exv10w5






Exhibit 10.5




CONSENT, WAIVER AND SECOND AMENDMENT TO SECOND

AMENDED AND RESTATED CREDIT AGREEMENT




     This Consent, Waiver and Second Amendment to Second Amended and Restated Credit Agreement
(this “Amendment”) dated as of the 23rd day of December, 2008, is by and among Roadrunner
Transportation Services, Inc., a Delaware corporation, Sargent Trucking, Inc., a Maine corporation,
Big Rock Transportation, Inc., an Indiana corporation, Midwest Carriers, Inc., an Indiana
corporation, Smith Truck Brokers, Inc., a Maine corporation, and B&J Transportation, Inc., a Maine
corporation (each, a “Borrower” and collectively the “Borrowers”), the Lenders (as defined below)
party hereto and Bank of America, N.A., as successor by merger to LaSalle Bank National
Association, as administrative agent for Lenders (“Administrative Agent”).



W I T N E S S E T H:




     WHEREAS, Administrative Agent, the financial institutions party thereto (together with their
respective successors and assigns, “Lenders”) and Borrowers are parties to that certain Second
Amended and Restated Credit Agreement (as amended or otherwise modified from time to time, the
“Credit Agreement”; capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Credit Agreement) dated as of March 14, 2007;



     WHEREAS, Events of Default exist under Section 13.1.5 of the Credit Agreement as a
result of Borrowers’ failure to comply with (i) the financial covenants in Sections
11.13.1, 11.13.2 and 11.13.3 of the Credit Agreement for the Computation Period
ended September 30, 2008 and (ii) the affirmative covenant in Section 10.10 of the Credit
Agreement as pertains to the Sargent Companies (collectively, the “Existing Events of Default”);



     WHEREAS, concurrently herewith, Administrative Agent and Holdings are entering into (i) that
certain Keep Well Agreement dated as of the date hereof (the “Keep Well Agreement”) and (ii) that
certain Consent, Waiver and Amendment to Amended and Restated Note Purchase Agreement dated as of
the date hereof (the “Mezzanine Amendment”) among the Sargent Companies, Roadrunner, the guarantors
listed therein, the Sankaty Entities and American Capital, in the form of Exhibit A hereto;



     WHEREAS, absent the written consent of Required Lenders, execution and delivery of the
Mezzanine Amendment would constitute a breach of Section 11.11 of the Credit Agreement, and an
Event of Default pursuant to Section 13.1.5 of the Credit Agreement;



     WHEREAS, to satisfy certain funding obligations contemplated by this Agreement and by the Keep
Well Agreement, Holdings desires to (i) amend the Certificate of Incorporation of Holdings pursuant
to a Certificate of Amendment in the form of Exhibit B hereto (the “Certificate of
Amendment”), which Certificate of Amendment authorizes the issuance of Series B Convertible
Preferred Stock of Holdings (the “Series B Stock”) and (ii)



 









 




issue Series B Stock (the “Series B Issuance”) to certain Persons, including to certain
Affiliates of Holdings;




     WHEREAS, absent the written consent of Required Lenders, (i) filing of the Certificate of
Incorporation would constitute a breach of Section 11.5 of the Credit Agreement, and an Event of
Default pursuant to Section 13.1.5 of the Credit Agreement and (ii) the Series B Issuance would
constitute a breach of Section 11.9 of the Credit Agreement, and an Event of Default pursuant to
Section 13.1.5 of the Credit Agreement;



     WHEREAS, Borrowers have requested that Administrative Agent and Required Lenders (i) waive the
Existing Events of Default, (ii) consent to the execution and delivery of the Mezzanine Amendment,
(iii) consent to the filing of the Certificate of Amendment, (iv) consent to the Series B Issuance
and (iv) amend the Credit Agreement in certain respects, as set forth herein, and Administrative
Agent and Required Lenders are willing to do so, subject to the terms and conditions contained
herein.



     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Administrative Agent, the undersigned
Lenders and Borrowers hereby agree as follows:



     1. Waiver and Consents.



     (a) Subject to the satisfaction of the conditions set forth in Section 6 below and in reliance
on the representations and warranties set forth in Section 7 below, Administrative Agent and the
undersigned Lenders hereby waive the Existing Events of Default. Except as a result of the waiver
set forth in this Section 1, nothing contained herein shall be deemed to constitute a waiver of any
Unmatured Event of Default or Event of Default that may heretofore or hereafter occur or have
occurred and be continuing or to modify any provision of the Credit Agreement.



     (b) Subject to the satisfaction of the conditions set forth in Section 6 below and in reliance
on the representations and warranties set forth in Section 7 below, Administrative Agent and the
undersigned Lenders hereby consent to (i) the execution and delivery of the Mezzanine Amendment,
(ii) the filing of the Certificate of Amendment and (iii) the Series B Issuance, to the extent the
proceeds thereof are applied to satisfy funding obligations contemplated by this Agreement and/or
the Keep Well Agreement. Except as a result of the waiver set forth in this Section 1, nothing
contained herein shall be deemed to constitute a waiver of any Unmatured Event of Default or Event
of Default that may heretofore or hereafter occur or have occurred and be continuing or to modify
any provision of the Credit Agreement.



     (c) Except as expressly provided herein, the execution and delivery of this Amendment and the
waivers, consents and modifications effected hereby shall not: (i) constitute an extension,
modification, waiver or consent of or with respect to any aspect of the Credit Agreement or the
other Loan Documents; (ii) extend the terms of the Credit Agreement or the due date of any of the
Obligations; (iii) give rise to any obligation on the



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part of Administrative Agent or any Lender to extend, modify, waive or consent to any term or
condition of the Credit Agreement or the other Loan Documents; or (iv) give rise to any defenses or
counterclaims to Administrative Agent’s or any Lender’s right to compel payment of the Obligations
or to otherwise enforce its rights and remedies under the Credit Agreement and the other Loan
Documents.




     2. Amendments to Credit Agreement.



     (a) The definition of “Base Rate” in Section 1.1 of the Credit Agreement is hereby
amended and restated in its entirety as follows:




  Base Rate means for any day, a per annum rate equal to the greater of
(a) the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus
0.50%; or (c) the LIBOR Rate for a 30 day Interest Period as determined on such day,
plus 1.0%.



     (b) Section 1.1 of the Credit Agreement is hereby amended to add the following
definitions:




  Keep Well Agreement means that certain Keep Well Agreement dated as of
December 23, 2008 between Administrative Agent and Holdings, as the same may be
amended or otherwise modified from time to time in accordance with the terms
thereof.




  Segregated Equity Investment means the $5,000,000 equity investment
made pursuant to the terms and conditions of the Keep Well Agreement, which
investment is segregated from other funds pursuant to the terms and conditions of
the Keep Well Agreement.




  Series B Convertible Preferred Stock means the Series B Convertible
Preferred Stock of Holdings issued on December 23, 2008.



     (c) Section 1.1 of the Credit Agreement is hereby amended to delete in its entirety
each of the definitions “Sponsor Make Whole Agreement” and “Sponsor Make Whole Subordinated Debt”.



     (d) Section 6.2.2(a)(ii) is hereby amended and restated in its entirety as follows:




  (ii) Concurrently with the receipt by any Loan Party of any Net Cash Proceeds
from any issuance of Capital Securities of any Loan Party (excluding (x) any
issuance of Capital Securities by Holdings pursuant to any employee or director
option program, benefit plan or compensation program, (y) any issuance by a
Subsidiary to Borrowers or another Subsidiary and (z) any issuance of Series B
Convertible Preferred Stock, to the extent the



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proceeds of such issuance constitute a portion of the Segregated Equity
Investment), in an amount equal to 100% of such Net Cash Proceeds.




     (e) The opening clause of Section 6.2.2(a)(iv), which previously read, “Within 105
days after the end of the each Fiscal Year (commencing with Fiscal Year 2007)” is hereby amended
and restated in its entirety as follows:



     Within 105 days after the end of each Fiscal Year (commencing with Fiscal Year
2009)



     (f) The third sentence of Section 6.3.1 of the Credit Agreement is hereby amended and
restated in its entirety as follows:



     All prepayments of the Term Loan shall be applied against the installments
thereof in the inverse order of maturity.



     (g) Section 10.10 of the Credit Agreement is hereby amended and restated in its
entirety as follows:



     10.10 Deposit Accounts.



     Unless the Administrative Agent otherwise consents in writing, in order to facilitate the
Administrative Agent’s and the Lenders’ maintenance and monitoring of their security interests in
the collateral, maintain Borrowers’ concentration account, primary disbursement account and lockbox
with Administrative Agent; provided, that (i) solely with respect to the Sargent Companies,
the provisions of this Section 10.10 shall be effective commencing February 27, 2009 and
may be satisfied by the Sargent Companies maintaining the existing accounts with banks that have
executed control agreements acceptable to Administrative Agent and (ii) it being understood and
acknowledged that certain Account Debtors may not comply with instructions issued by the Sargent
Companies to remit funds to lockboxes maintained with Administrative Agent following February 27,
2009. Until such time that Borrowers have established their principal deposit accounts with the
Administrative Agent, Borrowers shall make no changes in their respective cash management systems
as in effect on the Closing Date, unless the Administrative Agent otherwise consents in writing.



     (h) Section 11.1(o) of the Credit Agreement is hereby amended and restated in its
entirety as follows:



     (o) [Intentionally Omitted]



     (i) Section 11.3 of the Credit Agreement is hereby amended to delete the “and”
immediately preceding subsection (viii), replace the period at the end of subsection
(viii) with a comma, and add the following text to the end of the section:


and (ix) following the termination of the Keep Well Agreement pursuant to
Section 13(a)(ii) thereof, Holdings may, in its sole discretion, use any
proceeds remaining in the Specified Account, as such term is defined in the Keep
Well




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Agreement, to redeem outstanding shares of Series B Convertible Preferred Stock over
the 90 day period commencing upon the termination of the Keep Well Agreement in
accordance with Section C(6) of the Fourth Article of the Certificate of
Incorporation of Holdings; provided that the aggregate redemption price
shall not exceed the amount of such remaining proceeds in the Specified Account.




     (j) Section 11.13 of the Credit Agreement is hereby amended and restated in its
entirety as follows:



     11.13 Financial Covenants.



     11.13.1 Fixed Charge Coverage Ratio.



     Not permit the Fixed Charge Coverage Ratio to be less than (i) 1.10 to 1.0 for
any Computation Period ending prior to the termination of the Keep Well Agreement in
accordance with Section 13(a)(ii) of the Keep Well Agreement and (ii) 1.20
to 1.0 for any Computation Period ending after the termination of the Keep Well
Agreement in accordance with Section 13(a)(ii) of the Keep Well Agreement.



     11.13.2
Senior Debt to EBITDA Ratio.




	 	 	Not permit the Senior Debt to EBITDA Ratio as of the last day of any
Computation Period to exceed the applicable ratio set forth below for such
Computation Period:





	 	 	 
	Computation Period	 	Senior
Debt to
EBITDA Ratio
	December 31, 2008

	 	3.80 to 1.0
	March 31, 2009

	 	3.95 to 1.0
	June 30, 2009

	 	3.90 to 1.0
	September 30, 2009

	 	3.60 to 1.0
	December 31, 2009

	 	3.95 to 1.0
	March 31, 2010

	 	3.95 to 1.0
	June 30, 2010

	 	3.60 to 1.0
	September 30, 2010

	 	3.30 to 1.0
	December 31, 2010

	 	3.00 to 1.0
	Each March 31, June 30, September
30, and December 31 thereafter

	 	3.00 to 1.0






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     11.13.3 Total Debt to EBITDA Ratio.



     Not permit the Total Debt to EBITDA Ratio as of the last day of any Computation
Period to exceed the applicable ratio set forth below for such Computation Period:



	 	 	 
	Computation Period	 	Total
Debt to
 EBITDA Ratio
	December 31, 2008

	 	5.80 to 1.0
	March 31, 2009

	 	6.10 to 1.0
	June 30, 2009

	 	6.00 to 1.0
	September 30, 2009

	 	5.60 to 1.0
	December 31, 2009

	 	6.25 to 1.0
	March 31, 2010

	 	6.25 to 1.0
	June 30, 2010

	 	5.65 to 1.0
	September 30, 2010

	 	5.00 to 1.0
	December 31, 2010

	 	4.50 to 1.0
	Each March 31, June 30, September
30, and December 31 thereafter

	 	4.50 to 1.0






     (k) Section 13.1.13 of the Credit Agreement is hereby deleted in its entirety.



     (l) Schedules 9.6 and 9.15 of the Credit Agreement are hereby amended and restated in their
entirety as set forth on Exhibit C hereto.



     3. Pricing. From and following the date hereof, the pricing table set forth in the
definition of the term “Applicable Margin” shall be deemed to be the following (the “Increased
Applicable Margin”):



	 	 	 	 	 	 	 	 	 
	Level	 	LIBOR Margin	 	Base Rate Margin	 	Non-Use Fee Rate	 	L/C Fee Rate
	I
	 	5.00%
	 	3.50%
	 	0.50%
	 	5.00%





; provided, that if the Senior Debt to EBITDA Ratio is less than 3.0 to 1.0 for any
Computation Period ending after the date hereof (computed without giving effect to any
“Investments” made under (and as such term is defined in) the Keep Well Agreement) (such
Computation Period being the “Benchmark Period”), effective following the last day of the Benchmark
Period such pricing table will revert to the table set forth in the Credit Agreement prior to the
amendment described above; provided, further, that if the Senior Debt to EBITDA
Ratio does not remain below 3.0 to 1.0 for each of the two consecutive Computation Periods
immediately following the Benchmark Period (in each case computed without giving effect to any
Investments made under the Keep Well Agreement), the pricing table shall revert to the Increased
Applicable Margin set






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forth above, and the Borrowers shall upon demand pay to Administrative Agent, for the benefit of
the Lenders, as additional interest owing on the Loans an amount equal to the additional interest
that would have been due over the period commencing on the first day following the Benchmark Period
through date the pricing table reverts to the Increased Applicable Margin, so as to result in
interest accrual as if the Increased Applicable Margin had continuously remained in place.




     4. EBITDA.



     (a) Of the $12,000,000 equity investment made in Holdings on the date hereof, (i) $5,000,000
shall be deemed to be an increase to EBITDA (solely for the purpose of determining the Borrowers’
compliance with the financial covenants set forth in Section 11.13) for the period in which
such equity investment is made, and (ii) as specified in the Keep Well Agreement, the portion of
such investment comprising the Segregated Equity Investment may in the future be deemed to be an
increase to EBITDA (solely for the purpose of determining the Borrowers’ compliance with the
financial covenants set forth in Section 11.13 of the Credit Agreement).



     (b) Borrowers shall be permitted to have a one time addback to EBITDA for expenses incurred no
later than March 31, 2010 from the failure of Holdings to consummate the initial registered public
offering of Capital Securities of Holdings and Borrowers’ restructuring expenses, in an aggregate
amount not to exceed $3,000,000. Equivalent deductions shall be made from the computation of
Excess Cash Flow over the same applicable period.



     5. Debt Computation Matters. Notwithstanding anything to the contrary set forth in
the Credit Agreement, commencing with the Fiscal Quarter ending March 31, 2009, for purposes of
computing the Senior Debt to EBITDA Ratio and the Total Debt to EBITDA Ratio for any Computation
Period ending on or after March 31, 2009, Debt pertaining to the Revolving Loans shall be deemed to
equal the average daily balance of the outstanding Revolving Loans for the most recently completed
Fiscal Quarter in such Computation Period.



     6. Conditions. The effectiveness of this Amendment is subject to the satisfaction of
the following conditions precedent (unless specifically waived in writing by Administrative Agent):



     (a) Borrowers shall have executed and delivered this Amendment, together with such other
documents, agreements and instruments as Administrative Agent may require or reasonably request;



     (b) Holdings shall have executed and delivered the Keep Well Agreement;



     (c) Holdings shall have delivered to Administrative Agent a fully executed copy of the
Mezzanine Amendment;



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     (d) Administrative Agent shall have approved the terms and conditions of any agreement,
document or instrument pertaining to the $12,000,000 equity investment to be made in Holdings on or
about the date hereof, including without limitation, the Certificate of Amendment and any other
modification to any Loan Party’s organizational documents;



     (e) Holdings shall have received equity investments in Holdings of not less than $12,000,000,
$5,000,000 of which shall comprise the Segregated Equity Investment, and the balance of which shall
be paid by Borrowers to Administrative Agent, which payment amount Lenders hereby agree shall be
applied against outstanding Revolving Loans (without any corresponding reduction to the Revolving
Commitments);



     (f) Borrowers shall have paid to Administrative Agent, for the benefit of each Lender who
executes this Amendment on or before December 23, 2008, a fee equal to 25 basis points of the sum
of the outstanding principal balance of the Term Loan owing to such Lender and the Revolving
Commitment of such Lender, which fee shall be fully earned and non-refundable when paid;



     (g) Borrowers shall have paid to Administrative Agent the fees set forth in that certain fee
letter of even date herewith between Borrowers and Administrative Agent, which fees shall be fully
earned and non-refundable when paid;



     (h) Borrowers shall have delivered to Administrative Agent, the Consent and Reaffirmation
attached hereto, executed by each of the Persons listed as signatories thereto;



     (i) Borrowers shall have satisfied in full all unpaid costs and expenses (including without
limitation Attorney Costs) incurred by Administrative Agent in connection with the Loan Documents
(including without limitation all costs and expenses incurred by Administrative Agent in connection
with the preparation, due diligence, administration and enforcement of all documentation
contemplated by this Amendment); and



     (j) No Unmatured Event of Default or Event of Default (other than the Existing Events of
Default) shall have occurred and be continuing.



     7. Representations and Warranties. To induce Administrative Agent and the undersigned
Lenders to enter into this Amendment, each Borrower hereby represents and warrants to
Administrative Agent and Lenders that:



     (a) The execution, delivery and performance by each Borrower of this Amendment and each of the
other agreements, instruments and documents contemplated hereby are within each Borrower’s
corporate power, have been duly authorized by all necessary corporate action, have received all
necessary governmental approval (if any shall be required), and do not and will not contravene or
conflict with any provision of law applicable to any Borrower, the certificate of formation,
operating agreement and any other organizational document of any Borrower, any order, judgment or
decree of any court or



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governmental agency, or any agreement, instrument or document binding upon any Borrower or any
of its property (including without limitation the Subordinated Debt Documents);




     (b) Each of the Credit Agreement and the Loan Documents, as amended by this Amendment and the
documents and agreements contemplated thereby, are the legal, valid and binding obligation of
Borrowers, enforceable against Borrowers in accordance with its terms;



     (c) Except to the extent amended hereby, the representations and warranties contained in the
Credit Agreement and the Loan Documents are true and accurate as of the date hereof with the same
force and effect as if such had been made on and as of the date hereof; and



     (d) Except for the Existing Events of Default, Borrowers have performed all of their
obligations under the Credit Agreement and the Loan Documents to be performed by Borrowers on or
before the date hereof and as of the date hereof, Borrowers are in compliance with all applicable
terms and provisions of the Credit Agreement and each of the Loan Documents to be observed and
performed by Borrowers and no event of default or other event which upon notice or lapse of time or
both would constitute an event of default has occurred.



     8. Keep Well Agreement. The Lenders hereby consent to the terms and provisions of the
Keep Well Agreement, and authorize the Administrative Agent to execute and deliver the Keep Well
Agreement. In the event of any inconsistencies or conflicts between the terms of the Keep Well
Agreement and the terms of either the Credit Agreement and/or the Guaranty and Collateral
Agreement, the Keep Well Agreement shall be deemed to govern and control, and shall constitute an
amendment to the applicable provisions of the Credit Agreement and/or the Guaranty and Collateral
Agreement (as applicable) so as to avoid any such inconsistencies and/or conflicts. The Lenders
acknowledge that the Keep Well Agreement is the only agreement governing the release and
application of funds on deposit in the Specified Account (as such term is defined in the Keep Well
Agreement).



     9. Counterparts. This Amendment may be executed in any number of counterparts and by
the different parties on separate counterparts, and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the same Amendment.
Receipt by telecopy or electronic transmission of any executed signature page to this Amendment
shall constitute effective delivery of such signature page.



     10. Continued Effectiveness. Administrative Agent, Required Lenders and Borrowers
hereby agree that all references to the Credit Agreement which are contained in any of the Loan
Documents shall refer to the Credit Agreement as amended by this Amendment. Except as specifically
set forth herein, the Credit Agreement and each of the Loan Documents shall continue in full force
and effect according to its and their respective terms.



     11. Costs and Expenses. Each Borrower hereby agrees that all expenses incurred by
Administrative Agent and Lenders in connection with the preparation, negotiation



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and closing of the transactions contemplated hereby, including without limitation reasonable
attorneys’ fees and expenses, shall be part of the Obligations.




     12. Severability. Any provision of this Amendment that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.



[signature pages follow]







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     IN WITNESS WHEREOF, this Amendment has been executed as of the day and year first written
above.



	 	 	 	 	 
	 	ROADRUNNER TRANSPORTATION SERVICES, INC.

 	 
	 	By:  	/s/ Judith A. Vijums
 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	SARGENT TRUCKING, INC.

 	 
	 	By:  	/s/ Judith A. Vijums
 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	BIG ROCK TRANSPORTATION, INC.

 	 
	 	By:  	/s/ Judith A. Vijums
 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	MIDWEST CARRIERS, INC.

 	 
	 	By:  	/s/ Judith A. Vijums
 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	SMITH TRUCK BROKERS, INC.

 	 
	 	By:  	/s/ Judith A. Vijums
 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	B&J TRANSPORTATION, INC.

 	 
	 	By:  	/s/ Judith A. Vijums
 	 
	 	 	Title: 	 
	 	 	 	 
	 




 









 





	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as successor by

merger to LaSalle Bank National Association,

as Administrative Agent and as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Title: Senior Vice President 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/s/ Richard A. Clemmerson
 	 
	 	 	Title: Vice President 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	M&I MARSHALL & ILSLEY BANK,

as a Lender

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Title: Vice President 	 
	 	 	 	 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Title: Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	DE MEER MIDDLE MARKET CLO 2006-1, LTD., as a Lender

 	 
	 	By:  	/s/ Chris York
 	 
	 	 	Title: Vice President