Exhibit 10.1

 

 

 

INVESTMENT AGREEMENT

dated as of May 1, 2017

by and among

Roadrunner Transportation Systems, Inc.,

Elliott Associates, L.P.

and

Brockdale Investments LP

 

 

 

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Table of Contents

 

         Page   ARTICLE I   PURCHASE; CLOSING  

Section 1.1

 

Purchase

     1  

Section 1.2

 

Closing

     2  

Section 1.3

 

Closing Conditions

     2   ARTICLE II   REPRESENTATIONS AND WARRANTIES OF THE COMPANY  

Section 2.1

 

Organization and Authority

     4  

Section 2.2

 

Capitalization

     4  

Section 2.3

 

Authorization

     6  

Section 2.4

 

Sale and Status of Securities

     7  

Section 2.5

 

SEC Documents; Financial Statements

     7  

Section 2.6

 

Undisclosed Liabilities

     8  

Section 2.7

 

Brokers and Finders

     8  

Section 2.8

 

Litigation

     8  

Section 2.9

 

Taxes

     9  

Section 2.10

 

Permits and Licenses

     9  

Section 2.11

 

Environmental Matters

     10  

Section 2.12

 

Title

     10  

Section 2.13

 

Intellectual Property

     10  

Section 2.14

 

Employee Benefits/Labor

     10  

Section 2.15

 

Intentionally Omitted

     12  

Section 2.16

 

Registration Rights

     12  

Section 2.17

 

Compliance with Laws

     12  

Section 2.18

 

Absence of Changes

     12  

Section 2.19

 

Anti-Corruption

     12  

Section 2.20

 

Trade Controls

     13  

Section 2.21

 

Listing and Maintenance Requirements

     13  

Section 2.22

 

Material Contracts

     13  

Section 2.23

 

Insurance

     14  

Section 2.24

 

No Additional Representations

     14   ARTICLE III   REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS  

Section 3.1

 

Organization and Authority

     15  

Section 3.2

 

Authorization

     15  

Section 3.3

 

Purchase for Investment

     16  

Section 3.4

 

Financial Capability

     16  

Section 3.5

 

Brokers and Finders

     16  

 

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ARTICLE IV   COVENANTS  

Section 4.1

 

Filings; Other Actions

     16  

Section 4.2

 

Reasonable Best Efforts to Close

     17  

Section 4.3

 

Confidentiality

     17  

Section 4.4

 

State Securities Laws

     18  

Section 4.5

 

Interim Operating Covenants

     18  

Section 4.6

 

Non-Solicitation

     19  

Section 4.7

 

Tax Matters

     20  

Section 4.8

 

Use of Proceeds

     20  

Section 4.9

 

New ABL Facility; Daily Payment

     20  

Section 4.10

 

Board and Committee Appointments

     21   ARTICLE V   MISCELLANEOUS  

Section 5.1

 

Survival

     21  

Section 5.2

 

Expenses

     21  

Section 5.3

 

Amendment; Waiver

     22  

Section 5.4

 

Counterparts; Electronic Transmission

     22  

Section 5.5

 

Governing Law

     22  

Section 5.6

 

WAIVER OF JURY TRIAL

     22  

Section 5.7

 

Notices

     22  

Section 5.8

 

Entire Agreement

     23  

Section 5.9

 

Assignment

     23  

Section 5.10

 

Interpretation; Other Definitions

     24  

Section 5.11

 

Captions

     32  

Section 5.12

 

Severability

     32  

Section 5.13

 

No Third Party Beneficiaries

     32  

Section 5.14

 

Public Announcements

     32  

Section 5.15

 

Specific Performance

     32  

Section 5.16

 

Termination

     32  

Section 5.17

 

Effects of Termination

     33  

Section 5.18

 

Non-Recourse

     33  

Section 5.19

 

Disclosure Letter

     34  

 

Exhibit A: Form of Series B Certificate of Designations

Exhibit B: Form of Series C Certificate of Designations

Exhibit C: Form of Series D Certificate of Designations

Exhibit D: Form of Series E Certificate of Designations

Exhibit E: Form of Series F Certificate of Designations

Exhibit F: Form of Warrant Agreement

Exhibit G: Form of Stockholders’ Agreement

Exhibit H: Form of Registration Rights Agreement

Schedule A: Purchaser Allocations

 

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INVESTMENT AGREEMENT, dated as of May 1, 2017 (this “Agreement”), by and among
Roadrunner Transportation Systems, Inc., a Delaware corporation (the “Company”),
Elliott 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 Certificates of Designations,
Preferences and Rights in respect of each of the Company’s Series B Cumulative
Redeemable Preferred Stock, Series C Cumulative Redeemable Participating
Preferred Stock, Series D Cumulative Redeemable Participating Preferred Stock,
Series E Cumulative Redeemable Preferred Stock and Series F Cumulative
Redeemable Preferred Stock in the forms attached hereto as Exhibit A, Exhibit B,
Exhibit C, Exhibit D and Exhibit E, respectively (collectively, the “Certificate
of Designations”), in order to create a series of preferred stock, par value
$0.01 per share, designated as Series B Cumulative Redeemable Preferred Stock
(the “Series B Preferred Stock”), a series of preferred stock, par value $0.01
per share, designated as Series C Cumulative Redeemable Participating Preferred
Stock (the “Series C Preferred Stock”), a series of preferred stock, par value
$0.01 per share, designated as Series D Cumulative Redeemable Participating
Preferred Stock (the “Series D Preferred Stock”), a series of preferred stock,
par value $0.01 per share, designated as Series E Cumulative Redeemable
Preferred Stock (the “Series E Preferred Stock”) and a series of preferred
stock, par value $0.01 per share, designated as Series F Cumulative Redeemable
Preferred Stock (the “Series F Preferred Stock” and, together with the Series B
Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and
the Series E 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 Series B Preferred Stock, shares of Series C Preferred
Stock, shares of Series D Preferred Stock, shares of Series E Preferred Stock
and shares of Series F Preferred Stock, subject to the terms and conditions set
forth in this Agreement;

WHEREAS, in order to induce the Purchasers to enter into this Agreement, the
Company has agreed to issue to the Purchasers (or to their assignees pursuant to
Section 5.9) in accordance with the percentages set forth on Schedule A certain
warrants (the “Warrants”) to purchase shares of common stock, par value $0.01
per share, of the Company (“Common Stock”) at the Closing pursuant to the
Warrant Agreement in the form attached as Exhibit F (the “Warrant 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, on
the Closing Date, (i) 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, (v) 155,000 shares of Series B Preferred Stock (the
“Series B Purchased Shares”) at a purchase price of $1,000.00 per share,
(w) 55,000 shares of Series C Preferred Stock (the “Series C

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Purchased Shares”) at a purchase price of $1,000.00 per share, (x) 100 shares of
Series D Preferred Stock (the “Series D Purchased Shares”) at a purchase price
of $1.00 per share, (y) 90,000 shares of Series E Preferred Stock (the “Series E
Purchased Shares”) at a purchase price of $1,000.00 per share, and (z) 240,500
shares of Series F Preferred Stock (together with the Series B Purchased Shares,
the Series C Purchased Shares, the Series D Purchased Shares and the Series E
Purchased Shares, the “Purchased Shares”) at a purchase price of $1,000.00 per
share, in each case 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) and (ii) the Company agrees to issue to the Purchasers (or their
assignees) in accordance with the percentages set forth on Schedule A the number
of Warrants set forth in the Warrant Agreement, free and clear of any Liens
(other than restrictions arising under applicable securities Laws and the
Warrant Agreement).

Section 1.2    Closing.

(a)    Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, the closing of the purchase by the Purchasers of the Purchased Shares
and the issuance to the Purchasers of the Warrants pursuant to this Agreement
(the “Closing”) shall take place remotely via the electronic exchange of
documents and signatures at 12:01 a.m. New York time on May 2, 2017, subject to
the satisfaction or waiver of the conditions set forth in Section 1.3 (other
than those conditions that by their nature are to be satisfied by actions taken
at the Closing, but subject to their satisfaction) or at such other date, time
and place as the Company and the Purchasers agree (the “Closing Date”).

(b)    Subject to the satisfaction or waiver at or prior to the Closing of the
applicable conditions to the Closing in Section 1.3, at the Closing:

(1)    the Company will deliver to each Purchaser (i) certificates representing
the Purchased Shares purchased by such Purchaser, (ii) the Warrant Certificates
(as defined in the Warrant Agreement) representing the Warrants issued to such
Purchaser, (iii) each of the Stockholders’ Agreement, the Registration Rights
Agreement, and the Warrant Agreement, executed by the Company and (iv) 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 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, (ii) each of the Stockholders’
Agreement, Registration Rights Agreement and Warrant Agreement, executed by such
Purchaser and (iii) 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 the 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 the 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:

 

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(1)    subject to the limitations set forth in Section 5.2, substantially
contemporaneous with the Closing, the Company shall have reimbursed the
Purchasers for the costs, expenses and fees described in Section 5.2 to the
extent incurred prior to the Closing;

(2)    (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) and
2.21) 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 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) and 2.21 shall be true and correct in all but de
minimis respects as of the date of this Agreement and as of the 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);

(3)    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;

(4)    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)(2) and (3) have
been satisfied;

(5)    the Purchasers shall have received a copy of a payoff letter or other
evidence, reasonably satisfactory to them, that upon payment of the amounts
reflected therein, the amounts outstanding under the Existing Credit Facility
shall have been repaid and all obligations thereunder satisfied and discharged;
and

(6)    HCI Equity Management, L.P. and its affiliates shall have agreed, in form
and substance satisfactory to the Purchasers, to terminate its advisory
agreement with the Company and waive all unpaid fees thereunder.

(c)    The obligation of the Company to effect the Closing is also subject to
the satisfaction by the Purchasers or waiver by the Company prior to the Closing
of the following conditions:

(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 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

 

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(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 the
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 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, and
240,500 of which shares of preferred stock are designated as Series F Preferred
Stock. As of the close of business on April 28, 2017 (the “Capitalization
Date”), there were 38,340,607 shares of Common Stock

 

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issued and outstanding and no shares of preferred stock issued and outstanding.
As of the close of business on the Capitalization Date, (i) 1,084,533 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
905,668 were then unvested, (ii) 415,408 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)
1,749,898 shares of Common Stock were available for future awards under the 2010
Incentive Compensation Plan, (vi) 274,362 shares of Common Stock were reserved
for issuance upon the exercise of warrants outstanding on such date that were
granted pursuant to the Securities Purchase Agreement, dated December 11, 2009,
by and among Roadrunner Transportation Services, Inc., Roadrunner Transportation
Services Holdings, Inc., the “guarantors” named therein and the “purchasers”
named therein (“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
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

 

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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 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 the 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 ten.

(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) except as set forth on Section 2.3(b) of the
Disclosure Letter, 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 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 and
approval or expiration of applicable waiting periods under the HSR Act and Other
Competition Laws, 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.

(d)    As of the Closing, the number of Warrant Shares shall represent 0.99% of
the outstanding shares of Common Stock.

 

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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 and the
Warrants (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 Purchased Shares to be issued pursuant to this Agreement, and the
shares of Common Stock to be issued upon exercise of the Warrants (the “Warrant
Shares”), have been duly authorized by all necessary corporate action. When
issued and sold against receipt of the consideration therefor as provided in
this Agreement or the Warrant Agreement, the Purchased Shares and the Warrant
Shares will be validly issued, fully paid and nonassessable, will not be subject
to preemptive rights of any other stockholder of the Company and will
effectively vest in each Purchaser good title to the Purchased Shares and the
Warrant Shares, free and clear of all Liens (other than restrictions arising
under the Certificate of Incorporation, restrictions arising under applicable
securities Laws and restrictions set forth in the Stockholders’ Agreement). The
respective rights, preferences, privileges and restrictions of the Common Stock,
the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock, the Series E Preferred Stock and the Series F 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, or except to the extent reflected in (i) the Company
Financial Statements or (ii) the Company’s most recent drafts, dated April 10,
2017 and made available to the Purchasers on April 26, 2017, of (A) the
Company’s Annual Report on Form 10-K/A for the year ended December 31, 2015 and
(B) the Company’s Annual Report on Form 10-K for the year ended December 31,
2016, 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.

 

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(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.

(d)    The Company has delivered to the Purchasers a copy of the Company’s draft
unaudited financial statements as of and for the year ended December 31, 2016
(the “Draft Statements”). The Company subsequently delivered to the Purchasers a
revised Consolidated Balance Sheet and a revised Consolidated Statement of
Operations, which are included in Section 2.5 of the Disclosure Letter (the
“Updated Statements”). The Draft Statements, as revised by the Updated
Statements (as so revised, 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; provided,
however, that the Consolidated Statements of Stockholders’ Investment, the
Consolidated Statements of Cash Flows, and the Notes to Consolidated Financial
Statements included in the Draft Statements have not been revised to reflect the
Updated Statements. 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;
provided, however, that the Consolidated Statements of Stockholders’ Investment,
the Consolidated Statements of Cash Flows, and the Notes to Consolidated
Financial Statements included in the Draft Statements have not been revised to
reflect the Updated Statements.

(e)    Purchasers have received a true and correct copy of the cash flow report
for the 11 week period ended April 21, 2017, which has been prepared, consistent
with past practice, based upon the books and records of the Company maintained
in the ordinary course and used to prepare the financial statements of the
Company.

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. Except for Raymond James & Associates, Inc.,
the fees and expenses of which are set forth on Section 2.7 of the Disclosure
Letter and will be paid by the Company, 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

 

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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;

(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)    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

 

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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.

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

 

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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.

(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, except for Raymond James &
Associates, Inc., 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,

 

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(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.

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, 2017, there has not been
any action or omission of any Company Group Member that, if such action or
omission occurred between the date of this Agreement and the Closing Date, would
violate Section 4.5(f) or Section 4.5(h) without the prior written consent of
Purchasers.

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. Bribery
Act 2010 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.

 

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(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.

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

 

13

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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 Existing Credit Agreement, no such Material
Contract imposes any limitation on the payment of dividends at the Minimum
Dividend Rate(s) (as defined in the applicable Certificate of Designations) or,
if applicable, Participating Dividends (as defined in the applicable Certificate
of Designations) as contemplated to be paid under the terms of the applicable
Certificate of Designations

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 as would not, individually or in the aggregate, be materially
adverse to the Company Group, taken as a whole, (i) 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 (ii) 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.

 

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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 the Closing Date (except to the extent made only as of a
specified date, in which case as of such date), that:

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 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 the 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.

 

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(c)    Other than the securities or blue sky laws of the various states and
approval or expiration of applicable waiting periods under the HSR Act or Other
Competition Laws, 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 and the Warrants 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 and the Warrants
pursuant to an exemption from registration under the Securities Act solely for
investment with no present intention to distribute any of the Purchased Shares
or the Warrants to any person in violation of applicable securities laws,
(ii) will not sell or otherwise dispose of any of the Purchased Shares or the
Warrants, 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 the Warrants 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
and the Warrants indefinitely and (y) a total loss in respect of such
investment.

Section 3.4    Financial Capability. Such Purchaser currently has capital
commitments sufficient to, and at the 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 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.

(a)    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

 

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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 the 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. In particular, the Purchaser and the Company shall use
all reasonable best efforts to (i) as promptly as reasonably practicable
following the date hereof, submit the notifications under the HSR Act, with
respect to the transactions contemplated hereby, including the issuance of the
Purchased Shares and the Warrants to the Purchasers (including, for the
avoidance of doubt, the right to appoint Preferred Stock Directors (as defined
in the Certificate of Designations) to the Board of Directors of the Company),
and (ii) as promptly as reasonably practicable, make all filings under the
applicable Other Competition Laws, if any, required for the transactions
contemplated hereby, including the issuance of the Purchased Shares and the
Warrants to the Purchasers. 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 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) subject to Section 5.2, 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.

(b)    Without limiting the generality of Section 4.1(a), the Company shall
cause the Warrant Shares to be approved for listing on the NYSE during the
Pre-Closing Period, subject only to a notice of issuance.

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 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-

 

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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, 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 or the
Warrants and (b) cause such authorization, approval, permit or qualification to
be effective as of the Closing.

Section 4.5    Interim Operating Covenants. Except as set forth on Section 4.5
of the Disclosure Letter, during the Pre-Closing Period the Company shall, and
shall cause each other Company Group Member to, operate its business in the
ordinary course in substantially the same manner in which it previously has been
conducted and use its reasonable best efforts to preserve intact its business
and assets and its relationships with customers, suppliers, employees and others
having business dealings with it. Without limiting the generality of the
foregoing, without the prior written consent of the Purchasers (such consent not
to be unreasonably withheld, conditioned or delayed) or as contemplated herein,
and except as set forth on Section 4.5 of the Disclosure Letter, the Company
shall not, and shall cause each other Company Group Member not to:

(a)    declare, or make payment in respect of, any dividend or other
distribution upon any shares of capital stock of the Company (for the avoidance
of doubt, the parties agree that this limitation does not apply to any other
Company Group Member);

(b)    redeem, repurchase or acquire any capital stock of any Company Group
Member, other than repurchases of capital stock from employees, officers or
directors of any Company Group Member in the ordinary course of business
pursuant to any of the Company Group’s agreements or plans in effect as of the
date hereof;

(c)    amend the Certificate of Incorporation, the Certificate of Designations
or the Bylaws or take or authorize any action to wind up its affairs or
dissolve;

(d)    authorize, grant, issue or reclassify any capital stock, or securities
exercisable for, exchangeable for or convertible into capital stock (including
options, warrants or rights) of the Company other than (i) the authorization and
issuance of the Purchased Shares and (ii) issuances of capital stock, or
securities exercisable for, exchangeable for or convertible into shares or other
capital stock, of the Company to employees, officers or directors of any Company
Group Member in the ordinary course of business pursuant to any of the Company
Group’s agreements or plans in effect as of the date hereof;

(e)    incur any Indebtedness, other than (i) Indebtedness existing on the date
hereof, (ii) trade accounts payables incurred in the ordinary course of business
consistent with past practice, or (iii) short-term working capital Indebtedness
incurred in the ordinary course of business consistent with past

 

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practice or to pay any transaction expenses, filing fees and other costs and
expenses related to the transactions contemplated by this Agreement, the
Existing Credit Facility and the New ABL Facility;

(f)    settle or compromise any material action, suit, proceeding, investigation
or other litigation;

(g)    amend, modify or enter into any new agreement with Raymond James &
Associates, Inc. in a manner that materially increases the fees or commissions
payable by the Company;

(h)    amend, modify or enter into any new agreement with any Affiliate of the
Company;

(i)    enter into, assume, amend, modify, waive any material right under or
terminate any Credit Document or any Contract that would be a Credit Document;
or

(j)    agree or commit to do any of the foregoing.

Section 4.6    Non-Solicitation.

(a)    During the Pre-Closing Period, without the Purchasers’ prior written
consent, and except as set forth on Section 4.6 of the Disclosure Letter, none
of the Company or any Company Subsidiary shall, directly or indirectly, take
(and the Company shall not authorize or permit any directors, officers,
employees, accountants, consultants, legal counsel, advisors, agents or other
representatives of the Company or any Company Subsidiary or, to the extent
within the Company’s control, other Affiliates to take) any action to
(i) encourage (including by way of furnishing non-public information), solicit,
initiate or facilitate any Acquisition Proposal, (ii) enter into any agreement
with respect to any Acquisition Proposal or enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the issuance of the Purchased Shares and the Warrants or any other
transaction contemplated by this Agreement or the Transaction Documents or
(iii) participate in any way in discussions or negotiations with, or furnish any
information to, any person in connection with, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or
would reasonably be expected to lead to, any Acquisition Proposal. The Company
shall use all reasonable best efforts to ensure that the directors, officers,
employees, accountants, consultants, legal counsel, advisors, agents and other
representatives of the Company or any Company Subsidiary and, to the extent
within the Company’s control, other Affiliates, do not take or do any of the
actions referenced in the immediately foregoing sentence. Upon execution of this
Agreement, the Company shall cease immediately and cause to be terminated any
and all existing discussions or negotiations with any parties conducted
heretofore with respect to an Acquisition Proposal and promptly request that all
confidential information with respect thereto furnished on behalf of the Company
be returned.

(b)    Until such time as any of the Purchasers or any of their respective
Affiliates has the right to designate an individual for election as a director
of the Company pursuant to the Stockholders’ Agreement or Certificate of
Designations, the Company shall, as promptly as practicable (and in no event
later than five (5) business days after receipt thereof), advise the Purchasers
of any Acquisition Proposal, potential Acquisition Proposal, or any inquiry
received by it relating to any potential Acquisition Proposal and of the
material terms of any proposal or inquiry, including, but not limited to, the
identity of the person and its affiliates making the same, that it may receive
in respect of any such Acquisition Proposal, potential Acquisition Proposal, or
inquiry, or of any information requested from it or of any negotiations or
discussions being sought to be initiated with it, shall furnish to the
Purchasers a copy of any such proposal or inquiry, if it is in writing, or a
reasonably accurate written summary of any such proposal or inquiry, if it is
not in writing, and shall keep the Purchasers informed on a reasonably prompt
basis with respect to any developments with respect to the foregoing.

 

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Section 4.7    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 Warrants, 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.

(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, (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 (the
“Treaty”), (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 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 and (iv) the Company shall
not withhold or deduct any tax with respect to the daily payment described in
Section 4.9(b).

(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, shares of Preferred Stock or Warrants 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.

Section 4.8    Use of Proceeds. At the Closing, the Company shall use the
proceeds of the issuance of the Preferred Stock to repay the Existing Credit
Facility and pay the fees and expenses incurred in connection with the
transactions contemplated by this Agreement.

Section 4.9    New ABL Facility; Daily Payment.

(a)    Following the Closing, the Company shall use its reasonable best efforts
to, within ninety (90) days following the Closing Date, enter into the New ABL
Facility Credit Agreement and the related Credit Documents. If the New ABL
Facility is entered into, the Company shall use the proceeds of the New ABL
Facility to redeem issued and outstanding shares Series F Preferred Stock and,
if applicable, Series E Preferred Stock, (in each case pursuant to the terms of
the applicable Certificate of Designations) (the “Refinancing”, and the earlier
of (x) the expiration of such ninety (90) day period and (y) the date of the
Refinancing, the “Refinancing Date”). For the avoidance of doubt, following the
redemption of Series F Preferred Stock, and, if applicable, Series E Preferred
Stock in the Refinancing (and the payment of amounts referred to in clause
(y) of the definition of New ABL Facility), the available borrowing under the
New ABL Facility shall not exceed the amount in clause (z) of the definition of
New ABL Facility.

 

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Upon the Company’s reasonable request, the Purchasers shall cooperate in good
faith with the Company’s efforts to negotiate and enter into such New ABL
Facility Credit Agreement prior to the Refinancing Date; provided, however, that
neither Purchaser shall be obligated to undertake any monetary or other material
obligation or waive or modify any term of this Agreement in connection with the
foregoing.

(b)    From the Closing Date until the Refinancing Date, the Company shall pay
the Purchasers (or their designees), by wire transfer of immediately available
funds, a daily payment in an amount equal to $33,333.33 per calendar day during
such period. Such daily payment shall accrue daily and be payable monthly in
arrears, commencing on the first Business Day of the first month following the
Closing Date.

Section 4.10    Board and Committee Appointments. Promptly after the Closing
Date, the Board of Directors shall expand the size of the Board of Directors of
the Company by two members, and shall leave the two newly created positions
unfilled.    Following the date when all applicable waiting periods (and any
extension thereof) prescribed by the HSR Act have expired or been terminated,
the Company, upon receipt of notice from the Preferred Holders (as defined in
the Certificate of Designations), acting with the Preferred Requisite Vote (as
defined in the Certificate of Designations) shall within 10 business days
convene a special meeting of the Board of Directors (or cause an action by
written consent of the Board of Directors to be adopted) and (i) fill such two
vacancies with the individuals designated as the Preferred Stock Directors, with
one individual appointed as a Class II director and the other individual
appointed as a Class III director, as determined by the Preferred Holders (as
defined in the Certificate of Designations) and (ii) cause the Company to
execute customary indemnification agreements with such two individuals, in form
reasonably acceptable to the Preferred Holders (as defined in the Certificate of
Designations).    The Company shall not expand the size of the Board of
Directors (except as contemplated by this Section 4.10) between the date of this
Agreement and the 30th day following the expiration or termination of the
waiting periods referred to in this Section 4.10.

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
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 the Closing
shall survive for six (6) months following the Closing. The covenants or other
agreements of the parties that contemplate performance or fulfillment thereof at
or following the Closing shall survive the 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    Expenses. Except as set forth in Section 4.7(a), each party will
bear and pay all other costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated pursuant to this Agreement;
provided, that the Company shall (i) upon the Closing (or, to the extent any
such costs and expenses are incurred after the Closing, promptly following
notice from any Purchaser requesting reimbursement thereof) reimburse the
Purchasers for their reasonable and documented out-of-pocket costs and expenses
incurred in connection with the evaluation (including due diligence),
negotiation and consummation of this Agreement and the other Transaction
Documents and the transactions contemplated hereby and thereby, including fees
and expenses of legal and accounting advisors in connection any of the
foregoing; provided that the maximum amount of such costs and expenses
reimbursed at the Closing and thereafter shall not exceed $1,100,000 in the
aggregate, (ii) bear

 

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the cost of all filing fees for any required filings under the HSR Act, Other
Competition Laws and other applicable Laws in connection with the transactions
contemplated by the Transaction Documents and (iii) the fees and expenses in
connection with any First Lien Notes or Secured Notes shall be subject to
separate arrangements to be agreed as provided in the Stockholders’ Agreement.

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 privilege. The conditions to each party’s
obligation to consummate the 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

 

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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
   40 West 57th Street    New York, NY 10019    Attn:    Elliot Greenberg   
Fax:    (212) 478-2371    Email:    egreenberg@elliottmgmt.com    with a copy to
(which copy alone shall not constitute notice):    Debevoise & Plimpton LLP   
919 Third Avenue    New York, New York 10022    Attn:    Kevin M. Schmidt   
Fax:    (212) 521-7178    Email:    kmschmidt@debevoise.com (b)    If to the
Company:    Roadrunner Transportation Systems, Inc.    4900 South Pennsylvania
Ave.    Cudahy, WI 53110    Attn:    Curtis W. Stoelting    Fax:    (630)
968-0509    Email:    cstoelting@rrts.com    with a copy to (which copy alone
shall not constitute notice):    Greenberg Traurig, LLP    2375 E. Camelback
Road    Suite 700    Phoenix, Arizona 85016    Attn:    Bruce E. Macdonough   
Fax:    (602) 445-8618    Email:    macdonoughb@gtlaw.com

Section 5.8    Entire Agreement. This Agreement (including the Exhibits hereto
and the Disclosure Letter) constitutes the entire agreement, and supersedes 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 the Closing, to one or more
Permitted Transferees, (provided that no such assignment will relieve such
Purchaser of its obligations hereunder prior to the Closing) and, (ii) if
following the

 

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Closing, to any transferee of shares of Preferred Stock, Warrants or Warrant
Shares (subject to the Stockholders’ Agreement and the Warrant 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, 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)    “Acquisition Proposal” means any proposal or offer from any person
relating to any direct or indirect (i) sale, lease or other disposition directly
or indirectly by merger, consolidation, business combination, share exchange,
joint venture or otherwise of assets of the Company or any Subsidiary
representing 35% or more of the consolidated assets of the Company Group (other
than sales of inventory in the ordinary course of business and consistent with
past practice); (ii) issuance, sale or other disposition, directly or indirectly
(including by way of merger, consolidation, business combination, share
exchange, joint venture or any similar transaction), of securities (or options,
rights or warrants to purchase, or securities convertible into or exchangeable
for, such securities) representing 35% or more of any class of equity securities
of the Company; (iii) tender offer or exchange offer as defined pursuant to the
Exchange Act that, if consummated, would result in any person beneficially
owning 35% or more of any class or series (or the voting power of any class or
series) of equity securities of the Company or any other transaction in which
any person shall acquire beneficial ownership or the right to acquire beneficial
ownership, of 35% or more of any class or series (or the voting power of any
class or series) of equity securities; (iv) merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving any Company Group Member representing 35% or more of the consolidated
assets of the Company Group; or (v) combination of the foregoing (in each case,
other than the arrangements contemplated by the Transaction Documents).

 

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(8)    “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.

(9)    “Agreement” has the meaning set forth in the Preamble.

(10)    “Board of Directors” has the meaning set forth in Section 2.3(a).

(11)    “Bylaws” has the meaning set forth in Section 2.1(a).

(12)    “Capitalization Date” has the meaning set forth in Section 2.2(a).

(13)    “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.

(14)    “Certificate of Designations” has the meaning set forth in the Recitals.

(15)    “Certificate of Incorporation” has the meaning set forth in Section
2.1(a).

(16)    “Closing” has the meaning set forth in Section 1.2(a).

(17)    “Closing Date” has the meaning set forth in Section 1.2(a).

(18)    “Code” means the United States Internal Revenue Code of 1986, as
amended.

(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

 

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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).

(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 Existing Credit Facility Credit Agreement
or the New ABL Facility Credit Agreement.

(32)    “Credit Documents” means, with respect to a Credit Facility, the
applicable 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 Existing Credit Facility or the New ABL
Facility.

(34)    “Disclosure Letter” has the meaning set forth in Article II.

(35)    “Draft Statements” has the meaning set forth in Section 2.5(d).

(36)    “Effect” means any change, event, effect, state of facts, occurrence,
development or circumstance.

(37)    “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.

 

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(38)    “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.

(39)    “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.

(40)    “Existing Credit Facility” means the credit facility governed by the
Existing Credit Facility Credit Agreement and the related Credit Documents.

(41)    “Existing Credit Facility Credit Agreement” means Sixth Amended and
Restated Credit Agreement, dated as of September 24, 2015, among the Company,
U.S. Bank National Association, as administrative agent, swing line lender and
LC issuer, and the other parties thereto, as amended or modified by the Consent,
Waiver and First Amendment to Sixth Amended and Restated Credit Agreement, dated
as of June 17, 2016, the Waiver, dated as of November 14, 2016, the Forbearance
Agreement and Second Amendment to Sixth Amended and Restated Credit Agreement,
dated as of February 27, 2017 and the Forbearance Agreement Extension and Third
Amendment to Sixth Amended and Restated Credit Agreement, dated as of March 31,
2017.

(42)    “First Lien Notes” has the meaning set forth in the Stockholders’
Agreement.

(43)    ”Forbearance Agreement” means the Forbearance Agreement and Second
Amendment to Sixth Amended and Restated Credit Agreement, dated as of
February 27, 2017, among the Company and the lenders party to the Existing
Credit Facility, as amended by the Forbearance Agreement Extension and Third
Amendment to Sixth Amended and Restated Credit Agreement, dated as of March 31,
2017.

(44)    “GAAP” has the meaning set forth in Section 2.5(d).

(45)    “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.

(46)     “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.

(47)     “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.

(48)    “HSR Act” means Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

(49)    “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

 

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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.

(50)    “Information” has the meaning set forth in Section 4.3.

(51)    “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.

(52)    “Knowledge of the Company” means the knowledge, after reasonable
inquiry, of the individuals set forth in Section 5.10(52) of the Disclosure
Letter.

(53)    “Law” or “Laws” mean any statute, law, ordinance, treaty, rule, code,
regulation or other binding directive issued, promulgated or enforced by any
Governmental Entity.

(54)    “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).

(55)    “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, (ii) that relates to Indebtedness with an aggregate principal amount in
excess of $10,000,000 or (iii) that is the Forbearance Agreement or a side
letter or agreement relating thereto.

(56)    “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.

(57)    “New ABL Facility” means a customary asset based revolving credit
facility (which may include a term loan component) on terms and conditions
reasonably acceptable to the Purchasers, it being

 

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understood that the following terms and conditions would be reasonably
acceptable to the Purchasers (among other reasonably acceptable terms and
conditions): (i) the amount of revolving credit borrowings is subject to a
borrowing base, (ii) the maximum amount borrowed or available to be borrowed
under such credit facility (taking into account any customary borrowing base
reserves and cash dominion, springing financial covenant or other restrictive
availability blocks included in such credit facility) at any time does not
exceed an amount equal to the sum of (x) the amount required to consummate the
Refinancing with respect to all issued and outstanding shares of Series F
Preferred Stock and, if elected by the Company, some or all issued and
outstanding shares of Series E Preferred Stock (in each case in accordance with
the applicable Certificate of Designations), plus (y) the amount of all then
unpaid transaction expenses, filing fees and other costs and expenses required
to be paid by the Company in connection with the Transaction Documents, the
Refinancing and the New ABL Facility, plus (z) $40,000,000 (or such greater
amount as may be approved by the Designating Majority (as such term is defined
in the Stockholders’ Agreement)), (iii) the amount of funded loans thereunder is
at least $175,000,000 (or such lesser amount as may be approved by the
Designating Majority) and the proceeds of such funded debt are used to
consummate the Refinancing with respect to issued and outstanding shares of
Series F Preferred Stock, (iv) the collateral securing such facility is the same
collateral that secures the Existing Credit Facility, (v) payments in respect of
the Preferred Stock Minimum Dividend Rate(s) in accordance with the Certificate
of Designations are permitted subject only to satisfaction of reasonable and
customary payment conditions, (vi) the redemption of the Preferred Stock at
scheduled maturity thereof in accordance with the Certificate of Designations is
permitted, (vii) redemption of the Series E Preferred Stock in an amount equal
to 80% of the net proceeds of the Permitted Divestiture (as defined in the
Stockholders’ Agreement) is permitted and (viii) the terms are otherwise
substantially the same as applicable to the Existing Credit Facility or
otherwise not materially adverse to the holders of shares of Preferred Stock.

(58)    “New ABL Facility Credit Agreement” means a credit agreement governing
the New ABL Facility.

(59)    “Non-Recourse Party” has the meaning set forth in Section 5.18.

(60)    “NYSE” means the New York Stock Exchange.

(61)    “OFAC” has the meaning set forth in Section 2.20(a).

(62)    “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.

(63)    “Permits” has the meaning set forth in Section 2.10.

(64)    “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

 

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(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.

(65)    “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.

(66)    “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.

(67)    “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.

(68)    “Pre-Closing Period” means the period commencing on the date hereof and
terminating on the earlier to occur of (i) the Closing and (ii) the termination
of this Agreement in accordance with the provisions hereof.

(69)    “Preferred Stock” has the meaning set forth in the Recitals.

(70)    “Preferred Stock Directors” has the meaning set forth in the Certificate
of Designations.

(71)    “Purchase Price” means the aggregate purchase price payable by the
Purchasers to the Company for the issue of the Purchased Shares, which shall be
$540,500,100.00.

(72)    “Purchased Shares” has the meaning set forth in Section 1.1.

(73)     “Purchaser” or “Purchasers” has the meaning set forth in the Preamble.

(74)    “Refinancing” has the meaning set forth in Section 4.9(a).

(75)    “Refinancing Date” has the meaning set forth in Section 4.9(a).

(76)    “Registration Rights Agreement” means that certain Registration Rights
Agreement, the form of which is set forth as Exhibit H.

(77)    “Release” means disposing, discharging, injecting, spilling, leaking,
pumping, pouring, leaching, migration, emitting, escaping or emptying into or
upon the indoor or outdoor environment.

(78)    “Relevant Persons” has the meaning set forth in Section 2.19(a).

 

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(79)    “SEC” has the meaning set forth in Section 2.5(a).

(80)    “SEC Documents” has the meaning set forth in Section 2.5(a).

(81)    “Secured Notes” has the meaning set forth in the Stockholders’
Agreement.

(82)    “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.

(83)    “Series B Preferred Stock” has the meaning set forth in the Recitals.

(84)    “Series B Purchased Shares” has the meaning set forth in Section 1.1.

(85)    “Series C Preferred Stock” has the meaning set forth in the Recitals.

(86)    “Series C Purchased Shares” has the meaning set forth in Section 1.1.

(87)    “Series D Preferred Stock” has the meaning set forth in the Recitals.

(88)    “Series D Purchased Shares” has the meaning set forth in Section 1.1.

(89)    “Series E Preferred Stock” has the meaning set forth in the Recitals.

(90)    “Series E Purchased Shares” has the meaning set forth in Section 1.1.

(91)    “Series F Preferred Stock” has the meaning set forth in the Recitals.

(92)    “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.

(93)    “Stockholders’ Agreement” means that certain Stockholders’ Agreement,
the form of which is set forth as Exhibit G.

(94)    “Subsidiary” has the meaning set forth in Section 2.1(b).

(95)    “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.

(96)    “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).

 

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(97)     “Transaction Documents” means this Agreement, the Certificate of
Designations, the Stockholders’ Agreement, the Registration Rights Agreement and
the Warrant Agreement.

(98)    “Treaty” has the meaning set forth in Section 4.7(b).

(99)    “Updated Statements” has the meaning set forth in Section 2.5(d).

(100)    “Voting Debt” has the meaning set forth in Section 2.2(c).

(101)    “Warrant Agreement” has the meaning set forth in the Recitals.

(102)    “Warrants” has the meaning set forth in the Recitals.

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 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. This Agreement may only be terminated prior to the
Closing:

 

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(a)    by mutual written agreement of the Company and the Purchasers;

(b)    by the Company or the Purchasers, upon written notice to the other party
given at any time on or after May 5, 2017; provided, however, that the right to
terminate this Agreement pursuant to this Section 5.16(b) 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 the Closing to
occur on or prior to such date;

(c)    the Purchasers, upon written notice to the Company, if the Forbearance
Agreement ceases to be in effect (or superseded by a new forbearance agreement)
for more than one (1) full Business Day for any reason;

(d)    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

(e)    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.

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 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.

 

33

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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.

[The remainder of this page was intentionally left blank.]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the parties hereto as of the date first herein above
written.

 

COMPANY ROADRUNNER TRANSPORTATION SYSTEMS, INC. By:  

/s/ Curtis W. Stoelting

  Name: Curtis W. Stoelting   Title: Chief Executive Officer

 

[Signature Page to Investment Agreement]

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PURCHASER ELLIOTT ASSOCIATES, L.P. By:   Elliott Capital Advisors, L.P., its
General Partner By:   Braxton Associates, Inc., its General Partner By:  

/s/ Elliot Greenberg

  Name: Elliot Greenberg   Title: Vice President

 

[Signature Page to Investment Agreement]

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PURCHASER BROCKDALE INVESTMENTS LP By:   Middleton International Limited, its
General Partner By:  

/s/ Elliot Greenberg

  Name: Elliot Greenberg   Title: Vice President

 

[Signature Page to Investment Agreement]

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Purchaser Allocations

 

Purchaser

   Percentage  

Elliott Associates, L.P.

     32 % 

Brockdale Investments LP

     68 %