Exhibit 10.13
 
February 29, 2012
 
Spartan Motors, Inc.
1541 Reynolds Road
Charlotte, Michigan  48813
 
 
Re:
Amendment No. 1 to Amended and Restated Note Purchase and Private Shelf
Agreement

 
Ladies and Gentlemen:
 
This letter agreement (this “Letter”) makes reference to that certain Amended
and Restated Note Purchase and Private Shelf Agreement (the “Note Agreement”),
dated as of November 30, 2009, between Spartan Motors, Inc. (the “Company”), on
the one hand, and Prudential Investment Management, Inc. (“Prudential”),
Gibraltar Life Insurance Co., Ltd., and each Prudential Affiliate which becomes
party thereto, on the other hand. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Note Agreement, as amended hereby.
 
The Company has requested that Prudential and the holders of the Notes agree to
amend the Note Agreement as set forth below.  Subject to the terms and
conditions hereof, the undersigned holders of the Notes are willing to agree to
such request.
 
Accordingly, and in accordance with the provisions of paragraph 11C of the Note
Agreement, the parties hereto agree as follows:
 
SECTION 1.             Note Agreement Amendments.  Effective upon the Effective
Date (as defined in Section 2 hereof), the Note Agreement is amended as follows:
 
1.1.           A new paragraph 4G is added to the Note Agreement to read as
follows:
 
“4G.           Excess Leverage Fee.   In addition to the interest accruing on
the Notes, the Company agrees to pay to each holder of a Note a fee (the “Excess
Leverage Fee”) on the daily average outstanding principal amount of such Note
during each fiscal quarter ending subsequent to a Material Acquisition at a rate
per annum equal to 0.75% if the Leverage Ratio as of the end of such fiscal
quarter is greater than 2.75 to 1.0. The Excess Leverage Fee with respect to
each Note for any fiscal quarter shall be calculated on the same basis as
interest on such Note is calculated and the Excess Leverage Fee due on any Note
for any fiscal quarter shall be payable in arrears on the first interest payment
date on such Note ending after such fiscal quarter.  The payment of any Excess
Leverage Fee shall not constitute a waiver of any Default or Event of Default.”
 
1.2.           Paragraph 6A of the Note Agreement is amended and restated in its
entirety to read as follows:
 
 
 

--------------------------------------------------------------------------------

 
 
“6A.              Financial Covenants.  The Company will not:
 
6A(1).           Leverage Ratio.  Permit or suffer the Leverage Ratio to exceed
2.75 to 1.0 as of any fiscal quarter end, commencing with the fiscal quarter
ending December 31, 2011, provided that for the four (4) fiscal quarters
immediately following a Material Acquisition permitted pursuant to paragraph
6E(f), the Company shall not permit or suffer the Leverage Ratio to exceed 3.0
to 1.0.
 
6A(2).           Interest Coverage Ratio.  Permit or suffer the Interest
Coverage Ratio to be less than 2.50 to 1.00 as of the end of any fiscal quarter.
 
6A(3).           Tangible Net Worth.  Permit or suffer the Consolidated Tangible
Net Worth at any time to be less than (i) $100,000,000, plus (ii) 50% of
Consolidated Net Income of the Company and its Subsidiaries for each fiscal
year, commencing with the fiscal year ending December 31, 2011, provided that if
such net income is negative in any such fiscal year, the amount added for such
fiscal year shall be zero and such amount shall not reduce the amount added
pursuant to any other fiscal year.”
 
1.3.           Each of clause (e), (f) and (g) of paragraph 6B of the Note
Agreement is amended in its entirety to read as follows:
 
“(e)           Indebtedness of the Company or any Subsidiary incurred to finance
the acquisition, construction or improvement of any fixed or capital assets,
including Capitalized Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof; provided that (i) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) shall not exceed $2,500,000 at any
time outstanding;
 
(f)           unsecured Indebtedness of the Company and the Guarantors
outstanding under the Credit Agreement; and
 
(g)           if no Default or Event of Default exists or would be caused
thereby, other unsecured Indebtedness in an aggregate principal amount not
exceeding $20,000,000 at any time outstanding.”
 
1.4.           Clause (d) of paragraph 6G of the Note Agreement is amended and
restated in its entirety to read as follows:
 
“(d) other Restricted Payments not exceeding (i) $20,000,000 during any fiscal
year, provided that (A) such Restricted Payments shall not exceed $6,000,000 in
the aggregate during the first three fiscal quarters of any fiscal year (or such
greater amount as may be approved in writing by the Required Holders), (B) as of
the end of such fiscal year and at the time of the making of any Restricted
Payment during such fiscal year (provided such Restricted Payment together with
all prior Restricted Payments made during such fiscal year exceeds $6,000,000 in
the aggregate) the Leverage Ratio (on a pro forma basis after giving effect to
such Restricted Payment when determined in connection with the making of a
Restricted Payment) is less than or equal to 2.0 to 1.0, and (C) no less than
five Business Days prior to making any Restricted Payment which when added to
all prior Restricted Payments made during such fiscal year exceeds $6,000,000,
the Company delivers its pro forma computations acceptable to the Required
Holders to demonstrate its compliance with the immediately preceding clause (B),
and (ii) $6,000,000 in any fiscal year if as the end of such fiscal year the
Leverage Ratio is greater than 2.0 to 1.0.”
 
 
2

--------------------------------------------------------------------------------

 
 
1.5.           Paragraph 6P of the Note Agreement is hereby deleted.
 
1.6.           Clause (ii) of paragraph 7A(ii) of the Note Agreement is amended
and restated in its entirety to read as follows:
 
“(ii)           the Company defaults in the payment of any interest on any Note
or any Excess Leverage Fee for more than 5 Business Days after the date due
 
1.7.           Paragraph 10B of the Note Agreement is amended by adding, or
amending and restating, as applicable, the following definitions to read as
follows:
 
“Bank Agent” shall mean Wells Fargo Bank, National Association, as agent for the
Banks under the Credit Agreement, and its successors and assigns in that
capacity.
 
“Consolidated EBIT” shall mean Consolidated Net Income (excluding foreign
currency gains or losses and non-cash income or charges) plus, to the extent
deducted from revenues in determining Consolidated Net Income, without
duplication, (a) Consolidated Interest Expense, (b) expense for income taxes
paid or accrued, (c) extraordinary charges (as determined in accordance with
GAAP), (d) unusual or non­recurring charges in an aggregate amount not to exceed
$2,000,000 (or such greater amount as may be approved in writing by the Required
Holders, which approval shall not be unreasonably withheld) for any consecutive
four fiscal quarter period, provided that in addition to such amount the Company
(on a consolidated basis with its Subsidiaries) may add back $2,781,000 for the
fiscal quarter ending June 30, 2011 related to several nonrecurring
restructuring charges previously approved in writing by the Required Holders,
(e) up to $8,000,000 in the aggregate in Wakarusa Charges during the 2011 and
2012 fiscal years, and (f) amounts related to impairment of any intangible
assets, minus, to the extent included in Consolidated Net Income, (i)
extraordinary gains (as determined in accordance with GAAP) realized other than
in the ordinary course of business, (ii) the income (or deficit) of any Person
(other than a Subsidiary) in which the Company or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the Company or such Subsidiary in the form of dividends or similar
distributions and (iii) the undistributed earnings of any Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any contractual
obligation (other than under any Transaction Document) or Requirement of Law
applicable to such Subsidiary, all calculated for the Company and its
Subsidiaries on a consolidated basis.
 
 
3

--------------------------------------------------------------------------------

 
 
“Credit Agreement” shall mean, the Amended and Restated Credit Agreement, dated
December 16, 2011, by and among the Bank Agent, the Banks and the Company, as
amended, restated, supplemented or otherwise modified from time to time.
 
“Excess Leverage Fee” shall have the meaning given in paragraph 4G.
 
 “Leverage Ratio” shall mean, as of the end of any fiscal quarter, the ratio of
the Consolidated Total Debt as of such fiscal quarter end to the Consolidated
EBITDA for the period of four consecutive fiscal quarters ending with such
fiscal quarter end, provided that for purposes of paragraph 6G(d), Leverage
Ratio shall be calculated on a trailing twelve month basis as of any applicable
date of determination.
 
“Material Acquisition” shall mean an Acquisition where the total consideration
paid or payable (including cash payments, Indebtedness assumed, earnouts (as
projected by the Company in good faith) and other payments) is equal to or
greater than $15,000,000.
 
“Wakarusa Charges” shall mean certain non-cash charges that may be recognized by
the Company (on a consolidated basis with Utilimaster Corporation) during its
2011 and 2012 fiscal years in connection with the possible writedown in asset
value of its real property and improvements located at 65266-65906 State Road
19, Wakarusa, Indiana.
 
1.6.           Schedule 8A(1) of the Note Agreement is amended and restated in
its entirety to read as set forth on Exhibit A attached hereto.
 
SECTION 2.             Effectiveness.  The amendments in Section 1 of this
Letter shall become effective on the date (the “Effective Date”) of satisfaction
of the following:
 
(a)           receipt by Prudential and each holder of the Notes of counterparts
of this Letter executed by the Company and the Guarantors; and
 
(b)           receipt by Prudential and each holder of the Notes of a joinder to
the Guaranty Agreement executed by Classic Fire, LLC, a Michigan limited
liability company (“Classic Fire”), in accordance with the provisions paragraph
5K of the Note Agreement.
 
SECTION 3.             Additional Covenant.  The Company covenants that, on or
before March 30, 2012, it shall comply with all of the provisions of paragraph
5K of the Note Agreement with respect to Classic Fire not satisfied by the
joinder delivered pursuant to Section 2(b).  Any failure by the Company to
comply with the provisions of this Section 3 shall constitute an Event of
Default under the Note Agreement.
 
SECTION 4.             Former RR.  Effective on the Effective Date, the holders
of the Notes hereby release Former RR, Inc. (“Former RR”) as a Guarantor under
the Guaranty Agreement.  For the avoidance of doubt, if at any time after the
Effective Date, Former RR has assets, conducts business or is obligated or
required to become obligated under a Guarantee with respect to any Indebtedness
of the Company, Former RR shall be required to comply with the provisions of
paragraph 5K of the Note Agreement, including without limitation, becoming a
Guarantor under the Guaranty Agreement.
 
 
4

--------------------------------------------------------------------------------

 
 
SECTION 5.             Representations and Warranties. The Company represents
and warrants to the holders of the Notes that (a) the execution and delivery of
this Letter has been duly authorized by all necessary corporate action on behalf
of the Company and each Guarantor, and this Letter has been executed and
delivered by a duly authorized officer of the Company and each Guarantor, and
all necessary or required consents to this Letter (other than any consents
required to be obtained solely by the holders of the Notes) have been obtained
and are in full force and effect, (b) each representation and warranty set forth
in paragraph 8 of the Note Agreement and the other Transaction Documents to
which it is a party, is true and correct in all material respects as of the date
of execution and delivery of this Letter by the Company or such Guarantor with
the same effect as if made on such date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they were true and correct as of such earlier date), (c) after giving effect to
this Letter, no Event of Default or Default exists or has occurred and is
continuing on the date hereof, (d) the Company has delivered and correct and
complete copy of the Credit Agreement to the holders of the Notes and (e) Former
RR, Inc. was formerly known as Road Rescue, Inc., has no assets and conducts no
business and is not and is not required to become obligated under a Guarantee
with respect to any Indebtedness of the Company.
 
SECTION 6.             Reference to and Effect on Note Agreement; Ratification
of Transaction Documents.  Upon the effectiveness of the amendments in Section 1
of this Letter, each reference to the Note Agreement in any other document,
instrument or agreement shall mean and be a reference to the Note Agreement as
modified by this Letter.  Except as specifically set forth in Section 1 hereof,
the Note Agreement and each other Transaction Document shall remain in full
force and effect and is hereby ratified and confirmed in all respects.  Except
as specifically stated in Section 1 of this Letter, the execution, delivery and
effectiveness of this Letter shall not (a) amend the Note Agreement, any Note or
any other Transaction Document, (b) operate as a waiver of any right, power or
remedy of any holder of the Notes, or (c) constitute a waiver of, or consent to
any departure from, any provision of the Note Agreement, any Note or any other
Transaction Document at any time.  The execution, delivery and effectiveness of
this Letter shall not be construed as a course of dealing or other implication
that any holder of the Notes has agreed to or is prepared to grant any consents
or agree to any waiver to the Note Agreement or any other Transaction Document
in the future, whether or not under similar circumstances
 
SECTION 7.             Expenses. The Company hereby confirms its obligations
under the Note Agreement, whether or not the transactions hereby contemplated
are consummated, to pay, promptly after request by the holders of the Notes all
reasonable out-of-pocket costs and expenses, including attorneys’ fees and
expenses, incurred by such holders in connection with this Letter or the
transactions contemplated hereby, in enforcing any rights under this Letter, or
in responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Letter or the transactions contemplated
hereby.  The obligations of the Company under this Section 7 shall survive
transfer by any holder of any Note and payment of any Note.
 
 
5

--------------------------------------------------------------------------------

 
 
SECTION 8.             Reaffirmation.  Each Guarantor hereby consents to the
foregoing amendments to the Note Agreement and hereby ratifies and reaffirms all
of its payment and performance obligations, contingent or otherwise, under each
Guaranty Agreement, after giving effect to such amendments.  Each Guarantor
hereby acknowledges that, notwithstanding the foregoing amendments, that each
Guaranty Agreement remains in full force and effect and is hereby ratified and
confirmed.  Without limiting the generality of the foregoing, each Guarantor
agrees and confirms that each Guaranty Agreement continues to guaranty the
Guarantied Obligations (as defined in the Guaranty Agreement) arising under or
in connection with the Note Agreement or any of the Notes, as the same are
amended by this Letter.
 
SECTION 9.             Governing Law.  THIS LETTER SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS OF SUCH STATE WHICH WOULD OTHERWISE
CAUSE THIS LETTER TO BE CONSTRUED OR ENFORCED OTHER THAN IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS.
 
SECTION 10.           Counterparts; Section Titles.  This Letter may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together  shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Letter by facsimile or electronic transmission shall be effective as delivery of
a manually executed counterpart of this Letter. The section titles contained in
this Letter are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
 
[remainder of page intentionally left blank; signature page follows]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6

--------------------------------------------------------------------------------

 
 

 
Very truly yours,
         
PRUDENTIAL INVESTMENT MANAGEMENT, INC.
         
 
By:
       
Vice President
                   
GIBRALTAR LIFE INSURANCE CO., LTD.
            By: Prudential Investment Management (Japan),
Inc., as Investment Manager
            By: Prudential Investment Management, Inc.,
as Sub-Adviser
                    By:         Vice President  

 

 
 
Amendment No. 1 to Amended and Restated Note Purchase and Private Shelf
Agreement
 
 

--------------------------------------------------------------------------------

 

THE LETTER IS AGREED TO AND ACCEPTED BY:
     
SPARTAN MOTORS, INC.
         
By:
      Title:                    

   
CRIMSON FIRE AERIAL, INC.
         
By:
      Title:                    

   
CRIMSON FIRE, INC.
         
By:
      Title:                    

   
CLASSIC FIRE, LLC
         
By:
      Title:                    

   
SPARTAN MOTORS CHASSIS, INC.
         
By:
      Title:                    

   
UTILIMASTER HOLDINGS, INC.
         
By:
      Title:                    

 
 
Amendment No. 1 to Amended and Restated Note Purchase and Private Shelf
Agreement
 
 

--------------------------------------------------------------------------------

 

   
UTILIMASTER CORPORATION
         
By:
      Title:                    

                                                   
 
 
 
 
Amendment No. 1 to Amended and Restated Note Purchase and Private Shelf
Agreement
 
 

--------------------------------------------------------------------------------

 

EXHIBIT A

SCHEDULE 8A(1)
 
SUBSIDIARIES
 

Entity Jurisdiction of Formation  Capital Stock Owned By (100%)          
Spartan Motors Chassis, Inc.
 
Michigan
 
Spartan Motors, Inc.
Crimson Fire, Inc.
 
South Dakota
 
Spartan Motors, Inc.
Crimson Fire Aerials, Inc.
 
Pennsylvania
 
Spartan Motors, Inc.
Classic Fire, LLC
 
Michigan
 
Crimson Fire, Inc.
Former RR, Inc.
 
South Carolina
 
Spartan Motors, Inc.
Utilimaster Holdings, Inc.
 
Delaware
 
Spartan Motors, Inc.
Utilimaster Corporation
 
Delaware
 
Utilimaster Holdings, Inc.
Utilimaster Canada Limited
 
Ontario
 
Utilimaster Holdings, Inc.
UTM Acquisition Company, LLC
 
Indiana
 
Utilimaster Corporation