax purposes
with respect to each taxable year of the Company in which any such distribution or redemption occurs by
February 28 of the immediately following taxable year.
ARTICLE V
MISCELLANEOUS
Section 5.1 Survival. The representations and warranties of the parties contained in this
Agreement shall survive for twelve (12) months following the last Closing, except that (i) the
representations and warranties of the Company contained in Sections 2.1(a), 2.2(b), 2.2(c), 2.3(a) and
Section 2.4 will survive until the expiration of the applicable statutes of limitation and (ii) the
representations and warranties of the Company contained in Section 2.2(a) will survive indefinitely. The
covenants or other agreements of the parties that contemplate performance or fulfillment thereof prior to a
Closing shall survive for six (6) months following such Closing. The covenants or other agreements of the
parties that contemplate performance or fulfillment thereof at or following a Closing shall survive such
Closing until fully performed or fulfilled, unless and to the extent that non-compliance with such
covenants or agreements is waived in writing by the party entitled to such performance.
Section 5.2 Reserved.
Section 5.3 Amendment; Waiver. No amendment or waiver of any provision of this
Agreement will be effective with respect to any party unless made in writing and signed by an officer or
duly authorized representative of such party. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right, power or
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PHX 332633099v6
privilege. The conditions to each party’s obligation to consummate a Closing are for the sole benefit of
such party and may be waived by such party in whole or in part to the extent permitted by applicable law.
No waiver of any party to this Agreement will be effective unless it is in a writing signed by a duly
authorized officer of the waiving party that makes express reference to the provision or provisions subject
to such waiver. The rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
Section 5.4 Counterparts; Electronic Transmission. For the convenience of the parties
hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts will together constitute the same
agreement. Executed signature pages to this Agreement may be delivered by facsimile or other means of
electronic transmission and such facsimiles or other means of electronic transmission will be deemed as
sufficient as if actual signature pages had been delivered.
Section 5.5 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to principles or rules of conflict
of laws to the extent such principles or rules would require or permit the application of Laws of another
jurisdiction. The parties hereby irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the state and federal courts located in the Borough of Manhattan, State of New York for
any actions, suits or proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby. The parties hereby irrevocably and unconditionally consent to the jurisdiction of
such courts (and of the appropriate appellate courts therefrom) in any such action, suit or proceeding and
irrevocably waive, to the fullest extent permitted by law, any objection that they may now or hereafter
have to the laying of the venue of any such action, suit or proceeding in any such court or that any such
action, suit or proceeding which is brought in any such court has been brought in an inconvenient forum.
Process in any such action, suit or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees
that service of process on such party as provided in Section 5.7 shall be deemed effective service of
process on such party.
Section 5.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 5.7 Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other will be in writing and will be deemed to have been duly given (a) on
the date of delivery if delivered personally or by telecopy, facsimile or electronic mail, upon confirmation
of receipt, (b) on the first (1st) business day following the date of dispatch if delivered by a recognized
next-day courier service, or (c) on the third (3rd) business day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the
party to receive such notice.
(a) If to any or all of the Purchasers:
c/o Elliott Management Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
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PHX 332633099v6
Email: xxxxxxxxxx@xxxxxxxxxxx.xxx
with a copy to (which copy alone shall not constitute notice):
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxx.xxx
(b) If to the Company:
Roadrunner Transportation Systems, Inc.
0000 Xxxxx Xxxxxxxxxxxx Xxx.
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
Email: xxxxxxxxxx@xxxx.xxx
with a copy to (which copy alone shall not constitute notice):
Xxxxxxxxx Traurig, LLP
0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx
Fax: (000) 000-0000
Email: xxxxxxxxxxx@xxxxx.xxx
Section 5.8 Entire Agreement. This Agreement (including the Exhibits hereto and the
Disclosure Letter) and the Commitment Letter constitute the entire agreement, and supersede all other
prior agreements, understandings, representations and warranties, both written and oral, among the
parties, with respect to the subject matter hereof.
Section 5.9 Assignment. Neither this Agreement, nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other party; provided that each Purchaser (or any
Permitted Transferee) may assign its rights, interests and obligations under this Agreement, in whole or in
part, (i) if prior to a Closing, to one or more Permitted Transferees, (provided that no such assignment
will relieve such Purchaser of its obligations hereunder prior to such Closing) and, (ii) if following a
Closing, to any transferee of shares of Preferred Stock (subject to the Stockholders’ Agreement);
provided, however, that in the event of any such assignment, the assignee shall agree in writing to be
bound by the provisions of this Agreement, including the rights, interests and obligations so assigned.
Section 5.10 Interpretation; Other Definitions. Wherever required by the context of this
Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the
feminine and neuter genders and vice versa and, unless specified otherwise, references to any agreement,
document or instrument shall be deemed to refer to such agreement, document or instrument as amended,
supplemented or modified from time to time. All article, section, paragraph or clause references not
attributed to a particular document shall be references to such parts of this Agreement, and all exhibit,
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PHX 332633099v6
annex, letter and schedule references not attributed to a particular document shall be references to such
exhibits, annexes, letters and schedules to this Agreement. In addition, the following terms are ascribed
the following meanings:
(1) the term “business day” means any day that is not a Saturday, a Sunday and any other day
on which banks are required or authorized by law or other governmental action to be closed in New York
City;
(2) the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular section, paragraph or subdivision;
(3) the words “including,” “includes,” “included” and “include” are deemed to be followed
by the words “without limitation”;
(4) the word “or” is not exclusive; and
(5) the term “person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and
as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
(6) “2010 Incentive Compensation Plan” has the meaning set forth in Section 2.2(a).
(7) “Affiliate” means, with respect to any person, any other person directly or indirectly
controlling, controlled by or under common control with such person; provided, that (i) portfolio
companies in which any person or any of its Affiliates has an investment shall not be deemed an Affiliate
of such person, (ii) no Company Group Member, and none of the Company’s other controlled Affiliates,
will be deemed to be Affiliates of any Purchaser for purposes of this Agreement and (iii) each Company
Subsidiary shall be deemed an Affiliate of the Company and of each other Company Subsidiary. For
purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and
“under common control with”), when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management or policies of such person, whether through
the ownership of voting securities, by contract or otherwise.
(8) “Agreement” has the meaning set forth in the Preamble.
(9) “Board of Directors” has the meaning set forth in Section 2.3(a).
(10) “Bylaws” has the meaning set forth in Section 2.1(a).
(11) “Capitalization Date” has the meaning set forth in Section 2.2(a).
(12) “Capitalized Lease Obligations” means an obligation that is required to be classified as,
and expenses in respect of which are recognized as for, a capitalized lease for income statement reporting
purposes in accordance with GAAP.
(13) “Certificate of Designations” has the meaning set forth in the Recitals.
(14) “Certificate of Incorporation” has the meaning set forth in Section 2.1(a).
(15) “Closing” has the meaning set forth in Section 1.2(a).
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PHX 332633099v6
(16) “Closing Date” has the meaning set forth in Section 1.2(a).
(17) “Code” means the United States Internal Revenue Code of 1986, as amended.
(18) “Commitment Letter” means that certain letter agreement, dated January 30, 2018, by
and among the Company and the Purchasers.
(19) “Common Stock” has the meaning set forth in the Recitals.
(20) “Company” has the meaning set forth in the Preamble.
(21) “Company Financial Statements” has the meaning set forth in Section 2.5(d).
(22) “Company Group” means the Company and the Company Subsidiaries from time to time.
(23) “Company Group Member” means any corporation, partnership, joint venture, limited
liability company, unincorporated association, trust or other entity within the Company Group.
(24) “Company Material Adverse Effect” means, with respect to the Company, any Effect that
is or is reasonably likely to be materially adverse to the business, assets, liabilities, results of operations or
financial condition of the Company Group, taken as a whole; provided, however, that in no event shall
any of the following occurring after the date hereof, alone or in combination, be deemed to constitute, or
be taken into account in determining whether a Company Material Adverse Effect has occurred: (A) any
decrease in the market price of the Company’s Common Stock on the NYSE, (B) any failure by the
Company to meet any public revenue or earnings projections, (C) any Effect that results from changes
affecting the industry in which the Company operates, or the United States economy generally, or any
Effect that results from changes affecting general worldwide economic or capital market conditions,
(D) any Effect caused by the announcement or pendency of the transactions contemplated by this
Agreement (or the identity of the Purchasers or any of their Affiliates as the purchaser of the Purchased
Shares pursuant to the transactions contemplated by this Agreement); (E) acts of war or terrorism or
natural disasters, (F) the performance of this Agreement and the transactions contemplated hereby,
including compliance with the covenants set forth herein, or any actions or omissions of the Company
taken or omitted at the written request of the Purchasers; (G) changes in GAAP or other accounting
standards (or any interpretation thereof) or (H) changes in any Laws or other binding directives issued by
any Governmental Entity or interpretations or enforcement thereof; provided, however, that (x) the
exceptions in clause (A) and (B) shall not prevent or otherwise affect a determination that any Effect
underlying such change or failure has resulted in, or contributed to, a Company Material Adverse Effect,
(y) with respect to clauses (C), (E), (G) and (H), such Effects, alone or in combination, may be deemed to
constitute, or be taken into account in determining whether a Company Material Adverse Effect has
occurred to the extent such Effects disproportionately affect the Company Group, taken as a whole,
relative to other companies operating in the same industry as the Company Group.
(25) “Company PRSUs” has the meaning set forth in Section 2.2(a).
(26) “Company RSUs” has the meaning set forth in Section 2.2(a).
(27) “Company Stock Options” has the meaning set forth in Section 2.2(a).
(28) “Company Subsidiary” has the meaning set forth in Section 2.1(b).
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(29) “Company Warrants” has the meaning set forth in Section 2.2(a).
(30) “Contract” means any written or oral agreement, arrangement, commitment or other
instrument or obligation.
(31) “Credit Agreement” means the Credit Agreement, dated as of July 21, 2017, by and
among (i) the Company, (ii) the “Borrowers”, the “Subsidiary Guarantors” and the “Lenders” named
therein and (iii) BMO Xxxxxx Bank, N.A., as Administrative Agent, Swing Line Lender and a Letter of
Credit Issuer, as amended from time to time.
(32) “Credit Documents” means, with respect to the Credit Facility, the Credit Agreement and
all guarantees, security agreements, mortgages, deeds of trust, letters of credit, reimbursement
agreements, waivers and amendments and all other Contracts and documents executed and delivered in
connection therewith.
(33) “Credit Facility” means the credit facility governed by the Credit Agreement and the
related Credit Documents.
(34) “Disclosure Letter” has the meaning set forth in Article II.
(35) “Effect” means any change, event, effect, state of facts, occurrence, development or
circumstance.
(36) “Environmental Law” means any Laws regulating, relating to or imposing standards of
conduct concerning protection of natural resources, the environment or of human health and safety.
(37) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and all rules, regulations, rulings and interpretations adopted by the Internal Revenue
Service or the Department of Labor thereunder.
(38) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder, as the same may be amended from time to time.
(39) “GAAP” has the meaning set forth in Section 2.5(d).
(40) “Government Official” means any (i) officer, employee or other Person acting for or on
behalf of any Governmental Entity or public international organization or (ii) holder of, or candidate for,
public office, political party or official thereof or member of a royal family, or any other Person acting for
or on behalf of the foregoing.
(41) “Governmental Entity” means any transnational, multinational, domestic or foreign
federal, state, provincial or local governmental, regulatory or administrative authority, instrumentality,
department, court, arbitrator, agency, commission or official, including any political subdivision thereof,
any state-owned or state-controlled enterprise, or any non-governmental self-regulatory agency,
commission or authority.
(42) “Hazardous Substances” means any gasoline or petroleum (including crude oil or any
fraction thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants and any other substances that are regulated pursuant to, or could give
rise to liability under, any Environmental Law.
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PHX 332633099v6
(43) “HSR Act” means Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
(44) “Indebtedness” means, with respect to any person, without duplication, (i) all obligations
of such person for borrowed money (including accrued and unpaid interest and the full redemption value
of any premiums, costs or penalties associated with repaying such obligations), or with respect to deposits
or advances of any kind, (ii) all obligations of such person evidenced by bonds, debentures, notes or
similar instruments, (iii) all obligations of such person upon which interest charges are customarily paid
(other than trade payables incurred in the ordinary course of business consistent with past practice),
(iv) all obligations of such person under conditional sale or other title retention agreements relating to any
property purchased by such person, (v) all obligations of such person incurred or assumed as the deferred
purchase price of property or services (excluding obligations of such person to creditors for raw materials,
inventory, services and supplies incurred in the ordinary course of business consistent with past practice),
(vi) all Capitalized Lease Obligations, (vii) all obligations of others secured by a Lien on property or
assets owned or acquired by such person, whether or not the obligations secured thereby have been
assumed, (viii) all obligations of such person under interest rate, currency or commodity derivatives or
hedging transactions, (ix) all letters of credit or performance bonds issued for the account of such person
(excluding (A) letters of credit issued for the benefit of suppliers to support accounts payable to suppliers
incurred in the ordinary course of business consistent with past practice, (B) standby letters of credit
relating to workers’ compensation insurance and (C) surety bonds and customs bonds) and (x) all
guaranties and arrangements having the economic effect of a guaranty by such person of any
Indebtedness of any other person.
(45) “Information” has the meaning set forth in Section 4.3.
(46) “Intellectual Property” means all worldwide intellectual and industrial property rights,
including (i) patents, utility models, and all renewals, re-examinations, re-issues, divisions, extensions,
provisionals, continuations and continuations-in part thereof, (ii) trademarks, service marks, trade names,
corporate names, trade dress, domain names, social media usernames and other source indicators (and all
goodwill relating thereto), (iii) copyrights and rights in copyrightable subject matter in published and
unpublished works of authorship, (iv) rights in Software, (v) all registrations and applications to register
or renew the registrations of any of the foregoing, (vi) inventions, know-how, trade secrets, methods,
processes, formulae, models, tools, technical or proprietary information, and technology, and (vii) all
other intellectual property rights.
(47) “Knowledge of the Company” means the knowledge, after reasonable inquiry, of the
individuals set forth in Section 5.10(47) of the Disclosure Letter.
(48) “Law” or “Laws” mean any statute, law, ordinance, treaty, rule, code, regulation or other
binding directive issued, promulgated or enforced by any Governmental Entity.
(49) “Lien” means any mortgage, deed of trust, pledge, option, power of sale, retention of
title, right of pre-emption, right of first refusal, hypothecation, security interest, encumbrance, claim, lien
or charge of any kind, or an agreement, arrangement or obligation to create any of the foregoing (other
than Permitted Liens).
(50) “Material Contract” means any Contract (i) that has been filed by the Company with the
SEC that has not expired or been terminated prior to the date hereof or (ii) that relates to Indebtedness
with an aggregate principal amount in excess of $10,000,000.
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PHX 332633099v6
(51) “Multiemployer Plan” means (x) a “multiemployer plan” as defined in Section 3(37) of
ERISA that is maintained in the United States and (y) a non-U.S. defined-benefit pension plan for the
benefit of employees of multiple unrelated employers, in each case, to which any Company Group
Member contributes or is or has been required to contribute.
(52) “Non-Recourse Party” has the meaning set forth in Section 5.18.
(53) “NYSE” means the New York Stock Exchange.
(54) “OFAC” has the meaning set forth in Section 2.20(a).
(55) “Other Competition Laws” means all non-U.S. Laws intended to prohibit, restrict or
regulate actions having an anti-competitive effect or purpose, including competition, restraint of trade,
anti-monopolization, merger control or antitrust Laws.
(56) “Permits” has the meaning set forth in Section 2.10.
(57) “Permitted Lien” means: (i) liens for Taxes that are not yet due or payable or that are
being contested in good faith by appropriate proceedings and with respect to which reserves have been
made on the financial statements to the extent required under GAAP; (ii) statutory liens of landlords and
liens of carriers, warehousemen, mechanics, material men, repairmen and other liens imposed by Law for
amounts not yet due; (iii) liens incurred or deposits made to a Governmental Entity in the ordinary course
of business or as required by applicable Laws in connection with a governmental authorization,
registration, filing, license, permit or approval; (iv) liens incurred or deposits made in the ordinary course
of business in connection with workers’ compensation, unemployment insurance or other types of social
security; (v) defects of title, easements, rights of way, covenants, zoning, building and other similar
restrictions, charges or encumbrances not materially interfering with the ordinary conduct of business or
(vi) liens incurred in the ordinary course of the business securing obligations or liabilities that are not
individually or in the aggregate material to the relevant asset or property, respectively.
(58) “Permitted Transferee” means, with respect to any person, (i) any Affiliate of such
person, (ii) any successor entity of such person and (iii) with respect to any person that is an investment
fund, vehicle or similar entity, any other investment fund, vehicle or similar entity of which such person
or an Affiliate, advisor or manager of such person serves as the general partner, manager or advisor;
provided, however, that no portfolio company of any person shall be a Permitted Transferee.
(59) “Person” means an individual, a corporation, a general or limited partnership, a limited
liability company, an association, a trust, other legal entity or organization or Governmental Entity.
(60) “Plan” means any employee benefit plan (as defined in Section 3(3) of ERISA, whether
or not subject to ERISA) maintained for current or former employees of the Company, any Company
Subsidiary or any other person with whom the Company is considered a single employer under
Section 414 of the Code or Title IV of ERISA, to which any Company Group Member is required to
contribute, including any pension, profit-sharing, retirement, death, disability, supplemental retirement,
welfare benefit, retiree health, and life insurance plan, agreement or arrangement, or any other
compensation plan, policy, program, agreement or arrangement, including any employment, change in
control, bonus, equity or equity-based compensation, retention, severance, termination, deferred
compensation or other similar agreement, arrangement, plan, policy or program that any Company Group
Member, maintains, sponsors, is a party to, or as to which any Company Group Member otherwise has or
could have any material obligation or material liability, but excluding any Multiemployer Plans.
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PHX 332633099v6
(61) “Pre-Closing Period” means the period commencing on the date hereof and terminating
on the earlier to occur of (i) the first Closing and (ii) the termination of this Agreement in accordance with
the provisions hereof.
(62) “Preferred Stock” has the meaning set forth in the Recitals.
(63) “Preferred Stock CODs” means, collectively, the Certificates of Designations,
Preferences and Rights for the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock, the Series E Preferred Stock, and the Series E-1 Preferred Stock.
(64) “Purchase Price” means the aggregate purchase price payable by the Purchasers to the
Company for the issue of the Purchased Shares.
(65) “Purchased Shares” has the meaning set forth in Section 1.1.
(66) “Purchaser” or “Purchasers” has the meaning set forth in the Preamble.
(67) “Put Notice” shall mean a notification by the Company to the Purchasers that the
Company desires to sell Preferred Stock to the Purchasers for an aggregate purchase price of at least
$8,750,000.
(68) “Registration Rights Agreement” means the Registration Rights Agreement, dated as of
May 2, 2017, by and among the Company, the Purchasers, Xxxxxx Equity Investors V, L.P., TC
Roadrunner-Xxxxx Holdings, L.L.C., XX Xxxxxxx Holdings, L.L.C., HCI Equity Partners III, L.P. and
HCI Co-Investors III, L.P.
(69) “Release” means disposing, discharging, injecting, spilling, leaking, pumping, pouring,
leaching, migration, emitting, escaping or emptying into or upon the indoor or outdoor environment.
(70) “Relevant Persons” has the meaning set forth in Section 2.19(a).
(71) “SEC” has the meaning set forth in Section 2.5(a).
(72) “SEC Documents” has the meaning set forth in Section 2.5(a).
(73) “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, as the same may be amended from time to time.
(74) “Series B Preferred Stock” means the Company’s Series B Cumulative Redeemable
Preferred Stock.
(75) “Series C Preferred Stock” means the Company’s Series C Cumulative Redeemable
Participating Preferred Stock.
(76) “Series D Preferred Stock” means the Company’s Series D Cumulative Redeemable
Participating Preferred Stock.
(77) “Series E Preferred Stock” means the Company’s Series E Cumulative Redeemable
Preferred Stock.
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PHX 332633099v6
(78) “Series E-1 Preferred Stock” means the Preferred Stock.
(79) “Series F Preferred Stock” means the Company’s Series F Cumulative Redeemable
Preferred Stock.
(80) “Software” means all computer software, whether in source code and object code
formats, including mobile applications, in any and all forms and media, and all related documentation.
(81) “Stockholders’ Agreement” means the Stockholders’ Agreement, dated as of May 2,
2017, by and among the Company and the Purchasers, as amended from time to time.
(82) “Subsidiary” has the meaning set forth in Section 2.1(b).
(83) “Tax Return” means any return, declaration, report, statement or other document filed or
required to be filed in respect of Taxes (including any attached schedules), including any information
return, claim for refund, amended return and declaration of estimated Tax.
(84) “Taxes” means any U.S. federal, state, local, provincial or non-U.S. taxes, charges, fees,
levies or other assessments, including income, capital gains, alternative, minimum, accumulated earnings,
personal holding company, franchise, capital stock, profits, windfall profits, gross receipts, production,
goods and services, sales, use, value added, transfer, registration, stamp, premium, excise, customs duties,
severance, environmental (including taxes under section 59A of the Code), real property, personal
property, ad valorem, occupancy, license, occupation, employment, payroll, social security, disability,
unemployment, workers’ compensation, withholding, estimated or other similar tax, duty, fee, assessment
or other governmental charge or deficiencies thereof (including all interest and penalties thereon, related
liabilities and additions thereto).
(85) “Transaction Documents” means this Agreement and the Certificate of Designations.
(86) “Voting Debt” has the meaning set forth in Section 2.2(c).
Section 5.11 Captions. The article, section, paragraph and clause captions herein are for
convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or
otherwise affect any of the provisions hereof.
Section 5.12 Severability. If any provision of this Agreement or the application thereof to any
person (including the officers and directors of the parties hereto) or circumstance is determined by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to which it has been held
invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is
not affected in any manner materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
Section 5.13 No Third Party Beneficiaries. Except as expressly provided herein, nothing
contained in this Agreement, expressed or implied, is intended to confer upon any person other than the
parties hereto (and their permitted assigns), any benefit, right or remedies.
Section 5.14 Public Announcements. Subject to each party’s disclosure obligations imposed
by law or regulation or the rules of any stock exchange, each of the parties hereto will cooperate with
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each other in the development and distribution of all news releases and other public information
disclosures with respect to this Agreement and any of the transactions contemplated by this Agreement,
and neither the Company nor any Purchaser will make any such news release or public disclosure without
first consulting with the other, and, in each case, also receiving the other’s consent (which shall not be
unreasonably withheld or delayed) and each party shall coordinate with the party whose consent is
required with respect to any such news release or public disclosure.
Section 5.15 Specific Performance. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that, without the necessity of posting
bond or other undertaking, the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedies to which they are entitled at law or equity, and in the event that
any action or suit is brought in equity to enforce the provisions of this Agreement, and no party will
allege, and each party hereby waives, the defense or counterclaim that there is an adequate remedy at law.
Section 5.16 Termination.
(a) This Agreement may be terminated:
(1) by mutual written agreement of the Company and the Purchasers;
(2) by the Company or the Purchasers, upon written notice to the other party given at
any time on or after July 30, 2018; provided, however, that the right to terminate this Agreement
pursuant to this Section 5.16(a)(2) shall not be available to any party whose material breach of
any obligations under this Agreement shall have been the cause of, or shall have resulted in, the
failure of a Closing to occur on or prior to such date;
(3) by notice given by the Company to the Purchasers, if there have been one or
more inaccuracies in or breaches of one or more representations, warranties, covenants or
agreements made by any Purchaser in this Agreement such that the conditions in Section 1.3(c)
would not be satisfied and which have not been cured by such Purchaser within thirty (30) days
after receipt by such Purchaser of written notice from the Company requesting such inaccuracies
or breaches to be cured; or
(4) by notice given by the Purchasers to the Company, if there have been one or
more inaccuracies in or breaches of one or more representations, warranties, covenants or
agreements made by the Company in this Agreement such that the conditions in Section 1.3(b)
would not be satisfied and which have not been cured by the Company within thirty (30) days
after receipt by the Company of written notice from the Purchasers requesting such inaccuracies
or breaches to be cured.
(b) If not already terminated pursuant to Section 5.16(a), this Agreement shall automatically
terminate upon termination of the Commitment Letter pursuant to Section 6 of the Commitment Letter.
Section 5.17 Effects of Termination. In the event of any termination of this Agreement in
accordance with Section 5.16, neither party (or any of its Affiliates) shall have any liability or obligation
to the other (or any of its Affiliates) under or in respect of this Agreement, except to the extent of (A) any
liability arising from any intentional and material breach by such party under this Agreement arising prior
to such termination or (B) any fraud of this Agreement. In the event of any such termination, this
Agreement shall become void and have no effect, and the transactions contemplated hereby shall be
abandoned without further action by the parties hereto, in each case, except (x) as set forth in the
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PHX 332633099v6
preceding sentence and (y) that the provisions of Section 4.3 (Confidentiality), Section 5.3 to Section 5.14
(Amendment, Waiver; Counterparts, Electronic Transmission; Governing Law; Waiver of Jury Trial;
Notices; Entire Agreement, Assignment; Interpretation; Other Definitions; Captions; Severability; No
Third Party Beneficiaries; Public Announcements) and Section 5.18 (Non-Recourse) shall survive the
termination of this Agreement.
Section 5.18 Non-Recourse. This Agreement may only be enforced against, and any claims or
causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation,
execution or performance of this Agreement, may only be made against the entities that are expressly
identified as parties hereto, including entities that become parties hereto after the date hereof, and no
former, current or future equityholders, controlling persons, directors, officers, employees, agents or
Affiliates of any party hereto or any former, current or future equityholder, controlling person, director,
officer, employee, general or limited partner, member, manager, advisor, agent or Affiliate of any of the
foregoing (each, a “Non-Recourse Party”) shall have any liability for any obligations or liabilities of the
parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of,
or by reason of, the transactions contemplated hereby or in respect of any representations made or alleged
to be made in connection herewith. Without limiting the rights of either party against the other party
hereto, in no event shall either party or any of its Affiliates seek to enforce this Agreement against, make
any claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-
Recourse Party.
Section 5.19 Disclosure Letter. Any matter disclosed by the Company in the Disclosure Letter
pursuant to any Section of this Agreement shall be deemed to have been disclosed by the Company for
purposes of each other Section of this Agreement to which such disclosure is readily apparent.
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Schedule A
PHX 332633099v6
Purchaser Allocations
Purchaser Percentage
Xxxxxxx Associates, L.P. 32%
Brockdale Investments LP 68%
