AMENDMENT NO. 4 to the AMENDED AND RESTATED OPERATING AGREEMENT of AMERICAN PROCESSING COMPANY, LLC
Exhibit 10.2
THIS AMENDMENT NO. 4 (this “Amendment”) to that certain Amended and Restated Operating
Agreement, dated as of March 14, 2006, as amended by that certain Amendment No. 1 to the Amended
and Restated Operating Agreement, dated as of January 9, 2007, that certain Amendment No. 2 to the
Amended and Restated Operating Agreement, dated as of November 30, 2007 and that certain Amendment
No. 3 to the Amended and Restated Operating Agreement, dated as of February 28, 2008 (the
“Operating Agreement”), of American Processing Company, LLC, a Michigan limited liability company
(the “Company”), is made and entered into to be effective for all purposes as of August 15, 2008,
by and among the Company, the Manager and the Members listed on the signature pages hereto.
Capitalized terms used but not otherwise defined herein shall have meanings specified in the
Operating Agreement.
RECITALS
A. On July 29, 2008, the Manager sent a Call Notice to each Member (the “NDEx Notice”) whereby
the Manager requested that each Member contribute to the capital of the Company its pro rata share
of an amount equal to $17,941,000, which such amount is being raised in connection with the
purchase by the Company, directly and indirectly, of (i) all the outstanding capital stock of
THP/NDEx AIV Corp., a Delaware corporation (“THP Corp.”), (ii) all the general partnership
interests in THP/NDEx AIV, LP, a Delaware limited partnership (“THP LP”), (iii) all the limited
partnership interests in National Default Exchange Holdings, L.P., a Delaware limited partnership
(“NDEx Holdings”), other than those limited partnership interests held by THP LP, and (iv) all the
outstanding capital stock of National Default Exchange Management, Inc., a Delaware corporation
which is the general partner of NDEx Holdings (“Management”), other than the capital stock held by
THP LP. NDEx Holdings, Management, THP Corp. and THP LP are collectively referred to herein as
“NDEx”.
X. Xxxxx has elected to make capital contributions to the Company in connection with the NDEx
Notice and Xxxxx has agreed to make an additional contribution to the Company in the amount equal
to the sum of Trott & Trott’s Optional Capital Contribution Amount and Feiwell & Hannoy’s Optional
Capital Contribution Amount set forth in the NDEx Notice.
C. A portion of the capital contribution to be made by Xxxxx will be in the form of 825,528
shares of Xxxxx Common Stock with an agreed fair market value of $15,947,964.
D. The Company is a party to that certain Equity Purchase Agreement, dated as of July 28,
2008, by and among the Company and each of the other parties a party thereto (the “NDEx Equity
Purchase Agreement”) pursuant to which the Company has agreed to purchase all the outstanding
equity interests of NDEx.
E. As a portion of the consideration being paid by the Company for the acquisition of the
equity interests of NDEx, the Company has agreed to issue an aggregate of 84,137
Common Units (the “NDEx Seller Units”) to the Persons, and in the amount, set forth on
Schedule A attached hereto (such Persons, the “NDEx Sellers”).
F. Pursuant to Section 10.4 of the Operating Agreement, the Manager and a
Supermajority-in-Interest of the Members have agreed to amend the terms of the Operating Agreement
as provided in this Amendment in order to, among other things, reflect (i) the additional Common
Units issued to Xxxxx in connection with the additional capital contributions made by Xxxxx
described above, (ii) the issuance of the NDEx Seller Units to the NDEx Sellers and (iii) the
liquidity right agreed to be granted to the NDEx Sellers.
AGREEMENT
1. AMENDMENTS
1.1 The following definitions shall be added to, or amended in, as appropriate, Article
I of the Operating Agreement:
“Formula Value Per Common Unit” means, as of a specified date (such date, the
“Valuation Date”), an amount equal to the quotient of (x) the difference between (i)
the product of (A) the Company’s Adjusted EBITDA for the most recently completed
twelve (12) calendar months prior to the Valuation Date (the “Valuation Period”) and
(B) 6.25 and (ii) the aggregate amount of any interest bearing indebtedness of the
Company as of the Valuation Date and (y) the number of Common Units of the Company
outstanding as of the Valuation Date (determined on a Common Equivalent Basis). For
purposes of calculating the foregoing, if the Company incurs interest bearing
indebtedness from any Person, including, but not limited to, an Affiliate of the
Company, during the Valuation Period for purposes of funding in part or in whole one
or more Acquisitions, then the Company’s Adjusted EBITDA shall include the
annualized Adjusted EBITDA for each such Acquisition, calculated as follows: an
amount equal to the sum of (A) the product of (x) the quotient of (i) Adjusted
EBITDA attributable to such Acquisition since the closing of such Acquisition that
is included in the Company’s Adjusted EBITDA for the Valuation Period (the
“Annualized Acquisition Adjusted EBITDA”), divided by (ii) the number of days since
the closing of such Acquisition during the Valuation Period, multiplied by (y) three
hundred sixty-five (365), minus (B) the Annualized Acquisition Adjusted EBITDA for
such Acquisition.
“NDEx Sellers” means Xxxxxxx X. Xxxxxxx, Xxxxxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx,
Xxxxx X. Xxxxxxxx, Xxxx X. Xxxxxx, Xxxxx Xxxxx, Xxxx X. Xxxxxx and Xxxxxxx Xxxxxx Xxxxxxxx
Xxxxxx & Xxxxx, LLP, a Texas limited liability partnership (formerly known as Xxxxxxx Xxxxx
Xxxxxx Castle Xxxxxx & Xxxxxxxx, LLP).
“Minority Members” means Trott & Trott, Feiwell & Hannoy and each of the NDEx Sellers.
“Put Closing” is defined in Section 7.7(c).
“Put Note” is defined in Section 7.7(c).
“Put Securities” is defined in Section 7.7(c).
1.2 Section 7.7 of the Operating Agreement is hereby amended and restated in its
entirety as follows:
7.7 Liquidity Right.
(a) (i) For a period of six (6) months after August 2, 2009 with respect to Trott &
Trott and Feiwell & Hannoy only, or (ii) for a period of six (6) months after the
fourth anniversary of the Closing Date (as defined in the NDEx Equity Purchase
Agreement) with respect to the NDEx Sellers only, each Minority Member will have the
right to require the Company to repurchase all or any portion of such Minority
Member’s Common Units or other Membership Interests in the Company for a purchase
price equal to the Repurchase Price by delivering written notice of the exercise of
such right to the Manager (the “Put Notice”). The date on which the Manager
receives a Put Notice hereinafter is referred to as the “Put Delivery Date”. The
parties acknowledge and agree that, for purposes of calculating the Repurchase
Price, the specified date with respect to the Formula Value Per Common Unit shall be
the date of the Put Closing (as defined below).
(b) The Company shall be obligated to purchase all of each applicable Minority
Member’s Common Units or other Membership Interests in the Company requested to be
repurchased by such Minority Member in the Put Notice pursuant to Section
7.7(a) hereof (the “Put Securities”), at a closing (the “Put Closing”) on such
date as mutually agreed to by the Manager and the applicable Minority Members, which
date shall not be prior to thirty (30) days after the Put Delivery Date. At the Put
Closing, (i) each Minority Member shall (A) endorse and deliver any certificates
representing the Put Securities held by such Minority Member to be repurchased by
the Company, (B) execute and deliver any other instruments requested by the Company
to evidence the repurchase of the Put Securities by the Company, and (C) execute and
deliver definitive documentation containing customary representations, warranties
and indemnifications satisfactory to the Manager (including that such Minority
Member has good and marketable title to the Put Securities free and clear of all
liens, hypothecations, mortgages, charges, security interests, pledges and other
encumbrances and claims of any nature), and (ii) the Manager shall deliver to such
Minority Member a promissory note issued by the Company (a “Put Note”) in the
aggregate principal amount equal to the Repurchase Price. Prior to the Put Closing,
a Minority Member and the Manager shall in good faith negotiate the terms and
conditions of the Put Note; provided, however, that such Put Note
will (i) be unsecured, (ii) be for a term of three years with level payments of
principal and interest during the term thereof, (iii) bear interest at a rate equal
to the then prevailing prime rate plus two percent (2%) and (iv) be subject to the
terms and
conditions of any subordination agreement requested by the Senior Agent and the
Senior Lenders.
1.3 A new Section 3.3(c) is added to the Operating Agreement to read in its entirety
as follows:
(c) In-Kind Capital Contributions; Issuance of Additional Common Units. If
acceptable to the Manager, Optional Capital Contributions may be made in property
other than cash and the amount of such Optional Capital Contributions (which shall
be the fair market value of such property) shall be as determined by a
Supermajority-in-Interest of the Members. Xxxxx and each Minority Member who makes
Optional Capital Contributions shall receive additional Common Units in the Company
in an amount equal to the amount of Optional Capital Contributions so made divided
by the Formula Value Per Common Unit.
1.4 Pursuant to Section 3.4 of the Operating Agreement, upon the closing of the acquisition of
NDEx by the Company, the Manager hereby authorizes the issuance of the NDEx Common Units to each of
the NDEx Sellers in the amounts set forth on Schedule A.
1.5 Section 3.4(b)(ii) and Section 3.4(b)(iii) are hereby amended to read in
their entirety as follows:
(ii) If some, but not all of the Eligible Investors, do not exercise their rights
under this Section 3.4(b) (in such capacity, each a “Declining Investor”),
the Company shall so advise the other Eligible Investor(s) which are exercising
their rights under this Section 3.4(b) (in such capacity, a “Participating
Investor(s)”) by providing the Participating Investor(s) with written notice (the
“Participating Notice”) within ten (10) Business Days after the expiration of the
fifteen (15) Business Day period in which such rights could have been exercised.
The Participating Investor(s) shall thereupon for a period of five (5) Business Days
from the date of such Participating Notice be entitled to purchase the share of the
New Securities which could have been purchased by the Declining Investor(s). The
Participating Investor(s) shall close on the purchase of the New Securities within
thirty (30) days after the expiration of the 5-Business Day period.
(iii) The Company shall have one hundred twenty (120) days after the date of the
Preemptive Notice to sell or enter into an agreement (pursuant to which the sale of
New Securities covered thereby shall be closed, if at all, within sixty (60) days
from the date of such agreement) to sell the remaining New Securities not purchased
by the Eligible Investors or the Participating Investor(s), as the case may be, at a
price no less and upon the same terms and conditions as those specified in the
Preemptive Notice. If the price of the New Securities decreases or the terms and
conditions change, the provisions of this Section 3.4(b) shall again apply
de novo.
1.6 Exhibit A of the Operating Agreement is hereby replaced with Exhibit A
attached hereto.
1.7 Distributions. The parties agree that Distributable Cash related to the month in
which the Closing (as defined in the NDEx Equity Purchase Agreement) occurs shall be calculated by
computing the Member’s Participating Percentages for such month on a daily basis.
2. REFERENCE TO AND EFFECT ON THE OPERATING AGREEMENT
2.1 Each reference in the Operating Agreement to “this Agreement”, “hereunder”, “hereof”,
“herein”, or words of like import shall mean and be a reference to the Operating Agreement as
amended hereby.
2.2 Except as specifically amended above, the Operating Agreement shall remain in full force
and effect and is hereby ratified and confirmed.
3. MISCELLANEOUS
3.1 This Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same instrument. In
accordance with the Operating Agreement, this Amendment shall be effective upon execution by the
Company, the Manger and a Supermajority-in-Interest of the Members. This Amendment, to the extent
signed and delivered by means of a facsimile machine or other electronic transmission (including
transmission in portable document format by electronic mail), shall be treated in all manner and
respects and for all purposes as an original agreement and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered in person. At the
request of any party hereto, each other party hereto shall re-execute original forms hereof and
deliver them to all other parties, except that the failure of any party to comply with such a
request shall not render this Amendment invalid or unenforceable. No party hereto shall raise the
use of a facsimile machine or other electronic transmission to deliver a signature, or the fact
that any signature was transmitted or communicated through the use of a facsimile machine or other
electronic transmission, as a defense to the formation or enforceability of a contract and each
such party forever waives any such defense.
3.2 Section headings in this Amendment are included herein for convenience of reference only
and shall not constitute a part of this Amendment for any other purpose.
3.3 Each party shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Amendment and the consummation of the transactions contemplated
hereby.
3.4 The language used in this Amendment will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will be applied against
any party.
3.5 If and to the extent there are any inconsistencies between the Operating Agreement and
this Amendment, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written
above.
| COMPANY: | |||||||
| AMERICAN PROCESSING COMPANY, LLC | |||||||
| By: XXXXX APC LLC Its: Manager |
|||||||
| By: | /s/ Xxxxx X. Xxxxxx
|
||||||
| Name: Xxxxx X. Xxxxxx | |||||||
| Its: Vice President | |||||||
| MANAGER: | |||||||
| XXXXX APC LLC | |||||||
| By: | /s/ Xxxxx X. Xxxxxx
|
||||||
| Name: Xxxxx X. Xxxxxx | |||||||
| Its: Vice President | |||||||
| MEMBERS: | |||||||
| XXXXX APC LLC | |||||||
| By: | /s/ Xxxxx X. Xxxxxx
|
||||||
| Name: Xxxxx X. Xxxxxx | |||||||
| Its: Vice President | |||||||
| APC INVESTMENTS, LLC | |||||||
| By: | /s/ Xxxxx X. Xxxxx
|
||||||
| Name: Xxxxx X. Xxxxx | |||||||
| Its: Manager | |||||||
| FEIWELL & HANNOY PROFESSIONAL CORPORATION | |||||||
| By: | /s/ Authorized Signer
|
||||||
| Name: |
|||||||
| Its: | |||||||
SCHEDULE A
NDEx SELLERS
| Name | NDEX Seller Units | |||
Xxxxxxx X. Xxxxxxx and Xxxxxxxxxx X. Xxxxxxx, JTWROS |
34,609 | |||
Xxxx X. Xxxxxx and Xxxxxxx Xxxxxx Xxxxxx, Xx., Tenants
in Common |
14.899 | |||
Xxxxxx X. Xxxxxxxx |
14,899 | |||
Xxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx, JTWROS |
5,714 | |||
Xxxx X. Xxxxxx and Xxxxx X. Xxxxxx, JTWROS |
5,714 | |||
Xxxxx Xxxxx and Xxxxx Xxxxx, JTWROS |
5,714 | |||
Xxxxx X. Xxxxx |
393 | |||
Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, Tenants in Common |
394 | |||
Xxxxxxx Xxxxxx Xxxxxxxx Xxxxxx & Xxxxx, LLP |
1,801 | |||
TOTAL: |
84,137 | |||
EXHIBIT A
List of Members, Capital Contributions, Capital Accounts
Common Units and Participating Percentages
Common Units and Participating Percentages
As of August 15, 2008
| Name, Address, Phone | Participating | |||||||
| and Fax of Member | Common Units | Percentage | ||||||
Xxxxx APC, LLC |
1,173,952 | 90.14 | % | |||||
c/x Xxxxx Media Company 1200 Xxxxx Building 000 Xxxxxx Xxxxxx Xxxxx Xxxxxxxxxxx, Xxxxxxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 Attention: Xxxxx X. Xxxxx |
||||||||
APC Investments, LLC |
104,905 | 8.05 | % | |||||
00000 Xxxxxxxxxxxx Xxxxxxx Xxxxx 000 Xxxxxxxxxx Xxxxx, XX 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 Attention: Xxxxx X. Xxxxx |
||||||||
Feiwell & Hannoy Professional Corporation |
23,560 | 1.81 | % | |||||
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxxxxxx, Xxxxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 Attention: Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxxx |
||||||||
TOTAL: |
1,302,417 | 100.000 | % | |||||
EXHIBIT A
List of Members, Capital Contributions, Capital Accounts
Common Units and Participating Percentages
Common Units and Participating Percentages
As of Closing of the NDEx Acquisition
| Name, Address, Phone | Participating | |||||||
| and Fax of Member | Common Units | Percentage | ||||||
Xxxxx APC, LLC |
1,173,952 | 84.67 | % | |||||
c/x Xxxxx Media Company 1200 Xxxxx Building 000 Xxxxxx Xxxxxx Xxxxx Xxxxxxxxxxx, Xxxxxxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 Attention: Xxxxx X. Xxxxx |
||||||||
APC Investments, LLC |
104,905 | 7.57 | % | |||||
00000 Xxxxxxxxxxxx Xxxxxxx Xxxxx 000 Xxxxxxxxxx Xxxxx, XX 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 Attention: Xxxxx X. Xxxxx |
||||||||
Feiwell & Hannoy Professional Corporation |
23,560 | 1.70 | % | |||||
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxxxxxx, Xxxxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 Attention: Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxxx |
||||||||
Xxxxxxx Xxxxxx Xxxxxxxx Xxxxxx & Xxxxx, LLP |
1,801 | 0.13 | % | |||||
00000 Xxxxxxxx Xxxx., Xxxxx 000 Xxxxxxx, Xxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 Attention: Xxxxxxx X. Xxxxxxx, Chairman |
||||||||
| Name, Address, Phone | Participating | |||||||
| and Fax of Member | Common Units | Percentage | ||||||
Xxxxxxx X.
Xxxxxxx and Xxxxxxxxxx X. Xxxxxxx, |
34,609 | 2.50 | % | |||||
JTWROS 0000 Xxxx Xxxx Xxxxx Xxxxxx, Xxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 |
||||||||
Xxxxxx X. Xxxxxxxx |
14,899 | 1.07 | % | |||||
0000 Xxxxx Xxxx. Xxxxxxx, Xxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 |
||||||||
Xxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx, |
5,714 | 0.41 | % | |||||
JTWROS 0000 Xxxxxx Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 |
||||||||
Xxxx X. Xxxxxx
and Xxxxxxx Xxxxxx Xxxxxx, Xx., |
14,899 | 1.07 | % | |||||
Tenants in Common 00000 Xxxxxxx Xxxxx Xxxx Xxxxxxx, Xxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 |
||||||||
Xxxxx Xxxxx and Xxxxx Xxxxx, JTWROS |
5,714 | 0.41 | % | |||||
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 |
||||||||
Xxxx X. Xxxxxx and Xxxxx X. Xxxxxx, JTWROS |
5,714 | 0.41 | % | |||||
0000 Xxxxxxxx Xx. Xxxxxx Xxx, Xxxxx 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 |
||||||||
Xxxxx X. Xxxxx |
393 | 0.03 | ||||||
X.X. Xxx 00 Xxxxxxxxx, XX 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 |
||||||||
| Name, Address, Phone | Participating | |||||||
| and Fax of Member | Common Units | Percentage | ||||||
Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, |
394 | 0.03 | ||||||
Tenants in Common 00000 Xxxxxxxxxx Xxxxxx Xxxxxx, XX 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 |
||||||||
TOTAL: |
1,386,554 | 100.000 | % | |||||
