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As filed with the Securities and Exchange Commission on March 27, 2013

Registration No. 333-            

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

SUMMIT MATERIALS, LLC

SUMMIT MATERIALS FINANCE CORP.

(Exact name of registrant issuers as specified in their respective charters)

SEE TABLE OF ADDITIONAL REGISTRANT GUARANTORS

 

 

 

 

Delaware   1400   24-4138486

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

 

 

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, D.C. 20007

(202) 339-9509

(Address, including zip code, and telephone number, including area code, of registrants’ principal executive offices)

Thomas Hill

Chief Executive Officer

Summit Materials, LLC

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, D.C. 20007

(202) 339-9509

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

With a copy to:

Edward P. Tolley III, Esq.

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017-3954

(212) 455-2000

 

 

Approximate date of commencement of proposed exchange offer: As soon as practicable after this Registration Statement is declared effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.   ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨     Accelerated filer   ¨
Non-accelerated filer   x   (Do not check if a smaller reporting company)   Smaller reporting company   ¨

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross Border Issuer Tender Offer)   ¨

Exchange Act Rule 14d-1(d) (Cross Border Third Party Tender Offer)   ¨

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of Each Class of

Securities to be Registered

 

Amount

to be

Registered

 

Proposed

Maximum

Offering Price

Per Note

 

Proposed

Maximum

Aggregate

Offering Price(1)

 

Amount of

Registration Fee

10.5% Senior Notes due 2020

  $250,000,000   100%   $250,000,000   $34,100

Guarantees of the 10.5% Senior Notes due 2020(2)

  N/A(3)   (3)   (3)   (3)

 

 

(1) Estimated solely for the purpose of calculating the registration fee under Rule 457(f) of the Securities Act of 1933, as amended (the “Securities Act”).
(2) See inside facing page for additional registrant guarantors.
(3) Pursuant to Rule 457(n) under the Securities Act, no separate filing fee is required for the guarantees.

 

 

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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TABLE OF ADDITIONAL REGISTRANT GUARANTORS

 

Exact Name of Registrant Guarantor

as Specified in its Charter (or Other

Organizational Document)

  State or Other
Jurisdiction of
Incorporation or
Organization
  I.R.S.
Employer
Identification
Number
    Industrial
Classification
Code Number
    Address, Including Zip  Code
and Telephone Number,
Including Area Code, of
Registrant Guarantor’s
Principal Executive Offices

Austin Materials, LLC

  Delaware     45-2840524        1400      9020 N. Capital of Texas
Highway, Suite 250, Austin,
TX 78759

Continental Cement Company, L.L.C.

  Delaware     27-2594654        3241      14755 North Outer Forth Drive
#514, Chesterfield, MO 63017

Kilgore Companies, LLC

  Delaware     27-2910651        1400      7057 West 2100 South, West
Valley, UT 84128

Norris Quarries, LLC

  Delaware     45-4506838        1400      2604 N Stadium Blvd,
Columbia, MO 65202

RK Hall, LLC

  Delaware     27-3722217        1600      2810 NW Loop 286, Paris, TX
75460

Summit Materials Companies I, LLC

  Delaware     27-1395580        1400      2900 K Street NW, Suite 100,
Harbourside North Tower
Building, Washington, DC
20007

Summit Materials Corporations I, Inc.

  Delaware     27-5206889        1400      2900 K Street NW, Suite 100,
Harbourside North Tower
Building, Washington, DC
20007

Summit Materials Holdings I, LLC

  Delaware     27-2779766        1400      2900 K Street NW, Suite 100,
Harbourside North Tower
Building, Washington, DC
20007

Summit Materials Holdings II, LLC

  Delaware     27-2606667        3241      2900 K Street NW, Suite 100,
Harbourside North Tower
Building, Washington, DC
20007

Elam Construction, Inc.

  Colorado     84-0484380        1400      556 Struthers Avenue, Grand
Junction, CO 81501

Cornejo & Sons, L.L.C.

  Kansas     27-2336713        1600      2060 E. Tulsa, Wichita, KS
67216

Hamm Asphalt, LLC

  Kansas     48-0765153        2951      609 Perry Place, Perry, KS
66073

Hamm, Inc.

  Kansas     48-1243726        1400      609 Perry Place, Perry, KS
66073

N.R. Hamm Contractor, LLC

  Kansas     48-0581200        1600      609 Perry Place, Perry, KS
66073

N.R. Hamm Quarry, LLC

  Kansas     48-0581201        1400      609 Perry Place, Perry, KS
66073

Bourbon Limestone Company

  Kentucky     61-0592947        1400      395 North Middletown Rd,
Paris, KY 40361

Glass Aggregates, LLC

  Kentucky     20-4710585        1400      395 North Middletown Rd,
Paris, KY 40361

Hinkle Contracting Company, LLC

  Kentucky     61-0725598        1400      395 North Middletown Rd,
Paris, KY 40361

Kentucky Hauling, Inc.

  Kentucky     61-0930534        4700      395 North Middletown Rd,
Paris, KY 40361


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South Central Kentucky Limestone, LLC

  Kentucky     27-3004607        1400      395 North Middletown Rd,
Paris, KY 40361

Con-Agg of MO, L.L.C.

  Missouri     43-1765061        3273      2604 N Stadium Blvd,
Columbia, MO 65202

Fischer Quarries, L.L.C.

  Missouri     43-1767807        1400      2604 N Stadium Blvd,
Columbia, MO 65202

Quarry Properties, L.L.C.

  Missouri     20-1136159        1400      2604 N Stadium Blvd,
Columbia, MO 65202

Elam Paving, Inc.

  New Mexico     85-0473651        1400      556 Struthers Avenue, Grand
Junction, CO 81501

B&H Contracting, L.P.

  Texas     26-3160017        7389      2810 NW Loop 286, Paris, TX
75460

Industrial Asphalt, LLC

  Texas     74-2766027        1600      16409 Bratton Lane, Austin,
TX 78728

R.K. Hall Construction, Ltd.

  Texas     20-2347198        1600      2810 NW Loop 286, Paris, TX
75460

RKH Capital, L.L.C.

  Texas     20-4632566        6799      2810 NW Loop 286, Paris, TX
75460

SCS Materials, L.P.

  Texas     20-1932670        1600      2810 NW Loop 286, Paris, TX
75460

Altaview Concrete, LLC

  Utah     87-0431601        1600      7057 West 2100 South, West
Valley, UT 84128

B&B Resources, Inc.

  Utah     87-0490366        1600      7057 West 2100 South, West
Valley, UT 84128

Kilgore Equipment, LLC

  Utah     81-0551726        1600      7057 West 2100 South, West
Valley, UT 84128

Kilgore Trucking, LLC

  Utah     85-0487373        1600      7057 West 2100 South, West
Valley, UT 84128

Peak Construction Materials, LLC

  Utah     20-5978846        1600      7057 West 2100 South, West
Valley, UT 84128

Peak Management, L.C.

  Utah     87-0623232        8741      7057 West 2100 South, West
Valley, UT 84128

Salt Lake Valley Sand & Gravel, Inc.

  Utah     87-0561870        1600      7057 West 2100 South, West
Valley, UT 84128

Valley Ready Mix, Inc.

  Utah     87-0506149        1600      7057 West 2100 South, West
Valley, UT 84128

Wasatch Concrete Pumping, LLC

  Utah     87-0551837        1600      7057 West 2100 South, West
Valley, UT 84128

Wind River Materials, LLC

  Wyoming     27-3823267        1600      7057 West 2100 South, West
Valley, UT 84128


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED MARCH 27, 2013

PRELIMINARY PROSPECTUS

 

LOGO

SUMMIT MATERIALS, LLC

SUMMIT MATERIALS FINANCE CORP.

Offer to Exchange (the “exchange offer”)

 

 

$250,000,000 aggregate principal amount of 10.5% Senior Notes due 2020 (the “exchange notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for any and all outstanding unregistered 10.5% Senior Notes due 2020 (the “outstanding notes” and, together with the exchange notes, the “notes”).

The exchange notes will be fully and unconditionally guaranteed on a senior unsecured basis by all of our existing and future wholly-owned domestic restricted subsidiaries that guarantee indebtedness under our existing senior secured credit facilities and the outstanding notes and by our non-wholly-owned subsidiary, Continental Cement Company, L.L.C. (“Continental Cement”).

 

 

We are conducting the exchange offer in order to provide you with an opportunity to exchange your unregistered outstanding notes for freely tradable exchange notes that have been registered under the Securities Act.

The Exchange Offer

 

   

We will exchange all outstanding notes that are validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradable.

 

   

You may withdraw tenders of outstanding notes at any time prior to the expiration date of the exchange offer.

 

   

The exchange offer expires at 5:00 p.m., New York City time, on                     , 2013, which is the 21st business day after the date of this prospectus, unless extended. We do not currently intend to extend the expiration date.

 

   

The exchange of the outstanding notes for the exchange notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes.

 

   

The terms of the exchange notes to be issued in the exchange offer are substantially identical to the outstanding notes, except that the exchange notes will be freely tradable.

Results of the Exchange Offer

 

   

The exchange notes may be sold in the over-the-counter market, in negotiated transactions or through a combination of such methods. We do not plan to list the exchange notes on a national market.

All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the outstanding notes under the Securities Act.

 

 

We are an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and will be subject to reduced public company reporting requirements.

 

 

You should carefully consider the “ Risk Factors ” beginning on page 21 of this prospectus before participating in the exchange offer.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the exchange notes to be distributed in the exchange offer or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     , 2013.


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You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. This prospectus may be used only for the purposes for which it has been published and no person has been authorized to give any information not contained herein. If you receive any other information, you should not rely on it. We are not making an offer of these securities in any state where the offer is not permitted.

TABLE OF CONTENTS

 

     Page  

FORWARD-LOOKING STATEMENTS

     ii   

MARKET, RANKING AND OTHER INDUSTRY DATA

     ii   

EMERGING GROWTH COMPANY STATUS

     iii   

CERTAIN DEFINITIONS

     iii   

PROSPECTUS SUMMARY

     1   

RISK FACTORS

     21   

USE OF PROCEEDS

     41   

CAPITALIZATION

     42   

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

     43   

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

     45   

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SUMMIT MATERIALS, LLC

     46   

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF CONTINENTAL CEMENT COMPANY, L.L.C.

     70   

BUSINESS

     82   

MANAGEMENT

     104   

EXECUTIVE AND DIRECTOR COMPENSATION

     108   

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     116   

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     119   

DESCRIPTION OF OTHER INDEBTEDNESS

     121   

DESCRIPTION OF THE NOTES

     124   

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

     202   

CERTAIN ERISA CONSIDERATIONS

     203   

PLAN OF DISTRIBUTION

     205   

LEGAL MATTERS

     206   

CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     207   

EXPERTS

     206   

WHERE YOU CAN FIND MORE INFORMATION

     207   

INDEX TO FINANCIAL STATEMENTS

     F-1   

 

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FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” “projects” or “anticipates” or similar expressions that concern our strategy, plans or intentions. All statements made relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, it is very difficult to predict the impact of known factors, and, of course, it is impossible to anticipate all factors that could affect our actual results.

Some of the important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” and elsewhere in this prospectus. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements.

We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

MARKET, RANKING AND OTHER INDUSTRY DATA

The data included in this prospectus regarding markets and the industry in which we operate, including the size of certain markets and our position and the position of our competitors within these markets, are based on reports of government agencies, published industry sources and estimates based on our management’s knowledge and experience in the markets in which we operate. Data regarding the industries in which we compete and our market position and market share within these industries are inherently imprecise and are subject to significant business, economic and competitive uncertainties beyond our control, but we believe that they generally indicate size and position and market share within these industries. Our own estimates have been based on information obtained from our trade and business organizations and other contacts in the markets in which we operate. We believe these estimates to be accurate as of the date of this prospectus. However, this information may prove to be inaccurate because of the method by which we obtained some of the data for the estimates or because this information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. We have not independently verified any of the data from third party sources, nor have we ascertained the underlying economic assumptions relied upon therein. As a result, you should be aware that market, ranking and other similar industry data included in this prospectus, and estimates and beliefs based on that data, may not be reliable, and we cannot guarantee the accuracy or completeness of any such information contained in this prospectus.

 

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EMERGING GROWTH COMPANY STATUS

We are an “emerging growth company” as defined under the JOBS Act and are eligible to take advantage of certain exemptions from various public company reporting requirements. See “Risk Factors—Risks Related to Our Business and Our Industry—As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.”

Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act to comply with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards apply to private companies. As an “emerging growth company,” we may elect to delay adoption of new or revised accounting standards applicable to public companies until such standards are made applicable to private companies. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies.

We will remain an “emerging growth company” until the earliest of: (i) the last day of the fiscal year during which we had total annual gross revenues of $1 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement; (iii) the date on which we have, during the previous three year period, issued more than $1 billion in non-convertible debt; or (iv) the date on which we are deemed a “large accelerated issuer” as defined under the federal securities laws.

CERTAIN DEFINITIONS

As used in this prospectus, unless otherwise noted or the context otherwise requires,

 

   

“we,” “our,” “us,” and “the Company” refer to Summit Materials, LLC and its subsidiaries as a combined entity, including Summit Materials Finance Corp., the co-issuer of the notes;

 

   

“Summit Materials” refers only to Summit Materials, LLC and not its subsidiaries;

 

   

“Finance Corp.” refers only to Summit Materials Finance Corp., a wholly-owned subsidiary of Summit Materials;

 

   

“the Issuers” refers to Summit Materials and Finance Corp. as co-issuers of the notes but not to any of their subsidiaries;

 

   

“Hamm” and “Predecessor” refer to Hamm, Inc., our inaugural acquisition and the predecessor entity of Summit Materials;

 

   

“Hinkle Contracting” refers to Hinkle Contracting Corporation and its subsidiaries;

 

   

“Cornejo” refers collectively to Cornejo & Sons, L.L.C., C&S Group, Inc., Concrete Materials Company of Kansas, LLC and Cornejo Materials, Inc.;

 

   

“Greer” refers to certain assets of Elmo Greer & Sons, LLC;

 

   

“Harshman” refers collectively to certain assets of Harshman Construction L.L.C. and Harshman Farms, Inc.;

 

   

“Scotty’s” refers to South Central Kentucky Limestone, LLC;

 

   

“Harper Contracting” refers collectively to substantially all the assets of Harper Contracting, Inc., Harper Sand and Gravel, Inc., Harper Excavating, Inc., Harper Ready Mix Company, Inc. and Harper Investments, Inc.;

 

   

“Kilgore” refers collectively to Kilgore Pavement Maintenance, LLC and Kilgore Properties, LLC;

 

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“Con-Agg” refers to Con-Agg of MO, L.L.C.;

 

   

“Altaview Concrete” refers collectively to Altaview Concrete, LLC, Peak Construction Materials, LLC, Peak Management, L.C. and Wasatch Concrete Pumping, LLC;

 

   

“EnerCrest” refers to substantially all the assets of EnerCrest Products, Inc.;

 

   

“RK Hall” refers collectively to R.K. Hall Construction, Ltd., RHMB Capital, L.L.C., Hall Materials, Ltd., B&H Contracting, L.P. and RKH Capital, L.L.C.;

 

   

“SCS” refers to SCS Materials, L.P.;

 

   

“Triple C” refers to Triple C Concrete, Inc.;

 

   

“Elam Construction” refers to Elam Construction, Inc.;

 

   

“Bourbon” refers to Bourbon Limestone Company;

 

   

“Fischer” refers to Fischer Quarries, L.L.C.;

 

   

“B&B” refers collectively to B&B Resources, Inc., Valley Ready Mix, Inc. and Salt Lake Sand & Gravel, Inc.;

 

   

“Grand Junction Pipe” refers to Grand Junction Pipe, Inc.;

 

   

“Industrial Asphalt” refers collectively to Industrial Asphalt, LLC, Asphalt Paving Company of Austin, LLC, KBDJ, L.P. and all the assets of Apache Materials Transport, Inc.;

 

   

“Ramming Paving” refers collectively to J.D. Ramming Paving Co., LLC, RTI Hot Mix, LLC, RTI Equipment Co., LLC and Ramming Transportation Co., LLC;

 

   

“Parent” refers only to Summit Materials Holdings L.P., our indirect parent entity;

 

   

“Norris” refers to Norris Quarries, LLC;

 

   

“Kay & Kay” refers to certain assets of Kay & Kay Contracting, LLC;

 

   

“Sandco” refers to certain assets of Sandco Inc.;

 

   

“Blackstone” refers to certain investment funds affiliated with Blackstone Capital Partners V L.P.;

 

   

“Silverhawk” refers to certain investment funds affiliated with Silverhawk Summit, L.P.; and

 

   

“Sponsors” refers to Blackstone and Silverhawk.

 

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PROSPECTUS SUMMARY

This summary highlights selected information appearing elsewhere in this prospectus and may not contain all of the information that may be important to you. You should read this entire prospectus carefully, including the information set forth under the heading “Risk Factors” and our consolidated financial statements before participating in the exchange offer.

Our Company

We are a leading, vertically-integrated, geographically-diverse heavy-side building materials company; we supply aggregates, cement and related downstream products such as ready mixed concrete, asphalt paving mix, concrete products and paving and related construction services to a variety of end-uses in the U.S. construction industry, including public infrastructure projects, as well as private residential and non-residential construction. We believe we are a top 15 supplier of aggregates, a top 20 supplier of cement, a top 10 producer of asphalt paving mix and a major producer of ready mixed concrete in the United States by volume. As of December 29, 2012, we had 1.7 billion tons and 0.5 billion tons of proven aggregates reserves serving our aggregates and cement businesses, respectively, and operated over 120 sites and plants. In the year ended December 29, 2012, we sold 16.4 million tons of aggregates, 1.0 million tons of cement, 4.6 million tons of asphalt paving mix and 1.1 million cubic yards of ready mixed concrete. For the year ended December 29, 2012, we generated revenue of $962.9 million.

We were formed in September 2008. Since July 2009, the Sponsors and certain of our officers, directors and employees have made $794.5 million of funding commitments to our indirect parent entity, Summit Materials Holdings L.P. We have grown rapidly as a result of our disciplined acquisition strategy, utilizing approximately $457.3 million of the $463.9 million of equity commitments funded to our parent by the Sponsors and certain other investors. Today, our nine operating companies make up our three distinct geographic regions that span 20 states and 23 metropolitan statistical areas. We believe each of our operating companies has a top three market share position in its local market area and an extensive operating history, averaging over 35 years. Our highly experienced management team, led by 30-year industry veteran CEO Tom Hill, has successfully enhanced the operations of acquired companies by focusing on scale advantages, cost efficiencies and pricing discipline to improve profitability and cash flow.

Our strategy is focused on developing a heavy-side, vertically integrated company with a strong aggregates base. We strive to be a leading supplier of all four major resource-based products—aggregates, cement, asphalt paving mix and ready mixed concrete—in the U.S. heavy-side building materials industry. We believe vertical integration across these major products strengthens our market positions and helps us achieve significant cost advantages. We believe a diversified mix of products also provides us with greater stability and insulates against local market fluctuations, competitive pricing dynamics and other individual market variances.

Our revenue is derived from multiple end-use markets, including public infrastructure construction as well as residential and non-residential construction. For the year ended December 29, 2012, approximately 62% of our revenues related to public infrastructure construction and the remaining 38% related to residential and non-residential construction. In general, our aggregates and asphalt paving mix and paving businesses are weighted towards public construction. Our cement and ready mixed concrete businesses serve both the public and private construction markets. Public construction includes spending by federal, state and local governments for roads, highways, bridges, airports and other public infrastructure construction projects. A significant portion of our construction revenues are from public construction projects, a historically more stable portion of state and federal budgets. Our acquisitions to date are primarily focused in states with constitutionally-protected transportation funding sources, which we believe serves to limit our exposure to state and local budgetary uncertainties. Private construction includes both new residential and non-residential construction and repair and remodel markets,

 

 

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which have been significantly impacted by recent and current economic conditions. We believe exposure to various geographic markets affords us greater stability through economic cycles and positions us to capitalize on upside opportunities when recoveries in residential and non-residential construction occur.

Our Regional Platforms

We currently operate across 20 states through our three regional platforms: Central, West and East. Each of our operating businesses has its own management team that, in turn, reports to a regional president who is responsible for overseeing business development opportunities and implementing best practices within the regional platform. Our first and largest platform is our Central region. Our most recent platform, the West region, was established in August 2010 with our acquisition of the Harper Contracting and Kilgore businesses in Utah. Company acquisitions are an important element of our strategy, as we seek to enhance value through increased scale and cost savings from vertical integration within local markets through the regional management.

Central Region . The Central region platform encompasses our integrated aggregates, cement, asphalt paving mix, ready mixed concrete and other operations in Kansas, Missouri, Nebraska, Iowa and Illinois. Within the region, we control proven aggregates reserves serving our aggregates and cement businesses of approximately 1.1 billion tons and 0.5 billion tons, respectively, and total hard assets, which we define as the sum of our property, plant and equipment, net and inventories, with a balance sheet book value of $488.0 million as of December 29, 2012. During the year ended December 29, 2012, the Central region platform generated approximately 32% of our revenue. Approximately 52% of the Central region’s revenues were derived from public infrastructure spending, and the remaining 48% of its revenues were generated by residential and non-residential construction for the year ended December 29, 2012.

Our cement business in Missouri, Continental Cement, operates a highly efficient, technologically advanced, integrated manufacturing and distribution system strategically located near Hannibal, Missouri, 100 miles north of St. Louis along the Mississippi River. Continental Cement utilizes an on-site solid and liquid waste fuel processing facility, which can reduce our fuel costs at that facility by up to 50%. The Continental Cement plant is covered by Environmental Protection Agency (“EPA”) Hazardous Waste Combuster MACT regulations (“HWC-MACT”), rather than the Portland Cement NESHAP regulations (“PC-MACT”), due to its waste fuel processing capabilities. We believe the facility is well positioned to comply with any potential regulatory changes during the foreseeable future.

West Region . The West region platform encompasses our integrated aggregates, asphalt paving mix, ready mixed concrete, construction and other operations in Texas, Utah, Colorado, Idaho and Wyoming. Within the region, we control proven aggregates reserves of approximately 0.2 billion tons and total hard assets with a balance sheet book value of $254.9 million as of December 29, 2012. During the year ended December 29, 2012, the West region platform generated approximately 50% of our revenue. Approximately 64% of its revenues were derived from public infrastructure spending, and the remaining 36% of its revenues were generated by residential and non-residential construction for the year ended December 29, 2012.

In August 2010, we acquired Kilgore and simultaneously acquired and merged assets from Harper Contracting (collectively referred to as, the “Kilgore Companies”) in Salt Lake City, Utah to establish the cornerstone of our West region platform. We expanded Kilgore Companies with the acquisitions of Altaview Concrete in Salt Lake City, B&B in Bluffdale, Utah, EnerCrest in southwest Wyoming, and Triple C in southern Idaho. Subsequently, in December 2010, we extended the West platform to the Texas market with the acquisition of RK Hall, an aggregates and asphalt paving business primarily operating in northeast Texas as well as southern Arkansas and southern Oklahoma. We also expanded to Grand Junction, Colorado with our acquisitions of Grand

 

 

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Junction Pipe and Elam Construction. Capitalizing on the regional presence of RK Hall, we acquired Industrial Asphalt and Ramming Paving in August and October 2011, respectively, which expanded our presence into the attractive Austin, Texas market. These businesses complement each other with well-positioned reserves and integrated asphalt / paving operations.

East Region . The East region platform encompasses our integrated aggregates, asphalt paving mix, construction and other operations in Kentucky, Ohio, Indiana, Tennessee and Virginia. Within the region, we control proven aggregates reserves of approximately 0.4 billion tons as of December 29, 2012 and total hard assets with a balance sheet book value of $162.6 million as of December 29, 2012. During the year ended December 29, 2012, the East region platform generated approximately 18% of our revenue. Approximately 73% of the East region’s revenues were derived from public infrastructure spending, and the remaining 27% of its revenues were generated by residential and non-residential construction for the year ended December 29, 2012.

The East region platform is anchored by the Hinkle Contracting business, one of our largest acquisitions to date, which we acquired in February 2010 and strengthened with bolt-ons of select aggregates and asphalt assets from Greer, an asset swap with Scotty’s Contracting & Stone LLC where we exchanged asphalt paving mix and construction assets for a total of eight owned and leased quarry sites in southern Kentucky, the buyout of our non-controlling partner in the Bourbon Limestone aggregates business and select aggregates and asphalt assets from Kay & Kay Contracting, LLC.

Our Competitive Strengths

Leading market positions . We believe each of our operating companies has a top three market share position in its local market area. We believe we are among the top 15 suppliers of aggregates, top 20 suppliers of cement, a top 10 supplier of asphalt paving mix, and a major ready mixed concrete supplier in the United States by volume. We focus on acquiring companies that have leading local market positions, which we seek to enhance by building scale with other local aggregates and downstream businesses. The heavy-side building products industry is primarily local in nature due to transportation costs from the high weight-to-value ratio of the products. Given this dynamic, we believe achieving local market scale provides a competitive advantage that drives growth and stability for our business. We believe that our ability to prudently acquire and rapidly integrate multiple businesses enables us to become market leaders in attractive regions.

Vertically-integrated business model . We generate revenue across a spectrum of related products and services. We internally supply the majority of the aggregates used in the asphalt paving mixes and ready mixed concrete that we produce and in the construction services that we perform for our customers. Our vertically-integrated business model enables us to operate as a single source provider of materials and construction capabilities, creating cost, convenience and reliability advantages for our customers, while at the same time creating significant cross-marketing opportunities among our interrelated businesses. We believe this significantly enhances the value of our company and improves the quality and consistency of services for our customers.

Significant product and geographic scale . Our nine operating companies operate across 20 states in the central, western and eastern United States. We have grown our revenues by 17% in the year ended December 29, 2012, as compared to the year ended December 31, 2011, which compounds 91% revenue growth in the year ended December 31, 2011, as compared to the year ended December 31, 2010, which brought substantial additional scale to our operations in terms of purchasing and leveraging largely fixed overhead expenses. A combination of increased scale and vertical integration present opportunities to improve profitability through cost savings. We have achieved this scale without any significant customer or geographic concentration and continue to demonstrate operating earnings stability as a function of our diversification across products and regions.

Attractive industry dynamics and structure . We operate in an industry that we believe has attractive fundamentals, characterized by high barriers to entry and a stable competitive environment in the majority of

 

 

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markets. Barriers to entry are created by scarcity of raw material resources, limited efficient distribution range, asset intensity of equipment, land required for quarry operations and a time-consuming and complex regulatory and permitting process. In addition, profits are relatively stable throughout the cycle as a result of favorable pricing dynamics, historically stable public infrastructure spending and a largely variable cost structure. U.S. aggregates pricing has increased in 70 of the last 80 years, with growth accelerating since 2002 as continuing resource scarcity in the industry has led companies to focus increasingly on improved pricing strategies. Pricing growth remained strong in 2012, despite volume declines in certain key end markets.

High quality assets and coverage . As a function of our disciplined acquisition strategy and high quality asset base, hard asset values constitute a significant portion of our enterprise value and currently exceed net debt (which we define as total indebtedness less cash) as of December 29, 2012. As of December 29, 2012, the balance sheet book value of our hard assets was $905.5 million (excluding $1.1 million at corporate). The majority of our hard asset value is derived from our property, plant and equipment together with the value of our approximately 1.7 billion tons and 0.5 billion tons of proven aggregates reserves serving our aggregates and cement businesses, respectively, as of December 29, 2012. Assuming production rates in future years are equal to those for the year ended December 29, 2012, we estimate that the useful life of the proven reserves for our construction aggregates business and our cement business is over 170 years and over 200 years, respectively. Our asset base includes the Continental Cement plant, a new dry process cement plant that was commissioned in 2008. We believe this plant contributes significantly to our asset value given its high replacement cost, large capacity, technologically advanced manufacturing capabilities, strategic position on the Mississippi River and favorable environmental performance versus older facilities within the industry that will require upgrades to comply with stringent EPA standards coming into effect in the near-term. We believe our sizeable reserve base, paired with vertically-integrated, downstream products and services, enables us to better meet the needs of our end-use customers.

Strong operating market performance in challenging economic environment . We have demonstrated resilient financial performance despite challenging conditions in the broader economy over the last few years. This performance is largely due to our highly variable cost structure and exposure to more stable geographic markets and publicly-funded end-use segments. Many of our products, particularly aggregates and asphalt paving mix, have significant exposure to public road construction, which has demonstrated continued growth over the past 30 years, even during times of broader economic softness. In fact, through the prior three U.S. recessions (July 1990 through March 1991, March 2001 through November 2001 and December 2007 through June 2009), highway spending in real dollars grew 1.8% annually on average in years with a recession as compared to 1.5% annually on average in years without a recession. The majority of public road construction spending is funded at the state level through the states’ respective departments of transportation. The five key states in which we operate (Texas, Kansas, Kentucky, Missouri and Utah) have funds whose revenue sources are constitutionally protected and may only be used for transportation purposes. These dedicated, earmarked funding sources limit the impact current state deficits may have on public spending. As a result, our business exhibits significantly less volatility in profitability than witnessed in most other building product subsectors. We believe these business characteristics have helped mitigate the impact of the depressed economic environment on our profitability.

Experienced and proven leadership implementing acquisition strategy . Our senior management team has a proven track record of creating value. This team is led by Tom Hill, a 30-year industry veteran and former CEO of Oldcastle, Inc., CRH plc’s U.S. operations. In addition to Mr. Hill, our management team consists of a number of other former Oldcastle managers, including corporate development and finance executives and other heavy side industry operators. Our management team has a track record of executing and successfully integrating acquisitions in the sector. Mr. Hill demonstrated his ability to execute on a similar consolidation strategy while at Oldcastle Materials, where he led numerous acquisitions, taking the business from less than $0.3 billion to $7.4 billion in sales from 1992 to 2008. In executing Oldcastle’s consolidation strategy, Mr. Hill and his team completed 173 acquisitions worth approximately $6.3 billion in the aggregate and $36.0 million on average.

 

 

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From an operational standpoint, Mr. Hill was successful at managing Oldcastle’s rapid growth through the implementation of operational improvements, creation of a world-class safety program and development of a strong leadership team.

Strong sponsor equity commitment . Since July 2009, the Sponsors, together with certain of our officers, directors and employees, have made $794.5 million of funding commitments to our indirect parent company to strategically pursue consolidation within the heavy-side building materials industry in the United States. Since then, we have made 24 acquisitions, including bolt-ons, and our Sponsors, together with certain other investors in our parent, have invested approximately $463.9 million of equity capital, excluding rollover equity invested by sellers in certain of our acquisitions, with approximately $337.2 million of commitments to our parent remaining outstanding.

Our Business Strategy

Drive profitable growth through strategic acquisitions . We were established to acquire and grow heavy-side building materials companies with the goal of becoming a top-five U.S. player within five years. Since inception, we have demonstrated significant progress toward achieving this goal. We continue to believe that the relative fragmentation of the industry subsectors in which we operate, coupled with recent economic softness, create an environment in which we acquire companies at attractive valuations and increase scale and diversity over time through both platform and bolt-on acquisitions. We believe that attractive purchase prices and high quality of assets with selective exposure to well-funded public spending provide additional downside protection. Acquisitions can also provide synergies that provide additional revenue opportunities by filling in market gaps and expanding to adjacent geographies. We believe that achieving further vertical integration and increased scale will lead to improved cost positions, benefitting our profitability and cash flow generation. Our acquisition strategy is substantially similar to the one successfully employed by CEO Tom Hill and his team, including 25 current Summit employees, at Oldcastle Materials, CRH plc’s U.S. operations. Over a 16-year period, Mr. Hill helped execute over 173 acquisitions and approximately $6.3 billion of invested capital to make Oldcastle the largest U.S. integrated heavy-side business. Over that period, Oldcastle Materials reported that it grew sales from less than $0.3 billion in 1992 to $7.4 billion in 2008, representing a compound annual growth rate of over 25%.

Enhance margins and free cash flow generation through implementation of operational improvements . Our demonstrated ability to improve operating margins represents a large source of value. Based on our prior acquisition experience in the heavy-side business, we believe margin improvement is achievable within 12 to 18 months of acquisition. These gains are accomplished through proven profit optimization plans, including implementing a systematic pricing strategy and thorough operations review, leveraging information technology and financial systems to control costs, managing working capital, and achieving scale-driven purchasing synergies, along with fixed overhead control and reduction. Our regional presidents, supported by our central operations, risk management and finance and information technology teams, drive the implementation of detailed and thorough profit optimization plans at each acquisition post close.

Leverage vertically-integrated and strategically located operations for growth . As a vertically-integrated supplier of heavy-side building materials in attractive markets, we believe we have a significant competitive advantage as we seek to grow our share in existing markets and enter new markets. The majority of raw materials used to produce our products and provide our services are internally supplied. We believe our vertically-integrated business model enables us to operate as a single source provider of materials and construction capabilities, creating cost, convenience and reliability advantages for our customers, while at the same time creating significant cross-marketing opportunities among our interrelated businesses.

Leverage our position as a preferred buyer of privately held companies in our industry . Our business model fosters entrepreneurship in local markets while reaping the benefits of best practices and economies of scale brought by the larger group. Business owners have found our model to be attractive and we believe

 

 

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potential sellers prefer us as an acquirer. We seek to avoid competitive auctions and have instead individually negotiated each of our acquisitions to date. The owners of the majority of the companies we have acquired have chosen to stay on with Summit Materials following the sale and have in many cases chosen to roll equity investments into our parent company as well.

Capitalize on expected recovery in U.S. economy and construction markets . In July 2012, Moving Ahead for Progress in the 21st Century Act (“MAP-21”) was enacted and took effect in October 2012. MAP-21 is a 27-month, approximately $105 billion transportation funding program that provides for $40.4 billion and $41.0 billion for highway infrastructure investments in fiscal years 2013 and 2014, respectively. The spending levels are consistent with the preceding federal transportation funding program. However, given the nation’s aging infrastructure and considering longstanding historical spending trends, we expect U.S. infrastructure investment growth to resume. We believe we are well-positioned to capitalize on any such increase in investment. In addition, we have sufficient exposure to residential and non-residential end-markets to participate in a potential recovery in these markets. Given the challenging current environment, we expect to leverage this exposure to realize significant upside in the medium term.

Our Industry

The U.S. heavy-side building materials industry is comprised of four primary sectors: (i) aggregates, (ii) cement, (iii) asphalt paving mix and (iv) ready mixed concrete, each of which is widely used in most forms of construction activity. Participants in these sectors typically range from small, privately-held companies focused on a single product to multinational corporations that offer a wide array of construction materials and services. Competition is constrained in part by the distance materials may be efficiently transported, resulting in largely local or regional operations.

Transportation infrastructure projects, driven by both state and federal funding programs, represent a significant share of the U.S. heavy-side building materials market. The current federal funding program, MAP-21, was enacted in July 2012 and took effect in October 2012. MAP-21 is a 27-month, approximately $105 billion transportation funding program that provides for $40.4 billion and $41.0 billion for highway infrastructure investments in fiscal years 2013 and 2014, respectively. In addition to federal funding, highway construction and maintenance funding is also available through state, county and local agencies. Our five largest states by revenue (Texas, Kansas, Kentucky, Missouri and Utah, which represented approximately 27%, 16%, 14%, 11% and 11% of our total revenue for the year ended December 29, 2012) each have funds whose revenue sources are constitutionally protected and may only be spent on transportation projects.

Aggregates . Aggregates are key material components used in the production of asphalt paving mixes and concrete for the public infrastructure, highway, commercial and residential construction markets and are also widely used for various applications and products, such as road and building foundations, railroad ballast, erosion control, filtration, roofing granules and in solutions for snow and ice control. Generally extracted from the earth using surface or underground mining methods, aggregates are produced from natural deposits of various materials such as limestone, sand and gravel, granite and trap rock.

Aggregates represent an attractive market with high EBITDA margins, high barriers to entry, increasing resource scarcity and relatively stable profitability through the economic cycle. Production is moderately capital intensive and access to well-placed reserves is important given high transport costs and environmental permitting restrictions. Markets are typically local due to high transport costs and are generally fragmented, with numerous participants operating in localized markets and the top six players controlling approximately 30% of the national market in 2011. The U.S. market for these products was estimated at approximately 2.1 billion tons in 2012, at a total market value of $17.4 billion. Relative to other heavy-side construction materials such as cement and ready mixed concrete, aggregates consumption is more heavily weighted towards public infrastructure construction and maintenance and repair. The mix of end-uses varies widely by geography, however, based on the nature of

 

 

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construction activity in each market. Typically, three to six competitors comprise the majority market share of each local market because of the constraints around the availability of natural resources and transportation. Vertically-integrated players, with integrated asphalt paving mix, ready mixed concrete, and construction businesses operating off a strong aggregates platform, can have an advantage versus smaller, non-integrated producers by leveraging their aggregates for downstream operations.

Cement . Portland cement, an industry term for the common cement in general use around the world, is the basic ingredient of concrete and is made from a combination of limestone, shale, clay, silica and iron ore. Together with water, cement creates the paste that binds the aggregates together when making concrete. Cement is an input for ready mixed concrete and concrete products and commands significantly higher prices relative to aggregates, reflecting the more intensive capital investment required. Cement is a capital-intensive business with variable costs dominated by raw materials and energy required to fuel the kiln. Building new plants is challenging given the extensive permitting that is required and significant costs (new plant construction costs in the United States are estimated at $250-300 per ton according to the Portland Cement Association). Assuming construction costs of $275 per ton, a 1.25 million ton facility, such as the one Continental Cement operates, would cost approximately $343.8 million to construct.

The domestic cement industry is regional in nature with customers purchasing material from local sources. Nearly 98% of cement sold in the United States is shipped to customers by truck.

Asphalt paving mix . Asphalt paving mix is the most common roadway material used today, covering 94% of the more than 2.0 million miles of paved roadways in the U.S. Major inputs include aggregate and liquid asphalt (the refined residue from the distillation process of crude oils by refineries). Given the significant aggregates component in asphalt paving mix (up to 95% by weight), local aggregates producers often participate in the asphalt paving mix business to secure captive demand for aggregates. Asphalt and paving is also highly fragmented domestically, with end markets skewed towards public new road construction and maintenance and repair. Barriers to entry include permit hurdles, access to aggregates (asphalt plants are typically co-located at quarries wherever possible) and access to liquid asphalt.

Ready mixed concrete . Ready mixed concrete is one of the most versatile and widely used materials in construction today. Ready mixed concrete is created through the combination of coarse and fine aggregates, which make up approximately 60 to 75% of the mix by volume, with water, various chemical admixtures and cement making up the remainder. Given the high weight-to-value ratio, delivery of ready mixed concrete is typically limited to a one-hour haul from a production plant location and is further limited by a 90 minute window in which newly mixed concrete must be poured to maintain quality and performance. As a result of the transportation constraints, the ready mixed concrete market is highly localized, with an estimated 6,000 ready mixed concrete plants in the United States according to the National Ready Mixed Concrete Association (the “NRMCA”). While the barriers to entry for ready mixed concrete are lower, we participate selectively in ready mixed concrete markets in which we can control underlying raw materials.

 

 

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Acquisition History

The following table lists acquisitions we have completed since August 2009:

 

Company

  

Date of Acquisition

  

Region

Hamm (predecessor)

   August 25, 2009    Central

Hinkle Contracting

   February 1, 2010    East

Cornejo

   April 16, 2010    Central

Greer

   April 20, 2010    East

Continental Cement

   May 27, 2010    Central

Harshman

   June 15, 2010    Central

Scotty’s

   July 23, 2010    East

Harper Contracting

   August 2, 2010    West

Kilgore

   August 2, 2010    West

Con-Agg

   September 15, 2010    Central

Altaview Concrete

   September 15, 2010    West

EnerCrest

   September 28, 2010    West

RK Hall

   November 30, 2010    West

SCS

   November 30, 2010    West

Triple C

   January 14, 2011    West

Elam Construction

   March 31, 2011    West

Bourbon

   May 27, 2011    East

Fischer

   May 27, 2011    Central

B&B

   June 8, 2011    West

Grand Junction Pipe

   June 10, 2011    West

Industrial Asphalt

   August 2, 2011    West

Ramming Paving

   October 28, 2011    West

Norris

   February 29, 2012    Central

Kay & Kay

   October 5, 2012    East

Sandco

   November 30, 2012    West

 

 

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Corporate Structure

The following chart summarizes our organizational structure, equity ownership and our principal indebtedness as of the date of this prospectus. This chart is provided for illustrative purposes only and does not show all of our legal entities or all obligations of such entities.

 

LOGO

 

(1) Represents equity contributed by investment funds affiliated with the Sponsors and the contribution of equity by certain members of management and other investors (excluding rollover of equity investments made by sellers of acquired companies).
(2) Guarantor under the senior secured credit facilities, but not the senior notes.
(3) See “Description of Other Indebtedness—Senior Secured Credit Facilities.”

 

 

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(4) Summit Materials, LLC and Summit Materials Finance Corp. are the issuers of the notes and Summit Materials, LLC is the borrower under our senior secured credit facilities. Summit Materials Finance Corp. was formed in December 2011 solely to act as co-issuer of the notes, has only nominal assets and does not conduct any operations.
(5) Guarantor under the notes and guarantor under the senior secured credit facilities.
(6) Pursuant to the terms of the Amended and Restated Limited Liability Company Agreement of Continental Cement, in the absence of a dissolution or liquidation of Continental Cement, Summit Materials Holdings II, LLC (“Summit II”), which holds Class A Units of Continental Cement, and the holders of the Class B Units of Continental Cement are each entitled to receive a percentage of the distributions on a pari passu basis. The percentage received by the holders of the Class B Units relative to Summit II adjusts based on the time period that the Class A Units have been outstanding and whether Summit II has received a certain return on the capital contributions it made to purchase the Class A Units it holds. Summit II’s sharing percentage is generally between 70% to 80%. The holders of the Class B Units collectively share in the remaining distributions not allocated to Summit II. In connection with a dissolution or liquidation of Continental Cement, distributions are made either in the manner set forth above or, if it provides a greater return to Summit II with respect to the Class A Units, Summit II will receive a priority distribution ahead of the Class B Units up to an amount equal to the capital contributions made by Summit II in respect of the Class A Units, plus interest on such capital contributions of 11%, accruing daily and compounding annually from the date of issuance of the Class A Units. Any excess amount to be distributed after the priority payment to Summit II is then made to the holders of the Class B Units. Subject to certain exceptions, Summit II has the right to require Continental Cement to purchase all, but not less than all, of the Class B Units at any time after May 27, 2016 either in anticipation of an initial public offering of Parent, an indirect parent entity of Continental Cement, or if an initial public offering of Parent has already occurred. In addition, subject to certain conditions, holders of the Class B Units have the right to require Continental Cement to purchase all, but not less than all, of the Class B Units at a strike price that approximates fair value, including in the event of a change of control of Parent occurring after the earlier of the repayment of certain second lien credit agreement obligations and August 27, 2013 or at any time following May 27, 2016. Holders of Class B Units also have certain rights that allow them to rollover their interests in connection with an initial public offering.
(7) The notes are not and will not be guaranteed by any of our existing or future non-wholly owned subsidiaries other than Continental Cement or by any future foreign subsidiaries.

 

 

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Corporate Information

Summit Materials, LLC was formed under the laws of the State of Delaware in September 2008. Summit Materials Finance Corp., the co-issuer of the outstanding notes, was incorporated under the laws of the State of Delaware in December 2011. Our principal executive office is located at 2900 K Street NW, Suite 100, Harbourside North Tower Building, Washington, D.C. 20007. Our telephone number is (202) 339-9509.

Our Sponsors

Blackstone . Blackstone is one of the world’s leading investment and advisory firms. Blackstone’s alternative asset management businesses include the management of corporate private equity funds, real estate funds, hedge fund solutions, credit-oriented funds and closed-end mutual funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Through its different investment businesses, as of December 31, 2012, Blackstone had total assets under management of approximately $210.0 billion.

Silverhawk . Silverhawk Capital Partners, LLC is a private equity firm with offices in Greenwich, Connecticut and Charlotte, North Carolina. The founding partners have invested as a team and operated businesses since 1989. Founded in 2005, Silverhawk’s investments are focused in the energy, manufacturing and business service sectors. Currently, Silverhawk has approximately $200.0 million under management.

Recent Developments

On February 5, 2013, we entered into Amendment No. 1 (“Amendment No. 1”) to our existing Credit Agreement, dated as of January 30, 2012 (the “Credit Agreement”), among Summit Materials, the guarantors party thereto, the several banks and other financial institutions or entities from time to time parties thereto and Bank of America, N.A., as administrative agent, collateral agent and swing line lender. On February 11, 2013, we entered into the Tranche A Revolving Credit Commitment Conversion Agreement (the “Conversion Agreement,” and together with Amendment No. 1, the “Amendments), among Summit Materials, the guarantors party thereto, the several banks and other financial institutions or entities party thereto and Bank of America, N.A., as administrative agent, collateral agent and swing line lender. We refer to the Credit Agreement, as amended by the Amendments, as our “senior secured credit facilities.”

Among other things, the Amendments: (i) reduced the applicable margins used to calculate interest rates for term loans under our senior secured credit facilities by 1.0%; (ii) reduced the applicable margins used to calculate interest rates for $131.0 million of tranche A revolving credit loans available under the senior secured credit facilities by 1.0% (with no reductions to the applicable margins for the remaining $19.0 million of available revolving credit loans); (iii) increased term loans borrowed under our term loan facility by $25.0 million with the same terms as the existing term loans (bringing total term loan borrowings to approximately $422.0 million); (iv) included a requirement that we pay a fee equal to 1.0% of the principal amount of term loans repaid in connection with certain repricing or refinancing transactions within six months after February 5, 2013; and (v) created additional flexibility under the financial maintenance covenants, which are tested quarterly, by increasing the applicable maximum Consolidated First Lien Net Leverage Ratio and reducing the applicable minimum Interest Coverage Ratio (each as defined in the Credit Agreement governing our senior secured credit facilities).

 

 

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The Exchange Offer

The following summary is provided solely for your convenience and is not intended to be complete. You should read the full text and more specific details contained elsewhere in this prospectus for a more detailed description of the notes.

 

General

On January 23, 2012, the Issuers issued an aggregate of $250.0 million principal amount of 10.5% Senior Notes due 2020 in a private offering. In connection with the private offering, the Issuers and the guarantors entered into a registration rights agreement with the initial purchasers in which they agreed, among other things, to deliver this prospectus to you and to complete the exchange offer within 540 days after the date of issuance and sale of the outstanding notes. You are entitled to exchange in the exchange offer your outstanding notes for the exchange notes which are identical in all material respects to the outstanding notes except:

 

   

the exchange notes have been registered under the Securities Act;

 

   

the exchange notes are not entitled to any registration rights which are applicable to the outstanding notes under the registration rights agreement; and

 

   

the liquidated damages provisions of the registration rights agreement are no longer applicable.

 

The Exchange Offer

The Issuers are offering to exchange $250.0 million aggregate principal amount of 10.5% Senior Notes due 2020 which have been registered under the Securities Act for any and all of their outstanding 10.5% Senior Notes due 2020.

 

  You may only exchange outstanding notes in denominations of $2,000 and integral multiples of $1,000, in excess thereof.

 

Resale

Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, the Issuers believe that the exchange notes issued pursuant to the exchange offer in exchange for outstanding notes may be offered for resale, resold and otherwise transferred by you (unless you are our “affiliate” within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

 

   

you are acquiring the exchange notes in the ordinary course of your business; and

 

   

you have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the exchange notes.

 

  If you are a broker dealer and receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market making activities or other trading activities, you must acknowledge that you will deliver this prospectus in connection with any resale of the exchange notes. See “Plan of Distribution.”

 

 

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  Any holder of outstanding notes who:

 

   

is our affiliate;

 

   

does not acquire exchange notes in the ordinary course of its business; or

 

   

tenders its outstanding notes in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of exchange notes cannot rely on the position of the staff of the SEC enunciated in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling , dated available July 2, 1993, or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.

 

Expiration Date

The exchange offer will expire at 5:00 p.m., New York City time, on                     , 2013, which is the 21st business day after the date of this prospectus, unless extended by the Issuers. The Issuers do not currently intend to extend the expiration date.

 

Withdrawal

You may withdraw the tender of your outstanding notes at any time prior to the expiration of the exchange offer. The Issuers will return to you any of your outstanding notes that are not accepted for any reason for exchange, without expense to you, promptly after the expiration or termination of the exchange offer.

 

Interest on the Exchange Notes and the Outstanding Notes

The exchange notes will bear interest at the rate per annum set forth on the cover page of this prospectus from the most recent date to which interest has been paid on the outstanding notes. The interest will be payable semi-annually on January 31 and July 31. No interest will be paid on outstanding notes following their acceptance for exchange.

 

Conditions to the Exchange Offer

The exchange offer is subject to customary conditions, which the Issuers may waive. See “The Exchange Offer—Conditions to the Exchange Offer.”

 

Procedures for Tendering Outstanding Notes

If you wish to participate in the exchange offer, you must complete, sign and date the accompanying letter of transmittal, or a facsimile of such letter of transmittal, according to the instructions contained in this prospectus and the letter of transmittal. You must then mail or otherwise deliver the letter of transmittal, or a facsimile of such letter of transmittal, together with the outstanding notes and any other required documents, to the exchange agent at the address set forth on the cover page of the letter of transmittal.

 

 

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  If you hold outstanding notes through The Depository Trust Company (“DTC”) and wish to participate in the exchange offer, you must comply with the Automated Tender Offer Program procedures of DTC by which you will agree to be bound by the letter of transmittal. By signing, or agreeing to be bound by, the letter of transmittal, you will represent to us that, among other things:

 

   

you are not our “affiliate” within the meaning of Rule 405 under the Securities Act;

 

   

you do not have an arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;

 

   

you are acquiring the exchange notes in the ordinary course of your business; and

 

   

if you are a broker dealer that will receive exchange notes for your own account in exchange for outstanding notes that were acquired as a result of market making activities, that you will deliver a prospectus, as required by law, in connection with any resale of such exchange notes.

 

Special Procedures for Beneficial Owners

If you are a beneficial owner of outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender those outstanding notes in the exchange offer, you should contact the registered holder promptly and instruct the registered holder to tender those outstanding notes on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either make appropriate arrangements to register ownership of the outstanding notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

 

Guaranteed Delivery Procedures

If you wish to tender your outstanding notes and your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other required documents, or you cannot comply with the procedures under DTC’s Automated Tender Offer Program for transfer of book-entry interests, prior to the expiration date, you must tender your outstanding notes according to the guaranteed delivery procedures set forth in this prospectus under “The Exchange Offer—Guaranteed Delivery Procedures.”

 

Effect on Holders of Outstanding Notes

As a result of the making of, and upon acceptance for exchange of, all validly tendered outstanding notes pursuant to the terms of the exchange offer, the Issuers and the guarantors will have fulfilled a covenant under the registration rights agreement. Accordingly, there will be no increase in the interest rate on the outstanding notes under

 

 

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the circumstances described in the registration rights agreement. If you do not tender your outstanding notes in the exchange offer, you will continue to be entitled to all the rights and limitations applicable to the outstanding notes as set forth in the indenture; however, as a result of the making of, and upon acceptance for exchange of, all validly tendered outstanding notes pursuant to the terms of the exchange offer, the Issuers will not have any further obligation to you to provide for the exchange and registration of the outstanding notes under the registration rights agreement. To the extent that the outstanding notes are tendered and accepted in the exchange offer, the trading market for the remaining outstanding notes that are not so tendered and exchanged could be adversely affected.

 

Consequences of Failure to Exchange

All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, the Issuers do not currently anticipate that they will register the outstanding notes under the Securities Act.

 

Certain U.S. Federal Income Tax Considerations

The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event to holders for United States federal income tax purposes. See “Certain U.S. Federal Income Tax Considerations.”

 

Use of Proceeds

The Issuers will not receive any cash proceeds from the issuance of the exchange notes in the exchange offer. See “Use of Proceeds.”

 

Exchange Agent

Wilmington Trust, National Association is the exchange agent for the exchange offer. The addresses and telephone numbers of the exchange agent are set forth in the section captioned “The Exchange Offer—Exchange Agent” of this prospectus.

 

 

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Summary Historical Consolidated Financial and Other Data

The following tables set forth, for the periods and as of the dates indicated, our summary historical consolidated financial and other data. The summary historical consolidated financial information as of December 29, 2012 and December 31, 2011 and for our three fiscal years ended December 29, 2012, December 31, 2011 and December 31, 2010 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the summary historical consolidated balance sheet data at December 31, 2010 from our consolidated balance sheet as of December 31, 2010 which is not presented in this prospectus. In 2011, Summit Materials adopted a “4-4-5” fiscal calendar in the place of the calendar year it previously used. Under the 4-4-5 fiscal period, each year is divided into four quarters and each quarter consists of two four week “months” and one five week “month.” Historical results are not indicative of the results to be expected in the future. You should read the following information together with the more detailed information contained in “Selected Historical Consolidated Financial Data,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Summit Materials, LLC” and the consolidated financial statements and the accompanying notes appearing elsewhere in this prospectus.

 

(in thousands)    Year Ended
December 29,
2012
    Year Ended
December 31,
2011(1)
    Year Ended
December 31,
2010(1)
 

Statements of Operations Data:

      

Revenue

   $ 962,902      $ 822,548      $ 430,358   

Cost of revenue (exclusive of items shown separately below)

     749,363        630,944        308,297   

General and administrative expenses

     128,032        96,886        49,479   

Depreciation, depletion, amortization and accretion

     68,876        61,964        34,415   

Transaction costs

     1,988        9,120        22,268   
  

 

 

   

 

 

   

 

 

 

Operating income

     14,643        23,634        15,899   

Other expense (income)

     8,287        (21,244     11,558   

Interest expense

     58,079        47,784        25,430   
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income tax (benefit) expense

     (51,723     (2,906     (21,089

Income tax (benefit) expense

     (3,920     3,408        2,363   
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations

   $ (47,803   $ (6,314   $ (23,452
  

 

 

   

 

 

   

 

 

 

Cash Flow Data:

      

Net cash provided by (used for):

      

Operating activities

   $ 62,279      $ 23,253      $ (20,529

Investing activities

     (85,340     (192,331     (499,381

Financing activities

     7,702        146,775        575,389   

Balance Sheet Data (as of period end):

      

Cash and cash equivalents

   $ 27,431      $ 42,790      $ 65,093   

Total assets

     1,281,213        1,284,265        1,101,581   

Total debt including current portion of long-term debt

     639,843        608,981        559,980   

Capital leases

     3,092        3,158        3,217   

Total member’s interest

     382,428        436,372        345,993   

Redeemable noncontrolling interests

     22,850        21,300        21,300   

Other Financial Data (as of period end):

      

Total hard assets(2)

   $ 906,584      $ 906,166      $ 775,457   

Ratio of earnings to fixed charges(3)

     0.1        1.0        0.2   

 

 

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(in thousands)    Year Ended
December 29,
2012
     Year Ended
December 31,
2011
     Year Ended
December 31,
2010
 

Units Shipped and Consumed(4):

        

Stone, sand and gravel (tons)

     17,043         19,032         18,064   

Hot mix asphalt (tons)

     4,555         5,040         4,532   

Ready mixed concrete (cubic yards)

     1,093         1,099         1,231   

Cement (tons)

     1,003         850         854   

 

(1) Amounts are shown net of the results of operations associated with certain non-core businesses sold in 2012 and classified as discontinued operations.
(2) Defined as the balance sheet book value of the sum of (a) property, plant and equipment, net and (b) inventories.
(3) The ratio of earnings to fixed charges is determined by dividing earnings, as adjusted, by fixed charges. Fixed charges consist of interest on all indebtedness plus that portion of operating lease rentals representative of the interest factor (deemed to be 33% of operating lease rentals).
(4) Units include amounts shipped and consumed by our subsidiaries assuming that all of our subsidiaries were acquired on or before January 1, 2010.

 

 

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The Exchange Notes

The terms of the exchange notes are identical in all material respects to the terms of the outstanding notes, except that the exchange notes will not contain terms with respect to transfer restrictions or additional interest upon a failure to fulfill certain of our obligations under the registration rights agreement. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be governed by the same indenture under which the outstanding notes were issued. The following summary is not intended to be a complete description of the terms of the exchange notes. For a more detailed description of the exchange notes, see “Description of the Notes” in this prospectus.

 

Issuers

Summit Materials, LLC and Summit Materials Finance Corp.

 

Securities Offered

$250.0 million aggregate principal amount of 10.5% Senior Notes due 2020.

 

Maturity Date

The exchange notes will mature on January 31, 2020, unless earlier redeemed or repurchased.

 

Interest

The exchange notes will accrue interest at a rate of 10.5% per annum, payable on January 31 and July 31 of each year.

 

Guarantees

The exchange notes are guaranteed on a senior unsecured basis by all of our existing and future wholly-owned domestic restricted subsidiaries that guarantee indebtedness under our senior secured credit facilities and by our non-wholly-owned subsidiary, Continental Cement. These guarantees are subject to release under specified circumstances. See “Description of the Notes—Guarantees.” The guarantee of each guarantor will be an unsecured senior obligation of that guarantor and will rank:

 

   

equal in right of payment with all existing and future senior indebtedness of that guarantor;

 

   

senior in right of payment with all existing and future subordinated indebtedness of that guarantor;

 

   

effectively subordinated to all existing and future secured obligations of that guarantor, including any such guarantor’s guarantee of indebtedness under our senior secured credit facilities, to the extent of the value of the assets securing such indebtedness; and

 

   

structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, of our non-guarantor subsidiaries, including any foreign subsidiaries.

 

  See “Description of the Notes—Guarantees.”

 

Ranking

The exchange notes are our senior unsecured obligations and will:

 

   

rank equally in right of payment with all of our existing and future senior obligations;

 

   

rank senior in right of payment to all of our existing and future subordinated obligations;

 

 

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be effectively subordinated to all of our existing and future secured obligations, including borrowings under our senior secured credit facilities, to the extent of the value of the assets securing such obligations; and

 

   

be structurally subordinated to all of our existing and future indebtedness and other liabilities of our non-guarantor subsidiaries, including any foreign subsidiaries.

 

  As of December 29, 2012, we had:

 

   

$398.0 million of indebtedness under our senior secured credit facilities, less original issue discount of $3.5 million;

 

   

$250.0 million aggregate principal amount of outstanding senior notes, less original issue discount of $4.7 million; and

 

   

$3.7 million in capital leases and other obligations.

 

  Interest began to accrue from the issue date of the exchange notes.

 

Optional Redemption

We may redeem some or all of the exchange notes at any time prior to January 31, 2016 at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the redemption date and the “applicable premium” described under the caption “Description of the Notes—Optional Redemption.” We may redeem some or all of the exchange notes at any time on or after January 31, 2016 at the redemption prices and as described under the caption “Description of the Notes—Optional Redemption.”

 

Change of Control and Asset Sale Offers

Upon the occurrence of a change of control or upon the sale of certain of our assets in which we do not apply the proceeds as required, the holders of the exchange notes will have the right to require us to make an offer to repurchase each holder’s notes at a price equal to 101% (in the case of a change control) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date. See “Description of the Notes—Repurchase at the Option of Holders—Change of Control,” and “Description of the Notes—Repurchase at the Option of Holders—Asset Sales.

 

Certain Covenants

The exchange notes will be governed by the same indenture under which the outstanding notes were issued. The indenture governing the exchange notes contains covenants that, among other things, limit the ability of the Issuers and their restricted subsidiaries to:

 

   

incur additional indebtedness or issue certain preferred shares;

 

   

pay dividends, redeem our stock or make other distributions;

 

   

make certain investments;

 

   

create restrictions on the ability of our restricted subsidiaries to pay dividends to us or make other intercompany transfers;

 

 

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create liens;

 

   

sell or transfer certain assets;

 

   

consolidated, merge, sell or otherwise dispose of all or substantially all of our assets;

 

   

enter into certain transactions with our affiliates; and

 

   

designate subsidiaries as unrestricted subsidiaries.

 

  These covenants are subject to a number of important limitations, exceptions and qualifications. See “Description of the Notes—Certain Covenants.”

 

Use of Proceeds

We will not receive any proceeds from the exchange offer. See “Use of Proceeds.”

 

No Prior Market

The exchange notes will generally be freely transferable but will be new securities for which there will not initially be a market. Accordingly, there can be no assurance as to the development or liquidity of any market for the exchange notes. The initial purchasers in the private offering of the outstanding notes have advised us that they currently intend to make a market for the exchange notes, as permitted by applicable laws and regulations. However, they are not obligated to do so and may discontinue any such market making activities at any time without notice. We do not intend to apply for a listing of the exchange notes on any securities exchange or an automated dealer quotation system. See “Risk Factors—Risks Related to the Exchange Notes—Your ability to transfer the exchange notes may be limited by the absence of an active trading market, and an active trading market may not develop for the exchange notes.”

 

Governing Law

The exchange notes will be governed by the laws of the State of New York.

Risk Factors

You should carefully consider all the information in the prospectus prior to exchanging your outstanding notes. In particular, we urge you to carefully consider the factors set forth under the caption “Risk Factors” beginning on page 21 of this prospectus before participating in the exchange offer.

 

 

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RISK FACTORS

You should carefully consider the following risk factors and all other information contained in this prospectus before participating in the exchange offer. The risks and uncertainties described below are not the only risks facing us and your investment in the exchange notes. Additional risks and uncertainties that we are unaware of, or those we currently deem less significant, also may become important factors that affect us. The following risks could materially and adversely affect our business, financial condition, cash flows or results of operations.

Risks Related to the Exchange Offer

If you choose not to exchange your outstanding notes in the exchange offer, the transfer restrictions currently applicable to your outstanding notes will remain in force and the market price of your outstanding notes could decline.

If you do not exchange your outstanding notes for exchange notes in the exchange offer, then you will continue to be subject to the transfer restrictions on the outstanding notes as set forth in the offering memorandum distributed in connection with the private offering of the outstanding notes. In general, the outstanding notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act. You should refer to “Prospectus Summary—The Exchange Offer” and “The Exchange Offer” for information about how to tender your outstanding notes.

The tender of outstanding notes under the exchange offer will reduce the remaining principal amount of the outstanding notes, which may have an adverse effect upon, and increase the volatility of, the market price of the outstanding notes not exchanged in the exchange offer due to a reduction in liquidity.

Your ability to transfer the exchange notes may be limited by the absence of an active trading market, and an active trading market may not develop for the exchange notes.

The exchange notes are a new issue of securities for which there is no established trading market. We do not intend to have the exchange notes listed on a national securities exchange or to arrange for quotation on any automated quotation system. The initial purchasers have advised us that they intend to make a market in the exchange notes, as permitted by applicable laws and regulations; however, the initial purchasers are not obligated to make a market in the exchange notes, and they may discontinue their market-making activities at any time without notice. Therefore, we cannot assure you as to the development or liquidity of any trading market for the exchange notes. The liquidity of any market for the exchange notes will depend on a number of factors, including:

 

   

the number of holders of exchange notes;

 

   

our operating performance and financial condition;

 

   

the market for similar securities;

 

   

the interest of securities dealers in making a market in the exchange notes; and

 

   

prevailing interest rates.

Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the exchange notes. The market, if any, for the exchange notes may face similar disruptions that may adversely affect the prices at which you may sell your exchange notes. Therefore, you may not be able to sell your exchange notes at a particular time and the price that you receive when you sell may not be favorable.

 

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Certain persons who participate in the exchange offer must deliver a prospectus in connection with resales of the exchange notes.

Based on interpretations of the staff of the SEC contained in Exxon Capital Holdings Corp., SEC no-action letter (April 13, 1988), Morgan Stanley & Co. Inc., SEC no-action letter (June 5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1983), we believe that you may offer for resale, resell or otherwise transfer the exchange notes without compliance with the registration and prospectus delivery requirements of the Securities Act. However, in some instances described in this prospectus under “Plan of Distribution,” certain holders of exchange notes will remain obligated to comply with the registration and prospectus delivery requirements of the Securities Act to transfer the exchange notes. If such a holder transfers any exchange notes without delivering a prospectus meeting the requirements of the Securities Act or without an applicable exemption from registration under the Securities Act, such a holder may incur liability under the Securities Act. We do not and will not assume, or indemnify such a holder against, this liability.

Risks Related to Our Indebtedness and the Exchange Notes

Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under the exchange notes.

We are highly leveraged. As of December 29, 2012, (i) our total debt was approximately $648.0 million (without giving effect to original issue discount on our term loan facility), (ii) the notes and related guarantees have ranked effectively subordinated to approximately $398.0 million of senior secured indebtedness under our senior secured term loan facility to the extent of the value of the collateral securing such facility and (iii) we had an additional $150.0 million of unutilized capacity under our senior secured revolving credit facility (less $14.5 million of letters of credit outstanding).

Our high degree of leverage could have important consequences for you, including:

 

   

making it more difficult for us to make payments on the exchange notes;

 

   

increasing our vulnerability to general economic and industry conditions;

 

   

requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;

 

   

exposing us to the risk of increased interest rates as certain of our borrowings under our senior secured credit facilities will be at variable rates of interest;

 

   

restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

 

   

limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; and

 

   

limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged.

Borrowings under our senior secured credit facilities are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. Our interest expense for the year ended December 29, 2012 was $58.1 million, a portion of which was based on a floating rate index. A 0.125% increase in the floating rates on the funded amounts under our senior secured credit facility would have increased annual interest expense by approximately $0.5 million. Assuming all revolving loans are drawn under our senior secured revolving credit facility, a 0.125% change in the floating rate would result in an additional $0.2 million increase in our annual interest expense. In the future, we may enter into interest rate swaps that involve the exchange of

 

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floating for fixed rate interest payments in order to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

In addition, the indenture that governs the exchange notes and the credit agreement governing our senior secured credit facilities contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt.

Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to our financial condition.

We and our subsidiaries may be able to incur significant additional indebtedness in the future. Although the indenture governing the exchange notes and the credit agreement governing our senior secured credit facilities contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. If we incur any additional indebtedness that ranks equally with the exchange notes, subject to collateral arrangements, the holders of that debt will be entitled to share ratably with you in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of our company. Such additional indebtedness may have the effect of reducing the amount of proceeds paid to you. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness. In February 2013, we entered into Amendments to our senior secured credit facilities. The senior secured credit facilities currently provide senior secured financing in an amount of $572.0 million, consisting of a $150.0 million five-year revolving credit facility and a $422.0 million seven-year term loan facility. Our senior secured credit facilities include an uncommitted incremental facility that will allow us the option to increase the amount available under the term loan facility and/or the revolving credit facility by (i) $135.0 million and (ii) an additional amount so long as we are in pro forma compliance with a consolidated first lien net leverage ratio. Availability of such incremental facilities will be subject to, among other conditions, the absence of an event of default and pro forma compliance with the financial covenants under our credit agreement and the receipt of commitments by existing or additional financial institutions. All of those borrowings would be secured indebtedness and, therefore, effectively senior to the exchange notes and the guarantees of the exchange notes by the guarantors to the extent of the value of the assets securing such debt. See “Description of Other Indebtedness” and “Description of the Notes.”

We may not be able to generate sufficient cash to service all of our indebtedness, including the exchange notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including the exchange notes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Summit Materials, LLC—Liquidity and Capital Resources.” If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, seek additional capital, restructure or refinance our indebtedness, including the exchange notes, or sell assets. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The senior secured credit facilities and the indenture governing the exchange notes restrict our ability to use the proceeds from asset sales. We may not be able to consummate those asset sales to raise capital or sell assets

 

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at prices that we believe are fair and proceeds that we do receive may not be adequate to meet any debt service obligations then due. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. See “Description of Other Indebtedness” and “Description of the Notes.”

The exchange notes will not be secured by any of our assets and are effectively subordinated to our secured debt. The senior secured credit facilities are secured and, therefore, the related lenders will have a prior claim on substantially all of our assets and those of our guarantors.

The exchange notes will not be secured by any of our or our guarantors’ assets. The senior secured credit facilities, however, are secured by (i) a perfected security interest in certain stock, other equity interests and promissory notes owned by us and the guarantors and (ii) a perfected security interest in all other tangible and intangible assets (including, without limitation, equipment, contract rights, securities, patents, trademarks, other intellectual property, cash and real estate) owned by us or any of the guarantors, subject to certain limited exceptions. The lenders under the senior secured credit facilities are entitled to accelerate all obligations thereunder if we become insolvent or are liquidated, or if we otherwise default on any of our obligations and agreements under the senior secured credit facilities. If payment under any of the instruments governing our secured debt is accelerated, the lenders under these instruments will be entitled to exercise the remedies available to a secured lender under applicable law and pursuant to instruments governing such debt. Accordingly, the lenders under the senior secured credit facilities will have a prior claim on our assets (and those of the guarantors under the senior secured credit facilities). In that event, because the exchange notes will not be secured by any of our or the guarantors’ assets, it is possible that our and the guarantors’ remaining assets might be insufficient to satisfy your claims in full. Any such exercise of the lenders’ remedies under the senior secured credit facilities could impede or preclude our ability to continue to operate as a going concern.

As of December 29, 2012, we had $648.0 million of total consolidated indebtedness (without giving effect to original issue discount on our term loan facility), of which $398.0 million was secured. Under our senior secured credit facilities, we also have available to us an uncommitted incremental loan facility in an amount not to exceed (i) $135.0 million plus (ii) an additional amount so long as we are in pro forma compliance with a consolidated first lien net leverage ratio. All of those borrowings could be secured, and as a result, would be effectively senior to the exchange notes and the guarantees of the exchange notes. We may incur additional secured indebtedness as permitted under our senior secured credit agreement and other existing instruments governing our indebtedness.

We require a significant amount of cash to service our indebtedness. The ability to generate cash or refinance our indebtedness as it becomes due depends on many factors, some of which are beyond our control.

Our ability to make scheduled payments on, or to refinance our respective obligations under, our indebtedness, including the exchange notes, and to fund planned capital expenditures and other corporate expenses will depend on our future operating performance and on economic, financial, competitive, legislative, regulatory and other factors and any legal and regulatory restrictions on the payment of distributions and dividends to which we may be subject. Many of these factors are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized or that future borrowings will be available to us in an amount sufficient to enable us to satisfy our respective obligations under our indebtedness or to fund our other needs. In order for us to satisfy our obligations under our indebtedness and fund planned capital expenditures, we must continue to execute our business strategy. If we are unable to do so, we may need to reduce or delay our planned capital expenditures or refinance all or a portion of our indebtedness on or before maturity. Significant delays in our planned capital expenditures may materially and adversely affect our future revenue prospects. In addition, we cannot assure you that we will be able to refinance any of our indebtedness, including the exchange notes and our senior secured credit facilities, on commercially reasonable terms or at all.

 

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The indenture governing the exchange notes and the credit agreement governing our senior secured credit facilities restrict our ability and the ability of most of our subsidiaries to engage in some business and financial transactions.

Indenture governing the exchange notes. The indenture governing the exchange notes contain restrictive covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to:

 

   

incur additional indebtedness or issue certain preferred shares;

 

   

pay dividends, redeem our stock or make other distributions;

 

   

make investments;

 

   

create restrictions on the ability of our restricted subsidiaries to pay dividends to us or make other intercompany transfers;

 

   

create liens;

 

   

transfer or sell assets;

 

   

merge or consolidate;

 

   

enter into certain transactions with our affiliates; and

 

   

designate subsidiaries as unrestricted subsidiaries.

Senior secured credit facilities . The credit agreement governing our senior secured credit facilities contains a number of covenants that limit our ability and the ability of our restricted subsidiaries to:

 

   

incur additional indebtedness or guarantees;

 

   

create liens on assets;

 

   

change our fiscal year;

 

   

enter into sale and leaseback transactions;

 

   

engage in mergers or consolidations;

 

   

sell assets;

 

   

incur additional liens;

 

   

sell assets;

 

   

pay dividends and make other restricted payments;

 

   

make investments, loans or advances;

 

   

repay subordinated indebtedness;

 

   

make certain acquisitions;

 

   

engage in certain transactions with affiliates; and

 

   

change our lines of business.

In addition, the senior secured credit facilities require us to maintain a quarterly maximum consolidated first lien net leverage ratio and a quarterly minimum interest coverage ratio.

The credit agreement governing our senior secured credit facilities also contains certain customary representations and warranties, affirmative covenants and events of default (including, among others, an event of default upon a change of control). If an event of default occurs, the lenders under our senior secured credit facilities will be entitled to take various actions, including the acceleration of amounts due under our senior secured credit facilities and all actions permitted to be taken by a secured creditor.

 

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Our failure to comply with obligations under the indenture governing the exchange notes and the credit agreement governing our senior secured credit facilities may result in an event of default under the indenture or the credit agreement. A default, if not cured or waived, may permit acceleration of our indebtedness. We cannot be certain that we will have funds available to remedy these defaults. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all.

We may not have access to the cash flow and other assets of our subsidiaries that may be needed to make payment on the exchange notes.

Our ability to make payments on the exchange notes is dependent on the earnings and the distribution of funds from our subsidiaries. All of our business is conducted through our subsidiaries. The ability of our subsidiaries to make distributions, dividends or advances to us will depend on their future operating performance and on economic, financial, competitive, legislative, regulatory and other factors and any legal and regulatory restrictions on the payment of distributions and dividends to which they may be subject. Under the terms of the indenture governing the exchange notes and the credit agreement governing our senior secured credit facilities, our subsidiaries will be permitted to incur additional indebtedness that may restrict or prohibit distributions, dividends or loans from those subsidiaries to us. We cannot assure you that the agreements governing the current and future indebtedness of our subsidiaries will permit our subsidiaries to provide us with sufficient dividends, distributions or loans to fund payments on the exchange notes when due.

The exchange notes will be structurally subordinated to the liabilities of our non-guarantor subsidiaries.

Payments on the exchange notes are only required to be made by us and the guarantors. The exchange notes will only be guaranteed by our domestic subsidiaries that guarantee our obligations under the senior secured credit facilities. Accordingly, holders of the exchange notes will be structurally subordinated to the claims of creditors of non-guarantor subsidiaries, including trade creditors. All obligations of our non-guarantor subsidiaries, including trade payables, will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon liquidation or otherwise, to us or a guarantor of the exchange notes. The non-guarantor subsidiaries will be permitted to incur additional debt in the future under the indenture governing the exchange notes.

Additional debt could reduce our ability to satisfy our obligations under the exchange notes.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indenture governing the exchange notes do not fully prohibit us or our subsidiaries from doing so, and the credit agreement governing our senior secured credit facilities permit additional borrowing.

Such debt may be secured; if that is the case, then your rights to receive payments on the exchange notes would effectively be junior to the holders of such new debt. Also, if we incur any additional indebtedness that ranks equally with the exchange notes, the holders of that debt will be entitled to share ratably with the holders of the exchange notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of the Company. This may have the effect of reducing the amount of proceeds ultimately paid to you. If new debt is added to our current debt levels, the related risks that we and our subsidiaries now face, as described further herein, could intensify and we may not be able to meet all our debt obligations, including the repayment of the exchange notes.

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the exchange notes.

Any default under the agreements governing our indebtedness, including a default under the credit agreement governing our senior secured credit facilities that is not waived by the required lenders, and the

 

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remedies sought by the lenders could prevent us from paying principal, premium, if any, and interest on the exchange notes and substantially decrease the market value of the exchange notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness, including covenants in the credit agreement governing our senior secured credit facilities, we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness may be able to cause all of our available cash flow to be used to pay such indebtedness and, in any event could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest; the lenders under our senior secured credit facilities could elect to terminate their commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets and we could be forced into bankruptcy or liquidation. Upon any such bankruptcy filing, we would be stayed from making any ongoing payments on the exchange notes, and the holders of the exchange notes would not be entitled to receive post-petition interest or applicable fees, costs or charges, or any “adequate protection” under Title 11 of the United States Code (the “Bankruptcy Code”). Furthermore, if a bankruptcy case were to be commenced under the Bankruptcy Code, we could be subject to claims, with respect to any payments made within 90 days prior to commencement of such a case, that we were insolvent at the time any such payments were made and that all or a portion of such payments, which could include repayments of amounts due under the exchange notes, might be deemed to constitute a preference, under the Bankruptcy Code, and that such payments should be voided by the bankruptcy court and recovered from the recipients for the benefit of the entire bankruptcy estate. Also, in the event that we were to become a debtor in, a bankruptcy case seeking reorganization or other relief under the Bankruptcy Code, a delay and/or substantial reduction in payments under the exchange notes may otherwise occur. If our operating performance declines, we may in the future need to obtain waivers from the required lenders under our senior secured credit facilities to avoid being in default. If we breach our covenants under our senior secured credit facilities and seek a waiver, we may not be able to obtain a waiver from the required lenders and holders. If this occurs, we would be in default under the credit agreement governing our senior secured credit facilities, the lenders could exercise their rights, as described above, and we could be forced into bankruptcy or liquidation. See “Description of Other Indebtedness” and “Description of the Notes.”

We may not be able to repurchase the exchange notes upon a change of control.

Upon the occurrence of specific kinds of change of control events, we will be required to offer to repurchase all outstanding notes at 101% of their principal amount plus accrued and unpaid interest, unless such notes have been previously called for redemption. The source of funds for any such purchase of the exchange notes will be our available cash or cash generated from our subsidiaries’ operations or other sources, including borrowings, sales of assets or sales of equity. We may not be able to repurchase the exchange notes upon a change of control because we may not have sufficient financial resources to purchase all of the exchange notes that are tendered upon a change of control. Further, we will be contractually restricted under the terms of the credit agreement governing our senior secured credit facilities from repurchasing all of the exchange notes tendered by holders upon a change of control. Accordingly, we may not be able to satisfy our obligations to purchase the exchange notes unless we are able to refinance or obtain waivers under the credit agreement governing our senior secured credit facilities. Our failure to repurchase the exchange notes upon a change of control would cause a default under the indenture governing the exchange notes and a cross default under the credit agreement governing our senior secured credit facilities. See “Description of the Notes—Repurchase at the Option of Holders—Change of Control.” The credit agreement governing our senior secured credit facilities also provides that a change of control will be a default that permits lenders to accelerate the maturity of borrowings thereunder. Any of our future debt agreements may contain similar provisions.

Courts interpreting change of control provisions under New York law (which is the governing law of the indenture governing the exchange notes) have not provided clear and consistent meanings of such change of control provisions which leads to subjective judicial interpretation. In addition, a court case in Delaware has questioned whether a change of control provision contained in an indenture could be unenforceable on public

 

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policy grounds. No assurances can be given that another court would enforce the change of control provisions in the indenture governing the exchange notes as written for the benefit of the holders, or as to how these change of control provisions would be impacted were we to become a debtor in a bankruptcy case.

Federal and state fraudulent transfer laws may permit a court to void the exchange notes and the guarantees, subordinate claims in respect of the exchange notes and the guarantees and require noteholders to return payments received and, if that occurs, you may not receive any payments on the exchange notes.

Federal and state fraudulent transfer and conveyance statutes may apply to the issuance of the exchange notes and the incurrence of any guarantees of the exchange notes, including the guarantee by the guarantors entered into upon issuance of the exchange notes and subsidiary guarantees (if any) that may be entered into thereafter under the terms of the indenture governing the exchange notes. Under federal bankruptcy law and comparable provisions of state fraudulent transfer or conveyance laws, which may vary from state to state, the exchange notes or guarantees could be voided as a fraudulent transfer or conveyance if (i) the Issuers or any of the guarantors, as applicable, issued the exchange notes or incurred the guarantees with the intent of hindering, delaying or defrauding creditors or (ii) the Issuers or any of the guarantors, as applicable, received less than reasonably equivalent value or fair consideration in return for either issuing the exchange notes or incurring the guarantees and, in the case of (ii) only, one of the following is also true at the time thereof:

 

   

the Issuers or any of the guarantors, as applicable, were insolvent or rendered insolvent by reason of the issuance of the exchange notes or the incurrence of the guarantees;

 

   

the issuance of the exchange notes or the incurrence of the guarantees left the Issuers or any of the guarantors, as applicable, with an unreasonably small amount of capital to carry on the business;

 

   

the Issuers or any of the guarantors intended to, or believed that the Issuers or such guarantor would, incur debts beyond the Issuers’ or such guarantor’s ability to pay such debts as they mature; or

 

   

the Issuers or any of the guarantors were a defendant in an action for money damages, or had a judgment for money damages docketed against it or such guarantor if, in either case, after final judgment, the judgment is unsatisfied.

A court would likely find that we or a guarantor did not receive reasonably equivalent value or fair consideration for the exchange notes or such guarantee if we or such guarantor did not substantially benefit directly or indirectly from the issuance of the exchange notes or the applicable guarantee. As a general matter, value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied. A debtor will generally not be considered to have received value in connection with a debt offering if the debtor uses the proceeds of that offering to make a dividend payment or otherwise retire or redeem equity securities issued by the debtor.

We cannot be certain as to the standards a court would use to determine whether or not we or the guarantors were solvent at the relevant time or, regardless of the standard that a court uses, that the issuance of the guarantees would not be further subordinated to our or any of our guarantors’ other debt. Generally, however, an entity would be considered insolvent if, at the time it incurred indebtedness:

 

   

the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all its assets;

 

   

the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

 

   

it could not pay its debts as they become due.

If a court were to find that the issuance of the exchange notes or the incurrence of the guarantee was a fraudulent transfer or conveyance, the court could void the payment obligations under the exchange notes or such guarantee or further subordinate the exchange notes or such guarantee to our or the related guarantors’ presently

 

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existing and future indebtedness, or require the holders of the exchange notes to repay any amounts received with respect to such guarantee. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the exchange notes or such guarantee, as applicable. Sufficient funds to repay the exchange notes may not be available from other sources, including any remaining guarantor, if any. In addition, the court might direct you to repay any amounts that you already received from us or the guarantor. Further, the voidance of the exchange notes could result in an event of default with respect to the Issuers’ and their subsidiaries’ other debt that could result in acceleration of such debt.

If the guarantees were legally challenged, any guarantee could also be subject to the claim that, since the guarantee was incurred for the Issuers’ benefit, and only indirectly for the benefit of the applicable guarantor, the obligations of the applicable guarantor were incurred for less than fair consideration. A court could thus void the obligations under the guarantees, subordinate them to the applicable guarantor’s other debt or take other action detrimental to the holders of the exchange notes.

Although each guarantee entered into by a subsidiary will contain a provision intended to limit that guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer, this provision may not be effective to protect those guarantees from being voided under fraudulent transfer law, or may reduce that guarantor’s obligation to an amount that effectively makes its guarantee worthless. In a recent Florida bankruptcy case, this kind of provision was found to be ineffective to prohibit the guarantees.

In addition, any payment by us pursuant to the exchange notes made at a time we were found to be insolvent could be voided and required to be returned to us or to a fund for the benefit of our creditors if such payment is made to an insider within a one-year period prior to a bankruptcy filing or within 90 days for any outside party and such payment would give such insider or outsider party more than such creditors would have received in a distribution under the Bankruptcy Code.

Finally, as a court of equity, the bankruptcy court may otherwise subordinate the claims in respect of the exchange notes to other claims against us under the principle of equitable subordination, if the court determines that: (i) the holder of the exchange notes engaged in some type of inequitable conduct; (ii) such inequitable conduct resulted in injury to our other creditors or conferred an unfair advantage upon the holder of the exchange notes; and (iii) equitable subordination is not inconsistent with the provisions of the Bankruptcy Code.

Many of the covenants in the indenture that govern the exchange notes will not apply during any period in which the exchange notes are rated investment grade by both Moody’s and Standard & Poor’s.

Many of the covenants in the indenture that govern the exchange notes will not apply to us during any period in which the exchange notes are rated investment grade by both Moody’s Investors Service, Inc., or “Moody’s,” and Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or “S&P,” provided at such time no default or event of default has occurred and is continuing. These covenants restrict among other things, our ability to pay distributions, incur debt and to enter into certain other transactions. There can be no assurance that the exchange notes will ever be rated investment grade, or that if they are rated investment grade, that the exchange notes will maintain these ratings. However, suspension of these covenants would allow us to incur debt, pay dividends and make other distributions and engage in certain other transactions that would not be permitted while these covenants were in force. To the extent the covenants are subsequently reinstated, any such actions taken while the covenants were suspended would not result in an event of default under the indenture that governs the exchange notes. See “Description of the Notes—Certain Covenants.”

A downgrade, suspension or withdrawal of the rating assigned by a rating agency to our company or the exchange notes, if any, could cause the liquidity or market value of the exchange notes to decline.

The exchange notes have been rated by nationally recognized rating agencies and may in the future be rated by additional rating agencies. We cannot assure you that any rating assigned will remain for any given period of

 

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time or that a rating will not be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, circumstances relating to the basis of the rating, such as adverse changes in our business, so warrant. Any downgrade, suspension or withdrawal of a rating by a rating agency (or any anticipated downgrade, suspension or withdrawal) could reduce the liquidity or market value of the exchange notes. Any future lowering of our ratings may make it more difficult or more expensive for us to obtain additional debt financing. If any credit rating initially assigned to the exchange notes is subsequently lowered or withdrawn for any reason, you may lose some or all of the value of your investment.

The exchange notes are subject to prior claims of any secured creditors and the creditors of our subsidiaries, and if a default occurs we may not have sufficient funds to fulfill our obligations under the exchange notes.

The exchange notes are our unsecured general obligations, ranking equally with our other senior unsecured indebtedness but below any secured indebtedness and effectively below the debt and other liabilities of our subsidiaries. The indenture governing the exchange notes permits us and our subsidiaries to incur secured debt under specified circumstances. If we incur any secured debt, our assets and the assets of our subsidiaries will be subject to prior claims by our secured creditors. In the event of our bankruptcy, liquidation, reorganization, dissolution or other winding up, assets that secure debt will be available to pay obligations on the exchange notes only after all debt secured by those assets has been repaid in full. Holders of the exchange notes will participate in our remaining assets ratably with all of our unsecured and unsubordinated creditors, including our trade creditors.

If we incur any additional obligations that rank equally with the exchange notes, including trade payables, the holders of those obligations will be entitled to share ratably with the holders of the exchange notes in any proceeds distributed upon our bankruptcy, liquidation, reorganization, dissolution or other winding up. This may have the effect of reducing the amount of proceeds paid to you. If there are not sufficient assets remaining to pay all these creditors, all or a portion of the exchange notes then outstanding would remain unpaid.

Risks Related to Our Business and Our Industry

Our business depends on activity within the construction industry and the strength of the local economies in which we operate.

We sell most of our construction materials and provide all of our highway construction services to the construction industry, so our results depend on the strength of the construction industry. Demand for our products, particularly in the non-residential and residential construction markets, could remain weak and decline if companies and consumers cannot obtain credit for construction projects or if the slow pace of economic activity results in delays or cancellations of capital projects. In addition, state and federal budget issues may continue to hurt the funding available for infrastructure spending, particularly highway construction, which constitutes a significant portion of our business.

Our earnings depend on the strength of the local economies in which we operate because of the high cost to transport our products relative to their price. Many states have reduced their construction spending due to budget shortfalls resulting from lower tax revenues as well as uncertainty relating to long-term federal highway funding. As a result, there has been a reduction in many states’ investment in infrastructure spending. If economic and construction activity diminish in one or more areas, particularly in our top revenue-generating markets of Texas, Kansas, Kentucky, Missouri and Utah, our business and results of operations may be materially adversely affected and there is no assurance that reduced levels of construction activity will not continue to affect our business in the future.

The success of our business depends, in part, on our ability to execute on our acquisition strategy, the successful integration of acquisitions and the retention of key employees of our acquired businesses.

A significant portion of our historical growth has occurred through acquisitions and we will likely enter into acquisitions in the future. We have evaluated and expect to continue to evaluate possible acquisition transactions

 

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on an ongoing basis. At any time we may be engaged in discussions or negotiations with respect to several possible acquisitions. From time to time we enter into letters of intent to allow us to conduct due diligence on a confidential basis. Currently, we are in preliminary discussions with several potential acquisition targets. There can be no assurance that we will enter into definitive agreements with respect to such transactions or that they will be completed. Our growth has placed, and will continue to place, significant demands on our management and operational and financial resources. Acquisitions involve risks that the businesses acquired will not perform in accordance with expectations and that business judgments concerning the value, strengths and weaknesses of businesses acquired will prove incorrect.

Our interest expense will increase in connection with acquisitions as a result of the assumption or incurrence of debt and contingent liabilities and to the extent we finance such acquisitions with drawdowns from our revolving credit facility. We may become liable for certain liabilities of any acquired business, whether or not known to us. These risks could include, among others, tax liabilities, product liabilities, environmental liabilities and liabilities for employment practices, and they could be significant.

Acquisitions may require integration of the acquired companies’ sales and marketing, distribution, engineering, purchasing, finance and administrative organizations. We may not be able to integrate successfully any business we acquire or acquired into our existing business and any acquired businesses may not be profitable or as profitable as we had expected. The successful integration of our acquisitions may also require substantial attention from our senior management and the management of the acquired business, which could decrease the time that they have to service and attract customers and develop new products and services. In addition, we may not effectively utilize new equipment that we acquire through acquisitions or otherwise at utilization and rental rates consistent with that of our existing equipment. Furthermore, the complete integration of companies we acquire depends, to a certain extent, on the full implementation of our financial systems and policies. Moreover, because we may actively pursue a number of opportunities simultaneously, we may encounter unforeseen expenses, complications and delays, including difficulties in employing sufficient staff and maintaining operational and management oversight. Our inability to complete the integration of new businesses in a timely and orderly manner could increase costs and lower profits.

We cannot assure you that we will achieve the cost savings and synergies identified in this prospectus or that we will achieve synergies and cost savings in connection with future acquisitions. In addition, many of the businesses that we have acquired and will acquire have unaudited financial statements that have been prepared by the management of such companies and have not been independently reviewed or audited. We cannot assure you that the financial statements of companies we have acquired or will acquire would not be materially different if such statements were audited. Finally, we cannot assure you that we will continue to acquire businesses at valuations consistent with our prior acquisitions or that we will complete future acquisitions at all.

Our business is cyclical and requires significant working capital to fund operations.

Our business is cyclical and requires that we maintain significant working capital to fund our operations. Our ability to generate sufficient cash flow depends on future performance, which will be subject to general economic conditions, industry cycles and financial, business and other factors affecting our operations, many of which are beyond our control. If we are unable to generate sufficient cash to operate our business and service our outstanding debt and other obligations, we may be required, among other things, to further reduce or delay planned capital or operating expenditures, sell assets or take other measures, including the restructuring of all or a portion of our debt, which may only be available, if at all, on unsatisfactory terms.

A decline in public sector construction and reductions in governmental funding could adversely affect our operations and results.

A significant portion of our revenues are generated from publicly funded construction projects. As a result, if publicly funded construction continues to remain low due to reduced federal or state funding or otherwise, our earnings and cash flows will be negatively affected.

 

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The current federal funding program, MAP-21, was enacted in July 2012 and took effect in October 2012. MAP-21 is a 27-month, approximately $105 billion transportation funding program that provides for $40.4 billion and $41.0 billion for highway infrastructure investments in fiscal years 2013 and 2014, respectively. Additionally, in January 2011, the House passed a new rules package that repealed transportation law dating back to 1998, which protected annual funding levels from amendments that could reduce such funding. This rule change subjects funding for highways to yearly appropriation reviews. The change in the funding mechanism increases the uncertainty of many state departments of transportation regarding funds for highway projects. This uncertainty could result in states being reluctant to undertake large multi-year highway projects which could, in turn, negatively affect our sales.

As a result of the foregoing and other factors, we cannot be assured of the existence, amount and timing of appropriations for spending on federal, state or local projects. The federal support for the cost of highway maintenance and construction is dependent on congressional action. In addition, each state funds its infrastructure spending from specially allocated amounts collected from various taxes, typically gasoline taxes and vehicle fees, along with voter-approved bond programs. Shortages in state tax revenues can reduce the amounts spent on state infrastructure projects, even below amounts awarded under legislative bills. Nearly all states are now experiencing state-level funding pressures caused by lower tax revenues and an inability to finance approved projects. Delays or cancellations of state infrastructure spending have in the past, and we anticipate in the immediate future will continue to hurt our business because a significant portion of our business is dependent on state infrastructure spending.

Our business relies on private investment in infrastructure and a slower than normal recovery will adversely affect our results.

A portion of our sales are for projects with non-public owners. Construction spending is affected by developers’ ability to finance projects. The current credit environment has negatively affected the U.S. economy and demand for our products. Non-residential and residential construction could continue to decline if companies and consumers are unable to finance construction projects or if the economic slowdown continues to cause delays or cancellations of capital projects. If housing starts and non-residential projects do not begin to rise steadily with the slow economic recovery as they normally do when recessions end, our construction materials and contracting services sales may fall further and our business and results of operations may be materially adversely affected.

A decline in the funding of transportation authorities and other state agencies could adversely affect our operations and results.

A significant portion of our revenues, both through direct and indirect sales, are generated from public sources such as departments of transportation and other state agencies. The spending of these agencies is governed by an annual budget which is approved by the relevant state. To the extent that any of these entities significantly decreases its annual budget, our revenues could be adversely affected.

Difficult and volatile conditions in the credit markets could affect our financial position, results of operations and cash flows.

Demand for our products is primarily dependent on the overall health of the economy, and federal, state and local public funding levels. The stagnant, and at times declining, economy continues to put pressure on the demand for our construction materials and increases competition and aggressive pricing for private and public sector projects as companies migrate from bidding on scarce private sector work to projects in the public sector. In addition, a stagnant or declining economy tends to produce less tax revenue for public agencies, thereby decreasing a source of funds available for spending on public infrastructure improvements, which constitute a substantial part of our business.

With the slow pace of economic recovery, there is also a likelihood that we will not be able to collect on certain of our accounts receivable from our customers, many of which are still struggling. Although we are

 

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protected in part by payment bonds posted by some of our customers, we have in the past experienced payment delays from some of our customers during this economic downturn. Although such delays have not had a material impact on our business, there can be no assurance that this will be the case in the future.

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our senior secured credit facilities or from other sources in an amount sufficient to pay our debt or to fund our other liquidity needs. If we are unable to generate sufficient cash flow to meet our debt service requirements, we may have to renegotiate the terms of our senior secured credit facilities or obtain additional financing. We cannot assure you that we will be able to refinance any of our debt or obtain additional financing on commercially reasonable terms or at all. If we were unable to meet our debt service requirements or obtain new financing under these circumstances, we would have to consider other options, such as the sales of certain assets, sales of equity, and negotiations with our lenders to restructure our debt. The terms of our then existing indebtedness may restrict, or market or business conditions may limit, our ability to do any or all of these things.

If we are unable to accurately estimate the overall risks, requirements or costs when we bid on or negotiate a contract that is ultimately awarded to us, we may achieve a lower than anticipated profit or incur a loss on the contract.

Even though the majority of our governmental contracts contain certain raw material escalators to protect us from certain price increases, a portion of the contracts are on a fixed cost basis. The fixed cost basis portion of these contracts require us to perform the contract for a fixed unit price based on approved quantities irrespective of our actual costs and lump sum contracts require that the total amount of work be performed for a single price irrespective of our actual costs. We realize a profit on our contracts only if: (i) we successfully estimate our costs and then successfully control actual costs and avoid cost overruns and (ii) our revenues exceed actual costs. If our cost estimates for a contract are inaccurate, or if we do not execute the contract within our cost estimates, then cost overruns may cause us to incur losses or cause the contract not to be as profitable as we expected. The final results under these types of contracts could negatively affect our cash flow, earnings and financial position. The costs incurred and gross profit realized, if any, on our contracts can vary, sometimes substantially, from our original projections due to a variety of factors, including, but not limited to:

 

   

failure to include materials or work in a bid, or the failure to estimate properly the quantities or costs needed to complete a lump sum contract;

 

   

delays caused by weather conditions;

 

   

contract or project modifications creating unanticipated costs not covered by change orders;

 

   

changes in availability, proximity and costs of materials, including liquid asphalt, cement, aggregates and other construction materials (such as stone, gravel, sand and oil for asphalt paving), as well as fuel and lubricants for our equipment;

 

   

to the extent not covered by contractual cost escalators, variability and inability to predict the costs of purchasing diesel, liquid asphalt and cement;

 

   

availability and skill level of workers;

 

   

failure by our suppliers, subcontractors, designers, engineers or customers to perform their obligations;

 

   

fraud, theft or other improper activities by our suppliers, subcontractors, designers, engineers, customers or our own personnel;

 

   

mechanical problems with our machinery or equipment;

 

   

citations issued by any governmental authority, including the Occupational Safety and Health Administration and Mine Safety and Health Administration;

 

   

difficulties in obtaining required governmental permits or approvals;

 

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changes in applicable laws and regulations; and

 

   

uninsured claims or demands from third parties for alleged damages arising from the design, construction or use and operation of a project of which our work is part.

Public sector customers may seek to impose contractual risk-shifting provisions more aggressively, and we could face increased risks, which may adversely affect our cash flow, earnings and financial position.

Weather can materially affect our business and we are subject to seasonality.

Nearly all of the products used by us, and by our customers, in the public or private construction industry are used outdoors. In addition, our highway operations and production and distribution facilities are located outdoors. Therefore, seasonal changes and other weather-related conditions can adversely affect our business and operations through a decline in both the use of our products and demand for our services.

Adverse weather conditions such as extended rainy and cold weather in the spring and fall can reduce demand for our products by contractors and reduce sales or render our contracting operations less efficient. Occasionally, major weather events such as hurricanes, tropical storms and heavy snows with quick rainy melts adversely affect sales in the short term.

The construction materials business production and shipment levels follow activity in the construction industry, which typically occurs in the spring, summer and fall. Warmer and drier weather during the second and third quarters of our fiscal year typically result in higher activity and revenue levels during those quarters. The first quarter of our fiscal year has typically lower levels of activity due to the weather conditions. Our second quarter varies greatly with the spring rains and wide temperature variations. A cool wet spring increases drying time on projects, possibly delaying sales until the second quarter, while a warm dry spring may enable earlier project startup.

Within our local markets, we operate in a highly competitive industry.

The U.S. construction aggregates industry is highly fragmented with a large number of independent local producers in a number of our markets. Additionally, in most markets, we also compete against large private and public companies, some of which are as vertically-integrated as we are. Therefore, there is intense competition in a number of the markets in which we operate. This significant competition could lead to lower prices, lower sales volumes and higher costs in some markets, negatively affecting our results of operations and liquidity.

Our long-term success is dependent upon securing and permitting aggregate reserves in strategically located areas. If we are unable to secure and permit such reserves, it could negatively affect our earnings in the future.

Construction aggregates are bulky and heavy and, therefore, difficult to transport efficiently. Because of the nature of the products, the freight costs can quickly surpass the production costs. Therefore, except for geographic regions that do not possess commercially viable deposits of aggregates and are served by rail, barge or ship, the markets for our products tend to be very localized around our quarry sites and are served by truck. New quarry sites often take a number of years to develop, therefore our strategic planning and new site development must stay ahead of actual growth. Additionally, in a number of urban and suburban areas in which we operate, it is increasingly difficult to permit new sites or expand existing sites due to community resistance. Therefore, our future success is dependent, in part, on our ability to accurately forecast future areas of high growth in order to locate optimal facility sites and on our ability to either acquire existing quarries or secure operating and environmental permits to open new quarries. If we are unable to accurately forecast areas of future growth, acquire existing quarries or secure the necessary permits to open new quarries, our financial condition, results of operations and liquidity may be materially adversely affected.

 

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Our future growth may depend in part on acquiring other businesses in our industry and successfully integrating them with our existing operations.

In the past, we have made acquisitions to strengthen our existing locations, expand our operations, grow our reserves and grow our market share. We expect to continue to make selective acquisitions in contiguous locations and geographic markets or other business arrangements we believe will help our company. However, the success of our acquisition program will depend on our ability to find and buy other attractive businesses at a reasonable price, the availability of financing and our ability to successfully integrate acquired businesses into our existing operations. We cannot assure you that there will be attractive acquisition opportunities at reasonable prices, that financing will be available or that we can successfully integrate such acquired businesses into our existing operations. In addition, our results of operations from these acquisitions could in the future result in impairment charges for any of our intangible assets, goodwill or other long-lived assets.

If we fail to develop or maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results.

We have completed numerous acquisitions in the past few years and plan to continue to pursue growth through strategic acquisitions. Among the risks associated with acquisitions are the risks of control deficiencies that result from the integration of the acquired businesses.

In conjunction with the preparation of our consolidated financial statements for the year ended December 31, 2011, we identified significant deficiencies in our internal controls over financial reporting related to the preparation and review of guarantor financial statements and purchase accounting processes.

Although we believe we have remediated these control deficiencies and strengthened our internal controls over financial reporting, specifically by increasing our accounting personnel, supplementing our financial expertise with outside resources and conducting training regarding U.S. generally accepted accounting principles (“GAAP”) accounting and reporting matters during fiscal 2011 and 2012, there may still be material weaknesses or significant deficiencies in our internal controls in the future and the cost of remediating any such weaknesses or deficiencies could be significant.

If our remediation efforts are insufficient to address control deficiencies, they may adversely affect our ability to record, process, summarize and report financial information timely and accurately and, as a result, our consolidated financial statements may contain material misstatements or omissions and we could be required to restate our financial results.

Our industry is capital intensive and portions of our business have significant fixed and semi-fixed costs. Therefore, our earnings are sensitive to changes in volume.

The property and machinery needed to produce our products can be very expensive. Therefore, we need to spend a substantial amount of money to purchase and maintain the equipment necessary to operate our business. Although we believe that our current cash balance, along with our projected internal cash flows and our available financing resources, will be enough to give us the cash we need to support our currently anticipated operating and capital needs, if we are unable to generate sufficient cash to purchase and maintain the property and machinery necessary to operate our business, we may be required to reduce or delay planned capital expenditures or incur additional debt. In addition, given the level of fixed and semi-fixed costs within our business, particularly at our cement production facility, both our dollar profits and our profits as a percentage of net sales (margin) can be negatively affected by decreases in volume.

Our failure to meet schedule or performance requirements of our contracts could adversely affect us.

In most cases, our contracts require completion by a scheduled acceptance date. Failure to meet any such schedule could result in additional costs, penalties or liquidated damages being assessed against us, and these

 

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could exceed projected profit margins on the contract. Performance problems on existing and future contracts could cause actual results of operations to differ materially from those anticipated by us and could cause us to suffer damage to our reputation within the industry and among our customers, which may have a material adverse effect on our financial condition, results of operations and liquidity.

Environmental, health and safety laws and any changes to such laws may have a material adverse effect on our business, financial condition and results of operations.

We are subject to a variety of environmental, health and safety laws, and the cost of complying and other liabilities associated with such laws may have a material adverse effect on our business, financial condition and results of operations.

We are subject to a variety of federal, state and local environmental laws and regulations relating to: (i) the release or discharge of materials into the environment; (ii) the management, use, processing, handling, storage, transport or disposal of hazardous materials, including the management of hazardous waste used as a fuel substitute at our cement kiln in Hannibal, Missouri; and (iii) the protection of public and employee health, safety and the environment. These laws and regulations expose us to liability for the environmental condition of our current or formerly owned or operated facilities, and may expose us to liability for the conduct of others or for our actions that complied with all applicable laws at the time these actions were taken. In particular, we may incur remediation costs and other related expenses because our facilities were constructed and operated before the adoption of current environmental laws and the institution of compliance practices and because certain of our processes are regulated. These laws and regulations may also expose us to liability for claims of personal injury or property or natural resource damage related to alleged exposure to regulated materials. The existence of contamination at properties we own, lease or operate could also result in increased operational costs or restrictions on our ability to use those properties as intended, including for purposes of mining.

Despite our compliance efforts, there is the inherent risk of liability in the operation of our business, especially from an environmental standpoint. These potential liabilities could have an adverse impact on our operations and profitability. In many instances, we must have government approvals and certificates, permits or licenses in order to conduct our business, which often require us to make significant capital and maintenance expenditures to comply with zoning and environmental laws and regulations. Our failure to maintain required certificates, permits or licenses or to comply with applicable governmental requirements could result in substantial fines or possible revocation of our authority to conduct some of our operations. Governmental requirements that impact our operations also include those relating to air quality, waste management, water quality, mine reclamation, the operation of municipal waste and construction and demolition debris landfills, remediation of contaminated sites and worker health and safety. These requirements are complex and subject to frequent change. They impose strict liability in some cases without regard to negligence or fault and expose us to liability for the conduct of, or conditions caused by, others, or for our acts that may otherwise have complied with all applicable requirements when we performed them. Stricter laws and regulations, more stringent interpretations of existing laws or regulations or the future discovery of environmental conditions may impose new liabilities on us, reduce operating hours, require additional investment by us in pollution control equipment or impede our opening new or expanding existing plants or facilities.

Changes in legal requirements and governmental policies concerning zoning, land use, environmental and other areas of the law impact our business.

Our operations are affected by numerous federal, state and local laws and regulations related to zoning, land use and environmental matters. Despite our compliance efforts, we have an inherent risk of liability in the operation of our business, especially from an environmental standpoint. These potential liabilities could have an adverse impact on our operations and profitability. In addition, our operations require numerous governmental approvals and permits, which often require us to make significant capital and maintenance expenditures to comply with zoning and environmental laws and regulations. Stricter laws and regulations, or more stringent

 

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interpretations of existing laws or regulations, may impose new liabilities on us, reduce operating hours, require additional investment by us in pollution control equipment, or impede our opening new or expanding existing plants or facilities.

Climate change and climate change legislation or regulations may adversely impact our business.

A number of governmental bodies have introduced or are contemplating legislative and regulatory change in response to the potential impacts of climate change. Such legislation or regulation, if enacted, potentially could include provisions for a “cap and trade” system of allowances and credits, among other provisions. The EPA promulgated a mandatory reporting rule covering greenhouse gas emissions from sources considered to be large emitters. The EPA has also promulgated a greenhouse gas emissions permitting rule, referred to as the “Tailoring Rule” which requires permitting of newly constructed or significantly modified large emitters of greenhouse gases under the Federal Clean Air Act. Our Continental Cement plant and Hamm landfill each hold EPA Title V Permits and could be impacted by the Tailoring Rule. The effects on our operations and potential costs are uncertain at this time. Under the Tailoring Rule, existing permits may require changes which could require significant additional costs if there are future substantial modifications to either of these facilities that cause greenhouse gas emissions to be increased by the equivalent of 75,000 tons or more of carbon dioxide in a single year.

Other potential impacts of climate change include physical impacts such as disruption in production and product distribution due to impacts from major storm events and shifts in regional weather patterns and intensities. There is also a potential for climate change legislation and regulation to adversely impact the cost of purchased energy and electricity.

The impacts of climate change on our operations and the company overall are highly uncertain and difficult to estimate. However, because a chemical reaction inherent to the manufacture of Portland cement releases carbon dioxide, a greenhouse gas, cement kiln operations may be disproportionately impacted by future regulation of greenhouse gas emissions. Climate change and legislation and regulation concerning greenhouse gases could have a material adverse effect on our financial condition, results of operations and liquidity.

We depend on our senior management and we may be materially harmed if we lose any member of our senior management.

We are dependent upon the services of our senior management, especially CEO Tom Hill. The loss of key management personnel or our inability to attract and retain qualified management personnel could have a material adverse effect on us. A decision by any of these individuals to leave us, to compete against us or to reduce his involvement could have a material adverse effect on our financial condition, results of operations and liquidity.

We may not be able to grow our business effectively or successfully implement our growth plans if we are unable to recruit additional management and other personnel.

Our ability to continue to grow our business effectively and successfully implement our growth strategy is partially dependent upon our ability to attract and retain qualified management employees and other key employees. We believe there is a limited number of qualified people in our business and the industry in which we compete. As such, there can be no assurance that we will be able to identify and retain the key personnel that may be necessary to grow our business effectively or successfully implement our growth strategy. Our inability to attract and retain talented personnel could limit our ability to grow our business.

Labor disputes could disrupt operations of our businesses.

As of December 29, 2012, labor unions represent approximately 5% of our total hourly employees and 0.1% of our full time salaried employees. Our collective bargaining agreements for employees generally expire

 

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between 2013 and 2015. Although we have good relations with our employees and unions, disputes with our trade unions, or the inability to renew our labor agreements, could lead to strikes or other actions that could disrupt our business, raise costs, and reduce revenues and earnings from the affected locations.

Our operations are subject to special hazards that may cause personal injury or property damage, subjecting us to liabilities and possible losses which may not be covered by insurance.

Operating hazards inherent in our business can cause personal injury and loss of life, damage to or destruction of property, plant and equipment and environmental damage. We maintain insurance coverage in amounts and against the risks we believe are consistent with industry practice, but this insurance may not be adequate or available to cover all losses or liabilities we may incur in our operations. Our insurance policies are subject to varying levels of deductibles. Losses up to our deductible amounts are accrued based upon our estimates of the ultimate liability for claims incurred and an estimate of claims incurred but not reported. However, liabilities subject to insurance are difficult to assess and estimate due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, the number of incidents not reported and the effectiveness of our safety programs. If we were to experience insurance claims or costs above our estimates, we might also be required to use working capital to satisfy these claims rather than using working capital to maintain or expand our operations.

Unexpected factors affecting self-insurance claims and reserve estimates could adversely affect our business.

We use a combination of third-party insurance and self-insurance to provide for potential liabilities for workers’ compensation, general liability, vehicle accident, property and medical benefit claims. Although we believe we have minimized our exposure on individual claims, for the benefit of costs savings we have accepted the risk of a large amount of independent multiple material claims arising, which could have a significant impact on our earnings. We are liable for up to $500,000 per year per member for health claims. Our workers’ compensation and auto liability insurance has a $150,000 per occurrence deductible and our general liability per occurrence deductible is $100,000. Our property and excess property coverage carries a $200.0 million blanket annual limit, subject to a $50,000 deductible. Our general liability policy has a $1.0 million limit per occurrence and our auto liability policy has a $3.0 million combined single limit. We have umbrella insurance in the amount of $25.0 million to cover excess claims.

We estimate the liabilities associated with the risks retained by us, in part, by considering historical claims experience, demographic and severity factors and other actuarial assumptions which, by their nature, are subject to a high degree of variability. Any projection of losses concerning workers’ compensation and general liability is subject to a high degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, discount rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns.

We may incur material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications.

We provide to our customers specified product designs that meet building code or other regulatory requirements and contractual specifications for measurements such as durability, compressive strength, weight-bearing capacity and other characteristics. If we fail or are unable to provide products meeting these requirements and specifications, material claims may arise against us and our reputation could be damaged. Additionally, if a significant uninsured, non-indemnified or product-related claim is resolved against us in the future, that resolution may have a material adverse effect on our financial condition, results of operations and liquidity.

 

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The cancellation of significant contracts or our disqualification from bidding for new contracts could reduce revenues and have a material adverse effect on our results of operations.

Contracts that we enter into with governmental entities can usually be canceled at any time by them with payment only for the work already completed. In addition, we could be prohibited from bidding on certain governmental contracts if we fail to maintain qualifications required by those entities. A cancellation of an unfinished contract or our disqualification from the bidding process could cause our equipment to be idled for a significant period of time until other comparable work became available, which could have a material adverse effect on our financial condition, results of operations and liquidity.

We use large amounts of electricity, diesel fuel, liquid asphalt and other petroleum-based resources that are subject to potential supply constraints and significant price fluctuation, which could affect our operating results and profitability.

In our production and distribution processes, we consume significant amounts of electricity, diesel fuel, liquid asphalt and other petroleum-based resources. The availability and pricing of these resources are subject to market forces that are beyond our control. Our suppliers contract separately for the purchase of such resources and our sources of supply could be interrupted should our suppliers not be able to obtain these materials due to higher demand or other factors that interrupt their availability. Variability in the supply and prices of these resources could materially affect our results of operations from period to period and rising costs could erode our profitability.

Affiliates of the Sponsors indirectly own the substantial majority of the equity interests in us and may have conflicts of interest with us or the holders of the exchange notes in the future.

The Sponsors indirectly own a substantial majority of our equity interests. As a result, affiliates of the Sponsors will have control over our decisions to enter into any corporate transaction and will have the ability to prevent any transaction that requires the approval of equity holders regardless of whether holders of the exchange notes believe that any such transactions are in their own best interests. For example, affiliates of the Sponsors could collectively cause us to make acquisitions that increase the amount of our indebtedness or to sell assets, or could cause us to issue additional capital stock or declare dividends. So long as the Sponsors continue to indirectly own a significant amount of our outstanding equity interests, affiliates of the Sponsors will continue to be able to strongly influence or effectively control our decisions.

The indenture governing the exchange notes and the credit agreement governing our senior secured credit facilities permit us to pay advisory and other fees, dividends and make other restricted payments to the Sponsors under certain circumstances and the Sponsors or their respective affiliates may have an interest in our doing so. In addition, the Sponsors have no obligation to provide us with any additional debt or equity financing.

Additionally, the Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us or that supply us with goods and services. The Sponsors may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. The holders of the exchange notes should consider that the interests of the Sponsors may differ from their interests in material respects. See “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Certain Relationships and Related Party Transactions.”

As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.

As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. We will remain an “emerging growth company” until the earliest of: (i) the last day of the fiscal year during which we had total annual gross revenues of $1 billion or

 

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more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement; (iii) the date on which we have, during the previous three year period, issued more than $1 billion in non-convertible debt; or (iv) the date on which we are deemed a “large accelerated issuer” as defined under the federal securities laws.

For so long as we remain an “emerging growth company,” we will not be required to, among other things:

 

   

comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s reporting providing additional information about the audit and the financial statements (auditor discussion and analysis);

 

   

submit certain executive compensation matters to shareholders advisory votes pursuant to the “say on frequency” and “say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and “say on golden parachute” provisions (requiring a non- binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; and

 

   

include detailed compensation discussion and analysis in our filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and instead may provide a reduced level of disclosure concerning executive compensation.

We have not taken advantage of all of these reduced reporting burdens in this Registration Statement, although we may do so in future filings. Although we intend to rely on certain exemptions provided in the JOBS Act, the exact implications of the JOBS Act for us are still subject to interpretations and guidance by the SEC and other regulatory agencies. In addition, as our business grows, we may no longer satisfy the conditions of an “emerging growth company.” We are currently evaluating and monitoring developments with respect to these new rules and we cannot assure you that we will be able to take advantage of all of the benefits from the JOBS Act.

In addition, as an “emerging growth company,” we may elect to delay adoption of new or revised accounting standards applicable to public companies until such standards are made applicable to private companies. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies.

We are dependent on information technology and our systems and infrastructure face certain risks, including cyber security risks and data leakage risks.

We are dependent on information technology systems and infrastructure. Any significant breakdown, invasion, destruction or interruption of these systems by employees, others with authorized access to our systems, or unauthorized persons could negatively impact operations. There is also a risk that we could experience a business interruption, theft of information or reputational damage as a result of a cyber attack, such as an infiltration of a data center, or data leakage of confidential information either internally or at our third-party providers. While we have invested in the protection of our data and information technology to reduce these risks and periodically test the security of our information systems network, there can be no assurance that our efforts will prevent breakdowns or breaches in our systems that could adversely affect our financial condition, results of operations and liquidity.

 

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USE OF PROCEEDS

We will not receive any proceeds from the issuance of the exchange notes in the exchange offer. The exchange offer is intended to satisfy our obligations under the registration rights agreement that we entered into in connection with the private offering of the outstanding notes. As consideration for issuing the exchange notes as contemplated in this prospectus, we will receive in exchange a like principal amount of outstanding notes, the terms of which are identical in all material respects to the exchange notes, except that the exchange notes will not contain terms with respect to transfer restrictions or additional interest upon a failure to fulfill certain of our obligations under the registration rights agreement. The outstanding notes that are surrendered in exchange for the exchange notes will be retired and cancelled and cannot be reissued. As a result, the issuance of the exchange notes will not result in any change in our capitalization.

 

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CAPITALIZATION

The following table sets forth our consolidated cash and capitalization as of December 29, 2012.

You should read this table in conjunction with “Prospectus Summary—Summary Historical Consolidated Financial and Other Data,” “Selected Historical Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Summit Materials, LLC” and our historical consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

The outstanding notes that are surrendered in exchange for the exchange notes will be retired and cancelled and cannot be reissued. As a result, the issuance of the exchange notes will not result in any change in our capitalization.

 

     As of
December 29, 2012
 
     (in millions)  

Cash

   $ 27.4   
  

 

 

 

Debt:

  

Senior secured credit facilities(1)

   $ 398.0   

10.5% senior notes due 2020(2)

     250.0   
  

 

 

 

Total debt

     648.0   

Total member’s interest

     382.4   
  

 

 

 

Total capitalization

   $ 1,030.4   
  

 

 

 

 

(1) In February 2013, we entered into amendments to our senior secured credit facilities. The senior secured credit facilities currently provide senior secured financing in an amount of $572.0 million, consisting of a $150.0 million five-year revolving credit facility and a $422.0 million seven-year term loan facility. See “Description of Other Indebtedness—Senior Secured Credit Facilities.” Represents the principal amount of loans without giving effect to original issuance discount.
(2) Represents the aggregate principal amount of the notes, without giving effect to original issuance discounts or commissions to the initial purchasers.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information has been prepared to give effect to our acquisitions of Norris, Kay & Kay and Sandco, which were completed on February 29, 2012, October 5, 2012 and November 30, 2012, respectively, as if they occurred on January 1, 2012. The acquisitions of Norris, Kay & Kay and Sandco are considered business combinations in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, “ Business Combinations.”

The following unaudited pro forma condensed consolidated financial information has been derived from our audited consolidated financial statements for the year ended December 29, 2012 included elsewhere in this prospectus along with the pre-acquisition financial information for Norris, Kay & Kay and Sandco. The historical consolidated financial information has been adjusted in the accompanying unaudited pro forma condensed consolidated statements of operations to give effect to pro forma events that are (i) directly attributable to the transaction, (ii) factually supportable, and (iii) expected to have a continuing impact on us. The unaudited pro forma condensed consolidated statements of operations exclude $1.7 million in non-recurring charges directly attributable to the Norris, Kay & Kay and Sandco acquisitions, including transaction-related costs such as financial advisory, accounting and legal fees.

The unaudited pro forma condensed consolidated financial information is presented for illustrative and informative purposes only and is not intended to represent or be indicative of what our results of operations would have been had the acquisitions of Norris, Kay & Kay and Sandco actually occurred on January 1, 2012. The unaudited pro forma condensed consolidated financial information should be read in conjunction with the information contained in “Selected Historical Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Summit Materials, LLC” and the audited consolidated financial statements for each of Summit Materials and for Norris included elsewhere in this prospectus. The unaudited pro forma condensed consolidated financial information should not be considered representative of our future results of operations or financial position.

Unaudited Pro Forma Condensed Consolidated Statements of Operations

for the year ended December 29, 2012

 

     Summit Materials, LLC  
(in thousands)    Summit
Materials,
LLC
    Pre-
acquisition
results of
Norris,
Kay & Kay
and
Sandco
1/1/2012 –
11/30/2012
     Pro Forma
adjustments
for the
acquisition of
Norris,
Kay & Kay
and Sandco
           Pro Forma
Combined
 

Revenue

   $ 962,902      $ 13,895       $ —           $ 976,797   

Cost of revenue (exclusive of items shown separately below)

     749,363        11,502         —             760,865   

General and administrative expenses

     128,032        1,000         —             129,032   

Depreciation, depletion, amortization and accretion

     68,876        1,008         81        (a)         69,965   

Transaction costs

     1,988        —           (1,742     (b)         246   
  

 

 

   

 

 

    

 

 

      

 

 

 

Operating income (loss)

     14,643        385         1,661           16,689   
  

 

 

   

 

 

    

 

 

      

 

 

 

Other (income) expense, net.

     (1,182     15         —             (1,167

Loss on debt refinancing.

     9,469        —           —             9,469   

Interest expense

     58,079        2         200        (c)         58,281   
  

 

 

   

 

 

    

 

 

      

 

 

 

(Loss) income from continuing operations before income tax (benefit) expense

   $ (51,723   $ 368         1,461           (49,894
  

 

 

   

 

 

    

 

 

      

 

 

 

 

See accompanying notes to unaudited pro forma condensed consolidated financial information, which are an integral part of this information.

 

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Notes to Unaudited Pro Forma Condensed Consolidated Financial information

 

  (a) The depreciation expense adjustment relates to the step up in fair value of fixed assets acquired in the Norris, Kay & Kay and Sandco acquisitions. A summary of the effects of the adjustment to depreciation expense for the year ended December 29, 2012 is as follows (dollars in thousands):

 

Estimated depreciation expense

   $ 330   

Elimination of historical depreciation expense

     (249
  

 

 

 

Depreciation expense adjustment

   $ 81   
  

 

 

 

 

  (b) This adjustment is to eliminate historical transaction costs incurred in connection with the Norris acquisition, principally legal and financial advisory fees due to the non-recurring nature of these expenses. There was no income tax benefit recorded on the transaction costs in the historical consolidated results of operations, accordingly, no pro forma tax adjustment has been recorded for this adjustment. The transaction costs removed for the year ended December 29, 2012 is $1.7 million.

 

  (c) A summary of the effects of the adjustment to interest expense for the year ended December 29, 2012 is as follows (dollars in thousands):

 

Estimated interest expense on debt from Norris acquisition(i)

   $ 196   

Elimination of historical interest expense(ii)

     (2

Estimated interest associated with acquisition liabilities(iii)

     6   
  

 

 

 

Interest expense adjustment

   $ 200   
  

 

 

 

 

  (i) This adjustment is to reflect the estimated incremental interest expense based on the average interest rate between January 1, 2012 and February 29, 2012, the acquisition date, of approximately 4.75% on the debt incurred for the Norris acquisition as if incurred on January 1, 2012.

 

  (ii) This adjustment is to eliminate the interest expense in the historical statements of operations.

 

  (iii) We recorded certain acquisition-related liabilities at present value; accordingly, we began to record interest expense on the accretion of those liabilities. This adjustment is to record additional interest expense for the pre-acquisition period, assuming we had acquired Norris and recorded the acquisition-related liabilities at present value on January 1, 2012.

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following tables set forth, for the periods and as of the dates indicated, our selected predecessor and successor consolidated financial data. For financial statement presentation purposes, Hamm, which had a fiscal year end of March 31 prior to its acquisition by Summit Materials on August 26, 2009, has been identified as the predecessor. The selected predecessor statements of operations data for the period from April 1, 2009 to August 25, 2009 and for the year ended March 31, 2009 are derived from the audited consolidated financial statements not included in this prospectus. Summit Materials is the successor company. The selected successor statements of operations data for the three years ended December 29, 2012, December 31, 2011 and December 31, 2010 and the selected balance sheet data as of December 29, 2012 and December 31, 2011 are derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected successor statements of operations data for the period from August 26, 2009 to December 31, 2009 and the selected balance sheet data as of December 31, 2010 and December 31, 2009 are derived from our audited consolidated financial statements not included in this prospectus. The predecessor selected balance sheet data as of March 31, 2009 is derived from Hamm’s audited financial statements not included in this prospectus. In 2011, Summit Materials adopted a “4-4-5” fiscal calendar in place of the calendar year it previously used. Under the 4-4-5 fiscal period, each year is divided into four quarters and each quarter consists of two four week “months” and one five week “month.” Historical results are not indicative of the results to be expected in the future.

You should read the following information together with the more detailed information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Summit Materials, LLC” and the consolidated financial statements and the accompanying notes appearing elsewhere in this prospectus.

 

    Summit Materials, LLC (Successor)             Hamm, Inc. (Predecessor)    
(in thousands)   Year Ended
December
29, 2012
    Year Ended
December 31,
2011(1)
    Year Ended
December 31,
2010(1)
    Period from
August 26,
2009 to
December 31,
2009
          Period From
April 1, 2009
to August 25,
2009
    Year Ended
March 31,
2009
 

Statements of Operations Data:

               

Revenue

  $ 962,902      $ 822,548      $ 430,358      $ 29,348          $ 36,195      $ 104,407   

Cost of revenue (exclusive of items shown separately below)

    749,363        630,944        308,297        21,582            24,940        83,152   

General and administrative expenses

    128,032        96,886        49,479        4,210            1,639        2,993   

Depreciation, depletion, amortization and accretion

    68,876        61,964        34,415        3,148            3,187        8,101   

Transaction costs

    1,988        9,120        22,268        4,682           
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

   

 

 

 

Operating income (loss)

    14,643        23,634        15,899        (4,274         6,429        10,161   
               

Other (income) expense, net

    (1,182     (21,244     1,583        192            484        (1,220

Loss on debt refinancing

    9,469        —          9,975        —              —          —     

Interest expense

    58,079        47,784        25,430        574            —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

   

 

 

 

(Loss) income from continuing operations before income tax (benefit) expense

    (51,723     (2,906     (21,089     (5,040         5,945        11,381   

Income tax (benefit) expense

    (3,920     3,408        2,363        216            2,303        4,152   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

 

(Loss) income from continuing operations

  $ (47,803   $ (6,314   $ (23,452   $ (5,256       $ 3,642      $ 7,229   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

 

Cash Flow Data:

               

Net cash provided by (used for):

               

Operating activities

  $ 62,279      $ 23,253      $ (20,529   $ 3,897          $ 6,320      $ 17,430   

Investing activities

    (85,340     (192,331     (499,381     (46,669         31,255        (18,492

Financing activities

    7,702        146,775        575,389        52,379            (44,649     (2,045

Balance Sheet Data (as of period end):

               

Cash and cash equivalents

  $ 27,431      $ 42,790      $ 65,093      $ 9,614            $ 10,419   

Total assets

    1,281,213        1,284,265        1,101,581        111,775              100,719   

Total debt (including current portion of long-term debt)

    639,843        608,981        559,980        28,750              —     

Capital leases

    3,092        3,158        3,217        —                —     

Total member’s interest

    382,428        436,372        345,993        —                —     

Redeemable Noncontrolling interests

    22,850        21,300        21,300        —                —     

Other Financial Data (as of period end):

               

Total hard assets(2)

  $ 906,584      $ 906,166      $ 775,457      $ 92,309            $ 32,571   

Ratio of earnings to fixed charges(3)

    0.1        1.0        0.2        N/A            364.0        341.4   

 

(1) Amounts are shown net of results of operations associated with certain non-core businesses sold in 2012 and classified as discontinued operations.
(2) Defined as the balance sheet book value of the sum of (a) property, plant and equipment, net and (b) inventories.
(3) The ratio of earnings to fixed charges is determined by dividing earnings, as adjusted, by fixed charges. Fixed charges consist of interest on all indebtedness plus that portion of operating lease rentals representative of the interest factor (deemed to be 33% of operating lease rentals). Earnings were insufficient to cover fixed charges for the period from August 26, 2009 to December 31, 2009 by $5.8 million.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS OF SUMMIT MATERIALS, LLC

You should read the following discussion of our results of operations and financial condition with the “Unaudited Pro Forma Condensed Consolidated Financial Statements” and the “Selected Historical Consolidated Financial Data” sections of this prospectus and our audited consolidated financial statements and the related notes thereto included elsewhere in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this prospectus. Our actual results may differ materially from those contained in any forward-looking statements.

Overview

We are a leading, vertically-integrated, geographically-diverse heavy-side building materials company. We supply aggregates, cement and related downstream products such as asphalt paving mix, ready mixed concrete, concrete products and paving and related construction services to a variety of end-uses in the U.S. construction industry, including public infrastructure projects, as well as private residential and non-residential construction. We have organized the business by geographic region and have three operating segments, which are also our reporting segments: Central, West and East regions. Across the three regions, we believe we are a top 15 supplier of aggregates, a top 20 supplier of cement, a top 10 producer of asphalt paving mix and a major producer of ready mixed concrete in the United States by volume. As of December 29, 2012, we had 1.7 billion tons and 0.5 billion tons of proven aggregates reserves serving our aggregates and cement businesses, respectively, and operated over 120 sites and plants.

We were formed in September 2008. Since July 2009, the Sponsors and certain of our officers, directors and employees have made $794.5 million of funding commitments to our indirect parent entity, Summit Materials Holdings L.P. We have grown rapidly as a result of our disciplined acquisition strategy, utilizing approximately $457.3 million of the $463.9 million of equity commitments funded to Parent by the Sponsors and certain other investors. Today, our nine operating companies make up our three distinct geographic segments that span 20 states and 23 metropolitan areas. We believe each of our operating companies has a top three market share position in its local market area and an extensive operating history, averaging over 35 years. Our highly experienced management team, led by 30-year industry veteran, CEO Tom Hill has successfully enhanced the operations of acquired companies by focusing on scale advantages, cost efficiencies and pricing discipline to improve profitability and cash flow.

 

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Of the 22 states in which we operate, we currently have assets in 13 states across our three geographic regions. The map below illustrates our geographic footprint:

 

LOGO

Our revenue is derived from multiple end-use markets, including public infrastructure construction as well as private residential and non-residential construction. For the year ended December 29, 2012, approximately 62% of our revenue related to public infrastructure construction and the remaining 38% related to residential and non-residential construction. Our aggregates and asphalt paving mix and paving businesses serve both the public and private construction markets. Public construction includes spending by federal, state and local governments for roads, highways, bridges, airports and other public infrastructure construction projects. A significant portion of our construction revenues are from public construction projects, a historically more stable portion of state and federal budgets. Our acquisitions to date are focused in states with constitutionally-protected transportation funding sources, which we believe serves to limit our exposure to state and local budgetary uncertainties. Private construction includes both new residential and non-residential construction and repair and remodel markets, which have been significantly impacted by the downturn in the overall economy and the construction industry, in particular. We believe exposure to various markets affords us greater stability through economic cycles and positions us to capitalize on upside opportunities when recoveries in residential and non-residential construction occur.

Business Trends and Conditions

The U.S. heavy-side building materials industry is comprised of four primary sectors: (i) aggregates, (ii) cement, (iii) asphalt paving mix and (iv) ready-mixed concrete, each of which is widely used in most forms of construction activity. Participants in these sectors typically range from small, privately-held companies

 

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focused on a single product to multinational corporations that offer a wide array of construction materials and services. Markets are defined in part by the distance materials may be efficiently transported, resulting in largely local or regional operations.

Transportation infrastructure projects, driven by both state and federal funding programs, represent a significant share of the U.S. heavy-side building materials market. In July 2012, Moving Ahead for Progress in the 21st Century (MAP-21) was enacted and took effect in October 2012. MAP-21 is a 27-month, approximately $105 billion transportation funding program that provides for $40.4 billion and $41.0 billion in highway infrastructure investments in fiscal years 2013 and 2014, respectively. The spending levels are consistent with the preceding federal transportation funding program. In addition to federal funding, highway construction and maintenance funding is also available through state, county and local agencies. Our five largest states by revenue (Texas, Kansas, Kentucky, Missouri and Utah, which represented approximately 27%, 16%, 14%, 11% and 11%, respectively, of our total revenue for the year ended December 29, 2012) each have funds whose revenue sources are constitutionally protected and may only be spent on transportation projects:

 

   

Texas’ 2012 - 2013 Department of Transportation budget is $19.8 billion, a $3.9 billion increase from the previous 2010-2011 biennium budget

 

   

Kansas has a 10-year $8.2 billion highway bill that was passed in May 2010

 

   

Kentucky has a two-year $4.5 billion highway bill that was passed in April 2012

 

   

Missouri has an estimated $700.0 million in annual construction funding committed to essential road and bridge programs

 

   

Utah’s fiscal year 2012 transportation fund increased to $1.1 billion

Despite the economic challenges of recent years, we believe that the enacted federal transportation funding program extending through fiscal 2014 is a positive development, reducing the uncertainty that existed with the previous funding program that had been subject to 10 short-term extensions. Within many of our markets, the federal, state and local governments have taken actions to maintain or grow highway funding during a time in which many areas of spending are facing significant cuts. However, we could still be impacted by any economic improvement or slowdown, which could vary by local region and market. Our sales and earnings are sensitive to national, regional and local economic conditions and particularly to cyclical swings in construction spending, especially in the private sector.

In addition to being subject to cyclical swings in the economy, our business is seasonal in nature. Almost all of our products are produced and consumed outdoors. Severe weather, seasonal changes and other weather-related conditions can significantly affect the production and sales volumes of our products. Normally, the highest sales and earnings are in the second and third quarters and the lowest are in the first and fourth quarters. Winter weather months are generally periods of lower sales as we normally cannot cost-effectively mobilize and demobilize equipment and manpower during this period under adverse weather conditions. Periods of heavy rainfall also adversely affect our work patterns and therefore demand for our products. Our working capital may vary greatly during these peak periods, but generally return to comparable levels as our operating cycle is completed each fiscal year.

2012 Results

The principal factors in evaluating our financial condition and operating results for fiscal year 2012 compared to 2011 are:

 

   

Total revenue of $962.9 million in 2012, increased 17% or $140.4 million, from 2011, primarily as a result of acquisitions. Approximately 61% of our revenue is from product sales, which is the result of sales volume and pricing across our product lines. As illustrated in the table below, our volumes

 

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increased from 2011 to 2012, primarily from acquisitions, across all of our products. The 17% increase in cement volumes was organic, as we had no acquisitions in 2012 or 2011 impacting our cement capacity.

 

    

Volume

Increases in 2012
Compared to 2011

 

Aggregates

     23.4

Asphalt

     9.5

Readymix

     5.7

Cement

     17.1

In 2012, we experienced modest growth to flat pricing changes across our product lines. We experienced increases in aggregates and asphalt average selling prices across the Company and a decrease in ready mix due to a shift in product mix, despite increased prices across the ready mix concrete products on a like-for-like basis. The average selling price for cement decreased $0.70 per ton from 2011 to 2012 due to a change in the customer mix. In 2012, tons sold to peers and large volume customers increased, which are sold at a lower price per ton than retail sales, impacting average selling price for the year.

 

     Average Selling
Prices in 2012
compared to 2011
 

Aggregates

     3.5

Asphalt

     13.3

Readymix

     (0.8 %) 

Cement

     (0.9 %) 

 

   

Operating income of $14.6 million compared to $23.6 million in 2011. The decrease in operating income is primarily attributable to $8.0 million of charges recorded in 2012 on an indemnification agreement in the West region, compared to $1.9 million in 2011, and low margin legacy contracts and cost overruns in our construction business. These losses were offset by increased operating income from 2012 and 2011 acquisitions.

 

   

Cash provided by operations of $62.3 million improved from $23.3 million in 2011 due primarily to improved cash management.

 

   

Cash paid for acquisitions of $48.8 million decreased from $161.1 million in 2011. We acquired three companies in 2012 compared to eight companies in 2011.

Acquisitions

On February 29, 2012, we acquired certain assets of Norris Quarries, LLC in Missouri. The Norris acquisition expanded our market position in the Central region. It is a 100% aggregates company geographically situated between existing businesses in Missouri and Kansas.

On October 5, 2012, we acquired certain assets of Kay & Kay Contracting, LLC in Kentucky. The Kay & Kay acquisition expands our market presence in the southeastern region of Kentucky producing both aggregates and asphalts.

On November 30, 2012, we acquired the stock of Sandco Inc. in Colorado. The Sandco acquisition expands our market presence in the western region of Colorado producing both aggregates and ready mixed concrete.

Discontinued Operations

As part of our strategy to focus on our core business as a heavy-side building materials company, we sold our railroad construction and maintenance business (referred to herein as railroad business) and our environmental business, which is primarily associated with building retaining walls and removal and remediation

 

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of underground fuel storage tanks, in 2012 for $3.1 million in aggregate. Prior to recognition as discontinued operations, the railroad and environmental businesses were included as components of the East region’s operations. The railroad and environmental businesses’ revenue in fiscal 2012, 2011 and 2010 was $13.5 million, $16.1 million and $20.5 million, respectively, and loss before income tax expense was $2.8 million, $3.7 million and $0.4 million, respectively.

Aggregates

According to the March 2012 U.S. Geological Survey, approximately 1.14 billion tons of crushed stone with a value of approximately $11.3 billion was produced in the United States in 2011, down from approximately 1.15 billion tons in 2010. Sand and gravel production was approximately 795 million tons in 2011 valued at approximately $6.0 billion, up from 760 million tons in 2010. The U.S. aggregate industry is highly fragmented relative to other building product markets, with numerous participants operating in localized markets and the top six players controlling approximately 50% of the national market in 2011. The U.S. Geological Survey (“USGS”) reported that a total of 1,600 companies operating 3,900 quarries and 93 underground mines produced or sold crushed stone in 2011 in the United States.

We believe that the long-term growth of the market for aggregates is largely driven by growth in population, jobs and households, which impact transportation infrastructure spending and changes in population density. In the past few years, the recession in the United States has led to a decrease in overall private construction activity. Despite the increase in Federal stimulus spending, public construction activity has also declined over this period, albeit less than private construction markets. In fact, through the prior three U.S. recessions (July 1990 through March 1991, March 2001 through November 2001 and December 2007 through June 2009), highway spending in real dollars grew 1.8% annually on average in years with a recession as compared to 1.5% annually on average in years without a recession. While short-term demand for aggregates fluctuates with economic cycles, the declines have historically been followed by strong recovery, with each peak establishing a new historical high.

Cement

Cement production is a capital-intensive business with variable costs dominated by raw materials and energy required to fuel the kiln. Building new plants is challenging given the extensive permitting that is required and significant costs (new plant construction costs in the United States are estimated at $250-300 per ton according to the Portland Cement Association (“PCA”)). Assuming construction costs of $275 per ton, a 1.25 million ton facility, such as the one Continental Cement operates, would cost approximately $343.8 million to construct.

As reported by the PCA, consumption is down significantly from the industry peak of 141 million tons in 2005 to 79 million tons in 2011 because of the decline in U.S. construction sector activity. Domestic cement consumption has at times outpaced domestic production capacity with the shortfall being supplied with imports, primarily from China, Canada, Columbia, Mexico and South Korea. The PCA reports that cement imports have declined since their peak of 39 million tons in 2006 to 7 million tons in 2011, in a manner indicative of the industry’s general response to the current demand downturn. Despite the reduction in imports, capacity utilization declined from 95% in 2006 to 59% in 2011 according to the PCA. Continental Cement operated at 75% capacity utilization in 2011 and 81% in 2012, which is above the 2011 industry mean of 68% capacity utilization as its markets did not suffer the pronounced demand declines seen in states like Florida, California and Arizona. Demand is seasonal in nature with nearly two-thirds of U.S. consumption occurring between May and October, coinciding with end-market construction activity.

Cement production in the United States is distributed among 101 production facilities located across 36 states. The EPA has new emission standards for Portland cement plants (“NESHAP”) that are due to come into effect in 2015. On December 20, 2012, the EPA signed the NESHAP final rule, which was less stringent

 

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than previous draft. The PCA had estimated based on the draft rule that 18 plants could be forced to close due to the inability to meet NESHAP standards or because the compliance investment required may not be justified on a financial basis. These potential closures represent approximately 20 million tons of clinker capacity, or 20% of current capacity in the United States.

Continental Cement’s plant utilizes alternative fuel (hazardous and non-hazardous) as well as coal and petroleum coke and, as a result, is subject to HWC-MACT standards, rather than NESHAP. We expect HWC-MACT standards to generally conform to NESHAP, for which we are mostly in compliance, ahead of the effective date of the NESHAP standards. Any additional costs to comply with the NESHAP standards are not expected to have a material adverse impact on our financial position, results of operations or liquidity.

Asphalt Paving Mix

Asphalt paving mix is produced by mixing aggregates and asphalt cement, a petroleum based product that serves as the binder, at elevated temperatures. These high production temperatures are needed to allow the asphalt binder to become viscous enough to completely coat the aggregates in the paving mix, have good workability during laying and compaction, and provide durability during traffic exposure. A high weight-to-value ratio and the need to maintain the asphalt paving mix at a sufficiently high temperature during the paving process typically limits the delivery time to a one-hour haul from production plant to the paving location. Consequently, the asphalt paving mix market is highly localized with a fragmented ownership base.

There are over 4,000 asphalt paving mix plants in the United States. According to the National Asphalt Paving Association, approximately 366 million tons of asphalt paving mix was produced in 2011 which was broadly in line with the estimated 360 million tons produced in 2010.

The use of Warm Mix Asphalt (“WMA”) or “green” asphalt is gaining popularity. The immediate benefit to producing WMA is the reduction in energy consumption required by burning fuels to heat traditional hot mix asphalt (“HMA”) to temperatures in excess of 300°F at the production plant. WMA can reduce the temperature by 50 to 100°F, resulting in lower emissions, fumes and odors generated at the plant and the paving site.

The asphalt paving mix sector is heavily exposed to public infrastructure spending as the vast majority of public roads and highways are paved with asphalt. Demand is seasonal in nature and focused on the April to November period in most states as asphalt paving requires a certain minimum ambient temperature to achieve the desired performance. Asphalt cement or liquid asphalt is a major input material. As a petroleum product, its price is driven by many factors and a fluctuation in the price of inputs, such as asphalt cement and burner fuel, which is typically either natural gas or recycled oil, may not be immediately recovered from the end customer.

Ready Mixed Concrete

As a result of the transportation constraints, the ready-mixed concrete market is highly localized, with an estimated 6,000 ready mixed concrete plants in the United States, per the NRMCA. According to the NRMCA, 266 million cubic yards of ready-mixed concrete was produced in 2011, in line with the 258 million cubic yards in 2010, but 42% down from the industry peak of 458 million cubic yards in 2005. Ready-mixed concrete demand is driven in large part by private residential and non-residential building demand and the decline of demand since 2005 is strongly correlated with the decline in construction spending in these end-use markets during this period.

The major raw material inputs for ready mixed concrete are aggregates and cement, the price of which has generally tended to increase over time in a predictable manner. Ready-mixed concrete is almost always delivered to the end-user by the supplier via purposely designed vehicles. Consequently, fuel prices are also an important cost component. Many suppliers reduce their exposure to changes in fuel costs by including sales price adjustment provisions for changes in fuel prices.

 

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Components of Operating Results

Revenue

We derive our revenue predominantly by selling construction materials and providing construction services. Construction materials consist of aggregates and related downstream products, including asphalt, ready-mixed concrete, cement and concrete products. Construction services primarily relate to asphalt paving and other highway construction services.

The following summarizes our revenue recognition policy with respect to construction materials and services:

 

   

Revenue derived from construction material sales are recognized when risks associated with ownership have passed to unaffiliated customers. Typically this occurs when products are shipped. Product revenue generally includes sales of aggregates and related downstream products, cement and other materials to customers, net of discounts or allowances and taxes, if any.

 

   

Revenue derived from construction service contracts are recognized on the percentage-of-completion method, measured by the cost incurred to date compared to estimated total cost of each project. This method is used because management considers cost incurred to be the best available measure of progress on these contracts. Due to the inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change over the life of the contract.

Operating costs and expenses

The key components of our operating costs and expenses consist of the following:

Cost of revenue (exclusive of items shown separately below)

Cost of revenue consists of all production and delivery costs and primarily includes labor, repair and maintenance, utilities, raw materials, fuel, transportation, subcontractor costs and manufacturing overhead. Our cost of revenue is directly impacted by fluctuations in commodity energy prices, primarily diesel fuel, liquid asphalt and other petroleum-based resources. As a result, our operating profit margins can be significantly impacted by changes in the underlying cost of certain raw materials if they are not recovered through corresponding changes in revenue. We attempt to limit our exposure to changes in commodity energy prices by entering into forward purchase commitments when appropriate. In addition, we have sales price adjustment provisions that provide for adjustments based on fluctuations outside a limited range in certain energy-related production costs. These provisions are in place for most of our public contracts and we aggressively seek to include similar price adjustment provisions in our private contracts.

General and administrative expenses

General and administrative expenses consist primarily of salaries and personnel costs for our sales and marketing, administration, finance and accounting, legal, information systems and human resources employees. Additional expenses include audit, consulting and professional fees, travel, insurance and other corporate expenses.

Transaction costs

Transaction costs consist primarily of third party accounting, legal, valuation and financial advisory fees incurred in connection with acquisitions.

Depreciation, depletion, amortization and accretion

Our business is relatively capital-intensive. We carry property, plant and equipment at cost, net of applicable depreciation, depletion and amortization on our balance sheet. Depreciation on property, plant and equipment is

 

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computed on a straight-line basis or based on the economic usage over the estimated useful life of the asset. The general range of depreciable lives by fixed asset category, excluding mineral reserves which are depleted based on the units of production method on a quarry-by-quarry basis, is as follows:

 

Buildings and improvements

     7 - 40 years   

Plant, machinery and equipment

     3 - 40 years   

Truck and auto fleet

     3 - 10 years   

Mobile equipment and barges

     3 - 20 years   

Landfill airspace and improvements

     5 - 60 years   

Other

     2 - 10 years   

Amortization expense is the periodic expense related to our intangible assets, which were acquired as part of certain of our acquisitions. The intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets.

Accretion expense is recorded using the effective interest method and is related to the accrued mining reclamation liabilities and landfill closure and post-closure liabilities.

Results of Operations

The following discussion of our results of operations is focused on the material financial measures we use to evaluate the performance of our business from both a consolidated and operating segment perspective. We have three operating segments, which are also our reporting segments: Central, West and East regions. Operating income and margins are discussed in terms of changes in volume, pricing and mix of revenue source (e.g., type of product sales or service revenue). The majority of our service revenue is generated by long-term contracts. As discussed further under “—Components of Operating Results” above, we generally account for revenue under these contracts using the percentage of completion method of accounting. Under this method, revenue is recognized as work progresses. Performance on service contracts refers to changes in contract earnings rates during the term of the contract based on revisions to estimates of profit at completion on individual contracts. These revisions result from increases or decreases to the estimated value of the contract and/or the estimated costs required to complete the contract. The following discussion of results of operations provides additional disclosure to the extent that a significant or unusual event causes a material change in the profitability of a contract.

The following table includes revenue and operating income by segment for the indicated fiscal years. Operating income by segment is computed as earnings before interest, taxes and other income / expense.

 

     2012     2011     2010  

(in thousands)

   Revenue      Operating
income (loss)
    Revenue      Operating
income (loss)
    Revenue      Operating
income (loss)
 

Central

   $ 302,113       $ 37,560      $ 264,008       $ 38,105      $ 211,238       $ 27,178   

West

     484,922         (6,625     362,577         (455     59,337         (4,691

East

     175,867         (1,017     195,963         1,222        159,783         3,920   

Corporate(1)

     —           (15,275     —           (15,238     —           (10,508
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 962,902       $ 14,643      $ 822,548       $ 23,634      $ 430,358       $ 15,899   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

(1) Corporate results primarily consist of compensation expense for employees included in our headquarters.

Non-GAAP Performance Measures

Our chief operating decision maker evaluates the performance of our segments and allocates resources to them based on a measure we call segment profit, or EBITDA by segment. We define EBITDA as earnings (loss)

 

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before loss from discontinued operations, income tax (benefit) expense, interest expense and depletion, amortization and accretion. EBITDA reflects an additional way of viewing aspects of our business that, when viewed with our GAAP results and the accompanying reconciliations to GAAP financial measures included in the tables below, may provide a more complete understanding of factors and trends affecting our business. However, it should not be construed as being more important than other comparable GAAP measures and must be considered in conjunction with GAAP measures. In addition, non-GAAP financial measures are not standardized; therefore it may not be possible to compare such financial measures with other companies’ non-GAAP financial measures having the same or similar names. We strongly encourage investors to review our consolidated financial statements in their entirety and not rely on any single financial measure.

Reconciliation of Net Loss to EBITDA

 

(in thousands)

   2012     2011     2010  

Net loss

   $ (50,577   $ (10,050   $ (23,863

Loss from discontinued operations

     2,774        3,736        411   

Income tax (benefit) expense

     (3,920     3,408        2,363   

Interest expense

     58,079        47,784        25,430   

Depreciation, depletion, amortization and accretion

     68,876        61,964        34,415   
  

 

 

   

 

 

   

 

 

 

EBITDA

   $ 75,232      $ 106,842      $ 38,756   
  

 

 

   

 

 

   

 

 

 

 

EBITDA by Segment

(in thousands)

   2012     2011     2010  

Central

   $ 65,767      $ 65,651      $ 40,790   

West

     14,429        36,442        (1,710

East

     10,596        14,626        5,474   

Corporate

     (15,560     (9,877     (5,798
  

 

 

   

 

 

   

 

 

 

EBITDA

   $ 75,232      $ 106,842      $ 38,756   
  

 

 

   

 

 

   

 

 

 

In 2011, we adopted a “4-4-5” fiscal calendar in the place of the calendar year we previously used.

Consolidated Results of Operations

The tables below set forth our historical consolidated results from continuing operations for the fiscal years indicated.

 

(in thousands)

   2012     2011     2010  

Revenue

   $ 962,902      $ 822,548      $ 430,358   

Cost of revenue (exclusive of items shown separately below)

     749,363        630,944        308,297   

General and administrative expenses

     128,032        96,886        49,479   

Depreciation, depletion, amortization and accretion

     68,876        61,964        34,415   

Transaction costs

     1,988        9,120        22,268   
  

 

 

   

 

 

   

 

 

 

Operating income

     14,643        23,634        15,899   

Other (income) expense, net

     (1,182     (21,244     1,583   

Loss on debt refinancing

     9,469        —          9,975   

Interest expense

     58,079        47,784        25,430   
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income tax (benefit) expense

     (51,723     (2,906     (21,089

Income tax (benefit) expense

     (3,920     3,408        2,363   
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations

     (47,803     (6,314     (23,452

Loss from discontinued operations

     (2,774     (3,736     (411
  

 

 

   

 

 

   

 

 

 

Net loss

     (50,577     (10,050     (23,863

Net loss attributable to noncontrolling interests

     1,919        695        86   
  

 

 

   

 

 

   

 

 

 

Net loss attributable to member of Summit Materials, LLC

   $ (52,496   $ (10,745   $ (23,949
  

 

 

   

 

 

   

 

 

 

 

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Fiscal year 2012 compared to 2011

 

(in thousands)    2012     2011            Variance  

Revenue

   $ 962,902      $ 822,548           $ 140,354        17.1

Operating income

   $ 14,643      $ 23,634           $ (8,991     (38.0 %) 

Operating margin

     1.5     2.9         
 

EBITDA

   $ 75,232      $ 106,842           $ (31,610     (29.6 %) 

 

LOGO   

Revenue in 2012 increased to $962.9 million compared to $822.5 million in 2011. The $140.4 million increase was driven by acquisitions and pricing increases. Revenue from business acquired in 2012 totaled $24.7 million and the incremental revenue in 2012 from business acquired in 2011 was $149.7 million. Revenue growth from price increases and acquisitions was partially offset by volume decreases across our product lines, excluding our cement business where we had a 17% increase from 2011.

 

The West region experienced the most revenue growth in 2012, as compared to 2011. It was established in the second half of 2010 and grew significantly in 2011 through acquisitions. As a result, 2012 was the first year with a full twelve months of results from these acquisitions. The West region comprised 50% of

consolidated revenue in 2012 compared to 44% in 2011 and the East region revenue declined from 24% to 18% of consolidated revenue. Revenue, as a percentage of consolidated revenue, remained constant in the Central region in 2012 as compared to 2011.

Operating margin, which we define as operating income as a percentage of revenue, declined in 2012 to 1.5% from 2.9% in 2011 related primarily to $8.0 million in losses recognized on an indemnification agreement in the West region, compared to $1.9 million in 2011. Operating margin was also impacted by low margin contracts and cost overruns on certain construction projects, primarily, in the West region.

We experienced a decline in EBITDA from $106.8 million in 2011 to $75.2 million in 2012 related to the following:

 

   

In 2012, we recognized $8.0 million in losses on an indemnification agreement, compared to $1.9 million in 2011

 

   

In 2012, a $9.5 million loss associated with a debt refinancing was recognized

 

   

In 2011, we recognized a $12.1 million bargain purchase gain on certain acquisitions in the West region

 

   

In 2011 we recognized a $10.3 million favorable fair value adjustment on contingent consideration, compared to $0.4 million in 2012

 

   

Transaction fees decreased $7.1 million in 2012 due to a decrease in acquisition activity. We closed eight acquisitions in 2011 with an average purchase price of $23.6 million compared to three in 2012 for an average purchase price of $19.8 million

Other Financial Information

Other income, net

Other income decreased to $1.2 million in 2012 from $21.2 million in 2011. Included in other income in 2011 were $12.1 million of bargain purchase gains on certain acquisitions in the West region and a $10.3 million gain from fair value adjustments to contingent consideration, compared to a $0.4 million fair value adjustment in 2012.

 

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Loss on debt refinancing

We refinanced our long-term debt and accrued interest in January 2012 resulting in a $9.5 million charge. We did not refinance our long-term debt in 2011.

Interest expense

Interest expense increased $10.3 million, or 21.5%, to $58.1 million in 2012 compared to $47.8 million in 2011. The increase in our interest expense reflects an increase in our average debt. Our debt, without giving effect to original issuance discount, increased to $648.0 million at December 29, 2012 from $609.0 million at December 31, 2012. In addition, although our outstanding borrowings on our revolver were zero at year-end 2012, we carried an average balance of $36.7 million during 2012. The additional borrowings were primarily used to fund acquisitions ($48.8 million) and seasonal working capital requirements.

Income tax expense

Summit is a limited liability company and passes its tax attributes for federal and state tax purposes to its parent entities and is generally not subject to Federal or state income tax. However, the consolidated financial statements of the Company include Federal and state income tax provisions for subsidiaries organized as taxable entities. In 2012, we recorded income tax benefit of $3.9 million compared to an expense of $3.4 million in 2011. The decrease in the income tax expense is due to taxable losses incurred by taxable entities in 2012.

Fiscal year 2011 compared to 2010

 

(in thousands)

   2011     2010            Variance  

Revenue

   $ 822,548      $ 430,358           $ 392,190         91.1

Operating income

   $ 23,634      $ 15,899           $ 7,735         48.7

Operating margin

     2.9     3.7          

EBITDA

   $ 106,842      $ 38,756           $ 68,086         175.7

Our revenue increased significantly in 2011 to $822.5 million compared to $430.4 million in 2010. The $392.2 million increase was almost entirely driven by acquisitions. Revenue from business acquired in 2011 totaled $117.0 million and the incremental revenue in 2011 from business acquired in 2010 was $248.1 million.

 

LOGO   

The West region saw the most revenue growth in 2011, as compared to 2010. It was established in the second half of 2010 and grew significantly in 2011 through acquisitions. As a result of this growth, the West region comprised 44% of consolidated revenue in 2011 compared to 14% in 2010, thereby reducing the percentage of consolidated revenue contributed by the Central and East regions. Revenue, as a percentage of consolidated revenue, decreased 17% and 13% in the Central and East regions, respectively, in 2011 as compared to 2010.

 

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Operating margin declined in 2011 to 2.9% from 3.7% in 2010 related primarily to the growth in the West region. The West region’s operating margin is the lowest of our three regions and with their operations representing a higher proportion of the consolidated company, operating margins contracted in 2011. The West region’s operating margins, as compared to the other regions, have been impacted by the timing of the acquisitions. We acquired two businesses in Austin, Texas in August and October 2011. Our business is seasonal with our peak earnings occurring between April and November. With these acquisitions occurring late in the season, coupled with transaction fees associated with the acquisitions, an operating loss was recognized in 2011 in the West region. West region acquisitions were similarly timed in 2010 (August and November 2010), resulting in operating losses in 2010 as well. Underperformance on certain construction and paving contracts also impacted operating margins in the West region.

We experienced significant EBITDA growth in 2011 from $38.8 million in 2010 to $106.8 million in 2011 primarily related to the following:

 

   

EBITDA from 2011 acquisitions was $21.2 million, which includes a $12.1 million bargain purchase gain recognized with certain acquisitions in the West region

 

   

Incremental EBITDA in 2011 from 2010 acquisitions was $26.7 million, which includes a $10.3 million favorable fair value adjustment recognized on contingent consideration in the West and East regions

 

   

Transaction fees decreased $13.1 million in 2011 due to a decrease in acquisition activity. We closed eight acquisitions in 2011 with an average purchase price of $20.1 million compared to twelve acquisitions in 2010 with an average purchase price of $40.2 million

 

   

In 2010, a $10.0 million loss associated with two debt refinancings was recognized

Other Financial Information

Other (income) expense, net

Other income increased to $21.2 million in 2011 from expense of $1.6 million in 2010. Included in other income in 2011 were $12.1 million of bargain purchase gains on certain acquisitions in the West region and a $10.3 million gain from fair value adjustments to contingent consideration.

Loss on debt refinancing

We refinanced our term debt in February 2010 and again in December 2010 resulting in a $10.0 million charge for financing fees. We did not refinance our long-term debt in 2011.

Interest expense

Interest expense increased $22.4 million, or 87.9%, to $47.8 million in 2011 compared to $25.4 million in 2010. The increase in our interest expense reflects an increase in our term loan in December 2010 from $136.4 million to $400.0 million, and the increase in borrowings under our revolver facility associated with our 2011 acquisition activity. We amended one of our credit facilities in December 2010 to fund future acquisitions and take advantage of more favorable interest rates.

Income tax expense

Summit is a limited liability company and passes its tax attributes for Federal and state tax purposes to its parent entities and is generally not subject to Federal or state income tax. However, the consolidated financial statements of the Company include Federal and state income tax provisions for subsidiaries organized as taxable entities. In 2011, we recorded income tax expense of $3.4 million compared to $2.4 million in 2010. The increase in the income tax expense is due to an increase in taxable income from the taxable entities.

 

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Segment results of operations

Central region fiscal year 2012 compared to 2011

 

(in thousands)

   2012     2011            Variance  

Revenue

   $ 302,113      $ 264,008           $ 38,105        14.4

Operating income

   $ 37,560      $ 38,105           $ (545     (1.4 )% 

Operating margin

     12.4     14.4         

EBITDA

   $ 65,767      $ 65,651           $ 116        0.2

Revenue in the Central region increased $38.1 million, or 14.4%, in 2012 to $302.1 million compared to $264.0 million in 2011 due to acquisitions and a $15.4 million increase in cement sales, driven by a 17% increase in cement volumes. Revenue from business acquired in 2012 totaled $23.3 million and the incremental revenue in 2012 from business acquired in 2011 was $1.5 million.

Operating margin declined in 2012 to 12.4% from 14.4% in 2011 primarily due to a $3.4 million gain on landfill closure obligations in 2011, as a result of revisions to landfill closure plans. After adjusting for this non-recurring gain, operating margin in 2012 was generally consistent with 2011.

EBITDA remained relatively consistent from $65.7 million in 2011 to $65.8 million in 2012.

Central region fiscal year 2011 compared to 2010

 

(in thousands)

   2011     2010            Variance  

Revenue

   $ 264,008      $ 211,238           $ 52,770         25.0

Operating income

   $ 38,105      $ 27,178           $ 10,927         40.2

Operating margin

     14.4     12.9          

EBITDA

   $ 65,651      $ 40,790           $ 24,861         60.9

Revenue in the Central region increased $52.8 million, or 25.0%, in 2011 to $264.0 million compared to $211.2 million in 2010 due primarily to acquisitions. Revenue from business acquired in 2011 totaled $2.4 million and the incremental revenue in 2011 from business acquired in 2010 was $57.5 million. These revenue increases were partially offset by completion of a significant construction project with the Kansas Turnpike Authority in northeast Kansas which contributed approximately $10.9 million of additional revenue in 2010 than in 2011.

Operating margin improved in 2011 to 14.4% from 12.9% in 2010 primarily due to a $3.4 million gain on landfill closure obligations, as a result of revisions to landfill closure plans. After adjusting for this non-recurring gain, operating margin in 2011 was generally consistent with 2010.

The EBITDA growth of $24.9 million from $40.8 million in 2010 to $65.7 million in 2011 was primarily due to the following:

 

   

EBITDA from 2011 acquisitions was $0.9 million

 

   

Incremental EBITDA in 2011 from 2010 acquisitions was $12.4 million

 

   

$3.4 million gain on landfill closure obligations as a result of revisions to landfill closure plans

 

   

$8.7 million decrease in transactions costs. In 2010, we acquired four entities for an average purchase price of $66.0 million compared to one acquisition in 2011 for $8.7 million.

 

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West region fiscal year 2012 compared to 2011

 

(in thousands)

   2012     2011            Variance  

Revenue

   $ 484,922      $ 362,577           $ 122,345        33.7

Operating income

   $ (6,625   $ (455        $ (6,170     (1,356.0 )% 

Operating margin

     (1.4 )%      (0.1 )%          

EBITDA

   $ 14,429      $ 36,442           $ (22,013     (60.4 )% 

Revenue in the West region increased $122.3 million, or 33.7%, in 2012 to $484.9 million compared to $362.6 million in 2011. The majority of the increase is due to a full year of revenue from the six acquisitions that expanded our presence in Utah, Texas and Colorado in 2011. Incremental revenue from businesses acquired in 2011 totaled $147.4 million. These increases were partially offset by volume declines in the Utah market.

Operating margin remained relatively consistent at (0.1)% in 2011 and (1.4)% in 2012. The negative margin in 2011 was impacted by $6.0 million of transaction costs related to the acquisitions, while 2012 was impacted by $8.0 million in losses on an indemnification agreement, compared to $1.9 million in 2011, and lower margins on legacy construction projects due to cost overruns.

EBITDA declined $22.0 million from $36.4 million in 2011 to $14.4 million in 2012 primarily due the following:

 

   

In 2012, we recognized $8.0 million in losses on an indemnification agreement, compared to $1.9 million in 2011

 

   

In 2011, we recognized $12.1 million of bargain purchase gains on our acquisitions in Colorado

 

   

In 2011, we recognized a $4.8 million gain from a fair value adjustment to contingent consideration, compared to $0.4 million in 2012

West region fiscal year 2011 compared to 2010

 

(in thousands)

   2011     2010            Variance  

Revenue

   $ 362,577      $ 59,337           $ 303,240         511.0

Operating income

   $ (455   $ (4,691        $ 4,236         90.3

Operating margin

     (0.1 )%      (7.9 )%           
 

EBITDA

   $ 36,442      $ (1,710        $ 38,152         2,231.1

Our West region was established in 2010 with five acquisitions in Utah and in northeast Texas and expanded in 2011 with an additional six acquisitions expanding our presence in Utah, and into Austin, Texas and Colorado. The revenue growth in 2011 from 2010 was primarily due to these acquisitions. Revenue from businesses acquired in 2011 totaled $110.5 million and the incremental revenue in 2011 from businesses acquired in 2010 was $183.8 million.

Operating margin improved from (7.9)% in 2010 to (0.1)% in 2011. The negative margin in 2011 and 2010 was impacted by $4.1 million and $6.0 million, respectively, of transaction costs related to the acquisitions. The reduction in these transaction costs attributed to the improved operating margin in 2011.

The EBITDA growth of $38.2 million from a loss of $1.7 million in 2010 to $36.4 million in 2011 is primarily due the following:

 

   

EBITDA from 2011 acquisitions was $18.6 million, including $12.1 million bargain purchase gains related to the Colorado acquisitions

 

   

Incremental EBITDA in 2011 from 2010 acquisitions was $16.9 million

 

   

In 2011, we recognized a $4.8 million gain from a fair value adjustment to contingent consideration

 

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East region fiscal year 2012 compared to 2011

 

(in thousands)

   2012     2011            Variance  

Revenue

   $ 175,867      $ 195,963           $ (20,096     (10.3 )% 

Operating (loss) income

   $ (1,017   $ 1,222           $ (2,239     (183.2 )% 

Operating margin

     (0.6 )%      0.6         
 

EBITDA

   $ 10,596      $ 14,626           $ (4,030     (27.6 )% 

Our East region’s revenue decreased $20.1 million from $196.0 million in 2011 to $175.9 million in 2012 due to a decline in construction and paving activities in Kentucky.

Operating margin in the East region decreased from 0.6% in 2011 to (0.6)% in 2012 due primarily to cost overruns on certain construction projects.

EBITDA declined $4.0 million from $14.6 million in 2011 to $10.6 million in 2012 due primarily to a $3.7 million charge associated with the January 2012 debt refinancing and cost overruns of certain legacy construction projects.

East region fiscal year 2011 compared to 2010

 

(in thousands)

   2011     2010            Variance  

Revenue

   $ 195,963      $ 159,783           $ 36,180        22.6

Operating income

   $ 1,222      $ 3,920           $ (2,698     (68.8 )% 

Operating margin

     0.6     2.5         
 

EBITDA

   $ 14,626      $ 5,474           $ 9,152        167.2

Our East region’s revenue increased $36.2 million from 2010 as a result of revenue from business acquired in 2011 ($4.0 million), incremental revenue in 2011 from business acquired in 2010 ($6.8 million) and $8.4 million of additional revenue on two large concrete paving projects that began in 2009 and increased volume in the construction business.

Operating margin in the East region decreased from 2.5% in 2010 to 0.6% in 2011 due primarily to the two large concrete paving projects, which earned lower margins in 2011 due to cost overruns.

The EBITDA growth of $9.2 million from $5.5 million in 2010 to $14.6 million in 2011 was primarily due to the following:

 

   

EBITDA from 2011 acquisitions was $1.7 million

 

   

Incremental EBITDA in 2011 from 2010 acquisitions was a loss of $2.7 million

 

   

Transaction costs from acquisitions decreased $4.9 million

 

   

In 2010, we recognized $5.5 million of finance charge associated with two debt refinancings

Liquidity and Capital Resources

Our primary sources of liquidity include cash on-hand, cash provided by our operations and amounts available for borrowing under our credit facilities ($135.5 million at December 29, 2012). As of December 29, 2012 we had $27.4 million in cash and working capital of $114.4 million as compared to $42.8 million in cash and working capital of $146.7 million as of December 31, 2011. Working capital is calculated as current assets less current liabilities, excluding the current portion of long term debt.

Given the seasonality of our business, we typically experience significant fluctuations in working capital needs and balances during our peak summer season; these amounts are converted to cash over the course of our normal operating cycle. We believe we have sufficient financial resources from our liquidity sources to fund our

 

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business and operations for at least the next twelve months, including contractual obligations, capital expenditures, debt service obligations and potential future acquisitions. Our growth strategy contemplates future acquisitions for which we believe we have sufficient capital through committed funds from our Sponsors and our borrowing capacity. There were no restricted cash balances as of December 29, 2012 or December 31, 2011.

Our Credit Facilities

Refer to “Description of Other Indebtedness” and to the notes to the consolidated financial statements included elsewhere in this prospectus for detailed information on our long-term debt and revolving credit facility, scheduled maturities of long-term debt and affirmative and negative covenants, including the maximum allowable consolidated leverage ratios.

At December 29, 2012 and December 31, 2011, $648.0 million, without giving effect to original issuance discount, and $609.0 million, respectively was outstanding under the respective debt agreements, including the revolving credit facility, and the Company was in compliance with all debt covenants. At December 29, 2012, we had no outstanding borrowings on the revolving credit facility, but did carry an average balance of $36.7 million during 2012. The revolver borrowings were primarily used to fund acquisitions ($48.8 million) and seasonal working capital requirements.

January 2012 Financing Transactions

On January 30, 2012 Summit and its wholly-owned subsidiary, Summit Materials Finance Corp. (collectively, the “Issuers”), issued $250.0 million aggregate principal amount of 10.5% Senior Notes due January 31, 2020 (“Senior Notes”) under an indenture dated as of January 30, 2012 (as amended and supplemented, the “Indenture”) among the Issuers, the guarantors party thereto and Wilmington Trust, National Association, as trustee. The Senior Notes are guaranteed on a senior unsecured basis by all of our existing and future wholly-owned domestic restricted subsidiaries that guarantee indebtedness under our senior secured credit facilities and by our non wholly-owned subsidiary Continental Cement. Concurrently with the issuance of the Senior Notes, on January 30, 2012, Summit entered into a senior secured credit facility which provided for term loans in an initial aggregate amount of $400.0 million and revolving credit commitments in an initial aggregate amount of $150.0 million (the “Senior Secured Credit Facility”). The borrowings under the Senior Secured Credit Facility and net proceeds from the issuance of the Notes were used to refinance Summit’s pre-existing credit facility and the Continental Cement debt.

Proceeds from the Senior Secured Credit Facility and the Senior Notes were used primarily for (i) repayment of $451.0 million of borrowings under the existing credit facility, consisting of $396.0 million of term debt and $55.0 million of revolving credit facility debt, (ii) repayment of $142.7 million of secured debt of Continental Cement consisting of $39.0 million of first lien debt, $3.7 million of first lien revolving credit facility debt and $100.0 million of second lien debt, (iii) repayment of $13.0 million due under a promissory note by and between Continental Cement and a related party, (iv) payment of $4.5 million of accrued interest related to the pre-existing credit facility and the Continental Cement debt, (v) payment of $12.9 million of fees and (vi) $16.5 million of cash on hand. The refinancing of the existing credit facility was partially accounted for as an extinguishment. As a result of this transaction, $9.5 million was charged to earnings in January 2012 and $15.0 million in deferred financing fees will be amortized over the term of the debt using the effective interest method. The original issuance discounts of $9.5 million were recorded as a reduction to debt in January 2012 and will be accreted with a charge to earnings over the term of the debt.

The Indenture contains covenants limiting, among other things, Summit and its restricted subsidiaries’ ability to incur additional indebtedness or issue certain preferred shares, pay dividends, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of Summit’s assets, enter into certain transactions with affiliates, and designate subsidiaries as unrestricted subsidiaries. The Indenture also contains customary events of default. We entered into a registration rights agreement with the initial purchasers of the Senior Notes pursuant to which

 

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we have filed the registration statement on Form S-4 of which this prospectus forms a part. In the event that the exchange offer has not been consummated or a shelf registration statement covering resales of the notes has not been declared effective by the SEC, then the interest rate on the notes eligible for inclusion in such registration statement will be increased by certain specified rates pursuant to the registration rights agreement.

In February 2013, we entered into amendments to our Senior Secured Credit Facility that, among other things: (i) reduced the applicable margins used to calculate interest rates for term loans under our Senior Secured Credit Facility by 1.0%; (ii) reduced the applicable margins used to calculate interest rates for $131.0 million of tranche A revolving credit loans available under the Senior Secured Credit Facility by 1.0% (with no reductions to the applicable margins for the remaining $19.0 million of available revolving credit loans); (iii) increased term loans borrowed under our term loan facility by $25.0 million with the same terms as the existing term loans (bringing total term loan borrowings to approximately $422.0 million); (iv) included a requirement that we pay a fee equal to 1.0% of the principal amount of term loans repaid in connection with certain repricing or refinancing transactions within six months after February 5, 2013; and (v) created additional flexibility under the financial maintenance covenants, which are tested quarterly, by increasing the applicable maximum Consolidated First Lien Net Leverage Ratio and reducing the applicable minimum Interest Coverage Ratio (each as defined in the credit agreement governing our Senior Secured Credit Facility).

Cash Flows

The following table summarizes our net cash provided by or used for operating activities, investing activities and financing activities and our capital expenditures for the periods indicated (in thousands):

 

     Year Ended  
     December 29,
2012
    December 31,
2011
    December 31,
2010
 

Net cash provided by (used for):

      

Operating activities

   $ 62,279      $ 23,253      $ (20,529

Investing activities

     (85,340     (192,331     (499,381

Financing activities

     7,702        146,775        575,389   

Cash paid for capital expenditures

     (45,488     (38,656     (21,145

Operating activities

For the year ended 2012, cash provided by operating activities was $62.3 million as a result of improved management in our working capital, primarily from managing timing of invoice payments. The impact on operating cash flow from the changes in our operating assets was $27.2 million in 2012. The $50.6 million net loss was adjusted for $72.2 million of depreciation, depletion, amortization and accretion and the $9.5 million loss on the debt refinancing, partially offset by the $3.5 million deferred tax benefit.

For the year ended 2011, cash provided by operating activities was $23.3 million. The $10.1 million net loss was adjusted for $65.0 million of depreciation, depletion, amortization and accretion, which was partially offset by a $12.1 million bargain purchase gain, a $10.3 million gain on the revaluation of contingent consideration and a $12.6 million increase in inventory. Additionally, improved cash collections on our outstanding receivables during the fourth quarter of 2011 contributed to the performance.

For the year ended 2010, cash used for operating activities was $20.5 million. The $23.9 million net loss was adjusted for $35.5 million of depreciation, depletion, amortization and accretion and the $10.0 million loss on the 2010 debt refinancings. Operating cash flows in 2010 were reduced by $25.3 million of primarily interest charges incurred with the payment of legacy debt owed by Continental Cement. The interest was paid from the cash used to acquire an approximately 70% interest in Continental Cement.

 

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Investing activities

For the year ended 2012, cash used for investing activities was $85.3 million. We paid $48.8 million for three acquisitions and $45.5 million for capital expenditures. The 2012 acquisitions expanded our presence in certain of our existing markets. Approximately half of our 2012 capital expenditures were to replace or maintain equipment and the remaining portion reflects capital investments in the business, the most significant of which is the development of an underground mine at our cement plant. We spent $5.0 million on the underground mine development in 2012.

For the year ended 2011, cash used for investing activities was $192.3 million. The company paid $161.1 million for eight acquisitions and $38.7 million for capital expenditures. Six of the eight acquisitions were in the West region through which we entered the western Colorado and Austin, Texas markets as well as expanded our presence in Utah and Idaho.

For the year ended 2010, cash used for investing activities was $499.4 million. Investing activity was primarily driven by several large acquisitions totaling $482.3 million. In 2010, we established the West region in Utah and Texas and the East region in Kentucky, as well as expanded the Central region’s presence in Kansas and into Missouri.

Financing activities

For the year ended 2012, cash provided by financing activities was $7.7 million, which is primarily comprised of funds from the January 2012 refinancing transaction, less payments under deferred consideration and noncompete arrangements entered into with various acquisitions. In 2012, all acquisitions were funded with cash-on-hand and debt. Accordingly, we had no proceeds from investments from our member in 2012.

For the year ended 2011, cash provided by financing activities was $146.8 million. The $103.6 million capital contributions from our member were used to fund certain acquisitions. The remaining cash provided by financing activities reflects the net proceeds from new debt issuances, which were also used to fund acquisitions.

For the year ended 2010, cash provided by financing activities was $575.4 million, primarily driven by $338.6 million of capital contributions from our member and additional net borrowings used to fund $499.4 million of acquisitions and working capital needs.

Cash paid for capital expenditures

We expended approximately $45.5 million in capital expenditures in 2012 compared to $38.7 million in 2011. A significant portion of the increase in capital expenditures in 2012 relates to development of an underground mine to extract limestone on our Hannibal, Missouri property where our cement plant is located. We spent an additional $4.8 million on the underground mine development in 2012, as compared to 2011.

We estimate that we will incur between $54.0 million and $62.0 million in capital expenditures in 2013, which we expect to fund through cash on hand, cash from operations, outside financing and available borrowings under our credit facilities. A significant portion of our anticipated future capital expenditures relates to development of the underground mine referred to above. We expect to spend approximately $12.0 million in aggregate during 2013 and 2014 on this project. We believe this project will eliminate the need to strip away overburden that covers the limestone and ultimately save about $1.50 to $2.00 per ton of limestone costs off our average historical mining cost.

 

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Contractual Obligations

The following table presents, as of December 29, 2012, our obligations and commitments to make future payments under contracts and contingent commitments:

 

     Total      2013      2014-2015      2016-2017      Thereafter  

Contractual Obligations

              

Short term borrowings and long-term debt, including current portion

   $ 648,000       $ 4,000       $ 8,000       $ 9,000       $ 627,000   

Capital lease obligations

     6,330         360         720         720         4,530   

Operating lease obligations

     13,391         3,614         5,193         3,095         1,489   

Interest payments(1)

     345,287         50,305         99,881         98,911         96,190   

Acquisition-related liabilities

     46,430         9,525         13,998         9,654         13,253   

Royalty payments

     17,554         1,593         3,207         3,245         9,509   

Defined benefit plans(2)

     27,308         2,773         5,557         5,516         13,462   

Asset retirement obligation payments

     28,191         356         6,059         1,258         20,518   

Other

     708         164         330         214         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total contractual obligations(3)

   $ 1,133,199       $ 72,690       $ 142,945       $ 131,613       $ 785,951   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Future interest payments were calculated using the applicable fixed and floating rates charged by our lenders in effect as of December 29, 2012 and may differ from actual results.
(2) Amounts represent estimated future payments to fund our defined benefit plans.
(3) Any future payouts on the redeemable noncontrolling interest are excluded from total contractual obligations as the expected timing of settlement is not estimable.

Commitments and contingencies

In the normal course of business, we have commitments, lawsuits, claims, and contingent liabilities. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position or liquidity.

We are obligated under an indemnification agreement entered into with the sellers of Harper Contracting, Inc., Harper Sand and Gravel, Inc., Harper Ready Mix Company, Inc. and Harper Investments, Inc. (collectively, “Harper”) for the seller’s ownership interests in a joint venture agreement. Summit has the rights to any benefits under the joint venture as well as the assumption of any obligations, but does not own equity interests in the joint venture. The joint venture has incurred significant losses on a highway project in Utah, which have resulted in funding requirements for the joint venture partners and ultimately for us. Through year-end 2012, we have funded $8.8 million into the investment, $4.0 million in 2012 and $4.8 million in 2011. In 2012 and 2011, we recognized losses on the indemnification agreement of $8.0 million and $1.9 million, respectively, which are included in general and administrative expenses on the consolidated statements of operations.

Off-Balance sheet arrangements

As of December 29, 2012 we had no material off-balance sheet arrangements, such as financing or unconsolidated variable interest entities, that either have or are reasonably likely to have a current or future material effect on our results of operations, financial position, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

We are an “emerging growth company” under the JOBS Act and are eligible to take advantage of certain exemptions from various public company reporting requirements. Section 107 of the JOBS Act provides that an “emerging growth company” may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act to comply with new or revised accounting standards. In other words, an

 

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“emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. As an “emerging growth company,” we may elect to delay adoption of new or revised accounting standards applicable to public companies until such standards are made applicable to private companies. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. We may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act until we (i) are no longer an “emerging growth company” or (ii) affirmatively and irrevocably “opt-out” of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act. Accordingly, until the date we are no longer an “emerging growth company,” or affirmatively and irrevocably “opt-out” of the exemption provided by Section 7(a)(2)(B) of the Securities Act, upon the issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we may choose to rely on certain exemptions. See “Risk Factors—Risks Related to Our Business and Our Industry—As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.”

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period.

On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, allowance for doubtful accounts, inventories, asset retirement obligations, taxes and goodwill. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Acquisitions—Purchase price allocation

We regularly review strategic long-term plans, including potential investments in value-added acquisitions of related or similar businesses, which would increase our market share and/or are related to our existing markets. When an acquisition is completed, our consolidated statement of operations includes the operating results of the acquired business starting from the date of acquisition, which is the date that control is obtained. The purchase price is determined based on the fair value of assets given to and liabilities assumed from the seller as of the date of acquisition. We allocate the purchase price to the fair values of the tangible and intangible assets acquired and liabilities assumed as valued at the date of acquisition. Goodwill is recorded for the excess of the purchase price over the net of the fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date. The purchase price allocation is a critical accounting policy because the estimation of fair values of acquired assets and assumed liabilities is judgmental and requires various assumptions. Further, the amounts and useful lives assigned to depreciable and amortizable assets versus amounts assigned to goodwill, which is not amortized, can significantly affect the results of operations in the period of and in periods subsequent to a business combination.

 

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Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction, and, therefore, represents an exit price. A fair value measurement assumes the highest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible at the measurement date. We assign the highest level of fair value available to assets acquired and liabilities assumed based on the following options:

 

   

Level 1—Quoted prices in active markets for identical assets and liabilities

 

   

Level 2—Observable inputs, other than quoted prices, for similar assets or liabilities in active markets

 

   

Level 3—Unobservable inputs, which includes the use of valuation models

Level 2 fair values are typically used to value acquired machinery, equipment and land and assumed liabilities for asset retirement obligations, environmental remediation and compliance obligations and contingencies.

Level 3 fair values are used to value acquired mineral reserves, mineral interests and separately-identifiable intangible assets.

There is a measurement period after the acquisition date during which we may adjust the amounts recognized for a business combination. Any such adjustments are based on us obtaining additional information that existed at the acquisition date regarding the assets acquired or the liabilities assumed. Measurement period adjustments are generally recorded as increases or decreases to the goodwill recognized in the transaction. Material adjustments are applied retroactively to the date of acquisition and reported retrospectively. The measurement period ends once we have obtained all necessary information that existed as of the acquisition date, but does not extend beyond one year from the date of acquisition. Any adjustments to assets acquired or liabilities assumed beyond the measurement period are recorded in earnings.

We have invested $48.8 million and $161.1 million in business combinations and allocated this amount to assets acquired and liabilities assumed during the years ended December 29, 2012 and December 31, 2011, respectively.

Goodwill and goodwill impairment

Goodwill is tested annually for impairment and in interim periods if certain events occur indicating that the carrying amounts may be impaired. The impairment evaluation is a critical accounting policy because the evaluation involves the use of significant estimates and assumptions and considerable management judgment. Our judgments regarding the existence of impairment indicators and future cash flows are based on operational performance of our businesses, market conditions and other factors. Although there are inherent uncertainties in this assessment process, the estimates and assumptions we use, including estimates of future cash flows, volumes, market penetration and discount rates, are consistent with our internal planning. The estimated future cash flows are derived from internal operating budgets and forecasts for long-term demand and pricing in our industry and markets. If these estimates or their related assumptions change in the future, we may be required to record an impairment charge on all or a portion of our goodwill. Furthermore, we cannot predict the occurrence of future impairment-triggering events nor the impact such events might have on our reported values. Future events could cause us to conclude that impairment indicators exist and that goodwill associated with our acquired businesses are impaired. Any resulting impairment loss could have an adverse impact on our financial position and results of operations.

Under the two-step quantitative impairment test, the evaluation of impairment involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. We use a discounted cash flow (“DCF”) model to estimate the current fair value of our reporting units when testing for impairment, as management believes forecasted cash flows are the best indicator of such fair value. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows,

 

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including macroeconomic trends in the public and private construction industry, the timing of work embedded in our backlog, our performance and profitability under our contracts, our success in securing future sales and the appropriate interest rate used to discount the projected cash flows. Most of these assumptions vary significantly among the reporting units. This discounted cash flow analysis is corroborated by “top-down” analyses, including a market assessment of our enterprise value.

We assessed the fair value of our reporting units in relation to their carrying values, which resulted in the estimated fair values of these reporting units being substantially in excess of their carrying values by a range of 26% to 133%. We have recorded no goodwill impairment charges in the current year or in previous years.

Impairment of long-lived assets, excluding goodwill

We evaluate the carrying value of long-lived assets, including intangible assets subject to amortization, when events and circumstances indicate that the carrying value may not be recoverable. The impairment evaluation is a critical accounting policy because long-lived assets are material to our total assets (as of December 29, 2012, property, plant and equipment, net represents 63.5% of total assets) and the evaluation involves the use of significant estimates and assumptions and considerable management judgment. Such indicators may include deterioration in general economic conditions, negative developments in equity and credit markets, adverse changes in the markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others. A one year increase or decrease in the average useful lives of our property, plant and equipment would have affected depreciation expense by ($5.2) million or $6.1 million, respectively, in 2012. An impairment charge could be material to our financial condition and results of operations. The carrying value of long-lived assets is considered impaired when the estimated undiscounted cash flows from such assets are less than their carrying value. In that event, we recognize a loss equal to the amount by which the carrying value exceeds the fair value of the long-lived assets.

Fair value is determined by primarily using a discounted cash flow methodology that requires considerable management judgment and long-term assumptions. Our estimate of net future cash flows is based on historical experience and assumptions of future trends, which may be different from actual results. There were no material long-lived asset impairments during the years ended December 29, 2012 or December 31, 2011, nor were there any changes to the useful lives of assets having a material impact on our results of operations or financial position.

Revenue recognition

We account for revenue and earnings on our long-term construction contracts as service revenue using the percentage-of-completion method of accounting. Under the percentage-of-completion method, we recognize contract revenue as services are rendered. We estimate profit as the difference between total estimated revenue and total estimated cost of a contract and recognize that profit over the remaining life of the contract based on input measures (e.g., costs incurred). We generally measure progress toward completion on long-term construction contracts based on the proportion of costs incurred to date relative to total estimated costs at completion. We include revisions of estimated profits on contracts in earnings under the cumulative catch-up method, under which the impact of revisions in estimates is recognized immediately. If a revised estimate of contract profitability reveals an anticipated loss on the contract, we recognize the loss in the period it is identified.

The percentage-of-completion method of accounting involves the use of various estimating techniques to project costs at completion, and in some cases includes estimates of recoveries asserted against the customer for changes in specifications or other disputes. Contract estimates involve various assumptions and projections relative to the outcome of future events over a period of multiple years, including future labor productivity and availability, the nature and complexity of the work to be performed, the cost and availability of materials, the impact of delayed performance, and the availability and timing of funding from the customer. These estimates

 

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are based on our best judgment. A significant change in one or more of these estimates could affect the profitability of one or more of our contracts. We review our contract estimates regularly to assess revisions in contract values and estimated costs at completion. No material contract adjustments were recognized in 2012 or 2011.

We recognize revenue arising from claims either as income or as an offset against a potential loss only when the amount of the claim can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim.

Revenue for product sales is recognized when evidence of an arrangement exists, the fee is fixed or determinable, title passes, which generally is when the product is shipped, and collection is reasonably assured. Revenue from the receipt of waste fuels are based on fees charged for waste transfer and disposal and are recognized upon acceptance of the waste. Product revenue generally include sales of aggregates, cement and other materials to customers, net of discounts or allowances, if any, and generally include freight and delivery charges billed to customers. Freight and delivery charges associated with cement sales are recorded on a net basis.

Mining reclamation obligations

We incur reclamation obligations as part of our mining activities. Our quarry activities require the removal and relocation of significant levels of overburden to access stone of usable quantity and quality. The same overburden material is used to reclaim depleted mine areas, which must be sloped to a certain gradient and seeded to prevent erosion in the future. Reclamation methods and requirements can differ depending on the quarry and state rules and regulations in existence for certain locations. This differentiation impacts the potential obligation required at each individual subsidiary. As of December 29, 2012, our undiscounted reclamation obligations totaled $17.7 million, of which 18.2% is expected to be settled within the next five years and the remaining 81.8% thereafter.

Reclamation costs resulting from the normal use of long-lived assets, either owned or leased, are recognized over the period the asset is in use only if there is a legal obligation to incur these costs upon retirement of the assets. The obligation, which cannot be reduced by estimated offsetting cash flows, is recorded at fair value as a liability at the obligating event date and is accreted through charges to operating expenses. The fair value is based on our estimate for a third party to perform the legally required reclamation tasks including a reasonable profit margin. This fair value is also capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset.

The mining reclamation reserve is based on management’s estimate of future cost requirements to reclaim property at both currently operating and closed quarry sites. Costs are estimated in current dollars and inflated until the expected time of payment using a future estimated inflation rate and then discounted back to present value using a credit-adjusted, risk-free rate on obligations of similar maturity adjusted to reflect the Company’s credit rating. We review reclamation obligations at least every three years for a revision to the cost or a change in the estimated settlement date. Additionally, reclamation obligations are reviewed in the period that a triggering event occurs that would result in either a revision to the cost or a change in the estimated settlement date. Examples of events that would trigger a change in the cost include a new reclamation law or amendment to an existing mineral lease. Examples of events that would cause a change in the estimated settlement date include the acquisition of additional reserves or the closure of a facility. Any impact to earnings from cost revisions is included in cost of revenue.

New Accounting Standards

For a discussion of accounting standards recently adopted and the effect such accounting changes will have on our results of operations, financial position or liquidity, see note 1 to our audited consolidated financial statements included elsewhere in this prospectus.

 

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Quantitative and Qualitative Disclosures About Market Risk

We are exposed to certain market risks arising from transactions that are entered into in the normal course of business. Our operations are highly dependent upon the interest rate-sensitive construction industry as well as the general economic environment. Consequently, these marketplaces could experience lower levels of economic activity in an environment of rising interest rates or escalating costs.

Management has considered the current economic environment and its potential impact to our business. Demand for aggregates products, particularly in the nonresidential and residential construction markets, could decline if companies and consumers are unable to obtain financing for construction projects or if the economic recession causes delays or cancellations to capital projects. Additionally, declining tax revenue and state budget deficits have negatively affected states’ abilities to finance infrastructure construction projects.

Pension expense

Our subsidiary, Continental Cement, sponsors two non-contributory defined benefit pension plans for hourly and salaried employees, as well as healthcare and life insurance benefits for certain eligible retired employees. As of January 1, 2012, the pension and postretirement plans have been frozen to new entrants. Our results of operations are affected by our net periodic benefit cost from these plans, which totaled $1.2 million in 2012. Assumptions that affect this expense include the discount rate and, for the pension plans only, the expected long-term rate of return on assets. Therefore, we have interest rate risk associated with these factors. A one percentage-point increase or decrease in assumed health care cost trend rates would have affected estimated accumulated postretirement benefit obligation by $1.6 million or ($1.3) million, respectively, in 2012.

Commodity and energy price risk

We are subject to commodity price risk with respect to price changes in liquid asphalt and energy, including fossil fuels and electricity for aggregates, cement, asphalt paving mix and ready mix concrete production, natural gas for hot mix asphalt production and diesel fuel for distribution vehicles and production related mobile equipment. Liquid asphalt escalators in most of our public contracts, other than those in Texas, limit our exposure to price fluctuations in this commodity and we seek to obtain escalators on private and commercial contracts.

Inflation risk

Overall inflation rates in recent years have not been a significant factor in our revenue or earnings due to our ability to recover increasing costs by obtaining higher prices for our products through sale price escalators in place for most public sector contracts. Inflation risk varies with the level of activity in the construction industry, the number, size and strength of competitors and the availability of products to supply a local market.

Variable-Rate Borrowing Facilities

We have $150.0 million revolving credit commitments under the Senior Secured Credit Facility, which bear interest at a variable rate. A hypothetical 100-basis-point increase in interest rates on borrowings of $36.7 million, which represents our average outstanding balance throughout 2012, would increase interest expense by $0.4 million on an annual basis.

In February 2013, we entered into amendments to our Senior Secured Credit Facility that, among other things reduced the applicable margins used to calculate interest rates for term loans under our Credit Facility by 1.0% and reduced the applicable margins used to calculate interest rates for $131.0 million of $150.0 million Tranche A revolving credit loans available under the Senior Secured Credit Facility by 1.0%. Had this reduction been in place throughout 2012, our interest expense would have been reduced by $4.4 million.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS OF CONTINENTAL CEMENT COMPANY, L.L.C.

You should read the following discussion of Continental Cement’s results of operations and financial condition with Continental Cement’s audited consolidated financial statements and related notes thereto included elsewhere in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this prospectus. Continental Cement’s actual results may differ materially from those contained in any forward-looking statements.

Overview

Continental Cement produces Portland cement (“cement”) at its highly efficient, state-of-the-art, dry cement manufacturing plant located in Hannibal, Missouri and has distribution terminals in Hannibal and St. Louis, Missouri and Bettendorf, Iowa. Continental Cement’s primary cement operation customers are ready-mix operators and contractors located in the Midwestern United States. In addition to producing cement, Continental Cement secures, processes and blends hazardous and nonhazardous waste materials primarily for use as supplemental fuels in the cement manufacturing process. Continental Cement’s primary customers for this service are commercial transportation disposal facilities and petroleum and chemical manufacturers located in the continental United States.

Continental Cement’s cement serves a variety of end-uses in its market, including residential and non-residential, agricultural and public infrastructure projects. For the year ended December 31, 2012, approximately 35% of Continental Cement’s revenue related to public infrastructure construction and the remaining approximately 65% related to agricultural, residential and non-residential construction. Continental Cement believes exposure to various markets affords greater stability through economic cycles and positions it to capitalize on upside opportunities when recoveries in residential and non-residential construction occur. Continental Cement believes it is a top 20 supplier of cement in the United States by volume and the primary supplier within its local market.

Business Trends and Conditions

Cement is used in most forms of construction activity. Participants in the cement sector typically are large multinational corporations that offer a wide array of construction materials and services. Markets are defined in part by the distance materials may be efficiently transported from a cement distribution facility.

Transportation infrastructure projects, driven by both state and federal funding programs, represent a significant share of the U.S. heavy-side building materials market. In July 2012, MAP-21 was enacted and took effect in October 2012. MAP-21 is a 27-month, approximately $105 billion transportation funding program that provides for $40.4 billion and $41.0 billion in highway infrastructure investments in fiscal years 2013 and 2014, respectively. The spending levels are consistent with the preceding federal transportation funding program. In addition to federal funding, highway construction and maintenance funding is also available through state, county and local agencies. Missouri, which represented 52% of Continental Cement’s total revenue for the year ended December 31, 2012, has funds whose revenue sources are constitutionally protected and may only be spent on transportation projects. Missouri has approximately $700.0 million in annual construction funding committed to essential road and bridge programs.

Despite the economic challenges of recent years, Continental Cement believes that the enacted federal transportation funding program extending through fiscal 2014 is a positive development, reducing the uncertainty that existed with the previous funding program that had been subject to 10 short-term extensions. Within many of Continental Cement’s markets, the federal, state and local governments have taken actions to maintain or grow

 

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highway funding during a time in which many areas of spending are facing significant cuts. However, Continental Cement could still be impacted by any economic improvement or slowdown, which could vary by local region and market. Continental Cement’s sales and earnings are sensitive to national, regional and local economic conditions and particularly to cyclical swings in construction spending, especially in the private sector.

In addition to being subject to cyclical swings, Continental Cement’s business is also seasonal in nature. Almost all of its products are consumed outdoors. Severe weather, seasonal changes and other weather-related conditions can significantly affect the sales volumes of Continental Cement’s products. Normally, the highest sales and earnings are in the second and third quarters and the lowest are in the first and fourth quarters. Winter weather months are generally periods of lower sales as Continental Cement’s customers have fewer active projects. Periods of heavy rainfall also adversely affect Continental Cement’s customers’ work patterns and therefore demand for its products. Continental Cement’s working capital may vary greatly during these peak periods, but generally return to comparable levels as its operating cycle is completed each fiscal year.

Cement production is a capital-intensive business with variable costs dominated by raw materials and energy required to fuel the kiln. Building new plants is challenging given the extensive permitting that is required and significant costs (new plant construction costs in the United States are estimated at $250-300 per ton according to the PCA). Assuming construction costs of $275 per ton, a 1.25 million ton facility, such as the one Continental Cement operates, would cost approximately $343.8 million to construct.

As reported by the PCA, consumption is down significantly from the industry peak of 141 million tons in 2005 to 79 million tons in 2011 because of the decline in U.S. construction sector activity. Domestic cement consumption has at times outpaced domestic production capacity with the shortfall supplied with imports primarily from China, Canada, Colombia, Mexico and South Korea. The PCA reports that cement imports have declined since their peak of 39 million tons in 2006 to 7 million tons in 2011, in a manner indicative of the industry’s general response to the current demand downturn. Despite the reduction in imports, capacity utilization declined from 95% in 2006 to 59% in 2011 according to the PCA. Continental Cement operated at 75% capacity utilization in 2011 and 81% in 2012, which is above the industry mean of 68% capacity utilization in 2011 as its markets did not suffer the pronounced demand declines seen in states like Florida, California and Arizona. Demand is seasonal in nature with nearly two-thirds of U.S. consumption occurring between May and October, coinciding with end-market construction activity.

Cement production in the United States is distributed among 101 production facilities located across 36 states. The EPA has new emission standards for Portland cement plants (“NESHAP”) that are due to come into effect in 2015. On December 20, 2012, the EPA signed the NESHAP final rule, which was less stringent than previous drafts. The PCA had estimated based on the draft rule that 18 plants could be forced to close due to the inability to meet NESHAP standards or because the compliance investment required may not be justified on a financial basis. These potential closures represent approximately 20 million tons of clinker capacity, or 20% of current capacity in the United States.

Continental Cement’s plant utilizes alternative fuel (hazardous and non-hazardous) as well as coal and petroleum coke and, as a result, is subject to HWC-MACT standards, rather than NESHAP. Continental Cement expects HWC-MACT standards to generally conform to NESHAP, for which Continental Cement is substantially in compliance, in advance of the effective date of the NESHAP standards. Any additional costs to comply with the NESHAP standards are not expected to be material.

Components of Operating Results

Revenue

Continental Cement derives its revenue predominantly by selling cement and from the receipt of waste fuels, which are converted into fuel and used in the manufacturing of cement. Revenue derived from cement sales is recognized when risks associated with ownership have passed to customers. Typically this occurs when customers haul product from Continental Cement’s locations or when products are shipped. Product revenue

 

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includes sales of cement to customers, net of discounts, allowances and taxes, as applicable. Revenue from the receipt of waste fuels is classified as service revenue and is based on fees charged for the waste disposal, which are recognized when the waste is accepted.

Operating costs and expenses

The key components of Continental Cement’s operating costs and expenses consist of the following:

Cost of revenue (exclusive of items shown separately below)

Cost of revenue consists of all production and delivery costs as well as costs to dispose of waste fuels. Such costs primarily include labor, repair and maintenance, utilities, raw materials, fuel, transportation and manufacturing overhead. Continental Cement’s cost of revenue is directly impacted by fluctuations in commodity energy prices, primarily coal and natural gas. Continental Cement’s attempt to limit its exposure to changes in commodity energy prices by entering into annual forward purchase commitments when appropriate.

General and administrative expenses

General and administrative expenses consist primarily of salaries and personnel costs for Continental Cement’s sales and marketing, administration, finance and accounting, legal, information systems and human resources employees. Additional expenses include audit, consulting and professional fees, travel, insurance and other corporate expenses.

Transaction costs

Transaction costs consist primarily of third party accounting, legal, valuation and financial advisory fees incurred in connection with the May 2010 transaction through which Summit Materials II, LLC became Continental Cement’s majority shareholder and certain indebtedness was prepaid or refinanced.

Depreciation, depletion, amortization and accretion

Continental Cement’s business is relatively capital-intensive. Continental Cement carries property, plant and equipment at cost, net of applicable depreciation, depletion and amortization on its balance sheet. Depreciation on property, plant and equipment is computed on a straight-line basis or based on the economic usage over the estimated useful life of the asset.

The general range of depreciable lives by fixed asset category, excluding mineral reserves which are depleted based on the units of production method on a quarry-by-quarry basis, is as follows:

 

Buildings and improvements

     30 - 40 years     

Plant, machinery and equipment

     3 - 40 years     

Mobile equipment and barges

     3 - 20 years     

Other

     3 - 7 years       

Amortization expense is the periodic expense related to Continental Cement’s environmental permits and trade name, which was recognized as part of the May 2010 recapitalization. The environmental permits are generally amortized on a straight-line basis over three years. The trade name asset is amortized on a straight-line basis over its ten year estimated useful life.

Accretion expense is recorded using the effective interest method and is related to the accrued mining reclamation liabilities.

 

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Results of Operations

The following discussion of Continental Cement’s results of operations is focused on the material financial measures Continental Cement uses to evaluate the performance of its business. Operating income and margins are discussed in terms of changes in volume, pricing and mix of revenue source (e.g., wholesale or retail sales). Continental Cement’s product revenue reflects cement sales and service revenue reflects revenues from the acceptance of waste fuels.

To supplement the discussion of Continental Cement’s historical results of operations, Continental Cement has included a discussion of the aggregated information for the twelve months ended December 31, 2010, which represents only the mathematical sums of the information presented in the periods from (i) January 1, 2010 through May 26, 2010 (predecessor) and (ii) May 27, 2010 through December 31, 2010 (successor). Continental Cement refers to the aggregated period as “aggregated twelve months ended December 31, 2010”. Although this presentation is not in accordance with GAAP, under which these periods would not be aggregated, Continental Cement believes the aggregated information for the year ended December 31, 2010 provides a meaningful comparison of its results for 2010 to its results for the year ended December 31, 2011.

Non-GAAP Performance Measures

Continental Cement evaluates the performance of its business and allocates its resources based on a measure it calls EBITDA. Continental Cement defines EBITDA as net income (loss) before interest expense, and depreciation, depletion, amortization and accretion. EBITDA reflects an additional way of viewing aspects of Continental Cement’s business that, when viewed with Continental Cement’s GAAP results and the accompanying reconciliations to GAAP financial measures included in the tables below, may provide a more complete understanding of factors and trends affecting Continental Cement’s business. However, it should not be construed as being more important than other comparable GAAP measures and must be considered in conjunction with GAAP measures. In addition, non-GAAP financial measures are not standardized; therefore it may not be possible to compare such financial measures with other companies’ non-GAAP financial measures having the same or similar names. Continental Cement strongly encourages investors to review its consolidated financial statements in their entirety and not rely on any single financial measure.

Reconciliation of Net Income (Loss) to EBITDA

 

(in thousands)

   Year ended
December 31,
2012
     Year ended
December 31,
2011
     Aggregated
twelve months ended
December 31, 2010
    May 27, 2010 to
December 31,
2010
(Successor)
            January 1, 2010
to May 26, 2010
(Predecessor)
 

Net income (loss)

   $ 6,625       $ 2,462       $ (36,330   $ 227            $ (36,557

Interest expense

     12,622         14,621         26,686        8,150              18,536   

Depreciation, depletion, amortization and accretion

     10,479         9,984         9,707        5,390              4,317   
  

 

 

    

 

 

    

 

 

   

 

 

         

 

 

 

EBITDA

   $ 29,726       $ 27,067       $ 63      $ 13,767            $ (13,704
  

 

 

    

 

 

    

 

 

   

 

 

         

 

 

 

 

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Consolidated Results of Operations

The tables below set forth Continental Cement’s historical consolidated results for each of the periods indicated.

 

(in thousands)

  Year ended
December 31,
2012
    Year ended
December 31,
2011
    Aggregated
twelve months ended
December 31, 2010
    May 27, 2010 to
December 31, 2010
(Successor)
          January 1, 2010
to May 26, 2010
(Predecessor)
 

Revenue

  $ 94,882      $ 79,488      $ 79,780      $ 55,505          $ 24,275   

Cost of revenue (exclusive of items shown separately below)

    58,319        47,721        60,129        33,661            26,468   

General and administrative expenses

    6,706        4,761        6,096        2,547            3,549   

Depreciation, depletion, amortization and accretion

    10,479        9,984        9,707        5,390            4,317   

Transaction costs

    —          —          13,660        5,671            7,989   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Operating income (loss)

    19,378        17,022        (9,812     8,236            (18,048

Other (income) expense, net

    131        (61     (168     (141         (27

Interest expense

    12,622        14,621        26,686        8,150            18,536   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Net income (loss)

  $ 6,625      $ 2,462      $ (36,330   $ 227          $ (36,557
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Year ended December 31, 2012 compared to the year ended December 31, 2011

 

(in thousands)

   Year ended
December 31,
2012
    Year ended
December 31,
2011
           Variance  

Revenue

   $ 94,882      $ 79,488           $ 15,394         19.4

Operating income

   $ 19,378      $ 17,022           $ 2,356         13.8

Operating margin

     20.4     21.4          

EBITDA

   $ 29,726      $ 27,067           $ 2,659         9.8

Continental Cement’s revenue increased from $79.5 million in the twelve months ended December 31, 2011 to $94.9 million in the year ended December 31, 2012. The increase in revenue is a result of selling approximately 1.0 million tons of cement in 2012 as compared to 0.9 million tons in 2011, an increase of 11.1%. However, a significant portion of the increased volume represented tons sold wholesale as an entrant into a new market and to other cement producers, which resulted in a decrease in the average selling price from $83 per ton in 2011 to $81 per ton in 2012.

Operating margin, which Continental Cement defines as operating income as a percentage of revenue, declined from 21.4% in 2011 to 20.4% in 2012 due to the decrease in average selling price discussed above.

EBITDA improved $2.7 million, or 9.8%, in the twelve months ended December 31, 2012 to $29.7 million. The increase in EBITDA was a result of the increased sales to higher volume customers at lower prices and, to a lesser extent, increased waste fuel volumes.

 

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Other Financial Information

Interest expense

Interest expense decreased $2.0 million to $12.6 million in the year ended December 31, 2012 compared to $14.6 million in the year ended December 31, 2011. The decrease in Continental Cement’s interest expense was primarily due to a decrease in the weighted-average interest rate from 9.0% in 2011 to 7.7% in 2012. The decreased interest rate was a result of Summit Material’s refinancing in January 2012; see additional discussion below.

Year ended December 31, 2011 compared to the aggregated twelve months ended December 31, 2010

 

(in thousands)

   Year ended
December 31,
2011
    Aggregated
twelve months ended
December 31, 2010
           Variance  

Revenue

   $ 79,488      $ 79,780           $ (292     (0.4 )% 

Operating income (loss)

   $ 17,022      $ (9,812        $ 26,834        273.5

Operating margin

     21.4     (12.3 )%          

EBITDA

   $ 27,067      $ 63           $ 27,004        42,863.5

Continental Cement’s revenue remained relatively flat from $79.8 million in the aggregated twelve months ended December 31, 2010 to $79.5 million in the year ended December 31, 2011. However, operating margin and EBITDA improved significantly from (12.3)% and $0.1 million, respectively, in the aggregated twelve months ended December 31, 2010 to 21.4% and $27.1 million, respectively, in the year ended December 31, 2011. This improvement was a result of the following:

 

   

$13.7 million of transaction costs were incurred in the aggregated twelve months ended December 31, 2010 related to the transaction through which Summit Materials became the majority shareholder of Continental Cement

 

   

Cost of revenue decreased $12.4 million from $60.1 million in the aggregated twelve months ended December 31, 2010 to $47.7 million in the year ended December 31, 2011 due primarily to a $1.7 million charge for stripping in 2010, compared to no stripping charges in 2011 and a $7.2 million write-down of clinker inventory in 2010 to its market value, which was less than its cost basis.

Other Financial Information

Interest expense

Interest expense decreased $12.1 million, or 45.3%, to $14.6 million in the year ended December 31, 2011 compared to $26.7 million in the aggregated twelve months ended December 31, 2010. The decrease in Continental Cement’s interest expense was due to $3.5 million of interest expense in the period from January 1, 2010 to May 26, 2010 associated with the grant of redeemable members’ units and due to a $110.3 million payment on the long-term debt on May 27, 2010.

Liquidity and Capital Resources

Continental Cement’s primary sources of liquidity include cash, cash provided by its operations and amounts available for borrowing from Continental Cement’s parent company, Summit Materials. As of December 31, 2012, Continental Cement had $0.6 million in cash and working capital of $9.9 million as compared to $0.1 million in cash and working capital of $3.8 million as of December 31, 2011. Working capital is calculated as current assets less current liabilities, excluding the current portion of long term debt. In 2012, Continental Cement began participating in Summit Material’s centralized banking system, through which excess funds are swept to Summit Materials at the end of each day and Continental Cement’s accounts are funded each day from the sweep account for amounts presented to Continental Cement’s accounts for payment. Continental Cement expects the cash balance held at Continental Cement to be nominal going forward.

 

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Given the seasonality of its business, Continental Cement typically experiences significant fluctuations in working capital needs and balances throughout the year with sales peaking in the summer and fall months. Despite the seasonality of its sales, Continental Cement produces cement throughout the year with the exception of scheduled plant maintenance during non-peak months. Continental Cement believes it has sufficient financial resources from its liquidity sources to fund its business and operations, including contractual obligations, capital expenditures and debt service obligations for at least the next twelve months. There were no restricted cash balances as of December 31, 2012 or 2011.

Continental Cement’s Long-term Debt

Refer to “Description of Other Indebtedness” and to the notes to the consolidated financial statements included elsewhere in this prospectus for detailed information on Continental Cement’s indebtedness and scheduled maturities of long-term debt. At December 31, 2012 and December 31, 2011, there was $156.4 million and $154.0 million debt outstanding, respectively, including the revolving credit facility at year-end 2011.

January 2012 Financing Transactions

On January 30, 2012, Continental Cement’s parent company, Summit Materials, refinanced its consolidated outstanding indebtedness. The refinancing of the pre-existing long-term debt was partially accounted for as an extinguishment. As a result of the January 2012 financing transactions, Continental Cement’s existing debt was repaid by Summit Materials and was replaced by $156.8 million of long-term debt due to Summit Materials. In addition, Continental Cement recognized a charge to earnings of $0.3 million related to financing fees on the debt repaid.

The terms of Summit Materials’ debt limit certain transactions of its subsidiaries, including those of Continental Cement. Continental Cement’s ability to incur additional indebtedness or issue certain preferred shares, pay dividends to its noncontrolling members, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter into certain transactions with affiliates are limited.

Cash Flows

The following tables summarize Continental Cement’s net cash provided by or used for operating activities, investing activities and financing activities and Continental Cement’s capital expenditures for the periods indicated (in thousands):

 

    Year ended
December 31,
2012
    Year ended
December 31,
2011
    Aggregated
twelve months ended
December 31, 2010
    May 27, 2010
to December 31,
2010

(Successor)
          January 1, 2010
to May 26, 2010

(Predecessor)
 

Net cash provided by (used for):

             

Operating activities

  $ 22,379      $ 5,031      $ (19,560   $ (13,172       $ (6,388

Investing activities

    (23,035     (6,942     (7,487     (6,251         (1,236

Financing activities

    1,200        1,957        27,047        17,247            9,800   

Cash paid for capital expenditures

    (12,805     (7,110     (11,067     (6,726         (4,341

Operating activities

For the year ended 2012, cash provided by operating activities was $22.4 million, driven by net income of $17.1 million, net of $10.5 million of depreciation, depletion, amortization and accretion expense, as well as a $2.8 million reduction in inventory. The reduction in inventory was a result of an improvement in inventory management as compared to a $3.2 million increase in inventory in 2011.

 

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For the year ended 2011, cash provided by operating activities was $5.0 million, driven by net income of $12.4 million, net of $10.0 million of depreciation, depletion, amortization and accretion expense, offset by a $3.2 million increase in inventory and a $4.1 million increase in accounts receivable and other assets.

For the aggregated twelve months ended December 31, 2010, cash used for operating activities was $19.6 million. Operating cash flow was impacted by $13.7 million of transaction costs paid in association with Summit’s purchase of a 70% interest in Continental Cement and a concurrent refinancing of and payment on Continental Cement’s long-term debt. The proceeds from the sale of the 70% interest to Summit were also used to pay accrued interest, resulting in total interest payments in the aggregated twelve months ended December 31, 2010 of $30.7 million.

Investing activities

For the year ended 2012, cash used for investing activities was $23.0 million. Cash used for investing activities was impacted by $10.2 million of net loans to Continental Cement’s sister companies. Due to strong cash flow provided by operations, Continental Cement was a net lender to Continental Cement’s sister companies in 2012. Continental Cement also invested $5.0 million in the development of an underground aggregates mine on Continental Cement’s Hannibal, Missouri property where its cement plant is located.

For the year ended 2011, cash used for investing activities was $6.9 million, $7.1 million of which was on capital expenditures, primarily replacement and maintenance parts.

For the aggregated twelve months ended 2010, cash used for investing activities was $7.5 million, which primarily related to $11.1 million of capital expenditures. The largest capital investment in 2010 was for a dock relocation project in St. Louis, Missouri for $6.3 million. The capital expenditures were offset by the receipt of $3.1 million in funds restricted to use for investment on the dock relocation project.

Financing activities

For the year ended 2012, cash provided by financing activities was $1.2 million. Continental Cement’s financing cash flows in 2012 reflect Continental Cement’s net borrowings and repayments on long-term debt financed with Summit.

For the year ended 2011, cash provided by financing activities was $2.0 million, primarily driven by net borrowings and repayments on long-term debt.

For the aggregated twelve months ended 2010, cash provided by financing activities was $27.0 million. Included in financing activities in the aggregated twelve months ended December 31, 2010 was Summit’s $135.0 million purchase of Class A Units, $29.2 million of new borrowings, offset by $137.2 million of debt payments. Funds from the $135.0 million purchase of Class A Units were used to pay $110.3 million of outstanding indebtedness, as well as accrued interest and transaction fees.

Cash paid for capital expenditures

Continental Cement expended approximately $12.8 million in capital expenditures in 2012 compared to $7.1 million in 2011. A significant portion of the increase in capital expenditures in 2012 relates to developing an underground mine to extract limestone on Continental Cement’s Hannibal, MO property where its cement plant is located. Continental Cement spent an additional $4.8 million on the underground mine development in 2012, as compared to $0.2 million in 2011.

In the year ended December 31, 2011, Continental Cement invested $7.1 million in capital expenditures compared to $11.1 million in the aggregated twelve months ended December 31, 2010. In 2010, $6.3 million was spent on a dock relocation project in St. Louis, Missouri.

 

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Continental Cement estimates that it will incur between $16.0 million and $20.0 million in capital expenditures in 2013, which it has funded or expects to fund through cash on hand, cash from operations and available borrowings under Summit’s credit facilities. A significant portion of Continental Cement’s anticipated future capital expenditures relates to development of the underground mine. Continental Cement expects to spend approximately $12.5 million in aggregate during 2013 and 2014 on this project. Continental Cement believes this project will eliminate the need to strip away overburden that covers the limestone and ultimately save about $1.50 to $2.00 per ton of limestone off Continental Cement’s average historical mining cost.

Contractual Obligations

The following table presents, as of December 31, 2012, Continental Cement’s obligations and commitments to make future payments under contracts and contingent commitments:

 

     Total      2013      2014 - 2015      2016 - 2017      Thereafter  

Contractual Obligations

              

Short term borrowings and long-term debt, including current portion

   $ 156,358       $ 965       $ 1,930       $ 1,930       $ 151,533   

Operating lease obligations

     1,367         377         386         343         261   

Interest payments(1)

     83,316         12,138         24,101         23,867         23,210   

Pensions and other postretirement plans(2)

     27,308         2,773         5,557         5,516         13,462   

Asset retirement obligation payments

     1,830         —           1,470         —           360   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total contractual obligations(3)

   $ 270,179       $ 16,253       $ 33,444       $ 31,656       $ 188,826   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Future interest payments were calculated using the applicable fixed and floating rates charged by Summit Materials in effect as of December 31, 2012 and may differ from actual results.
(2) Amounts represent estimated future payments to fund Continental Cement’s defined benefit retirement plans.
(3) Any future payouts on the redeemable members’ interest are excluded from total contractual obligations as the expected timing of settlement is not estimable.

Commitments and contingencies

In the normal course of business, Continental Cement has commitments, lawsuits, claims and contingent liabilities. In the opinion of Continental Cement’s management, the ultimate disposition of these matters will not have a material adverse effect on its consolidated financial position, results of operations or liquidity.

Approximately 64% of Continental Cement’s employees are represented by labor organizations under collective bargaining agreements. The collective bargaining agreements expire between 2013 and 2015. Historically, the Company has been successful at negotiating successor agreements without any material disruption to operating activities. Management does not expect 2013 negotiations to have a material impact on results of operations, financial condition or liquidity.

Off-Balance sheet arrangements

As of December 31, 2012, Continental Cement had no material off-balance sheet arrangements, such as financing or unconsolidated variable interest entities, that either have or are reasonably likely to have a current or future material effect on Continental Cement’s results of operations, financial position, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

Continental Cement’s management’s discussion and analysis of its financial condition and results of operations is based on its consolidated financial statements, which have been prepared in accordance with

GAAP. The preparation of these consolidated financial statements requires Continental Cement’s management to

 

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make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period.

On an ongoing basis, Continental Cement’s management evaluates its estimates, including those related to the allowance for doubtful accounts, inventories, asset retirement obligations, the noncontrolling interest and goodwill. Continental Cement bases its estimates and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenue recognition

Revenue for cement sales is recognized when evidence of an arrangement exists, the fee is fixed or determinable, title passes, which is generally when the product is shipped, and collection is reasonably assured. Revenue from the receipt of waste fuels are recognized when the waste is accepted and a corresponding liability is recognized for the costs to burn the waste for the manufacturing of cement or to ship the waste offsite for disposal in accordance with regulations. Cement sales are recorded net of discounts, allowances and sales taxes, as applicable.

Mining reclamation obligations

Continental Cement incurs reclamation obligations as part of its mining activities. Continental Cement mines aggregates and clay at its Hannibal and Owensville, Missouri locations, respectively, which are a key material used in the production of cement. Continental Cement’s quarry activities require the removal and relocation of significant levels of overburden to access stone of usable quantity and quality. The same overburden material is used to reclaim depleted mine areas, which must be sloped to a certain gradient and seeded to prevent erosion in the future. Reclamation methods and requirements can differ depending on the quarry and regulations in existence for certain locations. As of December 31, 2012, Continental Cement’s undiscounted reclamation obligations totaled $1.8 million, of which 80.3% is expected to be settled within the next five years and the remaining 19.7% thereafter. Continental Cement’s above-ground aggregate reserves are nearing depletion and, as a result, Continental Cement is developing an underground mine, which holds over 200 years of proven aggregate reserves.

Reclamation costs resulting from the normal use of long-lived assets are recognized over the period the asset is in use only if there is a legal obligation to incur these costs upon retirement of the assets. The obligation, which cannot be reduced by estimated offsetting cash flows, is recorded at fair value as a liability at the obligating event date and is accreted through charges to operating expenses. The fair value is based on Continental Cement’s estimate for a third party to perform the legally required reclamation tasks including a reasonable profit margin. This fair value is also capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset.

The mining reclamation reserve is based on Continental Cement’s management’s estimate of future cost requirements to reclaim property at the above ground quarry site. Costs are estimated in current dollars and inflated until the expected time of payment using a future estimated inflation rate and then discounted back to present value using a risk-free rate on obligations of similar maturity adjusted to reflect Continental Cement’s credit rating. Continental Cement reviews reclamation obligations at least every three years for a revision to the cost or a change in the estimated settlement date. Additionally, reclamation obligations are reviewed in the period that a triggering event occurs that would result in either a revision to the cost or a change in the estimated settlement date. Examples of events that would trigger a change in the cost include a new reclamation law or amendment to an existing mineral lease. Examples of events that would cause a change in the estimated settlement date include the acquisition of additional reserves or the closure of a facility. Any impact to earnings from cost revisions is included in cost of revenue.

 

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Goodwill and goodwill impairment

Goodwill is tested annually for impairment and in interim periods if certain events occur indicating that the carrying amounts may be impaired. The impairment evaluation is a critical accounting policy because the evaluation involves the use of significant estimates and assumptions and considerable management judgment. Continental Cement’s judgments regarding the existence of impairment indicators and future cash flows related to goodwill are based on operational performance of its businesses, market conditions and other factors. Although there are inherent uncertainties in this assessment process, the estimates and assumptions Continental Cement uses, including estimates of future cash flows, volumes, market penetration and discount rates, are consistent with its internal planning. The estimated future cash flows are derived from internal operating budgets and forecasts for long-term demand and pricing in Continental Cement’s industry and market. If these estimates or their related assumptions change in the future, Continental Cement may be required to record an impairment charge on all or a portion of its goodwill. Furthermore, Continental Cement cannot predict the occurrence of future impairment-triggering events nor the impact such events might have on its reported values. Future events could cause Continental Cement to conclude that impairment indicators exist and that goodwill associated with its acquired businesses are impaired. Any resulting impairment loss could have an adverse impact on Continental Cement’s financial position and results of operations.

Continental Cement performed its annual assessment of goodwill in the fourth quarter of 2012 for its reporting unit for which Continental Cement’s senior management regularly reviews the operating results. Under the two-step quantitative impairment test, the evaluation of impairment involves comparing the current fair value of the reporting unit to its carrying value, including goodwill. Continental Cement uses a discounted cash flow (“DCF”) model to estimate the current fair value of its reporting unit when testing for impairment, as Continental Cement’s management believes forecasted cash flows are the best indicator of such fair value. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including macroeconomic trends in the public and private construction industry, the timing of work embedded in Continental Cement’s backlog, its performance and profitability under its contracts, its success in securing future sales and the appropriate interest rate used to discount the projected cash flows. This discounted cash flow analysis is corroborated by “top-down” analyses, including a market assessment of Continental Cement’s enterprise value.

As of the first day of the fourth quarter, Continental Cement’s fair value was assessed in relation to its carrying value. As a result of this analysis, Continental Cement determined that the estimated fair value is substantially in excess of its carrying values (greater than 40%). Continental Cement recorded no goodwill impairment charges in the current year or in previous years.

Impairment of long-lived assets, excluding goodwill

Continental Cement evaluates the carrying value of long-lived assets, including intangible assets subject to amortization, when events and circumstances indicate that the carrying value may not be recoverable. The impairment evaluation is a critical accounting policy because long-lived assets are material to Continental Cement’s total assets (as of December 31, 2012, property, plant and equipment, net represented 82% of total assets) and the evaluation involves the use of estimates and assumptions and considerable management judgment. Such indicators may include deterioration in general economic conditions, negative developments in equity and credit markets, adverse changes in the markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows or a trend of negative or declining cash flows over multiple periods, among others. A one year increase or decrease in average useful lives of plant and equipment would have affected depreciation expense by ($0.4) million or $0.4 million, respectively, in 2012. An impairment charge could be material to Continental Cement’s financial condition and results of operations. The carrying value of long-lived assets is considered impaired when the estimated undiscounted cash flows from such assets are less than their carrying value. In that event, Continental Cement recognizes a loss equal to the amount by which the carrying value exceeds the fair value of the long-lived assets.

 

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Fair value is determined by primarily using a discounted cash flow methodology that requires considerable management judgment and long-term assumptions. Continental Cement’s estimate of net future cash flows is based on historical experience and assumptions of future trends, which may be different from actual results. There were no material long-lived asset impairments during the years ended December 31, 2012 or December 31, 2011 nor were there any changes to the useful lives of assets having a material impact on Continental Cement’s financial condition and results of operations.

New Accounting Standards

For a discussion of accounting standards recently adopted and the effect such accounting changes will have on Continental Cement’s results of operations, financial position or liquidity, see note 1 to the audited Continental Cement consolidated financial statements included elsewhere in this prospectus.

Quantitative and Qualitative Disclosures About Market Risk

Continental Cement is exposed to certain market risks arising from transactions that are entered into in the normal course of business. Continental Cement’s operations are highly dependent upon the interest rate-sensitive construction industry as well as the general economic environment. Consequently, these marketplaces could experience lower levels of economic activity in an environment of rising interest rates or escalating costs.

Continental Cement’s management has considered the current economic environment and its potential impact to Continental Cement’s business. Demand for aggregates products, particularly in the nonresidential and residential construction markets, could decline if companies and consumers are unable to obtain financing for construction projects or if the economic recession causes delays or cancellations to capital projects. Additionally, declining tax revenue and state budget deficits have negatively affected states’ abilities to finance infrastructure construction projects.

Pension and other postretirement benefit plans

Continental Cement sponsors two non-contributory defined benefit pension plans for hourly and salaried employees, as well as healthcare and life insurance benefits for certain eligible retired employees. As of January 1, 2012, the pension and postretirement plans have been frozen to new entrants. Continental Cement’s results of operations are affected by its net periodic benefit cost from these plans, which totaled $1.2 million in 2012. Assumptions that affect this expense include the discount rate and, for the pension plans only, the expected long-term rate of return on assets. Therefore, Continental Cement has interest rate risk associated with these factors. A one percentage-point increase or decrease in assumed health care cost trend rates would have affected the accumulated postretirement benefit obligations by $1.6 million or ($1.3) million, respectively, in 2012.

Commodity and energy price risk

Continental Cement is subject to commodity price risk with respect to price changes in energy, including fossil fuels natural gas and diesel for cement production activities.

Inflation risk

Overall inflation rates in recent years have not been a significant factor in Continental Cement’s revenue or earnings due to Continental Cement’s ability to recover increasing costs by obtaining higher prices for its products through sale price escalators in place for most public sector contracts. Inflation risk varies with the level of activity in the construction industry, the number, size and strength of competitors and the availability of products to supply a local market.

 

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BUSINESS

Overview

We are a leading, vertically-integrated, geographically-diverse heavy-side building materials company; we supply aggregates, cement and related downstream products such as ready mixed concrete, asphalt paving mix, concrete products and paving and related construction services to a variety of end-uses in the U.S. construction industry, including public infrastructure projects, as well as private residential and non-residential construction. We believe we are a top 15 supplier of aggregates, a top 20 supplier of cement, a top 10 producer of asphalt paving mix and a major producer of ready mixed concrete in the United States by volume. As of December 29, 2012, we had 1.7 billion tons and 0.5 billion tons of proven aggregates reserves serving our aggregates and cement businesses, respectively, and operated over 120 sites and plants. In the year ended December 29, 2012, we sold 16.4 million tons of aggregates, 1.0 million tons of cement, 4.6 million tons of asphalt paving mix and 1.1 million cubic yards of ready mixed concrete. For the year ended December 29, 2012, we generated revenue of $962.9 million.

We were formed in September 2008. Since July 2009, the Sponsors and certain of our officers, directors and employees have made $794.5 million of funding commitments to our indirect parent entity, Summit Materials Holdings L.P. We have grown rapidly as a result of our disciplined acquisition strategy, utilizing approximately $457.3 million of the $463.9 million of equity commitments funded to Parent by the Sponsors and certain other investors. Today, our nine operating companies make up our three distinct geographic regions that span 20 states and 23 metropolitan statistical areas. We believe each of our operating companies has a top three market share position in its local market area and an extensive operating history, averaging over 35 years. Our highly experienced management team, led by 30-year industry veteran CEO Tom Hill, has successfully enhanced the operations of acquired companies by focusing on scale advantages, cost efficiencies and pricing discipline to improve profitability and cash flow.

Our strategy is focused on developing a heavy-side, vertically integrated company with a strong aggregates base. We strive to be a leading supplier of all four major resource-based products—aggregates, cement, asphalt paving mix and ready mixed concrete—in the U.S. heavy-side building materials industry. We believe vertical integration across these major products strengthens our market positions and helps us achieve significant cost advantages. We believe a diversified mix of products also provides us with greater stability and insulates against local market fluctuations, competitive pricing dynamics and other individual market variances.

Our revenue is derived from multiple end-use markets, including public infrastructure construction as well as residential and non-residential construction. For the year ended December 29, 2012, approximately 62% of our revenues related to public infrastructure construction and the remaining 38% related to residential and non-residential construction. In general, our aggregates and asphalt paving mix and paving businesses are weighted towards public construction. Our cement and ready mixed concrete businesses serve both the public and private construction markets. Public construction includes spending by federal, state and local governments for roads, highways, bridges, airports and other public infrastructure construction projects. A significant portion of our construction revenues are from public construction projects, a historically more stable portion of state and federal budgets. Our acquisitions to date are primarily focused in states with constitutionally-protected transportation funding sources, which we believe serves to limit our exposure to state and local budgetary uncertainties. Private construction includes both new residential and non-residential construction and repair and remodel markets, which have been significantly impacted by the recent and current economic conditions. We believe exposure to various geographic markets affords us greater stability through economic cycles and positions us to capitalize on upside opportunities when recoveries in residential and non-residential construction occur.

Markets by Region

We currently operate across 20 states through our three regional platforms: Central, West and East. Each of our operating businesses has its own management team that, in turn, reports to a regional president who is

 

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responsible for overseeing business development opportunities and implementing best practices within the regional platform. Our first and largest platform is our Central region. Our most recent platform, the West region, was established in August 2010 with our acquisition of the Harper Contracting and Kilgore businesses in Utah. Company acquisitions are an important element of our strategy, as we seek to enhance value through increased scale and cost savings from vertical integration within local markets and through the regional management.

Central Region . The Central region platform encompasses our integrated aggregates, cement, asphalt paving mix, ready mixed concrete and other operations in Kansas, Missouri, Nebraska, Iowa and Illinois. Within the region, we control proven aggregates reserves serving our aggregates and cement businesses of approximately 1.1 billion tons and 0.5 billion tons, respectively, and total hard assets, which we define as the sum of our property, plant and equipment, net and inventories, with a balance sheet book value of $488.0 million as of December 29, 2012. During the year ended December 29, 2012, the Central region platform generated approximately 32% of our revenue. Approximately 52% of the Central region’s revenues were derived from public infrastructure spending, and the remaining 48% of its revenues were generated by residential and non-residential construction for the year ended December 29, 2012.

Our cement business in Missouri, Continental Cement, operates a highly efficient, technologically advanced, integrated manufacturing and distribution system strategically located near Hannibal, Missouri, 100 miles north of St. Louis along the Mississippi River. Continental Cement utilizes an on-site solid and liquid waste fuel processing facility, which can reduce our fuel costs at that facility by up to 50%. The Continental Cement plant is covered by HWC-MACT, rather than PC-MACT, due to its waste fuel processing capabilities. We believe the facility is well positioned to comply with any potential regulatory changes during the foreseeable future.

West Region . The West region platform encompasses our integrated aggregates, asphalt paving mix, ready mixed concrete, construction, and other operations in Texas, Utah, Colorado, Idaho and Wyoming. Within the region, we control proven aggregates reserves of approximately 0.2 billion tons and total hard assets with a balance sheet book value of $254.9 million as of December 29, 2012. During the year ended December 29, 2012, the West region platform generated approximately 50% of our revenue. Approximately 64% of its revenues were derived from public infrastructure spending, and the remaining 36% of its revenues were generated by residential and non-residential construction for the year ended December 29, 2012.

In August 2010, we acquired Kilgore and simultaneously acquired and merged assets from Harper Contracting (collectively referred to as the “Kilgore Companies”) in Salt Lake City, Utah to establish the cornerstone of our West region platform. We expanded Kilgore Companies with the acquisitions of Altaview Concrete in Salt Lake City, B&B in Bluffdale, Utah, EnerCrest in southwest Wyoming, and Triple C in southern Idaho. Subsequently, in December 2010, we extended the West platform to the Texas market with the acquisition of RK Hall, an aggregates and asphalt paving business primarily operating in northeast Texas as well as southern Arkansas and southern Oklahoma. We also expanded to Grand Junction, Colorado with our acquisitions of Grand Junction Pipe and Elam Construction. Capitalizing on the regional presence of RK Hall, we acquired Industrial Asphalt and Ramming Paving in August and October 2011, respectively, which expanded our presence into the attractive Austin, Texas market. These businesses complement each other with well-positioned reserves and integrated asphalt / paving operations.

East Region . The East region platform encompasses our integrated aggregates, asphalt paving mix, construction and other operations in Kentucky, Indiana, Ohio, Tennessee and Virginia. Within the region, we control proven aggregates reserves of approximately 0.4 billion tons as of December 29, 2012 and total hard assets with a balance sheet book value of $162.6 million as of December 29, 2012. During the year ended December 29, 2012, the East region platform generated approximately 18% of our revenue. Approximately 73% of the East region’s revenues were derived from public infrastructure spending, and the remaining 27% of its revenues were generated by residential and non-residential construction for the year ended December 29, 2012.

 

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The East region platform is anchored by the Hinkle Contracting business, one of our largest acquisitions to date, which we acquired in February 2010 and strengthened with bolt-ons of select aggregates and asphalt assets from Greer, an asset swap with Scotty’s Contracting & Stone LLC where we exchanged asphalt paving mix and construction assets for a total of eight owned and leased quarry sites in southern Kentucky, the buyout of our non-controlling partner in the Bourbon Limestone aggregates business and select aggregates and asphalt assets from Kay & Kay.

Acquisition History

The following table lists acquisitions we have completed since August 2009:

 

Company

  

Date of Acquisition

           Region        

Hamm (predecessor)

   August 25, 2009    Central

Hinkle Contracting

   February 1, 2010    East

Cornejo

   April 16, 2010    Central

Greer

   April 20, 2010    East

Continental Cement

   May 27, 2010    Central

Harshman

   June 15, 2010    Central

Scotty’s

   July 23, 2010    East

Harper Contracting

   August 2, 2010    West

Kilgore

   August 2, 2010    West

Con-Agg

   September 15, 2010    Central

Altaview Concrete

   September 15, 2010    West

EnerCrest

   September 28, 2010    West

RK Hall

   November 30, 2010    West

SCS

   November 30, 2010    West

Triple C

   January 14, 2011    West

Elam Construction

   March 31, 2011    West

Bourbon

   May 27, 2011    East

Fischer

   May 27, 2011    Central

B&B

   June 8, 2011    West

Grand Junction Pipe

   June 10, 2011    West

Industrial Asphalt

   August 2, 2011    West

Ramming Paving

   October 28, 2011    West

Norris

   February 29, 2012    Central

Kay & Kay

   October 5, 2012    East

Sandco

   November 30, 2012    West

Our End Markets

Public Sector Construction . Public sector construction includes spending by federal, state and local governments for highways, bridges, airports and other public infrastructure construction projects. Generally, public sector construction spending is more stable than private sector construction. We believe that public sector spending is less sensitive to interest rates and often is supported by multi-year federal and state legislation and programs. A significant portion of our revenue is from public construction projects. As a result, the supply of funding for public highway construction significantly affects our public sector construction business.

Historically, public sector funding has been underpinned by a series of six-year federal highway authorization bills. Federal funds are allocated to the states which are required to match a portion of the federal funds they receive. Federal highway spending uses funds largely from the Federal Highway Trust Fund which derives its revenue from taxes on diesel fuel, gasoline and other user fees. The dependability of federal funding allows the state departments of transportation to plan for their long term highway construction and maintenance needs.

 

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In July 2012, MAP-21 was enacted and took effect in October 2012. MAP-21 is a 27-month, approximately $105 billion transportation funding program that provides for $40.4 billion and $41.0 billion for highway infrastructure investments in fiscal years 2013 and 2014, respectively. The spending levels are consistent with the preceding federal transportation funding program. However, given the nation’s aging infrastructure and considering longstanding historical spending trends, we expect U.S. infrastructure investment growth to resume.

Non-Residential Construction . Non-residential construction encompasses all privately financed construction other than residential structures. Demand for nonresidential construction is driven by population and job growth. Job growth creates demand for projects such as hotels, office buildings, warehouses and factories. Population growth spurs demand for stores, shopping centers, schools and restaurants. The supply of non-residential construction projects is affected by interest rates and the availability of credit to finance these projects.

Residential Construction . Residential construction includes single family houses and multi-family units such as apartments and condominiums. Demand for residential construction is influenced by new household formation, employment prospects and mortgage interest rates. In recent years, foreclosures have resulted in an oversupply of available houses which has dampened the demand for new residential construction in many markets in the United States.

Our Competitive Strengths

Leading market positions . We believe each of our operating companies has a top three market share position in its local market area. We believe we are among the top 15 suppliers of aggregates, top 20 suppliers of cement, a top 10 supplier of asphalt paving mix, and a major ready mixed concrete supplier in the United States by volume. We focus on acquiring companies that have leading local market positions, which we seek to enhance by building scale with other local aggregates and downstream businesses. The heavy-side building products industry is primarily local in nature due to transportation costs from the high weight-to-value ratio of the products. Given this dynamic, we believe achieving local market scale provides a competitive advantage that drives growth and stability for our business. We believe that our ability to prudently acquire and rapidly integrate multiple businesses enables us to become market leaders in attractive regions.

Vertically-integrated business model . We generate revenue across a spectrum of related products and services. We internally supply the majority of the aggregates used in the asphalt paving mixes and ready mixed concrete that we produce and in the construction services that we perform for our customers. Our vertically-integrated business model enables us to operate as a single source provider of materials and construction capabilities, creating cost, convenience and reliability advantages for our customers, while at the same time creating significant cross-marketing opportunities among our interrelated businesses. We believe this significantly enhances the value of our company and improves the quality and consistency of services for our customers.

Significant product and geographic scale . Our nine operating companies operate across 20 states in the central, western and eastern United States. We have grown our revenues by 17% in the year ended December 29, 2012, as compared to the year ended December 31, 2011, which compounds 91% revenue growth in the year ended December 31, 2011, as compared to the year ended December 31, 2010, which brought substantial additional scale to our operations in terms of purchasing and leveraging largely fixed overhead expenses. A combination of increased scale and vertical integration present opportunities to improve profitability through cost savings. We have achieved this scale without any significant customer or geographic concentration and continue to demonstrate operating earnings stability as a function of our diversification across products and regions.

Attractive industry dynamics and structure . We operate in an industry that we believe has attractive fundamentals, characterized by high barriers to entry and a stable competitive environment in the majority of markets. Barriers to entry are created by scarcity of raw material resources, limited efficient distribution range, asset intensity of equipment, land required for quarry operations and a time-consuming and complex regulatory

 

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and permitting process. In addition, profits are relatively stable throughout the cycle as a result of favorable pricing dynamics, historically stable public infrastructure spending and a largely variable cost structure. U.S. aggregates pricing has increased in 70 of the last 80 years, with growth accelerating since 2002 as continuing resource scarcity in the industry has led companies to focus increasingly on improved pricing strategies. Pricing growth remained strong in 2012, despite volume declines in certain key end markets.

High quality assets and coverage . As a function of our disciplined acquisition strategy and high quality asset base, hard asset values constitute a significant portion of our enterprise value and currently exceed net debt (which we define as total indebtedness less cash) as of December 29, 2012. As of December 29, 2012, the balance sheet book value of our hard assets was $905.5 million (excluding $1.1 million at corporate). The majority of our hard asset value is derived from our property, plant and equipment together with the value of our approximately 1.7 billion tons and 0.5 billion tons of proven aggregates reserves serving our aggregates and cement businesses, respectively, as of December 29, 2012. Assuming production rates in future years are equal to those for the year ended December 29, 2012, we estimate that the useful life of the proven reserves for our construction aggregates business and our cement business is over 170 years and over 200 years, respectively. Our asset base includes the Continental Cement plant, a new dry process cement plant that was commissioned in 2008. We believe this plant contributes significantly to our asset value given its high replacement cost, large capacity, technologically advanced manufacturing capabilities, strategic position on the Mississippi River and favorable environmental performance versus older facilities within the industry that face upgrades to comply with stringent EPA standards coming into effect in the near-term. We believe our sizeable reserve base, paired with vertically-integrated, downstream products and services, enables us to better meet the needs of our end-use customers.

Strong operating market performance in challenging economic environment . We have demonstrated resilient financial performance despite challenging conditions in the broader economy over the last few years. This performance is largely due to our highly variable cost structure and exposure to more stable geographic markets and publicly-funded end-use segments. Many of our products, particularly aggregates and asphalt paving mix, have significant exposure to public road construction, which has demonstrated continued growth over the past 30 years, even during times of broader economic softness. In fact, through the prior three U.S. recessions (July 1990 through March 1991, March 2001 through November 2001 and December 2007 through June 2009), highway spending in real dollars grew 1.8% annually on average in years with a recession as compared to 1.5% annually on average in years without a recession. The majority of public road construction spending is funded at the state level through the states’ respective departments of transportation. The five key states in which we operate (Texas, Kansas, Kentucky, Missouri and Utah) have funds whose revenue sources are constitutionally protected and may only be used for transportation purposes. These dedicated, earmarked funding sources limit the impact current state deficits may have on public spending. As a result, our business exhibits significantly less volatility in profitability than witnessed in most other building product subsectors. We believe these business characteristics have helped mitigate the impact of the depressed economic environment on our profitability.

Experienced and proven leadership implementing acquisition strategy . Our senior management team has a proven track record of creating value. This team is led by Tom Hill, a 30-year industry veteran and former CEO of Oldcastle, Inc., CRH plc’s U.S. operations. In addition to Mr. Hill, our management team consists of a number of other former Oldcastle managers, including corporate development and finance executives and other heavy side industry operators. Our management team has a track record of executing and successfully integrating acquisitions in the sector. Mr. Hill demonstrated his ability to execute on a similar consolidation strategy while at Oldcastle Materials, where he led numerous acquisitions, taking the business from less than $0.3 billion to $7.4 billion in sales from 1992 to 2008. In executing Oldcastle’s consolidation strategy, Mr. Hill and his team completed 173 acquisitions worth approximately $6.3 billion in the aggregate and $36.0 million on average. From an operational standpoint, Mr. Hill was successful at managing Oldcastle’s rapid growth through the implementation of operational improvements, creation of a world-class safety program and development of a strong leadership team.

 

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Strong sponsor equity commitment . Since July 2009, the Sponsors, together with certain of our officers, directors and employees have made $794.5 million of funding commitments to our indirect parent company to strategically pursue consolidation within the heavy-side building materials industry in the United States. Since then, we have made 24 acquisitions, including bolt-ons, and our Sponsors, together with certain other investors in our parent, have invested approximately $463.9 million of equity capital, excluding rollover equity invested by sellers in certain of our acquisitions, with approximately $337.2 million of commitments from our parent remaining outstanding.

Our Business Strategy

Key elements of our business strategy include:

Drive profitable growth through strategic acquisitions . We were established to acquire and grow heavy-side building materials companies with the goal of becoming a top-five U.S. player within five years. Since inception, we have demonstrated significant progress toward achieving this goal. We continue to believe that the relative fragmentation of the industry subsectors in which we operate, coupled with recent economic softness, create an environment in which we acquire companies at attractive valuations and increase scale and diversity over time through both platform and bolt-on acquisitions. We believe that attractive purchase prices and high quality of assets with selective exposure to well-funded public spending provide additional downside protection. Acquisitions can also provide synergies that provide additional revenue opportunities by filling in market gaps and expanding to adjacent geographies. We believe that achieving further vertical integration and increased scale will lead to improved cost positions, benefitting our profitability and cash flow generation. Our acquisition strategy is substantially similar to the one successfully employed by CEO Tom Hill and his team, including 25 current Summit employees, at Oldcastle Materials, CRH plc’s U.S. operations. Over a 16-year period, Mr. Hill helped execute over 173 acquisitions and approximately $6.3 billion of invested capital to make Oldcastle the largest U.S. integrated heavy-side business. Over that period, Oldcastle Materials reported that it grew sales from less than $0.3 billion in 1992 to $7.4 billion in 2008, representing a compound annual growth rate of over 25%.

Enhance margins and free cash flow generation through implementation of operational improvements . Our demonstrated ability to improve operating margins represents a large source of value. Based on our prior acquisition experience in the heavy-side business, we believe margin improvement is achievable within 12 to 18 months of acquisition. These gains are accomplished through proven profit optimization plans, including implementing a systematic pricing strategy and thorough operations review, leveraging information technology and financial systems to control costs, managing working capital, and achieving scale-driven purchasing synergies, along with fixed overhead control and reduction. Our regional presidents, supported by our central operations, risk management and finance and information technology teams, drive the implementation of detailed and thorough profit optimization plans at each acquisition post close.

Leverage vertically-integrated and strategically located operations for growth . As a vertically-integrated supplier of heavy-side building materials in attractive markets, we believe we have a significant competitive advantage as we seek to grow our share in existing markets and enter new markets. The majority of raw materials used to produce our products and provide our services are internally supplied. We believe our vertically-integrated business model enables us to operate as a single source provider of materials and construction capabilities, creating cost, convenience and reliability advantages for our customers, while at the same time creating significant cross-marketing opportunities among our interrelated businesses.

Leverage our position as a preferred buyer of privately held companies in our industry . Our business model fosters entrepreneurship in local markets while reaping the benefits of best practices and economies of scale brought by the larger group. Business owners have found our model to be attractive and we believe potential sellers prefer us as an acquirer. We seek to avoid competitive auctions and have instead individually negotiated each of our acquisitions to date. The owners of the majority of the companies we have acquired have chosen to stay on with Summit Materials following the sale and have in many cases chosen to roll equity investments into our parent company as well.

 

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Capitalize on expected recovery in U.S. economy and construction markets . In July 2012, MAP-21 was enacted and took effect in October 2012. MAP-21 is a 27-month, approximately $105 billion transportation funding program that provides for $40.4 billion and $41.0 billion for highway infrastructure investments in fiscal years 2013 and 2014, respectively. The spending levels are consistent with the preceding federal transportation funding program. However, given the nation’s aging infrastructure and considering longstanding historical spending trends, we expect U.S. infrastructure investment growth to resume. We believe we are well-positioned to capitalize on any such increase in investment. In addition, we have sufficient exposure to residential and non-residential end-markets to participate in a potential recovery in these markets. Given the challenging current environment, we expect to leverage this exposure to realize significant upside in the medium term.

Our Industry

The U.S. heavy-side building materials industry is comprised of four primary sectors: (i) aggregates, (ii) cement, (iii) asphalt paving mix and (iv) ready mixed concrete, each of which is widely used in most forms of construction activity. Participants in these sectors typically range from small, privately-held companies focused on a single product to multinational corporations that offer a wide array of construction materials and services. Competition is constrained in part by the distance materials may be efficiently transported, resulting in largely local or regional operations.

Transportation infrastructure projects, driven by both state and federal funding programs, represent a significant share of the U.S. heavy-side building materials market. The current federal funding program, MAP-21, was enacted in July 2012 and took effect in October 2012. MAP-21 is a 27-month, approximately $105 billion transportation funding program that provides for $40.4 billion and $41.0 billion for highway infrastructure investments in fiscal years 2013 and 2014, respectively. In addition to federal funding, highway construction and maintenance funding is also available through state, county and local agencies. Our five largest states by revenue (Texas, Kansas, Kentucky, Missouri and Utah, which represented approximately 27%, 16%, 14%, 11% and 11% of our total revenue for the year ended December 29, 2012) each have funds whose revenue sources are constitutionally protected and may only be spent on transportation projects:

 

   

Texas’ 2012—2013 Department of Transportation budget is $19.8 billion, a $3.9 billion increase from the previous 2010-2011 biennium budget.

 

   

Kansas has a 10 year $8.2 billion highway bill that was passed in May 2010.

 

   

Kentucky has a two year $4.5 billion highway bill that was passed in April 2012.

 

   

Missouri has an estimated $700.0 million in annual construction funding committed to essential road and bridge programs.

 

   

Utah’s fiscal year 2012 transportation fund increased in 2012 to $1.1 billion.

Construction Materials

Aggregates

Aggregates are key material components used in the production of asphalt paving mixes and concrete for the public infrastructure, highway, commercial and residential construction markets and are also widely used for various applications and products, such as road and building foundations, railroad ballast, erosion control, filtration, roofing granules and in solutions for snow and ice control. Generally extracted from the earth using surface or underground mining methods, aggregates are produced from natural deposits of various materials such as limestone, sand and gravel, granite and trap rock. Once extracted, processed and graded, aggregates are supplied directly to their end use or incorporated for further processing into construction materials, such as cement, asphalt paving mix, and ready mixed concrete.

According to the March 2012 U.S. Geological Survey, approximately 1.14 billion tons of crushed stone with a value of approximately $11.3 billion was produced in the United States in 2011, down from approximately 1.15 billion tons in 2010. Sand and gravel production was approximately 795 million tons in 2011 valued at approximately

 

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$6.0 billion, up from 760 million tons in 2010. The U.S. aggregate industry is highly fragmented relative to other building product markets, with numerous participants operating in localized markets and the top six players controlling approximately 30% of the national market in 2011. The USGS reported that a total of 1,600 companies operating 3,900 quarries and 93 underground mines produced or sold crushed stone in 2011 in the United States.

Transportation cost is a major variable in determining aggregate pricing and marketing radius. The cost of transporting aggregate products from the plant to the market often equates to or exceeds the sale price of the product at the plant. As a result of the high transportation costs and the large quantities of bulk material that have to be shipped, finished products are typically marketed locally. High transportation costs are responsible for the wide dispersion of production sites. Where possible, construction material producers maintain operations adjacent to highly populated areas to reduce transportation costs and enhance margins.

We believe that the long-term growth of the market for aggregates is largely driven by growth in population, jobs and households, which impact transportation infrastructure spending and changes in population density. In the past few years, the recession in the United States has led to a decrease in overall private construction activity. Despite the increase in federal stimulus spending, public construction activity has also declined over this period, albeit less than private construction markets. In fact, through the prior three U.S. recessions (July 1990 through March 1991, March 2001 through November 2001 and December 2007 through June 2009), highway spending in real dollars grew 1.8% annually on average in years with a recession as compared to 1.5% annually on average in years without a recession. While short-term demand for aggregates fluctuates with economic cycles, the declines have historically been followed by strong recovery, with each peak establishing a new historical high.

A significant portion of annual demand for aggregates is derived from large public infrastructure and highway construction projects. Approximately 38,000 tons of aggregate are required to construct a one mile stretch of a typical four-lane interstate highway. Highways located in markets with significant seasonal temperature variances are particularly vulnerable to freeze-thaw conditions that exert excessive stress on pavement and leads to more rapid surface degradation. Surface maintenance repairs, as well as general highway construction, occur in the warmer months, resulting in a majority of aggregates production and sales in the eight months from April through November in these markets.

Cement

Portland cement, an industry term for the common cement in general use around the world, is the basic ingredient of concrete and is made from a combination of limestone, shale, clay, silica and iron ore. Together with water, cement creates the paste that binds the aggregates together when making concrete. Few construction projects can take place without utilizing Portland cement somewhere in the design, making it a key ingredient used in the nation’s construction industry. The majority of all cement shipments are sent to ready mixed concrete operators. The remainder are directed to manufacturers of concrete related products such as block and precast, oil well service companies, contractors and government entities.

Portland cement is made from common materials such as limestone, shale, clay, silica, and iron ore. The principle raw materials are a blend of 88% limestone, 6% shale, with the remaining raw materials being clay and iron ore. Generally, the limestone and shale are mined from quarries located on site with the production plant. These core ingredients are blended and crushed into a fine grind and then preheated and ultimately introduced into a kiln heated to about 2,700°F. Under this extreme heat, a chemical transformation occurs uniting the elements to form a new substance with new physical and chemical characteristics. This new substance is called clinker and it is formed into pieces about the size of marbles. The clinker is then cooled and later ground into a fine powder that then is classified as Portland cement.

Cement production is a capital-intensive business with variable costs dominated by raw materials and energy required to fuel the kiln. Building new plants is challenging given the extensive permitting that is required and significant costs (new plant construction costs in the United States are estimated at $250-300 per ton according to the PCA). Assuming construction costs of $275 per ton, a 1.25 million ton facility, such as the one Continental Cement operates, would cost approximately $343.8 million to construct.

 

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As reported by the PCA, consumption is down significantly from the industry peak of 141 million tons in 2005 to 79 million tons in 2011 because of the decline in U.S. construction sector activity. Domestic cement consumption has at times outpaced domestic production capacity with the shortfall being supplied with imports, primarily from China, Canada, Columbia, Mexico and South Korea. The PCA reports that cement imports have declined since their peak of 39 million tons in 2006 to 7 million tons in 2011, in a manner indicative of the industry’s general response to the current demand downturn. Despite the reduction in imports, capacity utilization declined from 95% in 2006 to 59% in 2011 according to the PCA. Continental Cement operated above the industry mean at 68% capacity utilization in 2011 as its markets did not suffer the pronounced demand declines seen in states like Florida, California and Arizona. Demand is seasonal in nature with nearly two-thirds of U.S. consumption occurring between May and October, coinciding with end-market construction activity.

Cement production in the United States is distributed among 101 production facilities located across 36 states. The EPA has new emission standards for Portland cement plants (“NESHAP”) that are due to come into effect in 2015. On December 20, 2012, the EPA signed the final NESHAP rule, which was less stringent than previous drafts. The PCA had estimated based on the draft rule that 18 plants could be forced to close due to the inability to meet NESHAP standards or because the compliance investment required may not be justified on a financial basis. These potential closures represent approximately 20 million tons of clinker capacity, or 20% of current capacity in the United States.

Continental Cement’s plant utilizes alternative fuel (hazardous and non-hazardous) as well as coal and petroleum coke and, as a result, is subject to HWC-MACT standards, rather than NESHAP. We expect HWC-MACT standards to generally conform to NESHAP, for which we are mostly in compliance, ahead of the effective date of the NESHAP standards. Any additional costs to comply with the NESHAP standards are not expected to be material.

Asphalt Paving Mix

Asphalt paving mix is the most common roadway material used today. It is a versatile and essential building material that has been used to surface 94% of the more than 2.0 million miles of paved roadways in the U.S.

Typically, asphalt paving mix is placed in three distinct layers to create a flexible pavement structure. These layers consist of a base course, an intermediate or binder course, and a surface or wearing course. These layers vary in thicknesses of three to six inches for base mix, two to four inches for intermediate mix and one to two inches for surface mix.

The components of asphalt paving mix by weight are approximately 95% aggregates and 5% asphalt cement, a petroleum based product that serves as the binder. The ingredients are then metered, mixed and heated to a temperature in excess of 300° F before being placed in a truck and delivered to the jobsite for final placement.

Asphalt pavement is generally 100% recyclable and reusable and is the most reused and recycled pavement material in the United States. Reclaimed asphalt pavement can be incorporated into new pavement at replacement rates in excess of 30% depending upon the mix and the application of the product.

The use of Warm Mix Asphalt (“WMA”) or “green” asphalt is gaining popularity. The immediate benefit to producing WMA is the reduction in energy consumption required by burning fuels to heat traditional hot mix asphalt (“HMA”) to temperatures in excess of 300°F at the production plant. These high production temperatures are needed to allow the asphalt binder to become viscous enough to completely coat the aggregate in the HMA, have good workability during laying and compaction, and durability during traffic exposure. WMA can reduce the temperature by 50 to 100°F, resulting in lower emissions, fumes and odors generated at the plant and the paving site.

 

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There are over 4,000 asphalt paving mix plants in the United States. According to the National Asphalt Paving Association, approximately 366 million tons of asphalt paving mix was produced in 2011 which was broadly in line with the estimated 360 million tons produced in 2010.

Ready Mixed Concrete

Ready mixed concrete is one of the most versatile and widely used materials in construction today. Its flexible recipe characteristics allow for an end product that can assume almost any color, shape, texture and strength to meet the many requirements of end users that range from bridges, foundations, skyscrapers, pavements, dams, houses, parking garages, water treatment facilities, airports, tunnels, power plants, hospitals and schools. The versatility of ready mixed concrete gives engineers significant flexibility when designing these projects.

There are five primary ingredients that constitute a basic ready mixed concrete:

 

   

cement;

 

   

coarse aggregate;

 

   

fine aggregate;

 

   

water; and

 

   

admixtures.

The water and cement are combined and a chemical reaction is produced called hydration. This paste or binder represents between 25 to 40% of the volume of the mix that coats each particle of aggregate and serves as the agent that binds the aggregates together. The aggregates represent 60 to 75% of the mix by volume, with a small portion of volume (4 to 8%) consisting of entrapped air that was generated by using air entraining admixtures. Once fully hydrated, the workable concrete will then harden and take on the shape of the form in which it was placed.

The quality of a concrete mix is generally determined by ratio, by weight of water to cement. Higher quality concrete is produced by lowering the water-cement ratio as much as possible without sacrificing the workability of the fresh concrete. Specialty admixtures such as high range water reducers can aid in achieving this condition without sacrificing quality.

Other materials commonly used in the production of ready mixed concrete include fly-ash, a waste by-product from coal burning power plants, silica fume, a waste by-product generated from the manufacture of silicon and ferro-silicon metals, and ground granulated blast furnace slag, a by-product of the iron and steel manufacturing process. All of these products have cemetitious properties that enhance the strength, durability and permeability of the concrete. These materials are available directly from the producer or via specialist distributors who intermediate between the source producers and the ready mix concrete user.

Given the high weight-to-value ratio, delivery of ready mixed concrete is typically limited to a one-hour haul from a production plant location and is further limited by a 90 minute window in which newly mixed concrete must be poured to maintain quality and performance. As a result of the transportation constraints, the ready mixed concrete market is highly localized, with an estimated 6,000 ready mixed concrete plants in the United States according to the NRMCA. According to the NRMCA, 266 million cubic yards of ready mixed concrete was produced in 2011, in line with the 258 million cubic yards produced in 2010 but 42% down from the industry peak of 458 million cubic yards in 2005.

Our Operations

We operate our construction materials and highway construction businesses through local operations and marketing teams, which work closely with our end customers to deliver the products and services that meet each

 

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customer’s specific needs for a project. We believe that this strong local presence gives us a competitive advantage by keeping our costs low and allowing us to obtain a unique understanding for the evolving needs of our customers.

We have construction materials operations in 18 states across the Central, West and East regions. Each region is vertically-integrated in the aggregates, asphalt paving mix, and paving and related construction services businesses. Our Central region also manufactures cement, produces ready mixed concrete, and operates municipal landfill. Our East region has liquid asphalt terminal operations and provides concrete paving services.

As a result of our vertically-integrated operations, our end products are generally sold downstream to contractors and shipped directly to the job site. Approximately 36% of our aggregates production is sold directly to outside customers with the remaining amount being further processed by us and sold as a downstream product.

Additionally, approximately 64% of our asphalt paving mix products are installed by our paving and related construction services businesses. We charge a market price and competitive margin at each stage of the production process in order to optimize profitability across our operations.

Production Value Chain

Customer

 

LOGO

Construction Materials

We are a leading provider of construction materials in the markets we serve across the Central, West and East regions. Our construction materials operations are comprised of aggregate production, including: crushed stone and construction sand and gravel; hot mix asphalt production; ready mixed concrete production; and the production of cement.

Our Aggregate Operations

Aggregate Products

We mine limestone, gravel, and other natural resources from 78 crushed stone quarries and 36 sand and gravel deposits throughout the United States. Aggregates are produced mainly from blasting hard rock from quarries and then crushing and screening it to various sizes to meet our customers’ needs. The production of aggregates also involves the extraction of sand and gravel, which requires less crushing, but still requires screening for different sizes. Aggregate production utilizes capital intensive heavy equipment which includes the use of loaders, large haul trucks, crushers, screens and other heavy equipment at quarries.

 

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Once extracted, the minerals are processed and/or crushed on site into crushed stone, concrete and masonry sand, specialized sand, pulverized lime or agricultural lime. The minerals are processed to meet customer specifications or to meet industry standard sizes. Crushed stone is used primarily in ready mixed concrete, asphalt paving mix, and the construction of road base for highways.

Transportation costs are a major variable in determining aggregate pricing and marketing radius. The cost of transporting aggregate products from the plant to the market often equates to or exceeds the sale price of the products at the plant. As a result of high transportation costs and the large quantities of bulk material that have to be shipped, finished products are typically marketed locally. High transportation costs are responsible for the wide dispersion of production sites. Where possible, construction material producers maintain operations adjacent to highly populated areas to reduce transportation costs and enhance margins.

However, more recently, rising land values combined with local environmental concerns are forcing production sites to move further away from the end-use locations. Our extensive network of quarries, plants and facilities, located throughout our three regions ensures that we have a nearby operation to meet the needs of customers in each of our markets.

Aggregate Markets

The shipping distance from each quarry and the proximity to competitors are key factors that determine the geographic market area for each quarry. Each quarry location is unique with regards to demand for each product, proximity to competition and truck availability.

Aggregate Reserves

Our current estimate of 1.7 billion tons of proven reserves of recoverable stone, and sand and gravel of suitable quality for economic extraction is based on drilling and studies by geologists and engineers, recognizing reasonable economic and operating restraints as to maximum depth of extraction and permit or other restrictions.

Reported proven reserves include only quantities that are owned in fee or under lease, and for which all required zoning and permitting have been obtained. Of the 1.7 billion tons of aggregate reserves, 1.4 billion, or 80%, are located on owned land and 0.3 billion are located on leased land.

Aggregate Sales and Marketing

Each of our aggregate operations is responsible for the sale and marketing of its aggregate products. Approximately 36% of our aggregates production is sold directly to outside customers and the remaining amount is further processed by Summit and sold as a downstream product. Even though aggregate is a commodity product, we optimize pricing depending on the site location, availability of particular product, customer type, project type and haul cost. We sell aggregate to internal downstream operations at market prices.

Aggregate Competition

The U.S. aggregate industry is highly fragmented with numerous participants operating in localized markets. The USGS reported that a total of 1,550 companies operating 4,000 quarries and 91 underground mines produced or sold crushed stone in 2011 in the United States. This fragmentation is a result of the cost of transporting aggregates, which typically limits producers to a market area within approximately 40 miles of their production facilities.

The primary national players include Vulcan Materials Company, Martin Marietta Materials, Inc., CRH plc and Heidelberg with a combined estimated market share of approximately 30%.

 

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Competitors by region include:

Central—Martin Marietta, CRH plc, Lafarge and various local suppliers.

West—CRH plc, Heidelberg Cement plc, Martin Marietta and various local suppliers.

East—CRH plc, Heidelberg Cement plc, Vulcan and various local suppliers.

We believe we have a strong competitive advantage in aggregates through our well located reserves, high quality in key markets and our logistic networks. We further share and implement best practices relating to strategy, sales and marketing, production, safety, and environmental and land management. As a result of our vertical integration and local market knowledge, we have a strong understanding of the needs of most of our aggregates customers. Finally, our companies have reputation for responsible environmental stewardship and land restoration, which assists us in obtaining new permits and new reserves more easily.

Our Cement Operations

Cement Products

We operate a highly efficient, technologically advanced integrated cement manufacturing and distribution system located near Hannibal, Missouri, 100 miles north of St. Louis along the Mississippi River. We also operate an on-site waste fuel processing facility, which can reduce fuel costs for the plant by up to 50%. Our cement plant is one of only 11 with hazardous waste fuel facilities permitted and operating out of 113 total cement plants in the United States. The recently completed cement plant upgrade, which effectively doubled cement capacity to 1.25 million tons per annum, positions us ahead of the majority of U.S. plants in complying with 2013 NESHAP pollution limits for cement plants as Continental Cement is covered by the EPA’s HWC-MACT regulations, rather than the PC-MACT regulations, due to its waste fuel processing capabilities.

Continental Cement’s plant utilizes alternative fuel (hazardous and non-hazardous) as well as coal and petroleum coke and, as a result, is subject to HWC-MACT standards, rather than NESHAP. We expect HWC-MACT standards to generally conform to NESHAP, for which we are mostly in compliance, ahead of the effective date of the NESHAP standards. Any additional costs to comply with the NESHAP standards are not expected to be material.

Cement Markets

Cement is a product that is costly to transport over land. Consequently, the radius within which a typical cement plant is competitive extends for no more than 150 miles for the most common types of cement. Continental Cement’s served markets are eastern Missouri, southeastern Iowa, and central/northwestern Illinois. Cement is distributed to local customers primarily by truck from our plant. We also transport cement by inland barges on the Mississippi River to our storage and distribution terminals in St. Louis, Missouri and Bettendorf, Iowa.

Cement Sales and Marketing

Continental Cement’s customers are ready mixed concrete and concrete product producers in eastern Missouri, central Illinois, and eastern Iowa. Cement is distributed to local customers primarily by truck from our cement plant in Hannibal, Missouri. We also transport cement by inland barges to our storage and distribution terminals in St. Louis, Missouri and Bettendorf, Iowa. Sales are made on the basis of competitive prices in each market and, as is customary in the industry, we do not typically enter into long-term sales contracts.

Cement Competition

Continental Cement’s largest competitors are Holcim, Lafarge, Buzzi Unicem and Eagle Materials. Competitive factors include price, reliability of deliveries, location, quality of cement and support services. With

 

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a new low-cost cement plant, on-site raw material aggregate supply, a network of cement terminals, and longstanding customer relationships, we believe we are well positioned to serve our customers vis-à-vis our competitors.

Our Asphalt Paving Mix Operations

Asphalt Paving Mix Products

Our asphalt paving mix products are produced by first heating carefully measured amounts of aggregates at high temperatures to remove the moisture from the materials in an asphalt paving mix plant. As the aggregates are heated, liquid asphalt is then introduced to coat the aggregates. Depending on the specifications of a particular mix, recycled asphalt may be added to the mix which lowers the production costs. The aggregates used for our production of these products are generally supplied from our quarries or sand and gravel plants. The ingredients are metered, mixed and brought up to a temperature in excess of 300°F before being placed in a truck and delivered to the jobsite for final placement.

We operate two asphalt paving mix plants in the Central region, 23 plants in the West region and 15 plants in the East region. 93% of our plants can utilize recycled asphalt pavement.

Asphalt Paving Mix Markets

Asphalt paving mix is generally applied at high temperatures and prolonged exposure to air causes the mix to lose temperature and harden. Therefore delivery is typically within close proximity to the asphalt paving mix plant. Each asphalt paving mix plant is unique in that local market demand, proximity to competition, transportation costs and supply of aggregates and liquid asphalt vary widely from market to market. Most of our hot mix asphalt operations use a combination of company-owned and hired haulers to deliver materials to job sites.

Asphalt Paving Mix Sales and Marketing

Approximately 64% of the asphalt paving mix we produce is installed by our own paving crews. To optimize profitability, we sell asphalt paving mix internally at market prices. The rest is sold on a per ton basis to road contractors for the construction of roads, driveways, and parking lots, as well as directly to state departments of transportation and local authorities.

Asphalt Paving Mix Competition

There are over 4,000 asphalt paving mix plants in the United States. According to the National Asphalt Paving Association, approximately 366 million tons of asphalt paving mix was produced in 2011.

Our asphalt paving mix operations compete with CRH plc and other local suppliers in each of our three regions.

Based on availability of internal aggregate supply, quality, operating efficiencies, and location advantages, we believe we are well-positioned vis-à-vis our competitors.

Our Ready Mixed Concrete Operations

Ready Mixed Concrete Products

We believe our Central and West regions are leaders in the supply of ready mixed concrete. Our Central region supplies concrete to the Wichita, Kansas and Columbia, Missouri markets and surrounding areas. The West region has ready mixed concrete operations in the Salt Lake Valley, Utah, Twin Falls, Idaho and Grand

 

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Junction, Colorado markets. We produce ready mixed concrete by blending aggregates, cement, chemical admixtures in various ratios and water at our concrete production plants and placing the resulting product in ready mixed concrete trucks where it is then delivered to our customers.

Our aggregates business serves as the primary source of the raw materials for our concrete production, functioning essentially as a supplier to our ready mixed concrete operations. Different types of concrete include Lightweight Concrete, High Performance Concrete, Self Compacting/Consolidating Concrete and Architectural Concrete and are used in a variety of activities ranging from building construction to highway paving.

We operate 11 ready mixed concrete plants in the Central region and approximately 113 concrete delivery trucks. We also operate 16 ready mixed concrete plants and 182 delivery trucks in the West region. We currently do not have any ready mixed concrete plants in the East region.

Ready Mixed Concrete Competition

There are approximately 6,000 ready mixed concrete plants in the United States, and in 2011 the United States ready mixed industry produced approximately 266 million cubic yards of ready mixed concrete according to the NRMCA.

Our ready mixed concrete operations compete with CRH plc in Utah and Colorado, Lafarge in Kansas and various other privately owned competitors in other parts of the Central and Western regions.

Competition among ready mixed concrete suppliers is generally based on product characteristics, delivery times, customer service and price. Product characteristics such as tensile strength, resistance to pressure, durability, set times, ease of placing, aesthetics, workability under various weather and construction conditions as well as environmental impact are the main criteria that our customers consider for selecting their product. Our quality assurance program continually produces results in excess of design strengths while economizing on material costs. Additionally, we believe our strategic network of locations and superior customer service gives us a competitive advantage relative to other producers.

Asphalt Paving and Related Construction Services

As part of our vertical integration strategy, we provide asphalt and concrete paving and related construction services to both the public and private sectors as either a prime or sub-contractor. These services complement our heavy construction materials business by providing a reliable downstream outlet through which to distribute these products, in addition to the normal external distribution channels.

Our asphalt paving and construction services businesses bid on both public and private construction projects in each of their respective local markets. We only provide construction services operations as a complement to our heavy construction materials operation, which we believe is a major competitive strength. Other factors impacting competitiveness in this business segment include price, estimating abilities, knowledge of local markets and conditions, project management, financial strength, reputation for quality, and the availability of machinery and equipment.

Our contracts with our customers are primarily “fixed unit price” or “fixed price.” Under fixed unit price contracts, we provide materials or services at fixed unit prices (for example, dollars per ton of asphalt placed). While the fixed unit price contract shifts the risk of estimating the quantity of units required for a particular project to the customer, any increase in our unit cost over the expected unit cost in the bid, whether due to inflation, inefficiency, errors in our estimates or other factors, is borne by us unless otherwise provided in the contract. Most of our contracts contain escalators for increases in liquid asphalt prices.

 

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Customers

Our business is not dependent on any single customer or a few customers, the loss of which would have a material adverse effect on the respective market or on us as a whole. No individual customer accounted for more than 10% of our consolidated 2012 revenue.

Seasonality

Use and consumption of our products fluctuate due to seasonality. Nearly all of the products used by us, and by our customers, in the public or private construction industry are used outdoors. Our highway operations and production and distribution facilities are also located outdoors. Therefore, season changes and other weather-related conditions, in particular extended rainy and cold weather in the spring and fall and major weather events, such as hurricanes, tropical storms and heavy snows, can adversely affect our business and operations through a decline in both the use of our products and demand for our services. In addition, the construction materials business production and shipment levels follow activity in the construction industry, which typically occurs in the spring, summer and fall. Warmer and drier weather during the second and third quarters of our fiscal year typically result in higher activity and revenue levels during those quarters. The first quarter of our fiscal year has typically lower levels of activity due to weather conditions.

Intellectual Property

We do not own or have a license or other rights under any patents that are material to any of our businesses.

Employment

We had approximately 3,100 employees of which approximately 80% are hourly workers and the remainder are full time salaried employees, as of December 29, 2012. Because of the seasonal nature of our industry, many of our hourly and certain of our full time employees are subject to seasonal layoffs. The scope of layoffs vary greatly from season to season as they are largely a function of the type of projects in process and the weather in the late fall through early spring.

Approximately 5% of our hourly employees are union members and approximately 0.1% of our full time salaried employees are union members. We believe we enjoy a satisfactory working relationship with our employees and their unions.

Properties

Our headquarters are located in a 7,000 square foot office space, which we lease in Washington, D.C., under a lease expiring on August 31, 2017.

We also operate 114 quarries and sand deposits, 40 asphalt paving mix plants, 27 fixed and portable ready mixed concrete plants.

 

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The following chart sets forth specifics of our production and distribution facilities:

 

Property

 

Owned / Leased

  Aggregates   Asphalt
Plant
  Ready
Mixed
Concrete
  Cement   Landfill   Other

Amity, AR

  Leased     X        

DeQueen, AR

  Leased     X        

Kirby, AR

  Leased   Sandstone          

Texarkana, AR

  Leased     X        

Clark, CO

  Leased   Sand and Gravel          

Craig, CO

  Owned   Sand and Gravel   X        

Craig, CO

  Leased   Sand and Gravel          

Craig, CO

  Leased   Sand and Gravel          

Delta, CO

  Owned/Leased   Sand and Gravel          

Delta, CO

  Leased   Sand and Gravel          

Durango, CO

  Leased   Sand and Gravel   X   X      

Eagle, CO

  Leased     X(1)        

Fruita, CO

  Leased   Sand and Gravel          

Grand Junction, CO

  Owned   Sand and Gravel          

Grand Junction, CO

  Owned   Sand and Gravel          

Grand Junction, CO

  Owned     X        

Grand Junction, CO

  Owned/Leased   Sand and Gravel     X      

Grand Junction, CO

  Leased   Sand and Gravel          

Grand Junction, CO

  Owned   Sand and Gravel          

Grand Junction, CO

  Owned       X      

Silverton, CO

  Leased       X      

Parachute, CO

  Leased   Sand and Gravel          

Whitewater, CO

  Owned   Sand and Gravel          

Whitewater, CO

  Leased   Sand and Gravel          

Whitewater, CO

  Owned/Leased   Sand and Gravel          

Whitewater, CO

  Leased   Sand and Gravel          

Woody Creek, CO

  Owned   Sand and Gravel   X        

Bettendorf, IA

  Owned         X    

Bliss, ID

  Leased   Sand and Gravel          

Burley, ID

  Owned   Sand and Gravel          

Jerome, ID

  Owned       X       X

Rupert, ID

  Owned       X      

Rupert, ID

  Leased   Sand and Gravel          

Rupert, ID

  Owned   Sand and Gravel          

Rupert, ID

  Owned   Sand and Gravel          

Twin Falls, ID

  Owned       X       X

Chapman, KS

  Leased   Limestone          

Chapman, KS

  Owned   Limestone          

Easton, KS

  Leased   Limestone          

El Dorado, KS

  Leased       X      

Eudora, KS

  Owned/Leased   Limestone   X        

Eureka, KS

  Owned       X      

Grantville, KS

  Leased   Limestone          

Herington, KS

  Leased   Limestone          

Highland, KS

  Leased   Limestone          

Holton, KS

  Leased   Limestone          

Howard, KS

  Owned       X      

Lawrence, KS

  Owned/Leased           X  

 

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Property

 

Owned / Leased

  Aggregates   Asphalt
Plant
  Ready
Mixed
Concrete
  Cement   Landfill   Other

Leavenworth, KS

  Leased   Limestone          

Linwood, KS

  Owned   Limestone          

Melvern, KS

  Leased   Limestone          

Meriden, KS

  Leased   Limestone          

Moline, KS

  Leased   Limestone          

Olsburg, KS

  Leased   Limestone          

Onaga, KS

  Leased   Limestone          

Osage City, KS

  Leased   Limestone          

Overbrook, KS

  Leased   Limestone          

Perry, KS

  Owned             X

Seneca, KS

  Leased   Limestone          

St. Mary’s, KS

  Leased   Limestone          

Tonganoxie, KS

  Leased   Limestone          

Topeka, KS

  Leased   Limestone   X        

Troy, KS

  Leased   Limestone          

Washington, KS

  Leased   Limestone          

White City, KS

  Leased   Limestone          

Wichita, KS

  Owned           X  

Wichita, KS

  Owned           X  

Wichita, KS

  Owned       X      

Wichita, KS

  Owned       X      

Wichita, KS

  Leased       X      

Wichita, KS

  Owned             X

Wichita, KS

  Owned   Sand and Gravel          

Wichita, KS

  Leased   Sand and Gravel          

Wichita, KS

  Owned             X

Wichita, KS

  Owned             X

Winchester, KS

  Leased   Limestone          

Woodbine, KS

  Leased   Limestone          

Perry, KS

  Owned             X

Avon, KY

  Leased             X

Beattyville, KY

  Leased   Limestone   X        

Bethelridge, KY

  Owned   Limestone   X        

Burnside, KY

  Owned/Leased   Limestone   X        

Carrollton, KY

  Leased     X        

Carrollton, KY

  Leased             X

Carrollton, KY

  Owned             X

Cave City, KY

  Owned   Limestone          

Cave City, KY

  Owned   Limestone          

Crestwood, KY

  Leased     X        

Flat Lick, KY

  Owned     X        

Georgetown, KY

  Leased   Limestone          

Georgetown, KY

  Leased             X

Glasgow, KY

  Leased             X

Glasgow, KY

  Leased   Limestone          

Glasgow, KY

  Leased   Limestone          

Horsecave, KY

  Owned/Leased   Limestone          

Jackson, KY

  Owned     X        

Knob Lick, KY

  Owned   Limestone           X

Lexington, KY

  Owned             X

 

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Property

 

Owned / Leased

  Aggregates   Asphalt
Plant
  Ready
Mixed
Concrete
  Cement   Landfill   Other

London, KY

  Leased     X        

Magnolia, KY

  Owned   Sand and Gravel          

Middlesboro, KY

  Owned     X        

Monticello, KY

  Owned   Limestone          

Morehead, KY

  Leased     X         X

Paris, KY

  Leased/Owned   Limestone   X         X

Pineville, KY

  Leased   Limestone          

Ravenna, KY

  Leased   Limestone   X        

Richmond, KY

  Owned             X

Salyersville, KY

  Leased             X

Scottsville, KY

  Leased   Limestone          

Somerset, KY

  Leased   Limestone          

Somerset, KY

  Owned/Leased   Limestone   X         X

Stanton, KY

  Owned/Leased   Limestone   X        

Tompkinsville, KY

  Owned   Limestone          

West Liberty, KY

  Owned   Limestone   X        

Amazonia, MO

  Owned   Limestone          

Barnard, MO

  Leased   Limestone          

Bethany, MO

  Leased   Limestone          

Blythedale, MO

  Leased   Limestone          

Cameron, MO

  Owned             X

Cowgil, MO

  Leased   Limestone          

Dawn, MO

  Leased   Limestone          

Edinburg, MO

  Leased   Limestone          

Gallatin, MO

  Leased   Limestone          

Huntsville, MO

  Owned/Leased   Limestone          

Maitland, MO

  Owned/Leased   Limestone          

Mercer, MO

  Leased   Limestone          

Oregon, MO

  Leased   Limestone          

Pattonsburg, MO

  Leased   Limestone          

Pattonsburg, MO

  Leased   Limestone          

Princeton, MO

  Leased   Limestone          

Ravenwood, MO

  Leased   Limestone          

Savannah, MO

  Owned/Leased   Limestone          

Stet, MO

  Leased   Limestone          

Trenton, MO

  Leased   Limestone          

Chesterfield, MO

  Leased         X    

Columbia, MO

  Leased   Limestone          

Columbia, MO

  Leased   Limestone          

Columbia, MO

  Owned   Limestone     X      

Columbia, MO

  Owned             X

Columbia, MO

  Owned       X      

Columbia, MO

  Owned       X      

Columbia, MO

  Owned       X      

Hannibal, MO

  Owned   Limestone       X     X—

Moberly, MO

  Owned       X      

Ownesville, MO

  Owned         X    

Sedalia, MO

  Leased   Limestone          

St. Louis, MO

  Owned         X    

Pawnee City, NE

  Leased   Limestone          

 

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Property

 

Owned / Leased

  Aggregates   Asphalt
Plant
  Ready
Mixed
Concrete
  Cement   Landfill   Other

Sawyer, OK

  Owned/Leased   Sandstone          

Stringtown, OK

  Leased     X        

Florence, SC

  Leased             X

Jellico, TN

  Leased   Limestone          

Amarillo, TX

  Leased     X        

Austin, TX

  Owned     X        

Florence, TX

  Leased     X        

Buda, TX

  Owned     X        

Buda, TX

  Leased   Limestone           X

Buda, TX

  Leased     X        

Bullard, TX

  Leased             X

Corsicana, TX

  Leased     X        

Denison, TX

  Owned     X        

Denison, TX

  Owned             X

Florence, TX

  Owned   Limestone           X

Greenville, TX

  Owned     X        

Luling, TX

  Leased   Sand           X

Greenville, TX

  Owned     X        

Holiday, TX

  Leased             X

Mount Pleasant, TX

  Leased     X        

Paris, TX

  Owned             X

Paris, TX

  Owned     X        

Paris, TX

  Leased             X

Royce City, TX

  Leased     X        

Sulphur Springs, TX

  Owned             X

Texarkana, TX

  Leased             X

Bluffdale, UT

  Owned   Sand and Gravel     X      

Magna, UT

  Leased             X

Midvale, UT

  Owned       X      

Mona, UT

  Owned   Sand and Gravel          

Parley’s Canyon, UT

  Leased   Limestone          

Salt Lake City, UT

  Owned       X      

Sandy, UT

  Owned             X

Saratoga Springs, UT

  Leased   Sand and Gravel          

Stockton, UT

  Owned   Sand and Gravel          

Tooele, UT

  Owned   Sand and Gravel          

Tooele, UT

  Leased   Sand and Gravel          

Tooele, UT

  Owned   Sand and Gravel          

West Haven, UT

  Owned       X      

West Jordan, UT

  Owned       X       X

West Valley City, UT

  Leased             X

West Valley City, UT

  Owned   Sand and Gravel   X   X      

Ewing, VA

  Leased   Limestone          

Big Piney, WY

  Leased       X      

Evanston, WY

  Owned       X      

Kemmerer, WY

  Leased       X      

 

(1) Two asphalt plants are located at this location.

 

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Legal Proceedings

We are a party from time to time to legal proceedings relating to our operations. Our ultimate legal and financial liability in respect to all legal proceeding in which we are involved at any given time cannot be estimated with any certainty. However, based upon examination of such matters and consultation with counsel, management currently believes that the ultimate outcome of these contingencies, net of liabilities already accrued on our consolidated balance sheet, will not have a material adverse effect on our consolidated financial position, although the resolution in any reporting period of one or more of these matters could have a significant impact on our results of operations and/or cash flows for that period.

Environmental and Government Regulation

Our operations are subject to federal, state and local laws and regulations relating to the environment and to health and safety, including noise, discharges to air and water, waste management including the management of hazardous waste used as a fuel substitute at our Hannibal, Missouri cement kiln, remediation of contaminated sites, mine reclamation, operation of landfills, dust control, zoning and permitting. While we believe our operations are in substantial compliance with applicable requirements, there can be no assurance that compliance costs will not be significant.

We regularly monitor and review our operations, procedures, and policies for compliance with existing environmental laws and regulations, changes in interpretations of existing laws and enforcement policies, new laws that are adopted, and new requirements that we anticipate will be adopted that could affect our operations. Our operations in Kansas include one municipal waste landfill and two construction and demolition debris landfills. Among other environmental, health and safety requirements, we are subject to obligations to appropriately close those landfills at the end of their useful lives and provide for appropriate post-closure care. Asset retirement obligations relating to these landfills are recorded in our consolidated financial statements.

We incur reclamation obligations as part of our mining activities. Reclamation methods and requirements can vary depending on the individual site and state regulations. Generally, we are required to grade the mined properties to a certain slope and seed the property to prevent erosion. We record a mining reclamation liability in our consolidated financial statements to reflect the estimated fair value of the cost to reclaim each property including active and closed sites.

Health and Safety

Our facilities and operations are subject to a variety of worker health and safety requirements, particularly those administered by the federal Mine Safety and Health Administration and the Occupational Safety and Health Administration, which are likely to become more strict in the future. Throughout our organization, we strive for a zero-incident safety culture, and compliance with safety regulations. However, failure to comply with these requirements can result in fines and penalties and claims for personal injury and property damage. These requirements may also result in increased operating and capital costs in the future. We believe we are in substantial compliance with such requirements, but we cannot guarantee that violations will not occur, which could result in additional costs.

At Summit Materials and our operating companies, worker safety and health matters are overseen by our corporate Risk Management and Safety department as well as company level safety managers. We provide leadership and support, comprehensive training, and the other tools to accomplish health and safety goals, reduce risk, eliminate hazards, and ultimately make our work places safer.

We believe that the continuous support and leadership of our management team, along with the commitment and desire of all our employees to eliminate injuries and other incidents, will aid our journey towards our goal of zero incidents.

 

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Insurance

Our insurance program is structured using multiple “A” rated insurance carriers, and a variety of deductible amounts. In particular, our workers compensation and auto liability policies are subject to a $150,000 per occurrence deductible, and the general liability policy has a $100,000 deductible. Losses within these deductibles are accrued for using projections based on past loss history.

We also purchase $25.0 million in umbrella insurance limits. Other policies have smaller deductibles and include property, contractors equipment, contractors pollution and professional, directors and officers, employment practices liability and fiduciary and crime. We also have a separate marine insurance policy for our Continental Cement business.

 

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MANAGEMENT

Composition

The following table sets forth, as of March 1, 2013, certain information regarding the directors and executive officers of Summit Materials who are responsible for overseeing the management of our business, as well as certain information regarding the members of the board of directors of the general partner of Parent.

 

Name

   Age   

Position

Thomas Hill

   57    President and Chief Executive Officer; Chairman of the Board of Directors

John Murphy

   62    Interim Chief Financial Officer; Director

Douglas Rauh

   52    Chief Operating Officer

Damian Murphy

   43    Regional President—Central Region

Shane Evans

   42    Regional President—West Region

Michael Brady

   45    Executive Vice President

Howard Lance

   57    Director; Non-Executive Chairman of the Board of Directors

Neil Simpkins

   46    Director

Ted Gardner

   55    Director

Julia Kahr

   34    Director

Thomas Hill is the founder of the Company and has been Chief Executive Officer since the Company’s inception in September 2008. He was appointed Chairman of the Board of Directors of Parent in August 2009. From 2006 to 2008, he was the Chief Executive Officer of Oldcastle, Inc., the North American arm of CRH plc, one of the world’s leading building materials companies. Mr. Hill served on the CRH plc Board of Directors from 2002 to 2008 and, from 1992 to 2006, ran the Materials division of Oldcastle. Mr. Hill served as Chairman of the American Road and Transportation Builders Association (“ARTBA”) from 2002 to 2004, during congressional consideration of the multi-year transportation bill “SAFETEA-LU”. Mr. Hill has been Treasurer of both the National Asphalt Pavement Association and the National Stone Association, and he remains active with ARTBA’s Executive Committee. Mr. Hill received a B.A. in Economics and History from Duke University and an M.B.A. from Trinity College in Dublin, Ireland.

John Murphy was elected as a director of Parent and Chairman of the Audit Committee in February 2012. Effective December 18, 2012, Mr. Murphy was appointed Interim Chief Financial Officer. He was Senior Vice President and Chief Financial Officer of Smurfit-Stone Container Corporation from 2009 to 2010 and served in various senior management roles from 1998 to 2008, including Chief Financial Officer and Chief Operating Officer and as President and Chief Executive Officer of Accuride Corporation. Accuride Corporation filed for Chapter 11 bankruptcy protection in October 2009, and emerged in 2010. Since 2003, Mr. Murphy has served on the Board of Directors, the Governance Committee and as Chairman of the Audit Committee of O’Reilly Automotive, Inc. He has also served as a director and Audit Committee Chairman of DJ Orthopedics since January 2012. Mr. Murphy was elected as a director and Audit Committee member of Graham Packaging in February 2011. Graham Packaging was subsequently sold in September 2011.

Douglas Rauh joined the Company as the Regional President of the East Region in January 2012 with over 29 years of experience in the construction materials industry. Effective March 1, 2013, Mr. Rauh, became the Company’s Chief Operating Officer. Mr. Rauh started his career working for his family’s business, Northern Ohio Paving Company (“NOPCO”). He had roles of increasing responsibility from 1983 to 2000, concluding as Vice President. In April 2000, NOPCO was acquired by Oldcastle. Upon acquisition, NOPCO merged with The Shelly Co. (“Shelly”), which was also acquired by Oldcastle in early 2000. From 2000 through 2006, Mr. Rauh was the Vice President/General Manager of the Northeast Division of Shelly. During this period, several companies were acquired which tripled the division’s revenue. In 2007, Mr. Rauh was named Senior Vice President responsible for the Northeast and Northwest Divisions of Shelly. In 2008, Mr. Rauh was also given responsibility for Shelly’s ready mix concrete business in Northwest Ohio. Additionally, Mr. Rauh became responsible for all of Shelly’s hot mix asphalt plants. In 2009, Mr. Rauh was named the President and CEO of

 

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Shelly. During Mr. Rauh’s tenure with Shelly, he was an integral part of the team that completed over thirty acquisitions. He attended The Ohio State University and graduated in 1983 with a Bachelor of Science degree in Business Administration.

Damian Murphy joined the Company as Regional President of the Central Region in August 2009 with over 20 years of experience in the construction materials and mining industries, working with both public and privately held companies. Prior to joining the Company, Mr. Murphy served as Regional President of Oldcastle starting in 2007, Mr. Murphy also worked in the Rocky Mountain region as a Vice President, responsible for aggregates and hot mix asphalt production and sales. Before heading to Colorado, Mr. Murphy worked in the mid-Atlantic for a top 10 privately held aggregate supplier. He began his career in the mining industry in Europe. Mr. Murphy holds a Bachelor of Engineering (“B.E.”) degree with a concentration in Minerals Engineering from the Camborne School of Mines/ Exeter University in the United Kingdom.

Shane Evans joined the Company as Regional President of the West Region in August 2010 with 22 years of experience in the construction materials industry. He started his career working in his family’s construction and materials business where he held various operational and executive positions. Prior to joining the Company, Mr. Evans was part of Oldcastle Materials where he worked for 12 years, most recently as a Division President. Mr. Evans has a Bachelor of Science degree from Montana State University.

Michael Brady joined the Company in April 2009 as Executive Vice President. Before joining the Company, Mr. Brady was a Senior Vice President at Oldcastle Materials with overall responsibility for acquisitions and business development, having joined the company in 2000. Prior to that, Mr. Brady worked in several operational and general management positions in the paper and packaging industry in Ireland, the United Kingdom and Asia Pacific with the Jefferson Smurfit Group, plc (now Smurfit Kappa Group plc). Mr. Brady has a B.E. (Electrical) and a Master of Engineering and Science. (Microelectronics) from University College, Cork in Ireland. He earned his M.B.A. degree from INSEAD in Fontainebleau, France.

Howard Lance began to serve on the Board of Parent starting in October 2012. However, he was formally elected as a director of Parent and Non-Executive Chairman of the Board of Directors in February 2013. He was Chairman of the Board of Directors, President and Chief Executive Officer of Harris Corporation through 2011. Mr. Lance was appointed president and Chief Executive Officer of Harris Corporation and elected to its Board of Directors in January 2003. He was elected chairman of the Board of Directors in June 2003. Before joining Harris Corporation, Mr. Lance was president of NCR Corporation and Chief Operating Officer of its Retail and Financial Group. Previously, he spent 17 years with Emerson Electric Co., where he held senior management positions including Executive Vice President of its Electronics and Telecommunications segment, Chief Executive Officer and director of its Astec electronics subsidiary in Hong Kong, Group Vice President of its Climate Technologies segment and President of its Copeland Refrigeration division.

Neil Simpkins was elected as a director of Parent in August 2009. He is a Senior Managing Director of Blackstone in the Private Equity Group and is based in New York. He currently has global responsibility for portfolio management activities and investments in the healthcare services and industrial sectors. Since joining Blackstone in 1998, Mr. Simpkins has led the acquisitions of TRW Automotive, Vanguard Health Systems, Team Health, LLC, Apria Healthcare Group, Summit Materials and Emdeon, Inc. Before joining Blackstone, Mr. Simpkins was a Principal at Bain Capital. While at Bain Capital, Mr. Simpkins was involved in the execution of investments in the consumer products, industrial, healthcare and information industries. Prior to joining Bain Capital, Mr. Simpkins was a consultant at Bain & Company in the Asia Pacific region and in London. Mr. Simpkins graduated with honors from Oxford University and received an M.B.A. from Harvard Business School. He currently serves as Lead Director of TRW Automotive and Vanguard Health Systems and as a Director of Team Health, LLC, Apria Healthcare Group and Emdeon, Inc.

Ted Gardner was elected as a director of Parent in August 2009. He is a Managing Partner of Silverhawk. Prior to co-founding Silverhawk in 2005, Mr. Gardner was a Managing Partner of Wachovia Capital Partners

 

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(formerly, First Union Capital Partners) from 1989 until 2002. He was a director and Chairman of the Compensation Committee of Kinder Morgan, Inc. from 1999 to 2007 and was a director and the Chairman of Audit Committee of Encore Acquisition Company from 2001 to 2010. He is currently a director of Kinder Morgan Energy Partners and Spartan Energy Partners. Mr. Gardner received a B.A. degree in Economics from Duke University and a J.D. and M.B.A. from the University of Virginia.

Julia Kahr was elected as a director of Parent in August 2009. She is a Managing Director in Blackstone’s Corporate Private Equity group. Since joining Blackstone in 2004, she has been involved in the execution of Blackstone’s investments in SunGard, Encore Medical, DJ Orthopedics and Summit Materials. Before joining Blackstone, she was a Project Leader at the Boston Consulting Group, where she worked with companies in a variety of industries, including health care, financial services, media and entertainment and consumer goods. She is also the sole author of Working Knowledge, a book published by Simon & Schuster in 1998. She currently serves on the Board of Directors of DJ Orthopedics and is also a member of the Board of Directors of Episcopal Social Services. Ms. Kahr received a B.A. in Classical Civilization from Yale University where she graduated summa cum laude . She received an M.B.A. from Harvard Business School.

Corporate Governance Matters

Background and Experience of Directors

When considering whether directors and nominees have the experiences, qualifications, attributes or skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of our business and structure, the Board focused on, among other things, each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth above. We believe that our Parent’s directors provide an appropriate mix of experience and skills relevant to the size and nature of our business. The members of the Board considered, among other things, the following important characteristics which make each director a valuable member of the Board:

 

   

Mr. Hill’s extensive knowledge of our industry and significant experience in leading companies.

 

   

Mr. Murphy’s extensive financial knowledge, including from his service as Chief Financial Officer of Smurfit-Stone Container Corporation and Accuride Corporation.

 

   

Mr. Lance’s significant management and operational experience from his service in various senior management roles, including as President and Chief Executive Officer of Harris Corporation and President of NCR Corporation.

 

   

Mr. Simpkins’s significant financial expertise and business experience, including as a Senior Managing Director in the Private Equity Group at Blackstone and Principal at Bain Capital.

 

   

Mr. Gardner’s extensive business and leadership experience, including as a Managing Partner of Silverhawk and Managing Partner of Wachovia Capital Partners (formerly, First Union Capital Partners).

 

   

Ms. Kahr’s extensive knowledge of a variety of different industries and her significant financial and investment experience from her involvement in Blackstone, including as Managing Director.

Independence of Directors

We are not a listed issuer whose securities are listed on a national securities exchange or in an inter-dealer quotation system which has requirements that a majority of the board of directors be independent. However, if we were a listed issuer whose securities were traded on the New York Stock Exchange and subject to such requirements, we would be entitled to rely on the controlled company exception contained in Section 303A of the NYSE Listed Company Manual for exception from the independence requirements related to the majority of our Board of Directors. Pursuant to Section 303A of the NYSE Listed Company Manual, a company of which more

 

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than 50% of the voting power is held by an individual, a group of another company is exempt from the requirements that its board of directors consist of a majority of independent directors. At December 29, 2012, Blackstone beneficially owns greater than 50% of the voting power of the Company which would qualify the Company as a controlled company eligible for exemption under the rule.

Board Committees

The board of directors of the general partner of Parent (the “Board”) currently consists of six directors. The Board has determined that Mr. Murphy, Board member and Audit Committee Chairman and our Interim Chief Financial Officer since December 18, 2012, qualifies as an “audit committee financial expert” as defined in the federal securities laws and regulations. In light of Mr. Murphy’s role as Interim Chief Financial Officer, he is not considered “independent.”

Audit Committee

The audit committee assists our board of directors with its oversight of the quality and integrity of our accounting, auditing and reporting practices. Pursuant to its charter, the audit committee makes recommendations to our board of directors for the appointment, compensation and retention of the independent auditor. The audit committee’s primary responsibilities include the following:

 

   

Reviewing and discussing our consolidated financial statements and management’s discussion and analysis of financial condition and results of operations disclosure with management and the independent registered public accountants;

 

   

Reviewing and discussing our earnings releases and any financial information or earnings guidance given, if any, to investors, creditors, financial analysts and credit rating agencies; and

 

   

Reviewing and discussing the Company’s risk assessment and risk management policies.

Code of Conduct

Summit Materials’ Code of Conduct applies to all employees, including its board of directors, chief executive officer and chief financial officer. The Code of Conduct sets forth the Company’s conflict of interest policy, records retention policy, insider trading policy and policies for protection of Summit Material’s property, business opportunities and proprietary information. Summit Materials’ Code of Conduct is available free of charge on its website at summit-materials.com under the tab “Investor Relations.” Summit Materials intends to post on its website any amendments to, or waivers from, the Code of Conduct applicable to senior financial executives.

 

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EXECUTIVE AND DIRECTOR COMPENSATION

Executive Compensation

Summary Compensation Table

The following table sets forth all compensation paid to our named executive officers for the year ended December 29, 2012, and their respective titles at December 29, 2012.

 

Name and Principal Position

   Salary
($)
     Bonus
($)(1)
     Stock
Awards
($)(2)
     All Other
Compensation
($)(3)
     Total
($)
 

Thomas Hill

     510,000         267,750         —           25,594         803,344   

Chief Executive Officer

              

Douglas Rauh

     450,000         550,000         838,853         468,548         2,307,401   

Regional President—East Region(4)

              

Shane Evans

     357,000         32,130         —           31,854         420,984   

Regional President—West Region

              

Glenn Culpepper(5)

     446,505         —           —           31,854         478,359   

Former Chief Financial Officer

              

 

(1) Reflects the cash bonuses paid to the named executive officers in 2013 in respect of their services during 2012. The amounts of the bonus payments were determined by the Board of Directors in its discretion. For more information, see “—Bonus and Non-Equity Incentive Plan Compensation.” The amount for Mr. Rauh includes a starting bonus of $400,000 paid in a lump sum and a $150,000 discretionary bonus. For more details, see “—Employment Agreements—Douglas Rauh.”
(2) The amount reported in the Stock Awards column reflects the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board ASC Topic 718. The assumptions applied in determining the fair value of the stock awards are discussed in Note 19, Employee Long-Term Incentive Plan, to our December 29, 2012 audited consolidated financial statements included elsewhere in this prospectus. This amount reflects our calculation of the value of the awards at the grant date and do not necessarily correspond to the actual value that may ultimately be recognized by the named executive officer. A portion of the shares granted in 2012 vest under certain performance conditions, which are not currently deemed probable of occurring, and, therefore, have not been included in the table above. The unrecognized value of these awards assuming the highest level of performance conditions would be achieved was $176,883 for Mr. Rauh.
(3) All Other Compensation includes the following items: (a) amounts contributed by Summit Materials under the Summit Materials, LLC Retirement Plan, (b) payments for term life insurance, (c) payments for health insurance, (d) car allowances and (e) relocation costs. Amounts contributed to the Summit Materials, LLC Retirement Plan are matching contributions up to 4% of eligible compensation subject to IRS limits and totaled $9,800 for each of Mr. Hill, Mr. Rauh, Mr. Evans and Mr. Culpepper. Matching contributions are immediately vested. For more information, see “—Summit Materials, LLC Retirement Plan”. Payments for term life insurance were as follows: Mr. Hill—$6,719; Mr. Rauh—$979; Mr. Evans—$979 and Mr. Culpepper—$979. Payments for health insurance were $9,075 for each named executive officer. Payments made by Summit Materials for car allowances were as follows: Mr. Rauh—$20,844; Mr. Evans—$12,000 and Mr. Culpepper—$12,000. Payments made by Summit Materials associated with Mr. Rauh’s relocation were $427,850. For more details about the payments made to Mr. Rauh, see “—Employment Agreements—Douglas Rauh.”
(4) Effective March 1, 2013, Mr. Rauh has become our Chief Operating Officer.
(5) Mr. Culpepper resigned effective December 19, 2012.

 

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Employment Agreements

Thomas Hill

Parent entered into an employment agreement with Thomas Hill, dated as of July 30, 2009, whereby Mr. Hill serves as the Chief Executive Officer of the Parent and the Chief Executive Officer of the general partner of Parent (“Parent GP”). Mr. Hill also will continue to serve as a member of the Board so long as he serves in the foregoing capacities. Mr. Hill’s employment agreement had an initial term equal to three years commencing on July 30, 2009, which is automatically extended for additional one-year periods, unless Parent or Mr. Hill provides the other party 60 days prior written notice before the next extension date that the employment term will not be so extended. However, if Parent is dissolved pursuant to the terms of its exempted limited partnership agreement (a “Dissolution”), then the employment term shall automatically and immediately be terminated. On July 30, 2012, Mr. Hill’s employment agreement was automatically extended for an additional year.

Pursuant to the terms of his employment agreement, Mr. Hill’s annual base salary is $500,000, which amount is reviewed annually by the Board, and may be increased (but not decreased). Mr. Hill is also eligible to earn an annual bonus of up to 100% of his base salary based upon the achievement of performance targets established by the Board within the first three months of each fiscal year during the employment term. The Board, in its sole discretion, may appropriately adjust such performance targets in any fiscal year to reflect any merger, acquisition or divestiture affected by the Parent during such fiscal year. Mr. Hill is also entitled to participate in the Parent’s employee benefit plans, as in effect from time to time, on the same basis as those benefits are generally made available to other senior executives of Parent.

If Mr. Hill’s employment is terminated (i) by Parent with Cause or (ii) by him other than as a result of a “Constructive Termination,” he will be entitled to certain accrued amounts. If Mr. Hill’s employment is terminated as a result of his death or “Disability” (as defined in the employment agreement), he will be entitled to, in addition to certain accrued amounts, a pro rata portion of the annual bonus, if any, that Mr. Hill would have been entitled to receive, payable when such annual bonus would have otherwise been payable to him had his employment not been terminated. If Mr. Hill’s employment is terminated (i) by Parent without Cause or (ii) by him as a result of a “Constructive Termination” (as defined in the employment agreement), subject to his continued compliance with certain restrictive covenants and his non-revocation of a general release of claims, he will be entitled to receive, in addition to certain accrued amounts, (i) continued payment of his base salary in accordance with the Parent’s normal payroll practices, as in effect on the date of termination of his employment, until 18 months after the date of such termination and (ii) an amount equal to one and one-half times his annual bonus in respect of the fiscal year immediately preceding the applicable year of his termination of employment; provided that the aggregate amounts shall be reduced by the present value of any other cash severance or termination benefits payable to him under any other plans, programs or arrangements of the Parent or its affiliates.

In the event (i) Mr. Hill elects not to extend the employment term or (ii) of a “Dissolution” with a “Negative Return” (as such terms are defined in the employment agreement), unless Mr. Hill’s employment is earlier terminated, Mr. Hill’s termination of employment shall be deemed to occur on the close of business on the earlier of the effective date of “Dissolution” or the day immediately preceding the next scheduled extension date, and Mr. Hill shall be entitled to receive certain accrued amounts. In the event (i) that Parent elects not to extend the employment term or (ii) of a “Dissolution” with a “Positive Return” (as such terms are defined in his employment agreement), Mr. Hill shall be treated as terminated without Cause effective as of the close of business on the day immediately preceding the next scheduled extension date or the effective date of the “Dissolution,” and shall be entitled to receive the amounts and benefits described above.

Pursuant to the terms of his employment agreement, Mr. Hill is subject to the following covenants: (i) a covenant not to disclose confidential information while employed and at all times thereafter; (ii) a covenant not

 

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to compete for a period of 18 months following his termination of employment for any reason; and (iii) a covenant not to solicit employees or customers for a period of 18 months following his termination of employment for any reason.

Douglas Rauh

Parent entered into an employment agreement with Douglas Rauh, dated as of December 29, 2011, whereby Mr. Rauh serves as our Regional President, Eastern Division. Mr. Rauh’s employment agreement has an initial term equal to three years commencing on January 1, 2012 which will be automatically extended for additional one-year periods, unless Parent or Mr. Rauh provides the other party 60 days prior written notice before the next extension date that the employment term will not be so extended. The employment term will automatically and immediately be terminated upon a “Dissolution” (as defined in the employment agreement).

Pursuant to the terms of his employment agreement, Mr. Rauh’s annual base salary is $450,000, which amount is reviewed annually by the Board, and may be increased (but not decreased). Mr. Rauh is also eligible to earn an annual bonus of up to 60% of his base salary based upon the achievement of performance targets established by the Board within the first three months of each fiscal year during the employment term, with a potential bonus of up to 90% of his base salary for extraordinary performance. The Board, in its sole discretion, may appropriately adjust such performance targets in any fiscal year to reflect any merger, acquisition or divestiture affected by the Parent during such fiscal year. Notwithstanding the foregoing, Mr. Rauh’s minimum annual bonus for 2012 (payable in 2013) was $150,000. In addition, after Mr. Rauh commenced his employment, Parent paid Mr. Rauh a starting bonus of $400,000 in a lump sum. Mr. Rauh is entitled to a car allowance in the amount of $1,000 per month for car expenses, in addition to reimbursement from the Parent for Mr. Rauh’s actual expenditures for gasoline, upon submission of appropriate documentation.

The employment agreement provides that Parent reimburse Mr. Rauh for any loss suffered by Mr. Rauh in connection with the sale of his residence in Ohio, the actual out of pocket loss incurred by Mr. Rauh on the sale of his residence in Ohio, a gross-up of all income taxes imposed on Mr. Rauh in connection with the reimbursement payment, the cost of up to three visits by Mr. Rauh and his family to the Washington, D.C. area in connection with the search for a new residence, three months of the reasonable rental of a house in the Washington, D.C. area, and reasonable moving expenses incurred by Mr. Rauh in connection with his relocation. These obligations were satisfied by Parent in 2012 and are included in the “All Other Compensation” column of the Summary Compensation Table. In addition, the agreement provides that Parent reimburse Mr. Rauh for his out of pocket costs for payment of COBRA continuation premiums in connection with health care insurance covering Mr. Rauh and his family, until such time as Mr. Rauh and his family obtain coverage under the Parent’s health care insurance plan. These obligations were satisfied by Parent in 2012 and are included in the “All Other Compensation” column of the Summary Compensation Table. Mr. Rauh is also entitled to participate in the Parent’s employee benefit plans as in effect from time to time, on the same basis as those benefits are generally made available to other senior executives of Parent.

If Mr. Rauh’s employment is terminated (i) by Parent with “Cause” (as defined in the employment agreement) or (ii) by him other than as a result of a “Constructive Termination” (as defined in the employment agreement), he will be entitled to certain accrued amounts, and if Mr. Rauh’s employment is terminated as a result of his death or “Disability” (as defined in his employment agreement), he will be entitled to (a) certain accrued amounts, (b) a pro rata portion of the annual bonus, if any, that Mr. Rauh would have been entitled to receive, payable when such annual bonus would have otherwise been payable to him had his employment not terminated, and (c) the costs of COBRA health continuation coverage for 18 months (or, if shorter, until COBRA coverage ends under Parent’s group health plan). If Mr. Rauh’s employment is terminated (i) by Parent without Cause or (ii) by him as a result of a “Constructive Termination” (as defined in the employment agreement), subject to his continued compliance with certain restrictive covenants and his non-revocation of a general release of claims, he will be entitled to receive, in addition to certain accrued amounts, (i) continued payment of his base salary in accordance with the Parent’s normal payroll practices, as in effect on the date of termination of his

 

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employment, until 24 months after the date of such termination (or 12 months if the termination occurs on or after January 1, 2014) (the “Severance Period”), (ii) an amount equal to one and two times (or only one time if the termination occurs on or after January 1, 2014) Mr. Rauh’s annual bonus in respect of the fiscal year immediately preceding the applicable year of Mr. Rauh’s termination of employment, payable in equal monthly installments for 18 months after the date of such termination, and (iii) the costs of COBRA health continuation coverage for the lesser of the Severance Period or 18 months (or, if shorter, until COBRA coverage ends under Parent’s group health plan); provided that the aggregate amounts shall be reduced by the present value of any other cash severance or termination benefits payable to Mr. Rauh under any other plans, programs or arrangements of the Parent or its affiliates.

In the event (i) Mr. Rauh elects not to extend the employment term or (ii) of a “Dissolution” (as such term is defined in his employment agreement) in connection with which the Sponsors do not receive a return on their investment, unless Mr. Rauh’s employment is earlier terminated, Mr. Rauh’s termination of employment shall be deemed to occur on the close of business on the earlier of the effective date of “Dissolution” or the day immediately preceding the next scheduled extension date, and Mr. Rauh shall be entitled to receive certain accrued amounts. In the event (i) that Parent elects not to extend the employment term or (ii) of a “Dissolution” (as such term is defined in his employment agreement) in connection with which the Sponsors receive a return on their investment, Mr. Rauh shall be treated as terminated without Cause effective as of the close of business on the day immediately preceding the next scheduled extension date or the effective date of the “Dissolution,” and shall be entitled to receive the amounts and benefits described above.

Pursuant to the terms of his employment agreement, Mr. Rauh is subject to the following covenants: (i) a covenant not to disclose confidential information while employed and at all times thereafter; (ii) a covenant not to compete for a period of 12 months (24 months if the Severance Period is 24 months) following his termination of employment for any reason; and (iii) a covenant not to solicit employees or customers for a period of 12 months (24 months if the Severance Period is 24 months) following his termination of employment for any reason.

Shane Evans

Under the employment arrangement between Summit Materials and Shane Evans, Mr. Evans serves as our Regional President Western Division. Mr. Evans’s annual base salary is $350,000. In addition, Mr. Evans is also eligible to earn an annual bonus of up to 60% of his base salary based upon the achievement of performance targets established by the Board within the first three months of each fiscal year during the employment term, and the Board, in its sole discretion, may appropriately adjust such performance targets in any fiscal year to reflect any merger, acquisition or divestiture affected by the Parent during such fiscal year. Mr. Evans received a signing bonus of $150,000 upon commencing employment. Mr. Evans is entitled to a car allowance in the amount of $1,000 per month. Mr. Evans is also entitled to participate in employee benefit plans as in effect from time to time.

Glenn Culpepper

Glenn Culpepper, our former Chief Financial Officer, received a salary and benefits substantially consistent with a draft employment agreement delivered to him in June 2010 prior to the commencement of his employment. Mr. Culpepper’s draft employment agreement contemplated an initial term equal to three years commencing in June 2010, which was to be automatically extended for additional one-year periods, unless Parent or Mr. Culpepper provided the other party 60 days prior written notice before the next extension date that the employment term will not be so extended.

The draft employment agreement contemplated an annual base salary of $425,000, such amount to be reviewed annually by the Board, and subject to increase (but not decrease). It also contemplated that Mr. Culpepper would be eligible to earn an annual bonus of up to 70% of his base salary (the “Target”), as

 

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defined in the draft employment agreement, based upon the achievement of performance targets established by the Board within the first three months of each fiscal year during the employment term, with a potential bonus of up to 150% of the Target for extraordinary performance; provided, however, the Board, in its sole discretion, could appropriately adjust such performance targets in any fiscal year to reflect any merger, acquisition or divestiture affected by the Parent during such fiscal year. Notwithstanding the foregoing, the draft employment agreement provided that Mr. Culpepper’s minimum annual bonus for 2010 was $212,500. Promptly after Mr. Culpepper commenced his employment, Parent paid Mr. Culpepper a starting bonus of $700,000 in a lump sum minus applicable deductions. The draft employment agreement also contemplated that Mr. Culpepper would be entitled to a car allowance for rental or lease in the amount of $1,000 per month and that he would be entitled to participate in the Parent’s employee benefit plans as in effect from time to time, on the same basis as those benefits are generally made available to other senior executives of Parent.

Bonus and Non-Equity Incentive Plan Compensation

Pursuant to their employment arrangements as discussed above, each named executive officer is eligible to earn an annual bonus of up to a specified percentage of such named executive officer’s base salary based upon the achievement of performance targets established by the Board within the first three months of each fiscal year during such named executive officer’s employment term. The performance targets may be based on EBITDA and/or free cash flow targets; however, the Board, in its discretion, may adjust such performance targets in any fiscal year to reflect any merger, acquisition or divestiture affected by the Company during such fiscal year. In fiscal 2012, the performance targets were primarily based on EBITDA. During fiscal 2012, although the Company’s actual EBITDA result did not meet the target EBITDA and thus the named executive officers were not entitled to their cash payments under the non-equity compensation plan awards, the Board in its discretion determined to make cash bonus payments to Mr. Hill, Mr. Rauh and Mr. Evans, as disclosed in the footnote to the bonus column of the Summary Compensation Table above.

Employee Long-Term Incentive Plan

Certain of our employees, including our named executive officers, received Class D unit interests in the Parent between the fiscal years of 2009 and 2012. The Class D units provide rights to cash distributions based on a predetermined distribution formula (as provided for in the Second Amended and Restated Agreement of Exempted Limited Partnership dated January 29, 2010) upon the Parent’s general partner declaring a distribution. There are four categories of Class D units: Class D-1 U.S. Interests; Class D-1 Non-U.S. Interests; Class D-2 U.S. Interests and Class D-2 Non-U.S. Interests. Under the exempted limited partnership agreement, these units would be entitled to distributions as determined by the Board on a pro rata basis with the Class B and Class C Units after returns of capital to Class A and Class B Holders (Blackstone and other Sponsors) and a preferential distribution to Class C Holders.

Generally, 50% of each category of Class D-1 units vest with the passage of time (“time-vesting interests”) and the remaining 50% of the Class D-1 units and all Class D-2 units vest when certain investment returns are achieved by the Parent’s investors (“performance-vesting interests”). Of the time-vesting-interests, subject to the holder’s continued employment through the applicable vesting date, 20% vest on the first anniversary of the grant date and the remaining 80% vest monthly over the four-year period beginning on the first anniversary thereof. The time-vesting interests will become fully vested on an accelerated basis upon a change in control while the employee continues to provide services to the Company. Any of the time-vesting interests that are unvested on termination of the employee’s services will be forfeited by the employee.

The performance-vesting interests vest when certain investment returns are achieved by the Parent’s investors while the employee continues to provide services to the Company or its subsidiaries. There are two performance levels at which performance-vesting interests generally vest, with performance-vesting interests that are Class D-1 units vesting if the Parent’s investors receive a return on invested capital of 1.75 times their initial investment, and performance-vesting interests that are Class D-2 units vesting if the Parent’s investors receive a return on invested capital of 3.00 times their initial investment.

 

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Unvested interests are generally forfeited upon any termination of employment by the holder However, if the employee is terminated without “Cause” or resigns due to a “Constructive Termination” (each as defined in such employee’s employment agreement with the Company) within 12 months preceding a “Change of Control” or a “Public Offering” (each as defined in the Parent’s agreement of exempted limited partnership) any performance-vesting interests that would have been eligible to vest in connection with such transaction shall be restored and shall be eligible to vest based on the proceeds of such transaction.

If a holder’s employment is terminated by us for “Cause”, or the holder violates a restrictive covenant, any vested Class D units are automatically forfeited. If a holder’s employment is terminated by us without “Cause”, we may, under specified circumstances, repurchase the holder’s vested Class D units at a price per unit equal to the fair market value of such Class D units, minus any amounts already distributed to the holder in respect of such Class D units.

If a holder’s employment terminates as a result of the voluntary resignation of the holder, we may elect to convert all of the employee’s Class D units into a right to a fixed cash payment capped at a specified amount determined at the time of termination. The fixed cash payment calculated for this purpose is an amount equal to the fair market value of the holder’s vested Class D units minus any amounts already distributed to the holder in respect of such Class D units.

Summit Materials, LLC Retirement Plan

We have a qualified contributory retirement plan established to qualify as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code of 1986, as amended. The plan covers all employees, including our named executive officers, who are limited to their annual tax deferred contribution limit as allowed by the Internal Revenue Service and may contribute up to 75% of their gross wages. We provide for matching contributions to the plan, including 100% of pre-tax employee contributions and up to 4% of eligible compensation. Employer contributions vest immediately.

Potential Payments upon Termination or Change of Control

In the event of a termination of employment or change of control, Class D Units are subject to acceleration or extended periods during which the Class D Units have an opportunity to vest, as described in “—Employee Long-Term Incentive Plan” above, and the named executive officers are entitled to the cash and non-cash severance benefits in accordance with the terms of their employment agreements, as described in “—Employment Agreements.”

Compensation Committee Interlocks and Insider Participation

Presently, the Board does not have a compensation committee. All decisions about our executive compensation in fiscal 2012 were made by the Board. Mr. Hill, who is the Chairman of the Board and our President and Chief Executive Officer, generally participates in discussions and deliberations of the Board regarding executive compensation. Other than Mr. Hill and Mr. Murphy, who has served as our Interim Chief Financial Officer since December 18, 2012, no other member of the Board was at any time during fiscal 2012, or at any other time, one of our officers or employees. We are parties to certain transactions with our Sponsors described in “Certain Relationships and Related Party Transactions.” None of our executive officers has served as a director or member of a compensation committee (or other committee serving an equivalent function) of any entity, one of whose executive officers served as a director of Parent GP.

 

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Outstanding Equity Awards at 2012 Fiscal Year End

A summary of the outstanding equity awards for each named executive officer as of December 29, 2012 is as follows:

 

     Stock Awards  

Name

   Grant Date    Number of
shares or units
of stock that
have not vested
(#)(1)
     Market value of
shares or units of
stock that have  not
vested ($)(2)
     Equity incentive
plan awards:
Number of
unearned shares,
units or other
rights that have
not vested (#)(3)
     Equity incentive
plan awards:
Market or
payout value of
unearned shares,
units or other
rights that have
not vested ($)(2)
 

Thomas Hill

   08/25/2009      50         189,175         195         596,277   
   02/17/2010      100         377,282         312         953,005   
   04/16/2010      20         75,561         58         178,320   
   05/27/2010      151         568,757         407         1,241,226   
   08/02/2010      86         324,024         218         665,832   
   09/15/2010      52         195,409         123         376,527   
   11/30/2010      9         32,000         20         61,608   
   05/27/2011      73         275,181         140         425,522   
   08/02/2011      59         223,101         107         327,145   
   10/28/2011      36         135,153         61         186,193   

Douglas Rauh

   01/01/2012      223         838,853         290         884,416   

Shane Evans

   09/15/2010      105         394,370         249         759,897   
   11/30/2010      2         5,647         4         10,872   
   05/27/2011      13         48,561         25         75,092   
   08/02/2011      10         39,371         19         57,732   
   10/28/2011      6         23,851         11         32,858   

Glenn Culpepper(4)

        —           —           —           —     

 

(1) Reflects time-vesting Class D Units, which vest 20% on the first anniversary of the grant date and the remaining 80% vest monthly over the four-year period beginning on the first anniversary thereof.
(2) Reflects the aggregated market values at December 29, 2012 based on the most recent valuation of the Class D Units.
(3) Reflects performance-vesting interests that vest when certain investment returns are achieved by the Parent’s investors while the employee continues to provide services to the Company or its subsidiaries.
(4) Mr. Culpepper forfeited his unvested Class D units upon his resignation on December 19, 2012.

Director Compensation

We do not currently pay our Directors who are either employed by us, Blackstone or Silverhawk any compensation for their services as directors. Our other Directors receive compensation for each quarter serving as a Director. We may also reimburse our other directors for any reasonable expenses incurred by them in connection with services provided in such capacity. Our other directors may also receive equity incentive awards under our incentive plans.

Howard Lance

Howard Lance began to serve on the Board of Parent starting in October 2012. However, he was formally elected as a director of Parent in February 2013. Mr. Lance is entitled to an annual cash retainer of $250,000 for his service as director. In connection with joining the Board, Mr. Lance received an equity-based incentive arrangement that will provide him with the economic equivalent of stock options over $2,500,000 of Parent’s

 

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equity securities. The structure of the equity incentive will be consistent with those applicable generally to Parent’s existing management team, except that Mr. Lance’s equity award will be subject to vesting based solely on his continued service on the Board.

2012 Director Compensation

The table below summarizes the compensation paid to non-employee Directors for the year ended December 29, 2012.

 

Name

   Fees Earned or
Paid in Cash ($)
    Stock
awards ($)
 

John Murphy

     100,000 (1)      9,606 (2) 

Neil Simpkins

     —          —     

Ted Gardner

     —          —     

Julia Kahr

     —          —     

Howard Lance(3)

     62,500        —     

 

(1) Mr. Murphy received $25,000 for each fiscal quarter serving as a director.
(2) The amount reported in the Stock Awards column reflects the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board ASC Topic 718. The assumptions applied in determining the fair value of the stock awards are discussed in Note 19, Employee Long-Term Incentive Plan, to our December 29, 2012 audited consolidated financial statements included elsewhere in this prospectus. This amount reflects our calculation of the value of the awards at the grant date and do not necessarily correspond to the actual value that may ultimately be recognized by the director. A portion of the shares granted in 2012 vest under certain performance conditions, which are not currently deemed probable of occurring, and, therefore, have not been included in the table above. The unrecognized value of these awards assuming the highest level of performance conditions would be achieved was $10,127 for Mr. Murphy. At fiscal year end, the aggregate number of stock awards outstanding for each director was six Class D Units outstanding for Mr. Murphy.
(3) Mr. Lance began to serve on the Board starting in October 2012. However, he was formally elected as director in February 2013.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Parent owns 100% of the limited liability company interests of Summit Materials Holdings, LLC, which owns 100% of the limited liability company interests of Summit Materials Intermediate Holdings, LLC, which owns 100% of the limited liability company interests of Summit Materials, which owns 100% of the issued and outstanding common stock of Summit Materials Finance Corp. The limited partnership interests of Parent consist of Class A-1 Units, Class A-2 Units, Class B-1 Units, Class C Units and Class D-1 Units and Class D-2 Units. Class A-1 Units are equity interests in Parent and have economic characteristics that are similar to those of shares of preferred stock in a corporation. Class A-2 Units are equity interests in Parent that are issuable only upon the exchange of Class B-1 Units, Class C Units and Class D-1 Units or Class D-1 Units for Class A-2 Units following any transfer of any such units (other than transfers to certain permitted transferees) and have similar economic rights as Class A-1 Units. Class B Units are equity interests in Parent and have similar economic rights as Class A-1 Units. Class C Units are equity interests in Parent that have been issued to certain start-up partners of Parent and have economic characteristics similar to those of shares of junior preferred stock in a corporation. Class D-1 Units and Class D-2 Units are partnership profits interests having economic characteristics similar to stock appreciation rights and are subject to different vesting schedules and other conditions including certain transfer restrictions and put and call rights applicable only to employees or the other holders thereof. For additional information, see “Management—Executive and Director Compensation” and “Certain Relationships and Related Party Transactions.”

The following table sets forth information with respect to the beneficial ownership of the Class A-1 Units and Class A-2 Units of Parent taken together as a single class, the Class B-1, the Class C Units of Parent, the Class D-1 and Class D-2 Units taken together as a single class and the aggregate Class A-1 Units, Class A-2 Units, Class B-1 Units, Class C Units, Class D-1 Units and Class D-2 Units taken together as a single class, in each case, as of December 29, 2012 for (i) each individual or entity known by us to own beneficially more than 5% of the aggregate units, (ii) each of our named executive officers, (iii) each of our directors and (iv) all of our directors and our executive officers as a group.

The amounts and percentages of units beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.

 

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Except as otherwise indicated in the footnotes below, each of the beneficial owners has, to our knowledge, sole voting and investment power with respect to the indicated Class A-1 Units, Class A-2 Units, Class B-1 Units, Class C Units, Class D-1 Units and Class D-2 Units. Unless otherwise noted, the address of each beneficial owner of is c/o Summit Materials, LLC, 2900 K Street NW, Suite 100, Harbourside North Tower Building, Washington, D.C. 20007.

 

Name and
Address of Beneficial
Owner
  Class A Units     Class B-1 Units     Class C Units     Class D Units     Aggregate  
  Amount
and
Nature of
Beneficial
Ownership
    Percent     Amount
and
Nature of
Beneficial
Ownership
    Percent     Amount
and
Nature of
Beneficial
Ownership
    Percent     Amount
and
Nature of
Beneficial
Ownership
    Percent     Amount
and
Nature of
Beneficial
Ownership
    Percent  

Blackstone Funds(1)

    29,173        91.60     —          —          —          —          —          —          29,173 (2)      69.86

Silverhawk Summit, L.P.(3)

    1,572        5.03     —          —          260        35.91     —          —          1,832        4.39

Thomas Hill

    108              —          —          133        18.37     —          —          241        *   

John Murphy

    —          —          —          —          —          —          —          —          —          —     

Douglas Rauh

    —          —          —          —          —          —          —          —          —          —     

Damian Murphy

    —          —          —          —          —          —          —          —          —          —     

Shane Evans

    —          —          —          —          —          —          —          —          —          —     

Michael Brady

    25              —          —          31        4.28     —          —          56        *   

Howard Lance

    —          —          —          —          —          —          —          —          —          —     

Neil Simpkins(4)

    —          —          —          —          —          —          —          —          —          —     

Ted Gardner(5)

    100              —          —          124        17.13     —          —          224        *   

Julia Kahr(6)

    —          —          —          —          —          —          —          —          —          —     

Glenn Culpepper

    —          —          —          —          —          —          —          —          —          —     

All Directors and Executive Officers as a Group (10 persons)

    233              —          —          288        39.78     —          —          521        1.25

 

 

* Less than 1%.
(1) Units of Parent shown as beneficially owned by the Blackstone Funds (as hereinafter defined) are held by the following entities: (i) Blackstone Capital Partners (Cayman) V-NQ L.P. (“BCP Cayman V”) owns 23,602 Class A-1 Units representing 75.49% of the outstanding Class A Units of Parent; (ii) Blackstone Capital Partners (Cayman) NQ V-AC L.P. (“BCP Cayman NQ”) owns 4,975 Class A-1 Units representing 15.91% of the outstanding Class A Units of Parent; (iii) Summit BCP Intermediate Holdings L.P. (“Summit BCP”) owns 536 Class A-1 Units representing 1.71% of the outstanding Class A Units of Parent; (iv) Blackstone Participation Partnership (Cayman) V-NQ L.P. (“BPP”) owns 22 Class A-1 Units representing 0.07% of the outstanding Class A-1 Units of Parent; and (v) Blackstone Family Investment Partnership (Cayman) V-NQ L.P. (“BFIP”) owns 38 Class A-1 Units representing 0.12% of the outstanding Class A Units of Parent (BCP Cayman V, BCP Cayman NQ, Summit BCP, BPP and BFIP are collectively referred to as the “Blackstone Funds”). The general partner of BCP Cayman V and BCP Cayman NQ is Blackstone Management Associates (Cayman) V-NQ L.P. The general partner of Summit BCP is Summit BCP Intermediate Holdings GP, Ltd., and BFIP is the sole member and controlling entity of Summit BCP. The general partner and controlling entity of BFIP, BPP and Blackstone Management Associates (Cayman) V-NQ L.P. is BCP V-NQ GP L.L.C. Blackstone Holdings III L.P. is the managing member and majority interest owner of BCP V-NQ GP L.L.C. Blackstone Holdings III L.P. is indirectly controlled by The Blackstone Group L.P. and is owned, directly or indirectly, by Blackstone professionals and The Blackstone Group L.P. The Blackstone Group L.P. is controlled by its general partner, Blackstone Group Management L.L.C., which is in turn wholly owned by Blackstone’s senior managing directors and controlled by its founder, Stephen A. Schwarzman. Each of such Blackstone entities and Mr. Schwarzman may be deemed to beneficially own the securities beneficially owned by the Blackstone Funds directly or indirectly controlled by it or him, but each disclaims beneficial ownership of such securities except to the extent of its or his indirect pecuniary interest therein. The address of each of the Blackstone entities listed in this note is c/o The Blackstone Group L.P., 345 Park Avenue, New York, NY 10154.
(2) The limited partnership agreement of Parent Holdings (i) provides that, prior to an initial public offering, the Blackstone Funds have the right to require each unit owned by an employee to participate in any transaction constituting a change of control or the sale of all or substantially all of the assets of Parent to a third-party (in either case, with respect to U.S. investments only, non-U.S. investments only or both) and (ii) generally restricts the transfer of each unit owned by an employee until twelve months following an initial public offering. As a result, the Blackstone Funds may be deemed to beneficially own 95.60% of outstanding units of Parent. The units of Parent held by employees that may be so deemed beneficially owned by the Blackstone Funds are not reported in the table above. For additional information, see “Management—Executive and Director Compensation” and “Certain Relationships and Related Party Transactions.”
(3) Silverhawk Summit, L.P.is controlled by Silverhawk Capital Partners GP II, L.P. and is owned, directly or indirectly, by Silverhawk Capital Partners, LLC. The address of each of the Silverhawk entities listed in this note is c/o Silverhawk Capital Partners, LLC, 140 Greenwich Ave, 2nd Floor, Greenwich, CT 06830.
(4) Mr. Simpkins is a Senior Managing Director of The Blackstone Group. Mr. Simpkins disclaims beneficial ownership of any shares owned directly or indirectly by the Blackstone Funds, except to the extent of his indirect pecuniary interest therein. Mr. Simpkins’ address is c/o The Blackstone Group, L.P., 345 Park Avenue, New York, NY 10017.

 

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(5) Mr. Gardner is a Managing Partner of Silverhawk Capital Partners, LLC. Mr. Gardner disclaims beneficial ownership of any shares owned directly or indirectly by Silverhawk, except to the extent of his indirect pecuniary interest therein. Mr. Gardner’s address is c/o Silverhawk Capital Partners, LLC, 140 Greenwich Ave, 2nd Floor, Greenwich, CT 06830.
(6) Ms. Kahr is a Managing Director of The Blackstone Group. Ms. Kahr disclaims beneficial ownership of any shares owned directly or indirectly by the Blackstone Funds, except to the extent of his indirect pecuniary interest therein. Ms. Kahr’s address is c/o The Blackstone Group L.P., 345 Park Avenue, New York, NY 10017.

 

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Transaction and Management Fee Agreement

In connection with the formation of Parent, Parent entered into a transaction and management fee agreement with Blackstone Management Partners L.L.C. (“BMP”). Under this agreement, BMP (including through its affiliates) agreed to provide monitoring, advisory and consulting services relating to Parent and its subsidiaries. In consideration for the services, Parent will pay, or cause to be paid, to BMP a management fee which, for the year ended December 31, 2010 and subsequent years, is equal to the greater of $300,000 or 2.0% of Parent’s consolidated EBITDA for the immediately preceding fiscal year. BMP shall have no obligation to provide any other services to Parent absent express agreement. In addition, in consideration of BMP undertaking financial and structural analysis, due diligence investigations, corporate strategy and other advice and negotiation assistance necessary to enable Parent and its subsidiaries to undertake acquisitions, the Partnership will pay to BMP a transaction fee equal to (x) 1.0% of the aggregate enterprise value of any acquired entity or (y) if such transaction is structured as an asset purchase or sale, 1.0% of the consideration paid for or received in respect of the assets acquired or disposed of. In addition, Parent has agreed to indemnify BMP and its affiliates against liabilities relating to the services contemplated by the transaction and management fee agreement and will reimburse BMP and its affiliates for out-of-pocket expenses incurred in connection with providing such services.

At any time in connection with or in anticipation of a change of control of Parent, a sale of all or substantially all of Parent’s assets or an initial public offering of common equity of Parent or its successor (including any other entity used as a vehicle for an initial public offering), BMP may elect to receive, subject to the achievement of certain thresholds, in consideration of BMP’s role in facilitating such transaction and in settlement of the termination of the services provided under the transaction and management fee agreement, a single lump sum cash payment equal to the then-present value of all then-current and future annual management fees payable under the transaction and management fee agreement, assuming a hypothetical organic consolidated EBITDA growth rate equal to the growth rate over the prior twelve months and a termination date of the agreement to be the tenth anniversary of the date of the agreement. The transaction and management fee agreement will continue until the earlier of (x) the tenth anniversary of the date of the agreement, (y) the date BMP ceases to perform services and provides written notice thereof to Parent, or (z) such earlier date as Parent and BMP may mutually agree in writing.

Under the transaction and management fee agreement, BMP is permitted to, and has, assigned a portion of the fees to which it is entitled to receive from Parent thereunder to Silverhawk Summit, L.P. and to certain members of management.

Under the transaction and management fee agreement, during the years ended December 29, 2012, December 31, 2011 and December 31, 2010, Summit Materials paid BMP transaction fees of $0.0, $0.8 million, $7.7 million, respectively, and management fees of $2.1 million, $4.3 million and $1.1 million, respectively.

Exempted Limited Partnership Agreement of Parent

The Sponsors and certain of our current and former officers, directors, employees and certain investors who rolled over equity in companies we acquired, indirectly beneficially own our equity interests through their respective ownership of partnership interests in Parent. Certain members of management indirectly beneficially own equity interests in Summit Materials through their respective ownership of certain classes of incentive partnership interests in Parent issued as part of an equity incentive program. Summit Materials is indirectly wholly-owned and controlled by Parent.

The exempted limited partnership agreement of Parent provides that, except as otherwise set forth in the agreement, Parent GP has the exclusive right to manage, conduct and control the business of Parent. The agreement also includes provisions with respect to restrictions on transfer of partnership interests, rights of first offer, tag-along rights, drag-along rights and the right of Blackstone to cause an initial public offering, as well as certain other provisions, including with respect to registration rights and certain approval rights.

 

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Shareholders Agreement of Parent GP

Parent GP is party to a shareholders agreement with Blackstone, Silverhawk, our chief executive officer, Tom Hill, Ted Gardner, Michael Brady and certain other shareholders, which governs certain matters relating to ownership of Parent GP, including with respect to restrictions on the issuance or transfer of shares, affiliate transactions and various corporate governance matters. Pursuant to the terms of the shareholders agreement, Parent GP is managed by a board of directors, currently consisting of four individuals, two of whom are nominees of Blackstone, one of whom is a nominee of Silverhawk and one of whom is our chief executive officer. Under the shareholders agreement, owners of Class A interests of Parent are required to own shares of Parent GP. The majority of Parent GP is owned by Blackstone.

Management Equity Purchase Plan

Parent maintains equity incentive arrangements for executives and other senior management employees. Consistent with these arrangements, certain members of our management team have purchased and/or received, and may, from time to time, purchase and/or receive, equity interests or profit interests in Parent. Such purchases or awards of equity interests or profit interests may represent a substantial portion of the equity or profits of Parent.

Temporary Acquisition Financing from Blackstone

During the second half of 2010, we received an aggregate of $77.5 million in temporary acquisition financing, at an interest rate of 1.01% per annum, from Blackstone that we used as temporary financing for our acquisitions of RK Hall and Con-Agg. We repaid the temporary acquisition financing in full, including approximately $0.1 million in interest on December 17, 2010 with proceeds from Summit Materials Companies I, LLC’s amended and restated credit agreement.

Commercial Transactions with Sponsor Portfolio Companies

Our Sponsors and their respective affiliates have ownership interests in a broad range of companies. We have entered and may in the future enter into commercial transactions in the ordinary course of our business with some of these companies, including the sale of goods and services and the purchase of goods and services. None of these transactions or arrangements is expected to be material to us.

Procedures with Respect to Review and Approval of Related Person Transactions

Parent GP has not adopted a formal written policy for the review and approval of transactions with related persons. However, the exempted limited partnership agreement of Parent provides that the members of the board of directors of Parent GP shall review and approve transactions with related persons in certain circumstances.

Interim Chief Financial Officer

Mr. Murphy was appointed our Interim Chief Financial Officer effective as of December 18, 2012. In connection with his service as our Interim Chief Financial Officer, we pay Mr. Murphy a retainer equal to $446,500 per annum (or $37,208 per month). For the period from December 18, 2012 through December 29, 2012, Mr. Murphy did not receive any compensation.

 

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DESCRIPTION OF OTHER INDEBTEDNESS

Senior Secured Credit Facilities

Overview

On January 30, 2012, we entered into a senior secured credit facility with Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., as joint lead arrangers, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., UBS Securities LLC, Barclays Capital, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc., as joint bookrunners, Bank of America, N.A., as administrative agent, collateral agent and swing line lender, Bank of America, N.A., as letter of credit issuer, and Citigroup Global Markets Inc., as syndication agent.

The senior secured credit facilities currently provide senior secured financing in an amount of $572.0 million, consisting of a $150.0 million five-year revolving credit facility and a $422.0 million seven-year term loan facility. The revolving credit facility includes capacity available for letters of credit and for borrowings on same-day notice referred to as the swingline loans.

Our senior secured credit facilities include an uncommitted incremental facility that allow us the option to increase the amount available under the term loan facility and/or the revolving credit facility by (i) $135.0 million and (ii) an additional amount so long as we are in pro forma compliance with a consolidated first lien net leverage ratio. Availability of such incremental facilities will be subject to, among other conditions, the absence of an event of default and pro forma compliance with the financial covenants under our credit agreement and the receipt of commitments by existing or additional financial institutions.

In February 2013, we entered into Amendments to our senior secured credit facilities that, among other things: (i) reduced the applicable margins used to calculate interest rates for term loans under our senior secured credit facilities by 1.0%; (ii) reduced the applicable margins used to calculate interest rates for $131.0 million of tranche A revolving credit loans available under the senior secured credit facilities by 1.0% (with no reductions to the applicable margins for the remaining $19.0 million of available revolving credit loans); (iii) increased term loans borrowed under our term loan facility by $25.0 million with the same terms as the existing term loans (bringing total term loan borrowings to approximately $422.0 million); (iv) included a requirement that we pay a fee equal to 1.0% of the principal amount of term loans repaid in connection with certain repricing or refinancing transactions within six months after February 5, 2013; and (v) created additional flexibility under the financial maintenance covenants, which are tested quarterly, by increasing the applicable maximum Consolidated First Lien Net Leverage Ratio and reducing the applicable minimum Interest Coverage Ratio (each as defined in the Credit Agreement governing our senior secured credit facilities).

Interest Rate and Fees

Borrowings under our senior secured credit facilities will bear interest at a rate per annum equal to an applicable margin plus, at our option, either (i) a base rate determined by reference to the highest of (a) the Federal Funds rate plus 0.50%, (b) the prime rate of Bank of America, N.A. and (c) the British Bankers Association LIBOR Rate (subject to a LIBOR floor in the case of the term loan facility) plus 1.00% or (ii) a British Bankers Association LIBOR rate (subject to a LIBOR floor in the case of the term loan facility) determined by reference to Reuters two business days prior to the interest period relevant to such borrowing adjusted for certain additional costs. The applicable margin on our revolving credit facility will be subject to a step-down upon our attaining certain consolidated first lien net leverage ratios.

In addition to paying interest on outstanding principal under our senior secured credit facility, we will be required to pay a commitment fee to the lenders under the revolving credit facility in respect of the unutilized commitments thereunder. We will also pay customary letter of credit and agency fees.

 

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Mandatory Prepayments

The credit agreement governing our senior secured credit facilities will require us to prepay outstanding term loans, subject to certain exceptions, with:

 

   

commencing with the fiscal year ended December 29, 2012, 50% (which percentage will be reduced to 25% and 0% upon our attaining certain consolidated first lien net leverage ratios) of our annual excess cash flow less the principal amount of certain debt prepayments;

 

   

100% of the net proceeds from certain asset sales and casualty and condemnation proceeds, subject to certain threshold amounts of net proceeds and, if no default exists, to a 100% reinvestment right if reinvested or committed to be reinvested within 12 months of receipt so long as any committed reinvestment is actively reinvested within 18 months of receipt; and

 

   

100% of the net proceeds from issuances or incurrence of certain debt, other than proceeds from debt permitted to be incurred under the credit agreement governing the senior secured credit facilities.

We will apply the foregoing mandatory prepayments to the term loan in direct order of maturity.

Voluntary Prepayments

We may voluntarily repay outstanding loans under the senior secured credit facilities at any time without premium or penalty; provided that voluntary prepayments of eurocurrency rate loans made on a date other than the last day of an interest period applicable thereto shall be subject to customary breakage costs.

In addition, with respect to certain repricings or refinancings of the term loan facility within six months after February 5, 2013, we will be required to pay a fee equal to 1.0% of the principal amount of loans under the term loan facility that are repriced or refinanced.

Amortization and Final Maturity

We will be required to make scheduled quarterly payments each equal to 0.25% of the original principal amount of the term loans made on the closing date, with the balance expected to be due on the seventh anniversary of the closing date. We will not be required to make any scheduled payments under our revolving credit facility. The principal amounts outstanding under the revolving credit facility will be due and payable on the fifth anniversary of the closing date.

Guarantee and Security

All obligations under the senior secured credit facilities will be unconditionally guaranteed by Summit Materials Intermediate Holdings, LLC, and each existing and future direct or indirect wholly-owned domestic restricted subsidiary of the Company (other than certain immaterial subsidiaries, subsidiaries that are precluded by law, regulation or contractual obligation from guaranteeing the obligations and certain subsidiaries excluded via customary exceptions) and by the Company’s non-wholly owned Subsidiary Continental Cement (collectively, the “Credit Agreement Guarantors”).

All obligations under the senior secured credit facilities, and the guarantees of those obligations, will be secured by substantially all of the following assets of the Company and each subsidiary that is a Credit Agreement Guarantor, subject to certain exceptions:

 

   

a pledge of 100% of the capital stock of Summit Materials and 100% of the capital stock of each domestic subsidiary that is directly owned by Summit Materials or one of the subsidiary Credit Agreement Guarantors, promissory notes and any other instruments evidencing indebtedness owned by the Company or one of the subsidiary Credit Agreement Guarantors and 65% of the capital stock of each wholly owned foreign subsidiary that is, in each case, directly owned by Summit Materials or one of the subsidiary Credit Agreement Guarantors; and

 

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a security interest in, and mortgages on, substantially all tangible and intangible assets (above a materiality threshold in the case of mortgages) of Summit Materials and each subsidiary Credit Agreement Guarantor.

Certain Covenants and Events of Default

Our senior secured credit facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, our and our restricted subsidiaries’ ability to:

 

   

incur additional indebtedness or guarantees;

 

   

create liens on assets;

 

   

change our fiscal year;

 

   

enter into sale and leaseback transactions;

 

   

engage in mergers or consolidations;

 

   

sell assets;

 

   

pay dividends and make other restricted payments;

 

   

make investments, loans or advances;

 

   

repay subordinated indebtedness;

 

   

make certain acquisitions;

 

   

engage in certain transactions with affiliates; and

 

   

change our lines of business.

In addition, the senior secured credit facilities require us to maintain a quarterly maximum consolidated first lien net leverage ratio and a quarterly minimum interest coverage ratio.

The credit agreement governing our senior secured credit facilities also contains certain customary representations and warranties, affirmative covenants and events of default (including, among others, an event of default upon a change of control). If an event of default occurs, the lenders under our senior secured credit facilities will be entitled to take various actions, including the acceleration of amounts due under our senior secured credit facilities and all actions permitted to be taken by a secured creditor.

 

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DESCRIPTION OF THE NOTES

General

Certain terms used in this description are defined below under the subheading “—Certain Definitions.” In this description, (1) the terms “ we ,” “ our ,” “ us ” and “ Company ” each refer to Summit Materials, LLC, and not to any of its Subsidiaries, (2) the term “ Co-Issuer ” refers to Summit Materials Finance Corp. and (3) the term “ Issuers ” refers to the Company and the Co-Issuer.

The Issuers are jointly and severally liable for all obligations under the Notes. The Co-Issuer is a Wholly-Owned Subsidiary of the Company that has been incorporated in Delaware as a special purpose finance subsidiary to facilitate the offering of the Notes and other debt securities of the Company. The Company believes that some prospective purchasers of the Notes may be restricted in their ability to purchase debt securities of partnerships or limited liability companies, such as the Company, unless the securities are jointly issued by a corporation. The Co-Issuer will not have any substantial operations or assets and will not have any revenues. Accordingly, you should not expect the Co-Issuer to participate in servicing the principal and interest obligations on the Notes.

The Issuers issued $250.0 million aggregate principal amount of 10.5% senior notes due 2020 (the “ Outstanding Notes ”) under an indenture dated January 30, 2012 (the “ Indenture ”) among the Issuers, the Guarantors and Wilmington Trust, National Association, as trustee (the “ Trustee ”). The Outstanding Notes were issued in a private transaction that was not subject to the registration requirements of the Securities Act. The terms of the exchange notes to be issued in the exchange offer for such notes are substantially identical to the Outstanding Notes, except that the transfer restrictions, registration rights and additional interest provision relating to the Outstanding Notes will not apply to the exchange notes. In this section, we refer to the Outstanding Notes, together with the exchange notes offered hereby that are to be exchanged for the Outstanding Notes, as the “ Notes ”. Except as set forth herein, the terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act.

The following description is only a summary of the material provisions of the Indenture. It does not purport to be complete and is qualified in its entirety by reference to the provisions of the Indenture, including the definitions therein of certain terms used below. We urge you to read the Indenture because it, and not this description, defines your rights as Holders of the Notes. You may request copies of the Indenture at our address set forth under “Prospectus Summary—Corporate Information.”

Brief Description of the Notes

The Notes:

 

   

are general unsecured senior obligations of the Issuers;

 

   

rank equally in right of payment with all existing and future Senior Indebtedness of the Issuers (including borrowings under the Senior Secured Credit Facilities);

 

   

are effectively subordinated to all Secured Indebtedness of the Issuers (including borrowings under the Senior Secured Credit Facilities), to the extent of the value of the collateral securing such Secured Indebtedness;

 

   

are structurally subordinated to all existing and future Indebtedness, claims of holders of Preferred Stock and other liabilities of the Company’s Subsidiaries that are not guaranteeing the Notes;

 

   

are senior in right of payment to all future Subordinated Indebtedness of the Issuers; and

 

   

are initially guaranteed on a senior unsecured basis by the Guarantors and also will be guaranteed in the future by each U.S. Wholly-Owned Subsidiary that is a Restricted Subsidiary, if any, subject to certain exceptions, that guarantees Indebtedness of the Issuers under the Senior Secured Credit Facilities.

 

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Guarantees

The Guarantors, as primary obligors and not merely as sureties, have jointly and severally guaranteed, irrevocably and unconditionally, on an unsecured senior basis, the performance and full and punctual payment when due, whether at maturity, by acceleration or otherwise, of all obligations of the Issuers under the Indenture and the Notes, whether for payment of principal of, any premium, interest in respect of Notes or expenses, indemnification or otherwise, on the terms set forth in the Indenture by executing the Indenture.

The Guarantors guarantee the Notes and, in the future, subject to exceptions set forth under the caption “—Certain Covenants—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries,” each direct and indirect U.S. Wholly-Owned Subsidiary that is a Restricted Subsidiary of the Company that guarantees certain Indebtedness of the Issuers or any other Guarantor will, guarantee the Notes, subject to certain exceptions and to release as provided below or elsewhere in this “Description of the Notes.” Each of the Guarantees of the Notes are a general unsecured senior obligation of each Guarantor, rank equally in right of payment with all existing and future Senior Indebtedness of such Guarantor (including such Guarantor’s guarantee of the Senior Secured Credit Facilities), are effectively subordinated to all Secured Indebtedness of such Guarantor (including such Guarantor’s guarantee of the Senior Secured Credit Facilities), to the extent of the value of the collateral of such Guarantor securing such Secured Indebtedness, and rank senior in right of payment to all future Subordinated Indebtedness of such Guarantor. Each of the Guarantees of the Notes are structurally subordinated to all existing and future Indebtedness, claims of holders of Preferred Stock and other liabilities of Subsidiaries of each Guarantor that do not Guarantee the Notes.

Not all of the Company’s Subsidiaries guarantee the Notes. In the event of a bankruptcy, liquidation, reorganization or similar proceeding of any of these non-guarantor Subsidiaries, the non-guarantor Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to the Issuers or a Guarantor. As a result, all of the existing and future liabilities of our non-guarantor Subsidiaries, including any claims of trade creditors, are effectively senior to the Notes. The Indenture does not limit the amount of liabilities that are not considered Indebtedness which may be incurred by the Company or its Restricted Subsidiaries, including the non-Guarantors.

The obligations of each Guarantor under its Guarantee are limited as necessary to prevent the Guarantee from constituting a fraudulent conveyance under applicable law. This provision may not, however, be effective to protect a Guarantee from being voided under fraudulent transfer law, or may reduce the applicable Guarantor’s obligation to an amount that effectively makes its Guarantee worthless. If a Guarantee were rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the Guarantor, and, depending on the amount of such indebtedness, a Guarantor’s liability on its Guarantee could be reduced to zero. See “Risk Factors—Risks Related to Our Indebtedness and the Notes—Federal and state fraudulent transfer laws may permit a court to void the notes and the guarantees, subordinate claims in respect of the notes and the guarantees and require noteholders to return payments received and, if that occurs, you may not receive any payments on the notes.”

Any Guarantor that makes a payment under its Guarantee is entitled upon payment in full of all guaranteed obligations under the Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

Each Guarantor may consolidate with, amalgamate or merge with or into or sell all or substantially all its assets to the Company, the Co-Issuer or another Guarantor without limitation or any other Person upon the terms and conditions set forth in the Indenture. See “—Certain Covenants—Merger, Consolidation or Sale of All or Substantially All Assets.”

 

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Each Guarantee by a Guarantor provides by its terms that it will be automatically and unconditionally released and discharged upon:

(1) (a) any sale, exchange, disposition or transfer (by merger, amalgamation, consolidation or otherwise) of (i) the Capital Stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary or (ii) all or substantially all the assets of such Guarantor, in each case if such sale, exchange, disposition or transfer is made in compliance with the applicable provisions of the Indenture;

(b) the release or discharge of the Guarantee by such Guarantor of Indebtedness under the Senior Secured Credit Facilities, or the release or discharge of such other guarantee that resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such Guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such Guarantee is so reinstated, such Guarantee shall also be reinstated to the extent that such Guarantor would then be required to provide a Guarantee pursuant to the covenant described under “—Certain Covenants—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries”);

(c) the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in compliance with the applicable provisions of the Indenture; or

(d) the exercise by the Issuers of their legal defeasance option or covenant defeasance option as described under “—Legal Defeasance and Covenant Defeasance” or the discharge of the Issuers’ obligations under the Indenture in accordance with the terms of the Indenture; and

(2) such Guarantor delivering to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.

Ranking

The payment of the principal of, premium, if any, and interest on the Notes and the payment of any Guarantee rank equally in right of payment to all existing and future Senior Indebtedness of the Issuers or the relevant Guarantor, as the case may be, including the obligations of the Issuers and such Guarantor under the Senior Secured Credit Facilities.

The Notes and the Guarantees are effectively subordinated in right of payment to all of the Issuers’ and each Guarantor’s existing and future Secured Indebtedness to the extent of the value of the collateral securing such Secured Indebtedness. $401.1 million of Secured Indebtedness outstanding, including $398.0 million in borrowings under the Senior Secured Credit Facilities (without giving effect to OID on our term loan facility) and $3.1 million of obligations related to capital leases. As of December 29, 2012, the Company also had (1) an additional approximately $135.5 million of borrowing capacity under the revolving credit facility under the Senior Secured Credit Facilities (after giving effect to $14.5 million of issued but undrawn letters of credit), which, if borrowed, would be Secured Indebtedness and (2) the option to increase the amount available under the term loan facility and/or the revolving credit facility by (x) $135.0 million and (y) an additional amount so long as the Company is in pro forma compliance with a consolidated first lien net leverage ratio, which in each case, if borrowed, would be Secured Indebtedness.

Although the Indenture contains limitations on the amount of additional Indebtedness that the Issuers and the Restricted Subsidiaries (including the Guarantors) may incur, under certain circumstances the amount of such additional Indebtedness could be substantial and under certain circumstances such additional Indebtedness may be secured. The Indenture also does not limit the amount of additional Indebtedness that any direct or indirect parent company of the Company may incur. See “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.”

 

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Paying Agent and Registrar for the Notes

The Issuers will maintain one or more paying agents for the Notes. The initial paying agent for the Notes is the Trustee.

The Issuers will also maintain one or more registrars and a transfer agent. The initial registrar and transfer agent with respect to the Notes is the Trustee. The registrar will maintain a register reflecting ownership of the Notes outstanding from time to time. The paying agent will make payments on, and the transfer agent will facilitate transfer of, the Notes on behalf of the Issuers.

The Issuers may change the paying agent, the registrar or the transfer agent without prior notice to the Holders. The Company or any of its Subsidiaries may act as a paying agent, registrar or transfer agent.

If any Notes are listed on an exchange and the rules of such exchange so require, the Issuers will satisfy any requirement of such exchange as to paying agents, registrars and transfer agents and will comply with any notice requirements required under such exchange in connection with any change of paying agent, registrar or transfer agent.

Transfer and Exchange

A Holder may transfer or exchange Notes in accordance with the Indenture. The registrar and the Trustee may require a Holder to furnish appropriate endorsements and transfer documents in connection with a transfer of Notes. Holders will be required to pay all taxes due on transfer. The Issuers are not required to transfer or exchange any Note selected for redemption or tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Sale Offer. Also, the Issuers are not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed. The registered Holder of a Note will be treated as the owner of the Note for all purposes.

Principal, Maturity and Interest

The Issuers issued an aggregate principal amount of $250.0 million of Outstanding Notes in a private transaction that was not subject to the registration requirements of the Securities Act. The Notes will mature on January 31, 2020. Subject to compliance with the covenant described below under the caption “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” the Issuers may issue additional Notes under the Indenture from time to time (“ Additional Notes ”). All Notes including any Additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including waivers, amendments, redemptions and offers to purchase, except for certain waivers and amendments as set forth herein. Unless the context requires otherwise, references to “ Notes ” for all purposes of the Indenture and this “Description of the Notes” include any Additional Notes that are actually issued. The Notes will be issued in minimum denominations of $2,000 and any integral multiples of $1,000 in excess of $2,000.

Interest on the Notes accrues at the rate of 10.5% per annum. Interest on the Notes is payable semi-annually in arrears on each January 31 and July 31, commencing July 31, 2012 to the Holders of Notes of record on the immediately preceding January 15 and July 15, respectively. Interest on the Notes accrues from the most recent date to which interest has been paid or, if no interest has been paid, from and including the Issue Date. Interest on the Notes is computed on the basis of a 360-day year comprised of twelve 30-day months.

Payment of Principal, Premium and Interest

Cash payments of principal of, premium, if any, and interest on the Notes are payable at the office or agency of the Issuers maintained for such purpose or, at the option of the Issuers, cash payment of interest may be made through the paying agent by check mailed to the Holders of the Notes at their respective addresses set forth in the

 

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register of Holders; provided , that (a) all cash payments of principal, premium, if any, and interest with respect to the Notes represented by one or more global notes registered in the name of or held by The Depository Trust Company (“ DTC ”) or its nominee are made through the paying agent by wire transfer of immediately available funds to the accounts specified by the registered Holder or Holders thereof and (b) all cash payments of principal, premium, if any, and interest with respect to certificated Notes are made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the paying agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Until otherwise designated by the Issuers, the Issuers’ office or agency will be the office of the Trustee maintained for such purpose.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

The Issuers are not required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Issuers may be required to make an offer to purchase Notes as described under the caption “—Repurchase at the Option of Holders.” The Issuers, the Investors and their respective Affiliates may at any time and from time to time purchase Notes in the open market or otherwise.

Optional Redemption

Except as set forth below, the Issuers are not entitled to redeem the Notes at their option prior to January 31, 2016. At any time prior to January 31, 2016, the Issuers may on one or more occasions redeem all or a part of the Notes, upon notice as described under “—Selection and Notice,” at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, plus accrued and unpaid interest, if any, to the date of redemption (the “ Redemption Date ”), subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.

On and after January 31, 2016, the Issuers may redeem the Notes, in whole or in part, upon notice as described under the heading “—Selection and Notice,” at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if any, to the applicable Redemption Date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date, if redeemed during the twelve-month period beginning on January 31 of each of the years indicated below:

 

Year

   Senior
Notes
Percentage
 

2016

     105.250

2017

     102.625

2018 and thereafter

     100.000

In addition, until January 31, 2015, the Issuers may, at their option, and on one or more occasions, redeem up to 35.0% of the aggregate principal amount of Notes issued by them at a redemption price equal to the sum of (a) 100% of the aggregate principal amount thereof, plus (b) a premium equal to the stated interest rate per annum on the Notes, plus (c) accrued and unpaid interest, if any, to the applicable Redemption Date, subject to the right of Holders of Notes of record on the relevant record date to receive interest due on the relevant interest payment date, with the net cash proceeds received by the Company from one or more Equity Offerings or a contribution to the Company’s common equity capital made with the net cash proceeds of a concurrent Equity Offering; provided, that (a) at least 50% of the aggregate principal amount of Notes originally issued under the Indenture on the Issue Date and any Additional Notes issued under the Indenture after the Issue Date remains outstanding immediately after the occurrence of each such redemption; and (b) each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

 

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Notice of any redemption, whether in connection with an Equity Offering or otherwise, may be given prior to the completion thereof, and any such redemption or notice may, at the Issuers’ discretion, be subject to one or more conditions precedent, including, but not limited to, the completion of the related Equity Offering or other corporate transaction. If such redemption is subject to the satisfaction of one or more conditions precedent, in the Issuers’ discretion the Redemption Date may be delayed or the redemption may be rescinded in the event that any such conditions shall not have been satisfied by the original Redemption Date. If any Notes are listed on an exchange, and the rules of such exchange so require, the Issuers will notify the exchange of any such notice of redemption. In addition, the Issuers will notify the exchange of the principal amount of any Notes outstanding following any partial redemption of such Notes.

Selection and Notice

If the Issuers are redeeming less than all of the Notes issued under the Indenture at any time, the Trustee will select the Notes to be redeemed (a) if the Notes are listed on an exchange, in compliance with the requirements of such exchange or (b) on a pro rata basis to the extent practicable, or, if the pro rata basis is not practicable for any reason by lot or by such other method as the Trustee shall deem fair and appropriate. No Notes of $2,000 or less can be redeemed in part.

Notices of redemption shall be delivered electronically or mailed by first-class mail, postage prepaid, at least 30 but not more than 60 days before the redemption date to each Holder of Notes at such Holder’s registered address or otherwise in accordance with the procedures of DTC, except that redemption notices may be delivered more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture. If any Note is to be redeemed in part only, any notice of redemption that relates to such Note shall state the portion of the principal amount thereof that has been or is to be redeemed.

With respect to Notes represented by certificated notes, the Issuers will issue a new Note in a principal amount equal to the unredeemed portion of the original Note in the name of the Holder upon cancellation of the original Note; provided , that new Notes will only be issued in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000. Notes called for redemption become due on the date fixed for redemption. On and after the Redemption Date, interest ceases to accrue on Notes or portions of them called for redemption.

Repurchase at the Option of Holders

Change of Control

The Indenture provides that if a Change of Control occurs after the Issue Date, unless the Issuers have previously or concurrently delivered a redemption notice with respect to all the outstanding Notes as described under “—Optional Redemption,” the Issuers will make an offer to purchase all of the Notes pursuant to the offer described below (the “ Change of Control Offer ”) at a price in cash (the “ Change of Control Payment ”) equal to 101.0% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, subject to the right of Holders of the Notes of record on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control except to the extent that the Issuers have exercised the right to redeem the Notes as described under “—Optional Redemption” above, the Issuers will send notice of such Change of Control Offer electronically or by first-class mail, with a copy to the Trustee, to each Holder of Notes to the address of such Holder appearing in the security register or otherwise in accordance with the procedures of DTC with the following information:

(1) that a Change of Control Offer is being made pursuant to the covenant entitled “Change of Control,” and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Issuers;

(2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is delivered (the “ Change of Control Payment Date ”);

 

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(3) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(4) that unless the Issuers default in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) that Holders will be entitled to withdraw their tendered Notes and their election to require the Issuers to purchase such Notes, provided that the paying agent receives, not later than the close of business on the second Business Day prior to the expiration date of the Change of Control Offer, a facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes, or a specified portion thereof, and its election to have such Notes purchased;

(7) that if the Issuers are redeeming less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal to at least $2,000 or any integral multiple of $1,000 in excess of $2,000;

(8) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and

(9) the other instructions, as determined by the Issuers, consistent with the covenant described hereunder, that a Holder must follow.

The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, the Issuers will comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in the Indenture by virtue thereof.

On the Change of Control Payment Date, the Issuers will, to the extent permitted by law:

(1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the paying agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to, and purchased by, the Issuers.

The Senior Secured Credit Facilities provide, and future credit agreements or other agreements relating to Indebtedness to which the Issuers become a party may provide, that certain change of control events with respect to the Issuers would constitute a default thereunder (including a Change of Control under the Indenture). If we experience a change of control that triggers a default under the Senior Secured Credit Facilities or any such future Indebtedness, we could seek a waiver of such default or seek to refinance the Senior Secured Credit Facilities or such future Indebtedness. In the event we do not obtain such a waiver or do not refinance the Senior Secured Credit Facilities or such future Indebtedness, such default could result in amounts outstanding under the Senior Secured Credit Facilities or such future Indebtedness being declared due and payable.

 

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Our ability to pay cash to the Holders of Notes following the occurrence of a Change of Control may be limited by our then-existing financial resources. Therefore, sufficient funds may not be available when necessary to make any required repurchases.

The Change of Control purchase feature of the Notes may in certain circumstances make more difficult or discourage a sale or takeover of us and, thus, the removal of incumbent management. After the Issue Date, we have no present intention to engage in a transaction involving a Change of Control, although it is possible that we could decide to do so in the future. Subject to the limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of Indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to incur additional Indebtedness are contained in the covenants described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “—Certain Covenants—Liens.” Such restrictions in the Indenture can be waived only with the consent of the Holders of a majority in principal amount of the Notes then outstanding. Except for the limitations contained in such covenants, however, the Indenture does not contain any covenants or provisions that may afford Holders of the Notes protection in the event of a highly leveraged transaction.

The Issuers will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuers and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

The definition of “ Change of Control ” includes a disposition of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to certain Persons. Although there is a limited body of case law interpreting the phrase “ substantially all ,” there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “ all or substantially all ” of the assets of the Company and its Subsidiaries, taken as a whole. As a result, it may be unclear as to whether a Change of Control has occurred and whether a Holder of Notes may require the Issuers to make an offer to repurchase the Notes as described above.

The provisions under the Indenture relating to the Issuers’ obligation to make an offer to repurchase the Notes as a result of a Change of Control may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.

Asset Sales

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale, unless:

(1) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of; and

(2) except in the case of a Permitted Asset Swap, at least 75.0% of the consideration therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided, that the amount of:

(a) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of the Company or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Notes, that are assumed by the transferee of any such assets and for which the Company and all of its Restricted Subsidiaries have been validly released by all applicable creditors in writing;

 

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(b) any securities, notes or other obligations or assets received by the Company or such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into Cash Equivalents (to the extent of the Cash Equivalents received) within 180 days following the closing of such Asset Sale; and

(c) any Designated Non-cash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (i) $30.0 million and (ii) 2.25% of Total Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value,

shall be deemed to be Cash Equivalents for purposes of this provision and for no other purpose.

Within 365 days after the receipt of any Net Proceeds of any Asset Sale, the Company or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale,

(1) to permanently reduce:

(a) Obligations under the Senior Secured Credit Facilities, and to correspondingly reduce commitments with respect thereto;

(b) Obligations under Secured Indebtedness, which is secured by a Lien that is permitted by the Indenture, and to correspondingly reduce commitments with respect thereto;

(c) Obligations under other Senior Indebtedness (and to correspondingly reduce commitments with respect thereto), provided that the Issuers shall equally and ratably reduce Obligations under the Notes as provided under “—Optional Redemption” or through open-market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes to be repurchased, to the date of repurchase; or

(d) Indebtedness of a Restricted Subsidiary that is not a Guarantor, other than Indebtedness owed to the Issuers or another Restricted Subsidiary; or

(2) to make (a) an Investment in any one or more businesses, provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Company or any of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (b) capital expenditures or (c) acquisitions of other assets, in each of (a), (b) and (c), used or useful in a Similar Business; or

(3) to make an Investment in (a) any one or more businesses, provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Company or any of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (b) properties or (c) acquisitions of other assets that, in each of (a), (b) and (c), replace the businesses, properties and/or assets that are the subject of such Asset Sale.

provided , that in the case of clauses (2) and (3) above, a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as the Company, or such Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “ Acceptable Commitment ”) and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, the Company or such Restricted Subsidiary enters into another Acceptable Commitment (a “ Second Commitment ”) within 180 days of such cancellation or termination; provided further that if any Second Commitment is later cancelled or terminated for any reason before such Net Proceeds are applied, then such Net Proceeds shall constitute Excess Proceeds.

 

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Any Net Proceeds from the Asset Sale that are not invested or applied as provided and within the time period set forth in the preceding paragraph will be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $25.0 million, the Issuers shall make an offer to all Holders of the Notes and, if required by the terms of any Indebtedness that is pari passu with the Notes (“ Pari Passu Indebtedness ”), to the holders of such Pari Passu Indebtedness (an “ Asset Sale Offer ”), to purchase the maximum aggregate principal amount of the Notes and such Pari Passu Indebtedness that is in an amount equal to at least $2,000, or an integral multiple of $1,000 thereafter, that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100.0% of the principal amount thereof (or accreted value thereof, if less), plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. The Issuers will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $25.0 million by delivering the notice required pursuant to the terms of the Indenture, with a copy to the Trustee. The Issuers may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 365 days (or such longer period provided above) or with respect to Excess Proceeds of $25.0 million or less.

To the extent that the aggregate amount of Notes and such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes. If the aggregate principal amount of Notes or the Pari Passu Indebtedness surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the Company shall select such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered with adjustments as necessary so that no Notes or Pari Passu Indebtedness will be repurchased in part in an unauthorized denomination. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds that resulted in the Asset Sale Offer shall be reset to zero (regardless of whether there are any remaining Excess Proceeds upon such completion).

Pending the final application of any Net Proceeds pursuant to this covenant, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility, including under the Senior Secured Credit Facilities, or otherwise invest such Net Proceeds in any manner not prohibited by the Indenture.

The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, the Issuers will comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in the Indenture by virtue thereof.

The provisions under the Indenture relating to the Issuers’ obligation to make an offer to repurchase the Notes as a result of an Asset Sale may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.

Future credit agreements or other similar agreements to which the Issuers become a party may contain restrictions on the Issuers’ ability to repurchase Notes. In the event an Asset Sale occurs at a time when the Issuers are prohibited from purchasing Notes, the Issuers could seek the consent of their lenders to the repurchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the Issuers do not obtain such consent or repay such borrowings, the Issuers will remain prohibited from repurchasing Notes. In such a case, the Issuers’ failure to repurchase tendered Notes would constitute an Event of Default under the Indenture which would, in turn, likely constitute a default under such other agreements.

 

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Certain Covenants

Set forth below are summaries of certain covenants that are contained in the Indenture.

During any period of time that (i) the Notes have Investment Grade Ratings from both Rating Agencies and (ii) no Default has occurred and is continuing under the Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “ Covenant Suspension Event ” and the date thereof being referred to as the “Suspension Date”) then, the covenants specifically listed under the following captions in this “Description of the Notes” section of this prospectus will not be applicable to the Notes (collectively, the “ Suspended Covenants ”):

(1) “—Repurchase at the Option of Holders—Asset Sales”;

(2) “—Limitation on Restricted Payments”;

(3) “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(4) clause (4) of the first paragraph of “—Merger, Consolidation or Sale of All or Substantially All Assets”;

(5) “—Transactions with Affiliates”;

(6) “—Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries”; and

(7) “—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries”

During any period that the foregoing covenants have been suspended, the Company may not designate any of its Subsidiaries as Unrestricted Subsidiaries pursuant to the second sentence of the definition of “Unrestricted Subsidiary.”

If and while the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants, the Notes will be entitled to substantially less covenant protection. In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants under the Indenture for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date ”) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then the Company and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under the Indenture with respect to future events. The period of time between the Suspension Date and the Reversion Date is referred to in this description as the “ Suspension Period ”. Additionally, upon the occurrence of a Covenant Suspension Event, the amount of Excess Proceeds from Net Proceeds shall be reset to zero.

Notwithstanding the foregoing, in the event of any such reinstatement, no action taken or omitted to be taken by the Company or any of its Restricted Subsidiaries prior to such reinstatement will give rise to a Default or Event of Default under the Indenture with respect to the Notes; provided, that (1) with respect to Restricted Payments made after such reinstatement, the amount available to be made as Restricted Payments will be calculated as though the covenant described above under the caption “—Limitation on Restricted Payments” had been in effect prior to, but not during, the Suspension Period; and (2) all Indebtedness incurred, or Disqualified Stock issued, during the Suspension Period will be classified to have been incurred or issued pursuant to clause (3) of the second paragraph of “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;” (3) any Affiliate Transaction entered into after such reinstatement pursuant to an agreement entered into during any Suspension Period shall be deemed to be permitted pursuant to clause (6) of the second paragraph of the covenant described under “—Affiliate Transactions;” (4) any encumbrance or restriction on the ability of any Restricted Subsidiary that is not a Guarantor to take any action described in clauses (1) through (3) of the first paragraph of the covenant described under “—Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries” that becomes effective during any Suspension Period shall be

 

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deemed to be permitted pursuant to clause (a) of the second paragraph of the covenant described under “—Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries;” and (5) no Subsidiary of the Company shall be required to comply with the covenant described under “—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries” after such reinstatement with respect to any guarantee entered into by such Subsidiary during any Suspension Period.

There can be no assurance that the Notes will ever achieve or maintain Investment Grade Ratings.

Limitation on Restricted Payments

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(I) declare or pay any dividend or make any payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (in each case, solely in such Person’s capacity as holder of such Equity Interests), including any dividend, payment or distribution payable in connection with any merger, amalgamation or consolidation, other than:

(a) dividends and distributions by the Company payable solely in Equity Interests (other than Disqualified Stock) of the Company; or

(b) dividends and distributions by a Restricted Subsidiary so long as, in the case of any dividend, payment or distribution payable on or in respect of any class or series of securities (including Equity Interests) issued by a Restricted Subsidiary other than a Wholly-Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend, payment or distribution in accordance with its Equity Interests in such class or series of securities (including Equity Interests);

(II) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Company or any direct or indirect parent company of the Company, including in connection with any merger, amalgamation or consolidation;

(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness, other than:

(a) Indebtedness permitted under clauses (7), (8) and (9) of the second paragraph of the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; or

(b) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or

(IV) make any Restricted Investment (all such payments and other actions set forth in clauses (I) through (IV) above being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment:

(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(2) immediately after giving effect to such transaction on a pro forma basis, (x) the Company could incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” (the “ Fixed Charge Coverage Test ”) and (y) the Consolidated Leverage Ratio of the Company is less than 5.00 to 1.00; and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), 6(c), (9) and (14) of the next succeeding paragraph, but excluding all other

 

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Restricted Payments permitted by the next succeeding paragraph), is less than the sum of (without duplication):

(a) 50.0% of the Consolidated Net Income of the Company for the period (taken as one accounting period and including the predecessor) beginning on the first day of the fiscal quarter during which the Issue Date occurs to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100.0% of such deficit; plus

(b) 100.0% of the aggregate net cash proceeds and the fair market value of marketable securities or other property received by the Company since immediately after the Issue Date (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to clause (12)(a) of the second paragraph of “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”) from the issue or sale of:

(i) (A) Equity Interests of the Company, including Treasury Capital Stock (as defined below), but excluding cash proceeds and the fair market value of marketable securities or other property received from the sale of:

(x) Equity Interests to any future, present or former employees, directors, officers, managers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any direct or indirect parent company of the Company or any of the Company’s Subsidiaries after the Issue Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of the next succeeding paragraph; and

(y) Designated Preferred Stock;

and (B) to the extent such net cash proceeds are actually contributed to the Company, Equity Interests of the Company’s direct or indirect parent companies (excluding contributions of the proceeds from the sale of Designated Preferred Stock of such companies or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of the next succeeding paragraph); or

(ii) debt securities of the Company that have been converted into or exchanged for such Equity Interests of the Company;

provided , that this clause (b) shall not include the proceeds from (W) Refunding Capital Stock (as defined below) applied in accordance with clause (2) of the next succeeding paragraph, (X) Equity Interests or convertible debt securities of the Company sold to a Restricted Subsidiary, (Y) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (Z) Excluded Contributions; plus

(c) 100.0% of the aggregate amount of cash and the fair market value of marketable securities or other property contributed to the capital of the Company following the Issue Date (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to clause (12)(a) of the second paragraph of “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”) (other than by a Restricted Subsidiary and other than any Excluded Contributions); plus

(d) 100.0% of the aggregate amount received in cash and the fair market value of marketable securities or other property received by means of:

(i) the sale or other disposition (other than to the Company or a Restricted Subsidiary) of, or other returns on Investments from, Restricted Investments made by the Company or its Restricted

 

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Subsidiaries and repurchases and redemptions of such Restricted Investments from the Company or its Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees, which constitute Restricted Investments made by the Company or its Restricted Subsidiaries, in each case after the Issue Date; or

(ii) the sale (other than to the Company, the Co-Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a dividend or distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to clause (7) of the next succeeding paragraph or to the extent such Investment constituted a Permitted Investment) or a dividend from an Unrestricted Subsidiary after the Issue Date; plus

(e) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary or the merger, amalgamation or consolidation of an Unrestricted Subsidiary into the Company or a Restricted Subsidiary or the transfer of all or substantially all of the assets of an Unrestricted Subsidiary to the Company or a Restricted Subsidiary after the Issue Date, the fair market value of the Investment in such Unrestricted Subsidiary (or the assets transferred) at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, amalgamation, consolidation or transfer of assets, other than to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment; provided that, in the case of this clause (e), if the fair market value of such Investment shall exceed $40.0 million, such fair market value shall be determined by the board of directors of the Company, whose resolution with respect thereto will be delivered to the Trustee), at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary, other than to the extent the Investment in such Unrestricted Subsidiary was made by the Company, the Co-Issuer or a Restricted Subsidiary pursuant to clause (7) of the next succeeding paragraph or to the extent such Investment constituted a Permitted Investment.

The foregoing provisions will not prohibit:

(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or other distribution or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or other distribution or redemption payment would have complied with the provisions of the Indenture;

(2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests, including any accrued and unpaid dividends thereon (“ Treasury Capital Stock ”) or Subordinated Indebtedness of the Company or any Restricted Subsidiary or any Equity Interests of any direct or indirect parent company of the Company, in exchange for, or out of the proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary) of, Equity Interests of the Company or any direct or indirect parent company of the Company to the extent contributed to the Company (in each case, other than any Disqualified Stock) (“ Refunding Capital Stock ”), (b) the declaration and payment of dividends on Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to a Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company or any of its Subsidiaries) of Refunding Capital Stock, and (c) if, immediately prior to the retirement of Treasury Capital Stock, the declaration and payment of dividends thereon was permitted under clauses (6) (a) or (b) of this paragraph, the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Company) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Treasury Capital Stock immediately prior to such retirement;

(3) the defeasance, redemption, repurchase, exchange or other acquisition or retirement (a) of Subordinated Indebtedness of the Issuers or a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuers or a Guarantor or Disqualified Stock of the

 

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Company, the Co-Issuer or a Guarantor or (b) Disqualified Stock of the Issuers or a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of the Issuers or a Guarantor, that, in each case, is incurred or issued, as applicable, in compliance with “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” so long as:

(a) the principal amount (or accreted value, if applicable) of such new Indebtedness or the liquidation preference of such new Disqualified Stock does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Subordinated Indebtedness or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired for value, plus the amount of any premium (including tender premium) required to be paid under the terms of the instrument governing the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired, defeasance costs and any fees and expenses incurred in connection with the issuance of such new Indebtedness or Disqualified Stock;

(b) such new Indebtedness is subordinated to the Notes or the applicable Guarantee at least to the same extent as such Subordinated Indebtedness so defeased, redeemed, repurchased, exchanged, acquired or retired;

(c) such new Indebtedness or Disqualified Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired (or, if earlier, the date that is 91 days after the maturity date of the Notes); and

(d) such new Indebtedness or Disqualified Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired (or requires no or nominal payments in cash prior to the date that is 91 days after the maturity date of the Notes);

(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Company or any direct or indirect parent company of the Company held by any future, present or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any of its Subsidiaries or any of its direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, or any stock subscription or shareholder agreement (including, for the avoidance of doubt, any principal and interest payable on any notes issued by the Company or any direct or indirect parent company of the Company in connection with such repurchase, retirement or other acquisition), including any Equity Interest rolled over by management of the Company or any direct or indirect parent company of the Company in connection with the Transactions; provided, that the aggregate amount of Restricted Payments made under this clause (4) do not exceed in any calendar year $15.0 million (which shall increase to $25.0 million subsequent to the consummation of an underwritten public Equity Offering by the Company or any direct or indirect parent entity of the Company) (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $30.0 million in any calendar year (which shall increase to $50.0 million subsequent to the consummation of an underwritten public Equity Offering by the Company or any direct or indirect parent corporation of the Company)); provided , further , that such amount in any calendar year under this clause may be increased by an amount not to exceed:

(a) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Company and, to the extent contributed to the Company, the cash proceeds from the sale of Equity Interests of any of the Company’s direct or indirect parent companies, in each case to any future, present or former employees, directors, officers, members of management, or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any of its

 

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Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (3) of the preceding paragraph; plus

(b) the cash proceeds of key man life insurance policies received by the Company or its Restricted Subsidiaries (or any direct or indirect parent company to the extent contributed to the Company) after the Issue Date; less

(c) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (a) and (b) of this clause (4);

and provided , further , that cancellation of Indebtedness owing to the Company from any future, present or former employees, directors, officers, members of management or consultants of the Company (or their respective Controlled Investment Affiliates or Immediate Family Members), any of the Company’s direct or indirect parent companies or any of the Company’s Restricted Subsidiaries in connection with a repurchase of Equity Interests of the Company or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of the Indenture;

(5) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any of its Restricted Subsidiaries or any class or series of Preferred Stock of any Restricted Subsidiary issued in accordance with the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” to the extent such dividends are included in the definition of “ Fixed Charges ”;

(6) (a) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by the Company or any of its Restricted Subsidiaries after the Issue Date;

(b) the declaration and payment of dividends to any direct or indirect parent company of the Company, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by such parent company after the Issue Date, provided that the amount of dividends paid pursuant to this clause (b) shall not exceed the aggregate amount of cash actually contributed to the Company from the sale of such Designated Preferred Stock; or

(c) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph;

provided , in the case of each of (a), (b) and (c) of this clause (6), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is Preferred Stock, after giving effect to such issuance or declaration on a pro forma basis, the Company and its Restricted Subsidiaries on a consolidated basis would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(7) if the Consolidated Leverage Ratio of the Company is less than 5.00 to 1.00 on a pro forma basis after giving effect to such transaction, Investments in Unrestricted Subsidiaries having an aggregate fair market value taken together with all other Investments made pursuant to this clause (7) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities (until such proceeds are converted to Cash Equivalents), not to exceed the greater of (a) $15.0 million and (b) 1.0% of Total Assets at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(8) payments made or expected to be made by the Company or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, member of management or consultant (or their respective Controlled Investment

 

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Affiliates or Immediate Family Members) of the Company or any Restricted Subsidiary or any direct or indirect parent company of the Company and any repurchases of Equity Interests deemed to occur upon exercise of stock options, warrants or similar rights if such Equity Interests represent a portion of the exercise price of such options, warrants or similar rights;

(9) the declaration and payment of dividends on the Company’s common stock (or the payment of dividends to any direct or indirect parent company of the Company to fund a payment of dividends on such company’s common stock), following the first public offering of the Company’s common stock or the common stock of any direct or indirect parent company of the Company after the Issue Date, of up to 6% per annum of the net cash proceeds received by or contributed to the Company in or from any such public offering, other than public offerings with respect to the Company’s common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

(10) Restricted Payments in an amount that does not exceed the amount of Excluded Contributions received since the Issue Date;

(11) if the Consolidated Leverage Ratio of the Company is less than 5.00 to 1.00 on a pro forma basis after giving effect to such transaction, Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (11) (in the case of Restricted Investments, at the time outstanding (without giving effect to the sale of an Investment to the extent the proceeds of such sale do not consist of, or have not be subsequently sold or transferred for, Cash Equivalents)) not to exceed the greater of (a) $25.0 million and (b) 1.75% of Total Assets at such time;

(12) distributions or payments of Securitization Fees;

(13) any Restricted Payment made in connection with the Transactions and the fees and expenses related thereto or owed to Affiliates, in each case to the extent permitted by the covenant described under “—Transactions with Affiliates”;

(14) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those described under the captions “—Repurchase at the Option of Holders—Change of Control” and “—Repurchase at the Option of Holders—Asset Sales”; provided , that if the Issuers shall have been required to make a Change of Control Offer or Asset Sale Offer, as applicable, to purchase the Notes on the terms provided in the Indenture applicable to Change of Control Offers or Asset Sale Offers, respectively, all Notes validly tendered by Holders of such Notes in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed, acquired or retired for value;

(15) the declaration and payment of dividends or distributions by the Company to, or the making of loans to, any direct or indirect parent company of the Company in amounts required for any direct or indirect parent company of the Company to pay, in each case without duplication,

(a) franchise and similar taxes, and other fees and expenses, required to maintain their corporate or other entity existence;

(b) foreign, federal, state or local income or similar taxes, to the extent such income or similar taxes are attributable to the income of the Company and its Restricted Subsidiaries or, to the extent of any cash amounts actually received from its Unrestricted Subsidiaries for such purpose, to the income of such Unrestricted Subsidiaries; provided , that in each case the amount of such payments in respect of any fiscal year does not exceed the amount that the Company and/or its Restricted Subsidiaries (and, to the extent permitted above, its Unrestricted Subsidiaries), as applicable, would have been required to pay in respect of the relevant foreign, federal, state or local income or similar taxes for such fiscal year had the Company, its Restricted Subsidiaries and/or its Unrestricted Subsidiaries (to the extent described above), as applicable, paid such taxes separately from any such parent company;

(c) customary salary, bonus and other benefits payable to employees, directors, officers and managers of any direct or indirect parent company of the Company to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Company and its Restricted Subsidiaries;

 

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(d) general corporate operating and overhead costs and expenses of any direct or indirect parent company of the Company to the extent such costs and expenses are attributable to the ownership or operation of the Company and its Restricted Subsidiaries;

(e) fees and expenses other than to Affiliates of the Company related to any unsuccessful equity or debt offering of such parent entity;

(f) amounts payable pursuant to the Management Fee Agreement, (including any amendment thereto or replacement thereof so long as any such amendment or replacement is not materially disadvantageous in the good faith judgment of the board of directors of the Company to the Holders when taken as a whole, as compared to the Management Fee Agreement as in effect on the Issue Date (it being understood that any amendment thereto or replacement thereof to increase the fees payable pursuant to the Management Fee Agreement would be deemed to be materially disadvantageous to the Holders)), solely to the extent such amounts are not paid directly by the Company or its Subsidiaries;

(g) cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of the Company or any direct or indirect parent company of the Company;

(h) to finance Investments that would otherwise be permitted to be made pursuant to this covenant if made by the Company; provided, that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment, (B) such direct or indirect parent company shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the capital of the Company or one of its Restricted Subsidiaries or (2) the merger or amalgamation of the Person formed or acquired into the Company or one of its Restricted Subsidiaries (to the extent not prohibited by the covenant “—Merger, Consolidation or Sale of All or Substantially All Assets” below) in order to consummate such Investment, (C) such direct or indirect parent company and its Affiliates (other than the Company or a Restricted Subsidiary) receives no consideration or other payment in connection with such transaction except to the extent the Company or a Restricted Subsidiary could have given such consideration or made such payment in compliance with the Indenture, (D) any property received by the Company shall not increase amounts available for Restricted Payments pursuant to clause (3) of the preceding paragraph and (E) such Investment shall be deemed to be made by the Company or such Restricted Subsidiary pursuant to another provision of this covenant (other than pursuant to clause (10) hereof) or pursuant to the definition of “ Permitted Investments ” (other than clause (9) thereof);

(i) amounts that would be permitted to be paid by the Company under clauses (3), (4), (7), (8), (12), (13), (16) and (20) of the covenant described under “—Transactions with Affiliates”; provided , that the amount of any Restricted Payment made under this clause (15)(i) as permitted to be paid by clause (13) of the covenant described under “—Transactions with Affiliates” shall not exceed the amount permitted under clause (4) hereof; provided, further , that the amount of any dividend or distribution under this clause (15)(i) to permit such payment shall reduce, without duplication, Consolidated Net Income of the Company to the extent, if any, that such payment would have reduced Consolidated Net Income of the Company if such payment had been made directly by the Company and increase (or, without duplication of any reduction of Consolidated Net Income, decrease) EBITDA to the extent, if any, that Consolidated Net Income is reduced under this clause (15)(i) and such payment would have been added back to (or, to the extent excluded from Consolidated Net Income, would have been deducted from) EBITDA if such payment had been made directly by the Company, in each case, in the period such payment is made;

(16) the redemption, repurchase, retirement or other acquisition of any Equity Interests of any Restricted Subsidiary by the Company or any Restricted Subsidiary; and

(17) the distribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are cash and/or Cash Equivalents);

 

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provided , that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (11) and (17), no Default shall have occurred and be continuing or would occur as a consequence thereof.

As of the Issue Date, all of the Company’s Subsidiaries were Restricted Subsidiaries. The Company will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the penultimate sentence of the definition of “ Unrestricted Subsidiary .” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the penultimate sentence of the definition of “ Investments .” Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time, pursuant to this covenant or pursuant to the definition of “ Permitted Investments ,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be subject to any of the restrictive covenants set forth in the Indenture. For the avoidance of doubt, this covenant shall not restrict the making of any “ AHYDO catch up payment ” with respect to, and required by the terms of, any Indebtedness of the Company or any of its Restricted Subsidiaries permitted to be incurred under the terms of the Indenture.

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “ incur ” and collectively, an “ incurrence ”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided , that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries’ for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the then outstanding aggregate principal amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing, together with any amounts incurred under clauses (12) and (23) of the following paragraph, by Restricted Subsidiaries that are not Guarantors (other than the Co-Issuer) shall not exceed $75.0 million.

The foregoing limitations will not apply to:

(1) Indebtedness incurred pursuant to any Credit Facilities by the Company or any Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that immediately after giving effect to any such incurrence or issuance, the then outstanding aggregate principal amount of all Indebtedness incurred or issued under this clause (1) does not exceed $660.0 million;

(2) the incurrence by the Company and any Guarantor of Indebtedness represented by the Notes (including any guarantee thereof, but excluding any Additional Notes);

(3) Indebtedness of the Company and its Subsidiaries in existence on the Issue Date (other than Indebtedness described in clauses (1) and (2));

(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock incurred or issued by the Company or any Restricted Subsidiary and Preferred Stock incurred or issued by the Company or any

 

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Restricted Subsidiary, to finance the purchase, lease or improvement of property (real or personal), equipment or other assets used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount not to exceed the greater of (a) $40.0 million and (b) 3.0% of Total Assets (in each case, determined at the date of incurrence or issuance), so long as such Indebtedness, Disqualified Stock or Preferred Stock is incurred or issued at the date of such purchase, lease or improvement or within 270 days thereafter;

(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided , that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 Business Days following such drawing or incurrence;

(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided , that such Indebtedness is not reflected on the balance sheet of the Company, or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6));

(7) Indebtedness of the Company to a Restricted Subsidiary; provided , that any such Indebtedness owing to a Restricted Subsidiary that is not the Co-Issuer or a Guarantor is expressly subordinated in right of payment to the Notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (7);

(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided , that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not the Co-Issuer or a Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (8);

(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries or any pledge of such Capital Stock constituting a Permitted Lien) shall be deemed in each case to be an issuance of such shares of Preferred Stock (to the extent such Preferred Stock is then outstanding) not permitted by this clause (9);

 

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(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred under the Indenture, exchange rate risk or commodity pricing risk;

(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business;

(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100% of the net cash proceeds received by the Company since immediately after the Issue Date from the issue or sale of Equity Interests of the Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(b) and (3)(c) of the first paragraph of “—Limitation on Restricted Payments” to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments pursuant to the second paragraph of “—Limitation on Restricted Payments” or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) or (3) of the definition thereof) and,

(b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not exceed the greater of (i) $75.0 million and (ii) 5.5% of Total Assets (in each case, determined on the date of such incurrence); it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under the first paragraph of this covenant without reliance on this clause (12)(b)); provided, that the amount of Indebtedness, Disqualified Stock and Preferred Stock that may be incurred pursuant to this clause (12), together with amounts incurred under clause (23) and the immediately preceding paragraph, by Restricted Subsidiaries that are not Guarantors (other than the Co-Issuer) shall not exceed $75.0 million at any one time outstanding;

(13) the incurrence or issuance by the Company or any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to extend, replace, refund, refinance, renew or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under the first paragraph of this covenant and clauses (2), (3), (4) and (12)(a) above, this clause (13) and clause (14) below or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so extend, replace, refund, refinance, renew or defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including tender premiums), defeasance costs, and accrued interest, fees and expenses in connection therewith (the “ Refinancing Indebtedness ”) prior to its respective maturity; provided , that such Refinancing Indebtedness:

(a) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased (or requires no or nominal payments in cash prior to the date that is 91 days after the maturity date of the Notes);

(b) to the extent such Refinancing Indebtedness extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated in right of payment to the Notes or the Guarantee thereof at

 

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least to the same extent as the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively; and

(c) shall not include:

(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not the Co-Issuer or a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company, the Co-Issuer or a Guarantor;

(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor; or

(iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

and, provided , further , that subclause (a) of this clause (13) will not apply to any extension, replacement, refunding, refinancing, renewal or defeasance of any Credit Facilities or Secured Indebtedness;

(14) (a) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary, incurred or issued to finance an acquisition (or other purchase of assets) or (b) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company or any Restricted Subsidiary or merged into or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of the Indenture; provided , that in the case of clauses (a) and (b), after giving effect to such acquisition, merger, amalgamation or consolidation, either (x) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in the first paragraph of this covenant or (y) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger, amalgamation or consolidation;

(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;

(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;

(17) (a) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of the Indenture,

(b) any guarantee by a Restricted Subsidiary of Indebtedness of the Company; provided , that such guarantee is incurred in accordance with the covenant described below under “—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries”, or

(c) any incurrence by the Co-Issuer of Indebtedness as a co-issuer of Indebtedness of the Company that was permitted to be incurred by another provision of this covenant;

(18) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to future, present or former employees, directors, officers, managers and consultants thereof, their respective Controlled Investment Affiliates or Immediate Family Members, in each case to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent company of the Company to the extent described in clause (4) of the second paragraph under the caption “—Limitation on Restricted Payments”;

 

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(19) to the extent constituting Indebtedness, customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;

(20) (a) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business of the Company and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Company and its Restricted Subsidiaries and (b) Indebtedness in respect of Bank Products;

(21) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s length commercial terms;

(22) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (a) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business;

(23) the incurrence of Indebtedness of Restricted Subsidiaries of the Company that are not Guarantors (including Foreign Subsidiaries) in an amount outstanding under this clause (23) not to exceed together with any other Indebtedness incurred under this clause (23) the greater of (a) $50.0 million and (b) 3.5% of Total Assets (in each case, determined on the date of such incurrence); it being understood that any Indebtedness deemed incurred pursuant to this clause (23) shall cease to be deemed incurred or outstanding for purposes of this clause (23) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which the Company or such Restricted Subsidiaries could have incurred such Indebtedness under the first paragraph of this covenant without reliance on this clause (23)); provided, that the amount of Indebtedness, Disqualified Stock and Preferred Stock that may be incurred pursuant to this clause (23), together with amounts incurred under clause (12) and the immediately preceding paragraph, by Restricted Subsidiaries that are not Guarantors (other than the Co-Issuer) shall not exceed $75.0 million at any one time outstanding; and

(24) Indebtedness of the Company or any of its Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business.

For purposes of determining compliance with this covenant:

(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (24) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company, in its sole discretion, may classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one of the above clauses or under the first paragraph of this covenant; provided , that all Indebtedness outstanding under the Senior Secured Credit Facilities on the Issue Date will be treated as incurred on the Issue Date under clause (1) of the second paragraph above; and

(2) the Company will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in the first and second paragraphs above.

Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, of the same class will not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this covenant.

Notwithstanding any other provision of the Indenture to the contrary, for all purposes during the term of the Indenture, each lease in existence on the Issue Date shall have the same characterization as a Capitalized Lease

 

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Obligation or an operating lease as the characterization of that lease in the most recent financial statements in existence on the Issue Date, notwithstanding any change in characterization of that lease subsequent to the Issue Date by the Company based on changes in GAAP or its interpretation of GAAP.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. Dollar Equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided , that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus (b) the aggregate amount of fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with such refinancing.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

The Indenture provides that the Company does not, and does not permit any Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is contractually subordinated or junior in right of payment to any Indebtedness of the Company or such Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or such Guarantor’s Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be.

The Indenture does not treat (1) unsecured Indebtedness as subordinated or junior to Secured Indebtedness merely because it is unsecured or (2) Indebtedness as subordinated or junior to any other Indebtedness merely because it has a junior priority with respect to the same collateral or because it is guaranteed by other obligors.

Liens

The Company will not, and will not permit the Co-Issuer or any Guarantor to, directly or indirectly, create, incur, assume or suffer to exist any Lien (except Permitted Liens) that secures Obligations under any Indebtedness or any related Guarantee of Indebtedness, on any asset or property of the Company, the Co-Issuer or any Guarantor, or any income or profits therefrom, or assign or convey any right to receive income therefrom, unless:

(1) in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and

(2) in all other cases, the Notes or the Guarantees are equally and ratably secured,

except that the foregoing shall not apply to or restrict (a) Liens securing obligations in respect of the Notes and the related Guarantees, (b) Liens securing obligations in respect of (x) Indebtedness and other Obligations permitted to be incurred under Credit Facilities, including any letter of credit facility relating thereto, that was permitted by the terms of the Indenture to be incurred pursuant to clause (1) of the second paragraph under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and (y) obligations of the Issuers or any Subsidiary in respect of any Bank Products provided by any lender party to any Senior Secured Credit Facilities or any Affiliate of such lender (or any Person that was a lender or an Affiliate of a lender at the time the applicable agreements pursuant to which

 

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such Bank Products are provided were entered into) and (c) Liens securing obligations in respect of Indebtedness permitted to be incurred under the covenant described above under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; provided, that, with respect to Liens securing Indebtedness permitted under this subclause (c), at the time of incurrence and after giving pro forma effect thereto and the application of the net proceeds thereof, the Consolidated Secured Debt Ratio would be no greater than 3.50 to 1.00.

Any Lien created for the benefit of the Holders of the Notes pursuant to this covenant shall be deemed automatically and unconditionally released and discharged upon the release and discharge of each of the Liens described in clauses (1) and (2) above.

Merger, Consolidation or Sale of All or Substantially All Assets

Company

The Company may not consolidate or merge with or into or wind up into (whether or not the Company is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(1) the Company is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made, is a Person organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Person, as the case may be, being herein called the “ Successor Company ”); provided , that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company, if other than the Company, expressly assumes all the obligations of the Company under the Notes pursuant to supplemental indentures or other documents or instruments;

(3) immediately after such transaction, no Default exists;

(4) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable four-quarter period,

(a) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test, or

(b) the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would be equal to or greater than the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries immediately prior to such transaction;

(5) each Guarantor, unless it is the other party to the transactions described above, in which case clause (1)(b) of the second succeeding paragraph shall apply, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under the Indenture, the Notes and the Registration Rights Agreement; and

(6) the Co-Issuer, unless it is the party to the transactions described above, in which case clause (3) under the subheading “—Co-Issuer” below shall apply, shall have by supplemental indenture confirmed that it continues to be a co-obligor of the Notes; and

(7) the Company (or, if applicable, the Successor Company) shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures, if any, comply with the Indenture. The Successor Company will succeed to, and be substituted for the Company under the Indenture, the Guarantees and the Notes, as applicable.

Notwithstanding the immediately preceding clauses (3) and (4),

 

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(1) any Restricted Subsidiary may consolidate or amalgamate with or merge with or into or transfer all or part of its properties and assets to the Company, and

(2) the Company may merge with an Affiliate of the Company solely for the purpose of reorganizing the Company in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

Guarantors

Subject to certain limitations described in the Indenture governing release of a Guarantee upon the sale, disposition or transfer of a Guarantor, no Guarantor will, and the Company will not permit any Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(1) (a) such Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of such Guarantor, as applicable, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such surviving Guarantor or such Person, as the case may be, being herein called the “ Successor Person ”);

(b) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under the Indenture and such Guarantor’s related Guarantee pursuant to supplemental indentures or other documents or instruments;

(c) immediately after such transaction, no Default exists; and

(d) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures, if any, comply with the Indenture;

(2) the transaction is made in compliance with the first paragraph of the covenant described under “—Repurchase at the Option of Holders—Asset Sales”; or

(3) in the case of assets comprised of Equity Interests of Subsidiaries that are not Guarantors, such Equity Interests are sold, assigned, transferred, leased, conveyed or otherwise disposed of to one or more Restricted Subsidiaries.

Subject to certain limitations described in the Indenture, the Successor Person will succeed to, and be substituted for, such Guarantor under the Indenture and such Guarantor’s Guarantee. Notwithstanding the foregoing, any Guarantor may (1) merge or consolidate with or into, wind up into or transfer all or part of its properties and assets to another Guarantor or the Company, (2) merge with an Affiliate of the Company solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof, (3) convert into a corporation, partnership, limited partnership, limited liability company or trust organized or existing under the laws of the jurisdiction of organization of such Guarantor or (4) liquidate or dissolve or change its legal form if the Company determines in good faith that such action is in the best interests of the Company.

Co-Issuer

The Co-Issuer may not, directly or indirectly, consolidate or merge with or into or wind up into (whether or not the Co-Issuer is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the Co-Issuer’s properties or assets, in one or more related transactions, to any Person unless:

(1) (a) concurrently therewith, a corporate Wholly-Owned Restricted Subsidiary of the Company organized and validly existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (which may be the continuing Person as a result of such transaction)

 

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expressly assumes all the obligations of the Co-Issuer under the Notes, pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee, and the Registration Rights Agreement if the exchange offer contemplated therein has not been consummated or if the Issuers continue to have an obligation to file or maintain the effectiveness of a shelf registration statement as provided under such agreement; or

(b) after giving effect thereto, at least one obligor on the notes shall be a corporation organized and validly existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof;

(2) immediately after such transaction, no Default exists; and

(3) the Co-Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture, if any, comply with the Indenture.

Transactions with Affiliates

The Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate payments or consideration in excess of $10.0 million, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Company or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis; and

(2) the Company delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $20.0 million, a resolution adopted by the majority of the board of directors of the Company approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) above.

The foregoing provisions will not apply to the following:

(1) transactions between or among the Company or any of its Restricted Subsidiaries;

(2) Restricted Payments permitted by the provisions of the Indenture described above under the covenant “—Limitation on Restricted Payments” and the definition of “ Permitted Investments ”;

(3) the payment of management, consulting, monitoring, transaction, advisory and other fees, indemnities and expenses pursuant to the Management Fee Agreement (plus any unpaid management, consulting, monitoring, transaction, advisory and other fees, indemnities and expenses accrued in any prior year) and the termination fees pursuant to the Management Fee Agreement, or any amendment thereto or replacement thereof so long as any such amendment or replacement is not materially disadvantageous in the good faith judgment of the board of directors of the Company to the Holders when taken as a whole, as compared to the Management Fee Agreement as in effect on the Issue Date (it being understood that any amendment thereto or replacement thereof to increase the fees payable pursuant to the Management Fee Agreement would be deemed to be materially disadvantageous to the Holders);

(4) the payment of reasonable and customary fees and compensation paid to, and indemnities and reimbursements and employment and severance arrangements provided on behalf of or for the benefit of, current or former employees, directors, officers, managers or consultants of the Company, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(5) transactions in which the Company or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to

 

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the Company or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially less favorable to the Company or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis;

(6) any agreement as in effect as of the Issue Date, or any amendment thereto (so long as any such amendment is not disadvantageous in any material respect to the Holders when taken as a whole as compared to the applicable agreement as in effect on the Issue Date);

(7) the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it (or any parent company of the Company which holds, directly or indirectly, 100% of the issued and outstanding Equity Interests of the Company) is a party as of the Issue Date and any similar agreements which it (or any parent company of the Company which holds, directly or indirectly, 100% of the issued and outstanding Equity Interests of the Company) may enter into thereafter; provided, that the existence of, or the performance by the Company or any of its Restricted Subsidiaries (or such parent company) of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (7) to the extent that the terms of any such amendment or new agreement are not otherwise disadvantageous in any material respect in the good faith judgment of the board of directors of the Company to the Holders when taken as a whole;

(8) the Transactions and the payment of all fees and expenses related to the Transactions, including Transaction Expenses;

(9) transactions with customers, clients, suppliers, contractors, joint venture partners or purchasers or sellers of goods or services that are Affiliates, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture which are fair to the Company and its Restricted Subsidiaries, in the reasonable determination of the board of directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(10) the issuance of Equity Interests (other than Disqualified Stock) of the Company to any direct or indirect parent company of the Company or to any Permitted Holder or to any employee, director, officer, manager or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(11) sales of accounts receivable, or participations therein, or Securitization Assets or related assets in connection with any Qualified Securitization Facility;

(12) payments by the Company or any of its Restricted Subsidiaries to any of the Investors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures which payments are approved by a majority of the board of directors of the Company in good faith;

(13) payments and Indebtedness and Disqualified Stock (and cancellation of any thereof) of the Company and its Restricted Subsidiaries and Preferred Stock (and cancellation of any thereof) of any Restricted Subsidiary to any future, current or former employee, director, officer, manager or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any of its Subsidiaries or any of its direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement that are, in each case, approved by the Company in good faith; and any employment agreements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers, managers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) that are, in each case, approved by the Company in good faith;

 

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(14) (i) investments by Permitted Holders in securities of the Company or any of its Restricted Subsidiaries (and payment of reasonable out-of-pocket expenses incurred by such Permitted Holders in connection therewith) so long as (x) the investment is being offered by the Company or such Restricted Subsidiary generally to other investors on the same or more favorable terms and (y) the investment constitutes less than 5.0% of the proposed or outstanding issue amount of such class of securities ( provided , that any investments in debt securities by any Debt Fund Affiliates shall not be subject to the limitation in this clause (y)), and (ii) payments to Permitted Holders in respect of securities of the Company or any of its Restricted Subsidiaries contemplated in the foregoing subclause (i) or that were acquired from Persons other than the Company and its Restricted Subsidiaries, in each case, in accordance with the terms of such securities;

(15) payments to or from, and transactions with, any joint venture in the ordinary course of business (including, without limitation, any cash management activities related thereto);

(16) payments by the Company (and any direct or indirect parent company thereof) and its Subsidiaries pursuant to tax sharing agreements among the Company (and any such parent company) and its Subsidiaries, to the extent such payments are permitted under clause (15)(b) of the second paragraph under the caption “—Limitation on Restricted Payments”;

(17) any lease entered into between the Company or any Restricted Subsidiary, as lessee and any Affiliate of the Company, as lessor, which is approved by a majority of the disinterested members of the board of directors of the Company in good faith;

(18) intellectual property licenses in the ordinary course of business;

(19) any payments by the Company and the Company’s Subsidiaries made pursuant to any Tax Receivable Agreement; and

(20) the payment of reasonable out-of-pocket costs and expenses relating to registration rights and indemnities provided to stockholders of the Company or any direct or indirect parent thereof pursuant to the stockholders agreement or the registration rights agreement entered into on the Issue Date in connection therewith.

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

The Company will not, and will not permit any of its Restricted Subsidiaries that is not a Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Restricted Subsidiary to:

(1) (a) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries that is a Guarantor on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or

(b) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries that is a Guarantor;

(2) make loans or advances to the Company or any of its Restricted Subsidiaries that is a Guarantor; or

(3) sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries that is a Guarantor,

except (in each case) for such encumbrances or restrictions existing under or by reason of:

(a) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Senior Secured Credit Facilities and the related documentation and Hedging Obligations and the related documentation;

(b) the Indenture, the Notes and the guarantees thereof;

 

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(c) purchase money obligations for property acquired in the ordinary course of business and capital lease obligations that impose restrictions of the nature described in clause (3) above on the property so acquired;

(d) applicable law or any applicable rule, regulation or order;

(e) any agreement or other instrument of a Person acquired by or merged or consolidated with or into the Company or any of its Restricted Subsidiaries in existence at the time of such acquisition or at the time it merges with or into the Company or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such Person (but, in any such case, not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person so acquired and its Subsidiaries, or the property or assets of the Person so acquired and its Subsidiaries or the property or assets so acquired;

(f) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Company pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(g) Secured Indebtedness otherwise permitted to be incurred pursuant to the covenants described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “—Liens” that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(h) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business or arising in connection with any Permitted Liens;

(i) other Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries that are not Guarantors permitted to be incurred subsequent to the Issue Date pursuant to the provisions of the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(j) customary provisions in joint venture agreements and other similar agreements relating solely to such joint venture;

(k) customary provisions contained in leases, sub-leases, licenses, sub-licenses or similar agreements, including with respect to intellectual property and other agreements, in each case, entered into in the ordinary course of business;

(l) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Company or any of its Restricted Subsidiaries is a party entered into in the ordinary course of business; provided , that such agreement prohibits the encumbrance of solely the property or assets of the Company or such Restricted Subsidiary that are the subject to such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Company or such Restricted Subsidiary or the assets or property of another Restricted Subsidiary;

(m) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of any Restricted Subsidiary;

(n) customary provisions restricting assignment of any agreement entered into in the ordinary course of business;

(o) restrictions arising in connection with cash or other deposits permitted under the covenant “—Liens”;

(p) any agreement or instrument (A) relating to any Indebtedness, Disqualified or preferred stock permitted to be incurred or issued subsequent to the Issue Date pursuant to the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” if the encumbrances and restrictions are not materially more disadvantageous, taken as a whole, to the Holders than is customary in comparable financings for similarly situated issuers (as determined

 

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in good faith by the Company) or is otherwise in effect on the Issue Date and (B) either (x) the Company determines that such encumbrance or restriction will not adversely affect the Company’s ability to make principal and interest payments on the Notes as and when they come due or (y) such encumbrances and restrictions apply only during the continuance of a default in respect of a payment or financial maintenance covenant relating to such Indebtedness;

(q) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (a) through (p) above; provided , that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company, not materially more restrictive with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; and

(r) restrictions created in connection with any Qualified Securitization Facility that, in the good faith determination of the Company are necessary or advisable to effect such Qualified Securitization Facility.

Limitation on Guarantees of Indebtedness by Restricted Subsidiaries

The Company will not permit any of its Wholly-Owned Subsidiaries that are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities of the Company, the Co-Issuer or any Guarantor), other than a Guarantor, the Co-Issuer or a Foreign Subsidiary or a Securitization Subsidiary, to guarantee the payment of any Indebtedness of the Company, the Co-Issuer or any Guarantor unless:

(1) such Restricted Subsidiary within 30 days after the guarantee of such Indebtedness executes and delivers a supplemental indenture to the Indenture providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Company, the Co-Issuer or any Guarantor:

(a) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or such Guarantor’s Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes; and

(b) such Restricted Subsidiary waives and will not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other applicable rights against the Company or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee;

provided , that this covenant shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. The Company may elect, in its sole discretion, to cause any Subsidiary that is not otherwise required to be a Guarantor to become a Guarantor, in which case such Subsidiary shall not be required to comply with the 30 day period described in clause (1) above.

Reports and Other Information

Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Indenture requires the Company to file with the SEC from and after the Issue Date:

(1) within 90 days after the end of each fiscal year (or 135 days for the fiscal year ending December 31, 2011), annual reports on Form 10-K, or any successor or comparable form, containing the information required to be contained therein, or required in such successor or comparable form;

 

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(2) within 45 days after the end of each of the first three fiscal quarters of each fiscal year (or 90, 75 and 60 days, respectively, for the first three fiscal quarters ending after the Issue Date), reports on Form 10-Q containing all quarterly information that would be required to be contained in Form 10-Q, or any successor or comparable form;

(3) within five Business Days of the date on which an event would have been required to be reported on a Form 8-K or any successor or comparable form if the Company had been a reporting company under the Exchange Act, a current report relating to such event on Form 8-K or any successor or comparable form;

in each case, in a manner that complies in all material respects with the requirements specified in such form (except as described above or below and subject, in the case of required financial information, to exceptions consistent with the presentation of financial information in this Offering Memorandum, to the extent filed within the times specified above); provided , however, that the Company shall not be so obligated to file such reports referred to in clauses (1), (2) and (3) above with the SEC (i) if the SEC does not permit such filing or (ii) prior to the consummation of an exchange offer or the effectiveness of a shelf registration statement as required by the Registration Rights Agreement, in which event the Company will make available such information to the Trustee, the Holders of the Notes and prospective purchasers of Notes, in each case within 15 days after the time the Company would be required to file such information with the SEC, if it were subject to Sections 13 or 15(d) of the Exchange Act; provided, further , that until such time as the consummation of an exchange offer or the effectiveness of a shelf registration statement as required by the Registration Rights Agreement, the Company shall not be required to (i) in the case of (x) clauses (1) and (2) provide any information beyond the financial information that would be required to be contained in an annual or quarterly report on Form 10-K or 10-Q, as applicable, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and (y) clause (3) make available any information regarding director and management compensation or the occurrence of any of the events set forth in Items 1.04, 2.01, 2.05, 2.06, 3 (other than Item 3.03), 5.01, 5.02(e)—(f), 5.03-5.08, 6, 7, 8 or 9 of Form 8-K, (ii) make available any information regarding the occurrence of any of the events set forth in Items 1.01 or 1.02 of Form 8-K if the Company determines in its good faith judgment that the event that would otherwise be required to be disclosed is not material to the holders of the notes or the business, assets, operations, financial positions or prospects of the Company and its Restricted Subsidiaries taken as a whole, (iii) comply with Regulation G under the Exchange Act or Item 10(e) of Regulation S-K with respect to any “non-GAAP” financial information contained therein (other than providing reconciliations of such non-GAAP information to extent included in the Offering Memorandum), (iv) comply with Regulation S-X or (v) provide any information that is not otherwise similar to information currently included in the Offering Memorandum. In addition, notwithstanding the foregoing, the Company will not be required to (i) comply with Sections 302, 906 and 404 of the Sarbanes-Oxley Act of 2002 or (ii) otherwise furnish any information, certificates or reports required by Items 307 or 308 of Regulation S-K prior to the consummation of an exchange offer or the effectiveness of a shelf registration statement. In addition, to the extent not satisfied by the foregoing, the Company will agree that, for so long as any Notes are outstanding, it will furnish to Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

In the event that any direct or indirect parent company of the Company of which the Company is a Wholly-Owned Subsidiary becomes a Guarantor, the Indenture permits the Company to satisfy its obligations in this covenant with respect to financial information relating to the Company by furnishing financial information relating to such parent; provided , that, if and so long as such parent company shall have Independent Assets or Operations (as defined below), the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Company and its Restricted Subsidiaries on a stand-alone basis, on the other hand. “ Independent Assets or Operations ” means, with respect to any such parent company, that such parent company’s total assets, revenues, income from continuing operations before income taxes and cash flows from operating activities (excluding in each case amounts related to its investment in the Company and the Restricted Subsidiaries), determined in accordance with GAAP and as shown on the most recent balance sheet of such parent company, is more than 3.0% of such parent company’s corresponding consolidated amount.

 

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Notwithstanding the foregoing, such requirements shall be deemed satisfied prior to the commencement of the exchange offer or the effectiveness of the shelf registration statement (1) by the filing with the SEC of the exchange offer registration statement or shelf registration statement (or any other similar registration statement), and any amendments thereto, with such financial information that satisfies Regulation S-X of the Securities Act, subject to exceptions consistent with the presentation of financial information in this Offering Memorandum, to the extent filed within the time periods specified above, or (2) by posting on the Company’s website and providing to the Trustee within 15 days of the time periods after the Company would have been required to file annual and interim reports with the SEC if it were a non-accelerated filer, the financial information (including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section) that would be required to be included in such reports, subject to exceptions consistent with the presentation of financial information in this Offering Memorandum, to the extent filed within the times specified above.

Notwithstanding anything herein to the contrary, the Company will not be deemed to have failed to comply with any of its obligations hereunder for purposes of clause (3) under “—Events of Default and Remedies” until 90 days after the receipt of the written notice delivered thereunder.

To the extent any information is not provided within the time periods specified in this section “—Reports and Other Information” and such information is subsequently provided, the Company will be deemed to have satisfied its obligations with respect thereto at such time and any Default with respect thereto shall be deemed to have been cured.

Limitation on Business Activities of the Co-Issuer

The Co-Issuer may not hold any assets, become liable for any obligations or engage in any business activities; provided that it may be a co-obligor with respect to the Notes or any other Indebtedness issued by the Company and may engage in any activities directly related thereto or necessary in connection therewith. The Co-Issuer shall be a Wholly-Owned Subsidiary of the Company (or its permitted successors) at all times.

Events of Default and Remedies

The Indenture provides that each of the following is an “ Event of Default ”:

(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes;

(2) default for 30 days or more in the payment when due of interest on or with respect to the Notes;

(3) failure by the Company, the Co-Issuer or any Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of not less than 25% in principal amount of the then outstanding Notes to comply with any of its obligations, covenants or agreements (other than a default referred to in clause (1) or (2) above) contained in the Indenture or the Notes;

(4) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company, the Co-Issuer or any Restricted Subsidiary or the payment of which is guaranteed by the Company, the Co-Issuer or any Restricted Subsidiary, other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both:

(a) such default either results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or relates to an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated maturity; and

 

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(b) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, aggregate $30.0 million or more outstanding;

(5) failure by the Company, the Co-Issuer or any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Issuer for a fiscal quarter end provided as required under “—Reports and Other Information”) would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $30.0 million (net of amounts covered by insurance policies issued by reputable insurance companies), which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;

(6) certain events of bankruptcy or insolvency with respect to the Company or any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end provided as required under “—Reports and Other Information”) would constitute a Significant Subsidiary); or

(7) the Guarantee of any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end provided as required under “—Reports and Other Information”) would constitute a Significant Subsidiary) shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of any Guarantor that is a Significant Subsidiary (or the responsible officers of any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end) would constitute a Significant Subsidiary), as the case may be, denies in writing that it has any further liability under its Guarantee or gives written notice to such effect, other than by reason of the termination of the Indenture or the release of any such Guarantee in accordance with the Indenture.

If any Event of Default (other than of a type specified in clause (6) above) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in principal amount of the then total outstanding Notes may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately.

Upon the effectiveness of such declaration, such principal of and premium, if any, and interest will be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising under clause (6) of the first paragraph of this section, all outstanding Notes will become due and payable without further action or notice. The Indenture provides that the Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that withholding notice is in their interest.

The Indenture provides that the Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture (except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder) and rescind any acceleration with respect to the Notes and its consequences (except if such rescission would conflict with any judgment of a court of competent jurisdiction). In the event of any Event of Default specified in clause (4) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose:

(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged;

(2) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

 

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(3) the default that is the basis for such Event of Default has been cured.

In case an Event of Default occurs and is continuing, the Trustee is under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee indemnity or security reasonably satisfactory to the Trustee against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder of a Note may pursue any remedy with respect to the Indenture or the Notes unless:

(1) such Holder has previously given the Trustee written notice that an Event of Default is continuing;

(2) Holders of at least 25% in principal amount of the total outstanding Notes have requested in writing the Trustee to pursue the remedy;

(3) Holders of the Notes have offered the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee a direction inconsistent with such written request within such 60-day period.

Subject to certain restrictions, under the Indenture the Holders of a majority in principal amount of the total outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

The Indenture provides that the Issuers are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuers are required, within 10 Business Days, upon becoming aware of any Default, to deliver to the Trustee a statement specifying such Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuers or any Guarantor or any of their direct or indirect parent companies (other than the Company and the Guarantors) shall have any liability, for any obligations of the Issuers or the Guarantors under the Notes, the Guarantees or the Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

Legal Defeasance and Covenant Defeasance

The obligations of the Issuers and the Guarantors under the Indenture, the Notes and the Guarantees, as the case may be, will terminate (other than certain obligations) and will be released upon payment in full of all of the Notes. The Issuers may, at their option and at any time, elect to have all of their obligations discharged with respect to the Notes and have each Guarantor’s obligation discharged with respect to its Guarantee (“ Legal Defeasance ”) and cure all then existing Events of Default except for:

(1) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to the Indenture;

(2) the Issuers’ obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

 

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(3) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuers’ obligations in connection therewith; and

(4) the Legal Defeasance provisions of the Indenture.

In addition, the Issuers may, at their option and at any time, elect to have their obligations and those of each Guarantor released with respect to substantially all of the restrictive covenants that are described in the Indenture (“ Covenant Defeasance ”) and thereafter any omission to comply with such obligations shall not constitute a Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including bankruptcy, receivership, rehabilitation and insolvency events pertaining to the Issuers) described under “—Events of Default and Remedies” will no longer constitute an Event of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(1) the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the redemption date, as the case may be, of such principal, premium, if any, or interest on such Notes and the Company must specify whether such Notes are being defeased to maturity or to a particular redemption date; provided , that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of the Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit as of the date of redemption (any such amount, the “ Applicable Premium Deficit ”) only required to be deposited with the Trustee on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered by the Issuers to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption;

(2) in the case of Legal Defeasance, the Issuers shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions,

(a) the Issuers have received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Senior Secured Credit Facilities or any other material agreement or instrument

 

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(other than the Indenture) to which, the Issuers or any Guarantor is a party or by which the Issuers or any Guarantor is bound (other than that resulting from any borrowing of funds to be applied to make the deposit required to effect such Legal Defeasance or Covenant Defeasance and any similar and simultaneous deposit relating to other Indebtedness, and, in each case, the granting of Liens in connection therewith);

(6) the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

(7) the Issuers shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuers with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuers or any Guarantor or others; and

(8) the Issuers shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect as to all Notes, when either:

(1) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or

(2) (a) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers, and the Issuers or any Guarantor have irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. dollar-denominated Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption; provided , that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of the Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any Applicable Premium Deficit only required to be deposited with the Trustee on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered by the Issuers to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption,

(b) no Default (other than that resulting from borrowing funds to be applied to make such deposit or any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) with respect to the Indenture or the Notes shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under the Senior Secured Credit Facilities or any other material agreement or instrument (other than the Indenture) to which the Issuers or any Guarantor is a party or by which the Issuers or any Guarantor is bound (other than resulting from any borrowing of funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith);

(c) the Issuers have paid or caused to be paid all sums payable by it under the Indenture; and

 

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(d) the Issuers have delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.

In addition, the Issuers must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Amendment, Supplement and Waiver

Except as provided in the next two succeeding paragraphs, the Indenture, any Guarantee and the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding, including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes, and any existing Default or compliance with any provision of the Indenture or the Notes issued thereunder may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes, other than Notes beneficially owned by the Issuers or their Affiliates (including consents obtained in connection with a purchase of or tender offer or exchange offer for the Notes).

The Indenture provides that, without the consent of each affected Holder of Notes, an amendment or waiver may not, with respect to any Notes held by a non-consenting Holder:

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the fixed final maturity of any such Note or alter or waive the provisions with respect to the redemption of such Notes (other than provisions relating to (a) notice periods (to the extent consistent with applicable requirements of clearing and settlement systems) for redemption and conditions to redemption and (b) the covenants described above under the caption “—Repurchase at the Option of Holders”);

(3) reduce the rate of or change the time for payment of interest on any Note;

(4) waive a Default in the payment of principal of or premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in the Indenture or any Guarantee which cannot be amended or modified without the consent of all affected Holders;

(5) make any Note payable in money other than that stated therein;

(6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of or premium, if any, or interest on the Notes;

(7) make any change in these amendment and waiver provisions;

(8) impair the right of any Holder to receive payment of principal of, or premium, if any, or interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

(9) make any change to or modify the ranking of the Notes that would adversely affect the Holders; or

(10) except as expressly permitted by the Indenture, modify the Guarantees of any Significant Subsidiary, or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company), would constitute a Significant Subsidiary, in any manner materially adverse to the Holders of the Notes.

Notwithstanding the foregoing, the Issuers, any Guarantor (with respect to a Guarantee or the Indenture to which it is a party) and the Trustee may amend or supplement the Indenture and any Guarantee or Notes without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

 

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(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3) to comply with the covenant relating to mergers, amalgamations, consolidations and sales of assets;

(4) to provide for the assumption of the Issuers’ or any Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not materially adversely affect the legal rights under the Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuers or any Guarantor;

(7) to provide for the issuance of Additional Notes in accordance with the terms of the Indenture;

(8) to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act;

(9) to evidence and provide for the acceptance and appointment under the Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

(10) to provide for the issuance of exchange notes or private exchange notes, which are identical to exchange notes except that they are not freely transferable;

(11) to add a Guarantor under the Indenture or to release a Guarantor in accordance with the terms of the Indenture;

(12) to conform the text of the Indenture, the Guarantees or the Notes to any provision of the “Description of the Notes” section of the Offering Memorandum to the extent that such provision in the “Description of the Notes” section of the Offering Memorandum was intended to be a verbatim recitation of a provision of the Indenture, the Guarantee or the Notes;

(13) to make any amendment to the provisions of the Indenture relating to the transfer and legending of Notes as permitted by the Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided , that (a) compliance with the Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Notes; or

(14) to make any other modifications to the Notes or the Indenture of a formal, minor or technical nature or necessary to correct a manifest error, so long as such modification does not adversely affect the rights of any Holders of the Notes in any material respect.

The consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

Notices

Notices given by publication or electronic delivery will be deemed given on the first date on which publication is made and notices given by first-class mail, postage prepaid, will be deemed given five calendar days after mailing or transmitting.

Concerning the Trustee

The Indenture contains certain limitations on the rights of the Trustee thereunder, should it become a creditor of the Issuers, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee is permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if the Indenture has been qualified under the Trust Indenture Act) or resign.

 

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The Indenture provides that the Holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur (which shall not be cured), the Trustee is required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of his own affairs. Subject to such provisions, the Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of the Notes, unless such Holder shall have offered to the Trustee security and indemnity reasonably satisfactory to it against any loss, liability or expense.

Governing Law

The Indenture, the Notes and any Guarantee are governed by and construed in accordance with the laws of the State of New York.

Certain Definitions

Set forth below are certain defined terms used in the Indenture. For purposes of the Indenture, unless otherwise specifically indicated, the term “ consolidated ” with respect to any Person refers to such Person consolidated with its Restricted Subsidiaries, and excludes from such consolidation any Unrestricted Subsidiary as if such Unrestricted Subsidiary were not an Affiliate of such Person.

Acquired Indebtedness ” means, with respect to any specified Person,

(1) Indebtedness of any other Person existing at the time such other Person is merged or consolidated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging or consolidating with or into or becoming a Restricted Subsidiary of such specified Person, and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Additional Interest ” means all additional interest then owing pursuant to the Registration Rights Agreement.

Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “ control ” (including, with correlative meanings, the terms “ controlling ,” “ controlled by ” and “ under common control with ”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

Applicable Premium ” means, with respect to any Note on any Redemption Date, the greater of:

(1) 1.0% of the principal amount of such Note, and

(2) the excess, if any, of (a) the present value at such Redemption Date of (i) the redemption price of such Notes at January 31, 2016 (such redemption price being set forth in the table appearing above under the caption “Optional Redemption”), plus (ii) all required remaining scheduled interest payments due on such Note through January 31, 2016 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points over (b) the then outstanding principal amount of such Note.

Asset Sale ” means:

(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions (including by way of a Sale and Lease-Back Transaction) of property or assets of the Company or any of its Restricted Subsidiaries (each referred to in this definition as a “ disposition ”); or

 

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(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than Preferred Stock of Restricted Subsidiaries issued in compliance with the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”), whether in a single transaction or a series of related transactions;

in each case, other than:

(a) any disposition of Cash Equivalents or Investment Grade Securities or obsolete or worn out property or equipment in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale or no longer used or useful in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of the Company in a manner permitted pursuant to the provisions described above under “—Certain Covenants—Merger, Consolidation or Sale of All or Substantially All Assets” or any disposition that constitutes a Change of Control pursuant to the Indenture;

(c) the making of any Restricted Payment that is permitted to be made, and is made, under the covenant described above under “—Certain Covenants—Limitation on Restricted Payments” or any Permitted Investment;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate fair market value of less than $15.0 million;

(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

(f) to the extent allowable under Section 1031 of the Internal Revenue Code of 1986, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(g) the lease, assignment, sub-lease, license or sub-license of any real or personal property in the ordinary course of business;

(h) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) foreclosures, condemnation, expropriation or any similar action with respect to assets or the granting of Liens not prohibited by the Indenture;

(j) sales of accounts receivable, or participations therein, or Securitization Assets (other than royalties or other revenues (except accounts receivable)) or related assets in connection with any Qualified Securitization Facility or the disposition of an account receivable in connection with the collection or compromise thereof in the ordinary course of business;

(k) any financing transaction with respect to property built or acquired by the Company or any Restricted Subsidiary after the Issue Date, including Sale and Lease-Back Transactions and asset securitizations permitted by the Indenture;

(l) the sale or discount of inventory, accounts receivable or notes receivable in the ordinary course of business or the conversion of accounts receivable to notes receivable;

(m) the licensing or sub-licensing of intellectual property or other general intangibles in the ordinary course of business, other than the licensing of intellectual property on a long-term basis;

(n) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business;

(o) the unwinding of any Hedging Obligations;

(p) sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

 

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(q) the abandonment of intellectual property rights in the ordinary course of business, which in the reasonable good faith determination of the Company are not material to the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole;

(r) the issuance by a Restricted Subsidiary of Preferred Stock or Disqualified Stock that is permitted by the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(s) the granting of a Lien that is permitted under the covenant described above under “—Certain Covenants—Liens”; and

(t) the issuance of directors’ qualifying shares and shares issued to foreign nationals as required by applicable law.

Bank Products ” means any facilities or services related to cash management, including treasury, depository, overdraft, credit or debit card, purchase card, electronic funds transfer and other cash management arrangements.

Business Day ” means each day which is not a Legal Holiday.

Capital Stock ” means:

(1) in the case of a corporation, corporate stock or shares in the capital of such corporation;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

Capitalized Lease Obligation ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) prepared in accordance with GAAP; provided that any obligations of the Company or its Restricted Subsidiaries, or of a special purpose or other entity not consolidated with the Company and its Restricted Subsidiaries, either existing on the Issue Date or created prior to any recharacterization described below (or any refinancing thereof) (i) that were not included on the consolidated balance sheet of the Company as capital lease obligations and (ii) that are subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with the Company and its Restricted Subsidiaries, due to a change in accounting treatment or otherwise, shall for all purposes not be treated as a Capitalized Lease Obligations or Indebtedness.

Capitalized Software Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of a Person and its Restricted Subsidiaries.

Cash Equivalents ” means:

(1) United States dollars;

(2) (a) Canadian dollars, pounds sterling, yen, euros or any national currency of any participating member state of the EMU; or

(b) in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

 

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(3) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 24 months or less from the date of acquisition;

(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of 24 months or less from the date of acquisition, demand deposits, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any domestic or foreign commercial bank having capital and surplus of not less than $250.0 million;

(5) repurchase obligations for underlying securities of the types described in clauses (3), (4), (7) and (8) entered into with any financial institution or recognized securities dealer meeting the qualifications specified in clause (4) above;

(6) commercial paper and variable or fixed rate notes rated at least P-2 by Moody’s or at least A-2 by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;

(7) marketable short-term money market and similar funds having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency);

(8) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition;

(9) readily marketable direct obligations issued by any foreign government or any political subdivision or public instrumentality thereof, in each case having an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition;

(10) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency);

(11) securities with maturities of 12 months or less from the date of acquisition backed by standby letters of credit issued by any financial institution or recognized securities dealer meeting the qualifications specified in clause (4) above; and

(12) investment funds investing substantially all of their assets in securities of the types described in clauses (1) through (11) above.

In the case of Investments by any Foreign Subsidiary that is a Restricted Subsidiary or Investments made in a country outside the United States of America, Cash Equivalents shall also include (a) investments of the type and maturity described in clauses (1) through (8) and clauses (10), (11) and (12) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (b) other short-term investments utilized by Foreign Subsidiaries that are Restricted Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (1) through (12) and in this paragraph.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above, provided that such amounts are converted into any currency listed in clauses (1) and (2) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.

 

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Change of Control ” means the occurrence of any of the following:

(1) the sale, lease, transfer, conveyance or other disposition in one or a series of related transactions (other than by merger, consolidation or amalgamation), of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person other than any Permitted Holder; or

(2) the Company becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by (A) any Person (other than any Permitted Holder) or (B) Persons (other than any Permitted Holders) that are together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any such group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50.0% or more of the total voting power of the Voting Stock of the Company directly or indirectly through any of its direct or indirect parent holding companies.

Consolidated Depletion, Depreciation and Amortization Expense ” means with respect to any Person for any period, the total amount of depletion, depreciation and amortization expense of such Person, including the amortization of intangible assets, deferred financing fees, debt issuance costs, commissions, fees and expenses and Capitalized Software Expenditures of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

Consolidated Interest Expense ” means, with respect to any Person for any period, without duplication, the sum of:

(1) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations, and (e) net payments, if any made (less net payments, if any, received), pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (q) annual agency fees paid to the administrative agents and collateral agents under any Credit Facilities, (r) costs associated with obtaining Hedging Obligations, (s) any expense resulting from the discounting of any Indebtedness in connection with the application of recapitalization accounting or, if applicable, purchase accounting in connection with the Transactions or any acquisition, (t) penalties and interest relating to taxes, (u) any Additional Interest and any “ additional interest ” or “ liquidated damages ” with respect to other securities for failure to timely comply with registration rights obligations, (v) amortization or expensing of deferred financing costs and any other amounts of non-cash interest, amendment and consent fees, debt issuance costs, commissions, fees and expenses and discounted liabilities, (w) any expensing of bridge, commitment and other financing fees and any other fees related to the Transactions or any acquisitions after the Issue Date, (x) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Securitization Facility, (y) any accretion of accrued interest on discounted liabilities and any prepayment premium or penalty) and (z) interest expense resulting from push-down accounting; plus

(2) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

(3) interest income of such Person and its Restricted Subsidiaries for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

 

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Consolidated Leverage Ratio ” means, as at any date of determination, the ratio of (1) the Consolidated Total Indebtedness of the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (2) the Company’s EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.

Consolidated Net Income ” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided , that, without duplication,

(1) any after-tax effect of extraordinary, non-recurring or unusual gains or losses (less all fees and expenses relating thereto), charges or expenses (including relating to any multi-year strategic initiatives), Transaction Expenses, duplicative running costs, relocation costs, integration costs, facility consolidation and closing costs, severance costs and expenses, one-time compensation charges, costs relating to pre-opening and opening costs for plants/facilities, losses, costs or cost inefficiencies related to plant/facility disruptions or shutdowns, signing, retention and completion bonuses, costs incurred in connection with any strategic initiatives, transition costs, costs incurred in connection with acquisitions and non-recurring product and intellectual property development, other business optimization expenses (including costs and expenses relating to business optimization programs and new systems design, retention charges, system establishment costs and implementation costs) and operating expenses attributable to the implementation of cost-savings initiatives, and curtailments or modifications to pension and post-retirement employee benefit plans shall be excluded,

(2) the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies during such period shall be excluded;

(3) any net after-tax effect of gains or losses on disposal, abandonment or discontinuance of disposed, abandoned or discontinued operations, as applicable, shall be excluded,

(4) any net after-tax effect of gains or losses (less all fees, expenses and charges relating thereto) attributable to asset dispositions or abandonments or the sale or other disposition of any Capital Stock of any Person other than in the ordinary course of business shall be excluded,

(5) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary or that is accounted for by the equity method of accounting, shall be excluded; provided , that Consolidated Net Income of such Person shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to such Person or a Restricted Subsidiary thereof in respect of such period,

(6) solely for the purpose of determining the amount available for Restricted Payments under clause (3)(a) of the first paragraph of “—Certain Covenants—Limitation on Restricted Payments,” the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders (other than restrictions in the Notes or the Indenture), unless such restriction with respect to the payment of dividends or similar distributions has been legally waived, provided that Consolidated Net Income of such Person will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to such Person or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

 

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(7) effects of adjustments (including the effects of such adjustments pushed down to such Person and its Restricted Subsidiaries) in such Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition or joint venture investment or the amortization or write-off or write-down of any amounts thereof, net of taxes, shall be excluded,

(8) any after-tax effect of income (loss) from the early extinguishment or conversion of (i) Indebtedness, (ii) Hedging Obligations or (iii) other derivative instruments shall be excluded,

(9) any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities and investments recorded using the equity method or as a result of a change in law or regulation, in each case, pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded,

(10) any equity-based or non-cash compensation charge or expense including any such charge or expense arising from grants of stock appreciation or similar rights, stock options, restricted stock or other rights or equity incentive programs, and any cash charges associated with the rollover, acceleration, or payout of Equity Interests by management of the Company or any of its direct or indirect parent companies in connection with the Transactions, shall be excluded,

(11) any fees, expenses or charges incurred during such period, or any amortization thereof for such period, in connection with any acquisition, Investment, Asset Sale, disposition, incurrence or repayment of Indebtedness (including such fees, expenses or charges related to the offering and issuance of the Notes and other securities and the syndication and incurrence of any Credit Facilities), issuance of Equity Interests, refinancing transaction or amendment or modification of any debt instrument (including any amendment or other modification of the Notes and other securities and any Credit Facilities) and including, in each case, any such transaction consummated on or prior to the Issue Date and any such transaction undertaken but not completed, and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, in each case whether or not successful or consummated (including, for the avoidance of doubt the effects of expensing all transaction related expenses in accordance with Financial Accounting Standards Board Accounting Standards Codification 805), shall be excluded,

(12) accruals and reserves that are established within 12 months after the Issue Date that are so required to be established as a result of the Transactions (or within 12 months after the closing of any acquisition that are so required to be established as a result of such acquisition) in accordance with GAAP shall be excluded,

(13) any expenses, charges or losses to the extent covered by insurance or indemnity and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer or indemnifying party and only to the extent that such amount is in fact reimbursed within 365 days of the date of the insurable or indemnifiable event (net of any amount so added back in any prior period to the extent not so reimbursed within the applicable 365-day period), shall be excluded;

(14) any net pension or other post-employment benefit costs representing amortization of unrecognized prior service costs, actuarial losses, including amortization of such amounts arising in prior periods, amortization of the unrecognized net obligation (and loss or cost) existing at the date of initial application of Accounting Standards Codification Topic No. 715, Compensation-Retirement Benefits , shall be excluded, and

(15) any noncash compensation expense resulting from the application of Accounting Standards Codification Topic No. 718, Compensation—Stock Compensation , shall be excluded, and

 

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(16) the following items shall be excluded:

(a) any net unrealized gain or loss (after any offset) resulting in such period from Hedging Obligations and the application of Accounting Standards Codification Topic No. 815, Derivatives and Hedging ,

(b) any net unrealized gain or loss (after any offset) resulting in such period from currency translation gains or losses including those related to currency remeasurements of Indebtedness (including any net loss or gain resulting from Hedging Obligations for currency exchange risk) and any other foreign currency translation gains and losses, to the extent such gain or losses are non-cash items,

(c) any adjustments resulting for the application of Accounting Standards Codification Topic No. 460, Guarantees, or any comparable regulation,

(d) effects of adjustments to accruals and reserves during a prior period relating to any change in the methodology of calculating reserves for returns, rebates and other chargebacks, and

(e) changes related to earn-outs and other deferred or contingent consideration obligations (including to the extent accounted for as bonuses or otherwise) and adjustments thereof and purchase price adjustments.

In addition, to the extent not already included in the Consolidated Net Income of such Person and its Restricted Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall include the amount of proceeds received from business interruption insurance and reimbursements of any expenses and charges that are covered by indemnification or other reimbursement provisions in connection with any acquisition, Investment or any sale, conveyance, transfer or other disposition of assets permitted under the Indenture.

Notwithstanding the foregoing, for the purpose of the covenant described under “—Certain Covenants — Limitation on Restricted Payments” only (other than clause (3)(d) of the first paragraph thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Company and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Company and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by the Company or any of its Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under such covenant pursuant to clause (3)(d) thereof.

Consolidated Secured Debt Ratio ” as of any date of determination means, the ratio of (1) Consolidated Total Indebtedness of the Company and its Restricted Subsidiaries that is secured by Liens on the property of the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (2) EBITDA of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.

Consolidated Total Indebtedness ” means, as at any date of determination, an amount equal to the sum of (1) the aggregate amount of all outstanding Indebtedness of the Company and its Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments, as determined in accordance with GAAP (excluding for the avoidance of doubt all undrawn amounts under revolving credit facilities and letters of credit, all obligations relating to Qualified Securitization Facilities and Tax Receivable

 

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Agreements), and (2) the aggregate amount of all outstanding Disqualified Stock of the Company and all Preferred Stock of its Restricted Subsidiaries on a consolidated basis, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and maximum fixed repurchase prices, in each case determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of repurchase or purchase accounting in connection with the Transactions or any acquisition); provided , that Consolidated Total Indebtedness shall not include Indebtedness in respect of (A) any letter of credit, except to the extent of unreimbursed amounts under standby letters of credit and (B) Hedging Obligations existing on the Issue Date or otherwise permitted by clause (10) of the second paragraph under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; it being understood, for the avoidance of doubt that earn-out payments and non-compete payments (to the extent such payments would not become a liability on the balance sheet of such Person in accordance with GAAP as GAAP existed on December 31, 2008) and obligations to pay the deferred purchase price of property or services do not constitute Consolidated Total Indebtedness. For purposes hereof, the “ maximum fixed repurchase price ” of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the Company. The U.S. Dollar Equivalent principal amount of any Indebtedness denominated in a foreign currency will reflect the currency translation effects, determined in accordance with GAAP, of Hedging Obligations for currency exchange risks with respect to the applicable currency in effect on the date of determination of the U.S. Dollar Equivalent principal amount of such Indebtedness.

Contingent Obligations ” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“ primary obligations ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent,

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor;

(2) to advance or supply funds,

(a) for the purchase or payment of any such primary obligation; or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

Controlled Investment Affiliate ” means, as to any Person, any other Person, other than any Investor, which directly or indirectly is in control of, is controlled by, or is under common control with such Person and is organized by such Person (or any Person controlling such Person) primarily for making direct or indirect equity or debt investments in the Company and/or other companies.

Credit Agreement ” means that certain Credit Agreement, dated as of the Issue Date, by and among the Company, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., as joint lead arrangers, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., UBS Securities LLC, Barclays Capital, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc., as joint bookrunners, Bank of America, N.A., as administrative agent, collateral agent and swing line lender, Bank of America, N.A., as letter of credit issuer, Citigroup Global Markets Inc., as syndication agent and other parties party thereto.

 

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Credit Facilities ” means, with respect to the Company or any of its Restricted Subsidiaries, one or more debt facilities, including the Senior Secured Credit Facilities, or other financing arrangements (including, without limitation, commercial paper facilities or indentures) providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof, in whole or in part, and any indentures or credit facilities or commercial paper facilities that replace, refund, supplement or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding, supplemental or refinancing facility, arrangement or indenture that increases the amount permitted to be borrowed or issued thereunder or alters the maturity thereof ( provided that such increase in borrowings or issuances is permitted under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, trustee, lender or group of lenders or other holders.

Debt Fund Affiliate ” means (i) any fund managed by, or under common management with, GSO Capital Partners LP, (ii) any fund managed by GSO Debt Funds Management LLC, Blackstone Debt Advisors L.P., Blackstone Distressed Securities Advisors L.P., Blackstone Mezzanine Advisors L.P. or Blackstone Mezzanine Advisors II L.P. and (iii) any other Affiliate of the Investors that is a bona fide debt fund or an investment vehicle that is engaged in the making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course.

Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

Designated Non-cash Consideration ” means the fair market value of non-cash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate delivered by the Company, setting forth the basis of such valuation, executed by the principal financial officer of the Company, less the amount of Cash Equivalents received in connection with a subsequent sale, redemption or repurchase of or collection or payment on such Designated Non-cash Consideration.

Designated Preferred Stock ” means Preferred Stock of the Company or any direct or indirect parent company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate delivered by the Company executed by the principal financial officer of the Company or the applicable parent company thereof, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of the first paragraph of “—Certain Covenants—Limitation on Restricted Payments.”

Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely as a result of a change of control or asset sale) pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, in each case prior to the date 91 days after the earlier of the maturity date of the Notes or the date the Notes are no longer outstanding; provided , that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations; provided , further , that any Capital Stock held by any future, current or former employee, director, officer, manager or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members), of the Company, any of its Subsidiaries, any of its direct or indirect parent companies or any other entity in which the Company or a Restricted Subsidiary has an

 

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Investment and is designated in good faith as an “ affiliate ” by the board of directors of the Company (or the compensation committee thereof), in each case pursuant to any stock subscription or shareholders’ agreement, management equity plan or stock option plan or any other management or employee benefit plan or agreement shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries or in order to satisfy applicable statutory or regulatory obligations; provided, further, that the Class B Membership Interests of Continental Cement Company, L.L.C. shall not constitute Disqualified Stock.

EBITDA ” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period

(1) increased (without duplication) by the following, in each case (other than with respect to clauses (h) and (k)) to the extent deducted (and not added back) in determining Consolidated Net Income for such period:

(a) provision for taxes based on income or profits or capital, including, without limitation, federal, state, franchise and similar taxes and foreign withholding taxes (including any future taxes or other levies which replace or are intended to be in lieu of such taxes and any penalties and interest related to such taxes or arising from tax examinations) and the net tax expense associated with any adjustments made pursuant to clauses (1) through (16) of the definition of “ Consolidated Net Income ”; plus

(b) Fixed Charges of such Person for such period (including (x) net losses or Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, (y) bank fees and other financing fees and (z) costs of surety bonds in connection with financing activities, plus amounts excluded from Consolidated Interest Expense as set forth in clauses (1)(q) through (z) in the definition thereof); plus

(c) Consolidated Depletion, Depreciation and Amortization Expense of such Person for such period; plus

(d) the amount of any severance, relocation costs and expenses, integration costs, transition costs, pre-opening, opening, consolidation and/or closing costs for facilities, costs incurred in connection with any non-recurring strategic initiatives, costs incurred in connection with acquisitions and Investments and non-recurring product and intellectual property development, other business optimization expenses (including costs and expenses relating to business optimization programs and new systems design and implementation costs), project start-up costs, restructuring charges, accruals or reserves (including restructuring costs related to acquisitions and to closure/consolidation of facilities, retention charges, systems establishment costs and excess pension charges); plus

(e) any other non-cash charges, including any write-offs or write-downs reducing Consolidated Net Income for such period ( provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, (A) the Company may elect not to add back such non-cash charge in the current period and (B) to the extent the Company elects to add back such non-cash charge, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period); plus

(f) the amount of any non-controlling interest or minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly-Owned Subsidiary; plus

(g) the amount of management, monitoring, consulting, advisory fees and other fees (including termination fees) and indemnities and expenses paid or accrued in such period under the Management Fee Agreement or otherwise to the Investors to the extent otherwise permitted under “—Certain Covenants—Transactions with Affiliates”; plus

(h) the amount of “ run rate ” cost savings, operating expense reductions and synergies projected by the Company in good faith to result from actions taken, committed to be taken or expected in good faith to be taken no later than 12 months after the end of such period (calculated on a pro forma basis as

 

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though such cost savings, operating expense reductions and synergies had been realized on the first day of such period for which EBITDA is being determined and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions; provided , that such cost savings and synergies are reasonably identifiable and factually supportable (it is understood and agreed that “ run-rate ” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or expected to be taken, net of the amount of actual benefits realized during such period from such actions); plus

(i) the amount of loss on sale of receivables, Securitization Assets and related assets to any Securitization Subsidiary in connection with a Qualified Securitization Facility; plus

(j) any costs or expense incurred by the Company or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Company or net cash proceeds of an issuance of Equity Interest of the Company (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in clause (3) of the first paragraph under “—Certain Covenants—Limitation on Restricted Payments”; plus

(k) cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing EBITDA or Consolidated Net Income in any period to the extent non-cash gains relating to such income were deducted in the calculation of EBITDA pursuant to clause (2) below for any previous period and not added back; plus

(l) any net loss from disposed, abandoned or discontinued operations; plus

(m) accretion of asset retirement obligations in accordance with Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations ; plus

(n) interest income or investment earnings on retiree medical and intellectual property, royalty or license receivables;

(2) decreased (without duplication) by the following, in each case to the extent included in determining Consolidated Net Income for such period:

(a) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period and any non-cash gains with respect to cash actually received in a prior period so long as such cash did not increase EBITDA in such prior period; plus

(b) any net income from disposed, abandoned or discontinued operations.

EMU ” means economic and monetary union as contemplated in the Treaty on European Union.

Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

Equity Offering ” means any public or private sale or issuance of common stock or Preferred Stock of the Company or any of its direct or indirect parent companies (excluding Disqualified Stock), other than:

(1) public offerings with respect to the Company’s or any direct or indirect parent company’s common stock registered on Form S-4 or Form S-8;

(2) issuances to any Subsidiary of the Company; and

(3) any such public or private sale or issuance that constitutes an Excluded Contribution.

euro ” means the single currency of participating member states of the EMU.

 

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Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Excluded Contribution ” means net cash proceeds, marketable securities or Qualified Proceeds received by the Company from

(1) contributions to its common equity capital; and

(2) the sale (other than to a Subsidiary of the Company or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Company) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Company,

in each case designated as Excluded Contributions pursuant to an Officer’s Certificate delivered by the Company executed by the principal financial officer of the Company on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (3) of the first paragraph under “—Certain Covenants—Limitation on Restricted Payments.”

fair market value ” means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Company in good faith.

Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Company or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “ Fixed Charge Coverage Ratio Calculation Date ”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP) that have been made by the Company or any of its Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Company or any of its Restricted Subsidiaries since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to an Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation (including the Transactions), the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company (and may include, for the avoidance of doubt, cost savings, synergies and operating expense reductions resulting from such Investment, acquisition, merger, amalgamation or consolidation (including the Transactions) which is being given pro forma effect that have been or are expected to be realized based on actions taken, committed to

 

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be taken or expected in good faith to be taken within 18 months). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period except as set forth in the first paragraph of this definition. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

Fixed Charges ” means, with respect to any Person for any period, the sum of, without duplication:

(1) Consolidated Interest Expense of such Person for such period;

(2) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock during such period; and

(3) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

Foreign Subsidiary ” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof and any Restricted Subsidiary of such Foreign Subsidiary.

GAAP ” means (1) generally accepted accounting principles in the United States of America which are in effect from time to time (other than with respect to Capitalized Lease Obligations), it being understood that, for purposes of the Indenture, all references to codified accounting standards specifically named in the Indenture shall be deemed to include any successor, replacement, amended or updated accounting standard under GAAP or (2) if elected by the Company by written notice to the Trustee in connection with the delivery of financial statements and information, the accounting standards and interpretations (“ IFRS ”) adopted by the International Accounting Standard Board, as in effect on the first date of the period for which the Company is making such election; provided , that (a) any such election once made shall be irrevocable, (b) all financial statements and reports required to be provided, after such election pursuant to the Indenture shall be prepared on the basis of IFRS, (c) from and after such election, all ratios, computations and other determinations based on GAAP contained in the Indenture shall be computed in conformity with IFRS, (d) in connection with the delivery of financial statements (x) for any of its first three financial quarters of any financial year, it shall restate its consolidated interim financial statements for such interim financial period and the comparable period in the prior year to the extent previously prepared in accordance with GAAP as in effect on the Issue Date and (y) for delivery of audited annual financial information, it shall provide consolidated historical financial statements prepared in accordance with IFRS for the prior most recent fiscal year to the extent previously prepared in accordance with GAAP as in effect on the first date of the period in which the Company is making such election. For the avoidance of doubt, solely making an election (without any other action) referred to in this definition will not be treated as an incurrence of Indebtedness.

guarantee ” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

Guarantee ” means the guarantee by any Guarantor of the Issuers’ Obligations under the Indenture and the Notes.

 

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Guarantor ” means each Subsidiary of the Company, if any, that Guarantees the Notes in accordance with the terms of the Indenture.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer or mitigation of interest rate, currency or commodity risks either generally or under specific contingencies.

Holder ” means the Person in whose name a Note is registered on the registrar’s books.

Immediate Family Members ” means with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, qualified domestic partner, sibling, mother- in-law, father-in-law, son-in-law and daughter-in-law (including adoptive relationships) and any trust, partnership or other bona fide estate-planning vehicle the only beneficiaries of which are any of the foregoing individuals or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.

Indebtedness ” means, with respect to any Person, without duplication:

(1) any indebtedness (including principal and premium) of such Person, whether or not contingent:

(a) in respect of borrowed money;

(b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof);

(c) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes an obligation in respect of a commercial letter of credit, a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn-out or non-compete obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP as GAAP existed on the Issue Date and is not paid after becoming due and payable; or

(d) representing the net obligations under any Hedging Obligations,

if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; provided , that Indebtedness of any direct or indirect parent of the Company appearing upon the balance sheet of the Company solely by reason of push-down accounting under GAAP shall be excluded;

(2) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (1) of a third Person (whether or not such items would appear upon the balance sheet of the such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and

(3) to the extent not otherwise included, the obligations of the type referred to in clause (1) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person;

provided , that notwithstanding the foregoing, Indebtedness shall be deemed not to include (a) Contingent Obligations incurred in the ordinary course of business or (b) obligations under or in respect of Qualified Securitization Facilities; provided, further , that Indebtedness shall be calculated without giving effect to the effects of Financial Accounting Standards Board Accounting Standards Codification 815 and related

 

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interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.

Independent Financial Advisor ” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.

Initial Purchasers ” means Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc.

Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or if the applicable securities are not then rated by Moody’s or S&P an equivalent rating by any other Rating Agency.

Investment Grade Securities ” means:

(1) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents);

(2) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the Company and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment or distribution; and

(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments.

Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, advances to customers, commission, travel and similar advances to employees, directors, officers, managers and consultants, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of the Company in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “ Unrestricted Subsidiary ” and the covenant described under “—Certain Covenants—Limitation on Restricted Payments”:

(1) “ Investments ” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “ Investment ” in an Unrestricted Subsidiary in an amount (if positive) equal to:

(a) the Company’s “ Investment ” in such Subsidiary at the time of such redesignation; less

(b) the portion (proportionate to the Company’s Equity Interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer.

The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, interest payment, return of capital, repayment or other amount received in cash by the Company or a Restricted Subsidiary in respect of such Investment.

 

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Investors ” means any of (i) Blackstone Capital Partners V L.P. and its Affiliates and any investment funds advised or managed by any of the foregoing (other than any portfolio operating companies of Blackstone Capital Partners V L.P.) and (ii) Silverhawk Summit, L.P. and its Affiliates and any investment funds advised or managed by any of the foregoing (other than any portfolio operating companies of Silverhawk Summit, L.P.).

Issue Date ” means January 30, 2012.

Legal Holiday ” means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York or at the place of payment. If a payment date is on a Legal Holiday, payment will be made on the next succeeding day that is not a Legal Holiday and no interest shall accrue for the intervening period.

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided , that in no event shall an operating lease be deemed to constitute a Lien.

Management Fee Agreement ” means the transaction and management fee agreement or similar agreements between certain of the management companies associated with one or more of the Investors or their advisors, if applicable, and the Company (and/or its direct or indirect parent companies).

Management Stockholders ” means the members of management (and their Controlled Investment Affiliates and Immediate Family Members) of the Company (or its indirect or direct parent companies) who were holders of Equity Interests of any direct or indirect parent companies of the Companies on the Issue Date.

Moody’s ” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

Net Income ” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

Net Proceeds ” means the aggregate Cash Equivalents proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale, including any Cash Equivalents received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, payments made in order to obtain a necessary consent or required by applicable law, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, other fees and expenses, including title and recordation expenses, taxes paid or payable as a result thereof or any transactions occurring or deemed to occur to effectuate a payment under the Indenture (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Senior Indebtedness or amounts required to be applied to the repayment of Indebtedness secured by a Lien on such assets and required (other than required by clause (1) of the second paragraph of “—Repurchase at the Option of Holders—Asset Sales”) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Company or any of its Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Company or any of its Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

Obligations ” means any principal, interest (including any interest accruing on or subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with

 

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respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), premium, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness; provided , that any of the foregoing (other than principal and interest) shall no longer constitute “ Obligations ” after payment in full of such principal and interest except to the extent such obligations are fully liquidated and non-contingent on or prior to such payment in full.

Offering Memorandum ” means the confidential offering memorandum, dated January 23, 2012, relating to the initial sale of the Notes.

Officer ” means the Chairman of the board of directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the applicable Issuer or Guarantor.

Officer’s Certificate ” means a certificate signed on behalf of a Person by an Officer of such Person that meets the requirements set forth in the indenture. An Officer’s Certificate required to be delivered by the Issuers shall be signed by an Officer of each Issuer.

Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee that meets the requirements set forth in the Indenture.

Permitted Asset Swap ” means the substantially concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and Cash Equivalents between the Company or any of its Restricted Subsidiaries and another Person; provided , that any Cash Equivalents received must be applied in accordance with the covenant described under “—Repurchase at the Option of Holders—Asset Sales.”

Permitted Holders ” means each of the Investors and Management Stockholders and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing are members; provided , that in the case of such group and without giving effect to the existence of such group or any other group, such Investors and Management Stockholders, collectively, have beneficial ownership of more than 50.0% of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

Permitted Investments ” means:

(1) any Investment in the Company or any of its Restricted Subsidiaries;

(2) any Investment in Cash Equivalents or Investment Grade Securities;

(3) any Investment by the Company or any of its Restricted Subsidiaries in a Person (including, to the extent constituting an Investment, in assets of a Person that represent substantially all of its assets or a division, business unit or product line, including research and development and related assets in respect of any product) that is engaged directly or through entities that will be Restricted Subsidiaries in a Similar Business if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary; or

(b) such Person, in one transaction or a series of related transactions, is amalgamated, merged or consolidated with or into, or transfers or conveys substantially all of its assets (or such division, business unit or product line) to, or is liquidated into, the Company or a Restricted Subsidiary,

 

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and, in each case, any Investment held by such Person; provided, that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation, consolidation or transfer;

(4) any Investment in securities or other assets not constituting Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to the first paragraph under “—Repurchase at the Option of Holders—Asset Sales” or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date or an Investment consisting of any extension, modification or renewal of any such Investment or binding commitment existing on the Issue Date; provided , that the amount of any such Investment may be increased in such extension, modification or renewal only (a) as required by the terms of such Investment or binding commitment as in existence on the Issue Date (including as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities) or (b) as otherwise permitted under the Indenture;

(6) any Investment acquired by the Company or any of its Restricted Subsidiaries:

(a) consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business; or

(b) in exchange for any other Investment or accounts receivable, indorsements for collection or deposit held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable (including any trade creditor or customer); or

(c) in satisfaction of judgments against other Persons; or

(d) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(7) Hedging Obligations permitted under clause (10) of the covenant described in “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(8) any Investment in a Similar Business taken together with all other Investments made pursuant to this clause (8) that are at that time outstanding not to exceed the greater of (a) $35.0 million and (b) 2.50% of Total Assets (in each case, determined on the date such Investment is made, with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(9) Investments the payment for which consists of Equity Interests (other than Disqualified Stock) of the Company, or any of its direct or indirect parent companies; provided , that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the first paragraph under the covenant described in “—Certain Covenants—Limitations on Restricted Payments”;

(10) guarantees of Indebtedness permitted under the covenant described in “Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” performance guarantees and Contingent Obligations incurred in the ordinary course of business and the creation of liens on the assets of the Company or any Restricted Subsidiary in compliance with the covenant described under “—Certain Covenants—Liens”;

(11) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of the second paragraph of the covenant described under “—Certain Covenants—Transactions with Affiliates” (except transactions described in clauses (2), (5) and (9) of such paragraph);

(12) Investments consisting of purchases or other acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

 

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(13) Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (13) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (a) $25.0 million and (b) 1.75% of Total Assets (in each case, determined on the date such Investment is made, with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(14) Investments in or relating to a Securitization Subsidiary that, in the good faith determination of the Company are necessary or advisable to effect any Qualified Securitization Facility or any repurchase obligation in connection therewith;

(15) advances to, or guarantees of Indebtedness of, employees not in excess of $10.0 million outstanding in the aggregate;

(16) loans and advances to employees, directors, officers, managers and consultants (a) for business-related travel expenses, moving expenses and other similar expenses or payroll advances, in each case incurred in the ordinary course of business or consistent with past practices or (b) to fund such Person’s purchase of Equity Interests of the Company from the Company or any direct or indirect parent company thereof from such parent company;

(17) advances, loans or extensions of trade credit in the ordinary course of business by the Company or any of its Restricted Subsidiaries;

(18) any Investment in any Subsidiary or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business;

(19) Investments consisting of purchases and acquisitions of assets or services in the ordinary course of business;

(20) Investments made in the ordinary course of business in connection with obtaining, maintaining or renewing client contacts;

(21) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business in the ordinary course of business;

(22) repurchases of Notes;

(23) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection of deposit and Article 4 customary trade arrangements with customers consistent with past practices; and

(24) Investments consisting of promissory notes issued by the Company or any Guarantor to future, present or former officers, directors and employees, members of management, or consultants of the Company or any of its Subsidiaries or their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent thereof, to the extent the applicable Restricted Payment is a permitted by the covenant described under “—Certain Covenants—Limitation on Restricted Payment”.

Permitted Liens ” means, with respect to any Person:

(1) pledges, deposits or security by such Person under workmen’s compensation laws, unemployment insurance, employers’ health tax, and other social security laws or similar legislation or other insurance related obligations (including, but not limited to, in respect of deductibles, self insured retention amounts and premiums and adjustments thereto) or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory

 

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obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business;

(2) Liens imposed by law, such as landlords’, carriers’, warehousemen’s, materialmen’s, repairmen’s and mechanics’ Liens, in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate actions or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or not yet payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate actions diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4) Liens in favor of issuers of performance, surety, bid, indemnity, warranty, release, appeal or similar bonds or with respect to other regulatory requirements or letters of credit or bankers acceptances issued, and completion guarantees provided for, in each case, issued pursuant to the request of and for the account of such Person in the ordinary course of its business or consistent with past practice prior to the Issue Date;

(5) minor survey exceptions, minor encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, sewers, electric lines, drains, telegraph, telephone and cable television lines and other similar purposes, or zoning, building codes or other restrictions (including minor defects and irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental, to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person and exceptions on title policies insuring liens granted on Mortgaged Properties (as defined in the Senior Secured Credit Facilities);

(6) Liens securing Obligations relating to any Indebtedness permitted to be incurred pursuant to clause (4), (12)(b) (in an amount not to exceed $60.0 million at any one time outstanding under such clause), (13) or (23) of the second paragraph under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; provided , that (a) Liens securing Obligations relating to any Indebtedness, Disqualified Stock or Preferred Stock permitted to be incurred pursuant to clause (13) relate only to Obligations relating to Refinancing Indebtedness that (x) is secured by Liens on the same assets as the assets securing the Refinancing Indebtedness or (y) extends, replaces, refunds, refinances, renews or defeases Indebtedness incurred or Disqualified Stock or Preferred Stock issued under clauses (3), (4), (12) or (13) of the second paragraph under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” (b) Liens securing Obligations relating to Indebtedness permitted to be incurred pursuant to clause (23) extend only to the assets of Restricted Subsidiaries of the Company that are not Guarantors and (c) Liens securing Obligations relating to any Indebtedness, Disqualified Stock or Preferred Stock to be incurred pursuant to clause (4) of the second paragraph under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” extend only to the assets so purchased, leased or improved;

(7) Liens existing on the Issue Date (including to secure any Refinancing Indebtedness of any Indebtedness secured by such Liens);

(8) Liens on property or shares of stock or other assets of a Person at the time such Person becomes a Subsidiary; provided , that such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further , that such Liens may not extend to any other property or other assets owned by the Company or any of its Restricted Subsidiaries;

 

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(9) Liens on property or other assets at the time the Company or a Restricted Subsidiary acquired the property or such other assets, including any acquisition by means of a merger, amalgamation or consolidation with or into the Company or any of its Restricted Subsidiaries; provided , that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, amalgamation, merger or consolidation; provided , further , that the Liens may not extend to any other property owned by the Company or any of its Restricted Subsidiaries;

(10) Liens securing Obligations relating to any Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary permitted to be incurred in accordance with the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(11) Liens securing (x) Hedging Obligations and (y) obligations in respect of Bank Products;

(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s accounts payable or similar trade obligations in respect of bankers’ acceptances or trade letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13) leases, sub-leases, licenses or sub-licenses granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries and do not secure any Indebtedness;

(14) Liens arising from Uniform Commercial Code (or equivalent statute) financing statement filings regarding operating leases or consignments entered into by the Company and its Restricted Subsidiaries in the ordinary course of business or purported Liens evidenced by the filing of precautionary Uniform Commercial Code financing statements or similar public filings;

(15) Liens in favor of the Company, the Co-Issuer or any Guarantor;

(16) Liens on equipment of the Company or any of its Restricted Subsidiaries granted in the ordinary course of business to the Company’s clients;

(17) Liens on accounts receivable, Securitization Assets and related assets incurred in connection with a Qualified Securitization Facility;

(18) Liens to secure any modification, refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8) and (9); provided , that (a) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property) and proceeds and products thereof, and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8) and (9) at the time the original Lien became a Permitted Lien under the Indenture, and (ii) an amount necessary to pay any fees and expenses (including original issue discount, upfront fees or similar fees) and premiums (including tender premiums and accrued and unpaid interest) related to such modification, refinancing, refunding, extension, renewal or replacement;

(19) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers;

(20) Liens securing obligations in an aggregate principal amount outstanding which does not exceed the greater of (a) $50.0 million and (b) 3.75% of Total Assets (in each case, determined as of the date of such incurrence);

(21) security given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of business;

 

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(22) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) under the caption “—Events of Default and Remedies” so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

(23) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

(24) Liens (a) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (b) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (c) in favor of banking institutions arising as a matter of law or under general terms and conditions encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

(25) Liens deemed to exist in connection with Investments in repurchase agreements permitted under “Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; provided, that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

(26) Liens encumbering reasonable customary deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(27) Liens that are contractual rights of set-off (a) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (b) relating to pooled deposit or sweep accounts of the Company or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company and its Restricted Subsidiaries or (c) relating to purchase orders and other agreements entered into with customers of the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(28) Liens securing obligations owed by the Company or any Restricted Subsidiary to any lender under the Senior Secured Credit Facilities or any Affiliate of such a lender in respect of any overdraft and related liabilities arising from treasury, depository and cash management services or any automated clearing house transfers of funds;

(29) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(30) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Company or any Restricted Subsidiary in the ordinary course of business;

(31) Liens solely on any cash earnest money deposits made by the Company or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted by the Indenture;

(32) ground leases in respect of real property on which facilities owned or leased by the Company or any of its Subsidiaries are located;

(33) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

(34) Liens on Capital Stock of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;

(35) Liens on the assets of non-guarantor Restricted Subsidiaries securing Indebtedness of such Subsidiaries that were permitted by the terms of the Indenture to be incurred;

(36) Liens on cash advances in favor of the seller of any property to be acquired in an Investment permitted under the Indenture to be applied against the purchase price for such Investment;

 

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(37) any interest or title of a lessor, sub-lessor, licensor or sub-licensor or secured by a lessor’s, sub-lessor’s, licensor’s or sub-licensor’s interest under leases or licenses entered into by the Company or any of the Restricted Subsidiaries in the ordinary course of business; and

(38) deposits of cash with the owner or lessor of premises leased and operated by the Company or any of its Subsidiaries in the ordinary course of business of the Company and such Subsidiary to secure the performance of the Company’s or such Subsidiary’s obligations under the terms of the lease for such premises.

For purposes of this definition, the term “ Indebtedness ” shall be deemed to include interest on such Indebtedness.

Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

Preferred Stock ” means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.

Qualified Proceeds ” means the fair market value of assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business.

Qualified Securitization Facility ” means any Securitization Facility (a) constituting a securitization financing facility that meets the following conditions: (i) the board of directors of the Company shall have determined in good faith that such Securitization Facility (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Company and the applicable Securitization Subsidiary, (ii) all sales and/or contributions of Securitization Assets and related assets to the applicable Securitization Subsidiary are made at fair market value (as determined in good faith by the Company) and (iii) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Company) or (b) constituting a receivables financing facility.

Rating Agencies ” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuers which shall be substituted for Moody’s or S&P or both, as the case may be.

Registration Rights Agreement ” means a registration rights agreement with respect to the Notes dated as of the Issue Date, among the Issuers, the Guarantors and the representatives of the Initial Purchasers.

Related Business Assets ” means assets (other than Cash Equivalents) used or useful in a Similar Business, provided that any assets received by the Company or a Restricted Subsidiary in exchange for assets transferred by the Company or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

Restricted Investment ” means an Investment other than a Permitted Investment.

Restricted Subsidiary ” means, with respect to any Person, at any time, any direct or indirect Subsidiary of such Person (including the Co-Issuer and any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided , however , that upon an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary.” Unless otherwise indicated in this “Description of the Notes,” all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Company.

S&P ” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

 

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Sale and Lease-Back Transaction ” means any arrangement providing for the leasing by the Company or any of its Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to a third Person in contemplation of such leasing.

SEC ” means the U.S. Securities and Exchange Commission.

Secured Indebtedness ” means any Indebtedness of the Company or any of its Restricted Subsidiaries secured by a Lien.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Securitization Assets ” means the accounts receivable, royalty or other revenue streams and other rights to payment and any other assets related thereto subject to a Qualified Securitization Facility and the proceeds thereof.

Securitization Facility ” means any of one or more receivables or securitization financing facilities as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Company or any of its Restricted Subsidiaries (other than a Securitization Subsidiary) pursuant to which the Company or any of its Restricted Subsidiaries sells or grants a security interest in its accounts receivable or Securitization Assets or assets related thereto to either (a) a Person that is not a Restricted Subsidiary or (b) a Securitization Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

Securitization Fees ” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Securitization Subsidiary in connection with, any Qualified Securitization Facility.

Securitization Subsidiary ” means any Subsidiary formed for the purpose of, and that solely engages only in one or more Qualified Securitization Facilities and other activities reasonably related thereto.

Senior Indebtedness ” means:

(1) all Indebtedness of the Company or any Guarantor outstanding under the Senior Secured Credit Facilities and the related guarantees and Notes and related Guarantees (including interest accruing on or after the filing of any petition in bankruptcy or similar proceeding or for reorganization of the Company or any Guarantor (at the rate provided for in the documentation with respect thereto, regardless of whether or not a claim for post-filing interest is allowed in such proceedings)), and any and all other fees, expense reimbursement obligations, indemnification amounts, penalties, and other amounts (whether existing on the Issue Date or thereafter created or incurred) and all obligations of the Company or any Guarantor to reimburse any bank or other Person in respect of amounts paid under letters of credit, acceptances or other similar instruments;

(2) all (x) Hedging Obligations (and guarantees thereof) and (y) obligations in respect of Bank Products (and guarantees thereof) owing to a lender under the Senior Secured Credit Facilities or any Affiliate of such lender (or any Person that was a lender or an Affiliate of such lender at the time the applicable agreement giving rise to such Hedging Obligation was entered into); provided, that such Hedging Obligations and obligations in respect of Bank Products, as the case may be, are permitted to be incurred under the terms of the Indenture;

(3) any other Indebtedness of the Company or any Guarantor permitted to be incurred under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the Notes or any related Guarantee; and

 

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(4) all Obligations with respect to the items listed in the preceding clauses (1), (2) and (3); provided , that Senior Indebtedness shall not include:

(a) any obligation of such Person to the Issuers or any of their Subsidiaries;

(b) any liability for federal, state, local or other taxes owed or owing by such Person;

(c) any accounts payable or other liability to trade creditors arising in the ordinary course of business;

(d) any Indebtedness or other Obligation of such Person which is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or

(e) that portion of any Indebtedness which at the time of incurrence is incurred in violation of the Indenture.

Senior Secured Credit Facilities ” means the term loan facility, revolving credit facility and other credit facilities under the Credit Agreement, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings, refinancings or replacements thereof and any one or more indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund, supplement or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof ( provided that such increase in borrowings is permitted under the caption “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” above) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, trustee, lender or group of lenders or holders.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.

Similar Business ” means (1) any business conducted by the Company or any of its Restricted Subsidiaries on the Issue Date, and any reasonable extension thereof, or (2) any business or other activities that are reasonably similar, ancillary, incidental, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which the Company and its Restricted Subsidiaries are engaged on the Issue Date.

Subordinated Indebtedness ” means, with respect to the Notes,

(1) any Indebtedness of the Issuers which is by its terms subordinated in right of payment to the Notes, and

(2) any Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.

Subsidiary ” means, with respect to any Person:

(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50.0% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; and

(2) any partnership, joint venture, limited liability company or similar entity of which

(a) more than 50.0% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and

 

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(b) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Total Assets ” means the total assets of the Company and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recent balance sheet of the Company or such other Person as may be expressly stated.

Transaction Expenses ” means any fees or expenses incurred or paid by the Company or any Restricted Subsidiary in connection with the Transactions, including payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses and charges for repurchase or rollover of, or modifications to, stock options.

Transactions ” means the issuance of the Notes and borrowings under the Senior Secured Credit Facilities on the Issue Date to repay certain debt as described in the Offering Memorandum under “Offering Memorandum Summary—The Transactions” and the payment of related premiums, fees and expenses.

Treasury Rate ” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to January 31, 2016; provided , that if the period from the Redemption Date to such date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

Trust Indenture Act ” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-777bbbb).

Uniform Commercial Code ” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of New York.

Unrestricted Subsidiary ” means:

(1) any Subsidiary of the Company which at the time of determination is an Unrestricted Subsidiary (as designated by the Company, as provided below); and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Company may designate any Subsidiary of the Company, other than the Co-Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Company or any Subsidiary of the Company (other than solely any Subsidiary of the Subsidiary to be so designated); provided , that:

(1) any Unrestricted Subsidiary must be an entity of which the Equity Interests entitled to cast at least a majority of the votes that may be cast by all Equity Interests having ordinary voting power for the election of directors or Persons performing a similar function are owned, directly or indirectly, by the Company;

(2) such designation complies with the covenants described under “—Certain Covenants—Limitation on Restricted Payments”; and

(3) each of (a) the Subsidiary to be so designated and (b) its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any Restricted Subsidiary.

 

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The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, that, immediately after giving effect to such designation, no Default shall have occurred and be continuing and either:

(1) the Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test; or

(2) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be equal to or greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.

Any such designation by the Company shall be notified by the Company to the Trustee by promptly filing with the Trustee a copy of the resolution of the board of directors of the Company or any committee thereof giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

U.S. Dollar Equivalent ” means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the “ Exchange Rates ” column under the heading “ Currency Trading ” on the date two business days prior to such determination.

U.S. Government Securities ” means securities that are:

(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or

(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Securities or a specific payment of principal of or interest on any such U.S. Government Securities held by such custodian for the account of the holder of such depository receipt; provided , that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Securities or the specific payment of principal of or interest on the U.S. Government Securities evidenced by such depository receipt.

Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.

Weighted Average Life to Maturity ” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing:

(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment; by

(2) the sum of all such payments.

provided , that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness that is being extended, replaced, refunded, refinanced, renewed or defeased (the “ Applicable Indebtedness ”), the effects of any amortization or prepayments made on such Applicable Indebtedness prior to the date of the applicable extension, replacement, refunding, refinancing, renewal or defeasance shall be disregarded.

 

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Wholly-Owned Subsidiary ” of any Person means a Subsidiary of such Person, 100.0% of the outstanding Equity Interests of which (other than directors’ qualifying shares and shares issued to foreign nationals as required by applicable law) shall at the time be owned by such Person and/or by one or more Wholly-Owned Subsidiaries of such Person.

 

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THE EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

The Issuers and the guarantors of the notes and the initial purchasers have entered into a registration rights agreement on the original Issue Date of the notes. In the registration rights agreement, each of the Issuers and the guarantors of the notes have agreed that it will, at its expense, for the benefit of the holders of notes, (i) file one or more registration statements on an appropriate registration form with respect to a registered offer to exchange the notes for new notes guaranteed by the guarantors on a senior unsecured basis, with terms substantially identical in all material respects to the notes and (ii) use its commercially reasonable efforts to cause the registration statement to be declared effective under the Securities Act. As of the date of this prospectus, $250.0 million aggregate principal amount of the 10.5% Senior Notes due 2020 is outstanding, and the outstanding notes were issued in January 30, 2012.

Under the circumstances set forth below, the Issuers and the guarantors will use their commercially reasonable best efforts to cause the SEC to declare effective a shelf registration statement with respect to the resale of the outstanding notes within the time periods specified in the registration rights agreement and keep such registration statement effective for up to one year after the effective date of the shelf registration statement. These circumstances include:

 

   

if any change in law or in currently prevailing interpretations of the Staff of the SEC do not permit us to effect an exchange offer;

 

   

if an exchange offer is not consummated within the registration period contemplated by the registration rights agreement;

 

   

if, in certain circumstances, certain holders of unregistered exchange notes so request; or

 

   

if in the case of any holder that participates in an exchange offer, such holder does not receive exchange notes on the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the status of such holder as an affiliate of ours within the meaning of the Securities Act).

Under the registration rights agreement, if (A) we neither (i) exchanged exchange notes for all notes validly tendered in accordance with the terms of an exchange offer nor (ii) if applicable, had a shelf registration statement declared effective under the Securities Act, in either case on prior to the 540th day after the Issue Date, (B) notwithstanding clause (A), we are required to file a shelf registration statement and such shelf registration statement is not declared effective on or prior to the 90th day after the delivery of a shelf notice (as defined in the registration rights agreement) with respect thereto (the “Effectiveness Date”) or (C) if applicable, a shelf registration statement has been declared effective and such shelf registration statement ceases to be effective at any time during the effectiveness period (subject to certain exceptions) (each such event referred to in clauses (A), (B) and (C), a “Registration Default”), then additional interest (“Additional Interest”) shall accrue on the principal amount of the notes affected thereby at a rate of 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default (which rate will be increased by an additional 0.25% per annum for each subsequent 90-day period that such Additional Interest continues to accrue; provided that the rate at which such Additional Interest accrues may in no event exceed 1.00% per annum) (any such Additional Interest to be calculated by us) commencing on (x) the 540th day after the Issue Date (in the case of clause (A) above), (y) the Effectiveness Date (in the case of clause (B) above) or (z) the day on which such shelf registration statement ceases to be effective (in the case of clause (C) above); provided , however , that upon the exchange of exchange notes for all notes tendered (in the case of clause (A)(i) above), upon the effectiveness of the applicable shelf registration statement (in the case of clause (A)(ii) and (B) above) or upon the effectiveness of a shelf registration statement that had ceased to remain effective (in the case of clause (C) above), Additional Interest on such notes as a result of such clause (or the relevant sub-clause thereof), as the case may be, shall cease to accrue.

 

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If you wish to exchange your outstanding notes for exchange notes in the exchange offer, you will be required to make the following written representations:

 

   

you are not an affiliate of the Issuers or any guarantor within the meaning of Rule 405 of the Securities Act;

 

   

you have no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the exchange notes in violation of the Securities Act;

 

   

you are not engaged in, and do not intend to engage in, a distribution of the exchange notes; and

 

   

you are acquiring the exchange notes in the ordinary course of your business.

Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where the broker-dealer acquired the outstanding notes as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. Please see “Plan of Distribution.”

Resale of Exchange Notes

Based on interpretations by the SEC set forth in no-action letters issued to third parties, we believe that you may resell or otherwise transfer exchange notes issued in the exchange offer without complying with the registration and prospectus delivery provisions of the Securities Act, if:

 

   

you are not an affiliate of the Issuers or any guarantor within the meaning of Rule 405 under the Securities Act;

 

   

you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes;

 

   

you are not engaged in, and do not intend to engage in, a distribution of the exchange notes; and

 

   

you are acquiring the exchange notes in the ordinary course of your business.

If you are an affiliate of the Issuers or any guarantor, or are engaging in, or intend to engage in, or have any arrangement or understanding with any person to participate in, a distribution of the exchange notes, or are not acquiring the exchange notes in the ordinary course of your business:

 

   

you cannot rely on the position of the SEC set forth in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling, dated July 2, 1993, or similar no-action letters; and

 

   

in the absence of an exception from the position stated immediately above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.

This prospectus may be used for an offer to resell, resale or other transfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. Please read “Plan of Distribution” for more details regarding the transfer of exchange notes.

Terms of the Exchange Offer

On the terms and subject to the conditions set forth in this prospectus and in the accompanying letters of transmittal, the Issuers will accept for exchange in the exchange offer any outstanding notes that are validly tendered and not validly withdrawn prior to the expiration date. Outstanding notes may only be tendered in a

 

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principal amount of $2,000 and in integral multiples of $1,000 in excess thereof. The Issuers will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding notes surrendered in the exchange offer.

The form and terms of the exchange notes will be identical in all material respects to the form and terms of the outstanding notes except the exchange notes will be registered under the Securities Act, will not bear legends restricting their transfer and will not provide for any additional interest upon failure by the Issuers and the guarantors to fulfill their obligations under the registration rights agreement to complete the exchange offer, or file, and cause to be effective, a shelf registration statement, if required thereby, within the specified time period. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be issued under and entitled to the benefits of the same indenture that governs the terms of the outstanding notes. For a description of the indenture, see “Description of the Notes.”

The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.

This prospectus and the letters of transmittal are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offer. The Issuers and the guarantors intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC. Outstanding notes that are not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits such holders have under the indenture and the registration rights agreement except the Issuers and the guarantors will not have any further obligation to you to provide for the registration of the outstanding notes under the registration rights agreement.

The Issuers will be deemed to have accepted for exchange properly tendered outstanding notes when the Issuers have given written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from the Issuers and delivering exchange notes to holders. Subject to the terms of the registration rights agreement, the Issuers expressly reserve the right to amend or terminate the exchange offer and to refuse to accept the occurrence of any of the conditions specified below under “—Conditions to the Exchange Offer.”

If you tender your outstanding notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes described below in connection with the exchange offer. It is important that you read “—Fees and Expenses” below for more details regarding fees and expenses incurred in the exchange offer.

Expiration Date; Extensions, Amendments

As used in this prospectus, the term “expiration date” means 5:00 p.m., New York City time, on , 2013, which is the 21st business day after the date of this prospectus. However, if the Issuers, in their sole discretion, extend the period of time for which the exchange offer is open, the term “expiration date” will mean the latest time and date to which the Issuers shall have extended the expiration of the exchange offer.

To extend the period of time during which the exchange offer is open, the Issuers will notify the exchange agent of any extension by written notice, followed by notification by press release or other public announcement to the registered holders of the outstanding notes no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

 

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The Issuers reserve the right, in their sole discretion:

 

   

to delay accepting for exchange any outstanding notes (if the Issuers amend or extend the exchange offer);

 

   

to extend the exchange offer or to terminate the exchange offer if any of the conditions set forth below under “—Conditions to the Exchange Offer” have not been satisfied, by giving written notice of such delay, extension or termination to the exchange agent; and

 

   

subject to the terms of the registration rights agreement, to amend the terms of the exchange offer in any manner.

Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by notice to the registered holders of the outstanding notes. If the Issuers amend the exchange offer in a manner that it determines to constitute a material change, the Issuers will promptly disclose the amendment in a manner reasonably calculated to inform the holders of applicable outstanding notes of that amendment.

Conditions to the Exchange Offer

Despite any other term of the exchange offer, the Issuers will not be required to accept for exchange, or to issue exchange notes in exchange for, any outstanding notes and the Issuers may terminate or amend the exchange offer as provided in this prospectus prior to the expiration date if in their reasonable judgment:

 

   

the exchange offer or the making of any exchange by a holder violates any applicable law or interpretation of the SEC; or

 

   

any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that, in their judgment, would reasonably be expected to impair their ability to proceed with the exchange offer.

In addition, the Issuers will not be obligated to accept for exchange the outstanding notes of any holder that has not made to the Issuers:

 

   

the representations described under “—Purpose and Effect of the Exchange Offer,” “—Procedures for Tendering Outstanding Notes” and “Plan of Distribution;” or

 

   

any other representations as may be reasonably necessary under applicable SEC rules, regulations, or interpretations to make available to the Issuers an appropriate form for registration of the exchange notes under the Securities Act.

The Issuers expressly reserve the right at any time or at various times to extend the period of time during which the exchange offer is open. Consequently, the Issuers may delay acceptance of any outstanding notes by giving written notice of such extension to their holders. The Issuers will return any outstanding notes that the Issuers do not accept for exchange for any reason without expense to their tendering holder promptly after the expiration or termination of the exchange offer.

The Issuers expressly reserve the right to amend or terminate the exchange offer and to reject for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. In addition, the Issuers are generally required to extend the offering period for any material change, including the waiver of a material condition, so that at least five business days remain in the exchange offer after the change. The Issuers will give written notice of any extension, amendment, non-acceptance or termination to the holders of the outstanding notes as promptly as practicable. In the case of any extension, such notice will be issued no later than 9:00 a.m. New York City time, on the next business day after the previously scheduled expiration date.

 

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These conditions are for sole benefit of the Issuers and the Issuers may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times prior to the expiration date in their sole discretion. If the Issuers fail at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of such right. Each such right will be deemed an ongoing right that the Issuers may assert at any time or at various times prior to the expiration date.

In addition, the Issuers will not accept for exchange any outstanding notes tendered, and will not issue exchange notes in exchange for any such outstanding notes, if at such time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939 (the “TIA”).

Procedures for Tendering Outstanding Notes

To tender your outstanding notes in the exchange offer, you must comply with either of the following:

 

   

complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signature(s) on the letter of transmittal guaranteed if required by the letter of transmittal and mail or deliver such letter of transmittal or facsimile thereof to the exchange agent at the address set forth below under “—Exchange Agent” prior to the expiration date; or

 

   

comply with DTC’s Automated Tender Offer Program procedures described below.

In addition, either:

 

   

the exchange agent must receive certificates for outstanding notes along with the letter of transmittal prior to the expiration date;

 

   

the exchange agent must receive a timely confirmation of book-entry transfer of outstanding notes into the exchange agent’s account at DTC according to the procedures for book-entry transfer described below or a properly transmitted agent’s message prior to the expiration date; or

 

   

you must comply with the guaranteed delivery procedures described below.

Your tender, if not withdrawn prior to the expiration date, constitutes an agreement between the Issuers and you upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal.

The method of delivery of outstanding notes, letters of transmittal, and all other required documents to the exchange agent is at your election and risk. We recommend that instead of delivery by mail, you use an overnight or hand delivery service, properly insured. In all cases, you should allow sufficient time to assure timely delivery to the exchange agent before the expiration date. You should not send letters of transmittal or certificates representing outstanding notes to us. You may request that your broker, dealer, commercial bank, trust company or nominee effect the above transactions for you.

If you are a beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee and you wish to tender your notes, you should promptly contact the registered holder and instruct the registered holder to tender on your behalf. If you wish to tender the outstanding notes yourself, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either:

 

   

make appropriate arrangements to register ownership of the outstanding notes in your name; or

 

   

obtain a properly completed bond power from the registered holder of outstanding notes.

The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

 

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Signatures on the letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or trust company having an office or correspondent in the United States or another “eligible guarantor institution” within the meaning of Rule 17A(d)-15 under the Exchange Act unless the outstanding notes surrendered for exchange are tendered:

 

   

by a registered holder of the outstanding notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” in the letter of transmittal; or

 

   

for the account of an eligible guarantor institution.

If the letter of transmittal is signed by a person other than the registered holder of any outstanding notes listed on the outstanding notes, such outstanding notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder’s name appears on the outstanding notes and an eligible guarantor institution must guarantee the signature on the bond power.

If the letter of transmittal or any certificates representing outstanding notes, or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary or representative capacity, those persons should also indicate when signing and, unless waived by the Issuers, they should also submit evidence satisfactory to the Issuers of their authority to so act.

The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC’s system may use DTC’s Automated Tender Offer Program to tender. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, electronically transmit their acceptance of the exchange by causing DTC to transfer the outstanding notes to the exchange agent in accordance with DTC’s Automated Tender Offer Program procedures for transfer. DTC will then send an agent’s message to the exchange agent. The term “agent’s message” means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that:

 

   

DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering outstanding notes that are the subject of the book-entry confirmation;

 

   

the participant has received and agrees to be bound by the terms of the letter of transmittal, or in the case of an agent’s message relating to guaranteed delivery, that such participant has received and agrees to be bound by the notice of guaranteed delivery; and

 

   

the Issuers may enforce that agreement against such participant.

Acceptance of Exchange Notes

In all cases, the Issuers will promptly issue exchange notes for outstanding notes that they have accepted for exchange under the exchange offer only after the exchange agent timely receives:

 

   

outstanding notes or a timely book-entry confirmation of such outstanding notes into the exchange agent’s account at the book-entry transfer facility; and

 

   

a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message.

 

   

By tendering outstanding notes pursuant to the exchange offer, you will represent to the Issuers that, among other things:

 

   

you are not an affiliate of the Issuers or the guarantors within the meaning of Rule 405 under the Securities Act;

 

   

you do not have an arrangement or understanding with any person or entity to participate in a distribution of the exchange notes; and

 

   

you are acquiring the exchange notes in the ordinary course of your business.

 

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In addition, each broker-dealer that is to receive exchange notes for its own account in exchange for outstanding notes must represent that such outstanding notes were acquired by that broker-dealer as a result of market-making activities or other trading activities and must acknowledge that it will deliver a prospectus that meets the requirements of the Securities Act in connection with any resale of the exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. See “Plan of Distribution.”

The Issuers will interpret the terms and conditions of the exchange offer, including the letters of transmittal and the instructions to the letters of transmittal, and will resolve all questions as to the validity, form, eligibility, including time of receipt, and acceptance of outstanding notes tendered for exchange. Determinations of the Issuers in this regard will be final and binding on all parties. The Issuers reserve the absolute right to reject any and all tenders of any particular outstanding notes not properly tendered or to not accept any particular outstanding notes if the acceptance might, in their or their counsel’s judgment, be unlawful. The Issuers also reserve the absolute right to waive any defects or irregularities as to any particular outstanding notes prior to the expiration date.

Unless waived, any defects or irregularities in connection with tenders of outstanding notes for exchange must be cured within such reasonable period of time as the Issuers determine. Neither the Issuers, the exchange agent, nor any other person will be under any duty to give notification of any defect or irregularity with respect to any tender of outstanding notes for exchange, nor will any of them incur any liability for any failure to give notification. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the exchange agent to the tendering holder, unless otherwise provided in the letter of transmittal, promptly after the expiration date.

Book-Entry Delivery Procedures

Promptly after the date of this prospectus, the exchange agent will establish an account with respect to the outstanding notes at DTC, as book-entry transfer facilities, for purposes of the exchange offer. Any financial institution that is a participant in the book-entry transfer facility’s system may make book-entry delivery of the outstanding notes by causing the book-entry transfer facility to transfer those outstanding notes into the exchange agent’s account at the facility in accordance with the facility’s procedures for such transfer. To be timely, book-entry delivery of outstanding notes requires receipt of a confirmation of a book-entry transfer, a “book-entry confirmation,” prior to the expiration date. In addition, although delivery of outstanding notes may be effected through book-entry transfer into the exchange agent’s account at the book-entry transfer facility, the letter of transmittal or a manually signed facsimile thereof, together with any required signature guarantees and any other required documents, or an “agent’s message,” as defined below, in connection with a book-entry transfer, must, in any case, be delivered or transmitted to and received by the exchange agent at its address set forth on the cover page of the letter of transmittal prior to the expiration date to receive exchange notes for tendered outstanding notes, or the guaranteed delivery procedure described below must be complied with. Tender will not be deemed made until such documents are received by the exchange agent. Delivery of documents to the book-entry transfer facility does not constitute delivery to the exchange agent.

Holders of outstanding notes who are unable to deliver confirmation of the book-entry tender of their outstanding notes into the exchange agent’s account at the book-entry transfer facility or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date must tender their outstanding notes according to the guaranteed delivery procedures described below.

 

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Guaranteed Delivery Procedures

If you wish to tender your outstanding notes but your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other required documents to the exchange agent or comply with the applicable procedures under DTC’s Automatic Tender Offer Program, prior to the expiration date, you may still tender if:

 

   

the tender is made through an eligible guarantor institution;

 

   

prior to the expiration date, the exchange agent receives from such eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail, or hand delivery or a properly transmitted agent’s message and

 

   

notice of guaranteed delivery, that (1) sets forth your name and address, the certificate number(s) of such outstanding notes and the principal amount of outstanding notes tendered; (2) states that the tender is being made thereby; and (3) guarantees that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal, or facsimile thereof, together with the outstanding notes or a book-entry confirmation, and any other documents required by the letter of transmittal, will be deposited by the eligible guarantor institution with the exchange agent; and

 

   

the exchange agent receives the properly completed and executed letter of transmittal or facsimile thereof, as well as certificate(s) representing all tendered outstanding notes in proper form for transfer or a book-entry confirmation of transfer of the outstanding notes into the exchange agent’s account at DTC, and all other documents required by the letter of transmittal within three New York Stock Exchange trading days after the expiration date.

Upon request, the exchange agent will send to you a notice of guaranteed delivery if you wish to tender your outstanding notes according to the guaranteed delivery procedures.

Withdrawal Rights

Except as otherwise provided in this prospectus, you may withdraw your tender of outstanding notes at any time prior to 5:00 p.m., New York City time, on the expiration date.

For a withdrawal to be effective:

 

   

the exchange agent must receive a written notice, which may be by telegram, telex, facsimile or letter, of withdrawal at its address set forth below under “—Exchange Agent;” or

 

   

you must comply with the appropriate procedures of DTC’s Automated Tender Offer Program system.

Any notice of withdrawal must:

 

   

specify the name of the person who tendered the outstanding notes to be withdrawn;

 

   

identify the outstanding notes to be withdrawn, including the certificate numbers and principal amount of the outstanding notes; and

 

   

where certificates for outstanding notes have been transmitted, specify the name in which such outstanding notes were registered, if different from that of the withdrawing holder.

If certificates for outstanding notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of such certificates, you must also submit:

 

   

the serial numbers of the particular certificates to be withdrawn; and

 

   

a signed notice of withdrawal with signatures guaranteed by an eligible institution unless you are an eligible guarantor institution.

 

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If outstanding notes have been tendered pursuant to the procedures for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of the facility. The Issuers will determine all questions as to the validity, form, and eligibility, including time of receipt of notices of withdrawal and their determination will be final and binding on all parties. Any outstanding notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any outstanding notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder, without cost to the holder, or, in the case of book-entry transfer, the outstanding notes will be credited to an account at the book-entry transfer facility, promptly after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn outstanding notes may be retendered by following the procedures described under “—Procedures for Tendering Outstanding Notes” above at any time on or prior to the expiration date.

Exchange Agent

Wilmington Trust, National Association has been appointed as the exchange agent for the exchange offer. Wilmington Trust, National Association also acts as trustee under the indenture governing the notes. You should direct all executed letters of transmittal and all questions and requests for assistance, requests for additional copies of this prospectus or of the letters of transmittal, and requests for notices of guaranteed delivery to the exchange agent addressed as follows:

 

By Mail or Overnight Courier:   By Facsimile:   By Hand Delivery:
Wilmington Trust, National Association   (302) 636-4139   Wilmington Trust, National Association
c/o Wilmington Trust Company   Attn: Sam Hamed   c/o Wilmington Trust Company
Corporate Capital Markets     Corporate Capital Markets
Rodney Square North     Rodney Square North
1100 North Market Street     1100 North Market Street
Wilmington, Delaware 19890-1626     Wilmington, Delaware 19890-1626
Attn: Sam Hamed     Attn: Sam Hamed
  To Confirm by Telephone:  
  (302) 636-6181  
  Attn: Sam Hamed  

If you deliver the letter of transmittal to an address other than the one set forth above or transmit instructions via facsimile other than the one set forth above, that delivery or those instructions will not be effective.

Fees and Expenses

The registration rights agreement provide that we will bear all expenses in connection with the performance of our obligations relating to the registration of the exchange notes and the conduct of the exchange offer. These expenses include registration and filing fees, accounting and legal fees and printing costs, among others. We will pay the exchange agent reasonable and customary fees for its services and reasonable out-of-pocket expenses. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for customary mailing and handling expenses incurred by them in forwarding this prospectus and related documents to their clients that are holders of outstanding notes and for handling or tendering for such clients.

We have not retained any dealer-manager in connection with the exchange offer and will not pay any fee or commission to any broker, dealer, nominee or other person, other than the exchange agent, for soliciting tenders of outstanding unregistered notes pursuant to the exchange offer.

 

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Accounting Treatment

We will record the exchange notes in our accounting records at the same carrying value as the outstanding notes, which is the aggregate principal amount as reflected in our accounting records on the date of exchanges, as the terms of the exchange notes are substantially identical to the terms of the outstanding notes. Accordingly, we will not recognize any gain or loss for accounting purposes upon the consummation of this exchange offer. We will capitalize the expenses relating to the exchange offer.

Transfer Taxes

The Issuers and the guarantors will pay all transfer taxes, if any, applicable to the exchanges of outstanding notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:

 

   

certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of outstanding notes tendered;

 

   

tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or

 

   

a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange

If satisfactory evidence of payment of such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed to that tendering holder.

Holders who tender their outstanding notes for exchange will not be required to pay any transfer taxes. However, holders who instruct the Issuers to register exchange notes in the name of, or request that outstanding notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be required to pay any applicable transfer tax.

Consequences of Failure to Exchange

If you do not exchange your outstanding notes for exchange notes under the exchange offer, your outstanding notes will remain subject to the restrictions on transfer of such outstanding notes:

 

   

as set forth in the legend printed on the outstanding notes as a consequence of the issuances of the outstanding notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and

 

   

as otherwise set forth in the offering memorandum distributed in connection with the private offering of the outstanding notes.

In general, you may not offer or sell your outstanding notes unless they are registered under the Securities Act or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act.

Other

Participating in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offer or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes.

 

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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The exchange of outstanding notes for exchange notes in the exchange offer will not constitute a taxable event to holders for U.S. federal income tax purposes. Consequently, you will not recognize gain or loss upon receipt of an exchange note, the holding period of the exchange note will include the holding period of the outstanding note exchanged therefor and the basis of the exchange note will be the same as the basis of the outstanding note immediately before the exchange.

In any event, persons considering the exchange of outstanding notes for exchange notes should consult their own tax advisors concerning the U.S. federal income tax consequences in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction.

 

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CERTAIN ERISA CONSIDERATIONS

The following is a summary of certain considerations associated with the acquisition and holding of the notes by employee benefit plans that are subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”), plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) or provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”), and entities whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”).

General Fiduciary Matters

ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code (an “ERISA Plan”) and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under ERISA and the Code, any person who exercises any discretionary authority or control over the administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan, or who renders investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan.

In considering an investment in the notes of a portion of the assets of any Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary’s duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws.

Prohibited Transaction Issues

Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified transactions involving plan assets with persons or entities who are “parties in interest,” within the meaning of ERISA, or “disqualified persons,” within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. The acquisition and/or holding of notes (including an exchange of outstanding notes for exchange notes) by an ERISA Plan with respect to which an issuer or a guarantor is considered a party in interest or a disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an applicable statutory, class or individual prohibited transaction exemption. In this regard, the U.S. Department of Labor has issued prohibited transaction class exemptions, or “PTCEs,” that may apply to the acquisition and holding of the notes. These class exemptions include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in-house asset managers. There can be no assurance that all of the conditions of any such exemptions will be satisfied.

Because of the foregoing, the notes should not be acquired or held by any person investing “plan assets” of any Plan, unless such acquisition and holding (and the exchange of outstanding notes for exchange notes) will not constitute a non-exempt prohibited transaction under ERISA and the Code or a similar violation of any applicable Similar Laws.

 

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Representation

Accordingly, by acceptance of a note (including an exchange of outstanding notes for exchange notes), each purchaser and subsequent transferee of a note will be deemed to have represented and warranted that either (i) no portion of the assets used by such purchaser or transferee to purchase or hold the notes or any interest therein constitutes assets of any Plan or (ii) the purchase and holding of the notes or any interest therein by such purchaser or transferee will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or similar violation under any applicable Similar Laws.

The foregoing discussion is general in nature and is not intended to be all inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering acquiring or holding the notes on behalf of, or with the assets of, any Plan, consult with their counsel regarding the potential applicability of ERISA, Section 4975 of the Code and any Similar Laws to such investment and whether an exemption would be applicable to the acquisition and holding of the notes.

 

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PLAN OF DISTRIBUTION

Each broker dealer that receives exchange notes for its own account pursuant to an exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired as a result of market making activities or other trading activities. We have agreed that, for a period ending on the earlier of (i) 90 days from the date on which the registration statement for the exchange offer is declared effective, (ii) the date on which a broker dealer is no longer required to deliver a prospectus in connection with market making or other trading activities and (iii) the date on which all the notes covered by such registration statement have been sold pursuant to the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker dealer for use in connection with any such resale, and will promptly send additional copies of this prospectus and any amendments or supplements to this prospectus to any broker dealer that requests such documents in the letter of transmittal. In addition, all dealers effecting transactions in the exchange notes may be required to deliver a prospectus.

We will not receive any proceeds from any sale of exchange notes by broker dealers. Exchange notes received by broker dealers for their own account pursuant to an exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker dealer and/or the purchasers of any such exchange notes. Any broker dealer that resells exchange notes that were received by it for its own account pursuant to an exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit of any such resale of exchange notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the outstanding notes) other than commissions or concessions of any broker dealers and will indemnify you (including any broker dealers) against certain liabilities, including liabilities under the Securities Act.

 

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LEGAL MATTERS

The validity and enforceability of the exchange notes will be passed upon for us by Simpson Thacher & Bartlett LLP, New York, New York. In rendering its opinion, Simpson Thacher & Bartlett LLP will rely upon the opinion of Holland & Hart LLP as to all matters governed by the laws of the states of Colorado, New Mexico, Utah and Wyoming, the opinion of Kutak Rock LLP as to all matters governed by the laws of the states of Kansas and Missouri, the opinion of Stites & Harbison PLLC as to all matters governed by the laws of the state of Kentucky and the opinion of Bell Nunnally & Martin LLP as to all matters governed by the laws of the state of Texas. An investment vehicle comprised of several partners of Simpson Thacher & Bartlett LLP, members of their families, related persons and others own interest representing less than 1% of the capital commitments of funds affiliated with Blackstone.

EXPERTS

The consolidated financial statements of Summit Materials, LLC as of December 29, 2012 and for the year then ended have been included herein in reliance on the report of KPMG LLP, an independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of Summit Materials, LLC and subsidiaries as of December 31, 2011 and for the years ended December 31, 2011 and 2010, and the retrospective adjustments to such financial statements included in this prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion on the those consolidated financial statements and includes an explanatory paragraph referring to retrospective adjustments for discontinued operations). Such consolidated financial statements have been included upon the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of Continental Cement Company, L.L.C. as of December 31, 2012 and for the year then ended have been included herein in reliance on the report of KPMG LLP, an independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of Continental Cement Company, L.L.C. as of December 31, 2011 and for the year ended December 31, 2011 and for the periods from May 27, 2010 to December 31, 2010 (Successor) and from January 1, 2010 to May 26, 2010 (Predecessor) included in this prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such consolidated financial statements have been included upon the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of Cornejo & Sons, Inc. and subsidiaries as of October 31, 2009 and 2008 and for each of the years in the three year period ended October 31, 2009 included in this prospectus have been included in reliance on the report of Allen, Gibbs & Houlik, L.C., independent auditors, upon the authority of said firm as experts in accounting and auditing in giving said report.

The audited financial statements of Kilgore Pavement Maintenance, LLC for the period ended August 1, 2010, as of August 1, 2010 and December 31, 2009 and for the year ended December 31, 2009 included in this prospectus have been included in reliance on the report of Wisan, Smith, Racker & Prescott, LLP, independent auditors, upon the authority of said firm as experts in accounting and auditing in giving said report.

The audited financial statements of Norris Aggregate Products Co. for the two month period ended February 28, 2012, as of February 28, 2012 and December 31, 2011 and for the year ended December 31, 2011 included in this prospectus have been included in reliance on the report of CliftonLarsonAllen LLP, independent auditors, upon the authority of said firm as experts in accounting and auditing in giving said report.

 

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The combined financial statements of R.K. Hall Construction, Ltd. and Affiliates as of December 31, 2009 and December 31, 2008 and for the three year period ended December 31, 2009 included in this prospectus have been included in reliance on the report of Perryman Chaney Russell, LLP, independent auditors, upon the authority of said firm as experts in accounting and auditing in giving said report.

CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

In June 2012, the Board dismissed Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm of Summit Materials, LLC and Subsidiaries and Continental Cement Company, L.L.C. and Subsidiary and engaged KPMG LLP (“KPMG”). Deloitte’s reports on the financial statements of Summit Materials, LLC and Subsidiaries and Continental Cement Company, L.L.C. and Subsidiary, for the periods specified in such reports did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. There were (i) no disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Deloitte, would have caused Deloitte to make reference to the subject matter of the disagreements in connection with its reports and (ii) no reportable events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation S-K issued by the SEC, in connection with the audits of the financial statements of Summit Materials, LLC and Subsidiaries and Continental Cement Company, L.L.C. and Subsidiary for each of the 2011 and 2010 periods audited by Deloitte through the replacement of Deloitte with KPMG.

Neither we nor anyone acting on our behalf consulted with KPMG at any time prior to their retention by us with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Summit Materials, LLC and Subsidiaries and Continental Cement Company, L.L.C. and Subsidiary financial statements, and neither a written report was provided to us nor oral advice was provided that KPMG concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue or (ii) any matter that was the subject of a disagreement or reportable events set forth in Item 304(a)(1)(iv) and (v), respectively, of Regulation S-K.

WHERE YOU CAN FIND MORE INFORMATION

We and our guarantors have filed with the SEC a registration statement on Form S-4 under the Securities Act with respect to the exchange notes. This prospectus, which forms a part of the registration statement, does not contain all of the information set forth in the registration statement. For further information with respect to us, our guarantors and the exchange notes, reference is made to the registration statement. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete, and, where such contract or other document is an exhibit to the registration statement, each such statement is qualified by the provisions in such exhibit, to which reference is hereby made. The registration statement and other information can be inspected and copied at the Public Reference Room of the SEC located at Room 1580, 100 F Street, N.E., Washington D.C. 20549. Copies of such materials, including copies of all or any portion of the registration statement, can be obtained from the Public Reference Room of the SEC at prescribed rates. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room. Such materials may also be accessed electronically by means of the SEC’s home page on the Internet (http://www.sec.gov). However, any such information filed with the SEC does not constitute a part of this prospectus.

So long as we are subject to the periodic reporting requirements of the Exchange Act, we are required to furnish the information required to be filed with the SEC to the trustee and the holders of the outstanding unregistered notes. We have agreed that, even if we are not required under the Exchange Act to furnish such information to the SEC, we will nonetheless continue to furnish information that would be required to be furnished by us by Section 13 or 15(d) of the Exchange Act.

 

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INDEX TO FINANCIAL STATEMENTS

 

    

Page

 

Audited Consolidated Financial Statements of Summit Materials, LLC and Subsidiaries

  

Report of KPMG LLP, Independent Registered Public Accounting Firm

     F-3   

Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm

     F-4   

Consolidated Balance Sheets as of December 29, 2012 and December 31, 2011

     F-5   

Consolidated Statements of Operations for the years ended December 29, 2012, December  31, 2011 and December 31, 2010

  

 

F-6

  

Consolidated Statements of Comprehensive (Loss) Income for the years ended December 29, 2012, December 31, 2011 and December 31, 2010

  

 

F-7

  

Consolidated Statements of Cash Flows for the years ended December 29, 2012, December  31, 2011 and December 31, 2010

  

 

F-8

  

Consolidated Statements of Changes in Redeemable Noncontrolling Interest and Member’s Interest for the years ended December 29, 2012, December 31, 2011 and December 31, 2010

  

 

F-9

  

Notes to Consolidated Financial Statements

     F-10   

Audited Consolidated Financial Statements of Continental Cement Company, L.L.C. and Subsidiary

  

Report of KPMG LLP, Independent Registered Public Accounting Firm

     F-50   

Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm

     F-51   

Consolidated Balance Sheets as of December 31, 2012 and 2011

     F-52   

Consolidated Statements of Operations for the years ended December 31, 2012 and 2011 and for the periods from May 27, 2010 to December 31, 2010 (Successor) and January 1, 2010 to May 26, 2010 (Predecessor)

  

 

F-53

  

Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2012 and 2011 and for the periods from May 27, 2010 to December 31, 2010 (Successor) and January 1, 2010 to May 26, 2010 (Predecessor)

  

 

F-54

  

Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2011 and for the periods from May 27, 2010 to December 31, 2010 (Successor) and January 1, 2010 to May 26, 2010 (Predecessor)

  

 

F-55

  

Consolidated Statements of Changes in Redeemable Members’ Interest and Member’s Interest for the years ended December 31, 2012 and 2011 and for the periods from May 27, 2010 to December 31, 2010 (Successor) and January 1, 2010 to May 26, 2010 (Predecessor)

  

 

F-56

  

Notes to Consolidated Financial Statements

     F-57   

Audited Consolidated Financial Statements of Cornejo & Sons, Inc. and Subsidiaries

  

Report of Allen, Gibbs & Houlik, L.C., Independent Auditors

     F-76   

Consolidated Balance Sheets as of October 31, 2009 and 2008

     F-77   

Consolidated Statements of Operations for the years ended October 31, 2009, 2008 and 2007

     F-78   

Consolidated Statements of Stockholders’ Equity for the years ended October  31, 2009, 2008 and 2007

     F-79   

Consolidated Statements of Cash Flows for the years ended October 31, 2009, 2008 and 2007

     F-80   

Notes to Consolidated Financial Statements

     F-81   

Unaudited Consolidated Statements of Operations for the three months ended January  31, 2009 and January 31, 2010

     F-90   

Unaudited Consolidated Statements of Cash Flows for the three months ended January  31, 2009 and January 31, 2010

     F-91   

Notes to the Unaudited Consolidated Financial Statements

     F-92   

 

F-1


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Page

 

Audited Financial Statements of Kilgore Pavement Maintenance, LLC

  

Report of Wisan, Smith, Racker & Prescott, LLP, Independent Auditors

     F-96   

Balance Sheets as of August 1, 2010 and December 31, 2009

     F-97   

Statements of Operations and Members’ Equity for the period ended August  1, 2010 and for the year ended December 31, 2009

     F-98   

Statements of Cash Flows for the period ended August 1, 2010 and for the year ended December  31, 2009

     F-99   

Notes to Financial Statements

     F-100   

Audited Financial Statements of Norris Aggregate Products Co.

  

Report of CliftonLarsonAllen LLP, Independent Auditors

     F-106   

Balance Sheets as of February 28, 2012 and December 31, 2011

     F-107   

Statements of Operations for the two month period ended February 28, 2012 and for the year ended December 31, 2011

     F-108   

Statements of Stockholders’ Equity for the two month period ended February 28, 2012 and for the year ended December 31, 2011

     F-109   

Statement of Cash Flows for the two month period ended February 28, 2012 and for the year ended December 31, 2011

     F-110   

Notes to Financial Statements

     F-111   

Audited Combined Financial Statements of R.K. Hall Construction, Ltd.

  

Report of Perryman Chaney Russell, LLP, Independent Auditors

     F-116   

Combined Balance Sheets as of December 31, 2009 and 2008

     F-117   

Combined Statements of Operations and Equity for the years ended December 31, 2009, December  31, 2008 and December 31, 2007

     F-118   

Combined Statements of Cash Flows for the years ended December 31, 2009, December 31, 2008 and December 31, 2007

     F-119   

Notes to Combined Financial Statements

     F-120   

Unaudited Combined Balance Sheets as of December 31, 2009 and September 30, 2010

     F-126   

Unaudited Combined Statements of Operations and Equity for the nine months ended September  30, 2009 and September 30, 2010

     F-127   

Unaudited Combined Statements of Cash Flows for the nine months ended September  30, 2009 and September 30, 2010

     F-128   

Notes to Unaudited Combined Financial statements

     F-129   

 

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Report of Independent Registered Public Accounting Firm

 

The Board of Directors

Summit Materials, LLC:

 

We have audited the accompanying consolidated balance sheet of Summit Materials, LLC and subsidiaries as of December 29, 2012, and the related consolidated statements of operations, comprehensive (loss) income, cash flows and changes in redeemable noncontrolling interest and member’s interest for the year then ended. The consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the consolidated financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Summit Materials, LLC and subsidiaries as of December 29, 2012, and the results of their operations and their cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.

 

/s/ KPMG LLP

McLean, Virginia

March 27, 2013

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Member of

Summit Materials, LLC and Subsidiaries

Washington, D.C.

 

We have audited the accompanying consolidated balance sheet of Summit Materials, LLC and Subsidiaries (the “Company”) as of December 31, 2011, and the related consolidated statements of operations, comprehensive (loss) income, changes in redeemable noncontrolling interest and member’s interest, and cash flows for each of the years ended December 31, 2011 and 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Summit Materials, LLC and Subsidiaries as of December 31, 2011, and the results of their operations and their cash flows for each of the years ended December 31, 2011 and 2010, in conformity with accounting principles generally accepted in the United States of America.

 

As discussed in Note 3 to the consolidated financial statements, the accompanying 2011 and 2010 consolidated financial statements have been retrospectively adjusted for discontinued operations.

 

/s/ DELOITTE & TOUCHE LLP

McLean, Virginia

 

May 1, 2012 (March 26, 2013 as to Note 3)

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Consolidated Balance Sheets

December 29, 2012 and December 31, 2011

(In thousands)

 

     2012     2011  
Assets     

Current assets:

    

Cash

   $ 27,431     $ 42,790  

Accounts receivable, net

     100,298       105,233  

Costs and estimated earnings in excess of billings

     11,575       18,506  

Inventories

     92,977       84,263  

Other current assets

     10,068       12,382  
  

 

 

   

 

 

 

Total current assets

     242,349       263,174  

Property, plant and equipment, net

     813,607       821,903  

Investments in affiliates

     12,989       13,123  

Goodwill

     179,120       153,375  

Intangible assets, net

     8,606       9,179  

Other assets

     24,542       23,511  
  

 

 

   

 

 

 

Total assets

   $ 1,281,213     $ 1,284,265  
  

 

 

   

 

 

 

Liabilities, Redeemable Noncontrolling Interest and Member’s Interest

    

Current liabilities:

    

Current portion of long-term debt

   $ 4,000      $ 7,960   

Current portion of acquisition-related liabilities

     9,525        8,465   

Accounts payable

     61,634       69,643  

Accrued expenses

     49,822       33,995  

Billings in excess of costs and estimated earnings

     6,926       4,336  
  

 

 

   

 

 

 

Total current liabilities

     131,907       124,399  

Long-term debt

     635,843       601,021  

Acquisition-related liabilities

     23,919       20,238  

Other noncurrent liabilities

     84,266       80,935  
  

 

 

   

 

 

 

Total liabilities

     875,935       826,593  
  

 

 

   

 

 

 

Commitments and contingencies (see note 13)

    

Redeemable noncontrolling interest

     22,850       21,300  

Member’s interest:

    

Member’s equity

     484,584        482,707   

Accumulated deficit

     (94,085     (40,932

Accumulated other comprehensive loss

     (9,130     (6,577
  

 

 

   

 

 

 

Member’s interest

     381,369        435,198   

Noncontrolling interest

     1,059        1,174   
  

 

 

   

 

 

 

Total member’s interest

     382,428        436,372   
  

 

 

   

 

 

 

Total liabilities, redeemable noncontrolling interest and member’s interest

   $ 1,281,213     $ 1,284,265  
  

 

 

   

 

 

 

 

See accompanying notes to consolidated financial statements.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Consolidated Statements of Operations

Years ended December 29, 2012, December 31, 2011 and December 31, 2010

(In thousands)

 

     2012     2011     2010  

Revenue:

      

Product

   $ 588,762     $ 427,419     $ 240,120  

Service

     374,140       395,129       190,238  
  

 

 

   

 

 

   

 

 

 

Total revenue

     962,902       822,548       430,358  
  

 

 

   

 

 

   

 

 

 

Costs of revenue (exclusive of items shown separately below):

      

Product

     444,569       317,360       181,901  

Service

     304,794       313,584       126,396  
  

 

 

   

 

 

   

 

 

 

Total costs of revenue

     749,363       630,944       308,297  

General and administrative expenses

     128,032        96,886       49,479  

Depreciation, depletion, amortization and accretion

     68,876       61,964       34,415  

Transaction costs

     1,988       9,120       22,268  
  

 

 

   

 

 

   

 

 

 

Operating income

     14,643        23,634       15,899  

Other (income) expense, net

     (1,182     (21,244     1,583  

Loss on debt refinancing

     9,469       —         9,975  

Interest expense

     58,079       47,784       25,430  
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income tax (benefit) expense

     (51,723     (2,906     (21,089

Income tax (benefit) expense

     (3,920     3,408       2,363  
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations

     (47,803     (6,314     (23,452

Loss from discontinued operations

     (2,774     (3,736     (411
  

 

 

   

 

 

   

 

 

 

Net loss

     (50,577     (10,050     (23,863

Net income attributable to noncontrolling interest

     1,919       695       86  
  

 

 

   

 

 

   

 

 

 

Net loss attributable to member of Summit Materials, LLC

   $ (52,496   $ (10,745   $ (23,949
  

 

 

   

 

 

   

 

 

 

 

See accompanying notes to consolidated financial statements.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Consolidated Statements of Comprehensive (Loss) Income

Years ended December 29, 2012, December 31, 2011 and December 31, 2010

(In thousands)

 

     2012     2011     2010  

Net loss

   $ (50,577   $ (10,050   $ (23,863

Other comprehensive loss:

      

Pension and postretirement adjustment

     (3,648     (5,675     (2,708
  

 

 

   

 

 

   

 

 

 

Comprehensive loss

     (54,225     (15,725     (26,571

Less comprehensive income (loss) attributable to the noncontrolling interest

     824       (675     (350
  

 

 

   

 

 

   

 

 

 

Comprehensive loss attributable to member of Summit Materials, LLC

   $ (55,049   $ (15,050   $ (26,221
  

 

 

   

 

 

   

 

 

 

 

See accompanying notes to consolidated financial statements.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Consolidated Statements of Cash Flows

Years ended December 29, 2012, December 31, 2011 and December 31, 2010

(In thousands)

 

     2012     2011     2010  

Cash flow from operating activities:

      

Net loss

   $ (50,577   $ (10,050   $ (23,863

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

      

Depreciation, depletion, amortization and accretion

     72,179       64,983       35,456  

Share-based compensation expense

     2,533       2,484       1,169  

Financing fee amortization

     3,266       2,335       2,067  

Deferred income tax benefit

     (3,468     (1,974     (2,022

Loss on sale of property, plant and equipment

     2,564       2,349       242  

Bargain purchase gain

     —         (12,133     —    

Revaluation of asset retirement obligations

     —          (3,420     —    

Revaluation of contingent consideration

     (409     (10,344     —    

Loss on debt refinancing

     9,469       —         9,975  

Other

     (465     894       656  

Decrease (increase) in operating assets, net of acquisitions:

      

Accounts receivable

     5,201       13,901       12,242  

Costs and estimated earnings in excess of billings

     6,931       (613     (5,088

Inventories

     (1,726     (12,643     184  

Other current assets

     3,494       (4,823     (245

Other assets

     1,189       (1,016     3,164  

(Decrease) increase in operating liabilities, net of acquisitions:

      

Accounts payable

     (6,076     6,612       (14,128

Accrued expenses

     17,175        (6,455     (28,547

Billings in excess of costs and estimated earnings

     2,589       (8,209     (4,828

Other liabilities

     (1,590     1,375       (6,963
  

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     62,279       23,253       (20,529
  

 

 

   

 

 

   

 

 

 

Cash flow from investing activities:

      

Acquisitions, net of cash acquired

     (48,757     (161,073     (482,333

Purchases of property, plant and equipment

     (45,488     (38,656     (21,145

Proceeds from the sale of property, plant and equipment

     8,836       7,157       4,700  

Other

     69       241       (603
  

 

 

   

 

 

   

 

 

 

Net cash used for investing activities

     (85,340     (192,331     (499,381
  

 

 

   

 

 

   

 

 

 

Cash flow from financing activities:

      

Proceeds from investment by member

     —         103,630       338,639  

Net proceeds from debt issuance

     713,361       96,748       485,373  

Payments on long-term debt

     (697,438     (49,000     (245,855

Payments on acquisition-related liabilities

     (7,519     (4,593     (2,721

Other

     (702     (10     (47
  

 

 

   

 

 

   

 

 

 

Net cash provided by financing activities

     7,702       146,775       575,389  
  

 

 

   

 

 

   

 

 

 

Net (decrease) increase in cash

     (15,359     (22,303     55,479  

Cash — beginning of period

     42,790       65,093       9,614  
  

 

 

   

 

 

   

 

 

 

Cash — end of period

   $ 27,431     $ 42,790     $ 65,093  
  

 

 

   

 

 

   

 

 

 

 

See accompanying notes to consolidated financial statements.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Consolidated Statements of Changes in Redeemable Noncontrolling Interest and Member’s Interest

Years ended December 29, 2012, December 31, 2011 and December 31, 2010

(In thousands)

 

    Total member’s interest                    
    Member’s
equity
    Retained
earnings/
accumulated
deficit
    Accumulated
other
comprehensive
income (loss)
(AOCI)
    Noncontrolling
interest
    Total
member’s
interest
    Redeemable
noncontrolling
interest
 
           
           
           
           

Balance — December 31, 2009

  $ 36,785     $ (5,256   $ —       $ —       $ 31,529     $ —    

Contributed capital

    338,639       —         —         1,274       339,913       21,300  

Accretion / redemption value adjustment

    —         (350     —         —         (350     350  

Net (loss) income

    —         (23,949     —         —         (23,949     86  

Other comprehensive loss

    —         —         (2,272     —         (2,272     (436

Share-based compensation

    1,169       —         —         —         1,169       —    

Payment of dividends

    —         —         —         (47     (47     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance — December 31, 2010

    376,593       (29,555     (2,272     1,227       345,993       21,300  

Contributed capital

    103,630       —         —         —         103,630       —    

Accretion / redemption value adjustment

    —         (632     —         —         (632     632  

Net (loss) income

    —         (10,745     —         (43     (10,788     738  

Other comprehensive loss

    —         —         (4,305     —         (4,305     (1,370

Share-based compensation

    2,484       —         —         —         2,484       —    

Payment of dividends

    —         —         —         (10     (10     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance — December 31, 2011

    482,707       (40,932     (6,577     1,174       436,372       21,300  

Accretion / redemption value adjustment

    —          (657     —          —          (657     657   

Net (loss) income

    —          (52,496 )     —          (69 )     (52,565 )     1,988  

Other comprehensive loss

    —         —         (2,553     —         (2,553     (1,095

Repurchase of member’s interest

    (656     —         —         —         (656     —    

Share-based compensation

    2,533       —         —         —         2,533       —    

Payment of dividends

    —         —         —         (46     (46     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance — December 29, 2012

  $ 484,584     $ (94,085   $ (9,130   $ 1,059     $ 382,428     $ 22,850   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

See accompanying notes to consolidated financial statements.

 

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Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

(1)   Summary of Organization and Significant Accounting Policies

 

Summit Materials, LLC (“Summit” or the “Company”) is a wholly owned subsidiary of Summit Materials Holdings L.P. (“Parent”) whose major indirect owners are certain investment funds affiliated with Blackstone Capital Partners V L.P. (“BCP”). Summit has a number of subsidiaries including Summit Materials Holdings I, LLC (“Summit I”) and Summit Materials Holdings II, LLC (“Summit II”), which have individually made a number of acquisitions through 2012.

 

Noncontrolling interests represent a 20% ownership of Ohio Valley Asphalt, LLC (“OVA”) and a 30% redeemable ownership in Continental Cement Company, L.L.C. (“Continental Cement”).

 

The Company’s fiscal year-end in 2010 was December 31. In 2011, the Company changed its fiscal year to be 52 weeks with each quarter comprised of 13 weeks ending on a Saturday. The Company’s year-end in 2012 and 2011 fell on December 29 and December 31, respectively.

 

Company’s Activities — Summit is a vertically-integrated, heavy building materials company. Across its subsidiaries, it is engaged in the manufacturing and sale of aggregate material, hot-mix asphalt, Portland cement and ready - mixed concrete. It is also engaged in road paving and related construction services. Summit owns and operates stone quarries, asphalt plants, ready - mix plants, a cement plant and landfill sites. Most of the Company’s construction work is performed under fixed unit-price contracts with state and local governmental entities. The operations of Summit are conducted primarily across 12 states, with the most significant revenues generated in Texas, Kansas, Kentucky, Missouri and Utah.

 

Principles of Consolidation — The consolidated financial statements include the accounts of the Company and its majority owned subsidiaries. All intercompany balances and transactions have been eliminated. The Company attributes member’s interests and net (loss) income separately to the controlling and noncontrolling interest, whereby consolidated member’s interests and net (loss) income are separately attributable to the controlling interest and to the noncontrolling interest. The Company accounts for investments in entities for which it has an ownership of 20% to 50% using the equity method of accounting.

 

Use of Estimates — The consolidated financial statements of the Company have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), which require management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible and other long-lived assets, pension and other postretirement obligations, asset retirement obligations and the redeemable noncontrolling interest. Estimates also include revenue earned and costs to complete open contracts. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management adjusts such estimates and assumptions when circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from estimates made. Changes in estimates, including those resulting from continuing changes in the economic environment, will be reflected in the Company’s consolidated financial statements in the period in which the change in estimate occurs.

 

Business and Credit Concentrations — The majority of Summit’s customers are located in Texas, Kansas, Kentucky, Missouri and Utah. Summit’s accounts receivable consist primarily of amounts due from individuals, corporations and governmental entities within these areas. Collection of these accounts is, therefore, dependent on the economic conditions in the aforementioned states.

 

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Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

However, credit granted within Summit’s trade areas has been granted to a wide variety of customers. Management does not believe that any significant concentrations of credit exist with respect to individual customers or groups of customers.

 

Cash — The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. As of December 29, 2012 and December 31, 2011, the Company had no cash equivalents.

 

Accounts Receivable — Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the collectability of individual accounts. In establishing the allowance, management considers historical losses adjusted to take into account current market conditions and its customers’ financial condition, the amount of receivables in dispute, the current receivables aging and current payment terms. Balances that remain outstanding after reasonable collection efforts are exercised are written off through a charge to the valuation allowance.

 

The balances billed but not paid by customers, pursuant to retainage provisions included in contracts, will be due upon completion of the contracts.

 

Revenue and Cost Recognition — Revenues from construction contracts are included in service revenue in the consolidated statements of operations and are recognized under the percentage-of-completion accounting method. The percent complete is measured by the cost incurred to date compared to the estimated total cost of each project. This method is used as management considers expended cost to be the best available measure of progress on these contracts. Inherent uncertainties in estimating costs make it at least reasonably possible that the estimates used will change within the near term and over the life of the contracts.

 

Contract costs include all direct material and labor costs and those indirect costs related to contract performance and completion. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. General and administrative costs are charged to expense as incurred.

 

Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income. Such revisions are recognized in the period in which they are determined. An amount equal to contract costs incurred that are attributable to claims is included in revenue when realization is probable and the amount can be reliably estimated.

 

Costs and estimated earnings in excess of billings are comprised principally of revenue recognized on contracts (on the percentage-of-completion method) for which billings had not been presented to customers because the amount were not billable under the contract terms at the balance sheet date. In accordance with the contract terms, the unbilled receivables at December 29, 2012 will be billed in 2013. Amounts are billed based on contractual terms. Billings in excess of costs and estimated earnings represent billings in excess of revenues recognized.

 

Revenues for product sales are recognized when evidence of an arrangement exists, the fee is fixed or determinable, title passes, which is generally when the product is shipped, and collection is reasonably assured. Product revenues include sales of aggregates, cement and other materials to customers, net of discounts, allowances or taxes, if any. Internal product sales are eliminated from service revenue in the consolidated statements of operations.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Revenues from the receipt of waste are based on fees charged for waste transfer and disposal upon acceptance of the waste.

 

Inventories — Inventories consist of stone removed from quarries and processed for future sale, raw materials and finished concrete blocks. Inventories are valued at the lower of cost or market and are accounted for on a first-in first-out basis or an average cost basis. If items become obsolete or otherwise unusable, they will be charged to costs of production in the period that determination is made by management. Stripping costs are costs of removing overburden and waste material to access aggregate materials. Stripping costs incurred during the production process are considered costs of extraction and are capitalized and recognized in cost of revenue in the same period as the revenue from the sale of the inventory.

 

Property, Plant and Equipment, net — Property, plant and equipment are recorded at cost, less accumulated depreciation and depletion. Expenditures for additions and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Repair and maintenance costs that do not substantially add to the productive capacity or extend the useful life of the asset are expensed as incurred.

 

Landfill airspace is included in property, plant and equipment at cost and is amortized based on utilization of the asset. Management reassesses the landfill airspace capacity with any changes in value recorded in cost of revenue. Capitalized landfill costs include expenditures for the acquisition of land and related airspace, engineering and permitting costs, cell construction costs and direct site improvement costs.

 

Upon disposal, the cost and related accumulated depreciation are removed from the Company’s accounts and any gain or loss is included in operating income.

 

Depreciation on property, plant and equipment, including capital lease assets, is computed on a straight-line basis or based on the economic usage over the estimated useful life of the asset. The estimated useful lives are generally as follows:

 

Buildings and improvements

     7–40 years   

Plant, machinery and equipment

     3–40 years   

Truck and auto fleet

     3–10 years   

Mobile equipment and barges

     3–20 years   

Landfill airspace and improvements

     5–60 years   

 

Depletion of mineral reserves is calculated for proven and probable reserves by the units of production method on a quarry-by-quarry basis. Leasehold improvements are amortized on a straight-line basis over the lesser of the asset’s useful life or the remaining lease term.

 

The Company reviews the carrying value of property, plant and equipment for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. Such indicators may include, among others, deterioration in general economic conditions, negative developments in equity and credit markets, adverse changes in the markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows or a trend of negative or declining cash flows over multiple periods. In 2012, impairment charges of $1.6 million were recognized in operating income. No material impairment charges were recognized in 2011 or 2010.

 

Accrued Mining and Landfill Reclamation — The mining reclamation reserve and financial commitments for landfill closure and post-closure activities are based on management’s estimate of future cost requirements to reclaim property at both currently operating and closed sites. Estimates of these obligations have been

 

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Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

developed based on management’s interpretation of current requirements and proposed regulatory changes and are intended to approximate fair value. Costs are estimated in current dollars, inflated until the expected time of payment, using an inflation rate of 2.5%, and then discounted back to present value using a credit-adjusted, risk-free rate on obligations of similar maturity, adjusted to reflect the Company’s credit rating. Changes in the credit-adjusted, risk-free rate do not change recorded liabilities, but subsequently recognized obligations are measured using the revised credit-adjusted, risk-free rate.

 

Significant changes in inflation rates or the amount or timing of future cost estimates typically result in both (1) a current adjustment to the recorded liability (and corresponding adjustment to the asset) and (2) a change in liability and asset amounts to be recorded prospectively over the remaining capacity of the landfill or unmined quarry. Any changes related to the capitalized and future cost of the related assets are recognized in accordance with Summit’s amortization policy, which would generally result in amortization expense being recognized prospectively over the remaining life of the asset.

 

Intangible Assets — The Company’s intangible assets are comprised of quarry lease agreements and trade names. The assets related to quarry lease agreements are a result of the submarket royalty rates paid under agreements for extracting aggregate. The values were determined as of the respective acquisition dates by a comparison of market-royalty rates to contract-royalty rates. The intangible assets are amortized on a straight-line basis over the lives of the leases. Continental Cement’s trade name comprises the majority of the remaining intangible assets. The following table shows intangible assets by type and in total (in thousands):

 

     December 29, 2012      December 31, 2011  
     Gross
Carrying
Amount
     Accumulated
Amortization
    Net
Carrying
Amount
     Gross
Carrying
Amount
     Accumulated
Amortization
    Net
Carrying
Amount
 

Quarry leases

   $ 8,940       $ (1,092   $ 7,848       $ 8,940       $ (623   $ 8,317   

Trade names

     1,020         (262     758         1,020         (158     862   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total intangible assets

   $ 9,960       $ (1,354   $ 8,606       $ 9,960       $ (781   $ 9,179   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

 

The weighted average useful life of the quarry intangible assets is 19.8 years and 10.0 years for the Continental Cement trade name. Amortization expense in 2012, 2011 and 2010 was $0.6 million, $0.5 million and $0.3 million, respectively. The estimated amortization expense for intangible assets for each of the next five years and thereafter is as follows (in thousands):

 

2013

   $ 546   

2014

     549   

2015

     549   

2016

     549   

2017

     545   

Thereafter

     5,868   
  

 

 

 

Total

   $ 8,606   
  

 

 

 

 

Goodwill — Goodwill represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired. Goodwill recorded in connection with the Company’s acquisitions is primarily attributable to the expected profitability, assembled workforces of the acquired businesses and the synergies expected to arise after the Company’s acquisition of those businesses. Goodwill is not amortized, but is tested

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

annually for impairment as of the first day of the fourth quarter and whenever events or circumstances indicate that goodwill may be impaired. The test for goodwill impairment is a two-step process to first identify potential goodwill impairment for each reporting unit and then, if necessary, measure the amount of the impairment loss. Goodwill is tested for impairment based on the Company’s operating companies, which management has determined to be the Company’s reporting units, which are one level below its segments.

 

As of December 29, 2012, we had eight reporting units with goodwill for which we completed our annual goodwill impairment test. The first step of the goodwill impairment test employed by the company compares the fair value of the reporting units to their carrying values. Management estimates the fair value of the reporting units primarily based on the discounted projected cash flows of the underlying operations. A number of significant assumptions and estimates are required to forecast operating cash flows, including macroeconomic trends in the public and private construction industry, the timing of work embedded in backlog, performance and profitability under contracts, expected success in securing future sales and the appropriate interest rate used to discount the projected cash flows. These assumptions may vary significantly among the reporting units. During the 2012 annual review of goodwill, management concluded that the estimated fair value of the reporting units was substantially in excess of their carrying values, resulting in no impairment. The Company has recorded no goodwill impairment charges to date.

 

The following table presents goodwill by reportable segments and in total (in thousands):

 

     Central      West     East      Total  

Beginning balance — January 1, 2011

   $ 48,210      $ 63,905     $ 5,071      $ 117,186  

Acquisitions

     5,375        27,693       3,121        36,189  
  

 

 

    

 

 

   

 

 

    

 

 

 

Balance — December 31, 2011

     53,585        91,598       8,192        153,375  

Acquisitions ( i )

     19,204        (205     6,746        25,745  
  

 

 

    

 

 

   

 

 

    

 

 

 

Ending balance — December 29, 2012

   $ 72,789      $ 91,393     $ 14,938      $ 179,120  
  

 

 

    

 

 

   

 

 

    

 

 

 

 

  (i)   Includes certain immaterial working capital adjustments in the West region related to 2011 acquisitions.

 

Income Taxes — The Company is a limited liability company and passes tax attributes for Federal and state tax purposes to Parent and is generally not subject to Federal or state income tax. However, the consolidated financial statements of the Company include federal and state income tax provisions and related accounts for subsidiaries that are taxable entities.

 

For the Company’s taxable entities, deferred income tax assets and liabilities are computed for differences between the financial statement amounts and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized for deferred tax assets if it is more likely than not that some portion or all of the net deferred tax assets will not be realized.

 

The Company evaluates the tax positions taken on income tax returns that remain open to examination by the respective tax authorities from prior years and positions expected to be taken on the current year tax returns to identify uncertain tax positions. Interest and penalties are recorded in income tax expense.

 

Fair Value Measurements — The fair value accounting guidance establishes the following fair value hierarchy that prioritizes the inputs used to measure fair value:

 

Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets.

 

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Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

 

Level 2 — Inputs other than Level 1 that are based on observable market data, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs that are observable that are not prices and inputs that are derived from or corroborated by observable markets.

 

Level 3 — Valuations developed from unobservable data, reflecting the Company’s own assumptions, which market participants would use in pricing the asset or liability.

 

Assets and liabilities measured at fair value in the consolidated balance sheets as of year-end 2012 and 2011 are as follows (in thousands):

 

     2012      2011  

Accrued expenses:

     

Current portion of contingent consideration

   $ 746       $ 1,155   

Acquisition-related liabilities:

     

Contingent consideration

   $ 1,908       $ 2,123   

 

Certain acquisitions made by the Company require the payment of additional consideration contingent upon the achievement of specified operating results, referred to as contingent consideration or earn-out obligations. These payments will not be made if earn-out thresholds are not achieved. No material earn-out payments have been made to date.

 

Summit records contingent consideration at fair value on the acquisition date and then remeasures its fair value each reporting period. Any adjustments to fair value are recognized in earnings in the period identified. Management of the Company determines the appropriate policies and procedures to be used when determining the fair value of contingent consideration. Its fair values are based on unobservable inputs, or Level 3 assumptions, including projected probability-weighted cash payments and an 8.5% discount rate, which reflects the Company’s credit risk. Changes in fair value may occur as a result of a change in actual or projected cash payments, the probability weightings applied by the Company to projected payments or a change in the discount rate. Significant increases or decreases in any of these inputs in isolation could result in a significantly lower, or higher, fair value measurement. In 2012 and 2011, we recognized reductions to contingent consideration of $0.4 million and $10.3 million, respectively, due primarily to revised estimates of the probability of achieving the specified targets.

 

Financial Instruments — The Company’s financial instruments include certain acquisition related liabilities (deferred consideration and noncompete obligations) and debt. The fair value of the deferred consideration and noncompete obligations approximate their carrying value of $23.4 million and $7.4 million, respectively, as of December 29, 2012, and $15.1 million and $10.3 million, respectively, as of December 31, 2011. The fair value was determined based on level 3 inputs of the fair value hierarchy, including the cash payment terms in the purchase agreements and a discount rate reflecting the Company’s credit risk.

 

The fair value of long-term debt approximates $670.7 million and $605.0 million as of December 29, 2012 and December 31, 2011, respectively, compared to its carrying value of $639.8 million and $609.0 million, respectively. Fair value was determined based on Level 2 inputs of the fair value hierarchy, including observable inputs such as interest rates, bond yields and quoted prices for these instruments in inactive markets.

 

Kiln-Down Costs — Continental Cement experiences periodic major maintenance of its kiln (referred to as a kiln-down). The Company accounts for these costs under the direct expensing method, whereby costs are charged to operations as incurred.

 

 

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Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

New Accounting Standards — In May 2011, the FASB issued Accounting Standards Update No. 2011-04 Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ ASU 2011-04”) . The amendments in this update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in this update to result in a change in the application of the existing requirements. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this update are effective prospectively during interim and annual periods beginning after December 15, 2011. The Company adopted ASU 2011-04 as of January 1, 2012, which did not result in a material impact on fair value measurements or related disclosures.

 

Reclassifications — Certain amounts have been reclassified in prior periods to conform to the presentation in the consolidated financial statements as of and for the year-ended December 29, 2012.

 

(2)   Acquisitions

 

The Company has acquired a number of entities since its formation in 2009, which were financed through a combination of debt and contributions from the Company’s member. Debt financing was composed of term loan debt and revolver facilities. Member’s contributions were provided by Parent to the Company. The operations of each acquisition have been included in the Company’s consolidated results of operations since the respective dates of the acquisitions. The Company measures all assets acquired and liabilities assumed at their acquisition-date fair value. The purchase price allocation for the acquisitions has been finalized with the exception of Kay & Kay Contracting, LLC and Sandco Inc. due to the recent nature of the acquisitions.

 

2012 Acquisitions — The following describes the acquisitions that occurred in 2012 by region.

 

Central region

 

   

On February 29, 2012, the Company acquired certain assets of Norris Quarries, LLC, an aggregates business in northwest Missouri, with cash raised through the January 2012 financing transaction and drawn from the senior secured credit facility.

 

West region

 

   

On November 30, 2012, the Company acquired the stock of Sandco Inc., an aggregates and ready-mix business in Colorado with cash on-hand.

 

East region

 

   

On October 5, 2012, the Company acquired certain assets of Kay & Kay Contracting, LLC, an aggregates business in Kentucky with cash on-hand.

 

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Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Pro forma Financial Information (Unaudited) — The following unaudited supplemental pro forma information presents the financial results as if the 2012 acquisitions occurred on January 1, 2011. The acquisitions made in 2011 are not included in the pro forma summary as these acquisitions were not material individually or in the aggregate. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been made on January 1, 2011, nor is it indicative of any future results.

 

(in thousands)    Year ended  
     December 29,
2012
    December 31,
2011
 

Revenue

   $ 976,797      $ 870,414  

Net loss

     (45,976     (657

 

2011 acquisitions — The following describes the acquisitions that occurred in 2011 by region.

 

Central region

 

   

On May 27, 2011, the Company acquired the membership interests of Fischer Quarries, L.L.C. using funds provided by Parent.

 

West region

 

   

On January 14, 2011, the Company acquired all of the stock of Triple C Concrete, Inc. in Idaho, financed with cash raised from the December 2010 refinancing.

 

   

On March 31, 2011, the Company acquired Elam Construction, Inc. in Colorado, financed with cash from the December 2010 refinancing.

 

   

On June 8, 2011, the Company acquired B & B Resources, Inc. using cash funded through a combination of debt and funds provided by Parent.

 

   

On June 10, 2011, the Company acquired the stock of Grand Junction Pipe, Inc. using funds provided by Parent.

 

   

On August 2, 2011, the Company, acquired the stock of Asphalt Paving Company of Austin, L.L.C. and certain of its Affiliates (“Asphalt Paving”) in Texas with funds provided by Parent.

 

   

On October 28, 2011, the Company acquired the stock of JD Ramming, Inc., RTI Hot Mix, Inc., RTI Equipment, Inc. and Ramming Transportation, Inc. in Texas funded through a combination of debt, cash on hand and funds provided by Parent.

 

East region

 

   

On May 27, 2011, the Company acquired the remaining 50% interest in a joint venture it had with Bourbon Limestone, Company using funds provided by Parent.

 

The application of purchase accounting resulted in a bargain purchase gain of $2.6 million and $9.6 million for Elam Construction, Inc. and Grand Junction Pipe, Inc., respectively, which is reflected in other (income) expense in the consolidated statement of operations for the year-ended December 31, 2011. The amount of the bargain purchase gain is equal to the amount by which the fair value of net assets acquired exceeded the consideration transferred. The Company believes that the resulting bargain purchase gains are reasonable as the sellers were highly motivated.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

2010 Acquisitions — The following describes the acquisitions that occurred in 2010 by region.

 

Central region

 

   

On April 16, 2010, the Company purchased 100% of the outstanding ownership interests in Cornejo & Sons, L.L.C., C&S Group, Inc., Concrete Materials Company of Kansas, LLC and Cornejo Materials, Inc, collectively referred to as Cornejo. Cornejo provides construction, excavation and paving contracting services for government agencies and private industry primarily within the state of Kansas. Cornejo operates concrete, sand and asphalt production facilities. It also operates a landfill that is open to the public.

 

   

On June 15, 2010, the Company purchased the lease on a quarry and assets from Harshman Construction L.L.C. and Harshman Farms, Inc. (collectively, Harshman), in Moline, Kansas.

 

   

On May 27, 2010, the Company acquired 70% of the outstanding ownership interests of Continental Cement. The proceeds from the purchase were used by Continental Cement to repay certain outstanding indebtedness.

 

   

On September 15, 2010, the Company acquired 100% of the outstanding ownership interests of Con-Agg of MO, L.L.C. (“Con-Agg”). Con-Agg owns and operates aggregate, ready-mix facilities and an underground storage facility.

 

West region

 

   

The Company acquired the assets of Harper Contracting, Inc., Harper Sand and Gravel, Inc., Harper Ready Mix Company, Inc. and Harper Investments, Inc. (collectively referred to as Harper) and the assets of Kilgore Pavement Maintenance, LLC and Kilgore Properties, LLC, pursuant to two separate purchase agreements (collectively referred to as Kilgore). The transactions closed on August 2, 2010. Kilgore is engaged in various contracting and construction projects, primarily road and earthwork for governmental and commercial properties located in Utah. It also owns and operates quarry and asphalt production facilities.

 

   

On September 15, 2010, the Company purchased all interests in Altaview Concrete, LLC, Peak Construction Materials, LLC, Peak Management, L.C. and Wasatch Concrete Pumping, LLC (collectively, Altaview). Altaview is engaged primarily in the production and delivery of concrete to governmental, commercial and private properties in Utah.

 

   

On September 28, 2010, the Company purchased certain assets of EnerCrest Products, Inc. (Enercrest). Enercrest is engaged primarily in the mining and selling of quarry aggregates, including crushed stone and other similar products to customers located in Wyoming.

 

   

On November 30, 2010, the Company acquired 100% of the ownership equity interests of RK Hall Construction, Ltd., RHMB Capital, L.L.C., Hall Materials, Ltd., SCS Materials, L.P., B&H Contracting, L.P. and RKH Capital, LLC (collectively referred to as RK Hall) pursuant to an interest purchase agreement. RK Hall is engaged in road and bridge building and the third-party sale of aggregate material and hot-mix asphalt. It owns and operates a number of asphalt plant facilities and a concrete plant facility, all located in Northeast Texas.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

East region

 

   

On February 1, 2010, the Company acquired 100% of the outstanding ownership interests of Hinkle Contracting Company, LLC (“Hinkle”). The purchase included the remaining 20% interests in Hinkle’s subsidiary, Glass Aggregates, LLC (Glass f.k.a. Glass Paving and Stone, LLC). Hinkle owns 80% of OVA. The remaining 20% noncontrolling interest was valued based on the fair value of net assets adjusted for income or losses, dividends received and contributions made. Hinkle is primarily engaged in business as a highway and site contractor. It also owns and operates stone quarries, asphalt plants and concrete block plants.

 

   

On April 20, 2010, the Company purchased certain assets of Elmo Greer & Sons, LLC (“Greer”), including three asphalt plants, mobile equipment and a leased quarry.

 

   

On July 23, 2010, the Company sold two asphalt plants and related construction assets in Hart and Barren counties in Kentucky in exchange for the long-term leases of four active quarries in Barren, Metcalfe, Monroe and Allen counties in Kentucky held by Scotty’s Contracting & Stone, LLC (“Scottys”). Inventory and quarry equipment were also included in the exchange.

 

The following table summarizes aggregated information regarding the fair values of the assets acquired and liabilities assumed as of the respective acquisition dates in 2012, 2011 and 2010 (in thousands):

 

     Year-ended  
     2012     2011     2010  

Financial assets

   $ 1,397     $ 50,036     $ 96,759  

Inventories

     6,988       22,329       41,474  

Plant and equipment

     21,543       125,187       658,524  

Other assets

     1,330       4,811       14,879  

Investments in affiliates

     —         —         21,655  

Intangible assets (quarry lease)

     3,172       2,708       7,232  

Financial liabilities

     (944     (27,304     (94,380

Long-term debt

     —         —         (160,480

Other long term liabilities

     (364     (17,503     (20,083
  

 

 

   

 

 

   

 

 

 

Net assets acquired

     33,122       160,264       565,580  

Goodwill

     26,230       36,189       117,186  

Pre-existing interest

     —         (7,565     —    

Noncontrolling interest

     —         —         (22,574
  

 

 

   

 

 

   

 

 

 

Total purchase price

     59,352       188,888       660,192  
  

 

 

   

 

 

   

 

 

 

Noncash transactions:

      

Acquisition related liabilities

     (10,547     (7,603     (36,942

Continental Cement member’s interest

     —          —          (135,000

Other

     (48     (20,212     (5,917
  

 

 

   

 

 

   

 

 

 

Total noncash transactions

     (10,595     (27,815     (177,859
  

 

 

   

 

 

   

 

 

 

Net cash paid for acquisitions

   $ 48,757     $ 161,073     $ 482,333  
  

 

 

   

 

 

   

 

 

 

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

(3)   Discontinued Operations

 

In 2012, the Company sold its railroad construction and repair business (referred to herein as railroad business) and its environmental business, which is primarily associated with building retaining walls and removal and remediation of underground fuel storage tanks, in separate transactions for $3.1 million. Prior to recognition as discontinued operations, the railroad and environmental businesses were included as components of the East region’s operations.

 

Debt and interest expense were not allocated to the railroad and environmental businesses since there was no debt specifically attributable to the operations. The railroad and environmental businesses are organized within a limited liability company and passes its tax attributes for Federal and state tax purposes to its parent company and is generally not subject to Federal or state income tax. The railroad and environmental businesses’ revenue and loss before income tax expense in fiscal years 2012, 2011 and 2010 are summarized below (in thousands):

 

     2012     2011     2010  

Revenue

   $ 13,505      $ 16,065      $ 20,495   

Loss from discontinued operations before income tax expense

     (2,774     (3,736     (411

 

(4)   Accounts Receivable, Net

 

Accounts receivable, net consists of the following as of year-end 2012 and 2011 (in thousands):

 

     2012     2011  

Trade accounts receivable

   $ 88,637      $ 94,420  

Retention receivables

     13,181       13,321  

Receivables from related parties

     1,871        1,052  

Other

     —         70  
  

 

 

   

 

 

 

Accounts receivable

     103,689       108,863  

Less allowance for doubtful accounts

     (3,391     (3,630
  

 

 

   

 

 

 

Accounts receivable, net

   $ 100,298     $ 105,233  
  

 

 

   

 

 

 

 

Retention receivables are amounts earned by the Company, but held by customers until construction contracts and projects have been fully completed or near completion. Amounts are expected to be billed and collected within a year.

 

(5)   Inventories

 

Inventories consist of the following as of year-end 2012 and 2011 (in thousands):

 

     2012      2011  

Aggregate stockpiles

   $ 62,872       $ 52,219   

Finished goods

     9,342         11,728   

Work-in-process

     2,679         2,961   

Raw materials

     18,084         17,355   
  

 

 

    

 

 

 

Total

   $ 92,977       $ 84,263   
  

 

 

    

 

 

 

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

(6)   Property, Plant and Equipment, Net

 

Property, plant and equipment, net, consist of the following as of year-end 2012 and 2011 (in thousands):

 

     2012     2011  

Land (mineral bearing) and asset retirement costs

   $ 106,135      $ 93,899   

Land (nonmineral bearing)

     69,560        71,996   

Buildings and improvements

     78,168        77,330   

Plants, machinery and equipment

     623,949        589,622   

Truck and auto fleet

     19,399        20,930   

Landfill airspace and improvements

     46,841        46,734   

Construction in progress

     20,734        11,877   

Other

     5,134        5,175   
  

 

 

   

 

 

 

Property, plant and equipment

     969,920        917,563   

Less accumulated depreciation, depletion and amortization

     (156,313     (95,660
  

 

 

   

 

 

 

Property, plant and equipment, net

   $ 813,607      $ 821,903   
  

 

 

   

 

 

 

 

Depreciation, depletion and amortization expense of property, plant and equipment was $68.6 million, $61.8 million and $34.7 million for the years ended December 29, 2012, December 31, 2011 and December 31, 2010, respectively.

 

Property, plant and equipment at year-end 2012 and 2011 include $3.1 million (net of $0.2 million accumulated amortization) and $3.3 million (net of $0.2 million accumulated amortization), respectively, of capital leases for a building. Approximately $0.4 million of the future obligations associated with the capital leases are included in accrued expenses and the present value of the remaining future capital lease payments is included in other noncurrent liabilities on the consolidated balance sheets. Future minimum rental commitments under long-term capital leases over the next five years as of December 29, 2012 are $0.4 million annually.

 

(7)   Investments in Affiliates

 

Summit’s investments in affiliates are accounted for using the equity method. Summit’s share of the net income from affiliates was $0.7 million in 2012 and $0.9 million and $0.7 million of the net loss in 2011 and 2010, respectively, which is included in other (income) expense. Distributions from affiliates during 2012 were $0.7 million. No material distributions were made in 2011. In 2012, Summit sold its investment in Hinkle Meyer Environmental Services, LLC in conjunction with the sale of the environmental business. Investments in affiliates as of year-end 2012 and 2011 are as follows (in thousands):

 

     Ownership
percentage
    2012      Ownership
percentage
    2011  

Nally & Gibson, Georgetown, LLC

     50   $ 12,138         50   $ 12,027   

Carrollton River Terminal, LLC

     50     722         50     642   

The Rock Group, LLC

     50     129         50     245   

Hinkle Meyer Environmental

         

Services, LLC

     —          —           50     209   
    

 

 

      

 

 

 

Total

     $ 12,989         $ 13,123   
    

 

 

      

 

 

 

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

(8)   Debt

 

Debt as of year-end 2012 and 2011 are summarized as follows (in thousands):

 

     2012      2011  

Borrowings on revolver facilities:

     

Current portion

   $ —         $ 4,000   

Long-term portion

     —           57,000   
  

 

 

    

 

 

 

Total borrowings on revolver facilities

   $ —         $ 61,000   
  

 

 

    

 

 

 

Long-term debt:

     

$250.0 million senior notes, net of $4.7 million discount

   $ 245,303       $ —     

$400.0 million senior secured credit facility, net of $3.5 million discount

     394,540         —     

Summit I $400.0 million credit facility

     —           396,001   

Summit II:

     

$45.0 million term loan

     —           39,000   

Subordinated secured credit note

     —           100,000   

Unsecured note payable to related party

     —           12,980   
  

 

 

    

 

 

 

Total debt

     639,843         547,981   

Current portion of debt

     4,000         3,960   
  

 

 

    

 

 

 

Long-term debt

   $ 635,843       $ 544,021   
  

 

 

    

 

 

 

 

As of December 29, 2012, the Company has no outstanding borrowings on the revolving credit commitments. The total contractual payments of long-term debt for the five years subsequent to December 29, 2012, are as follows (in thousands):

 

2013

   $ 4,000   

2014

     4,000   

2015

     4,000   

2016

     5,000   

2017

     4,000   

Thereafter

     627,000   
  

 

 

 

Total

     648,000   

Less: Original issue discount

     8,157   
  

 

 

 

Total debt

   $ 639,843   
  

 

 

 

 

January 2012 Financing Transactions

 

On January 30, 2012 Summit and Summit Materials Finance Corp (collectively, the “Issuers”) issued $250.0 million aggregate principal amount of 10.5% Senior Notes due January 31, 2020 (“Senior Notes”). Concurrently with the issuance of the Senior Notes, on January 30, 2012, Summit entered into a new senior secured credit facility that provided for term loans in an initial aggregate amount of $400.0 million and revolving credit commitments in an initial aggregate amount of $150.0 million (the “Senior Secured Credit Facility”).

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Summit, along with all of its wholly-owned subsidiaries and its non wholly-owned subsidiary, Continental Cement, are named as guarantors of the Senior Secured Credit Facility and the Senior Notes. In addition, Summit has pledged substantially all of its assets and those of Continental Cement as collateral for the Senior Secured Credit Facility.

 

Proceeds from the Senior Notes and the Senior Secured Credit Facility were used primarily for (i) repayment of $451.0 million of borrowings under the existing credit facility, consisting of $396.0 million of term debt and $55.0 million of revolving credit facility debt, (ii) repayment of $142.7 million of secured debt of Continental Cement, (iii) repayment of $13.0 million due under a promissory note by and between Continental Cement and a related party, (iv) payment of $4.5 million of accrued interest related to the existing credit facility and the Continental Cement debt, (v) payment of $12.9 million of fees and (vi) $16.5 million to cash on hand. The refinancing of the pre-existing credit facility was partially accounted for as an extinguishment.

 

As a result, $9.5 million of deferred financing fees were charged to earnings in January 2012 and $15.0 million in deferred financing fees were recorded and are being amortized over the term of the debt using the effective interest method. The Company recognized $1.3 million of amortization on the original issuance discount in 2012. In addition, the debt was issued with an original issuance discount of $9.5 million, which was recorded as a reduction to debt in January 2012, and is being accreted with a charge to earnings over the term of the debt.

 

Senior Notes — The $250.0 million Senior Notes bear interest at 10.5% per year, payable semi-annually in arrears; interest payments commenced on July 31, 2012. The Notes will mature on January 31, 2020.

 

At any time prior to January 31, 2015, the Issuers may redeem some or all of the Senior Notes at a redemption price equal to 110.500% of the principal amount thereof, plus accrued and unpaid interest. The redemption price decreases to 105.250%, 102.625% and 100.000% of the principal amount on January 31, 2016, January 31, 2017 and January 31, 2018 and thereafter, respectively.

 

Upon the occurrence of a change of control or upon the sale of certain assets in which Summit does not apply the proceeds as required, the holders of the Senior Notes will have the right to require the Issuers to make an offer to repurchase each holder’s Notes at a price equal to 101% (in the case of a change of control) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest.

 

The Senior Notes contain covenants limiting, among other things, Summit and the guarantor subsidiaries’ ability to incur additional indebtedness or issue certain preferred shares, pay dividends, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of Summit’s assets, enter into certain transactions with affiliates, and designate subsidiaries as unrestricted subsidiaries. The Senior Notes also contain customary events of default. As of December 29, 2012, Summit was in compliance with all covenants.

 

Senior Secured Credit Facility — The Senior Secured Credit Facility includes a term loan in the amount of $400.0 million with a 6.0% interest rate and requires principal repayments of $1.0 million on the last business day of each March, June, September and December, commencing in June 2012. The remaining principal balance is due in full on the maturity date, which is January 30, 2019.

 

The Senior Secured Credit Facility has revolving credit commitments of $150.0 million. The revolving credit facility matures on January 30, 2017. Borrowings under the Senior Secured Credit Facility bear interest per annum equal to an applicable margin of 4.5% plus, at the Company’s option, either (i) a base rate determined by reference to the highest of (a) the Federal Funds rate plus 0.50%, (b) the prime rate of

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Bank of America, N.A. and (c) the British Bankers Association London Interbank Offered Rate (“LIBOR”) Rate plus 1.00% or (ii) a British Bankers Association LIBOR rate determined by reference to Reuters prior to the interest period relevant to such borrowing adjusted for certain additional costs.

 

The available borrowings under the revolving credit facility were reduced by $14.5 million of irrevocable letters of credit issued to Summit. As of December 29, 2012, the Company has no outstanding balance under the revolver facility and $135.5 million was available for borrowings.

 

The Senior Secured Credit Facility contains certain financial covenants related to debt and interest leverage calculated based on definitions set forth in the agreement. The consolidated first lien net leverage ratio, reported each quarter should be no greater than 4.75:1.0 through December 31, 2012; 4.25:1.0 from January 1, 2013 to September 30, 2013; 4.00:1.0 from October 1, 2013 to December 31, 2014, and 3.85:1.0 thereafter. The interest coverage ratio must be at least 1.75:1.0 from April 1, 2012 through December 31, 2012; 1.85:1.0 from January 1, 2013 to December 31, 2013 and 2.0:1.0 thereafter. As of December 29, 2012, Summit was in compliance with all covenants.

 

A summary of the significant terms of the December 31, 2011 credit facilities, which were repaid with the January 30, 2012 transactions, follows:

 

Summit I

 

On February 1, 2010, Summit I entered into a credit agreement with a syndicate of banks secured by assets within and administered by Summit I. The original credit agreement provided for a four-and-a-half-year term loan with interest charged at a rate of 6.75% and a repayment of principal at a rate of 1% per annum payable quarterly. Summit I’s total borrowings under the original term loan were $136.4 million at February 1, 2010. On December 17, 2010, Summit I finalized an amendment to the credit agreement, which amended and restated the original facility (the “Amended Credit Agreement”). Under the Amended Credit Agreement, Summit I’s term loan borrowings increased to $400.0 million with a 6.5% interest rate and required principal repayments of 1% of term debt per annum which are payable quarterly. There were $11.0 million in capitalized loan fees associated with this transaction.

 

Summit I’s revolver facility increased from $50.0 million to $75.0 million with the Amended Credit Agreement. There are two classes within the facility: Class A matures on January 31, 2014 and makes up $17.5 million of the revolver facility, and Class B matures on January 31, 2015 and makes up $57.5 million of the facility. The available borrowings under the revolver facility remained reduced by $13.3 million irrevocable letters of credit issued to Summit I. The letters of credit were required by insurance carriers to secure surety bonds for certain construction contracts. There was a $61.0 million outstanding balance under the revolver facility as of December 31, 2011, which was repaid in conjunction with the January 2012 financing transaction.

 

Summit I must adhere to certain financial covenants related to debt and interest leverage calculated based on definitions laid out in the amended credit agreement. As of December 31, 2011, Summit I was in compliance with all financial covenants.

 

Summit I, along with all its subsidiary companies, were named as guarantors of the term loan and on the revolver facility. In addition, Summit I had pledged substantially all of its assets as collateral for the term loan and revolver facility.

 

Summit II

 

Continental Cement, a subsidiary of Summit II, entered into its Second Amended and Restated Credit Agreement (“First Lien Credit Agreement”) on May 27, 2010 with its syndicate banks providing a term loan

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

commitment and revolving line of credit facility, with swing line, and letter of credit sub-limit. Interest was charged on outstanding borrowings at increments of either, (a) the Base Rate, as defined in the credit agreement, plus 3.5% margin or (b) the greater of (i) 1.5% or (ii) the LIBOR plus 4.5% margin. Continental Cement has the option of selecting either rate but must have minimum levels and increments for selecting the LIBOR rate. Interest on funds borrowed at the Base Rate is payable quarterly, except the swing line which is paid monthly. Alternatively, interest on funds borrowed based on the LIBOR rate is payable in either one-, two-, three-, or nine-month intervals. Outstanding borrowings were secured by substantially all of Continental Cement’s assets and all such commitments were set to expire on May 27, 2013. The revolving line of credit facility had $20.0 million available and included a $10.0 million sub-limit for standby letter of credits and a $2.0 million swingline sub-limit.

 

Continental Cement borrowed $45.0 million from the term loan facility and repaid $6.0 million in optional principle payments during 2010. Under the terms of the First Lien Credit Agreement, Continental Cement was required to adhere to certain financial covenants related to debt and interest leverage calculated based on definitions laid out in the First Lien Credit Agreement.

 

On May 27, 2010, Continental Cement amended its Second Lien Credit Agreement with its subordinated lenders of the subordinated secured credit facility totalling $100.0 million. The Second Lien Credit Agreement provided for a term loan maturing August 28, 2013. The Second Lien Credit Agreement was subject to the same financial covenants in the First Lien Credit Agreement.

 

On May 27, 2010, the Company executed an unsecured note payable from a related party totalling $13.0 million. Payment including principal and interest were due in one lump-sum on May 30, 2015 subject to a subordination agreement required by Continental Cement’s term loan.

 

(9)   Member’s Interest

 

Business affairs of the Company are managed by the Board of Directors, which is composed of six directors. Directors of the Board are appointed by the unit holders of Summit Materials Holdings L.P., which is the sole member of the Company. Additional directors may be admitted to Summit with the written consent of Summit Materials Holdings L.P.

 

During the years ended December 31, 2011 and December 31, 2010, the Member of the Company contributed $103.6 million and $338.6 million, respectively, to Summit. No contributions were made during the year-ended December 29, 2012. Contributions are presented as member’s interest in the consolidated statements of changes in member’s interest.

 

(10)   Income Taxes

 

As of year-end 2012, 2011 and 2010, income taxes consist of the following (in thousands):

 

     2012     2011     2010  

Provision for income taxes:

      

Current

   $ (452   $ 5,382     $ 4,385  

Deferred

     (3,468     (1,974     (2,022
  

 

 

   

 

 

   

 

 

 

Income tax (benefit) expense

   $ (3,920   $ 3,408     $ 2,363  
  

 

 

   

 

 

   

 

 

 

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

The effective tax rate on pre-tax income differs from the U.S. statutory rate due to the following (in thousands):

 

     2012     2011     2010  

Income tax provision (benefit) at federal statutory tax rate

   $ (19,074   $ (6,895   $ (7,310

Book loss (income) not subject to income tax

     16,167        13,790       9,364  

State and local income taxes

     (90     666       241  

Depletion expense

     (377     (372     (377

Domestic production activities deduction

     —          (273     (213

Bargain purchase gain

     —         (4,250     —    

Effective rate change

     (532     627       —    

Valuation allowance

     36       (360     359  

Other

     (50 )     475       299  
  

 

 

   

 

 

   

 

 

 

Income tax provision (benefit)

   $ (3,920   $ 3,408     $ 2,363  
  

 

 

   

 

 

   

 

 

 

 

The following table summarizes the components of the net deferred income tax liability as of year-end 2012 and 2011 (in thousands):

 

     2012     2011  

Deferred tax assets (liabilities):

    

Mining reclamation reserve

   $ 1,449     $ 865  

Accelerated depreciation

     (34,733     (41,892

Net operating loss

     2,134       1,037  

Capital losses on securities

     989        1,734  

Landfill closure reserve

     (30     92  

Working capital (e.g., accrued compensation, prepaid assets)

     3,101        3,189  
  

 

 

   

 

 

 

Defered tax liabilities, net

     (27,090     (34,975

Less valuation allowance on loss carryforwards

     (1,025     (1,010
  

 

 

   

 

 

 

Total

   $ (28,115   $ (35,985
  

 

 

   

 

 

 

Included in accompanying consolidated balance sheets under the following captions:

    

Current asset — deferred income taxes

   $ 2,275     $ 2,426  

Other noncurrent liability

     (30,390     (38,411
  

 

 

   

 

 

 

Total

   $ (28,115   $ (35,985
  

 

 

   

 

 

 

 

In assessing the realizability of deferred tax assets as of year-end 2012 and 2011, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible (including the impact of available carryback and carryforward periods), projected future taxable income and tax-planning strategies in making this assessment. Management anticipates the deferred income tax asset related to losses on securities and net operating losses will not be fully utilized before their expiration in 2014; therefore, a valuation allowance has been recorded as of year-end 2012 and 2011. In 2011, $0.8 million of capital loss was carried back for a tax benefit recovery of $0.3 million. The remaining capital loss of $1.0 million is not expected to be utilized

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

prior to expiration in 2014; therefore, the remaining balance has been fully reserved in the valuation allowance as of year-end 2012. At December 29, 2012, the Company has net operating loss carryforwards for Federal and state income tax purposes of $2.0 million and $0.1 million, respectively, which are available to offset future Federal and state taxable income, if any, through 2032.

 

Summit does not have any uncertain tax positions as of December 29, 2012. Tax years from 2009 to 2011 remain open and subject to audit by Federal and state tax authorities. No income tax expense or benefit was recognized in other comprehensive loss in 2012, 2011 or 2010.

 

(11)   Employee Benefit Plans

 

Deferred Compensation Plan — The Company sponsors employee 401(k) savings plans for all salaried employees and certain union employees. The plans provide for various required and discretionary Company matches of employees’ eligible compensation contributed to the plans. The expense for all defined contribution plans amounted to $2.2 million, $1.9 million and $0.8 million for the years ended December 29, 2012, December 31, 2011 and December 31 2010, respectively.

 

Defined Benefit and Other Postretirement Benefits Plans — One of the Company’s subsidiaries, Continental Cement, sponsors two noncontributory defined benefit pension plans for hourly and salaried employees. The salary employee pension plan was closed to new participants and frozen in January 2000 and the hourly employee pension plan was closed to new participants in May 2003. Pension benefits for certain eligible hourly employees are based on a monthly pension factor for each year of credited service. Pension benefits for certain eligible salaried employees are generally based on years of service and average eligible compensation.

 

Continental Cement also sponsors healthcare and life insurance benefits for certain eligible retired employees, which are not funded. Effective January 1, 2012, the Company eliminated all future retiree health and life coverage for active salaried, nonunion hourly and certain union employees that retire on or after January 1, 2012. This change in the other postretirement benefit plans resulted in a $1.7 million reduction in the December 31, 2011 accumulated benefit obligations.

 

The funded status of the pension and other postretirement benefit plans is recognized in the consolidated balance sheets as the difference between the fair value of plan assets and the benefit obligations. For defined benefit pension plans, the benefit obligation is the projected benefit obligation (“PBO”) and for the other postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation (“APBO”). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The APBO represents the actuarial present value of postretirement benefits attributed to employee services already rendered. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. The measurement of the benefit obligations are based on the Company’s estimates and actuarial valuations. These valuations reflect the terms of the plan and use participant-specific information, such as compensation, age and years of service, as well as certain assumptions that require significant judgment, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest-crediting rates and mortality rates.

 

The Company uses its fiscal year-end as the measurement date for its defined benefit pension plans and for its other postretirement benefit plans.

 

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Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Obligations and Funded Status — The following information is as of year-end 2012 and 2011 (in thousands):

 

     2012     2011  
     Pension
benefits
    Other
benefits
    Pension
benefits
    Other
benefits
 

Change in benefit obligations:

        

Beginning of period

   $ 26,514      $ 14,467      $ 23,732      $ 13,110   

Service cost

     276        207        275        227   

Interest cost

     1,056        585        1,161        710   

Actuarial loss

     2,347        1,597        2,710        3,390   

Change in plan provisions

     —          —          —          (1,705

Benefits paid

     (1,518     (1,046     (1,364     (1,265
  

 

 

   

 

 

   

 

 

   

 

 

 

End of period

     28,675        15,810        26,514        14,467   
  

 

 

   

 

 

   

 

 

   

 

 

 

Change in plan assets:

        

Fair value of assets at beginning of period

     16,639        —          16,531        —     

Actual return on plan assets

     1,205        —          43        —     

Employer contributions

     1,537        1,046        1,428        1,265   

Benefits paid

     (1,518     (1,046     (1,363     (1,265
  

 

 

   

 

 

   

 

 

   

 

 

 

Fair value of assets at end of period

     17,863        —          16,639        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Liability recognized

   $ 10,812     $ 15,810     $ 9,875     $ 14,467  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Approximately $1.1 million and $1.0 million of the obligation for postretirement benefits is included in current liabilities as of year-end 2012 and 2011, respectively.

 

     2012     2011  
     Pension
benefits
     Other
benefits
    Pension
benefits
     Other
benefits
 

Amounts recognized in accumulated other comprehensive income:

          

Net actuarial loss

   $ 8,056       $ 5,501      $ 5,875       $ 4,213   

Prior service cost

     —           (1,526     —           (1,705
  

 

 

    

 

 

   

 

 

    

 

 

 

Total amount recognized

   $ 8,056       $ 3,975      $ 5,875       $ 2,508   
  

 

 

    

 

 

   

 

 

    

 

 

 

 

The amount recognized in accumulated other comprehensive income (“AOCI”) is the actuarial loss and prior service cost, which has not yet been recognized in periodic benefit cost, adjusted for amounts allocated to the redeemable noncontrolling interest. At December 29, 2012, the actuarial loss expected to be amortized from AOCI to periodic benefit cost in 2013 is $0.4 million and $0.2 million for the pension and postretirement obligations, respectively.

 

 

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Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

     Year-end 2012     Year-end 2011     Year-end 2010  
     Pension
benefits
    Other
benefits
    Pension
benefits
    Other
benefits
    Pension
benefits
     Other
benefits
 

Amounts recognized in other comprehensive loss:

             

Net actuarial loss

   $ 2,444     $ 1,597     $ 4,066     $ 3,390     $ 1,814      $ 894  

Prior service cost

     —            —          (1,705     —           —     

Amortization of prior year service cost

     —          180       —          —          —           —     

Amortization of loss

     (261     (312     (5     (71     —           —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total amount recognized

   $ 2,183     $ 1,465     $ 4,061     $ 1,614     $ 1,814      $ 894  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

     Year-end
2012
    Year-end
2011
     Year-end
2010
 
     Pension
benefits
    Other
benefits
    Pension
benefits
    Other
benefits
     Pension
benefits
    Other
benefits
 

Components of net periodic benefit cost:

             

Service cost

   $ 276      $ 207      $ 275      $ 227       $ 121      $ 116   

Interest cost

     1,056        585        1,161        710         677        380   

Amortization of loss

     261        312        5        69         —          —     

Expected return on plan assets

     (1,301     (180     (1,400     —           (788     —     
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net periodic benefit cost

   $ 292      $ 924      $ 41      $ 1,006       $ 10      $ 496   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

Assumptions — Weighted-average assumptions used to determine the benefit obligations are:

 

     2012      2011  
     Pension
benefits
     Other
benefits
     Pension
benefits
     Other
benefits
 

Discount rate

     3.30% – 3.57%         3.41%         3.89% – 4.07%         4.00%   

 

The expected long-term return on plan assets is based upon the Company’s estimation of what a portfolio, with the target allocation described below, will earn over a long-term horizon. The discount rate is derived using the Citigroup Pension Discount Curve.

 

Weighted-average assumptions used to determine net periodic benefit cost for the period are:

 

     Year-end
2012
     Year-end
2011
 
     Pension
benefits
     Other
benefits
     Pension
benefits
     Other
benefits
 

Discount rate

     3.89% – 4.07%         4.00%         4.94% – 5.12%         5.07%   

Expected long-term rate of return on plan assets

     7.50%         NA         8.50%         NA   

 

Assumed health care cost trend rates are 9% grading to 7% and 7% grading to 5% as of year-end 2012 and 2011, respectively. Assumed health care cost trend rates have a significant effect on the amounts reported

 

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Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

for the Company’s post retirement medical and life plans. A one percentage-point change in assumed health care cost trend rates would have the following effects (in thousands):

 

     2012     2011  
     Increase      (Decrease)     Increase      (Decrease)  

Total service cost and interest cost components

   $ 73       $ (63   $ 93       $ (77

Estimated APBO

     1,555         (1,331     1,348         (1,145

 

Plan Assets — The defined benefit pension plans’ (the “Plans”) investment strategy is to minimize investment risk while generating acceptable returns. The Plans currently invest a relatively high proportion of the plan assets in fixed income securities, while the remainder is invested in equity securities. The equity securities are diversified into funds with growth and value investment strategies. The target allocation for plan assets is as follows: equity securities – 30%; fixed income securities –65%; and cash reserves –5%. The Plans’ current investment allocations are within the tolerance of the target allocation. The Company has no level 3 investments as of or for the years-ended December 29, 2012 and December 31, 2011.

 

At year-end 2012 and 2011, the trust was invested largely in publicly traded equities and fixed-income securities, but may invest in other asset classes in the future consistent with our investment policy. The Plans’ investments in equity assets include U.S. and international securities and equity funds. The Plans’ investments in fixed-income assets include U.S. Treasury and U.S. agency securities and corporate bonds. Retirement plan assets are reported at fair value at each measurement date. The Company estimates the fair value of the Plans’ assets using various valuation techniques and, to the extent available, quoted market prices in active markets or observable market inputs are used in estimating the fair value of the Plans’ assets. The descriptions and fair value methodologies for the Plans’ assets are as follows:

 

Cash — The carrying amounts of cash approximate fair value due to the short-term maturity.

 

Equity Securities — Equity securities are valued at the closing market price reported on a U.S. exchange where the security is actively traded and are therefore classified as Level 1 assets.

 

Fixed Income Securities — Corporate and government bonds are classified as Level 2 assets, as they are either valued at quoted market prices from observable pricing sources at the reporting date or valued based upon comparable securities with similar yields and credit ratings.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

The fair value of the Company’s pension plans’ assets by asset class and fair value hierarchy level as of year-end 2012 and 2011 are as follows (in thousands):

 

     Fair value measurements at year-end 2012  
     Total
fair
value
     Quoted prices in
active markets for
identical assets
(Level 1)
     Observable
inputs
(Level 2)
 

Cash

   $ 1,656       $ 1,656       $ —     

Equity securities:

        

U.S. Large cap value

     1,063         1,063         —     

U.S. Large cap growth

     1,037         1,037         —     

U.S. Mid cap value

     542         542         —     

U.S. Mid cap growth

     536         536         —     

U.S. Small cap value

     546         546         —     

U.S. Small cap growth

     539         539         —     

International

     1,134         1,134         —     

Fixed income securities:

        

Intermediate-government

     1,247         —           1,247   

Intermediate-corporate

     4,402         —           4,402   

Short term-government

     2,038         —           2,038   

Short term-corporate

     3,123         —           3,123   
  

 

 

    

 

 

    

 

 

 

Total

   $ 17,863       $ 7,053       $ 10,810   
  

 

 

    

 

 

    

 

 

 

 

     Fair value measurements at year-end 2011  
     Total
fair
value
     Quoted prices in
active markets for
identical assets
(Level 1)
     Observable
inputs
(Level 2)
 

Cash

   $ 1,217       $ 1,217       $ —     

Equity securities:

        

U.S. Large cap value

     1,399         1,399         —     

U.S. Large cap growth

     1,388         1,388         —     

U.S. Mid cap value

     700         700         —     

U.S. Mid cap growth

     687         687         —     

U.S. Small cap value

     701         701         —     

U.S. Small cap growth

     705         705         —     

International

     1,378         1,378         —     

Fixed income securities:

        

Intermediate-government

     1,100         —           1,100   

Intermediate-corporate

     2,418         —           2,418   

Short term-government

     2,067         —           2,067   

Short term-corporate

     2,879         —           2,879   
  

 

 

    

 

 

    

 

 

 

Total

   $ 16,639       $ 8,175       $ 8,464   
  

 

 

    

 

 

    

 

 

 

 

Cash Flows — The Company expects to contribute approximately $1.3 million to its pension plans and $1.1 million to its other postretirement benefit plans in 2013.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

The estimated benefit payments for each of the next five years and the five-year period thereafter are as follows (in thousands):

 

     Pension
benefits
     Other
benefits
 

2013

   $ 1,718       $ 1,055   

2014

     1,707         1,113   

2015

     1,715         1,022   

2016

     1,748         1,079   

2017

     1,744         945   

2018–2022

     8,738         4,724   
  

 

 

    

 

 

 

Total

   $ 17,370       $ 9,938   
  

 

 

    

 

 

 

 

(12)   Accrued Mining and Landfill Reclamation

 

The Company has asset retirement obligations arising from regulatory requirements to perform certain reclamation activities at the time that certain quarries and landfills are closed. The liability was initially measured at fair value and subsequently is adjusted for accretion expense, payments and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. The following table presents the activity for the asset retirement obligations for the years-ended December 29, 2012 and December 31, 2011 (in thousands):

 

     2012     2011  

Beginning balance

   $ 13,328      $ 13,766   

Acquired obligations

     364        1,884   

Change in cost estimate

     604        (4,530

Settlement of reclamation obligations

     (77     (993

Additional liabilities incurred

     —          2,511   

Accretion expense

     625        690   
  

 

 

   

 

 

 

Ending balance

   $ 14,844      $ 13,328   
  

 

 

   

 

 

 

 

In 2011, the Company received an interpretation of the landfill reclamation requirements from the State of Kansas, which resulted in an approximate $4.5 million reduction to the post-closure liabilities. This adjustment, after reducing the related asset retirement landfill asset to zero, was included in cost of revenue for the year-ended December 31, 2011.

 

(13)   Commitments and Contingencies

 

Litigation and Claims — Summit is party to certain legal actions arising from the ordinary course of business activities. In the opinion of management, these actions are without merit or the ultimate disposition, if any, resulting from them will not have a material effect on Summit’s consolidated financial position, results of operations or liquidity. Summit’s policy is to record legal fees as incurred.

 

Environmental Remediation — Summit’s mining operations are subject to and affected by Federal, state and local laws and regulations relating to the environment, health and safety and other regulatory matters. These operations require environmental operating permits, which are subject to modification, renewal and revocation. Summit regularly monitors and reviews its operations, procedures and policies for compliance

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

with these laws and regulations. Despite these compliance efforts, risk of environmental liability is inherent in the operation of Summit’s business, as it is with other companies engaged in similar businesses and there can be no assurance that environmental liabilities will not have a material adverse effect on Summit’s consolidated financial position, results of operations or liquidity.

 

On July 11, 2006, the Company received a construction permit for a new kiln system for the cement plant to replace the current system at that time. The new kiln began shakedown operations in 2008 and is operating under the Hazardous Waste Combustor National Emission Standards for Hazardous Air Pollutants (“NESHAP”). Continental Cement performed the required Comprehensive Performance Test in 2009/2010 and submitted the Notification of Compliance (“NOC”) to the regulatory agencies. In 2012, the Company tested and passed the required Confirmatory Performance Test and submitted an amended NOC at that time. The next required Confirmatory Performance Test will be in 2015. Summit applied for renewal of their Part 70 Operating Permit in 2010 and received the permit on September 22, 2011. This permit encompasses all active construction permits and general operating requirements for the entire plant, and will remain in effect for five years.

 

On October 14, 1999, the Missouri Dept. of Natural Resources (“MDNR”) and the EPA granted the company a Final Hazardous Waste Management Facility Permit that authorizes the Company to handle, treat, store, recover energy from and dispose of hazardous waste as a supplemental fuel source (RCRA Part B Permit). This permit also incorporated certain Boiler and Industrial Furnace (“BIF”) regulation emission limits and operating parameters that the company was subject to prior to the Hazardous Waste Combustor Maximum Achievable Control Technology standards. On October 13, 2009, a permit renewal application was submitted to MDNR. The application was accepted as complete and MDNR annually issues a notification that the Company can operate under the original permit until review of the renewal is complete. MDNR has delayed review of the renewal application until the agency revises their Health Profile regulations. MDNR has authorized the company to operate under interim status. Once the permit renewal is approved, the renewal will cover another ten-year period.

 

Other — The Company is obligated under an indemnification agreement entered into with the sellers of Harper for the sellers’ ownership interests in a joint venture agreement. Summit has the rights to any benefits under the joint venture as well as the assumption of any obligations, but does not own equity interests in the joint venture. The joint venture has incurred significant losses on a highway project in Utah, which have resulted in requests for funding from the joint venture partners and ultimately from the Company. Through year-end 2012, the Company has funded $8.8 million, $4.0 million in 2012 and $4.8 million in 2011. In 2012 and 2011, the Company recognized losses on the indemnification agreement of $8.0 million and $1.9 million, respectively, which are included in general and administrative expenses. As of year end 2012 and 2011, accruals of $4.3 million and $0.3 million, respectively, were recorded in other noncurrent liabilities as management’s best estimate of future funding obligations.

 

In February 2011, Continental Cement incurred a property loss related to a sunken barge with cement product aboard. At which time, the Company recognized a loss of $0.6 million for the lost product and property. As of December 29, 2012, the Company has a $0.9 million accrual for the estimated reclamation costs. Any insurance recoveries from the loss will be recognized when probable.

 

During the course of business, there may be revisions to project costs and conditions that can give rise to change orders. Revisions can also result in claims we might make against the customer or a subcontractor to recover project variances that have not been satisfactorily addressed through change orders with the customer. As of year-end 2012 and 2011, unapproved change orders and claims are $4.8 million ($1.6 million in costs and estimated earnings in excess of billings and $3.2 million in other assets) and $4.7 million ($0.4 million in accounts receivable, $1.1 million in costs and estimated earnings in excess of billings and $3.2 million in other assets), respectively.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

(14)   Related-Party Transactions

 

The Company incurred management fees paid to Blackstone Management Partners L.L.C. (“BMP”) totaling $2.1 million, $3.0 million and $2.5 million in 2012, 2011 and 2010, respectively, under terms of an agreement dated July 30, 2009, between Summit Materials Holdings L.P. and BMP. Under the terms of the agreement, BMP is permitted to, and has, assigned a portion of the fees to which it is entitled to receive to Silverhawk Summit, L.P. and to certain members of management. The fees were paid for consultancy services related to acquisition activities and are included in general and administrative expenses.

 

The Company purchased equipment from a noncontrolling member of Continental Cement for approximately $2.3 million, inclusive of $0.1 million of interest, in 2011, which was paid for in 2012.

 

Summit earned revenue of $7.9 million, $8.6 million and $8.5 million and incurred costs of $0.2 million, $0.7 million and $1.1 million in connection with several transactions with unconsolidated affiliates for the years ended December 29, 2012, December 31, 2011 and December 31, 2010, respectively. As of December 29, 2012 and December 31, 2011, accounts receivable from affiliates was $1.9 million and $1.1 million, respectively, and accounts payable to affiliates was $0.2 million and $2.2 million, respectively.

 

Cement sales to companies owned by certain noncontrolling members of Continental Cement were approximately $12.5 million, $9.5 million and $9.0 million for the years ended December 29, 2012, December 2011 and December 31, 2010, respectively, and accounts receivables due from these parties were approximately $1.0 million and $1.3 million as of December 29, 2012 and December 2011, respectively.

 

The Company owes $2.1 million to a noncontrolling member of Continental Cement for accrued interest on a related party note, which is expected to be fully settled by 2014. The principal balance on the note was repaid as part of the January 2012 financing transactions.

 

Lease payments of $1.0 million, $0.4 million and $0.2 million were made to related parties for the years ended December 29, 2012, December 2011 and December 31, 2010, respectively.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

(15)   Acquisition-Related Costs and Liabilities

 

A number of acquisition-related liabilities have been recorded subject to terms in the relevant purchase agreements. There are three main categories of such obligations, deferred consideration, noncompete payments and earn-out obligations. Noncompete payments have been accrued where certain former owners of newly acquired companies have entered into standard noncompete arrangements. Subject to terms and conditions stated in these noncompete agreements, payments are generally made over a five-year period. Deferred consideration is purchase price consideration paid in the future as agreed to in the purchase agreement and is not contingent on future events. Deferred consideration is scheduled to be paid in years ranging from 5 to 20 years in either monthly, quarterly or annual installments. The remaining payments due under these noncompete and deferred consideration agreements are as follows (in thousands):

 

2013

   $ 8,779   

2014

     8,528   

2015

     4,545   

2016

     3,790   

2017

     3,790   

Thereafter

     13,254   
  

 

 

 

Total scheduled payments

     42,686   

Present value adjustments

     (11,896
  

 

 

 

Total noncompete obligations and deferred consideration

   $ 30,790   
  

 

 

 

 

Accretion on the deferred consideration and noncompete obligations is charged to interest expense.

 

Certain acquisitions require purchase consideration if specified operating results are achieved. The changes to earn-out obligations as of year-end 2012 and 2011 are as follows (in thousands):

 

     2012     2011  

Beginning balance

   $ 3,278      $ 13,622   

Payments

     (215     —     

Revaluation

     (409     (10,344
  

 

 

   

 

 

 

Ending balance

   $ 2,654      $ 3,278   
  

 

 

   

 

 

 

Current portion of earn-out obligations

   $ 746      $ 1,155   

Long-term portion of earn-out obligations

     1,908        2,123   
  

 

 

   

 

 

 

Total earn-out obligations

   $ 2,654      $ 3,278   
  

 

 

   

 

 

 

 

(16)   Supplemental Cash Flow Information

 

Supplemental cash flow information for year-end 2012, 2011 and 2010 is as follows (in thousands):

 

     2012     2011     2010  

Cash payments:

      

Interest

   $ 36,357      $ 41,790      $ 36,862   

Income taxes

     799        5,608        5,755   

Noncash investing activities:

      

Acquisitions

   $ (10,595   $ (27,815   $ (177,859

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

(17)   Leasing Arrangements

 

Rent expense, including short-term rentals, during the years ended December 29, 2012, December 31, 2011 and December 31, 2010 was $3.5 million, $4.3 million and $4.2 million, respectively.

 

Minimum rental commitments under long-term operating leases, which primarily relate to land, plant and equipment as of December 29, 2012, are as follows (in thousands):

 

2013

   $ 3,614   

2014

     2,807   

2015

     2,385   

2016

     1,745   

2017

     1,350   

 

The Company has lease agreements associated with quarry facilities under which royalty payments are made. The payments are generally based on tons sold in a particular period; however, certain agreements have minimum annual payments. Royalty expense recorded in cost of revenue in for the years ended December 29, 2012, December 31, 2011 and December 31, 2010 were $3.9 million, $3.1 million and $1.0 million, respectively. Future contractual minimum commitments under royalty agreements as of December 29, 2012 are as follows (in thousands):

 

2013

   $ 1,593   

2014

     1,586   

2015

     1,621   

2016

     1,585   

2017

     1,659   

 

(18)   Redeemable Noncontrolling Interest

 

The Company owns 100 Class A Units of Continental Cement, which represent a 70% economic interest in Continental Cement and have a preference in liquidation to the Class B Units. Continental Cement issued 100,000,000 Class B Units in May 2010, which remain outstanding. These units represent a 30% economic interest in Continental Cement and are subordinate to the Class A Units.

 

Continental Cement’s Class A Units include a cumulative distribution preference which requires, to the extent distributions are authorized by its Board of Directors, Continental Cement Class A Units receive, prior to any distributions to the Class B Unit holders, a priority return of 11% accruing daily and compounding annually on each anniversary of the date of issuance to Class A Unit holders. To the extent the priority return is not made in a given year, the amount of the priority return will increase the liquidation preference of the Class A Units up to an 80% allowable sharing percentage in distributions and liquidation proceeds. The Company holds all the Class A Units. No distributions are currently anticipated.

 

The Continental Cement Amended and Restated Limited Liability Company Agreement (“Subscription Agreement”) provides Summit with a call option that allows the Company to call the Class B Units held by the owners of Continental Cement prior to Summit’s purchase of the Class A Units (“Rollover Members”), at a strike price that approximates fair value, on the earlier of May 2016, on the date that Summit affects an initial public offering or upon any other change of control of Summit. The Rollover Members have a put option that allows them to put the Class B Units to Summit, at a strike price that approximates fair value, exercisable if there is a change of control of the Summit Class A Units, or after May 2016. Finally, the

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Subscription Agreement includes transfer restrictions which prohibit the Rollover Members from transferring their Class B Units without the consent of the Board of Continental Cement.

 

Because the Class B Units are puttable by the Rollover Members in the future based on the passage of time, which can be accelerated upon the occurrence of a contingent event, Summit’s noncontrolling interest is classified in temporary equity. The redemption value is based upon the estimated fair value of Continental Cement, which is valued using Level 3 inputs. Summit elected to accrete changes in the redemption value of the noncontrolling interest over the period from the date of issuance to the earliest anticipated redemption date of the instrument, which is currently May 2016, using an interest method. The accretion is as an adjustment to the consolidated accumulated deficit. The redemption value of the redeemable noncontrolling interest as of year-end 2012 and 2011 approximated its carrying value.

 

(19)   Employee Long Term Incentive Plan

 

Certain employees of the Company hold Class D unit interests in Summit Materials Holdings L.P. The Class D units provide rights to cash distributions based on a predetermined distribution formula upon the general partner of Summit Materials Holdings L.P. declaring a distribution.

 

Certain of the Class D units vest with the passage of time (time-vesting interests) and the remaining vest when certain investment returns are achieved by the investors of Summit Materials Holdings L.P. (performance-vesting interests). Of the time-vesting-interests, 20% vest on the first anniversary and the remaining 80% vest monthly over a period of four years following the first anniversary date. The performance-vesting interests vest when certain specified cash distribution targets are achieved by Summit Materials Holdings L.P. If the employee leaves the Company, the Company can (1) purchase the vested Class D units for a lump sum payment provided certain conditions have been met or (2) elect to convert all of the employee’s Class D units into a right to receive future distributions capped at a termination amount. The termination amount is determined as an amount equal to the fair market value of the Class D unit holder’s vested interests minus any amounts already distributed to the Class D unit holders respective of those Class D units. The fair value of the time-vesting Class D units granted in 2012, 2011 and 2010 totaled $1.1 million, $3.4 million and $11.1 million, respectively. The weighted-average grant-date fair value in 2012, 2011 and 2010 was $3,761; $3,876 and $4,110, respectively.

 

The following table summarizes information for Class D unit interests in Summit Materials Holdings L.P.:

 

     Time-vesting interests      Performance-vesting
interests
 
     Number of
Awards
    Weighted
average
grant-date
fair value
     Number of
Awards
    Weighted
average
grant-date
fair value
 

Beginning balance — January 1, 2012

     2,750      $ 3,949         4,801      $ 3,081   

Granted

     300        3,761         390        3,050   

Vested

     (825     3,884         —          —     

Forfeited

     (497     4,184         (989     3,419   

Redeemed

     (36     4,629         —          —     
  

 

 

      

 

 

   

Balance — December 29, 2012

     1,692      $ 3,864         4,202      $ 3,087   
  

 

 

      

 

 

   

 

As of year-end 2012 and 2011, the cumulative amount of units vested total 1,732 and 943, respectively. The fair value of the Class D units is estimated as of the grant date using Monte Carlo simulations, which

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

requires the input of subjective assumptions, including the expected volatility and the expected term. The following table presents the weighted average assumptions used to estimate the fair value of grants in 2012, 2011 and 2010:

 

     2012    2011    2010

Class D Units:

        

Risk-free interest rate

   1.62%    1.71% – 2.39%    1.65% – 3.47%

Dividend yield

   None    None    None

Volatility

   47%    42% – 49%    41% – 51%

Expected term

   6 – 8 years    6 – 8 years    6 – 8 years

 

The risk-free rate is based on the yield at the date of grant of a U.S. Treasury security with a maturity period approximating the expected term. As the Company has no plans to issue regular dividends, a dividend yield of zero was used. The volatility assumption is based on reported data of a peer group of publically traded companies for which historical information was available adjusted for the Company’s capital structure. The expected term is based on expectations about future exercises and represents the period of time that the units granted are expected to be outstanding.

 

Compensation expense for time-vesting interest granted is based on the grant-date fair value. The Company recognizes these compensation costs on a straight-line basis over the service period, which is generally the vesting period of the award. A forfeiture rate assumption is factored into the compensation cost based on historical forfeitures. Compensation expense for performance-vesting interests would be recognized based on the grant date fair value. However, no compensation expense has been recognized for the performance-vesting interests, as management does not believe it is currently probable that certain investment returns, the performance criteria, will be achieved.

 

Share-based compensation expense, which is recognized in general and administrative expenses, totaled $2.5 million, $2.5 million and $1.2 million for the years ended December 29, 2012, December 31, 2011 and December 31, 2010, respectively. As of December 29, 2012, unrecognized compensation cost totaled $5.2 million. The weighted average remaining contractual term over which the unrecognized compensation cost is to be recognized is 3.0 years as of year-end 2012.

 

(20)   Segment Information

 

The Company has determined that it has three operating segments, which are its reportable segments: Central region, West region and East region. These segments are consistent with the Company’s management reporting structure. The operating results of each segment are regularly reviewed and evaluated separately by the Chief Executive Officer, the Company’s Chief Operating Decision Maker (“CODM”). The CODM primarily evaluates the performance of its segments and allocates resources to them based on segment profit, which is computed as earnings before interest, taxes, depreciation, depletion, amortization and accretion. In addition, certain items such as management fees are excluded from the calculation of segment profit.

 

Each region has several acquired subsidiaries that are engaged in various activities including quarry mining, aggregate production and contracting. Assets employed by segment include assets directly identified with those operations. Corporate assets consist primarily of cash, property, plant and equipment for corporate operations and other assets not directly identifiable with a reportable business segment. The accounting policies applicable to each segment are consistent with those used in the consolidated financial statements.

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

The following tables display selected financial data for the Company’s reportable business segments (in thousands):

 

     2012     2011     2010  

Revenue:

      

Central region

   $ 302,113      $ 264,008      $ 211,238   

West region

     484,922        362,577        59,337   

East region

     175,867        195,963        159,783   
  

 

 

   

 

 

   

 

 

 

Total revenue

   $ 962,902      $ 822,548      $ 430,358   
  

 

 

   

 

 

   

 

 

 
     2012     2011     2010  

Segment profit:

      

Central region

   $ 65,767      $ 65,651      $ 43,639   

West region

     14,429        36,442        (1,710

East region

     10,596        14,626        7,223   

Corporate and other

     (15,560     (9,877     (10,396
  

 

 

   

 

 

   

 

 

 

Total reportable segments and corporate

     75,232        106,842        38,756   

Interest expense

     (58,079     (47,784     (25,430

Depreciation, depletion, amortization and accretion

     (68,876     (61,964     (34,415
  

 

 

   

 

 

   

 

 

 

Loss before income tax expense (benefit)

   $ (51,723   $ (2,906   $ (21,089
  

 

 

   

 

 

   

 

 

 
     2012     2011     2010  

Cash paid for capital expenditures:

      

Central region

   $ 20,996      $ 20,078      $ 8,384   

West region

     14,993        9,256        3,512   

East region

     8,736        9,311        9,114   
  

 

 

   

 

 

   

 

 

 

Total reportable segments

     44,725        38,645        21,010   

Corporate and other

     763        11        135   
  

 

 

   

 

 

   

 

 

 

Total capital expenditures

   $ 45,488      $ 38,656      $ 21,145   
  

 

 

   

 

 

   

 

 

 
     2012     2011     2010  

Depreciation, depletion, amortization and accretion:

      

Central region

   $ 30,215      $ 27,646      $ 18,352   

West region

     23,771        19,706        3,971   

East region

     14,809        14,525        12,052   
  

 

 

   

 

 

   

 

 

 

Total reportable segments

     68,795        61,877        34,375   

Corporate and other

     81        87        40   
  

 

 

   

 

 

   

 

 

 

Total depreciation, depletion, amortization and accretion

   $ 68,876      $ 61,964      $ 34,415   
  

 

 

   

 

 

   

 

 

 

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

     2012     2011     2010  

Total assets:

      

Central region

   $ 610,003      $ 587,341      $ 577,808   

West region

     428,115        451,017        263,388   

East region

     224,603        238,018        220,809   
  

 

 

   

 

 

   

 

 

 

Total reportable segments

     1,262,721        1,276,376        1,062,005   

Corporate and other

     18,492        7,889        39,576   
  

 

 

   

 

 

   

 

 

 

Total

   $ 1,281,213      $ 1,284,265      $ 1,101,581   
  

 

 

   

 

 

   

 

 

 
     2012     2011     2010  

Revenue by product (a) :

      

Aggregates

   $ 146,991      $ 116,082      $ 69,848   

Asphalt

     242,458        182,952        82,338   

Readymix

     100,941        94,302        31,756   

Cement

     77,676        69,664        50,272   

Construction and paving

     541,837        498,338        241,565   

Other

     (147,001     (138,790     (45,421
  

 

 

   

 

 

   

 

 

 

Total reportable segments

   $ 962,902      $ 822,548      $ 430,358   
  

 

 

   

 

 

   

 

 

 

 

  (a)   Revenue by product includes intercompany sales transferred at market value. The elimination of intercompany transactions is included in Other.

 

(21)   Condensed Consolidating Financial Information

 

On January 30, 2012, the Issuers issued $250.0 million aggregate principal amount of 10.5% Senior Notes due January 31, 2020 (the Senior Notes). Concurrently with the issuance of the Senior Notes, on January 30, 2012, Summit entered into a new credit facility which provided for term loans in an initial aggregate amount of $400.0 million and revolving credit commitments in an initial aggregate amount of $150.0 million (the Senior Secured Credit Facility).

 

The Company, along with all of its domestic wholly owned subsidiary companies (Wholly owned Guarantors) and non wholly owned subsidiary, Continental Cement (Non-Wholly owned Guarantor), are named as guarantors (collectively, the Guarantors) of the Senior Secured Credit Facility and the Senior Notes. Certain other partially owned subsidiaries do not guarantee the notes (collectively, the Non-Guarantors), which includes a subsidiary of Continental Cement. The Guarantors provide a joint and several, full and unconditional guarantee of the securities. There are no significant restrictions on the Company’s ability to obtain funds from any of the Guarantor Subsidiaries in the form of a dividend or loan. Additionally, there are no significant restrictions on a Guarantor Subsidiary’s ability to obtain funds from the Company or its direct or indirect subsidiaries.

 

The following condensed consolidating balance sheets, statements of operations and statements of cash flows are provided for the Company, the Wholly owned Guarantors, the Non-Wholly owned Guarantor and the Non Guarantors. Summit Materials Finance Corp as a co-issuer of the Senior Notes had no transactions during 2012 or assets as of December 29, 2012. Earnings from subsidiaries are included in other (income) expense in the condensed consolidated statements of operations below. The financial information may not necessarily be indicative of results of operations and comprehensive income, cash flows or financial position had the guarantor or nonguarantor subsidiaries operated as independent entities.

 

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Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Condensed Consolidating Balance Sheets

December 29, 2012

 

    Summit
Materials,
LLC
(Parent)
    Non
wholly
owned
Guarantor
    Wholly
owned
Guarantors
    Non
Guarantors
    Eliminations     Consolidated  
Assets            

Current assets:

           

Cash

  $ 697     $ 397     $ 30,981     $ 680     $ (5,324   $ 27,431  

Accounts receivable, net

    —          7,421       90,765       3,255       (1,143     100,298  

Intercompany receivables

    14,931       15,557       9,018       —          (39,506     —     

Cost and estimated earnings in excess of billings

    —          —          11,428       147       —          11,575  

Inventories

    —          7,073       84,555       1,349       —          92,977  

Other current assets

    25       726       8,447       2,409       (1,539     10,068  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

    15,653       31,174       235,194       7,840       (47,512     242,349  

Property, plant and equipment, net

    1,074       287,677       517,994       6,862       —          813,607  

Investments in affiliates

    374,528       1,779       147,658       722       (511,698     12,989  

Goodwill

    —          23,124       155,024       972       —          179,120  

Intangible assets, net

    —          742       7,864       —          —          8,606  

Other assets

    53       10,112       13,784       593       —          24,542  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $ 391,308     $ 354,608     $ 1,077,518     $ 16,989     $ (559,210   $ 1,281,213  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Liabilities, Redeemable Noncontrolling Interest and Member’s Interest            

Current liabilities:

           

Current portion of debt

  $ —        $ 965     $ 3,035     $ —        $ —        $ 4,000  

Current portion of acquisition-related liabilities

    —          —          9,525       —          —          9,525  

Accounts payable

    2,745       6,715       51,179       2,138       (1,143     61,634  

Accrued expenses

    6,877       10,742       38,050       1,015       (6,862     49,822  

Intercompany payables

    —          —          33,396       6,110       (39,506     —     

Billings in excess of cost and estimated earnings

    —          —          6,656       270       —          6,926  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

    9,622       18,422       141,841       9,533       (47,511     131,907  

Long-term debt

    —          155,394       480,449       —          —          635,843  

Acquisition-related liabilities

    —          —          23,919       —          —          23,919  

Other noncurrent liabilities

    395       27,091       56,780       —          —          84,266  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    10,017       200,907       702,989       9,533       (47,511     875,935  

Redeemable noncontrolling interest

    —          —          —          —          22,850       22,850  

Redeemable members’ interest

    —          22,850       —          —          (22,850     —     

Total member’s interest

    381,291       130,851       374,529       7,456       (511,699     382,428  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities, redeemable noncontrolling interest and member’s interest

  $ 391,308     $ 354,608     $ 1,077,518     $ 16,989     $ (559,210   $ 1,281,213  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Condensed Consolidating Balance Sheets

December 31, 2011

 

     Summit
Materials,
LLC
(Parent)
     Non
wholly
owned
Guarantor
     Wholly
owned
Guarantors
     Non
Guarantors
     Eliminations     Consolidated  
Assets                 

Current assets:

                

Cash

   $ 6,701      $ 8      $ 33,997      $ 2,084      $ —        $ 42,790  

Accounts receivable, net

     —          5,419        97,010        3,059        (255     105,233  

Intercompany receivables

     6,819        7,330        17,341        —           (31,490     —     

Cost and estimated earnings in excess of billings

     —           —           18,425        81        —          18,506  

Inventories

     —           9,914        73,832        517        —          84,263  

Other current assets

     124        770        11,591        185        (288     12,382  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total current assets

     13,644        23,441        252,196        5,926        (32,033     263,174  

Property, plant and equipment, net

     393        285,305        528,640        7,565        —          821,903  

Investments in affiliates

     431,317        —           148,154        622        (566,970     13,123  

Goodwill

     —           23,124        129,279        972        —          153,375  

Intangible assets, net

     —           842        8,337        —           —          9,179  

Other assets

     —           11,050        12,006        455        —          23,511  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

   $ 445,354      $ 343,762      $ 1,078,612      $ 15,540      $ (599,003   $ 1,284,265  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Liabilities, Redeemable Noncontrolling Interest and Member’s Interest

                

Current liabilities:

                

Current portion of debt

   $ —         $ —         $ 7,960      $ —         $ —        $ 7,960  

Current portion of acquisition-related liabilities

     —           —           8,465        —           —          8,465  

Accounts payable

     1,903        8,012        59,162        2,252        (1,686     69,643  

Accrued expenses

     6,607        5,354        21,587        741        (294     33,995  

Intercompany payables

     —           —           22,721        7,330        (30,051     —     

Billings in excess of cost and estimated earnings

     —           —           4,318        18        —          4,336  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total current liabilities

     8,510        13,366        124,213        10,341        (32,031     124,399  

Long-term debt

     —           153,980        447,041        —           —          601,021  

Acquisition-related liabilities

     —           —           20,238        —           —          20,238  

Other noncurrent liabilities

     472        24,374        55,803        286        —          80,935  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities

     8,982        191,720        647,295        10,627        (32,031     826,593  

Redeemable noncontrolling interest

     —           —           —           —           21,300       21,300  

Redeemable members’ interest

     —           22,250        —           —           (22,250     —     

Total member’s interest

     436,372        129,792        431,317        4,913        (566,022     436,372  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities, redeemable noncontrolling interest and member’s interest

   $ 445,354      $ 343,762      $ 1,078,612      $ 15,540      $ (599,003   $ 1,284,265  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

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Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income

Year ended December 29, 2012

 

     Summit
Materials,
LLC
(Parent)
    Non wholly
owned
Guarantor
    Wholly
owned
Guarantors
    Non
Guarantors
    Eliminations     Consolidated  

Revenue

   $ —        $ 81,516     $ 861,444     $ 33,074     $ (13,132   $ 962,902  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue (exclusive of items shown separately below)

     —          58,319       685,594       18,582       (13,132     749,363  

General and administrative expenses

     8       6,235       120,462       1,327       —          128,032  

Depreciation, depletion, amortization and accretion

     81       10,093       57,666       1,036       —          68,876  

Transaction costs

     —          —          1,988       —          —          1,988  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (expense)

     (89     6,869       (4,266     12,129       —          14,643  

Other (income) expense

     52,400       (2,065     6,630       (101     (48,577     8,287  

Interest expense

     —          12,045       47,293       633       (1,892     58,079  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) gain from continuing operations before taxes

     (52,489     (3,111     (58,189     11,597       50,469       (51,723

Income tax expense (benefit)

     5       —          (3,925     —          —          (3,920
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from continuing operations

     (52,494     (3,111     (54,264     11,597       50,469       (47,803

Loss from discontinued operations

     —          —          (2,774     —          —          (2,774
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

     (52,494     (3,111     (57,038     11,597       50,469       (50,577

Net income attributable to noncontrolling interest

     —          —          —          —          1,919       1,919  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to member of Summit Materials, LLC

   $ (52,494   $ (3,111   $ (57,038   $ 11,597     $ 48,560     $ (52,496
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive (loss) income attributable to member of Summit Materials, LLC

   $ (52,494   $ (6,759   $ (57,038   $ 11,597     $ 49,645     $ (55,049
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

F-43


Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income

Year ended December 31, 2011

 

     Summit
Materials,
LLC
(Parent)
    Non wholly
owned
Guarantor
    Wholly
owned
Guarantors
    Non
Guarantors
     Eliminations     Consolidated  

Revenue

   $ —       $ 70,064     $ 734,388     $ 21,566      $ (3,470   $ 822,548  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Cost of revenue (exclusive of items shown separately below)

     —         41,221       575,989       17,204        (3,470     630,944  

General and administrative expenses

     1,453       3,933       90,071       1,429        —         96,886  

Depreciation, depletion, amortization and accretion

     87       9,697       51,227       953        —         61,964  

Transaction costs

     —          —          9,120       —           —          9,120  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Operating income (expense)

     (1,540     15,213       7,981       1,980        —          23,634  

Other expense (income)

     8,510       (61     (24,375     124        (5,442     (21,244

Interest expense

     —          14,004       33,685       647        (552     47,784  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

(Loss) gain from continuing operations before taxes

     (10,050     1,270       (1,329     1,209        5,994       (2,906

Income tax expense (benefit)

     —          —          3,408       —           —          3,408  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

(Loss) income from continuing operations

     (10,050     1,270       (4,737     1,209        5,994       (6,314

Loss from discontinued operations

     —          —          (3,736     —           —          (3,736
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net (loss) income

     (10,050     1,270       (8,473     1,209        5,994       (10,050

Net income attributable to noncontrolling interest

     695       —          695       —           (695     695  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net (loss) income attributable to member of Summit Materials, LLC

   $ (10,745   $ 1,270     $ (9,168   $ 1,209      $ 6,689     $ (10,745
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive (loss) income attributable to member of Summit Materials, LLC

   $ (9,375   $ (4,405   $ (13,473   $ 1,209      $ 10,994     $ (15,050
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

F-44


Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income

Year ended December 31, 2010

 

     Summit
Materials,
LLC
(Parent)
    Non wholly
owned
Guarantor
    Wholly
owned
Guarantors
    Non
Guarantors
     Eliminations     Consolidated  

Revenue:

   $ —        $ 50,597     $ 366,036     $ 14,052      $ (327   $ 430,358  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Cost of revenue (exclusive of items shown separately below):

     —          30,424       266,577       11,623        (327     308,297  

General and administrative expenses

     4,604       1,402       42,237       1,236        —          49,479  

Depreciation, depletion, amortization and accretion

     40       5,258       28,392       725        —          34,415  

Transaction costs

     1,712       5,671       14,885       —           —          22,268  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Operating income (expense)

     (6,356     7,842       13,945       468        —          15,899  

Other (income) expense

     17,507       (141     12,132       18        (17,958     11,558  

Interest expense

     —          7,799       17,213       418        —          25,430  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

(Loss) gain from continuing operations before taxes

     (23,863     184       (15,400     32        17,958       (21,089

Income tax expense

     —          —          2,363       —           —          2,363  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

(Loss) income from continuing operations

     (23,863     184       (17,763     32        17,958       (23,452

Loss from discontinued operations

     —          —          (411     —           —          (411
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net (loss) income

     (23,863     184       (18,174     32        17,958       (23,863

Net income attributable to noncontrolling interest

     86       —          86       —           (86     86  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net (loss) income attributable to member of Summit Materials, LLC

   $ (23,949   $ 184     $ (18,260   $ 32      $ 18,044     $ (23,949
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive (loss) income attributable to member of Summit Materials, LLC

   $ (23,513   $ (2,524   $ (20,532   $ 32      $ 20,316     $ (26,221
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

F-45


Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Condensed Consolidating Statements of Cash Flows

Year ended December 29, 2012

 

     Summit
Materials,
LLC
(Parent)
    Non wholly
owned
Guarantor
    Wholly owned
Guarantors
    Non
Guarantors
    Eliminations     Consolidated  

Net cash provided by operating activities

   $ 4,845     $ 12,806     $ 36,649     $ 8,217     $ (238   $ 62,279  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from investing activities:

            

Acquisitions — net of cash acquired

     —          —          (48,757     —          —          (48,757

Purchases of property, plant and equipment

     (762     (12,174     (31,818     (734     —          (45,488

Proceeds from the sale of property, plant and equipment

     —          69       8,577       190       —          8,836  

Other

     —          —          69       —          —          69  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used for investing activities

     (762     (12,105     (71,929     (544     —          (85,340
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from financing activities:

            

Net proceeds from debt issuance

     713,378       (17     —          —          —          713,361  

Loans received from and payments made on loans from other Summit Companies

     (25,371     (295     39,783       (8,793     (5,324     —     

Payments on long-term debt

     (697,438     —          —          —          —          (697,438

Payments on acquisition-related liabilities

     —          —          (7,519     —          —          (7,519

Other

     (656     —          —          (284     238       (702
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash (used for) provided by financing activities

     (10,087     (312     32,264       (9,077     (5,086     7,702  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash

     (6,004     389       (3,016     (1,404     (5,324     (15,359

Cash — beginning of period

     6,701       8       33,997       2,084       —          42,790  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash — end of period

   $ 697     $ 397     $ 30,981     $ 680     $ (5,324   $ 27,431  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Condensed Consolidating Statements of Cash Flows

Year ended December 31, 2011

 

     Summit
Materials,
LLC
(Parent)
    Non wholly
owned
Guarantor
    Wholly owned
Guarantors
    Non
Guarantors
    Eliminations     Consolidated  

Net cash (used in) provided by operating activities

   $ (824   $ 3,808     $ 17,262     $ 2,586     $ 421     $ 23,253  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

            

Acquisitions — net of cash acquired

     —          —          (161,073     —          —          (161,073

Proceeds from the sale of investments

     —          —          377       (136     —          241  

Purchases of property, plant and equipment

     (11     (5,933     (31,210     (1,502     —          (38,656

Proceeds from the sale of property, plant and equipment

     —          168       6,880       109       —          7,157  

Cash contribution to affiliates

     (135,530     —          —          —          135,530       —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used for investing activities

     (135,541     (5,765     (185,026     (1,529     135,530       (192,331
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from financing activities:

            

Proceeds from investment by member

     103,630       —          135,530       421       (135,951     103,630  

Net proceeds from debt issuance

     —          36,456       60,292       —          —          96,748  

Payments on long-term debt

     —          (34,500     (14,500     —          —          (49,000

Payments on acquisition-related liabilities

     —          —          (4,593     —          —          (4,593

Payment of dividends

     —          —          —          (10     —          (10
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used for) financing activities

     103,630       1,956       176,729       411       (135,951     146,775  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (decrease) increase in cash

     (32,735     (1     8,965       1,468       —          (22,303

Cash — beginning of period

     39,436       9       25,032       616       —          65,093  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash — end of period

   $ 6,701     $ 8     $ 33,997     $ 2,084     $ —        $ 42,790  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

F-47


Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

Condensed Consolidating Statements of Cash Flows

Year ended December 31, 2010

 

     Summit
Materials,
LLC
(Parent)
    Non wholly
owned
Guarantor
    Wholly
owned
Guarantors
    Non
Guarantors
    Eliminations     Consolidated  

Net cash (used in) provided by operating activities

   $ (669   $ (12,379   $ (8,626   $ 1,145     $ —        $ (20,529
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

            

Acquisitions — net of cash acquired

     —          —          (482,333     —          —          (482,333

Proceeds from the sale of investments

     —          —          —          —          —          —     

Purchases of property, plant and equipment

     (135     (5,334     (15,312     (364     —          (21,145

Proceeds from the sale of property, plant and equipment

     —          475       4,162       63       —          4,700  

Cash contribution to affiliates

     (336,280     —          (135,000     —          471,280       —     

Other

     —          —          —          (603     —          (603
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash (used for) provided by investing activities

     (336,415     (4,859     (628,483     (904     471,280       (499,381
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from financing activities:

            

Proceeds from investment by member

     338,639       135,000       336,280       —          (471,280     338,639  

Net proceeds from debt issuance

     37,478       7,300       439,383       1,212       —          485,373  

Payments on long-term debt

     —          (125,053     (120,202     (600     —          (245,855

Payments on acquisition-related liabilities

     —          —          (2,721     —          —          (2,721

Payment of dividends

     —          —          190       (237     —          (47
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used for) financing activities

     376,117       17,247       652,930       375       (471,280     575,389  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (decrease) increase in cash

     39,033       9       15,821       616       —          55,479  

Cash — beginning of period

     403       —          9,211       —          —          9,614  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash — end of period

   $ 39,436     $ 9     $ 25,032     $ 616     $ —        $ 65,093  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

F-48


Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

December 29, 2012 and December 31, 2011

 

(22)   Subsequent Events

 

On February 5, 2013, the Company entered into an amendment to its existing Senior Notes and Senior Secured Credit Facility (Amendment No. 1). On February 7, 2013, the Company entered into a Tranche A Revolving Credit Commitment Conversion Agreement. The terms of Amendment No.1 include the following:

 

   

reduction in the applicable margins used to calculate interest rates for term loans and $131.0 million of the $150.0 million revolving credit loans by 1.0%;

 

   

increase in the principal amount of the term loans borrowed by $25.0 million with the same terms as the existing term loans;

 

   

a requirement that the Company pay a fee equal to 1.0% of the principal amount of term loans repaid in connection with certain repricing or refinancing transactions within six months after February 5, 2013; and

 

   

additional flexibility under the financial maintenance covenants, which are tested quarterly, by increasing the applicable maximum Consolidated Net Leverage Ratio and reducing the applicable minimum Interest Coverage Ratio.

 

F-49


Table of Contents

Report of Independent Registered Public Accounting Firm

 

The Board of Directors

Summit Materials, LLC:

 

We have audited the accompanying consolidated balance sheet of Continental Cement Company, L.L.C. and subsidiary as of December 31, 2012, and the related consolidated statements of operations, comprehensive income (loss), cash flows and changes in redeemable members’ interest and member’s interest for the year then ended. The consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the consolidated financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Continental Cement Company, L.L.C. and subsidiary as of December 31, 2012, and the results of their operations and their cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.

 

/s/ KPMG LLP

 

McLean, Virginia

March 27, 2013

 

F-50


Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Member of

Summit Materials, LLC and Subsidiaries

Washington, D.C.

 

We have audited the accompanying consolidated balance sheet of Continental Cement Company, L.L.C. and Subsidiary (the “Company”) as of December 31, 2011, and the related consolidated statements of operations, comprehensive (loss) income, changes in redeemable member’s interest and equity, and cash flows for the year ended December 31, 2011 and for the periods from May 27, 2010 to December 31, 2010 (Successor) and from January 1, 2010 to May 26, 2010 (Predecessor). These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, such consolidated financial statements, present fairly, in all material respects, the financial position of Continental Cement Company, L.L.C. and Subsidiary as of December 31, 2011, and the results of their operations and their cash flows for the year ended December 31, 2011 and for the periods from May 27, 2010 to December 31, 2010 (Successor) and from January 1, 2010 to May 26, 2010 (Predecessor), in conformity with accounting principles generally accepted in the United States of America.

 

/s/DELOITTE & TOUCHE LLP

McLean, Virginia

 

April 18, 2012

 

F-51


Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C.

AND SUBSIDIARY

 

Consolidated Balance Sheets

December 31, 2012 and 2011

(In thousands, except unit amounts)

 

     2012     2011  
Assets     

Current assets:

    

Cash

   $ 599     $ 55  

Accounts receivable, net

     9,924       7,657  

Due from Summit

     10,303       —    

Inventories

     7,073       9,914  

Other current assets

     815       795  
  

 

 

   

 

 

 

Total current assets

     28,714       18,421  

Property, plant and equipment, net

     291,666       289,083  

Goodwill

     24,096       24,096  

Intangible asset, net

     742       842  

Other assets

     10,705       11,505  
  

 

 

   

 

 

 

Total assets

   $ 355,923     $ 343,947  
  

 

 

   

 

 

 

Liabilities, Redeemable Members’

Interest and Member’s Interest

    
     2012     2011  

Current liabilities:

    

Accounts payable

   $ 7,248     $ 8,550  

Accrued expenses

     11,301       5,509  

Deferred sales revenue

     222       585  

Current portion of long-term debt

     965       —    
  

 

 

   

 

 

 

Total current liabilities

     19,736       14,644  

Long-term debt

     155,394       153,980  

Pension and postretirement benefit obligations

     25,568       23,322  

Other noncurrent liabilities

     1,524       1,339  
  

 

 

   

 

 

 

Total liabilities

     202,222       193,285  
  

 

 

   

 

 

 

Redeemable members’ interest (100,000,000 Class B units issued and authorized)

     22,850       22,250  

Member’s interest:

    

Member’s equity (100 Class A units issued and authorized)

     135,000       135,000  

Paid-in capital

     118       56  

Retained earnings

     7,764       1,739  

Accumulated other comprehensive loss

     (12,031     (8,383
  

 

 

   

 

 

 

Total member’s interest

     130,851       128,412  
  

 

 

   

 

 

 

Total liabilities, redeemable members’ interest and member’s interest

   $ 355,923     $ 343,947  
  

 

 

   

 

 

 

 

See accompanying notes to consolidated financial statements.

 

F-52


Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C.

AND SUBSIDIARY

 

Consolidated Statements of Operations

Years ended December 31, 2012 and 2011 and periods

from May 27, 2010 to December 31, 2010 (Successor) and

January 1, 2010 to May 26, 2010 (Predecessor)

(In thousands)

 

     Successor            Predecessor  
     Year ended December 31,     May 27, 2010
to
December 31,

2010
           January  1,
2010

to
May 26, 2010
 
     2012     2011         

Revenue:

             

Revenue from third parties:

             

Product

   $ 65,213     $ 57,804     $ 37,763          $ 18,466  

Service

     13,366       8,708       4,084            1,454  

Revenue from related parties:

             

Product

     16,303       12,269       12,990            3,976  

Service

     —         707       668            379  
  

 

 

   

 

 

   

 

 

        

 

 

 

Total revenue

     94,882       79,488       55,505            24,275  
  

 

 

   

 

 

   

 

 

        

 

 

 

Cost of revenue (exclusive of items shown separately below):

             

Product

     49,541       41,221       30,424            24,474  

Service

     8,778       6,500       3,237            1,994  
  

 

 

   

 

 

   

 

 

        

 

 

 

Total cost of revenue

     58,319       47,721       33,661            26,468  

General and administrative expenses

     6,706       4,761       2,547            3,549  

Depreciation, depletion, amortization and accretion

     10,479       9,984       5,390            4,317  

Transaction costs

     —         —         5,671            7,989  
  

 

 

   

 

 

   

 

 

        

 

 

 

Operating income (loss)

     19,378       17,022       8,236            (18,048

Other income (expense)

     (131     61       141            27  

Interest expense

     (12,622     (14,621     (8,150          (18,536
  

 

 

   

 

 

   

 

 

        

 

 

 

Net income (loss)

     6,625       2,462       227            (36,557

Net loss attributable to noncontrolling interest

     —         —         —              (97
  

 

 

   

 

 

   

 

 

        

 

 

 

Net income (loss) attributable to controlling interest

   $ 6,625     $ 2,462     $ 227          $ (36,460
  

 

 

   

 

 

   

 

 

        

 

 

 

 

See accompanying notes to consolidated financial statements.

 

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Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C.

AND SUBSIDIARY

 

Consolidated Statements of Comprehensive Income (Loss)

Years ended December 31, 2012 and 2011 and periods

from May 27, 2010 to December 31, 2010 (Successor) and

January 1, 2010 to May 26, 2010 (Predecessor)

(In thousands)

 

     Successor    

 

   Predecessor  
     Year ended December 31,     May 27, 2010
to
December 31,

2010
   

 

   January  1,
2010

to
May 26, 2010
 
         2012             2011             

Net income (loss)

   $ 6,625     $ 2,462     $ 227          $ (36,557

Other comprehensive loss – pension and post-retirement liability adjustment

     (3,648     (5,675     (2,708          (3,546
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

Comprehensive income (loss)

     2,977       (3,213     (2,481          (40,103

Less comprehensive loss attributable to the noncontrolling interest

     —         —         —              (97
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

Comprehensive income (loss) attributable to the controlling interest

   $ 2,977     $ (3,213   $ (2,481        $ (40,006
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

 

See accompanying notes to consolidated financial statements.

 

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Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C.

AND SUBSIDIARY

 

Consolidated Statements of Cash Flows

Years ended December 31, 2012 and 2011 and periods

from May 27, 2010 to December 31, 2010 (Successor) and

January 1, 2010 to May 26, 2010 (Predecessor)

(In thousands)

 

     Successor    

 

   Predecessor  
     Year ended December 31,     May 27, 2010
to
December 31,

2010
   

 

   January  1,
2010

to
May 26, 2010
 
         2012             2011             

Cash flows from operating activities:

             

Net income (loss)

   $ 6,625     $ 2,462     $ 227          $ (36,557

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

             

Depreciation, depletion, amortization and accretion

     10,479       9,985       5,390            4,317  

Financing fee amortization

     12       138       80            1,166  

Interest expense paid in kind

     —         —         —              4,421  

Grant of redeemable members’ interest to interest expense

     —         —         —              3,528  

Interest payments on loans from other Summit companies

     (83     —         —              —    

Other

     (10     170       25            (224

(Increase) decrease in operating assets, net of acquisitions:

             

Account receivable

     (1,924     (1,232     2,819            (2,834

Other current assets

     58       (251     (119          (202

Inventories

     2,841       (3,191     9,750            7,014  

Other assets

     308       (2,872     1,939            25  

(Decrease) increase in operating liabilities, net of acquisitions:

             

Accounts payable

     (907     865       640            (2,553

Accrued expenses

     6,685       650       (26,359          15,606  

Pension and postretirement benefit obligations

     (1,368     (1,644     (2,328          —    

O t her liabilities

     (340     (49     (5,236          (95
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

Net cash provided by (used in) operating activities

     22,379       5,031       (13,172          (6,388
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

Cash flows from investing activities:

             

Loans to affiliates

     (10,220     —         —              —    

Decrease in restricted cash

     —         —         —              3,105  

Purchase of property, plant and equipment

     (12,805     (7,110     (6,726          (4,341

Proceeds from the sale of property, plant and equipment

     69       168       475            —    

Other

     (79     —         —              —    
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

Net cash used in investing activities

     (23,035     (6,942     (6,251          (1,236
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

Cash flows from financing activities:

             

Member contribution

     —         —         135,000            —    

Proceeds from borrowing

     7,000       36,500       7,300            21,900  

Principal payments on long-term debt

     (5,783     (34,500     (125,053          (12,100

Deferred financing fees

     (17     (43     —              —    
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

Net cash provided by financing activities

     1,200       1,957       17,247            9,800  
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

Net increase (decrease) in cash

     544       46       (2,176          2,176  

Cash – beginning of period

     55       9       2,185            9  
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

Cash – end of period

   $ 599     $ 55     $ 9          $ 2,185  
  

 

 

   

 

 

   

 

 

   

 

  

 

 

 

 

See accompanying notes to consolidated financial statements.

 

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Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C.

AND SUBSIDIARY

 

Consolidated Statements of Changes in Redeemable Members’ Interest and Member’s Interest

Years ended December 31, 2012 and 2011 and periods

from May 27, 2010 to December 31, 2010 (Successor) and

January 1, 2010 to May 26, 2010 (Predecessor)

(In thousands)

 

    Redeemable
members’
interest
    Member’s
equity
    Paid
in
capital
    Retained
earnings
(accumulated
deficit)
    Accumulated
other
comprehensive
loss
    Total
controlling
interest in
member’s
equity (deficit)
    Noncontrolling
interest
    Total
member’s
interest
 

Balance – January 1, 2010

  $ 5,000     $ 16,000     $ —       $ (26,884   $ (12,465   $ (23,349   $ (161   $ (23,510

Net loss

    —         —         —         (36,460     —         (36,460     (97     (36,557

Other comprehensive loss

    —         —         —         —         (3,546     (3,546     —         (3,546

Grant of redeemable members’ units

    3,528       —         —         —         —         —         —         —    

Fair value adjustment – redeemable members’ units

    1,526       —         —         (1,526     —         (1,526     —         (1,526
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance – May 26, 2010 (Predecessor)

  $ 10,054     $ 16,000     $ —       $ (64,870   $ (16,011   $ (64,881   $ (258   $ (65,139
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
               

Balance – May 27, 2010 (Successor)

  $ 21,300     $ 135,000     $ —       $ —       $  —       $ 135,000     $ —       $ 135,000  

Accretion of redeemable noncontrolling interest

    350       —         —         (350     —         (350     —         (350

Other comprehensive loss

    —         —         —         —         (2,708     (2,708     —         (2,708

Net income

    —         —         —         227       —         227       —         227  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance – December 31, 2010

    21,650       135,000       —         (123     (2,708     132,169       —         132,169  

Accretion of redeemable members’ interest

    600       —         —         (600     —         (600     —         (600

Other comprehensive loss

    —         —         —         —         (5,675     (5,675     —         (5,675

Net income

    —         —         —         2,462       —         2,462       —         2,462  

Share-based compensation

    —         —         56       —         —         56       —         56  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance – December 31, 2011

    22,250       135,000       56       1,739       (8,383     128,412       —         128,412  

Accretion of redeemable members’ interest

    600       —         —         (600     —         (600     —         (600

Other comprehensive loss

    —         —         —         —         (3,648     (3,648     —         (3,648

Net income

    —         —         —         6,625       —         6,625       —         6,625  

Share-based compensation

    —         —         62       —         —         62       —         62  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance – December 31, 2012

  $ 22,850     $ 135,000     $ 118     $ 7,764     $ (12,031   $ 130,851     $ —       $ 130,851  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

See accompanying notes to consolidated financial statements.

 

F-56


Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

(1)   Summary of Organization and Significant Accounting Policies

 

  (a) Business Organization

 

Continental Cement Company, L.L.C. (the “Company” or “Continental Cement”), a Delaware limited liability company, was formed pursuant to the Amended and Restated Continental Cement Limited Liability Company Agreement (“LLC Agreement”). As such, liability of its Members is generally limited to the amount of their net investment in the Company.

 

  (b) Successor/Predecessor Presentation

 

As a result of Summit Holdings II, LLC (“Summit II”), a wholly-owned subsidiary of Summit Materials, LLC (“Summit”), purchasing a controlling interest in Continental Cement effective May 27, 2010 (“Transaction”), the consolidated financial statements and certain footnote presentations included herein separate the Company’s presentations into two distinct periods, the periods subsequent to Summit’s acquisition of a majority of the Company’s membership interests (labeled Successor) and the preceding period (labeled Predecessor), to indicate the application of different bases of accounting between the periods presented. This is presented in the consolidated financial statements with a black line separating Predecessor and Successor indicating that the amounts shown for the periods before and after the Transaction of Continental Cement are not comparable.

 

  (c) Company’s Activities

 

The Company produces Portland cement at its plant located in Hannibal, Missouri. Cement distribution terminals are maintained in Hannibal and St. Louis, Missouri and Bettendorf, Iowa. The Company’s primary cement operation customers are ready-mix operators and contractors located in the Midwestern United States.

 

Green America Recycling, L.L.C. (“GAR”), a wholly owned subsidiary of the Company, is engaged in the business of securing, processing and blending hazardous and nonhazardous waste materials primarily for use as supplemental fuels in Continental Cement’s manufacturing process. GAR’s primary customers are commercial transportation disposal facilities and petroleum and chemical manufacturers located in the continental United States.

 

  (d) Principles of Consolidation

 

The consolidated financial statements of the Company include the accounts of Continental Cement and its wholly owned subsidiary, GAR. All significant intercompany balances and transactions have been eliminated.

 

  (e) Use of Estimates

 

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of

 

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Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible and other long-lived assets, pension and other postretirement obligations, asset retirement obligations and the redeemable members’ interest. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management adjusts such estimates and assumptions when circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from estimates made. Changes in estimates, including those resulting from continuing changes in the economic environment, will be reflected in the Company’s consolidated financial statements in the period in which the change in estimate occurs.

 

  (f) Business and Credit Concentrations

 

The majority of the Company’s customers are located in Iowa, Illinois, and Missouri. The Company’s accounts receivable consist primarily of accounts of ready-mix operators and contractors within this area. Collection of these accounts is, therefore, dependent on the economic conditions of the area. However, credit granted within the Company’s trade area has been granted to a wide variety of customers, and management does not believe that any significant concentrations of credit exist with respect to individual customers or groups of customers who are engaged in similar activities that would be similarly affected by changes in economic or other conditions. The Company had approximately 13%, 14%, 16%, and 18% cement sales concentration with companies owned by a certain minority owner of the Company for the years ended December 31, 2012 and 2011 and the periods from May 27, 2010 to December 31, 2010 (Successor) and January 1, 2010 to May 26, 2010 (Predecessor), respectively.

 

  (g)   Cash

 

During 2012, the Company began participating in Summit’s centralized treasury function whereby cash is periodically swept to an intercompany bank account with Summit. As of December 31, 2012, the Company’s net cash position held by Summit was $10,303.

 

  (h) Accounts Receivable

 

Accounts receivable is stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollected amounts through a charge to earnings and a credit to the allowance for doubtful accounts based on its assessment of the status of individual accounts. In establishing the allowance, management considers historical losses adjusted to take into account current market conditions and our customers’ financial condition, the amount of receivables in dispute, the current receivables aging and current payment terms. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts. Changes in the allowance for doubtful accounts have not been material to the consolidated financial statements.

 

  (i) Revenue Recognition

 

Revenue from the sale of cement is recorded when evidence of an arrangement exists, the fee is fixed or determinable, title passes, which is generally when the product is shipped, and collection is reasonably assured. The Company records freight revenue on a net basis together with freight costs within cost of sales.

 

Revenues from the receipt of waste fuels are based on fees charged for the waste disposal and recorded when the waste is accepted.

 

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Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

  (j) Inventories

 

Inventories of raw materials, work in process and finished goods are carried at the lower of cost (determined using the average cost method) or market. If items become obsolete or otherwise unusable, they will be charged to costs of production when that determination is made by management.

 

  (k) Property, Plant and Equipment

 

Property, plant and equipment are recorded at cost, less accumulated depreciation, depletion and amortization. Expenditures for additions and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Repair and maintenance costs that do not substantially extend the life of the Company’s property, plant and equipment are expensed as incurred.

 

Upon disposal, the cost and related accumulated depreciation are removed from the Company’s accounts and any gain or loss is included in operating income.

 

Depreciation on property, plant and equipment is computed on a straight-line basis. These estimated useful lives are as follows:

 

Building and improvements

   30 – 40 years

Plant, machinery and equipment

   3 – 40 years

Mobile equipment and barges

   3 – 20 years

Other

   3 – 7 years

 

Depletion of mineral reserves is calculated over proven and probable reserves by the units of production method on a quarry-by-quarry basis.

 

The Company reviews the carrying value of property, plant and equipment for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. Such indicators may include, among others, deterioration in general economic conditions, negative developments in equity and credit markets, adverse changes in the markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows or a trend of negative or declining cash flows over multiple periods.

 

  (l) Accrued Mining Reclamation

 

The mining reclamation obligations are based on management’s estimate of future cost requirements to reclaim property at quarry sites. Estimates of these obligations have been developed based on management’s interpretation of current requirements and proposed regulatory changes and are intended to approximate fair value. Costs are estimated in current dollars, inflated until the expected time of payment, using an inflation rate of 2.5%, and then discounted back to present value using a risk-free rate on obligations of similar maturity, adjusted to reflect the Company’s credit rating. Changes in the credit-adjusted, risk-free rate do not change recorded liabilities, but subsequently recognized obligations are measured using the revised credit-adjusted, risk-free rate.

Significant changes in inflation rates or the amount or timing of future cost estimates typically result in both (1) a current adjustment to the recorded liability (and corresponding adjustment to the asset) and (2) a change in liability and asset amounts to be recorded prospectively over the remaining capacity of

 

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Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

the unmined quarry. Any changes related to the capitalized and future cost of the related assets are recognized in accordance with Continental Cement’s amortization policy, which would generally result in amortization expense being recognized prospectively over the remaining life of the asset.

 

  (m) Intangible Asset

 

The Company’s intangible asset related to its trade name was $742 and $842 as of December 31, 2012 and 2011, respectively. The intangible asset is amortized on a straight-line basis over its ten year life. Amortization expense for the years ended December 31, 2012 and 2011 and for the period from May 27, 2010 to December 31, 2010, was $100, $100 and $58, respectively. The estimated amortization expense for the intangible asset for each of the next five years and thereafter is as follows:

 

2013

   $  100  

2014

     100  

2015

     100  

2016

     100  

2017

     100  

Thereafter

     242  
  

 

 

 

Total

   $ 742  
  

 

 

 

 

  (n)   Goodwill

 

Goodwill is the excess of cost over the fair value of net assets of businesses acquired. Goodwill recorded in connection with the Transaction described in note 2 is primarily attributable to the expected profitability and assembled workforce of the Company. The value of goodwill as of December 31, 2012 and 2011 was $24,096. Goodwill is not amortized, but is tested annually for impairment and whenever events or circumstances change that would make it more likely than not that an impairment may have occurred.

 

Continental Cement performs an annual impairment analysis as of the first day of the fourth quarter of each fiscal year for its one reporting unit. The first step of the goodwill impairment test compares the fair value of the reporting unit to its carrying value. Management estimates the fair value of the reporting unit primarily based on the discounted projected cash flows of the underlying operations. A number of significant assumptions and estimates are required to forecast operating cash flows, including macroeconomic trends in the public and private construction industry, the timing of work embedded in backlog, performance and profitability under contracts, expected success in securing future sales and the appropriate interest rate used to discount the projected cash flows. During the 2012 and 2011 annual review of goodwill, management concluded that the estimated fair value of the reporting unit was substantially in excess of its carrying value, resulting in no impairment. The Company has recorded no goodwill impairment charges to date.

 

  (o)   Income Taxes

 

Continental Cement and GAR are limited liability companies that pass their tax attributes for Federal and state tax purposes to their members and are generally not subject to Federal or state income tax.

 

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Table of Contents

CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

  (p)   Kiln-Down Costs

 

Continental Cement experiences annual major maintenance of its kiln (referred to as a kiln-down). The Company accounts for these costs under the direct expensing method, whereby costs are charged to operations as incurred.

 

  (q)   New Accounting Standards

 

In May 2011, the FASB issued Accounting Standards Update No. 2011-04 Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs ( “ASU 2011-04”) . The amendments in this update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in this update to result in a change in the application of the existing requirements. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this update are effective prospectively during interim and annual periods beginning after December 15, 2011. The Company adopted ASU 2011-04 as of January 1, 2012, which did not result in a material impact on fair value measurements or related disclosures.

 

  (2)   Sale of Controlling Interest

 

On May 27, 2010, the Company became a 70% owned subsidiary of Summit II pursuant to the Transaction whereby the Company issued new Class A units representing 70% ownership interests in the Company to Summit II for $135,000 while the Company’s former owners received Class B units representing the remaining 30% ownership of the Company. Pursuant to the terms of the Amended and Restated Continental Cement Company Limited Liability Company Agreement to the extent distributions are authorized by the Company’s Board of Directors, Summit is entitled up to an 11% priority return which accrues daily and compounds annually on the date of issuance of the Class A units. To the extent that the priority return is not made in a given year, the priority return increases Summit’s sharing percentage in distributions and liquidation proceeds of the Company up to a maximum of 80 percent.

 

The proceeds from the new equity raised by the Company of $135,000, together with the issuance of $1,000 of subordinated debt to the existing shareholders were used to repay the outstanding balance on the Company’s senior secured credit facility (the First Lien Facility) of $107,600 and the outstanding balance on the Company’s subordinated debt facility (the Second Lien Facility) of $2,700. Concurrent with the Transaction, the Company entered into second amendments to their First Lien Facility and Second Lien Facility (the Second Amendments) which provide, among other things, for the admission of Summit as permitted holder and amends relevant portions of the First Lien Facility and Second Lien Facility agreements to conform to the recapitalized structure. The Second Amendments also reduce the revolving credit line available under the First Lien Facility to $20,000.

 

The Transaction was accounted for under the acquisition method of accounting as Summit, together with the non-controlling interest holders acting as a collaborative group, obtained substantial

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

ownership of the Company. Accordingly, the assets acquired and liabilities assumed, as well as redeemable members’ interests, were recorded at fair value at the Transaction date. The purchase price for Summit’s 70% of the Company of $135,000 was first allocated to the identified assets acquired and liabilities assumed based on their estimated fair values at the date of the transaction and the excess was allocated to goodwill. The transaction costs associated with the Transaction totaled $5,671.

 

The following table summarizes the finalized fair value of the assets and liabilities at the date of Transaction:

 

Financial assets

   $ 9,753  

Inventories

     11,179  

Property, plant and equipment

     289,960  

Other assets

     12,502  

Intangible assets (trade name)

     1,000  

Current liabilities

     (11,627

Long-term debt

     (160,480

Other long-term liabilities

     (20,083

Goodwill

     24,096  

Redeemable members’ interest

     (21,300
  

 

 

 

Fair value of net assets acquired

   $ 135,000  
  

 

 

 

 

  (3)   Accounts Receivable, net

 

Accounts receivable, net consists of the following:

 

     December 31,  
     2012     2011  

Trade accounts receivable from unaffiliated entities

   $ 8,859      $ 6,745   

Trade accounts receivable from related parties

     1,193        1,501   

Accounts receivable

     10,052        8,246   

Less allowance for doubtful accounts

     (128     (589
  

 

 

   

 

 

 

Accounts receivable, net

   $ 9,924      $ 7,657   
  

 

 

   

 

 

 

 

  (4)   Inventories

 

Inventories consist of the following:

 

     December 31,  
     2012      2011  

Raw materials

   $ 475       $ 604   

Work-in-process

     2,248         2,961   

Finished goods

     4,350         6,349   
  

 

 

    

 

 

 

Total inventories

   $ 7,073       $ 9,914   
  

 

 

    

 

 

 

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

  (5)   Property, Plant and Equipment, net

 

Property, plant and equipment, net consist of the following:

 

     December 31,  
     2012     2011  

Land (nonmineral bearing)

   $ 4,605      $ 4,605   

Land (mineral bearing) and asset retirement costs

     15,449        14,832   

Building and improvements

     40,681        40,393   

Plant, machinery and equipment

     231,454        227,655   

Mobile equipment and barges

     7,859        7,857   

Construction in progress

     15,301        7,933   

Other

     1,373        825   
  

 

 

   

 

 

 

Property, plant and equipment

     316,722        304,100   

Less accumulated depreciation, depletion and accretion

     (25,056     (15,017
  

 

 

   

 

 

 

Property, plant and equipment, net

   $ 291,666      $ 289,083   
  

 

 

   

 

 

 

 

Depreciation, depletion and accretion expense of property, plant and equipment was $10,295, $9,818, $5,329 and $4,270 for the years ended December 31, 2012 and 2011 and the periods from May 27, 2010 to December 31, 2010 (Successor) and January 1, 2010 to May 26, 2010 (Predecessor), respectively.

 

  (6)   Other Assets

 

Other assets consist of the following:

 

     December 31,  
     2012      2011  

Spare repair parts

   $ 10,059       $ 9,973   

Other

     646         1,532   
  

 

 

    

 

 

 

Total other assets

   $ 10,705       $ 11,505   
  

 

 

    

 

 

 

 

  (7)   Accrued Expenses

 

Accrued expenses and other liabilities consist of the following:

 

     December 31,  
     2012      2011  

Accrued interest due to Summit

   $ 4,283       $ 120   

Accrued interest due to certain members

     2,149         2,273   

Accrued postretirement benefits other than pensions, current portion

     1,055         1,021   

Accrued professional fees

     1,250         742   

Accrued payroll, insurance, and benefits

     897         1,013   

Accrued bonus liability

     1,153         194   

Other

     514         146   
  

 

 

    

 

 

 

Total

   $ 11,301       $ 5,509   
  

 

 

    

 

 

 

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

  (8)   Long-Term Debt

 

Long-term debt, including the current portion of long-term debt, consists of the following:

 

     December 31,  
     2012      2011  

Debt due to Summit

   $  156,359       $ —     

1st lien facility

     —           2,000   

2nd lien facility

     —           39,000   

Subordinated secured credit note

     —           100,000   

Unsecured note payable to related party

     —           12,980   
  

 

 

    

 

 

 

Total debt

   $ 156,359       $ 153,980   
  

 

 

    

 

 

 

 

Interest costs incurred were $12,622, $14,621, $8,150 and $18,536 for the years ended December 31, 2012 and 2011 and the periods from May 27, 2010 to December 31, 2010 (Successor) and January 1, 2010 to May 26, 2010 (Predecessor), respectively.

 

  (a)   January 2012 Financing Transactions

 

On January 30, 2012, Summit refinanced its consolidated outstanding indebtedness, including $142.7 million of the Company’s indebtedness and interest thereon. As a result of the January 2012 financing transactions, Continental Cement’s existing debt was repaid by Summit and was replaced by $156.8 million of long-term debt due to Summit. In addition, Continental Cement recognized a charge to earnings of $0.3 million related to financing fees on the debt repaid.

 

The terms of Summit’s debt limit certain transactions of its subsidiaries, including those of Continental Cement. Continental Cement’s ability to incur additional indebtedness or issue certain preferred shares, pay dividends to the noncontrolling members, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter into certain transactions with affiliates are limited.

 

Continental Cement, excluding GAR, is named as a guarantor of Summit’s debt and the Company pledged substantially all of its assets as collateral for Summit’s debt.

 

Future maturities of long-term debt due to Summit as allocated to the Company as of December 31, 2012 are as follows:

 

2013

   $ 965   

2014

     965   

2015

     965   

2016

     965   

2017

     965   

Thereafter

     151,534   
  

 

 

 

Total

   $ 156,359   
  

 

 

 

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

  (b)   May 2010 Financing Transactions

 

Continental Cement entered into the Second Amended and Restated Credit Agreement (First Lien Credit Agreement) on May 27, 2010, with its syndicate banks providing a term loan commitment and revolving line of credit facility, with swing line and letter of credit sub-limit. Interest was charged on outstanding borrowings at increments of either, (a) the Base Rate, as defined in the credit agreement, plus 3.5% margin or (b) the greater of (i) 1.5% or (ii) the LIBOR plus 4.5% margin. The interest rate during 2011 varied from 6.0% to 6.75%. Continental Cement had the option of selecting either rate but must have minimum levels and increments for selecting the LIBOR rate. Interest on funds borrowed at the Base Rate was payable quarterly, except the swing line which was paid monthly. Alternatively, interest on funds borrowed based on the LIBOR rate was payable in either one-, two-, three-, or six-month intervals. Outstanding borrowings were secured by substantially all of Continental Cement’s assets and all such commitments expire on May 27, 2013. The revolving line of credit facility has $20,000 available and included a $10,000 sub-limit for standby letters of credit and a $2,000 swingline sub-limit. At December 31, 2012, all outstanding debt was reported as long-term debt in the accompanying balance sheet reflecting the Company’s intent and ability to refinance these borrowings on a long-term basis. On January 30, 2012, Continental Cement’s debt was refinanced.

 

Prior to the Transaction, the term loan was to mature in May 2013. Under the terms of the First Lien Credit Agreement, Continental Cement had to adhere to certain financial covenants related to debt and interest leverage calculated based on definitions laid out in the First Lien Credit Agreement. The senior leverage ratio, reported each quarter, was to be no greater than 2.75:1.0 through March 31, 2011 and no greater than 2.25:1 for the period June 30, 2011 to March 31, 2013. The total leverage ratio, reported each quarter, was to be no greater than 7.25:1.0 through March 31, 2011; 6.75:1.0 for the period June 30, 2011 to September 30, 2011; 6.5:1.0 for the period December 31, 2011; 6.25:1 for the period March 31, 2012 to June 30, 2012 and 6.0:1 for the period September 30, 2012 to March 31, 2013. The interest coverage ratio needed to be at least 1.5:1.0. Capital expenditures could not exceed $15,000 for fiscal year ended December 31, 2010; $17,000 for fiscal year ended December 31, 2011; $20,000 in fiscal years ending December 31, 2012 and 2013, and dividends were restricted, absent Continental Cement meeting certain requirements outlined in the First Lien Credit Agreement. As of December 31, 2011, Continental Cement was in compliance with all financial covenants. There were no financial covenants as of December 31, 2012 related to amounts due to Summit.

 

On May 27, 2010, Continental Cement amended its Second Lien Credit Agreement with its subordinated lenders of the subordinated secured credit facility totaling $100,000. The Second Lien Credit Agreement provided for a term loan at 10.0% until May 27, 2012, at which point the interest rate increases to 12.0%, maturing August 28, 2013 and was subject to the same financial covenants in the First Lien Credit Agreement.

 

On May 27, 2010, Continental Cement executed an unsecured note payable at 11% from a related party totaling $12,980. Payment including principal and interest were due in one lump-sum on May 30, 2015, subject to a subordination agreement required by Continental Cement’s term loan.

 

Borrowings under the First Lien Credit Agreement, Second Lien Credit Agreement, the subordinated secured credit note and the unsecured note payable were retired in conjunction with the January 2012 financing transactions, as described above.

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

  (9)   Members’ Interest

 

Business affairs of the Company are managed by the Board composed of up to seven Directors. As of December 31, 2012 and 2011, Summit Members are entitled to appoint four Directors to the Board and Rollover Members (the Predecessor Members that collaborated with Summit to complete the Transaction) are entitled to appoint three Directors to the Board. Any Director may be removed from the Board with or without cause at any time by the Directors entitled to appoint such Director.

 

The LLC Agreement provides that resolutions of the Board of Directors require the consent of at least a majority of the Directors, with the exception of matters requiring Special Board Approval. Special Board Approval requires the consent of one or two directors appointed by the Rollover Members (depending on the level of ownership held by the Rollover Members in the aggregate as of the approval date). Such matters included (1) a merger or consolidation of Continental Cement with or into any other company, (2) any transfer of Class A or Class B Units that would cause a change in control, (3) any acquisition or divestiture by the Company of any of its subsidiaries at a price equal to or greater than $15,000, (4) the creation or issuance of any new Units, any new class of Units or any other form of equity securities, (5) the liquidation, dissolution or winding up of the Company and (6) any amendments to the LLC Agreement or other governing documents of the Company except as specifically permitted by the LLC Agreement.

 

  (a)   Class A Units

 

The Company has issued 100 Class A Units as of December 31, 2012 and 2011 to Summit. These units represent a 70% economic interest in the Company and have a preference in liquidation to the Class B Units. Class A Units are entitled to a priority distribution which accrues daily and compounds annually and requires that Continental Cement make distributions ahead of the Class B Units up to an amount equal to the capital contributions made by Summit in respect to the Class A Units, plus interest on such capital contributions of 11%, to Class A Unit holders prior to making distributions to the Class B Unit holders. To the extent that the priority return is not made in a given year, the amount of the priority return will increase the liquidation preference of the Class A Units.

 

  (b)   Class B Units

 

The Company has issued 100,000,000 Class B Units as of December 31, 2012 and 2011. These units represent a 30% economic interest in Continental Cement and are subordinate to the Class A Units.

 

The LLC Agreement also provides Summit with a call option that allows it to call the Class B Units held by the original owners of Continental Cement, at a strike price that approximates fair value, after the sixth anniversary of the Transaction, on the date that Summit affects an initial public offering or upon any other change of control of Summit. The original owners have a put option that allows them to put the Class B Units to Summit, at a strike price that approximates fair value, exercisable on the second anniversary of the Transaction if there is a change of control of the Summit Class A units or after the sixth anniversary of the Transaction. Finally, the Agreement includes transfer restrictions which prohibit the Rollover Members from transferring their Class B Units without the consent of the Board until the fifth anniversary after the Transaction.

 

Net income or loss from operations is generally allocated in a manner such that the capital account of each Member is equal to the distributions that would be made to such Member if the Company were dissolved, its affairs wound up, its assets and liabilities settled for cash and the net assets of the Company were distributed in accordance with the LLC Agreement.

 

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

  (c)   Predecessor

 

On March 31, 2009, the Company entered into an agreement with its subordinated secured lenders providing for the automatic execution of an amended operating agreement contingent on the event that $10,152 of the subordinated notes issued on March 31, 2009, were not repaid in full before August 31, 2009. The contingent amended agreement, if executed, granted membership units to the subordinated secured lenders on a graduated scale. These membership units are puttable at fair value with a floor of $0.925 per unit by the subordinated secured lenders after five years and contain certain protective rights.

 

At May 26, 2010, 8,108,108 membership units had been issued based on the passage without payment of the August 31, 2009, November 30, 2009, and February 28, 2010 early payment dates. On February 28, 2010, 2,844,950 units were issued to the subordinated secured lenders valued at $3,528.

 

The Company voluntarily adopted FASB Accounting Standards Codification (ASC) 480-10-S99-3A and because the membership units are puttable by and at the discretion of the subordinated secured lenders, classified the membership units in mezzanine equity. The Company elected to recognize changes in the greater of redemption value or fair value as they occur and adjust the carrying amount of the instrument to equal the greater of redemption value or fair value at the end of each reporting period. The fair value is determined using Level 3 inputs and redemption value is determined based on the contractual terms of the underlying agreement. A $1,526 fair value adjustment to member’s interest was recognized in the period from January 1, 2010 to May 26, 2010. These membership units were settled for no compensation with the Transaction discussed in note 2.

 

(10)   Employee Benefit Plans

 

  (a)   Deferred Compensation Plan

 

The Company sponsors an Employee 401(k) Savings Plan for all salaried employees and certain union employees. The plan provides for various required and discretionary Company matches of employees’ eligible compensation contributed to the plan and a discretionary profit sharing contribution as determined by the Board. The Company contributions to the plan were $385, $294, $192 and $133 for the years ended December 31, 2012 and 2011 and the periods from May 27, 2010 to December 31, 2010 (Successor) and January 1, 2010 to May 26, 2010 (Predecessor), respectively.

 

  (b)   Defined Benefit Plans and Postretirement Benefits Other than Pensions

 

Continental Cement sponsors two noncontributory defined benefit pension plans for hourly and salaried employees. The salary employee pension plan was closed to new participants and frozen in January 2000 and the hourly employee pension plan was closed to new participants in May 2003. Pension benefits for certain eligible hourly employees are based on a monthly pension factor for each year of credited service. Pension benefits for certain eligible salaried employees are generally based on years of service and average eligible compensation.

 

Continental Cement also sponsors healthcare and life insurance benefits for certain eligible retired employees, which are not funded. The retiree healthcare and life insurance plan was closed for salaried employees in January 2003 and hourly employees in July 2006. Effective January 1, 2012, the Company eliminated all future retiree health and life coverage for active salaried, nonunion hourly and

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

certain union employees that retire on or after January 1, 2012. This change in the other postretirement benefit plans resulted in a $1.7 million reduction in the December 31, 2011 accumulated benefit obligations. The funded status of the pension and other postretirement benefit plans is recognized in the balance sheets as the difference between the fair value of plan assets and the benefit obligations. For defined benefit pension plans, the benefit obligation is the projected benefit obligation (“PBO”) and for the other postretirement benefit plans the benefit obligation is the accumulated postretirement benefit obligation (“APBO”). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The APBO represents the actuarial present value of postretirement benefits attributed to employee services already rendered. Starting in 2010, the PBO equals the APBO because no employees included in the plan have future salary increases. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. The measurement of the benefit obligation is based on Continental Cement’s estimates and actuarial valuations provided by third-party actuaries. These valuations reflect the terms of the plan and use participant-specific information such as compensation, age and years of service, as well as certain assumptions that require significant judgment, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates.

 

The Company uses its fiscal year-end as the measurement date for its defined benefit pension plans and for its other postretirement benefit plans.

 

Obligations and Funded Status - The following information is as of December 31, 2012 and 2011:

 

     2012     2011  
     Pension
benefits
    Other
benefits
    Pension
benefits
    Other
benefits
 

Change in benefit obligations:

        

Beginning of period

   $ 26,514      $ 14,467      $ 23,732      $ 13,110   

Service cost

     276        207        275        227   

Interest cost

     1,056        585        1,161        710   

Actuarial loss

     2,347        1,597        2,710        3,390   

Change in plan provisions

     —          —          —          (1,705

Benefits paid

     (1,518     (1,046     (1,364     (1,265
  

 

 

   

 

 

   

 

 

   

 

 

 

End of period

     28,675        15,810        26,514        14,467   
  

 

 

   

 

 

   

 

 

   

 

 

 

Change in plan assets:

        

Fair value of assets at beginning of period

     16,639        —          16,531        —     

Actual return on plan assets

     1,205        —          43        —     

Employer contributions

     1,537        1,046        1,428        1,265   

Benefits paid

     (1,518     (1,046     (1,363     (1,265
  

 

 

   

 

 

   

 

 

   

 

 

 

Fair value of assets at end of period

     17,863        —          16,639        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Liability recongized

   $ 10,812     $ 15,810     $ 9,875     $ 14,467  
  

 

 

   

 

 

   

 

 

   

 

 

 

Current liabilities

   $ —        $ (1,055   $ —        $ (1,021

Noncurrent liabilities

     (10,812     (14,755     (9,875     (13,447
  

 

 

   

 

 

   

 

 

   

 

 

 

Liability recognized

   $ (10,812   $ (15,810   $ (9,875   $ (14,468
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

Approximately $1.1 million and $1.0 million of the obligation for postretirement benefits is included in current liabilities as of year-end 2012 and 2011, respectively.

 

     2012     2011  
     Pension
benefits
     Other
benefits
    Pension
benefits
     Other
benefits
 
            

Amounts recognized in accumulated other comprehensive income:

          

Net actuarial loss

   $ 8,056       $ 5,501      $ 5,875       $ 4,213   

Prior service cost

     —           (1,526     —           (1,705
  

 

 

    

 

 

   

 

 

    

 

 

 

Total amount recognized

   $ 8,056       $ 3,975      $ 5,875       $ 2,508   
  

 

 

    

 

 

   

 

 

    

 

 

 

 

The amount recognized in accumulated other comprehensive income (“AOCI”) is the actuarial loss, which has not yet been recognized in periodic benefit cost. At December 31, 2012, the actuarial loss expected to be amortized from AOCI to periodic benefit cost in 2013 is $0.4 million and $0.2 million for the pension and postretirement obligations, respectively.

 

     Successor            Predecessor  
     Year ended December 31,     May 27, 2010 to
December 31, 2010
           January 1, 2010 to
May 26, 2010
 
     2012     2011             
     Pension
benefits
    Other
benefits
    Pension
benefits
    Other
benefits
    Pension
benefits
     Other
benefits
           Pension
benefits
     Other
benefits
 

Amounts recognized in other comprehensive loss:

                       

Net actuarial loss

   $ 2,444      $ 1,597      $ 4,066      $ 3,390      $ 1,814       $ 894           $ 1,696       $ 2,242   

Prior service cost

                     (1,705                         (47      80   

Amortization of prior year service cost

            180                                                    

Gain due to curtailment

                                                     (38        

Amortization of loss

     (261     (312     (5     (71                         (300      (87
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

        

 

 

    

 

 

 

Total amount recognized

   $ 2,183      $ 1,465      $ 4,061      $ 1,614      $ 1,814       $ 894           $ 1,311       $ 2,235   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

        

 

 

    

 

 

 

 

     Successor            Predecessor  
     Year ended December 31,      May 27, 2010 to
December 31, 2010
           January 1, 2010 to
May 26, 2010
 
     2012     2011              
     Pension
benefits
    Other
benefits
    Pension
benefits
    Other
benefits
     Pension
benefits
    Other
benefits
           Pension
benefits
     Other
benefits
 

Components of net periodic benefit cost:

                       

Service cost

   $ 276        207        275        227         121        116             84         59   

Interest cost

     1,056        585        1,161        710         677        380             507         256   

Amortization of loss

     261        312        5        69                            347         7   

Expected return on plan assets

     (1,301     (180     (1,400             (788                 (566        
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

        

 

 

    

 

 

 

Net periodic pension benefit cost

     292        924        41        1,006         10        496             372         322   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

        

 

 

    

 

 

 

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

Assumptions - Weighted-average assumptions used to determine the benefit obligations are:

 

     2012     2011  
     Pension
benefits
     Other
benefits
    Pension
benefits
     Other
benefits
 

Discount rate

     3.30% – 3.57%         3.41     3.89% – 4.07%         4.00

 

The expected long-term return on plan assets is based upon the Company’s estimation of what a portfolio, with the target allocation described below, will earn over a long-term horizon. The discount rate is derived using the Citigroup Pension Discount Curve.

 

Weighted-average assumptions used to determine net periodic benefit cost for the period are:

 

     Year-end 2012     Year-end 2011  
     Pension
benefits
    Other
benefits
    Pension
benefits
    Other
benefits
 

Discount rate

     3.89% – 4.07%        4.00     4.94% – 5.12%        5.07

Expected long-term rate of return on plan assets

     7.50     NA        8.50     NA   

 

Assumed health care cost trend rates are 9% grading to 7% and 7% grading to 5% as of year-end 2012 and 2011, respectively. Assumed health care cost trend rates have a significant effect on the amounts reported for the Company’s post-retirement medical and life plans. A one percentage-point change in assumed health care cost trend rates would have the following effects (in thousands):

 

     2012     2011  
     Increase      (Decrease)     Increase      (Decrease)  

Total service cost and interest cost components

   $ 73       $ (63   $ 93       $ (77

Estimated APBO

     1,555         (1,331     1,348         (1,145

 

Plan Assets - The defined benefit pension plans’ (the “Plans”) investment strategy is to minimize investment risk while generating acceptable returns. The Plans currently invest a relatively high proportion of the plan assets in fixed income securities, while the remainder is invested in equity securities. The equity securities are diversified into funds with growth and value investment strategies. The target allocation for plan assets is as follows: equity securities – 30%; fixed income securities –65%; and cash reserves –5%. The Plans’ current investment allocations are within the tolerance of the target allocation.

 

Fair value determinations are based on the following hierarchy, which prioritizes the inputs used to measure fair value:

 

Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets.

 

Level 2 – Inputs other than Level 1 that are based on observable market data, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs that are observable that are not prices and inputs that are derived from or corroborated by observable markets.

 

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

Level 3 – Developed from unobservable data, reflecting the Company’s own assumptions.

 

The Company has no level 3 investments as of or for the years-ended December 31, 2012 and 2011.

 

At year-end 2012 and 2011, the trust was invested largely in publicly traded equities and fixed-income securities, but may invest in other asset classes in the future consistent with our investment policy. The Plans’ investments in equity assets include U.S. and international securities and equity funds. The Plans’ investments in fixed-income assets include U.S. Treasury and U.S. agency securities and corporate bonds. Retirement plan assets are reported at fair value at each measurement date. The Company estimates the fair value of the Plans’ assets using various valuation techniques and, to the extent available, quoted market prices in active markets or observable market inputs are used in estimating the fair value of the Plans’ assets. The descriptions and fair value methodologies for the Plans’ assets are as follows:

 

Cash - The carrying amounts of cash approximate fair value due to the short-term maturity.

 

Equity Securities - Equity securities are valued at the closing market price reported on a U.S. exchange where the security is actively traded and are therefore classified as Level 1 assets.

 

Fixed Income Securities – Corporate and government bonds are classified as Level 2 assets, as they are either valued at quoted market prices from observable pricing sources at the reporting date or valued based upon comparable securities with similar yields and credit ratings.

 

The fair value of the Company’s pension plans’ assets by asset class and fair value hierarchy level as of year-end 2012 and 2011 are as follows:

 

     Fair value measurements at year-end
2012
 
     Total fair
value
     Quoted
prices

in active
markets

for identical
assets

(Level 1)
     Observable
inputs

(Level  2)
 

Cash

   $ 1,656       $ 1,656       $ —     

Equity securities:

        

U.S. Large cap value

     1,063         1,063         —     

U.S. Large cap growth

     1,037         1,037         —     

U.S. Mid cap value

     542         542         —     

U.S. Mid cap growth

     536         536         —     

U.S. Small cap value

     546         546         —     

U.S. Small cap growth

     539         539         —     

International

     1,134         1,134         —     

Fixed income securities:

        

Intermediate-government

     1,247         —           1,247   

Intermediate-corporate

     4,402         —           4,402   

Short term-government

     2,038         —           2,038   

Short term-corporate

     3,123         —           3,123   
  

 

 

    

 

 

    

 

 

 

Total

   $ 17,863       $ 7,053       $ 10,810   
  

 

 

    

 

 

    

 

 

 

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

     Fair value measurements at year-end 2011  
     Total fair
value
     Quoted
prices in
active
markets
for identical
assets
(Level 1)
     Observable
inputs
(Level 2)
 

Cash

   $ 1,217       $ 1,217       $ —     

Equity securities:

        

U.S. Large cap value

     1,399         1,399         —     

U.S. Large cap growth

     1,388         1,388         —     

U.S. Mid cap value

     700         700         —     

U.S. Mid cap growth

     687         687         —     

U.S. Small cap value

     701         701         —     

U.S. Small cap growth

     705         705         —     

International

     1,378         1,378         —     

Fixed income securities:

        

Intermediate-government

     1,100         —           1,100   

Intermediate-corporate

     2,418         —           2,418   

Short term-government

     2,067         —           2,067   

Short term-corporate

     2,879         —           2,879   
  

 

 

    

 

 

    

 

 

 

Total

   $ 16,639       $ 8,175       $ 8,464   
  

 

 

    

 

 

    

 

 

 

 

Cash Flows - The Company expects to contribute approximately $1.3 million to its pension plans and $1.1 million to its other postretirement benefit plans in 2013.

 

The estimated benefit payments for each of the next five years and the five-year period thereafter are as follows:

 

     Pension
benefits
     Other
benefits
 

2013

   $ 1,718       $ 1,055   

2014

     1,707         1,113   

2015

     1,715         1,022   

2016

     1,748         1,079   

2017

     1,744         945   

2018–2022

     8,738         4,724   
  

 

 

    

 

 

 

Total

   $ 17,370       $ 9,938   
  

 

 

    

 

 

 

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

(11)   Accrued Mining Reclamation

 

The Company has asset retirement obligations arising from regulatory requirements to perform certain reclamation activities at the time that certain quarries are closed. The liability was initially measured at fair value and subsequently is adjusted for accretion expense, payments and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. The following table presents the activity for the asset retirement obligations for the years-ended December 31, 2012 and 2011:

 

     Year ended December 31,  
       2012          2011    

Beginning balance

   $ 687       $ 659   

Increase in cost estimate

     532         —    

Accretion expense

     30         28   
  

 

 

    

 

 

 

Ending balance

   $ 1,249       $ 687   
  

 

 

    

 

 

 

 

(12)   Commitments and Contingencies

 

  (a)   Litigation and Claims

 

Continental Cement is party to certain legal actions arising from the ordinary course of business activities. In the opinion of management, these actions are without merit or that the ultimate disposition, if any, resulting from them will not have a material effect on Continental Cement’s consolidated financial position, results of operations or liquidity. Continental Cement’s policy is to record legal fees as incurred.

 

  (b)   Environmental Remediation

 

Continental Cement’s mining operations are subject to and affected by Federal, state and local laws and regulations relating to the environment, health and safety and other regulatory matters. These operations require environmental operating permits, which are subject to modification, renewal and revocation. Continental Cement regularly monitors and reviews its operations, procedures and policies for compliance with these laws and regulations. Despite these compliance efforts, risk of environmental liability is inherent in the operation of Continental Cement’s business, as it is with other companies engaged in similar businesses and there can be no assurance that environmental liabilities will not have a material adverse effect on Continental Cement in the future.

 

On October 14, 1999, the Missouri Department of Natural Resources (MDNR) and the EPA granted the Company a Final Hazardous Waste Management Facility Permit that authorizes Continental Cement to handle, treat, store, recover energy from and dispose of hazardous waste as a supplemental fuel source (RCRA Part B Permit). This permit also incorporated certain Boiler and Industrial Furnace (BIF) regulation emission limits and operating parameters that the Company was subject to prior to the Maximum Achievable Control Technology Standards. On October 13, 2009, a permit renewal application was submitted to MDNR. MDNR has authorized the Company to operate under interim status. Once approved, the renewal will cover another ten-year period.

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

On July 11, 2006, Continental Cement received a Construction Permit for a new kiln system to replace the system in operation at that time. The new kiln began shakedown operations in 2008 and is operating under the new Hazardous Waste Combustor Maximum Achievable Control Technology Standards. Continental Cement has performed the required confirmatory permit tests and submitted a Notification of Compliance to the regulatory agencies. The amended Construction Permit is in place and Continental Cement is now preparing an application for renewal of the Part 70 Operating Permit that will encompass the new permit requirements as well as those that still apply to the components of the existing facility.

 

  (c)   Other

 

In February 2011, Continental Cement incurred a property loss related to a sunken barge with cement product aboard. At which time, the Company recognized a loss of $0.6 million for the lost product and property. As of December 31, 2012, the Company has a $0.9 million accrual for the estimated remaining costs to remove the barge. Any insurance recoveries from the loss will be recorded when probable.

 

Continental Cement is obligated under various firm purchase commitments for certain raw materials and services that are in the ordinary course of business. Management does not expect any significant changes in the market value of these goods and services during the commitment period that would have a material adverse effect on the financial position, results of operations, and cash flows of Continental Cement. The terms of the purchase commitments are generally less than one year.

 

Approximately 64% of the Company’s employees are represented by labor organizations under collective bargaining agreements. The collective bargaining agreements expire between 2013 and 2015. Historically, the Company has been successful at negotiating successor agreements without any material disruptions to operating activities. The Company does not expect the 2013 negotiations to have a material impact on its results of operations, financial position or liquidity.

 

(13)   Related-Party Transactions

 

The Company purchased equipment from a certain member of the Company for approximately $2,130 during the year ended December 31, 2011. In addition, interest expense of $90 was recorded on this purchase during the year ended December 31, 2011. This related party equipment purchase and interest was included in accounts payable at December 31, 2011 and paid in 2012.

 

The Company owes $2.1 million to a certain member of Continental Cement for accrued interest on a related party note. The principal balance on the note was repaid as part of the January 2012 financing transactions.

 

Cement sales to companies owned by certain members of Continental Cement were approximately $12.5 million, $9.5 million, $9.0 million and $4.0 million for the years ended December 31, 2012 and December 31, 2011 and for the periods from May 27, 2010 to December 31, 2010 (Successor) and from January 1, 2010 to May 26, 2010 (Predecessor), respectively, and accounts receivables due from these parties were approximately $1.0 million and $1.3 million as of December 31, 2012 and 2011, respectively.

 

Cement sales to other companies owned by Summit were approximately $3.8 million, $2.8 million and $3.9 million for the years ended December 31, 2012 and December 31, 2011 and for the period from May 27, 2010 to December 31, 2010, respectively, and accounts receivables due from these parties were approximately $0.2 million and $0.2 million as of December 31, 2012 and 2011, respectively.

 

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CONTINENTAL CEMENT COMPANY, L.L.C. AND SUBSIDIARY

 

Notes to Consolidated Financial Statements

December 31, 2012 and 2011

(In thousands)

 

Waste fuel sales by Continental Cement to American Environmental Services, Inc. (related through common ownership in Green America Recycling) were approximately $0.7 million for the year ended December 31, 2011 and the period from May 27, 2010 through December 31, 2010 (Successor) and $0.4 million for the period from January 1, 2010 through May 26, 2010 (Predecessor). During 2011, the Company purchased the remaining interest in Green America Recycling for $1, at which point American Environmental Services, Inc. was no longer a related party.

 

From January 1, 2010 to May 26, 2010 (Predecessor), the Company’s Operating Agreement provided for $121 for non-compete fee to be paid to the Managing Member of the Company.

 

(14)   Supplemental Cash Flow Information

 

Supplemental cash flow information is as follows:

 

     Successor    

 

   Predecessor  
            May  27,
2010
to
December 31,
2010
   

 

   January  1,
2010

to
May  26,
2010
 
     Year ended December 31,          
     2012     2011          

Cash paid for interest

   $ 7,353      $ 12,946       $ 22,389           $ 8,321   

Non cash financing activities:

              

Financing fees

   $ —       $ —        $ 424           $ 800   

Redeemable members unit

     —         —          —              3,528   

Long-term debt due to Summit

     156,842        —          —              —    

Repayment of long-term debt and accrued interest by Summit

     (156,842     —          —              —    

 

(15)   Leasing Arrangements

 

Rent expense incurred, including short term rentals and primarily related to land and equipment, was $524, $426, $542, and $521 for the years ended December 31, 2012 and 2011 and the periods from May 27, 2010 to December 31, 2010 (Successor) and January 1, 2010 to May 26, 2010 (Predecessor), respectively.

 

Minimum rental commitments under long-term operating leases as of December 31, 2012, are as follows:

 

Year ending December 31:

  

2013

   $ 377  

2014

     209  

2015

     177  

2016

     172  

2017

     172  

 

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Table of Contents

LOGO

 

INDEPENDENT AUDITOR’S REPORT

 

To the Board of Directors

 

Cornejo & Sons, Inc. and Subsidiaries

 

We have audited the accompanying consolidated balance sheets of Cornejo & Sons, Inc. and Subsidiaries as of October 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years ended October 31, 2009, 2008 and 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Cornejo & Sons, Inc. and Subsidiaries as of October 31, 2009 and 2008 and the results of their operations and their cash flows for the years ended October 31, 2009, 2008 and 2007, in conformity with accounting principles generally accepted in the United States of America.

 

/s/ Allen, Gibbs & Houlik, L.C.

 

December 15, 2011

 

301 N. Main, Suite 1700  ·  Wichita, Kansas 67202-4868  ·  (316)  267-7231  ·   (316)  267-0339  fax  ·  www.aghlc.com

 

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CORNEJO & SONS, INC. AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

October 31, 2009 and 2008

 

     2009      2008  
ASSETS      

CURRENT ASSETS

     

Cash and cash equivalents

   $ 11,659,720       $ 5,343,679   

Receivables (including retainage), less allowance for doubtful accounts of $47,385 and $58,597

     7,314,880         10,738,012   

Notes receivable, related party

     101,997         11,320   

Inventory

     640,827         295,290   

Costs and estimated earnings in excess of billings on uncompleted contracts

     2,225,358         1,934,321   

Prepaid expenses

     239,393         132,309   
  

 

 

    

 

 

 

Total current assets

     22,182,175         18,454,931   
  

 

 

    

 

 

 

PROPERTY AND EQUIPMENT

     

Property and equipment

     47,443,915         42,100,844   

Less accumulated depreciation

     30,261,970         26,739,922   
  

 

 

    

 

 

 
     17,181,945         15,360,922   
  

 

 

    

 

 

 

OTHER ASSETS

     

Cash surrender value of life insurance

     931,180         959,101   

Land and buildings held for investment

     1,243,184         1,243,184   

Notes receivable, related party

     1,180,880         1,066,119   

Income tax deposit

     449,446         337,123   

Goodwill

     1,949,021         1,949,021   

Other assets

     2,251,245         2,459,590   
  

 

 

    

 

 

 
     8,004,956         8,014,138   
  

 

 

    

 

 

 
   $ 47,369,076       $ 41,829,991   
  

 

 

    

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY      

CURRENT LIABILITIES

     

Current maturities of long-term debt

   $ 792,619       $ 1,121,360   

Current maturities of related party notes payable

     267,705         441,455   

Accounts payable, including retainage of $1,065,191 and $857,442

     6,243,871         5,096,669   

Billings in excess of costs and estimated earnings on uncompleted contracts

     1,439,934         1,537,568   

Accrued liabilities:

     

Salaries and wages

     256,053         462,853   

Property, payroll, and other taxes

     1,102,164         1,326,411   

Other

     213,176         225,521   
  

 

 

    

 

 

 

Total current liabilities

     10,315,522         10,211,837   
  

 

 

    

 

 

 

Long-term debt, less current maturities

     1,824,753         3,415,360   

Related party notes payable, less current maturities

     762,206         965,082   

Deferred income taxes

     160,151         168,000   
  

 

 

    

 

 

 

Total long-term liabilities

     2,747,110         4,548,442   
  

 

 

    

 

 

 

STOCKHOLDERS’ EQUITY

     

Common stock — no par value

     30,000         30,000   

Retained earnings

     37,085,246         29,848,514   
  

 

 

    

 

 

 
     37,115,246         29,878,514   

Less treasury stock — 1,221,000 shares at cost

     2,808,802         2,808,802   
  

 

 

    

 

 

 

Total stockholders’ equity

     34,306,444         27,069,712   
  

 

 

    

 

 

 
   $ 47,369,076       $ 41,829,991   
  

 

 

    

 

 

 

 

The accompanying notes are an integral

part of these consolidated financial statements.

 

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CORNEJO & SONS, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended October 31, 2009, 2008 and 2007

 

     2009     2008     2007  

Revenues earned

   $ 84,507,746      $ 79,554,879      $ 65,632,472   

Cost of revenues earned

     66,246,714        64,524,133        54,005,588   
  

 

 

   

 

 

   

 

 

 

Gross profit

     18,261,032        15,030,746        11,626,884   

Selling, general, and administrative expenses

     (8,655,619     (6,767,591     (6,103,254

Gain on disposal of property and equipment

     1,420,833        18,244        199,075   
  

 

 

   

 

 

   

 

 

 

Income from operations

     11,026,246        8,281,399        5,722,705   
  

 

 

   

 

 

   

 

 

 

Other income (expense):

      

Interest and dividend income

     93,875        127,655        103,062   

Interest expense

     (236,439     (299,504     (235,760

Miscellaneous

     249,638        270,965        178,908   
  

 

 

   

 

 

   

 

 

 
     107,074        99,116        46,210   
  

 

 

   

 

 

   

 

 

 

Net income before taxes

     11,133,320        8,380,515        5,768,915   

Income tax benefit (expense)

     5,000        (589,000     (119,000
  

 

 

   

 

 

   

 

 

 

Net income

   $ 11,138,320      $ 7,791,515      $ 5,649,915   
  

 

 

   

 

 

   

 

 

 

 

The accompanying notes are an integral

part of these consolidated financial statements.

 

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CORNEJO & SONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Years Ended October 31, 2009, 2008 and 2007

 

    Common Stock –
Class A
    Common Stock –
Class B
                   
    Number
of
Shares
    Par
Value
    Number
of
Shares
    Par
Value
    Retained
Earnings
    Treasury
Stock
    Total  

Balance, October 31, 2006

    17,787      $ 300        1,760,906      $ 29,700      $ 21,608,179      $ (2,808,802   $ 18,829,377   

Stockholder distributions

            (2,968,947       (2,968,947

Net income

            5,649,915          5,649,915   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, October 31, 2007

    17,787        300        1,760,906        29,700        24,289,147        (2,808,802     21,510,345   

Stockholder distributions

            (2,232,148       (2,232,148

Net income

            7,791,515          7,791,515   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, October 31, 2008

    17,787        300        1,760,906        29,700        29,848,514        (2,808,802     27,069,712   

Stockholder distributions

            (3,901,588       (3,901,588

Net income

            11,138,320          11,138,320   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, October 31, 2009

    17,787      $ 300        1,760,906      $ 29,700      $ 37,085,246      $ (2,808,802   $ 34,306,444   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying notes are an integral

part of these consolidated financial statements.

 

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CORNEJO & SONS, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended October 31, 2009, 2008 and 2007

 

     2009     2008     2007  

Cash flows from operating activities:

      

Net income

   $ 11,138,320      $ 7,791,515      $ 5,649,915   

Adjustments to reconcile net income to net cash flows from operating activities:

      

Depreciation and amortization

     4,147,493        4,000,603        3,210,240   

Gain on disposal of property and equipment

     (1,420,833     (18,244     (199,075

Deferred income taxes

     (7,849     155,410        126,017   

Changes in operating assets and liabilities:

      

Receivables

     3,423,132        (2,225,351     (1,930,898

Inventory

     (345,537     19,152        (237,208

Costs and estimated earnings in excess of billings on uncompleted contracts

     (291,037     (841,114     126,466   

Interest receivable

     —          2,301        (1,020

Prepaid expenses

     (107,084     3,548        (35,412

Income tax deposit

     (112,323     59,032        (218,197

Accounts payable

     1,147,202        (194,712     1,549,863   

Billings in excess of costs and estimated earnings on uncompleted contracts

     (97,634     211,790        (70,172

Accrued liabilities

     (443,392     654,251        (16,226
  

 

 

   

 

 

   

 

 

 

Net cash flow from operating activities

     17,030,458        9,618,181        7,954,293   
  

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

      

Proceeds from sale of property and equipment

     1,971,409        41,877        354,238   

Acquisition of property and equipment

     (6,309,976     (4,634,813     (3,347,187

Disbursement of notes receivable, related party

     (496,838     (1,418,366     (380,418

Proceeds from notes receivable, related party

     291,400        350,327        510,916   

Purchase of other assets

     (771     (1,406     (1,136

Proceeds from sale of land and buildings held for investment

     —          25,000        11,100   

Purchase of land and buildings held for investment

     —          —          (92,946

Decrease in cash surrender value of life insurance

     27,921        728,927        91,686   
  

 

 

   

 

 

   

 

 

 

Net cash flow from investing activities

     (4,516,855     (4,908,454     (2,853,747
  

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

      

Distributions to stockholders

     (3,901,588     (2,232,148     (2,968,947

Payment of long-term debt

     (2,551,503     (2,898,054     (1,092,470

Proceeds from long-term debt

     632,155        423,528        988,616   

Payment of related party notes payable

     (376,626     (173,397     (245,399

Proceeds from related party notes payable

     —          1,425,000        —     
  

 

 

   

 

 

   

 

 

 

Net cash flow from financing activities

     (6,197,562     (3,455,071     (3,318,200
  

 

 

   

 

 

   

 

 

 

Increase in cash and cash equivalents

     6,316,041        1,254,656        1,782,346   

Cash and cash equivalents, beginning of year

     5,343,679        4,089,023        2,306,677   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of year

   $ 11,659,720      $ 5,343,679      $ 4,089,023   
  

 

 

   

 

 

   

 

 

 

Non-cash transaction:

      

Acquisition of other assets and property and equipment with the issuance of long-term debt

   $ —        $ 3,500,000      $ —     
  

 

 

   

 

 

   

 

 

 

 

The accompanying notes are an integral

part of these consolidated financial statements.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Business Operations — Cornejo & Sons, Inc. (Company) was incorporated on May 2, 1983, and performs construction, excavation, and paving contracting services for governmental agencies and private industry primarily within the state of Kansas. The work is generally performed under fixed price contracts. In connection with its normal construction activities, the Company may be required to purchase bid and performance bonds. The surety issuing the bonds has recourse against certain of the Company’s assets in the event the surety is required to honor the bonds. The length of the Company’s contracts varies, but is generally under one year. Billings are submitted as work progresses, and retainages are generally due upon job completion and acceptance.

 

The Company’s wholly-owned subsidiary, Concrete Materials Company of Kansas, L.L.C. (CMC), operates concrete production facilities and provides concrete to the Company, as well as unrelated third parties.

 

The Company’s wholly-owned subsidiary, Cornejo Materials, Inc., (CMI) operates sand production facilities and provides sand and top soil to the Company and CMC, as well as unrelated third parties.

 

The Company’s wholly-owned subsidiary, Allmetal Recycling, L.L.C. (AMR), operates a facility that buys and accepts scrap metal from the Company as well as unrelated third parties, and sells metal.

 

Principles of Consolidation — The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (Companies). All material intercompany accounts and transactions are eliminated in the consolidation. Management has determined that there are no other entities that require consolidation under authoritative literature.

 

Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect: (1) the reported amounts of assets and liabilities, (2) disclosures such as contingencies, and (3) the reported amounts of revenues and expenses included in such financial statements. Actual results could differ from those estimates.

 

Cash and Cash Equivalents — The Companies consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Companies maintain cash in bank accounts that, at times, may exceed federally insured limits. The Companies have not experienced any losses in such accounts and believe they are not exposed to any significant credit risk on cash and cash equivalents.

 

Receivables — Receivables are carried at the original billing amount less an estimate made for doubtful receivables based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience. Receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received.

 

A receivable is considered to be past due if any portion of the receivable balance is outstanding more than 90 days. Interest is charged on receivables outstanding for more than 60 days and is recognized as it is charged. Interest charges are suspended when the balance is deemed uncollectible.

 

Inventory — Inventory consists of various asphalt and concrete aggregates and is stated at the lower of cost (determined on the first-in, first-out basis) or market.

 

Contracts — Profits on long-term contracts are recorded on the basis of the Company’s estimates of the percentage-of-completion of individual contracts. That portion of the total contract is accrued, which is allocable, on the basis of the Company’s engineering estimates of the percentage-of-completion, to contract expenditures

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

incurred and work performed. In circumstances where estimating the final outcome is impractical except to assure no loss will be incurred, the Company uses a zero estimate of profit.

 

Contract costs include all direct costs plus indirect shop costs related to contract performance. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Revisions in the costs and profit estimates during the course of the work are reflected in the accounting period in which the facts that require the revision become known.

 

The asset, “costs and estimated earnings in excess of billings on uncompleted contracts,” represents costs in excess of revenues recognized. The liability, “billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized.

 

Non-Contract Revenue Recognition — CMC and CMI generally recognize revenue when product is delivered to the customers. AMR generally recognizes revenue upon the sale of metal to a customer in accordance with pre-approved agreements.

 

Property and Equipment — Property and equipment are carried at cost. Depreciation is computed using both the straight-line and declining-balance methods. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to expense as incurred; significant renewals and betterments are capitalized. Deduction is made for retirements resulting from renewals or betterments.

 

Goodwill — The Companies record as goodwill the excess of purchase price over the fair value of the identifiable net assets acquired. Authoritative literature prescribes a two-step process for impairment testing of goodwill, which is performed annually, as well as when an event triggering impairment may have occurred. The first step tests for impairment, while the second step, if necessary, measures the impairment. The Companies have elected to perform the annual analysis during the fourth quarter of each fiscal year as of October 31 st . No indicators of impairment were identified as of October 31, 2009 or 2008.

 

Other Assets — Other assets consist of non-compete agreements and acquired landfill rights of $2,246,733 less accumulated amortization, and are amortized on the straight-line method over their estimated useful lives, generally 5 years and 15 years, respectively. Total amortization was $209,116, $184,152 and $59,334 for the years ended October 31, 2009, 2008 and 2007, respectively. Estimated aggregate amortization expenses will approximate $209,116 for each of the next three years and then will be approximately $173,000 after that until each asset is fully amortized.

 

Fair Value of Financial Instruments — Non-derivative financial instruments included in the balance sheets are cash value of life insurance. These instruments are carried at amounts approximating fair value.

 

Income Taxes — Effective November 1, 2002, the Company and CMC each elected to be taxed as an ‘S’ Corporation. CMI was a ‘C’ Corporation for tax purposes until electing to be taxed as an ‘S’ Corporation effective January 1, 2009. AMR is organized as a limited liability company and will be included with the Company for tax purposes.

 

Under an ‘S’ Corporation election, income and losses, along with any tax credits, will be reportable for income tax purposes by the stockholders on their individual income tax returns. Accordingly, the accompanying financial statements do not include a provision for income taxes on ‘S’ corporate earnings. Customarily,

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

stockholders in ‘S’ Corporations withdraw funds from equity to make quarterly and annual income tax payments. The Companies do not accrue such withdrawals as the taxable income is earned, instead, the Companies’ policy is to record such withdrawals when the cash is distributed.

 

Prior to January 1, 2009, CMI filed its own tax return on a calendar year-end basis. After January 1, 2009, CMI will be consolidated with the Company’s tax return.

 

As a condition of this ‘S’ Corporation election, the Internal Revenue Service (IRS) requires a tax deposit for fiscal years other than a calendar year-end. As of October 31, 2009 and 2008, the deposit with the IRS in order for the Companies to maintain a fiscal year-end of October 31 is $449,446 and $337,123, respectively.

 

Companies making the election to become an ‘S’ Corporation are subject to a tax on any unrecognized “built-in” gain realized during the 10-year period after the conversion. The unrecognized built-in gain is any gain realized upon disposing of an asset that can be attributed to appreciation before the conversion to ‘S’ status. During the years ended October 31, 2009, 2008 and 2007, the Companies did not recognize any built-in gains tax expense from the sale of appreciated assets. The Company has reduced its deferred tax liability to its estimate of future tax obligations related to disposals of assets subject to the built-in gains tax. However, the Company intends to utilize tax planning techniques in an effort to defer tax obligations as a result of disposals of assets subject to the built-in gains tax when possible.

 

Stockholder’s Equity — During January 2010, the Companies amended the Articles of Incorporation to allow for the issuance of up to 10 million shares of common stock without par value with the shares divided into two classes: 100,000 shares of Class A shares (voting) and 9,900,000 shares of Class B shares (non-voting). Further, the Companies declared a 1,000: 1 stock split based on the respective numbers of outstanding shares owned by each shareholder of record as of January 14, 2010. Shares were issued on the basis of 1% of the common stock issued as Class A voting stock and 99% issued as Class B non-voting stock. This resulted in 3,000 shares of common stock issued at October 31, 2009 and 2008 being retroactively split into 17,787 shares of Class A and 1,760,906 shares of Class B stock issued. This had no effect on the total stockholder’s equity or value of common stock issued.

 

Advertising — The Companies charge the cost of advertising to expense as incurred. Advertising expense was $60,041, $86,170 and $64,539 for the years ended October 31, 2009, 2008 and 2007, respectively.

 

Asset Retirement Obligation — In connection with the Companies’ landfill operations, the Companies accrue annually a portion of the estimated liability expected to close the landfills at the end of their operational lives as well as the estimated post-closure costs. At October 31, 2009 and 2008, the Companies have accrued $104,286 and $29,750, respectively, in estimated asset retirement obligations, which is included in other accrued liabilities.

 

Subsequent Events — Subsequent events have been evaluated through the date of the independent auditor’s report, December 15, 2011, which is the date these financial statements were available to be issued.

 

Recently Issued Accounting Standards — The FASB has issued interpretations related to the accounting for uncertain tax positions, which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements for both ‘C’ corporations and pass-through entities. This guidance prescribes a recognition threshold and measurement standard for the financial statement recognition and measurement of an income tax position taken or expected to be taken in a tax return including positions that the organization is exempt from

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

income taxes or not subject to income taxes on unrelated business income. In addition, it provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

 

The Company presently discloses or recognizes income tax positions based on management’s estimate of whether it is reasonably possible or probable, respectively, that a liability has been incurred for unrecognized income tax expense or benefits by applying accounting literature on accounting for contingencies.

 

The Company will adopt this new interpretation in its 2010 annual financial statements but does not anticipate it will significantly affect its financial statements.

 

2. RECEIVABLES

 

     October 31,  
     2009      2008  

Completed contracts and other

   $ 3,593,779       $ 5,291,185   

Contracts-in-process

     2,442,989         3,388,344   

Retainage

     1,278,112         2,058,483   
  

 

 

    

 

 

 
   $ 7,314,880       $ 10,738,012   
  

 

 

    

 

 

 

 

3. RECEIVABLES, RELATED PARTY

 

The Companies have various unsecured demand notes receivable at October 31, 2009 and 2008, in the aggregate amount of $101,997 and $11,320, respectively, due from stockholders or related parties.

 

The Companies have an unsecured note receivable at October 31, 2009 and 2008, in the amount of $1,180,880 and $1,066,119, respectively, due from a related party. The Companies anticipate the collection of this note via proceeds from the ultimate maturity of a life insurance policy on this related party. As such, this note has been classified as long-term.

 

4. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

 

     2009      2008  

Costs incurred on uncompleted contracts

   $ 57,877,170       $ 45,183,095   

Estimated earnings

     11,888,838         8,173,404   
  

 

 

    

 

 

 
     69,766,008         53,356,499   

Less: billings to date

     68,980,584         52,959,746   
  

 

 

    

 

 

 
   $ 785,424       $ 396,753   
  

 

 

    

 

 

 

 

Included in accompanying balance sheets under the following captions:

 

Costs and estimated earnings in excess of billings on uncompleted contracts

   $ 2,225,358      $ 1,934,321   

Billings in excess of costs and estimated earnings on uncompleted contracts

     (1,439,934     (1,537,568
  

 

 

   

 

 

 
   $ 785,424      $ 396,753   
  

 

 

   

 

 

 

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

5. PROPERTY AND EQUIPMENT

 

Property and equipment consists of the following at October 31:

 

Classification

   Useful Life      2009      2008  

Land

      $ 1,970,633       $ 1,970,633   

Buildings and improvements

     12 to 40 years         3,611,875         3,585,796   

Automobiles and trucks

     5 to 15 years         6,019,170         5,526,690   

Construction equipment

     5 to 20 years         29,050,211         26,085,454   

Office equipment

     5 to 10 years         285,249         241,351   

Asphalt plant equipment

     10 years         1,520,581         1,520,581   

Rock crushing equipment

     10 years         1,285,965         1,073,900   

Concrete plant equipment

     10 years         3,700,231         2,096,439   
     

 

 

    

 

 

 
      $ 47,443,915       $ 42,100,844   
     

 

 

    

 

 

 

 

Depreciation expense for 2009, 2008 and 2007 was $3,938,377, $3,816,451 and $3,150,906, respectively.

 

6. LONG-TERM DEBT

 

The Companies have an unsecured note payable to an unrelated third party. The note is payable in annual installments of $50,552 through April 2012 and bears interest at 4.5%. The balance of this note was $138,965 and $181,355 at October 31, 2009 and 2008, respectively.

 

The Companies had a secured note payable to a bank for the purchase of land. The note was payable in monthly installments of $7,807 at a variable interest rate of 0.5% below prime rate. The note was to mature on May 1, 2012. This note was paid off during 2009. The balance of this note was $0 and $324,034 at October 31, 2009 and 2008, respectively.

 

In April 2006, the Companies secured a note payable for $1,000,000 to a bank. The note was payable in monthly installments of $15,069 at a variable interest rate of 2.0% above the London Interbank Offered Rate (LIBOR) (2.24% at October 31, 2009). The note was to mature on May 1, 2013. This note was paid off during 2009. The balance of this note was $0 and $706,369 at October 31, 2009 and 2008, respectively, and was secured by substantially all assets of the Company.

 

The Companies have several secured notes payable to certain finance companies for the acquisition of equipment. The notes are interest free and call for monthly payments between approximately $1,400 and $11,000 through maturity. The aggregate outstanding balance on these notes at October 31, 2009 and 2008 was $15,327 and $168,411, respectively.

 

The Companies have interest free, unsecured notes payable for acquisition of equipment and construction of a plant, payable in monthly installments. The aggregate outstanding balance on these notes is $17,765 and $25,661, at October 31, 2009 and 2008, respectively.

 

In connection with the acquisition of the remaining interest of CMI during 2006, the Companies entered into a financing arrangement for the payment of a non-compete agreement with the former stockholder. The agreement calls for monthly payments of $3,000 for five years. The remaining balance on this agreement at October 31, 2009 and 2008 was $54,000 and $90,000, respectively.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

6. LONG-TERM DEBT (CONTINUED)

 

During 2008, in connection with the acquisition of property and equipment and landfill rights (included in other assets), the Companies have a 5.80% interest rate note payable to a Bank payable in monthly installments of $67,682 with all outstanding principal and interest due January 1, 2011. The balance on this note at October 31, 2009 and 2008 is $2,391,315 and $3,040,890, respectively, and is secured by substantially all assets of the Companies.

 

Maturities of long-term debt are as follows:

 

     Year Ending October 31,  

2010

   $ 792,619   

2011

     1,774,404   

2012

     50,349   
  

 

 

 
   $ 2,617,372   
  

 

 

 

 

Interest paid on long-term debt above for the years ended October 31, 2009, 2008 and 2007 was $238,024, $286,419 and $236,194, respectively.

 

The Company and CMC each have revolving credit agreements with a local bank secured by substantially all assets. Under these agreements, the Company and CMC may borrow up to $2,500,000 and $500,000, respectively, at 2.00% above LIBOR (2.24% at October 31, 2009). At October 31, 2009 and 2008, no amounts were drawn on these agreements, and the full balances were available for borrowing.

 

7. RELATED PARTY NOTES PAYABLE

 

     October 31,  
     2009      2008  

Note payable to a relative of the stockholders for acquisition of land and buildings. This secured note is structured as a life annuity with monthly payments of $13,120. Monthly payments are expected to continue until paid and/or cancellation of the life annuity.

   $ 1,029,911       $ 1,406,537   

Less current maturities

     267,705         441,455   
  

 

 

    

 

 

 
   $ 762,206       $ 965,082   
  

 

 

    

 

 

 

 

Interest imputed on the above related party notes payable for the years ended October 31, 2009 and 2008 was $3,149 and $10,533, respectively.

 

8. EMPLOYEE BENEFIT PLANS

 

The Companies have a profit sharing retirement plan for the benefit of all qualified employees. The Trust Agreement stipulates the amount of the annual contribution to the plan shall be determined by the Board of Directors of the Companies. The amount so determined is not to exceed the amount deductible for income tax purposes. The Companies did not make contributions in 2009, 2008 or 2007.

 

The Companies also have a 401(k) plan for the benefit of substantially all of its employees. The Companies contribute a matching contribution at the discretion of the Board of Directors. The Companies’ contributions for 2009, 2008 and 2007 were $104,351, $127,332 and $91,565, respectively.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

8. EMPLOYEE BENEFIT PLANS (CONTINUED)

 

The Companies have a deferred compensation agreement with three key employees that will pay each employee monthly an agreed upon amount for 10 years (aggregates to approximately $105,000 annually) after the earlier of retirement or a change in control event (as defined). The agreements are partially funded through Company owned life insurance policies on the three employees. The total amount accrued is $43,766 at October 31, 2009 and $0 at October 31, 2008.

 

9. INCOME TAXES

 

At October 31, 2009 and 2008, deferred taxes consist of management’s estimate of future tax obligations related to disposals of assets subject to built-in gains tax. Management’s historical practice has been to defer gains on disposals for tax purposes by trading in assets via tax-free exchanges. Should this historical practice change or not be available, the potential liability for future built-in gains tax could be substantially greater. Deferred taxes consist of the following at October 31:

 

     2009     2008  

Deferred tax liability:

    

Built-in gains tax

   $ (160,151   $ (168,000
  

 

 

   

 

 

 

 

The income tax provision on CMI (attributed to operations prior to the conversion to an ‘S’ corporation) differs from the amount of income tax determined by applying the U.S. Federal income tax rate (34%) to pretax income for the years ended October 31, 2009 and 2008, primarily due to non-deductible items.

 

10. RELATED PARTY TRANSACTIONS

 

The Companies leased their office and other shop facilities from entities owned by the officers and stockholders of the Corporation, under an operating lease agreement that expired in October 2007. The leases contained a one-year renewal option, which was exercised, and required monthly payment aggregating $14,000. The lease also required the Companies to pay all executor costs (such as property taxes, maintenance, and insurance). Rents paid under this agreement were approximately $146,000 for the year ended October 31, 2008 and $168,000 for the year ended October 31, 2007. During fiscal 2008, the Companies acquired the office and shop facilities that were previously rented from related entities by issuing debt (see Note 7).

 

11. MAJOR CUSTOMERS

 

Revenue from one of the Companies’ customers during the years ended October 31, 2009, 2008 and 2007 was approximately $34 million, $22 million and $19 million, respectively. The amount receivable from this same customer at October 31, 2009 and 2008 was $1,141,079 and $2,615,891, respectively.

 

12. COMMITMENTS AND CONTINGENCIES

 

From time to time, the Companies are subject to claims and litigation that arise in the ordinary course of business. Management does not expect these matters to have a material adverse effect on the Companies’ financial condition.

 

13. FAIR VALUE MEASUREMENT

 

In September 2006, the FASB issued guidance which defines fair value, establishes a framework for measuring fair value under current accounting pronouncements that require or permit fair value measurement and enhances disclosures about fair value measurements. Effective November 1, 2008, the Company adopted this

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

13. FAIR VALUE MEASUREMENT (CONTINUED)

 

guidance. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction value hierarchy which requires an entity to maximize the use of observable inputs when measuring fair value.

 

The guidance describes three levels of inputs that may be used to measure fair value:

 

Level 1 — Inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date;

 

Level 2 — Inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and

 

Level 3 — Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.

 

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

 

Cash Value of Life Insurance — These instruments are classified as Level 3. The values are determined by the underwriting insurance company’s valuation models and represent the guaranteed value the Company would receive upon surrender of the policies as of October 31, 2009. These policies are held on key employees.

 

Below are the Company’s financial instruments carried at fair value on a recurring basis by the fair value hierarchy levels described above.

 

     Assets at Fair Value as of October 31, 2009      Fair Value  
         Level 1              Level 2              Level 3         

Cash value of life insurance

   $ —         $ —         $ 931,180       $ 931,180   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

The table below sets forth a summary of changes in the fair value of the Company’s level 3 assets for the year ended October 31, 2009:

 

     Level 3 Assets  
     Cash Value of  Life
Insurance
 

Balance, beginning of year

   $ 959,101   

Net of change in fair market value and premiums paid

     (27,921
  

 

 

 

Balance, end of year

   $ 931,180   
  

 

 

 

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

14. ACQUISITION

 

Effective August 7, 2009, the Company (through a wholly-owned subsidiary specifically created for this acquisition, AMR) acquired the assets of an entity in Wichita. This acquisition has been accounted for in accordance with applicable accounting guidance on business combinations. The aggregate purchase price of $1,500,000 was all allocated to the estimated fair values of the fixed assets acquired.

 

15. SUBSEQUENT EVENT

 

Effective April 16, 2010, the Companies sold substantially all assets to an unrelated third party. This transaction triggered the change of control provision in the deferred compensation agreements. This resulted in an additional accrual, on the effective date of the transaction, of approximately $572,000. This transaction also triggered built-in gains tax (see Note 9) of approximately $516,000 on the effective date of the transaction.

 

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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended January 31, 2010 and 2009

 

     2010     2009  

Revenues earned

   $ 15,566,623      $ 15,148,511   

Cost of revenues earned

     10,957,490        12,396,098   
  

 

 

   

 

 

 

Gross profit

     4,609,133        2,752,413   

Selling, general, and administrative expenses

     2,285,313        1,738,645   

Gain on disposal of property and equipment

     240,171        —     
  

 

 

   

 

 

 

Income from operations

     2,563,991        1,013,768   
  

 

 

   

 

 

 

Other income (expense):

    

Interest and dividend income

     31,940        16,457   

Interest expense

     (39,188     (60,086

Miscellaneous

     66,001        63,048   
  

 

 

   

 

 

 
     58,753        19,419   
  

 

 

   

 

 

 

Net income before taxes

     2,622,744        1,033,187   

Income tax expense

     —          (90,000
  

 

 

   

 

 

 

Net income

   $ 2,622,744      $ 943,187   
  

 

 

   

 

 

 

 

The accompanying notes are an integral

part of these unaudited interim financial statements.

 

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CORNEJO & SONS, INC. AND SUBSIDIARIES

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended January 31, 2010 and 2009

 

     2010     2009  

Cash flows from operating activities:

    

Net income

   $ 2,622,744      $ 943,187   

Adjustments to reconcile net income to net cash flow from operating activities:

    

Depreciation and amortization

     1,096,008        1,420,670   

Gain on disposal of property and equipment

     (240,171     —     

Changes in operating assets and liabilities:

    

Receivables

     1,141,118        4,048,040   

Inventory

     (304,647     (305,636

Costs and estimated earnings in excess of billings on uncompleted contracts

     181,784        1,206,294   

Prepaid expenses

     (1,108,005     (1,054,328

Income tax deposit

     —          (7,500

Accounts payable

     (4,227,489     (2,287,361

Billings in excess of costs and estimated earnings on uncompleted contracts

     440,617        342,153   

Accrued liabilities

     92,946        (532,655
  

 

 

   

 

 

 

Net cash flow from operating activities

     (305,095     3,772,864   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Proceeds from sale of property and equipment

     385,495        —     

Acquisition of property and equipment

     (1,019,411     (1,709,542

Disbursement of notes receivable, related party

     (27,488     (60,502

Receipts on notes receivable, related party

     96,397        —     

Purchases of/change in other assets

     (466,152     30,970   
  

 

 

   

 

 

 

Net cash flow from investing activities

     (1,031,159     (1,739,074
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Distributions to stockholders

     (802,704     (1,291,425

Payment of long-term debt

     (449,036     (480,560

Proceeds from long-term debt

     898,241        632,155   

Payment of related party notes payable

     (38,301     (43,357

Proceeds from related party notes payable

     46,715        218,025   
  

 

 

   

 

 

 

Net cash flow from financing activities

     (345,085     (965,162
  

 

 

   

 

 

 

Increase in cash and cash equivalents

     (1,681,339     1,068,628   

Cash and cash equivalents, beginning of period

     11,659,720        5,343,679   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 9,978,381      $ 6,412,307   
  

 

 

   

 

 

 

 

The accompanying notes are an integral

part of these unaudited interim financial statements.

 

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CORNEJO & SONS, INC. AND SUBSIDIARIES

 

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The consolidated interim financial statements for Cornejo & Sons, Inc. and Subsidiaries have been prepared by the Company, without audit. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. Management believes that the disclosures are adequate to present fairly the financial position, results of operations and cash flows at the dates and for the periods presented. It is suggested that this interim financial information be read in conjunction with the financial statements and notes thereto appearing in the Company’s latest annual audit report. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.

 

Stockholders’ Equity — During January 2010, the Companies amended the Articles of Incorporation to allow for the issuance of up to 10 million shares of common stock without par value with the shares divided into two classes: 100,000 shares of Class A shares (voting) and 9,900,000 shares of Class B shares (non-voting). Further, the Companies declared a 1,000:1 stock split based on the respective number of outstanding shares owned by each shareholder of record as of January 14, 2010. Shares were issued on the basis of 1% of the common stock issued as Class A voting stock and 99% issued as Class B non-voting stock. This resulted in 3,000 shares of common stock issued at October 31, 2009 split into 17,787 shares of Class A and 1,760,906 shares of Class B stock issued at January 31, 2010. This had no effect on the total stockholders’ equity or value of common stock issued.

 

Asset Retirement Obligation — In connection with the Companies’ landfill operations, the Companies accrue a portion of the estimated liability expected to close the landfills at the end of their operational lives as well as the estimated post-closure costs. The Company established a new estimate of this retirement obligation based on revised cash flow projections, which primarily relate to capping and closing the landfills. This change in estimate, that resulted in the recognition of an additional liability of approximately $500,000, was recognized as of November 1, 2009. At January 31, 2010 and October 31, 2009, the Companies have accrued $602,305 and $104,286, respectively, in estimated asset retirement obligations, which is included in other liabilities.

 

Subsequent Events — These financial statements considered subsequent events through December 15, 2011, the date the financial statements were available to be issued.

 

Future Adoption of New Accounting Standards — In January 2010, the FASB issued ASU No. 2010-06, “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements”, which also requires additional disclosures about purchases, sales, issuances and settlements in the roll-forward of Level 3 fair value measurements. This new guidance will be effective for the Company on January 1, 2011. The adoption of this new accounting guidance is not expected to have a material impact on the Company’s consolidated financial statements.

 

2. RECEIVABLES

 

     January 31,
2010
     October 31,
2009
 

Construction contracts (completed and in-process)

   $ 4,950,350       $ 6,036,768   

Retainage

     1,223,412         1,278,112   
  

 

 

    

 

 

 
   $ 6,173,762       $ 7,314,880   
  

 

 

    

 

 

 

 

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CORNEJO & SONS, INC. AND SUBSIDIARIES

 

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

3. NOTES RECEIVABLE, RELATED PARTY

 

The Companies have various unsecured demand notes receivable at January 31, 2010 and October 31, 2009, in the aggregate amount of $19,966 and $101,997, respectively, due from stockholders, employees or related parties.

 

The Companies have an unsecured note receivable at January 31, 2010 and October 31, 2009, in the amount of $1,194,002 and $1,180,880, respectively, due from a related party. The Companies anticipate the collection of this note via proceeds from the ultimate maturity of a life insurance policy on this related party. As such, this note has been classified as long-term.

 

4. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

 

     January 31,
2010
    October 31,
2009
 

Costs incurred on uncompleted contracts

   $ 65,194,582      $ 57,877,170   

Estimated earnings

     15,260,938        11,888,838   
  

 

 

   

 

 

 
     80,455,520        69,766,008   

Less: billings to date

     80,292,497        68,980,584   
  

 

 

   

 

 

 
   $ 163,023      $ 785,424   
  

 

 

   

 

 

 

Included in accompanying balance sheets under the following captions:

    

Costs and estimated earnings in excess of billings on uncompleted contracts

   $ 2,043,574      $ 2,225,358   

Billings in excess of costs and estimated earnings on uncompleted contracts

     (1,880,551     (1,439,934
  

 

 

   

 

 

 
   $ 163,023      $ 785,424   
  

 

 

   

 

 

 

 

5. PROPERTY AND EQUIPMENT

 

Property and equipment consists of the following:

 

Classification

  

Useful Life

   January 31,
2010
     October 31,
2009
 

Land

      $ 1,970,633       $ 1,970,633   

Buildings and improvements

   12 to 40 years      3,611,875         3,611,875   

Automobiles and trucks

   5 to 15 years      5,868,995         6,019,170   

Construction equipment

   5 to 20 years      29,606,480         29,050,211   

Office equipment

   5 to 10 years      286,128         285,249   

Asphalt plant equipment

   10 years      1,520,581         1,520,581   

Rock crushing equipment

   10 years      1,285,965         1,285,965   

Concrete plant equipment

   10 years      3,413,241         3,700,231   
     

 

 

    

 

 

 
      $ 47,563,898       $ 47,443,915   
     

 

 

    

 

 

 

 

Depreciation expense for the three months ended January 31, 2010 and 2009 was $1,043,728 and $1,368,390, respectively.

 

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CORNEJO & SONS, INC. AND SUBSIDIARIES

 

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

6. LONG-TERM DEBT

 

The Companies have an unsecured note payable to an unrelated third party. The note is payable in annual installments of $50,552 through April 2012 and bears interest at 4.5%. The balance of this note was $138,965 at January 31, 2010 and October 31, 2009.

 

The Companies have several secured notes payable to certain finance companies for the acquisition of equipment. The notes are interest free and call for monthly payments between approximately $1,400 and $11,000 through maturity. The aggregate outstanding balance on these notes at January 31, 2010 and October 31, 2009 was $11,147 and $15,327, respectively.

 

The Companies have interest free, unsecured notes payable for acquisition of equipment and construction of a plant, payable in monthly installments. The aggregate outstanding balance on these notes is $16,446 and $17,765 at January 31, 2010 and October 31, 2009, respectively.

 

In connection with the acquisition of the remaining interest of CMI during 2006, the Companies entered into a financing arrangement for the payment of a non-compete agreement with the former stockholder. The agreement calls for monthly payments of $3,000 for five years. The remaining balance on this agreement at January 31, 2010 and October 31, 2009 was $45,000 and $54,000, respectively.

 

The Companies have an unsecured note payable to an unrelated third party. The note is payable in monthly installments of $91,475 through August 2010 and bears interest at 3.99%. The balance of this note was $631,893 and $0 at January 31, 2010 and October 31, 2009, respectively.

 

During 2008, in connection with the acquisition of property and equipment and landfill rights (included in other assets), the Companies have a 5.80% interest rate note payable to a bank payable in monthly installments of $67,682 with all outstanding principal and interest due January 1, 2011. The balance on this note at January 31, 2010 and October 31, 2009 is $2,223,126 and $2,391,315, and is secured by substantially all assets of the Companies.

 

Maturities of long-term debt are as follows:

 

Periods Ending October 31,

      

2010 (nine months)

   $ 1,241,167   

2011

     1,774,404   

2012

     51,006   
  

 

 

 
   $ 3,066,577   
  

 

 

 

 

Interest paid on long-term debt above for the three months ended January 31, 2010 and 2009 was $45,424 and $60,086, respectively.

 

The Company and CMC each have revolving credit agreements with a local bank secured by substantially all assets. Under these agreements, the Company and CMC may borrow up to $2,500,000 and $500,000, respectively, at 2.00% above LIBOR (0.90% at January 31, 2010). At January 31, 2010 and October 31, 2009, no amounts were drawn on these agreements, and the full balances were available for borrowing.

 

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CORNEJO & SONS, INC. AND SUBSIDIARIES

 

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

7. RELATED PARTY NOTES PAYABLE

 

       January 31,
2010
     October 31,
2009
 

Note payable to a relative of the stockholders for acquisition of land and buildings. This secured note is structured as a life annuity with monthly payments of $13,120. Monthly payments are expected to continue until paid and/or cancellation of the life annuity.

   $ 1,038,325       $ 1,029,911   

Less current maturities

     314,420         267,705   
  

 

 

    

 

 

 
   $ 723,905       $ 762,206   
  

 

 

    

 

 

 

 

8. INCOME TAXES

 

At January 31, 2010 and October 31, 2009, deferred taxes consist of management’s estimate of future tax obligations related to disposals of assets subject to built-in gains tax. Management’s historical practice has been to defer gains on disposals for tax purposes by trading in assets via tax-free exchanges (see also Note 9). Should this historical practice change or not be available, the potential liability for future built-in gains tax could be substantially greater. Deferred taxes consist of a $168,000 and $160,151 built-in gains tax liability at January 31, 2010 and October 31, 2009, respectively.

 

The income tax provision on CMI (attributed to operations prior to the conversion to an ‘S’ corporation) differs from the amount of income tax determined by applying the U.S. Federal income tax rate (34%) to pretax income for the three months ended January 31, 2010 and 2009, primarily due to non-deductible items.

 

9. SUBSEQUENT EVENT

 

Effective April 16, 2010, the Companies sold substantially all assets to an unrelated third party. This transaction triggered the change of control provisions in the deferred compensation agreements. This resulted in an additional accrual, on the effective date of the transaction, of approximately $572,000. This transaction also triggered built-in gains tax (see Note 8) of approximately $516,000 on the effective date of the transaction.

 

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INDEPENDENT AUDITORS’ REPORT

 

Board of Directors

Kilgore Pavement Maintenance, LLC

Salt Lake City, Utah

 

We have audited the accompanying balance sheets of Kilgore Pavement Maintenance, LLC as of August 1, 2010 and December 31, 2009, and the related statements of operations and members’ equity, and cash flows for the period from January 1, 2010 through August 1, 2010 and for the year ended December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kilgore Pavement Maintenance, LLC as of August 1, 2010 and December 31, 2009 and the results of its operations and its cash flows for the period from January 1, 2010 through August 1, 2010 and for the year ended December 31, 2009 in conformity with U.S. generally accepted accounting principles.

 

 

/s/ Wisan, Smith, Racker & Prescott, LLP

Salt Lake City, Utah

October 25, 2011

 

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Table of Contents

KILGORE PAVEMENT MAINTENANCE, LLC

 

BALANCE SHEETS

August 1, 2010 and December 31, 2009

 

     2010     2009  
ASSETS     

CURRENT ASSETS

    

Cash and cash equivalents

   $ 793,485      $ 2,237,524   

Receivables:

    

Trade accounts including amounts retained on construction contracts of $437,804 and $1,343,104, respectively

     8,365,634        12,021,269   

Employee advances

     —          700   
  

 

 

   

 

 

 

Total receivables

     8,365,634        12,021,969   

Less allowance for doubtful accounts

     (12,238     (100,000
  

 

 

   

 

 

 

Net receivables

     8,353,396        11,921,969   

Costs and estimated earnings in excess of billings on uncompleted contracts

     247,209        75,721   

Inventories

     2,165,882        453,280   

Prepaid expenses

     —          73,111   
  

 

 

   

 

 

 

TOTAL CURRENT ASSETS

     11,559,972        14,761,605   

EQUIPMENT, net of accumulated depreciation of $9,552,839 and $8,397,963, respectively

     4,461,276        5,582,298   

OTHER ASSETS

    

Deposits

     71,821        71,821   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 16,093,069      $ 20,415,724   
  

 

 

   

 

 

 
LIABILITIES AND MEMBERS’ EQUITY     

CURRENT LIABILITIES

    

Accounts payable including amounts retained on construction contracts of $114,167 and $177,725, respectively

   $ 1,971,247      $ 1,677,171   

Accrued expenses

     217,644        70,026   

Accrued losses on uncompleted contracts

     41,012        —     

Current portion of long-term liabilities

     612,290        669,646   

Current portion of obligations under capital leases

     28,279        59,136   

Billings in excess of costs and estimated earnings on uncompleted contracts

     21,734        244,976   
  

 

 

   

 

 

 

TOTAL CURRENT LIABILITIES

     2,892,206        2,720,955   

LONG-TERM LIABILITIES

     1,446,585        1,817,364   

OBLIGATIONS UNDER CAPITAL LEASES

     20,593        37,181   

MEMBERS’ EQUITY

     11,733,685        15,840,224   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND MEMBERS’ EQUITY

   $ 16,093,069      $ 20,415,724   
  

 

 

   

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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Table of Contents

KILGORE PAVEMENT MAINTENANCE, LLC

 

STATEMENTS OF OPERATIONS AND MEMBERS’ EQUITY

Period ended August 1, 2010 and Year ended December 31, 2009

 

     2010     2009  

INCOME

    

Contract revenues earned

   $ 11,037,841      $ 37,616,032   

EXPENSES

    

Cost of revenues earned

     6,454,067        21,101,592   

Selling, general and administrative

     5,759,705        5,846,665   

Bad debts

     927,551        100,000   

Depreciation

     1,154,876        1,973,739   
  

 

 

   

 

 

 
     14,296,199        29,021,996   
  

 

 

   

 

 

 

OPERATING INCOME (LOSS)

     (3,258,358     8,594,036   

OTHER INCOME (EXPENSE)

    

Interest income

     3,296        55,175   

Interest expense

     (68,592     (71,161
  

 

 

   

 

 

 
     (65,296     (15,986
  

 

 

   

 

 

 

NET INCOME (LOSS)

     (3,323,654     8,578,050   

MEMBERS’ EQUITY

    

Balance — beginning of period

     15,840,224        15,806,806   

Distributions to members

     (782,885     (8,544,632
  

 

 

   

 

 

 

Balance — end of period

   $ 11,733,685      $ 15,840,224   
  

 

 

   

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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KILGORE PAVEMENT MAINTENANCE, LLC

 

STATEMENTS OF CASH FLOWS

Period ended August 1, 2010 and Year ended December 31, 2009

 

     2010     2009  

CASH FLOWS FROM OPERATING ACTIVITIES

    

Net income (loss)

   $ (3,323,654   $ 8,578,050   

Adjustments to reconcile net income (loss) to net cash flows from (used by) operating activities:

    

Depreciation

     1,154,876        1,973,739   

Bad debts

     927,551        100,000   

Loss on sale of assets

     —          19,945   

(Increase) decrease in assets:

    

Trade accounts receivable

     2,640,322        2,669,852   

Employee advances

     700        (50

Costs and estimated earnings in excess of billings on uncompleted contracts

     (171,488     (25,571

Inventories

     (1,712,602     (427,291

Prepaid expenses

     73,111        (3,980

Deposits

     —          (10,374

Increase (decrease) in liabilities:

    

Accounts payable

     294,076        (959,749

Accrued expenses

     147,618        (37,427

Accrued losses on uncompleted contracts

     41,012        —     

Billings in excess of costs and estimated earnings on uncompleted contracts

     (223,242     228,924   
  

 

 

   

 

 

 

Net cash flows from (used by) operating activities

     (151,720     12,106,068   

CASH FLOWS FROM INVESTING ACTIVITIES

    

Cash from disposal of equipment

     —          61,312   

Cash paid for purchases of equipment

     (33,854     (283,130
  

 

 

   

 

 

 

Net cash used by investing activities

     (33,854     (221,818

CASH FLOWS FROM FINANCING ACTIVITIES

    

Distributions to members

     (782,885     (8,544,632

Cash paid to reduce long-term liabilities

     (428,135     (1,756,068

Cash paid to reduce obligations under capital leases

     (47,445     (81,816
  

 

 

   

 

 

 

Net cash used by financing activities

     (1,258,465     (10,382,516
  

 

 

   

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

     (1,444,039     1,501,734   

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

     2,237,524        735,790   
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

   $ 793,485      $ 2,237,524   
  

 

 

   

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

    

Equipment acquired through assumption of long-term liabilities

   $ —        $ 1,886,671   
  

 

 

   

 

 

 

Refinanced debt

   $ —        $ 377,921   
  

 

 

   

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

    

Cash paid for interest

   $ 68,592      $ 71,161   
  

 

 

   

 

 

 

Cash paid for income taxes

   $ —        $ —     
  

 

 

   

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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Table of Contents

KILGORE PAVEMENT MAINTENANCE, LLC

 

NOTES TO FINANCIAL STATEMENTS

August 1, 2010 and December 31, 2009

 

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES

 

The Company’s accounting policies conform to U.S. generally accepted accounting principles. The following policies are considered to be significant:

 

Business Activity

 

The Company operates in the construction industry, paving and maintaining asphalt surfaces. The work is usually performed under fixed price contracts. Projects are generally located in the State of Utah. The Company files statutory liens on all construction projects where collection problems are anticipated.

 

Income Recognition — Construction Contracts

 

The financial statements are prepared on the percentage-of-completion method of accounting. Profits on contracts are recorded on the basis of “cost-to-cost” determination of percentage-of-completion on individual contracts, commencing when progress reaches a point where cost and estimate analysis and other evidence of trend are sufficient to estimate final results with reasonable accuracy. That portion of the total contract price which is allocable to contract expenditures incurred and work performed is accrued as earned income. At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is accrued. Claims for additional revenue are recognized when settled.

 

Costs and Billings on Uncompleted Contracts

 

Costs and estimated earnings in excess of billings on uncompleted contracts represent the amount by which costs of contracts in progress plus estimated earnings exceed related progress billings.

 

Billings in excess of costs and estimated earnings on uncompleted contracts represent the amount by which progress billings on contracts in progress exceed related costs and estimated earned profit.

 

Cash and Cash Equivalents

 

Cash equivalents are generally comprised of certain highly liquid investments with original maturities of less than three months.

 

Trade Accounts Receivable

 

Trade accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Based on management’s assessment of the credit history with customers having outstanding balances and current relationships with them, it has concluded that realization losses on balances outstanding at year end will be immaterial.

 

Inventories

 

Inventories consist mainly of the components necessary to produce asphalt and inventories are reflected in the financial statements at their aggregate lower of cost (first-in, first-out) or market.

 

Equipment

 

Equipment is recorded at cost less accumulated depreciation with depreciation expense computed using the straight-line method in amounts sufficient to write off the cost of depreciable assets over their estimated useful lives.

 

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KILGORE PAVEMENT MAINTENANCE, LLC

 

NOTES TO FINANCIAL STATEMENTS

August 1, 2010 and December 31, 2009

 

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Normal maintenance and repair items are charged to costs and expenses as incurred. The cost and accumulated depreciation of equipment sold or otherwise retired is removed from the accounts and gain or loss on disposition is reflected in net income in the period of disposition.

 

Income Taxes

 

The Company is a limited liability company and as allowed under IRS statutes, the Company has elected to report taxable income as an “S” Corporation. Under such election, federal and state income taxes on earnings of the Company are generally the responsibility of the individual member.

 

Concentrations of Credit Risk

 

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash deposits, trade accounts receivable and accounts payable.

 

The Company maintains its cash deposits at one financial institution. At times such deposits may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash.

 

Approximately 33% and 51% of the Company’s trade accounts receivable balance is derived from one and three customers at August 1, 2010 and December 31, 2009, respectively. One and two of the Company’s customers accounted for approximately 22% of 2010 and 25% of 2009 revenues, respectively. Concentrations of credit risk with respect to trade accounts receivable are limited because the Company routinely assesses the financial strength of its customers and follows the practice of filing statutory liens or filing claims against payment and performance bonds on all construction projects where collection problems are anticipated.

 

Approximately 43% and 71% of the Company’s August 1, 2010 and December 31, 2009 trade accounts payable, respectively, are due to two and one suppliers, respectively. The materials and products provided by one of these suppliers plus three others represent approximately 52% and 12% of the Company’s 2010 and 2009 cost of revenues earned. The Company limits its exposure by maintaining buying relationships with other capable vendors.

 

Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. In these financial statements assets, liabilities, and earnings from contracts involve extensive reliance on management’s estimates. Actual results could differ from those estimates.

 

Advertising and Promotion

 

All costs associated with advertising and promoting the Company’s services are expensed in the period incurred. Advertising and promotion expenses during the period ended August 1, 2010 totaled $31,783. Advertising and promotion expenses for the year ended December 31, 2009 totaled $75,511.

 

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KILGORE PAVEMENT MAINTENANCE, LLC

 

NOTES TO FINANCIAL STATEMENTS

August 1, 2010 and December 31, 2009

 

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Subsequent Events

 

Management has evaluated subsequent events through October 25, 2011, which is also the date the financial statements were available to be issued. Except as disclosed in Note 13, no subsequent events were noted during this evaluation that require disclosure in these financial statements.

 

NOTE 2 — CONTRACTS IN PROGRESS

 

Information with respect to contracts in progress at August 1, 2010 and December 31, 2009 follows:

 

     2010     2009  

Expenditures on uncompleted contracts

   $ 1,635,886      $ 4,342,922   

Estimated earnings (losses) thereon

     (57,760     1,840,975   
  

 

 

   

 

 

 
     1,578,126        6,183,897   

Less billings applicable thereto

     (1,352,651     (6,353,152
  

 

 

   

 

 

 

Net (over)/under billings

   $ 225,475      $ (169,255
  

 

 

   

 

 

 

 

     2010     2009  

Included in the accompanying balance sheets under the following captions:

    

Costs and estimated earnings in excess of billings on uncompleted contracts

   $ 247,209      $ 75,721   

Billings in excess of costs and estimated earnings on uncompleted contracts

     (21,734     (244,976
  

 

 

   

 

 

 

Net (over)/under billings

   $ 225,475      $ (169,255
  

 

 

   

 

 

 

 

NOTE 3 — INVENTORIES

 

Inventories at August 1, 2010 and December 31, 2009 consist of the following:

 

     2010      2009  

Road base and fill materials

   $ 1,890,425       $ 360,008   

Oils

     240,504         59,700   

Fuel

     34,953         33,572   
  

 

 

    

 

 

 
   $ 2,165,882       $ 453,280   
  

 

 

    

 

 

 

 

NOTE 4 — EQUIPMENT

 

Equipment as of August 1, 2010 and December 31, 2009 is summarized as follows:

 

     2010     2009  

Cost:

    

Autos and trucks

   $ 5,763,558      $ 5,805,958   

Asphalt plant and equipment

     2,801,050        2,801,050   

Construction equipment

     5,290,186        5,213,932   

Office equipment

     159,321        159,321   
  

 

 

   

 

 

 
     14,014,115        13,980,261   

Less accumulated depreciation

     (9,552,839     (8,397,963
  

 

 

   

 

 

 

Net book value

   $ 4,461,276      $ 5,582,298   
  

 

 

   

 

 

 

 

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KILGORE PAVEMENT MAINTENANCE, LLC

 

NOTES TO FINANCIAL STATEMENTS

August 1, 2010 and December 31, 2009

 

NOTE 4 — EQUIPMENT (CONTINUED)

 

Amounts included in equipment for assets capitalized under capital lease obligations at August 1, 2010 and December 31, 2009 are $130,388 and $450,738, respectively. Accumulated amortization for items capitalized under capital leases was $84,752 and $324,566 at August 1, 2010 and December 31, 2009, respectively. Amortization expense on assets recorded under capital leases is included in depreciation expense.

 

NOTE 5 — LINE OF CREDIT

 

The Company has a $1,500,000 line of credit with a bank. This line bears interest at the greater of the bank’s prime rate or 5.0%, but never below 5.0% and is secured by assets of the Company. As of August 1, 2010, there were no draws against the line of credit. The line of credit matures on July 5, 2011.

 

NOTE 6 — LONG-TERM LIABILITIES

 

Long-term liabilities as of August 1, 2010 and December 31, 2009 are summarized below:

 

     2010     2009  

Notes to a bank, interest ranging from 2.5% to 5.0%, due in monthly installments of $30,844, including interest, secured by equipment

   $ 1,577,867      $ 1,735,752   

Notes to equipment finance companies, interest ranging from 4% to 5%, due in monthly installments of $29,475, including interest, secured by equipment

     481,008        751,258   
  

 

 

   

 

 

 
     2,058,875        2,487,010   

Less current portion of long-term liabilities

     (612,290     (669,646
  

 

 

   

 

 

 

Long-term liabilities excluding current portion

   $ 1,446,585      $ 1,817,364   
  

 

 

   

 

 

 

 

Aggregate maturities of long-term liabilities in each of the next five years are summarized as follows:

 

2011

   $ 612,290   

2012

     452,472   

2013

     315,560   

2014

     332,508   

2015

     278,522   

Thereafter

     67,523   
  

 

 

 
   $ 2,058,875   
  

 

 

 

 

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KILGORE PAVEMENT MAINTENANCE, LLC

 

NOTES TO FINANCIAL STATEMENTS

August 1, 2010 and December 31, 2009

 

NOTE 7 — OBLIGATIONS UNDER CAPITAL LEASES

 

The Company has entered into capital leases for construction equipment. Aggregate future minimum lease payments under these leases are as follows:

 

2011

   $ 30,894   

2012

     23,170   

2013

     —     

2014

     —     

2015

     —     

Thereafter

     —     
  

 

 

 

Total minimum lease payments

     54,064   

Less amount representing interest

     (5,192
  

 

 

 

Present value of minimum lease payments (including $28,279 classified as current)

   $ 48,872   
  

 

 

 

 

NOTE 8 — OPERATING LEASE

 

The Company leases its facilities from a related entity through common ownership under a long-term operating lease agreement. This lease expires in October 2025. The Company also has operating leases for construction equipment and also leases other equipment under short-term arrangements as needed. These leases expire in March 2011 and May 2012. Rents expensed, including rents to the related entity, under operating leases during the period ended August 1, 2010 totaled $381,053 and for the year ended December 31, 2009 totaled $851,602.

 

The following is a schedule of the future minimum lease payments as of August 1, 2010:

 

     Third
Party
     Related
Entity
     Total  

2011

   $ 249,978       $ 360,000       $ 609,978   

2012

     127,762         360,000         487,762   

2013

     —           360,000         360,000   

2014

     —           360,000         360,000   

2015

     —           360,000         360,000   

Thereafter

     —           3,660,000         3,660,000   
  

 

 

    

 

 

    

 

 

 
   $ 377,740       $ 5,460,000       $ 5,837,740   
  

 

 

    

 

 

    

 

 

 

 

The total amount expensed on the related entity lease was $210,000 and $360,000 during the period ended August 1, 2010 and the year ended December 31, 2009, respectively.

 

NOTE 9 — BENEFIT PLAN

 

The Company sponsors a 401(k) contributory retirement plan (the Plan) covering all full-time personnel who have attained the age of twenty-one and who have been employed longer than one year. The Company may elect to make matching contributions to the Plan matching 50% of employee contributions up to 6% of eligible compensation. Matching contributions to the Plan amounted to $73,467 and $120,437 for the period ended August 1, 2010 and for the year ended December 31, 2009, respectively. Administrative expenses paid by the Company for the Plan totaled $4,269 and $2,880 for the period ended August 1, 2010 and for the year ended December 31, 2009, respectively.

 

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KILGORE PAVEMENT MAINTENANCE, LLC

 

NOTES TO FINANCIAL STATEMENTS

August 1, 2010 and December 31, 2009

 

NOTE 10 — RELATED-PARTY TRANSACTIONS

 

The Company leases its facilities from a related entity that is owned by a member of the Company. (See note 8).

 

NOTE 11 — COMMITMENTS AND CONTINGENCIES

 

In connection with the sale of the Company described in Note 13, the Company’s acquirer also acquired the operations of another entity that was subsequently merged into the operations acquired from the Company. This other entity has historically been the Company’s largest customer and largest vendor and the two companies have had other business relationships. In connection with the sale, the former owner of the other entity required that the Company pay a fee for land previously used and pay an additional amount related to shared use of a permit. In the Company’s dealings with this entity as supplier and customer, the use of the land and the permit was considered part of the business relationship. The amounts paid of $500,000 and $245,800 for the land fee and permit, respectively, have been included in selling, general and administrative expense on the statement of operations.

 

NOTE 12 — MEMBERS’ EQUITY

 

In connection with the sale of the Company discussed in Note 13, the major member of the Company elected to award $2.1 million of the sales proceeds to three key employees and two nonemployees. These awards of sales proceeds were based on services these individuals provided to the Company. As the amount is known as of August 1, 2010 and the award was based on services provided and no future services were required from these individuals, the Company recorded the $2.1 million as an expense and as a capital contribution from the member. The capital contribution of $2.1 million is included in net distributions for the period ended August 1, 2010. The member contributed cash equal to the $2.1 million expense.

 

NOTE 13 — SUBSEQUENT EVENTS

 

On July 12, 2010, the Company signed an agreement and plan of merger and asset purchase agreement (the “Agreement”) with the Kilgore Companies, LLC formerly known as Harper-Kilgore, LLC that became effective after the close of business on August 1, 2010. The Agreement calls for Kilgore Companies, LLC to acquire the membership units of the Company less cash and other excluded items for approximately $42.5 million.

 

These financial statements have been presented as though the Company was continuing on, no adjustments or reclasses have been recorded to reflect that certain liabilities were paid shortly after the period end or for any effects of the sale, except as disclosed.

 

Also in connection with the sale of the Company, the Company incurred legal fees of $152,409. This amount is included in selling, general and administrative expenses on the statement of operations.

 

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Independent Auditor’s Report

 

Board of Directors

Norris Asphalt Paving Co.

Ottumwa, Iowa

 

We have audited the accompanying balance sheets of Norris Aggregate Products, a division of Norris Asphalt Paving Co., as of February 28, 2012 and December 31, 2011 and the related statements of operations, stockholders’ equity, and cash flows for the two month period and year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Norris Aggregate Products, a division of Norris Asphalt Paving Co., as of February 28, 2012 and December 31, 2011, and the results of its operations and its cash flows for the two month period and year then ended in conformity with accounting principles generally accepted in the United States of America.

 

/s/ CliftonLarsonAllen LLP

 

West Des Moines, Iowa

October 23, 2012

 

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NORRIS AGGREGATE PRODUCTS

 

BALANCE SHEETS

February 28, 2012 and December 31, 2011

 

ASSETS

 

     2012      2011  

CURRENT ASSETS

     

Cash

   $ 92,123       $ 8,477   

Accounts and contracts receivable

     945,183         2,055,930   

Accounts receivable — related party

     3,241,672         2,045,144   

Inventories

     8,462,461         9,079,143   

Prepaid stripping

     1,111,360         1,161,355   

Prepaid expenses

     415,906         390,520   
  

 

 

    

 

 

 

Total current assets

     14,268,705         14,740,569   
  

 

 

    

 

 

 

PROPERTY AND EQUIPMENT

     

Cost

     23,611,303         23,645,302   

Less accumulated depreciation

     17,034,716         16,820,001   
  

 

 

    

 

 

 

Total property and equipment

     6,576,587         6,825,301   
  

 

 

    

 

 

 

OTHER ASSETS

     

Prepaid stripping — noncurrent

     1,071,689         664,099   

Other

     169,167         180,834   
  

 

 

    

 

 

 

Total other assets

     1,240,856         844,933   
  

 

 

    

 

 

 

TOTAL ASSETS

   $ 22,086,148       $ 22,410,803   
  

 

 

    

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY   

LIABILITIES

     

Checks written in excess of bank balance

   $ —          $ 28,373   

Accounts payable — trade

     202,715         285,281   

Other liabilities

     880,504         836,833   
  

 

 

    

 

 

 

Total liabilities

     1,083,219         1,150,487   
  

 

 

    

 

 

 

STOCKHOLDERS’ EQUITY

     

Retained earnings

     21,002,929         21,260,316   
  

 

 

    

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 22,086,148       $ 22,410,803   
  

 

 

    

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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NORRIS AGGREGATE PRODUCTS

 

STATEMENTS OF OPERATIONS

Two Month Period Ended February 28, 2012 and Year Ended December 31, 2011

 

     2012     2011  

SALES

    

Aggregates

   $ 1,912,298      $ 32,145,782   

Trucking

     158,665        3,147,383   
  

 

 

   

 

 

 

Total sales

     2,070,963        35,293,165   
  

 

 

   

 

 

 

COST OF SALES

    

Aggregates

     1,728,480        20,468,923   

Trucking

     162,143        3,156,011   
  

 

 

   

 

 

 

Total cost of sales

     1,890,623        23,624,934   
  

 

 

   

 

 

 

Gross profit

     180,340        11,668,231   

OPERATING EXPENSES

     424,514        3,640,997   

GAIN ON SALE OF PROPERTY AND EQUIPMENT

     3,900        158,471   
  

 

 

   

 

 

 

(Loss) income from operations

     (240,274     8,185,705   

OTHER (EXPENSE) INCOME

    

Interest expense

     (1,622     (130,996

Other

     (15,491     114,510   
  

 

 

   

 

 

 

Total other expense

     (17,113     (16,486
  

 

 

   

 

 

 

NET (LOSS) INCOME

   $ (257,387   $ 8,169,219   
  

 

 

   

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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NORRIS AGGREGATE PRODUCTS

 

STATEMENTS OF STOCKHOLDERS’ EQUITY

Two Month Period Ended February 28, 2012 and Year Ended December 31, 2011

 

     Retained
Earnings
 

BALANCE, DECEMBER 31, 2010

   $ 13,091,097   

Net income

     8,169,219   
  

 

 

 

BALANCE, DECEMBER 31, 2011

     21,260,316   

Net loss

     (257,387
  

 

 

 

BALANCE, FEBRUARY 28, 2012

   $ 21,002,929   
  

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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NORRIS AGGREGATE PRODUCTS

 

STATEMENT OF CASH FLOWS

Two Month Period Ended February 28, 2012 and Year Ended December 31, 2011

 

     2012     2011  

CASH FLOWS FROM OPERATING ACTIVITIES

    

Net (loss) income

   $ (257,387   $ 8,169,219   

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    

Depreciation and amortization

     260,381        1,656,201   

Gain on sale of property and equipment

     (3,900     (158,471

Effects of changes in operating assets and liabilities:

    

Accounts and contracts receivable

     1,110,747        (704,632

Accounts receivable — related party

     (1,196,528     (9,035,563

Inventories

     616,682        986,280   

Prepaid stripping

     (357,595     (94,694

Prepaid expenses

     (25,386     (31,697

Accounts payable

     (82,566     (234,244

Other liabilities

     43,671        68,313   
  

 

 

   

 

 

 

Net cash provided by operating activities

     108,119        620,712   
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

    

Purchases of property and equipment

     —          (994,343

Proceeds from sale of property and equipment

     3,900        344,905   
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     3,900        (649,438
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

    

Checks written in excess of bank balance

     (28,373     28,373   
  

 

 

   

 

 

 

NET INCREASE (DECREASE) IN CASH

   $ 83,646      $ (353

CASH, BEGINNING OF YEAR

     8,477        8,830   
  

 

 

   

 

 

 

CASH, END OF YEAR

   $ 92,123      $ 8,477   
  

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

    

Interest paid

   $ 1,622      $ 130,996   

 

The accompanying notes are an integral part of the financial statements.

 

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NORRIS AGGREGATE PRODUCTS

 

NOTES TO FINANCIAL STATEMENTS

February 28, 2012 AND December 31, 2011

 

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Norris Aggregate Products (the Company) is an aggregates producer that operates quarries in northern Missouri. The Company is a division of Norris Asphalt Paving Co. (NAPCO). NAPCO also operates an asphalt division (Asphalt) that specializes in the placement of asphalt paving and sales of asphalt mix in southeastern Iowa and northern Missouri. The accounting policies of both divisions are identical and further described in this Note 1.

 

On February 29, 2012, NAPCO entered into an agreement to sell the Company. See Note 9.

 

Basis of presentation

 

The accompanying financial statements present the financial position, results of operations, stockholders’ equity and cash flows as if the Company operated as a separate, stand-alone entity. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The financial position and results of operations of the Company are accounted for as division within the combined NAPCO financial statements and, therefore, reflect the portion of the assets, liabilities and operations directly associated with the Company. In addition, on a basis determined by NAPCO management, shared expenses, generally administrative in nature, have been allocated between the Company and Asphalt. Management believes these estimates are reasonable and appropriate in the circumstances.

 

Use of estimates in preparing financial statements

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Receivables and credit policies

 

Accounts receivable are uncollateralized customer obligations which generally require payment within thirty days from the invoice date. Accounts receivable are stated at the invoice amount plus accrued interest. Account balances with invoices over ninety days old are considered delinquent. Payments of accounts receivable are applied to the specific invoices identified on the customer’s remittance advice or, if unspecified, to the earliest unpaid invoices.

 

The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts that reflects management’s best estimate of amounts that will not be collected. Management reviews individual accounts receivable balances that exceed ninety days from the invoice date and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected. All accounts or portions thereof deemed to be uncollectible or to require an excessive collection cost are written off to the allowance for doubtful accounts. No allowance for doubtful accounts was deemed necessary at February 28, 2012 and December 31, 2011.

 

Revenue recognition

 

Revenues are recognized when risks associated with ownership have passed to unaffiliated customers. Typically this occurs when products are shipped. Product revenues generally include sales of aggregates to customers, net of discounts or allowances, if any, and include freight and delivery charges billed to customers.

 

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NORRIS AGGREGATE PRODUCTS

 

NOTES TO FINANCIAL STATEMENTS

February 28, 2012 AND December 31, 2011

 

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Inventories

 

Inventories consist of mined aggregate material and are stated at the lower of cost or market with cost determined on a first-in, first-out (FIFO) basis.

 

Property and equipment

 

The Company’s buildings are depreciated on the straight-line method over their estimated useful lives of thirty-nine years. Equipment consists of various manufacturing equipment, vehicles, computer equipment, and office furniture. These assets are depreciated on the straight-line method over their estimated useful lives, which range from three to seven years.

 

Prepaid stripping

 

Prepaid stripping is allocated to aggregate reserves based on the costs to remove the overburden to allow those reserves to be mined. Stripping cost is charged to the production process as aggregate reserves are mined. The current portion of the prepayment was determined utilizing the estimated aggregate tonnage to be mined in the following year.

 

Impairment of long-lived assets

 

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of carrying amount or the fair value less costs to sell.

 

Sales taxes collected and remitted

 

The Company presents sales taxes collected from customers and remitted to governmental authorities on a net basis, excluding such amounts from sales and cost of sales.

 

Advertising

 

Advertising costs are charged to operations when incurred.

 

Income taxes

 

Income taxes have not been provided as NAPCO has elected to be treated as a Subchapter S corporation for federal and state income tax purposes. Under this election, the net income or loss of NAPCO is passed through to the stockholders and reported on their individual income tax returns.

 

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NORRIS AGGREGATE PRODUCTS

 

NOTES TO FINANCIAL STATEMENTS

February 28, 2012 AND December 31, 2011

 

NOTE 2 — PROPERTY AND EQUIPMENT

 

Property and equipment cost consists of the following as of February 28, 2012 and December 31, 2011:

 

     2012      2011  

Land

   $ 2,599,467       $ 2,599,467   

Buildings & office equipment

     578,148         578,148   

Quarry equipment

     19,093,710         19,093,710   

Vehicles

     1,339,978         1,373,977   
  

 

 

    

 

 

 

Total property and equipment

   $ 23,611,303       $ 23,645,302   
  

 

 

    

 

 

 

 

Depreciation expense for the two months ended February 28, 2012 and the year ended December 31, 2011 was $248,714 and $1,586,201, respectively.

 

NOTE 3 — FINANCIAL INSTRUMENT RISK

 

The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes the Company is not exposed to any significant credit risk on its cash.

 

NOTE 4 — PROFIT SHARING PLAN

 

NAPCO has a profit sharing plan that covers all Company employees upon hire that are age nineteen or older. The Company’s contributions to the plan are based on years of service and allow for a maximum annual contribution of $2,500 per employee. The contributions may be limited by the employee’s contribution to the plan. Plan expense for the two months ended February 28, 2012 and the year ended December 31, 2011 was $4,784 and $57,410, respectively.

 

NOTE 5 — RELATED PARTIES

 

A summary of the transactions between the Company and NAPCO is as follows:

 

     Sales      Purchases      Accounts
Receivable
     Fees
Paid
 

February 28, 2012

   $ —         $ —         $ 3,241,672       $ 24,000   

December 31, 2011

   $ 1,604,902       $ 118,038       $ 2,045,144       $ 144,000   

 

Purchases from NAPCO are recorded in cost of sales. Fees paid are for management services provided by NAPCO and are included in operating expenses.

 

The Company incurred $1,622 and $130,996 in interest for the two month period and year ended February 28, 2012 and December 31, 2011, respectively, for its portion of debt service incurred by NAPCO, as determined by management.

 

Related party commitments

 

NAPCO has a revolving line of credit agreement with a financial institution. Maximum borrowings under the line of credit agreement, which matures on September 5, 2012, are $8,500,000 in the months of March to

 

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NORRIS AGGREGATE PRODUCTS

 

NOTES TO FINANCIAL STATEMENTS

February 28, 2012 AND December 31, 2011

 

NOTE 5 — RELATED PARTIES (CONTINUED)

 

November and $4,500,000 for December through February. Interest is payable monthly at the 1 month London Interbank Offered Rate (LIBOR) rate plus 2.00% (2.25% at February 28, 2012). As of February 28, 2012 and December 31, 2011, there were no borrowings on this line of credit. The loan is secured by both NAPCO’s and the Company’s accounts receivable, equipment, inventory and certain other assets.

 

In 2011, NAPCO obtained a revolving reducing term loan agreement with the same financial institution. The revolving reducing term loan has a maximum amount of $5,666,667 at December 31, 2011 with the borrowing base decreasing at a rate of $188,889 per month. Interest is payable monthly at the 1 month LIBOR plus 2.00% (2.25% at February 28, 2012). The loan is secured by both NAPCO’s and the Company’s accounts receivable, inventory and equipment and matures on September 5, 2012. No advances were made on the note in 2011 or during the two months ended February 28, 2012.

 

The loan agreement with the financial institution requires NAPCO to pay a fee of 0.25% per year on the average daily unused amount of the revolving line of credit, calculated on a quarterly basis. The loan agreement with the financial institution contains various covenants pertaining to, among other things, cash flow coverage, debt to tangible net worth, levels of tangible net worth, capital expenditures, and dividend restrictions. Management believes NAPCO met all debt covenants at February 28, 2012 and December 31, 2011.

 

NOTE 6 — COMMITMENTS

 

The Company has agreements to pay royalties on aggregate sold from certain leased quarries. The agreements expire at various dates through December 31, 2099. The agreements require that the following minimum annual royalty amounts be remitted:

 

2012 (remaining 10 months)

   $ 113,750   

2013

     135,500   

2014

     125,500   

2015

     125,500   

2016

     120,500   

2017

     94,000   

Thereafter

     2,709,000   
  

 

 

 

Total

   $ 3,423,750   
  

 

 

 

 

Royalties paid for the two month period ended February 28, 2012 and year ended December 31, 2011 were $46,587 and $572,782, respectively, and are recorded as a cost of sales.

 

NOTE 7 — CONTINGENCIES

 

The Company is party to certain legal actions arising in the normal course of business. While the ultimate outcome of these matters is uncertain, management believes that the effect, if any, will not be significant to the financial statements. Nevertheless, it is at least reasonably possible that management’s view of the outcome in legal matters that involve considerable uncertainty could change materially in the near term.

 

The Company is subject to various federal and state regulations regarding the care, delivery, and containment of various products, which the Company either does or has handled. The Company could be contingently liable for any associated costs, which could arise from the handling, delivery, and containment of these products.

 

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NORRIS AGGREGATE PRODUCTS

 

NOTES TO FINANCIAL STATEMENTS

February 28, 2012 AND December 31, 2011

 

NOTE 8 — INCOME TAXES

 

NAPCO files income tax returns in the U.S. federal jurisdiction and two states. NAPCO is a pass through entity for income tax purposes whereby any income tax liabilities or benefits are attributable to NAPCO’s owners. Any amounts paid by NAPCO for income taxes are accounted for as dividend transactions with NAPCO’s owners.

 

The federal and state income tax returns of NAPCO for 2008 and thereafter are subject to examination by the Internal Revenue Service and state taxing authorities, generally for three years after filing.

 

The Company follows the requirements for accounting for uncertain tax positions. The Company has determined no liability related to uncertain tax positions was required at February 28, 2012 and December 31, 2011.

 

NOTE 9 — SUBSEQUENT EVENTS

 

On February 29, 2012, NAPCO sold all the assets, liabilities and ongoing operations of the Company. NAPCO management has determined that the proceeds exceeded the bases of the net assets sold.

 

Management evaluated subsequent events through October 23, 2012, the date the financial statements were available to be issued. Events or transactions occurring after February 28, 2012, but prior to October 23, 2012 that provided additional evidence about conditions that existed at February 28, 2012, have been recognized in the financial statements for the period ended February 28, 2012. Events or transactions that provided evidence about conditions that did not exist at February 28, 2012 but arose before the financial statements were available to be issued have not been recognized in the financial statements for the two months ended February 28, 2012.

 

 

 

This information is an integral part of the accompanying financial statements.

 

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INDEPENDENT AUDITOR’S REPORT

 

To the Partners and Members

R.K. Hall Construction, Ltd. and Affiliates

Paris, Texas

 

We have audited the accompanying combined balance sheets of R.K. Hall Construction, Ltd. and affiliates as of December 31, 2009 and 2008, and the related combined statements of operations and equity and cash flows for the years ended December 31, 2009, 2008 and 2007. The combined financial statements are the responsibility of the Companies’ management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of R.K. Hall Construction, Ltd. and affiliates as of December 31, 2009 and 2008, and the results of operations and cash flows for the years ended December 31, 2009, 2008 and 2007, in conformity with accounting principles generally accepted in the United States of America.

 

/s/ Perryman Chaney Russell, LLP

 

September 21, 2011

 

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R.K. HALL CONSTRUCTION, LTD.

AND AFFILIATES

 

Combined Balance Sheets

December 31

 

     2009      2008  
Assets      

Current assets:

     

Cash

   $ 10,016,193       $ 7,582,598   

Receivables

     8,259,171         11,465,007   

Inventory

     4,940,793         3,618,341   

Cost and estimated earnings in excess of billings on contracts in progress

     889,919         4,027,730   

Prepaid expenses

     226,378         255,710   
  

 

 

    

 

 

 

Total current assets

     24,332,454         26,949,386   
  

 

 

    

 

 

 

Property and equipment:

     

Land

     2,065,334         2,065,334   

Buildings and improvements

     1,532,903         1,498,256   

Plants

     12,344,109         11,969,382   

Machinery, equipment, vehicles and tools

     19,776,471         16,115,143   

Office furniture, equipment and software

     491,320         360,032   
  

 

 

    

 

 

 
     36,210,137         32,008,147   

Less accumulated depreciation

     9,876,453         6,489,642   
  

 

 

    

 

 

 
     26,333,684         25,518,505   
  

 

 

    

 

 

 

Other assets

     1,000         1,000   
  

 

 

    

 

 

 
   $ 50,667,138       $ 52,468,891   
  

 

 

    

 

 

 
Liabilities and Equity      

Current liabilities:

     

Current portion of long-term debt

   $ 5,991,424       $ 8,373,559   

Accounts payable

     5,638,529         6,282,437   

Accrued liabilities

     538,378         763,307   

Billings in excess of costs and estimated earnings on contracts in progress

     3,185,041         1,665,666   

State income tax payable

     123,984         65,446   
  

 

 

    

 

 

 

Total current liabilities

     15,477,356         17,150,415   
  

 

 

    

 

 

 

Long-term debt

     17,559,708         21,803,599   

Deferred state income tax

     73,604         60,910   
  

 

 

    

 

 

 
     17,633,312         21,864,509   
  

 

 

    

 

 

 

Equity

     17,556,470         13,453,967   
  

 

 

    

 

 

 
   $ 50,667,138       $ 52,468,891   
  

 

 

    

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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R.K. HALL CONSTRUCTION, LTD.

AND AFFILIATES

 

Combined Statements of Operations and Equity

For the Years Ended December 31

 

     2009     2008     2007  

Income from construction:

      

Revenue earned

   $ 128,514,888      $ 141,528,394      $ 97,558,425   

Job costs

     (115,407,218     (132,947,706     (88,825,589
  

 

 

   

 

 

   

 

 

 

Gross profit on construction

     13,107,670        8,580,688        8,732,836   

General and administrative expenses

     (7,084,438     (6,841,727     (5,259,417

Gain on sale of assets

     230,615        78,248        7,343   
  

 

 

   

 

 

   

 

 

 

Income from operations

     6,253,847        1,817,209        3,480,762   

Other income and (expenses):

      

Interest income

     280,841        279,691        243,900   

Other income

     49,484        113,806        202,818   

Interest expense

     (2,037,097     (2,222,811     (1,743,210
  

 

 

   

 

 

   

 

 

 

Net income (loss) before provision for state income tax

     4,547,075        (12,105     2,184,270   

Provision for state income tax

     (87,768     (82,961     (93,834
  

 

 

   

 

 

   

 

 

 

Net income (loss)

     4,459,307        (95,066     2,090,436   

Equity:

      

Beginning of year

     13,453,967        14,266,913        9,721,721   

Contributions

     130,000        —          3,000,000   

Distributions

     (486,804     (717,880     (545,244
  

 

 

   

 

 

   

 

 

 

End of year

   $ 17,556,470      $ 13,453,967      $ 14,266,913   
  

 

 

   

 

 

   

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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R.K. HALL CONSTRUCTION, LTD.

AND AFFILIATES

 

Combined Statements of Cash Flows

For the Years Ended December 31

 

     2009     2008     2007  

Cash flows from operating activities:

      

Net income (loss)

   $ 4,459,307      $ (95,066   $ 2,090,436   

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

      

Depreciation

     3,450,406        3,668,025        3,617,109   

Gain on sale of assets

     (230,615     (78,248     (7,343

(Increase) decrease in:

      

Receivables

     3,205,836        2,872,000        (5,733,654

Inventory

     (1,322,452     362,042        (1,250,338

Costs and estimated earnings in excess of billings

     3,137,811        (3,288,291     788,956   

Prepaid expenses

     29,332        (98,324     (147,607

Increase (decrease) in:

      

Accounts payable

     (643,908     (1,796,983     3,591,745   

Accrued liabilities

     (224,929     56,035        337,715   

Billings in excess of costs and estimated earnings

     1,519,375        261,685        (363,249

Income taxes

     71,232        24,487        93,834   
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     13,451,395        1,887,362        3,017,604   
  

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

      

Proceeds from sale of equipment

     290,205        1,071,295        80,000   

Purchases of property and equipment

     (4,325,175     (4,386,049     (10,890,152
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (4,034,970     (3,314,754     (10,810,152
  

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

      

Proceeds from borrowings

     2,316,852        5,336,766        11,118,953   

Payment on principal of notes payable

     (8,942,878     (5,702,674     (4,108,279

Partner contributions

     130,000        —          3,000,000   

Partner withdrawals

     (486,804     (636,646     (545,244

Contribution of additional paid-in capital

     —          —          26,092   
  

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (6,982,830     (1,002,554     9,491,522   
  

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash

     2,433,595        (2,429,946     1,698,974   

Beginning cash and cash equivalents

     7,582,598        10,012,544        8,313,570   
  

 

 

   

 

 

   

 

 

 

Ending cash and cash equivalents

   $ 10,016,193      $ 7,582,598      $ 10,012,544   
  

 

 

   

 

 

   

 

 

 

Supplemental cash flow information:

      

Partner withdrawals of non-cash assets

   $ —        $ 81,234      $ —     

 

The accompanying notes are an integral part of the financial statements.

 

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R.K. HALL CONSTRUCTION, LTD. AND AFFILIATES

 

Notes to the Combined Financial Statements

For the Years Ended

December 31, 2009, 2008 and 2007

 

Note 1 — Summary of Significant Accounting Policies

 

The combined financial statements include the accounts of R.K. Hall Construction, Ltd. and affiliates through common ownership (the Companies) and have been prepared in accordance with accounting principals generally accepted in the United States of America (U.S. GAAP). All significant intercompany transactions and balances have been eliminated in combination. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements in accordance with U.S. GAAP have been recorded.

 

History

 

The Companies are engaged in road and bridge construction and the related sale and manufacturing of hot mix asphalt concrete. The Companies are organized in the states of Texas and Arkansas.

 

The Companies operate eleven asphalt plant facilities and one concrete plant facility located throughout Northeast Texas. Job sites are located in Texas, Arkansas and Oklahoma. The length of the Companies’ contracts varies but typically averages less than one year.

 

Use of estimates

 

Management uses estimates and assumptions in preparing these financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.

 

Recognition of income and costs on construction contracts

 

The Companies use the percentage-of-completion method of reporting profits on major construction contracts. Under this method, the percentage of the cost incurred to date to the total estimated costs is used to determine the portion of the contract amount which is considered earned to date. At the time a loss on a contract becomes known, the full amount of the projected loss is recognized. Contract costs include all direct material and labor costs as well as indirect construction costs. Selling, general and administrative costs are charged to expense as incurred.

 

On contracts in progress where costs and estimated earnings are in excess of billings, the excess is treated as a current asset. Where billings are in excess of costs and estimated earnings, this excess is shown as a current liability. These amounts are as follows at December 31:

 

     2009     2008  

Costs and estimated earnings on contracts in progress

   $ 131,474,992      $ 87,373,998   

Billings on contracts in progress

     133,770,114        85,011,934   
  

 

 

   

 

 

 
   $ (2,295,122   $ 2,362,064   
  

 

 

   

 

 

 

 

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R.K. HALL CONSTRUCTION, LTD. AND AFFILIATES

 

Notes to the Combined Financial Statements

For the Years Ended

December 31, 2009, 2008 and 2007

 

Note 1 — Summary of Significant Accounting Policies (Continued)

 

Recognition of income and costs on construction contracts (Continued)

 

These amounts are shown in the accompanying financial statements as follows at December 31:

 

     2009     2008  

Current assets

   $ 889,919      $ 4,027,730   

Current liabilities

     3,185,041        1,665,666   
  

 

 

   

 

 

 
   $ (2,295,122   $ 2,362,064   
  

 

 

   

 

 

 

 

Property and equipment

 

Property and equipment are stated at cost and depreciated over estimated useful lives using the straight-line method, ranging from three to thirty-nine years. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. Depreciation expense is included in job costs and general and administrative expenses on the statements of operations and equity.

 

     2009      2008      2007  

Depreciation expense for the years ended December 31:

   $ 3,450,406       $ 3,668,025       $ 3,617,109   

 

Statements of cash flows

 

For purposes of the statements of cash flows, the Companies consider all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.

 

     2009      2008      2007  

The Companies paid the following during the years ended December 31:

        

Interest expense

   $ 2,256,366       $ 2,000,461       $ 1,746,999   

Income taxes

     16,536         58,474         —     

The Companies had exposure related to cash balances with financial institutions in excess of federally insured amounts before outstanding items not yet cleared at December 31:

     5,311,909         9,101,772      

 

Management monitors these balances to insure funds are not at risk.

 

Inventory

 

Inventory, consisting of stone, sand, asphalt and diesel fuel, is stated at the lower of cost or market. The Companies value all inventory utilizing the first-in, first-out method.

 

Presentation of taxes

 

The Companies collect various taxes from customers and remit these amounts to applicable taxing authorities. The Companies’ accounting policy is to exclude these taxes from revenues and job costs.

 

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R.K. HALL CONSTRUCTION, LTD. AND AFFILIATES

 

Notes to the Combined Financial Statements

For the Years Ended

December 31, 2009, 2008 and 2007

 

Note 2 — Receivables

 

Receivables consist of the following at December 31:

 

     2009     2008  

Contract billings

   $ 5,707,256      $ 8,286,918   

Contract retainage

     2,610,762        3,168,355   

Allowance for doubtful accounts

     (60,000     —     

Employees

     1,153        9,734   
  

 

 

   

 

 

 
   $ 8,259,171      $ 11,465,007   
  

 

 

   

 

 

 

 

Note 3 — Accounts Payable

 

     2009      2008  

Amounts due to subcontractors have been retained pending the completion and customer acceptance of jobs at December 31:

   $ 1,855,461       $ 1,264,324   

 

These amounts are included in accounts payable.

 

Note 4 — Long-term Debt

 

Long-term debt consists of the following at December 31:

 

     2009      2008  

Notes payable to bank, payable in monthly installments of $418,922 including interest ranging from 5% to 7.6%; secured by machinery, equipment, vehicles, plants and partners’ guaranty

   $ 10,043,220       $ 13,822,542   

Notes payable to finance companies, payable in monthly installments of $75,024 including interest ranging from 0% to 7.82%; secured by machinery, equipment and vehicles

     2,094,368         1,171,129   

Note payable to bank, payable in monthly installments of $87,500 plus interest at 7.5%; secured by equipment and partners’ guaranty

     8,414,255         9,467,480   

Note payable to bank, payable in monthly installments of $12,500 plus interest at 7.5%; secured by real estate and members’ guaranty

     1,237,500         1,387,500   

Note payable to finance company, payable in semi-annual installments of $71,864.58 including interest at 4.25%; secured by real estate and members’ guaranty

     1,761,789         1,828,507   

Note payable to bank, line of credit up to $4,500,000, interest at 5.75%, maturing May 25, 2010; secured by inventory and equipment and partners’ guaranty

     —           2,500,000   
  

 

 

    

 

 

 
     23,551,132         30,177,158   

Less current maturities

     5,991,424         8,373,559   
  

 

 

    

 

 

 
   $ 17,559,708       $ 21,803,599   
  

 

 

    

 

 

 

 

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R.K. HALL CONSTRUCTION, LTD. AND AFFILIATES

 

Notes to the Combined Financial Statements

For the Years Ended

December 31, 2009, 2008 and 2007

 

Note 4 — Long-term Debt (Continued)

 

Future maturities of long-term debt are as follows:

 

For the years ending December 31:

  

2010

   $ 5,991,424   

2011

     5,266,114   

2012

     3,748,646   

2013

     2,101,079   

2014

     1,409,448   

Thereafter

     5,034,421   

 

Note 5 — Operating Leases

 

The Companies are obligated under operating leases for asphalt plants and equipment. The lease payments amount to $125,761 per month and are guaranteed by the partners and members.

 

     2009      2008      2007  

Lease expense for the years ended December 31:

   $ 783,809       $ 379,656       $ 379,655   

 

Lease expense is included in job costs on the statements of operations and equity.

 

Minimum future lease payments are as follows:

 

For the years ending December 31:

  

2010

   $ 1,509,130   

2011

     1,509,130   

2012

     1,509,130   

2013

     1,088,402   

2014

     558,603   

Thereafter

     228,956   

 

Note 6 — Related Party Transactions

 

The Companies lease equipment from entities owned by its partners. The equipment leases are on a month-to-month basis.

 

     2009      2008      2007  

Lease expense during the years ended December 31:

   $ 1,274,583       $ 1,124,179       $ 681,202   

Included in accounts payable at December 31:

     298,886         155,894      

 

The Companies also purchased materials from an entity owned by one of its partners.

 

     2009      2008      2007  

Material purchased during the years ended December 31:

   $ 2,465,334       $ 2,182,187       $ —     

Included in accounts payable at December 31:

     99,524         97,810      

 

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R.K. HALL CONSTRUCTION, LTD. AND AFFILIATES

 

Notes to the Combined Financial Statements

For the Years Ended

December 31, 2009, 2008 and 2007

 

Note 6 — Related Party Transactions (Continued)

 

All of these related party expenses are included in job costs and general and administrative expenses on the statements of operations and equity.

 

Partner/member guaranties are included in long-term debt and in operating leases (Note 4 and Note 5).

 

Note 7 — Concentrations

 

Concentrations of business with a single entity (Texas Department of Transportation) subjects the Companies to the potential for credit risk.

 

     Accounts Receivable     Revenue  
     Amount      Percent     Amount      Percent  

Concentrations of contracts receivable and revenue as of and for the years ended December 31:

          

2009

   $ 2,955,100         36   $ 54,154,276         42

2008

     5,034,844         44     84,164,723         59

2007

          57,113,165         59

 

Note 8 — Profit Sharing Plan

 

The Companies have a profit sharing plan for the primary purpose of providing retirement benefits to all eligible employees. The Companies’ contributions each year are subject to the discretion of management.

 

     2009      2008      2007  

The Companies made contributions to the plan as follows for the years ended December 31:

   $ 61,532       $ —         $ 7,986   

 

Note 9 — Income Taxes

 

The Companies are not tax paying entities for Federal income tax purposes and, accordingly, does not incur Federal income tax. Instead, the partners and members are liable for individual Federal income tax on the Companies’ income or loss.

 

The income tax provision includes deferred state income tax attributable to temporary differences between income reported for financial purposes versus income tax purposes resulting from the Companies’ use of the accelerated method of computing tax depreciation.

 

The provision for income tax consists of the following for the years ended December 31:

 

     2009      2008      2007  

Current state income tax

   $ 75,074       $ 64,337       $ 59,583   

Deferred state income tax

     12,694         18,624         34,251   
  

 

 

    

 

 

    

 

 

 
   $ 87,768       $ 82,961       $ 93,834   
  

 

 

    

 

 

    

 

 

 

 

The Companies do not have any unrecognized tax benefit which could significantly change its provision for income tax. The Companies are subject to examination for the prior three years by Federal taxing authorities and the prior four years for state taxing authorities.

 

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R.K. HALL CONSTRUCTION, LTD. AND AFFILIATES

 

Notes to the Combined Financial Statements

For the Years Ended

December 31, 2009, 2008 and 2007

 

Note 10 — Subsequent Events

 

Management has evaluated subsequent events through September 21, 2011, the date the financial statements were available to be issued.

 

In November, 2010, RK Hall, LLC (an indirect, wholly-owned subsidiary of Summit Materials, LLC) was formed to effect the acquisition of the business and partner/member interests of the Companies. On November 12, 2010, the Companies and its partners/members entered into an Interest Purchase Agreement with RK Hall, LLC, pursuant to which the business and partner/member interests of the Companies were acquired by RK Hall, LLC. The effective date of the transaction was November 30, 2010.

 

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R.K. HALL CONSTRUCTION, LTD.

AND AFFILIATES

 

Unaudited Combined Balance Sheets

 

     September 30,
2010
     December 31,
2009
 
Assets      

Current assets:

     

Cash

   $ 11,501,871       $ 10,016,193   

Receivables

     18,468,757         8,259,171   

Inventory

     5,271,623         4,940,793   

Cost and estimated earnings in excess of billings on contracts in progress

     1,942,309         889,919   

Prepaid expenses

     380,342         226,378   
  

 

 

    

 

 

 

Total current assets

     37,564,902         24,332,454   
  

 

 

    

 

 

 

Property and equipment:

     

Land

     2,065,334         2,065,334   

Buildings and improvements

     1,552,281         1,532,903   

Plants

     15,249,887         12,344,109   

Machinery, equipment, vehicles and tools

     22,824,487         19,776,471   

Office furniture, equipment and software

     514,767         491,320   
  

 

 

    

 

 

 
     42,206,756         36,210,137   

Less accumulated depreciation

     12,874,176         9,876,453   
  

 

 

    

 

 

 
     29,332,580         26,333,684   
  

 

 

    

 

 

 

Other assets

     1,000         1,000   
  

 

 

    

 

 

 
   $ 66,898,482       $ 50,667,138   
  

 

 

    

 

 

 
Liabilities and Equity      

Current liabilities:

     

Current portion of long-term debt

   $ 7,206,571       $ 5,991,424   

Accounts payable

     17,309,949         5,638,529   

Accrued liabilities

     1,515,942         538,378   

Billings in excess of costs and estimated earnings on contracts in progress

     2,729,902         3,185,041   

State income tax payable

     104,808         123,984   
  

 

 

    

 

 

 

Total current liabilities

     28,867,172         15,477,356   
  

 

 

    

 

 

 

Long-term debt

     15,228,840         17,559,708   

Deferred state income tax

     75,000         73,604   
  

 

 

    

 

 

 
     15,303,840         17,633,312   
  

 

 

    

 

 

 

Equity

     22,727,470         17,556,470   
  

 

 

    

 

 

 
   $ 66,898,482       $ 50,667,138   
  

 

 

    

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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R.K. HALL CONSTRUCTION, LTD.

AND AFFILIATES

 

Unaudited Combined Statements of Operations and Equity

For the Nine Months Ended September 30

 

     2010     2009  

Income from construction:

    

Revenue earned

   $ 105,283,347      $ 102,440,270   

Job costs

     (92,204,521     (92,261,985
  

 

 

   

 

 

 

Gross profit on construction

     13,078,826        10,178,285   

General and administrative expenses

     (5,829,467     (5,064,343

Gain on sale of assets

     51,796        200,108   
  

 

 

   

 

 

 

Income from operations

     7,301,155        5,314,050   

Other income and (expenses):

    

Interest income

     68,856        210,630   

Other income

     53,218        34,857   

Interest expense

     (1,493,101     (1,564,809
  

 

 

   

 

 

 

Net income before provision for income tax

     5,930,128        3,994,728   

Provision for state income tax

     (59,920     (116,505
  

 

 

   

 

 

 

Net income

     5,870,208        3,878,223   

Equity:

    

Beginning of period

     17,556,471        13,453,967   

Contributions

     —          —     

Distributions

     (699,209     (380,931
  

 

 

   

 

 

 

End of period

   $ 22,727,470      $ 16,951,259   
  

 

 

   

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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R.K. HALL CONSTRUCTION, LTD.

AND AFFILIATES

 

Unaudited Combined Statements of Cash Flows

For the Nine Months Ended September 30

 

     2010     2009  

Cash flows from operating activities:

    

Net income

   $ 5,870,208      $ 3,878,223   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation

     3,087,390        2,480,672   

Gain on sale of assets

     (51,796     (200,108

(Increase) decrease in:

    

Receivables

     (10,209,586     (3,375,967

Inventory

     (330,830     (1,044,597

Costs and estimated earnings in excess of billings

     (1,052,390     3,330,544   

Prepaid expenses

     (153,964     (99,691

Increase (decrease) in:

    

Accounts payable

     11,671,420        7,133,210   

Accrued liabilities

     977,564        646,778   

Billings in excess of costs and estimated earnings

     (455,139     2,140,446   

Income taxes

     (17,780     56,755   
  

 

 

   

 

 

 

Net cash provided by operating activities

     9,335,097        14,946,265   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Proceeds from sale of property and equipment

     116,457        254,801   

Purchases of property and equipment

     (6,150,946     (4,027,144
  

 

 

   

 

 

 

Net cash used in investing activities

     (6,034,489     (3,772,343
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from borrowings

     4,756,215        2,316,852   

Payment on principal of notes payable

     (5,871,936     (7,272,665

Partner contributions

     —          —     

Partner withdrawals

     (699,209     (380,931
  

 

 

   

 

 

 

Net cash used in financing activities

     (1,814,930     (5,336,744
  

 

 

   

 

 

 

Net increase in cash

     1,485,678        5,837,178   

Beginning cash and cash equivalents

     10,016,193        7,582,598   
  

 

 

   

 

 

 

Ending cash and cash equivalents

   $ 11,501,871      $ 13,419,776   
  

 

 

   

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

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R.K. HALL CONSTRUCTION, LTD.

 

Notes to the Unaudited Combined Financial Statements

At September 30, 2010 and December 31, 2009 and

For the Nine Months Ended

September 30, 2010 and 2009

 

Note 1 — Summary of Significant Accounting Policies

 

The combined financial statements include the accounts of R.K. Hall Construction, Ltd. and affiliates through common ownership (the Companies) and have been prepared in accordance with accounting principals generally accepted in the United States of America (U.S. GAAP). All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements in accordance with U.S. GAAP have been recorded.

 

History

 

The Companies are engaged in road and bridge construction and the related sale and manufacturing of hot mix asphalt concrete. The Companies are organized in the state of Texas and Arkansas.

 

The Companies operate eleven asphalt plant facilities and one concrete plant facility located throughout Northeast Texas. Job sites are located in Texas, Arkansas and Oklahoma. The length of the Companies’ contracts varies but typically average less than one year.

 

Use of estimates

 

Management uses estimates and assumptions in preparing these financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.

 

Recognition of income and costs on construction contracts

 

The Companies use the percentage-of-completion method of reporting profits on major construction contracts. Under this method, the percentage of the cost incurred to date to the total estimated costs is used to determine the portion of the contract amount which is considered earned to date. At the time a loss on a contract becomes known, the full amount of the projected loss is recognized. Contract costs include all direct material and labor costs as well as indirect construction costs. Selling, general and administrative costs are charged to expense as incurred.

 

On contracts in progress where costs and estimated earnings are in excess of billings, the excess is treated as a current asset. Where billings are in excess of costs and estimated earnings, this excess is shown as a current liability. These amounts are as follows at:

 

     September 30,
2010
    December 31,
2009
 

Costs and estimated earnings on contracts in progress

   $ 134,037,362      $ 131,474,992   

Billings on contracts in progress

     134,824,955        133,770,114   
  

 

 

   

 

 

 
   $ (787,593   $ (2,295,122
  

 

 

   

 

 

 

 

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R.K. HALL CONSTRUCTION, LTD.

 

Notes to the Unaudited Combined Financial Statements

At September 30, 2010 and December 31, 2009 and

For the Nine Months Ended

September 30, 2010 and 2009

 

Note 1 — Summary of Significant Accounting Policies (Continued)

 

These amounts are shown in the accompanying financial statements as follows at:

 

     September 30,
2010
    December 31,
2009
 

Current assets

   $ 1,942,309      $ 889,919   

Current liabilities

     2,729,902        3,185,041   
  

 

 

   

 

 

 
   $ (787,593   $ (2,295,122
  

 

 

   

 

 

 

 

Property and equipment

 

Property and equipment are stated at cost and depreciated over estimated useful lives using the straight-line method, ranging from three to thirty-nine years. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. Depreciation expense amounted to $3,087,390 and $2,480,672 for the nine months ended September 30, 2010 and 2009, respectively, and is included in job costs and general and administrative expenses on the statements of operations and equity.

 

Statements of cash flows

 

For purposes of the statements of cash flows, the Companies consider all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.

 

     September 30,
2010
     September 30,
2009
 

The Companies paid the following during the nine months ended:

     

Interest expense

   $ 1,668,502       $ 1,564,809   

Income taxes

     77,700         59,150   

 

     September 30,
2010
     December 31,
2009
 

The Companies had exposure related to cash balances with financial institutions in excess of federally insured amounts before outstanding items not yet cleared:

   $ 5,818,075       $ 5,311,909   

 

Management monitors these balances to insure funds are not at risk.

 

Inventories

 

Inventory, consisting of stone, sand, asphalt and diesel fuel, is stated at the lower of cost or market. The Companies value all inventory utilizing the first-in, first-out method.

 

Presentation of taxes

 

The Companies collect various taxes from customers and remit these amounts to applicable taxing authorities. The Companies’ accounting policy is to exclude these taxes from revenues and job costs.

 

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R.K. HALL CONSTRUCTION, LTD.

 

Notes to the Unaudited Combined Financial Statements

At September 30, 2010 and December 31, 2009 and

For the Nine Months Ended

September 30, 2010 and 2009

 

Note 2 — Receivables

 

Receivables consist of the following at:

 

     September 30,
2010
    December 31,
2009
 

Contract billings

   $ 16,623,182      $ 5,707,256   

Contract retainage

     1,872,559        2,610,762   

Allowance for doubtful accounts

     (30,000     (60,000

Employees

     3,016        1,153   
  

 

 

   

 

 

 
   $ 18,468,757      $ 8,259,171   
  

 

 

   

 

 

 

 

Note 3 — Accounts Payable

 

Amounts due to subcontractors that have been retained pending the completion and customer acceptance of jobs amounted to $1,302,672 and $1,855,461 at September 30, 2010 and December 31, 2009, respectively. These amounts are included in accounts payable.

 

Note 4 — Long-term Debt

 

Long-term debt consists of the following at:

 

     September 30,
2010
     December 31,
2009
 

Notes payable to bank, payable in monthly installments of $345,090 including interest ranging from 5% to 7.6%; secured by machinery, equipment, vehicles, plants and partners’ guaranty

   $ 7,745,377       $ 10,043,220   

Notes payable to finance companies, payable in monthly installments of $127,457 including interest ranging from 0% to 7.46%; secured by machinery, equipment and vehicles

     3,272,974         2,094,368   

Note payable to bank, payable in monthly installments of $87,500 plus interest at 7.5%; secured by equipment and partners’ guaranty

     7,511,796         8,414,255   

Note payable to bank, payable in monthly installments of $12,500 plus interest at 7.5%; secured by real estate and members’ guaranty

     1,125,000         1,237,500   

Note payable to finance company, payable in semi-annual installments of $71,865 including interest at 4.25%; secured by real estate and members’ guaranty

     1,727,362         1,761,789   

Note payable to finance company, payable in quarterly installments of $284,955 including interest at 13.00%; secured by equipment

     1,052,902         —     
  

 

 

    

 

 

 
     22,435,411         23,551,132   

Less current maturities

     7,206,571         5,991,424   
  

 

 

    

 

 

 
   $ 15,228,840       $ 17,559,708   
  

 

 

    

 

 

 

 

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R.K. HALL CONSTRUCTION, LTD.

 

Notes to the Unaudited Combined Financial Statements

At September 30, 2010 and December 31, 2009 and

For the Nine Months Ended

September 30, 2010 and 2009

 

Note 4 — Long-term Debt (Continued)

 

Future maturities of long-term debt are as follows:

 

For the years ending December 31:

  

2010 (Three months)

   $ 1,564,021   

2011

     7,051,262   

2012

     4,799,877   

2013

     2,613,266   

2014

     1,487,524   

2015

     1,285,869   

Thereafter

     3,633,592   

 

Note 5 — Operating Leases

 

The Companies are obligated under operating leases for asphalt plants and equipment. The lease payments amount to $125,761 per month and are guaranteed by the partners and members.

 

     2010      2009  

Lease expense for the nine months ended September 30:

   $ 1,131,847       $ 549,943   

 

Lease expense is included in job costs on the statements of operations and equity.

 

Minimum future lease payments are as follows:

 

 

For the years ending December 31:

  

2010 (Three months)

   $ 377,282   

2011

     1,509,130   

2012

     1,509,130   

2013

     1,088,402   

2014

     558,603   

2015

     228,956   

 

Note 6 — Related Party Transactions

 

The Companies lease equipment from entities owned by its partners. The equipment leases are on a month-to-month basis.

 

     September 30,
2010
     September 30,
2009
 

Lease expense during the nine months ended:

   $ 677,595       $ 1,011,888   

 

     September 30,
2010
     December 31,
2009
 

Included in accounts payable at:

   $ —         $ 298,886   

 

The Companies also purchased materials from an entity owned by one of its partners.

 

     September 30,
2010
     September 30,
2009
 

Material purchased during the nine months ended:

   $ 524,685       $ 2,108,760   

 

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R.K. HALL CONSTRUCTION, LTD.

 

Notes to the Unaudited Combined Financial Statements

At September 30, 2010 and December 31, 2009 and

For the Nine Months Ended

September 30, 2010 and 2009

 

Note 6 — Related Party Transactions (Continued)

 

     September 30,
2010
     December 31,
2009
 

Included in accounts payable at:

   $ 203,459       $ 99,524   

 

All of these related party expenses are included in job costs and general and administrative expenses on the statements of operations and equity.

 

Partner/member guaranties are included in long-term debt and in operating leases (Note 4 and Note 5).

 

Note 7 — Concentrations

 

Concentrations of business with a single entity (Texas Department of Transportation) subjects the Companies to the potential for credit risk.

 

     Accounts Receivable     Revenue  
     Amount      Percent     Amount      Percent  

Concentrations of contracts receivable and revenue as of and/or for the nine months ended:

          

September 30, 2010

   $ 7,738,018         39   $ 51,373,696         49

September 30, 2009

          42,678,971         42

December 31, 2009

   $ 2,955,100         36     

 

Note 8 — Profit Sharing Plan

 

The Companies have a profit sharing plan for the primary purpose of providing retirement benefits to all eligible employees. The Companies’ contributions each year are subject to the discretion of management.

 

     2010      2009  

The Companies made contributions to the plan as follows for the nine months ended September 30:

   $ 98,576       $ 35,393   

 

Note 9 — Income Taxes

 

The Companies are not tax paying entities for Federal income tax purposes and, accordingly, does not incur Federal income tax. Instead, the partners and members are liable for individual Federal income tax on the Companies’ income or loss.

 

The income tax provision includes deferred state income tax attributable to temporary differences between income reported for financial purposes versus income tax purposes resulting from the Companies’ use of the accelerated method of computing tax depreciation.

 

The provision for income tax consists of the following for the nine months ended September 30:

 

     2010      2009  

Current state income tax

   $ 58,524       $ 105,970   

Deferred state income tax

     1,396         10,535   
  

 

 

    

 

 

 
   $ 59,920       $ 116,505   
  

 

 

    

 

 

 

 

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R.K. HALL CONSTRUCTION, LTD.

 

Notes to the Unaudited Combined Financial Statements

At September 30, 2010 and December 31, 2009 and

For the Nine Months Ended

September 30, 2010 and 2009

 

Note 9 — Income Taxes (Continued)

 

The Companies do not have any unrecognized tax benefit which could significantly change its provision for income tax. The Companies are subject to examination for the prior three years by Federal taxing authorities and the prior four years for state taxing authorities.

 

Note 10 — Subsequent Events

 

Management has evaluated subsequent events through September 29, 2011, the date the financial statements were available to be issued.

 

In November, 2010, RK Hall, LLC (an indirect, wholly-owned subsidiary of Summit Materials, LLC) was formed to effect the acquisition of the business and partner/member interests of the Companies. On November 12, 2010, the Companies and its partners/members entered into an Interest Purchase Agreement with RK Hall, LLC, pursuant to which the business and partner/member interests of the Companies were acquired by RK Hall, LLC. The effective date of the transaction was November 30, 2010.

 

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers.

(a) The following entities are incorporated under the laws of the State of Delaware: Summit Materials Finance Corp. and Summit Materials Corporations I, Inc. (collectively, the “Delaware Corporations”).

Delaware General Corporation Law

Section 145(a) of the Delaware General Corporation Law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

Section 145(b) of the Delaware General Corporation Law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

Section 145(c) of the Delaware General Corporation Law provides that to the extent that a present or former director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 145(a) and (b), or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

Section 145(d) of the Delaware General Corporation Law provides that any indemnification under Section 145(a) and (b) (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 145(a) and (b). Such determination shall be made, with respect to a person who is a director or officer of the

 

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corporation at the time of such determination (1) by a majority vote of the directors who were not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.

Section 145(e) of the Delaware General Corporation Law provides that expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in Section 145. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate.

Section 145(f) of the Delaware General Corporation Law provides that the indemnification and advancement of expenses provided by, or granted pursuant to, Section 145 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or the bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.

Section 145(g) of the Delaware General Corporation Law provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145.

Section 174 of the Delaware General Corporation Law provides, among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.

Organizational Documents of Delaware Registrants

The articles of incorporation and/or bylaws of each of the Delaware Corporations provide that, to the fullest extent permitted by the Delaware General Corporation Law, the corporation shall indemnify any current or former Director or officer of the corporation and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the corporation against all expenses, liabilities and losses reasonably incurred or suffered by him or her in connection with any action, suit or proceeding brought by or in the right of the corporation or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the corporation or by reason of the fact that he or she is or was serving, at the request of the corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

 

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(b) Summit Materials, LLC, Austin Materials, LLC, Continental Cement Company, L.L.C., Kilgore Companies, LLC, Norris Quarries, LLC, RK Hall LLC, Summit Materials Companies I, LLC, Summit Materials Holdings I, LLC and Summit Materials Holdings II, LLC, are limited liability companies organized under the laws of the State of Delaware (collectively, the “Delaware Limited Liability Companies”).

Delaware Limited Liability Company Act

Section 18-108 of the Delaware Limited Liability Company Act empowers a Delaware limited liability company to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.

In accordance with these provisions, the Limited Liability Company Agreements of each of the Delaware Limited Liability Companies state that to the fullest extent permitted by applicable law, the company shall indemnify a member, manager, an officer, a person to whom the managers delegate management responsibilities, any affiliate, officer, director or shareholder of a member, or manager, or any employee or agent of the company or of the indemnified party from any loss, damage or claim incurred by the indemnified party by reason of any act performed or omitted to be performed by the indemnified party in good faith in connection with the business of the company including expenses (including legal fees) incurred by such indemnified person in defending any claim, demand, action, suit or proceeding; provided however , that an indemnified party shall not be indemnified for any loss, damage or claim incurred by such party by reason of gross negligence or willful misconduct with such acts or omissions.

(c) The following entity is incorporated under the laws of the State of Colorado: Elam Construction, Inc. (the “Colorado Corporation”).

Colorado Business Corporation Act

Section 7-109-102 and Section 7-109-107 of the Colorado Business Corporation Act provide that a corporation may indemnify a person made party to a proceeding because the person is or was a director, officer, employee, fiduciary or agent if (a) such person’s conduct was in good faith; and (b) such person reasonably believed (i) in the case of conduct in such person’s official capacity with the corporation, that such conduct was in the corporation’s best interests; and (ii) in all other cases (other than criminal cases), that such conduct was at least not opposed to the corporation’s best interests; and (c) in the case of any criminal proceeding, such person had no reasonable cause to believe his or her conduct was unlawful. The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, in itself, determinative that such person did not meet the standard of care under Section 7-109-102. A corporation may not indemnify a director, officer, employee, fiduciary or agent under Section 7-109-102 of the Colorado Business Corporation Act in connection with any proceeding (y) by or in the right of the corporation in which such person was adjudged liable to the corporation; or (z) charging that such person derived an improper personal benefit, whether or not involving an action in an official capacity, in which proceeding such person was adjudged liable on the basis that such person derived an improper personal benefit. Indemnification under Section 7-109-102 of the Colorado Business Corporation Act shall be limited to reasonable expenses incurred in connection with such proceeding.

Section 7-109-103 and Section 7-109-107 of the Colorado Business Corporation Act provide that, unless limited by a corporation’s articles of incorporation, a corporation shall indemnify directors and officers of the corporation, and may indemnify an employee, fiduciary or agent of the corporation, who are wholly successful, on the merits or otherwise, in the defense of any proceeding to which such director, officer, employee, fiduciary or agent was a party because the person was a director, officer, employee, fiduciary or agent against reasonable expenses incurred by such person in connection with the proceeding. The Colorado Corporation’s articles of incorporation do not contain a contrary provision.

 

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Section 7-109-104 and Section 7-109-107 of the Colorado Business Corporation Act permit a corporation to advance reasonable expenses incurred by a director, officer, employee, fiduciary or agent who is a party to a proceeding in advance of final disposition of the proceeding if: (a) the director, officer, employee, fiduciary or agent furnishes to the corporation a written affirmation of such director, officer, employee, fiduciary or agent’s good faith belief that he or she has met the standard of conduct set forth in Section 7-109-102 of the Colorado Business Corporation Act; (b) the director, officer, employee, fiduciary or agent furnishes to the corporation a written undertaking to repay the advance if it is ultimately determined that he or she did not meet the standard of conduct set forth in Section 7-109-102 of the Colorado Business Corporation Act; and (c) a determination is made that the facts then known to those making the determination would not preclude indemnification under the Colorado Business Corporation Act. Section 7-109-107 of the Colorado Business Corporation Act permits a corporation to indemnify and advance expenses to officers, employees, fiduciaries or agents who are not directors, to a greater extent than directors if not inconsistent with public policy, and if provided for by the corporation’s bylaws, general or specific action of its board of directors or shareholders, or contract.

Section 7-109-106 of the Colorado Business Corporation Act provides that a corporation may not indemnify a director, officer, employee, fiduciary or agent under Section 7-109-102 of the Colorado Business Corporation Act unless authorized in the specific case after a determination has been made that indemnification of such person is permissible in the circumstances because such person has met the standard of conduct set forth in Section 7-109-102 of the Colorado Business Corporation Act. Such determination shall be made, (a) by a majority vote of the directors who are not parties to such action, (b) by a committee of such directors designated by the board of directors, even though less than a quorum, (c) if there are no such directors, or if such directors so direct, by independent legal counsel, or (d) by the shareholders.

Section 7-109-108 of the Colorado Business Corporation Act provides that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, fiduciary or agent of the corporation, or who, while a director, officer, employee, fiduciary, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary or agent of another entity, against liability asserted against or incurred by the person in that capacity or arising from the person’s status as a director, officer, employee, fiduciary or agent, whether or not the corporation would have the power to indemnify the person against the same liability under the Colorado Business Corporation Act.

Organizational Documents of the Colorado Corporation

The articles of incorporation and bylaws of the Colorado Corporation provide that, to the fullest extent permitted by the Colorado Business Corporation Act, the Colorado Corporation shall indemnify any current or former director or officer of the Colorado Corporation and may, at the discretion of the Board of Directors of the Colorado Corporation, indemnify any current or former employee, fiduciary or agent of the Colorado Corporation against expenses, liabilities and losses reasonably incurred or suffered by such person in connection with any action, suit, or proceeding, to which such person is a party or is threatened to be made a party by reason of such person’s current or former position with the Colorado Corporation, as a director, officer, employee, fiduciary or agent or by reason of the fact that such person is or was serving, at the request of the Colorado Corporation as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust or other enterprise; provided, however, prior to such indemnification, the Board of Directors of the Colorado Corporation or a committee thereof must determine that such indemnitee conducted himself or herself in good faith and reasonably believed, (i) in such person’s official capacity that such conduct was in the Colorado Corporation’s best interests, (ii) in all other cases (other than criminal cases), that such conduct was not opposed to the Colorado Corporation’s best interests, or (iii) in the case of any criminal action, that such conduct was not unlawful.

(d) The following entity is incorporated under the laws of the State of Kansas: Hamm, Inc. (the “Kansas Corporation”).

 

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Kansas General Corporation Code

The Kansas General Corporation Code, Chapter 17, Articles 60 to 74 of the Kansas Statutes Annotated, provides in K.S.A. 17-6305(a) that a corporation shall have power to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the corporation, by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, including attorney fees, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation; and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

The Kansas General Corporation Code provides in K.S.A. 17-6305(b) that a corporation shall have power to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, including attorney fees, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.

The Kansas General Corporation Code provides in K.S.A. 17-6305(c) that to the extent that a present or former director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of K.S.A. 17-6305, or in defense of any claim, issue or matter therein, such director, officer, employee or agent shall be indemnified against expenses actually and reasonably incurred by such person in connection therewith, including attorney fees.

The Kansas General Corporation Code provides in K.S.A. 17-6305(d) that any indemnification under subsections (a) and (b) of K.S.A. 17-6305, unless ordered by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because such director, officer, employee or agent has met the applicable standard of conduct set forth in subsections (a) and (b) of K.S.A. 17-6305. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination: (1) by a majority vote of the directors who were not parties to such action, suit or proceeding, even though less than a quorum; (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or (4) by the stockholders.

The Kansas General Corporation Code provides in K.S.A. 17-6305(e) that expenses, including attorney fees, incurred by a director or officer in defending a civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it is ultimately

 

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determined that the director or officer is not entitled to be indemnified by the corporation as authorized in K.S.A. 17-6305. Such expenses, including attorney fees, incurred by former directors and officers or incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate.

The Kansas General Corporation Code provides in K.S.A. 17-6305(f) that the indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of K.S.A. 17-6305 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in a person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the articles of incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.

The Kansas General Corporation Code provides in K.S.A. 17-6305(g) that a corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of K.S.A. 17-6305.

Organizational Documents of the Kansas Corporation

The articles of incorporation of the Kansas Corporation provide that each person who is or was a director or officer of the corporation, and each director, officer, employee or agent of the corporation who is or was serving at the request of the corporation as a director or officer of another corporation (including the heirs, executors, administrators and estate of such person) shall be indemnified by the corporation as of right to the full extent permitted or authorized by the laws of the State of Kansas, as now in effect and as hereafter amended, against any expenses, judgments, fines and amounts paid in settlement (including attorneys’ fees) actually and reasonably incurred by such person in his capacity as or arising out of his status as a director or officer of the corporation or if serving at the request of the corporation as a director or officer of another corporation. The indemnification provided by this provision shall not be exclusive of any other rights to which those indemnified may be entitled under the articles of incorporation, under any other bylaw or under any agreement, vote of stockholders or disinterested directors or otherwise, and shall not limit in any way any right which the corporation may have to make different or further indemnifications with respect to the same or different persons or classes of persons.

The bylaws of the Kansas Corporation provide that when a person is sued, either alone or with others, because he is or was a director or officer of the corporation, or of another corporation serving at the request of the corporation, in any proceeding arising out of his alleged misfeasance or nonfeasance in the performance of his duties or out of any alleged wrongful act against the corporation or by the corporation, he shall be indemnified for his reasonable expenses, including attorneys’ fees incurred in the defense of the proceeding, if both of the following conditions exist: (a) the person sued is successful in whole or in part, or the proceeding against him is settled with the approval of the court and (b) the court finds that his conduct fairly and equitably merits such indemnity.

(e) Cornejo & Sons, L.L.C., Hamm Asphalt, LLC, N.R. Hamm Contractor, LLC and N.R. Hamm Quarry, LLC are limited liability companies organized under the laws of the State of Kansas (collectively, the “Kansas Limited Liability Companies”).

 

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Kansas Revised Limited Liability Company Act

The Kansas Revised Limited Liability Company Act, K.S.A. 17-7662 through K.S.A. 17-76,142, as amended, provides in K.S.A. 17-7670(a) that subject to such standards and restrictions, if any, as are set forth in its operating agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever. To the extent that a member, manager, officer, employee or agent has been successful on the merits or otherwise or the defenses of any action, suits or proceeding, or in defense of any issue or matter therein, such director, officer, employee or agent shall be indemnified against expenses actually and reasonably incurred by such person in connection therewith, including attorney fees.

Organizational Documents of the Kansas Limited Liability Companies

The operating agreement of each of the Kansas Limited Liability Companies provides that to the fullest extent permitted by the laws of the State of Kansas and except in the case of bad faith, gross negligence or willful misconduct, no member or officer shall be liable to the company or any other member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such member or officer in good faith on behalf of the company and in a manner reasonably believed to be within the scope of the authority conferred on such member or officer by the operating agreement. Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a member or officer, shall be indemnified and held harmless by the company to the same extent as permitted by the laws of the State of Kansas for directors and officers of corporations organized under the laws of the State of Kansas. Any indemnity under the operating agreement shall be provided out of and to the extent of company assets only, and no member shall have personal liability on account thereof.

(f) The following entities are incorporated under the laws of the Commonwealth of Kentucky: Bourbon Limestone Company and Kentucky Hauling, Inc. (together, the “Kentucky Corporations”).

Kentucky Business Corporations Act

Section 8-510 of KRS Chapter 271B (the “Kentucky Business Corporations Act”) provides that a corporation may indemnify an individual made a party to a proceeding because he is or was a directors against liability incurred in the proceeding if he conducted himself in good faith and he reasonably believed in the case of conduct in his official capacity with the corporation that his conduct was in its best interests and in all other cases, that his conduct was at least not opposed to its best interests and in the case of any criminal proceeding, he has no reasonable cause to believe his conduct was unlawful. A director’s conduct with respect to an employee benefit plan for a purpose he reasonable believed to be in the interests of the participants in and beneficiaries of the plan shall be conduct that satisfies the requirement that he reasonably believed that his conduct was at least not opposed to the corporation’s best interests. The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not be, of itself, determinative that the director did not meet the standard of conduct described herein. A corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation or in connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. Indemnification permitted under Section 8-510 of the Kentucky Business Corporations Act in connection with a proceeding by or in the right of the corporation shall be limited to reasonable expenses incurred in connection with the proceeding.

Section 8-520 of the Kentucky Business Corporations Act provides that unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding.

 

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Section 8-530 of the Kentucky Business Corporations Act provides that a corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if the director furnishes the corporation a written affirmation of his good faith belief that he has met the standard of conduct described in Section 8-510 of the Kentucky Business Corporations Act, the director furnishes the corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct and a determination is made that the facts then known to those making the determination would not preclude indemnification under Sections 8-500 to 8-580 of the Kentucky Business Corporations Act. The written undertaking shall be an unlimited general obligation of the director but shall not be required to be secured and may be accepted without reference to financial ability to make repayment. Determinations and authorizations of payments under this section shall be made in the manner specified in 8-550 of the Kentucky Business Corporations Act.

Section 8-540 of the Kentucky Business Corporations Act provides that unless a corporation’s articles of incorporation provide otherwise, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification if it determines the director is entitled to mandatory indemnification under Section 8-520 of the Kentucky Business Corporations Act, in which case the court shall also order the corporation to pay the director’s reasonable expenses incurred to obtain court-ordered indemnification, or the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standard of conduct set forth in Section 8-510 of the Kentucky Business Corporations Act or was adjudged liable as described in subsection (4) of Section 8-510 of the Kentucky Business Corporations Act, but if he was adjudged so liable his indemnification shall be limited to reasonable expenses incurred.

Section 8-550 of the Kentucky Business Corporations Act provides that a corporation shall not indemnify a director under Section 8-510 of the Kentucky Business Corporations Act unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he met the standard of conduct set forth in Section 8-510 of the Kentucky Business Corporations Act. The determination shall be made by the board of directors by majority vote of a quorum consisting of directors not at that time parties to the proceeding, or, if a quorum cannot be obtained, by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate), consisting solely of two (2) or more directors not at the time parties to the proceeding, or by special legal counsel selected by the board of directors or its committee in the manner prescribed above, or if a quorum of the board of directors cannot be obtained, selected by a majority vote of the full board of directors (in which selection directors who are parties may participate), or by the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding shall not be voted on the determination. Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled to select special legal counsel as set forth above.

Section 8-560 of the Kentucky Business Corporations Act provides that unless the articles of incorporation provide otherwise, an officer of the corporation who is not a director shall be entitled to mandatory indemnification under Section 8-520 of the Kentucky Business Corporations Act, and is entitled to apply for court-ordered indemnification under Section 8-540 of the Kentucky Business Corporations Act, in each case to the same extent as a director, the corporation may indemnify and advance expenses under Sections 8-500 to 8-580 of the Kentucky Business Corporations Act to an officer, employee, or agent of the corporation who is not a director to the same extent as to a director and a corporation may also indemnify and advance expenses to an officer, employee, or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, general or specific actions of its board of directors, or contract.

 

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Section 8-570 of the Kentucky Business Corporations Act provides that a corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee or agent of the corporation, is or was serving at the request of the corporation as a director, officer, manager, partner, trustee, employee, or agent of another entity, or of an employee benefit plan or other enterprise, against liability asserted against or incurred in that capacity or arising from the status as a director, officer, manager, employee, or agent, whether or not the corporation would have power to indemnify against the same liability under Sections 8-510 or 8-520 of the Kentucky Business Corporations Act.

Section 8-580 of the Kentucky Business Corporations Act provides that the indemnification and advancement of expenses provided by, or granted pursuant to, Sections 8-500 to 8-580 of the Kentucky Business Corporations Act shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. Sections 8-500 to 8-580 of the Kentucky Business Corporations Act shall not limit a corporation’s power to pay or reimburse expenses incurred by a director in connection with his appearance as a witness at a proceeding at a time when he has not been made a named defendant or responded to the proceeding.

Section 8-330 of the Kentucky Business Corporations Act provides, among other things, that a director who votes for or who assents to a distribution made in violation of Section 6-400 of the Kentucky Business Corporations Act or the articles of incorporation shall be personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating Section 6-400 of the Kentucky Business Corporations Act or the articles of incorporation if it is established that he did not perform his duties in compliance with Section 8-300 of the Kentucky Business Corporations Act.

Organizational Documents of Kentucky Corporations

The articles of incorporation of Bourbon Limestone Company state that the corporation shall, to the fullest extent permitted by Kentucky law, indemnify any director of the corporation from and against any and all reasonable costs and expenses (including, but not limited to, attorneys’ fees) and any liabilities (including, but not limited to, judgments, fines, penalties and reasonable settlements) paid by or on behalf of, or imposed against, such person in connection with any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative, investigative or other (including any appeal relating thereto), whether formal or informal, and whether made or brought by or in the right of the corporation or otherwise, in which such person is, was or at any time becomes a party or witness, or is threatened to be made a party or witness, or otherwise, by reason of the fact that such person is, was or at any time becomes a director of the corporation or, at the corporation’s request, a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

The bylaws of Kentucky Hauling, Inc. state that any person who was or is a party or is threatened to be made a party to any threatened or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified by the corporation against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted I good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

 

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(g) Glass Aggregates, LLC, Hinkle Contracting Company, LLC and South Central Kentucky Limestone, LLC are limited liability companies organized under the laws of the Commonwealth of Kentucky (together, the “Kentucky Limited Liability Companies”).

Section 180 of KRS Chapter 275 (the “Kentucky Limited Liability Company Act”) provides that a written operating agreement may eliminate the personal liability of a member of manager for monetary damages for breach of any duty provided for in Section 170 of the Kentucky Limited Liability Company Act and provide for indemnification of a member or manager for judgments, settlements, penalties, fines, or expenses incurred in a proceeding to which a person is a party because the person is or was a member or manager.

The Operating Agreement of Hinkle Contracting Company, LLC states that, except in cases of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a member or officer, shall be indemnified and held harmless by the company to the same extent as permitted by the laws of the Commonwealth of Kentucky for directors and officers of corporations organized under the laws of the Commonwealth of Kentucky.

The Operating Agreement of South Central Kentucky Limestone, LLC states that, to the greatest extent allowed by the laws of the Commonwealth of Kentucky, the company will indemnify the member if made a party to any proceeding because the member is or was a member against all liability incurred by the member in accordance with any proceeding and pay for or reimburse the reasonable expenses incurred by the member in connection with any such proceeding in advance of final disposition thereof. The company will have the power but not the obligation to indemnify any person who is or was an employee or agent of the company to the same extent as if such person was a member.

The Articles of Organization of Glass Aggregates, LLC state that the company shall indemnify any member, officer and or manager for any judgments, settlements, penalties, fines or expenses incurred in a proceeding to which a person is a party because the person is or was a member of the limited liability company.

The Operating Agreement of Glass Aggregates, LLC states that the company shall indemnify and hold harmless, to the fullest extent permitted by the Kentucky Limited Liability Company Act as it presently exists or as it may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that he, or a person for whom he is the legal representative, is or was a manager, member, officer, employee or agent of the company or is or was serving at the request of the company as a director, trustee, officer, manager, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise, limited liability company, or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person. The company shall be required to indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the board of managers of the company.

(h) Con-Agg of MO, L.L.C., Fischer Quarries, L.L.C. and Quarry Properties, L.L.C. are limited liability companies organized under the laws of the State of Missouri (collectively, the “Missouri Limited Liability Companies”).

Missouri Limited Liability Company Act

The Missouri Limited Liability Company Act, Sections 347.010 to 347.187 of the Revised Statutes of Missouri, provides in Section 347.057, RSMo., that a person who is a member, manager, or both, of a limited liability company is not liable, solely by reason of being a member or manager, or both, under a judgment, decree or order of a court, or in any other manner, for a debt, obligation or liability of the limited liability company, whether arising in contract, tort or otherwise or for the acts or omissions of any other member, manager, agent or employee of the limited liability company.

 

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The Missouri Limited Liability Company Act provides in Section 347.088.1, RSMo., that except as otherwise provided in the operating agreement an authorized person shall discharge his or her duty under the Missouri Limited Liability Company Act and the operating agreement in good faith, with the care a corporate officer of like position would exercise under similar circumstances, in the manner a reasonable person would believe to be in the best interest of the limited liability company, and shall not be liable for any such action so taken or any failure to take such action, if he or she performs such duties in compliance with such subsection.

The Missouri Limited Liability Company Act provides in Section 347.088.2, RSMo., that to the extent that, at law or equity, a member or manager or other person has duties, including fiduciary duties, and liabilities relating to those duties to the limited liability company or to another member, manager, or other person that is party to or otherwise bound by an operating agreement: (1) any such member, manager, or other person acting under the operating agreement shall not be liable to the limited liability company or to any such other member, manager, or other person for the member’s, manager’s, or other person’s good faith reliance on the provisions of the operating agreement; and (2) the member’s, manager’s or other person’s duties and liabilities may be expanded or restricted by provision in the operating agreement.

Organizational Documents of the Missouri Limited Liability Companies

The operating agreement of Con-Agg of MO, L.L.C., contains no indemnification provisions. The operating agreement of Fischer Quarries, L.L.C. provides that no member shall be liable under a judgment, decree or order of a court, or in any other manner, for any debt, obligation or liability of the company. A member of the company shall not be personally liable to the company or its members for any monetary damages for breach of fiduciary duty, except for liability for any acts or omissions which involve intentional misconduct, fraud or knowing violation of law or for a distribution, redemption or purchase of or with respect to a member’s ownership interest in the company in violation of Missouri law. Any repeal or modification of such provisions of the operating agreement by the members of the company shall be prospective only, and shall not adversely affect any limitation on the personal liability of a member of the company existing at the time of such repeal or modification or thereafter arising as a result of the acts or omissions prior to the time of such repeal or modification. The company shall indemnify, save and hold harmless a member from any loss, damage, liability or expense incurred or sustained by him by reason of any act performed by him or on behalf of the company and in furtherance of its interest; provided, however, that such right to indemnification shall not apply to relieve the member from liability for gross negligence or willful malfeasance.

The operating agreement of Quarry Properties, L.L.C. provides that no person shall be liable to the company or its members for any loss, damage, liability or expense suffered by the company or its members on account of any action taken or omitted to be taken by such person as a member or as manager of the company or by such person while serving at the request of the company as a director, officer or in any other comparable position of any other enterprise, if such person discharges such person’s duties in good faith, exercising the same degree of care and skill that a prudent person would have exercised under the circumstances in the conduct of such prudent person’s own affairs, and in a manner such person reasonably believes to be in the best interest of the company. A member’s liability under such provision shall be so limited for those actions taken or omitted to be taken by such member in connection with the management of the business and affairs of the company. Such operating agreement further provides that the company shall indemnify each person who has been or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or appellate by reason of the fact that such person is or was a member or manager of the company, or is or was serving at the request of the company as a director, officer or in any other comparable position of any other enterprise, such indemnity shall apply against all liabilities and expenses, including, without limitation, judgments, amounts paid in settlement, attorneys’ fees, ERISA excise taxes or penalties, fines and other expenses, actually and reasonably incurred by such person in connection with any such action, suit or proceeding; provided, however, that the company shall not be required to indemnify or advance expenses to any person from or on account of such person’s conduct that was finally adjudged to have been knowingly fraudulent, deliberately dishonest, or willful misconduct; provided further that the company shall not

 

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be required to indemnify or advance expenses to any person in connection with an action, suit or proceeding initiated by such person unless the initiation of such action, suit or proceeding was authorized in advance by the members of the company; provided further that a member shall be indemnified under the operating agreement only for those actions taken or omitted to be taken by such member in connection with the management of the business and affairs of the company.

(i) The following entity is incorporated under the laws of the State of New Mexico: Elam Paving, Inc. (the “New Mexico Corporation”).

New Mexico Business Corporation Act

Section 53-11-4.1 of the New Mexico Business Corporation Act provides that a corporation shall have power to indemnify any person made (or threatened to be made) a party to any proceeding (whether threatened, pending or completed) by reason of the fact that the person is or was a director (or, while a director, is or was serving in any of certain other capacities) if: (1) the person acted in good faith; (2) the person reasonably believed: (a) in the case of conduct in the person’s official capacity with the corporation, that the person’s conduct was in its best interests; and (b) in all other cases, that the person’s conduct was at least not opposed to its best interests; and (3) in the case of any criminal proceeding, the person had no reasonable cause to believe the person’s conduct was unlawful. Indemnification may be made against judgments, penalties, fines, settlements and reasonable expenses actually incurred by the person in connection with the proceeding, but may be limited or unavailable with respect to certain proceedings. In some instances, indemnification of a director may be mandatory or, upon the application of a director, may be ordered by a court. Reasonable expenses incurred by a director may, under certain circumstances, be paid or reimbursed in advance of a final disposition of a proceeding. Unless limited by its articles of incorporation, a corporation may (or, as the case may be, shall) indemnify and advance expenses to an officer of the corporation to the same extent as to a director under Section 53-11-4.1. Also, unless limited by its articles of incorporation, a corporation has: (1) the power to indemnify and to advance expenses to an employee or agent of the corporation to the same extent that it may indemnify and advance expenses to directors under the statute; and (2) additional power to indemnify and to advance reasonable expenses to an officer, employee or agent who is not a director to such further extent, consistent with law, as may be provided by its articles of incorporation, by-laws, general or specific action of its Board of Directors, or contract.

Section 53-11-4.1 also provides that the indemnification authorized thereunder shall not be deemed exclusive of any rights to which those seeking indemnification may be entitled under the articles of incorporation, the by-laws, an agreement, a resolution of shareholders or directors or otherwise.

Organizational Documents of the New Mexico Corporation

The bylaws of the New Mexico Corporation provide that, to the fullest extent permitted by the New Mexico Business Corporation Act, the New Mexico Corporation shall indemnify any current or former director or officer of the New Mexico Corporation and may, at the discretion of the Board of Directors of the New Mexico Corporation, indemnify any current or former employee, fiduciary or agent of the New Mexico Corporation against expenses, liabilities and losses reasonably incurred or suffered by such person in connection with any action, suit, or proceeding, to which such person is a party or is threatened to be made a party by reason of such person’s current or former position with the New Mexico Corporation, as a director, officer, employee, fiduciary or agent or by reason of the fact that such person is or was serving, at the request of the New Mexico Corporation as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust or other enterprise.

(j) Industrial Asphalt, LLC and RKH Capital, L.L.C. are limited liability companies organized under the laws of the State of Texas (collectively, the “Texas Limited Liability Companies”).

 

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Texas Business Organizations Code

Section 8.002(a) of the Texas Business Organizations Code provides that except as provided by Section 8.002(b), Chapter 8 of the Texas Business Organizations Code does not apply to a (1) general partnership; or (2) limited liability company.

Section 8.002(b) of the Texas Business Organizations Code provides that the governing documents of a general partnership or a limited liability company may adopt provisions of Chapter 8 of the Texas Business Organizations Code or may contain other provisions, which will be enforceable, relating to: (1) indemnification; (2) advancement of expenses; (3) insurance or another arrangement to indemnify or hold harmless a governing person.

Section 101.402 of the Texas Business Organizations Code provides that a limited liability company may indemnify, pay in advance or reimburse expenses incurred by a person, and purchase or procure or establish and maintain insurance or another arrangement to indemnify or hold harmless a person.

Organizational Documents of Texas Limited Liability Companies

In accordance with the above provisions, the company agreement of Industrial Asphalt, LLC provides that, to the fullest extent permitted by law, the company shall indemnify and hold harmless each member and manager of the company and its officers, directors, shareholders, managers, members, employees, agents, subsidiaries and assigns from and against any and all losses, claims, demands, liabilities, expenses, judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the indemnitee may be involved, or threatened to be involved, as a party or otherwise, which relates to or arises out of the company or its property, business or affairs; provided, however, that an indemnitee shall not be entitled to indemnification under the indemnification provisions of the company agreement with respect to (a) any claim with respect to which the indemnitee has engaged in fraud, willful misconduct, bad faith or gross negligence or (b) any claim initiated by an indemnitee unless that claim (or any part thereof) was brought to enforce that an indemnitee’s rights to indemnification under the company agreement. The company shall pay in advance of the final disposition of any such claim expenses incurred by an indemnitee in defending that claim if, but only if, that indemnitee so requests and delivers to the company of an undertaking by or on behalf of that indemnitee to repay amounts so advanced if it ultimately is determined that the indemnitee is not entitled indemnification under the indemnification provisions of the company agreement.

In accordance with the above provisions, the company agreement of RKH Capital, L.L.C. provides that the company may indemnify any person who was or is a party defendant or is threatened to be made a party defendant, in any pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the company) by reason of the fact that he or she is or was the member of the company, employee or agent of the company, or is or was serving at the request of the company, for expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if the member determines that he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

(k) B&H Contracting, L.P., SCS Materials, L.P. and R.K. Hall Construction, Ltd. are limited partnerships formed under the laws of the State of Texas (collectively, the “Texas Limited Partnerships”).

Texas Business Organizations Code

Section 8.003(a) of the Texas Business Organizations Code provides that the certificate of formation of an enterprise may restrict the circumstances under which the enterprise must or may indemnify or may advance expenses to a person under Chapter 8 of the Texas Business Organizations Code.

 

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Section 8.003(b) of the Texas Business Organizations Code provides that the written partnership agreement of a limited partnership may restrict the circumstances in the same manner as the certificate of formation under Section 8.003(a).

Section 8.004 of the Texas Business Organizations Code provides that except as provided in Section 8.151, a provision for an enterprise to indemnify or advance expenses to a governing person is valid only to the extent it is consistent with Chapter 8 of the Texas Business Organizations Code.

Section 8.051(a) of the Texas Business Organizations Code provides that an enterprise shall indemnify a governing person, former governing person, or delegate against reasonable expenses actually incurred by the person in connection with a proceeding in which the person is a respondent because the person is or was a governing person or delegate if the person is wholly successful, on the merits or otherwise, in the defense of the proceeding.

Section 8.051(b) of the Texas Business Organizations Code provides that a court that determines, in a suit for indemnification, that a governing person, former governing person, or delegate is entitled to indemnification under Section 8.051 shall order indemnification and award to the person the expenses incurred in securing the indemnification.

Section 8.052(a) of the Texas Business Organizations Code provides that on application of a governing person, former governing person, or delegate and after notice is provided as required by the court, a court may order an enterprise to indemnify the person to the extent the court determines that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances.

Section 8.052(b) of the Texas Business Organizations Code provides that Section 8.052 applies without regard to whether the governing person, former governing person, or delegate applying to the court satisfies the requirements of Section 8.101, has been found liable (1) to the enterprise; or (2) because the person improperly received a personal benefit, without regard to whether the benefit resulted from an action taken in the person’s official capacity.

Section 8.052(c) of the Texas Business Organizations Code provides that the indemnification ordered by the court under Section 8.052 is limited to reasonable expenses if the governing person, former governing person, or delegate is found liable (1) to the enterprise; or (2) because the person improperly received a personal benefit, without regard to whether the benefit resulted from an action taken in the person’s official capacity.

Section 8.101(a) of the Texas Business Organizations Code provides that an enterprise may indemnify a governing person, former governing person, or delegate who was, is, or is threatened to be made a respondent in a proceeding to the extent permitted by Section 8.102 if it is determined in accordance with Section 8.103 that: (1) the person: (A) acted in good faith; (B) reasonably believed: (i) in the case of conduct in the person’s official capacity, that the person’s conduct was in the enterprise’s best interests; and (ii) in any other case, that the person’s conduct was not opposed to the enterprise’s best interests; and (C) in the case of a criminal proceeding, did not have a reasonable cause to believe the person’s conduct was unlawful; (2) with respect to expenses, the amount of expenses other than a judgment is reasonable; and (3) indemnification should be paid.

Section 8.101(b) of the Texas Business Organizations Code provides that action taken or omitted by a governing person or delegate with respect to an employee benefit plan in the performance of the person’s duties for a purpose reasonably believed by the person to be in the interest of the participants and beneficiaries of the plan is for a purpose that is not opposed to the best interests of the enterprise.

Section 8.101(c) of the Texas Business Organizations Code provides that action taken or omitted by a delegate to another enterprise for a purpose reasonably believed by the delegate to be in the interest of the other enterprise or its owners or members is for a purpose that is not opposed to the best interests of the enterprise.

 

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Section 8.101(d) of the Texas Business Organizations Code provides that a person does not fail to meet the standard under Section 8.101(a)(1) solely because of the termination of a proceeding by: (1) judgment; (2) order; (3) settlement; (4) conviction; or (5) a plea of nolo contendere or its equivalent.

Section 8.102(a) of the Texas Business Organizations Code provides that, subject to Section 8.102(b), an enterprise may indemnify a governing person, former governing person, or delegate against: (1) a judgment; and(2) expenses, other than a judgment, that are reasonable and actually incurred by the person in connection with a proceeding.

Section 8.102(b) of the Texas Business Organizations Code provides that indemnification under Section 8.102 of a person who is found liable to the enterprise or is found liable because the person improperly received a personal benefit: (1) is limited to reasonable expenses actually incurred by the person in connection with the proceeding; (2) does not include a judgment, a penalty, a fine, and an excise or similar tax, including an excise tax assessed against the person with respect to an employee benefit plan; and (3) may not be made in relation to a proceeding in which the person has been found liable for: (A) wilful or intentional misconduct in the performance of the person’s duty to the enterprise; (B) breach of the person’s duty of loyalty owed to the enterprise; or (C) an act or omission not committed in good faith that constitutes a breach of a duty owed by the person to the enterprise.

Section 8.102(c) of the Texas Business Organizations Code provides that a governing person, former governing person, or delegate is considered to have been found liable in relation to a claim, issue, or matter only if the liability is established by an order, including a judgment or decree of a court, and all appeals of the order are exhausted or foreclosed by law.

Section 8.103(a) of the Texas Business Organizations Code provides that except as provided by Sections 8.103(b) and (c), the determinations required under Section 8.101(a) must be made by: (1) a majority vote of the governing persons who at the time of the vote are disinterested and independent, regardless of whether the governing persons who are disinterested and independent constitute a quorum; (2) a majority vote of a committee of the governing authority of the enterprise if the committee: (A) is designated by a majority vote of the governing persons who at the time of the vote are disinterested and independent, regardless of whether the governing persons who are disinterested and independent constitute a quorum; and (B) is composed solely of one or more governing persons who are disinterested and independent; (3) special legal counsel selected by the governing authority of the enterprise, or selected by a committee of the governing authority, by vote in accordance with Section 8.103(a)(1) or Section 8.103(a)(2); (4) the owners or members of the enterprise in a vote that excludes the ownership or membership interests held by each governing person who is not disinterested and independent; or (5) a unanimous vote of the owners or members of the enterprise.

Section 8.103(b) of the Texas Business Organizations Code provides that if special legal counsel determines under Section 8.103(a)(3) that a person meets the standard under Section 8.101(a)(1), the special legal counsel shall determine whether the amount of expenses other than a judgment is reasonable under Section 8.101(a)(2) but may not determine whether indemnification should be paid under Section 8.101(a)(3). The determination whether indemnification should be paid must be made in a manner specified by Section 8.103(a)(1), (2), (4), or (5).

Section 8.103(c) of the Texas Business Organizations Code provides that a provision contained in the governing documents of the enterprise, a resolution of the owners, members, or governing authority, or an agreement that requires the indemnification of a person who meets the standard under Section 8.101(a)(1) constitutes a determination under Section 8.101(a)(3) that indemnification should be paid even though the provision may not have been adopted or authorized in the same manner as the determinations required under Section 8.101(a). The determinations required under Sections 8.101(a)(1) and (2) must be made in a manner provided by Section 8.103 (a).

 

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Section 8.103(d) of the Texas Business Organizations Code provides that with respect to a limited partnership, a vote of a majority-in-interest of the limited partners in a vote that excludes the interest held by each general partner who is not disinterested and independent constitutes a determination under Section 8.103(a)(4). For purposes of Section 8.103(d), “majority-in-interest” means, with respect to limited partners, limited partners who own more than 50 percent of the current percentage or other interest in the profits of the partnership that is owned by all of the limited partners.

Section 8.104(a) of the Texas Business Organizations Code provides that an enterprise may pay or reimburse reasonable expenses incurred by a present governing person or delegate who was, is, or is threatened to be made a respondent in a proceeding in advance of the final disposition of the proceeding without making the determinations required under Section 8.101(a) after the enterprise receives: (1) a written affirmation by the person of the person’s good faith belief that the person has met the standard of conduct necessary for indemnification under Chapter 8 of the Texas Business Organizations Code; and (2) a written undertaking by or on behalf of the person to repay the amount paid or reimbursed if the final determination is that the person has not met that standard or that indemnification is prohibited by Section 8.102.

Section 8.104(b) of the Texas Business Organizations Code provides that a provision in the governing documents of the enterprise, a resolution of the owners, members, or governing authority, or an agreement that requires the payment or reimbursement permitted under Section 8.104 authorizes that payment or reimbursement after the enterprise receives an affirmation and undertaking described by Section 8.104(a).

Section 8.104(c) of the Texas Business Organizations Code provides that the written undertaking required by Section 8.104(a)(2) must be an unlimited general obligation of the person but need not be secured and may be accepted by the enterprise without regard to the person’s ability to make repayment.

Section 8.104(d) of the Texas Business Organizations Code provides that with respect to a limited partnership, a vote of a majority-in-interest of the limited partners in a vote that excludes the interest held by each general partner who is not disinterested and independent constitutes an authorization under Section 8.104(b). For purposes of Section 8.104(b), “majority-in-interest” means, with respect to limited partners, limited partners who own more than 50 percent of the current percentage or other interest in the profits of the partnership that is owned by all of the limited partners.

Section 8.105(a) of the Texas Business Organizations Code provides that notwithstanding any other provision of Chapter 8 of the Texas Business Organizations Code but subject to Section 8.003 and to the extent consistent with other law, an enterprise may indemnify and advance expenses to a person who is not a governing person, including an officer, employee, or agent, as provided by: (1) the enterprise’s governing documents; (2) general or specific action of the enterprise’s governing authority; (3) resolution of the enterprise’s owners or members; (4) contract; or (5) common law.

Section 8.105(b) of the Texas Business Organizations Code provides that an enterprise shall indemnify an officer to the same extent that indemnification is required under Chapter 8 of the Texas Business Organizations Code for a governing person.

Section 8.105(c) of the Texas Business Organizations Code provides that a person described by Section 8.105(a) may seek indemnification or advancement of expenses from an enterprise to the same extent that a governing person may seek indemnification or advancement of expenses under Chapter 8 of the Texas Business Organizations.

Section 8.105(d) of the Texas Business Organizations Code provides that notwithstanding any authorization or determination specified in Chapter 8 of the Texas Business Organizations Code, an enterprise may pay or reimburse, in advance of the final disposition of a proceeding and on terms the enterprise considers appropriate, reasonable expenses incurred by: (1) a former governing person or delegate who was, is, or is threatened to be

 

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made a respondent in the proceeding; or (2) a present or former employee, agent, or officer who is not a governing person of the enterprise and who was, is, or is threatened to be made a respondent in the proceeding.

Section 8.105(e) of the Texas Business Organizations Code provides that a determination of indemnification for a person who is not a governing person of an enterprise, including an officer, employee, or agent, is not required to be made in accordance with Section 8.103.

Section 8.106 of the Texas Business Organizations Code provides that notwithstanding any other provision of Chapter 8 of the Texas Business Organizations Code, an enterprise may pay or reimburse reasonable expenses incurred by a governing person, officer, employee, agent, delegate, or other person in connection with that person’s appearance as a witness or other participation in a proceeding at a time when the person is not a respondent in the proceeding.

Section 8.151(a) of the Texas Business Organizations Code provides that notwithstanding any other provision of Chapter 8 of the Texas Business Organizations Code, an enterprise may purchase or procure or establish and maintain insurance or another arrangement to indemnify or hold harmless an existing or former governing person, delegate, officer, employee, or agent against any liability: (1) asserted against and incurred by the person in that capacity; or (2) arising out of the person’s status in that capacity.

Section 8.151(b) of the Texas Business Organizations Code provides that the insurance or other arrangement established under Section 8.151(a) may insure or indemnify against the liability described by Section 8.151(a) without regard to whether the enterprise otherwise would have had the power to indemnify the person against that liability under Chapter 8 of the Texas Business Organizations Code.

Section 8.151(c) of the Texas Business Organizations Code provides that insurance or another arrangement that involves self-insurance or an agreement to indemnify made with the enterprise or a person that is not regularly engaged in the business of providing insurance coverage may provide for payment of a liability with respect to which the enterprise does not otherwise have the power to provide indemnification only if the insurance or arrangement is approved by the owners or members of the enterprise.

Section 8.151(c-1) of the Texas Business Organizations Code provides that with respect to a limited partnership, a vote of a majority-in-interest of the limited partners constitutes approval of the owners for purposes of Section 8.151(c).

Section 8.151(d) of the Texas Business Organizations Code provides that for the benefit of persons to be indemnified by the enterprise, an enterprise may, in addition to purchasing or procuring or establishing and maintaining insurance or another arrangement: (1) create a trust fund; (2) establish any form of self-insurance, including a contract to indemnify; (3) secure the enterprise’s indemnity obligation by grant of a security interest or other lien on the assets of the enterprise; or (4) establish a letter of credit, guaranty, or surety arrangement.

Section 8.151(e) of the Texas Business Organizations Code provides that insurance or another arrangement established under Section 8.151 may be purchased or procured or established and maintained: (1) within the enterprise; or (2) with any insurer or other person considered appropriate by the governing authority, regardless of whether all or part of the stock, securities, or other ownership interest in the insurer or other person is owned in whole or in part by the enterprise.

Section 8.151(f) of the Texas Business Organizations Code provides that the governing authority’s decision as to the terms of the insurance or other arrangement and the selection of the insurer or other person participating in an arrangement is conclusive. The insurance or arrangement is not voidable and does not subject the governing persons approving the insurance or arrangement to liability, on any ground, regardless of whether the governing persons participating in approving the insurance or other arrangement are beneficiaries of the insurance or arrangement. Section 8.151(f) does not apply in case of actual fraud.

 

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Section 8.152(a) of the Texas Business Organizations Code provides that an enterprise shall report in writing to the owners or members of the enterprise an indemnification of or advance of expenses to a governing person.

Section 8.152(b) of the Texas Business Organizations Code provides that subject to Section 8.152(c), the report must be made with or before: (1) the notice or waiver of notice of the next meeting of the owners or members of the enterprise; or (2) the next submission to the owners or members of a consent to action without a meeting.

Section 8.152(c) of the Texas Business Organizations Code provides that the report must be made not later than the first anniversary of the date of the indemnification or advance.

Organizational Documents of Texas Limited Partnerships

The partnership agreement for each of the Texas Limited Partnerships provides that the partners, and their affiliates, officers, directors, employees and agents or any person performing a similar function on behalf of the partnership may be indemnified and held harmless by the partnership from and against any and all judgments, penalties, settlements and reasonable expenses actually incurred by any indemnitee who was, is or is threatened to be made a named defendant or respondent in any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the indemnitee may be involved, or threatened to be involved, as a party or otherwise, by reason of its status as a partner or an affiliate thereof or an officer, director, employee or agent of the partnership, or a partner or affiliate thereof, if the indemnitee acted in good faith and in a manner it reasonably believed to be in, or not opposed to, the best interest of the partnership. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that the indemnitee acted in a manner contrary to that specified above.

The partnership agreement for each of the Texas Limited Partnerships further provides that the partnership, through its general partner, in its sole discretion, may purchase and maintain insurance on behalf of the general partner and such other persons as the general partner shall determine, in its sole discretion, against any liability that may be asserted against or expense that may be incurred by such person in connection with the partnership’s activities, regardless of whether the partnership would have the power to indemnify such person against such liability under the provisions of the partnership agreement.

The partnership agreement for each of the Texas Limited Partnerships further provides that expenses incurred by an indemnitee in defending any claim, demand, action, suit or proceeding subject to the indemnification provisions of the partnership agreement may, from time to time, be advanced by the partnership prior to the final disposition of such claim, demand, action, suit or proceeding (i) upon written affirmation by the indemnitee of its good faith belief that it has met the standard of conduct necessary for indemnification and (ii) upon receipt by the partnership of any undertaking by or on behalf of the indemnitee to repay such amount if it shall be determined that such person is not entitled to be indemnified as authorized under the indemnification provisions of the partnership agreement. The indemnification provided in the indemnification provisions of the partnership agreement is for the benefit of the indemnitees and shall not be deemed to create any right to indemnification for any other persons.

(l) The following entities are incorporated under the laws of the State of Utah: B&B Resources, Inc., Salt Lake Valley Sand & Gravel, Inc. and Valley Ready Mix, Inc. (collectively, the “Utah Corporations”).

Utah Revised Business Corporation Act

Section 16-10a-902 (“Section 902”) of the Utah Revised Business Corporation Act provides that a corporation may indemnify any individual who was, is, or is threatened to be made a named defendant or respondent (a “Party”) in any threatened, pending or completed action, suit or proceeding, whether civil,

 

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criminal, administrative or investigative and whether formal or informal (a “Proceeding”), because he is or was a director of the corporation or is or was serving at its request as a director, officer, partner, trustee, employee, fiduciary or agent of another corporation or other person or of an employee benefit plan against any obligation incurred with respect to a Proceeding, including any judgment, settlement, penalty, fine or reasonable expenses (including attorneys’ fees), incurred in the Proceeding if his conduct was in good faith, he reasonably believed that his conduct was in, or not opposed to, the best interests of the corporation, and, in the case of any criminal Proceeding, he had no reasonable cause to believe his conduct was unlawful; except that (i) indemnification under Section 902 in connection with a Proceeding by or in the right of the corporation is limited to payment of reasonable expenses (including attorneys’ fees) incurred in connection with the Proceeding and (ii) the corporation may not indemnify a director in connection with a Proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation, or in connection with any other Proceeding charging that the director derived an improper personal benefit, whether or not involving action in his official capacity, in which Proceeding he was adjudged liable on the basis that he derived an improper personal benefit.

Section 16-10a-903 (“Section 903”) of the Utah Revised Business Corporation Act provides that, unless limited by its articles of incorporation, a corporation shall indemnify a director who was successful, on the merits or otherwise, in the defense of any Proceeding, or in the defense of any claim, issue or matter in the proceeding, to which he was a Party because he is or was a director of the corporation, against reasonable expenses (including attorneys’ fees) incurred by him in connection with the Proceeding or claim with respect to which he has been successful.

In addition to the indemnification provided by Sections 902 and 903, Section 16-10a-905 (“Section 905”) of the Utah Revised Business Corporation Act provides that, unless otherwise limited by a corporation’s articles of incorporation, a director may apply for indemnification to the court conducting the Proceeding or to another court of competent jurisdiction. On receipt of an application and after giving any notice the court considers necessary, (i) the court may order mandatory indemnification under Section 903, in which case the court shall also order the corporation to pay the director’s reasonable expenses to obtain court-ordered indemnification, or (ii) upon the court’s determination that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances and regardless of whether the director met the applicable standard of conduct set forth in Section 902, the court may order indemnification as the court determines to be proper, except that indemnification with respect to certain Proceedings resulting in a director being found liable for certain actions against the corporation may be limited to reasonable expenses (including attorneys’ fees) incurred by the director.

The Utah Revised Business Corporation Act provides that a corporation may pay for or reimburse the reasonable expenses (including attorneys’ fees) incurred by a director who is a Party to a Proceeding in advance of the final disposition of the Proceeding if (i) the director furnishes the corporation a written affirmation of his good faith belief that he has met the applicable standard of conduct described in Section 902, (ii) the director furnishes to the corporation a written undertaking, executed personally or in his behalf, to repay the advance if it is ultimately determined that he did not meet the required standard of conduct, and (iii) a determination is made that the facts then known to those making the determination would not preclude indemnification under Section 904.

Unless a corporation’s articles of incorporation provide otherwise, (i) an officer of the corporation is entitled to mandatory indemnification and is entitled to apply for court ordered indemnification, in each case to the same extent as a director, (ii) the corporation may indemnify and advance expenses to an officer, employee, fiduciary or agent of the corporation to the same extent as a director, and (iii) a corporation may also indemnify and advance expenses to an officer, employee, fiduciary or agent who is not a director to a greater extent than the right of indemnification granted to directors, if not inconsistent with public policy, and if provided for by its articles of incorporation, bylaws, general or specific action of its board of directors or contract.

 

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Organizational Documents of Utah Corporations

The articles of incorporation and/or bylaws of each of the Utah Corporations provide that, to the fullest extent permitted by the Utah Revised Business Corporation Act, the corporation shall indemnify any current or former director or officer of the corporation and may, at the discretion of the board of directors, indemnify any current or former employee or agent of the corporation against all expenses, liabilities and losses reasonably incurred or suffered by him or her in connection with any action, suit or proceeding brought by or in the right of the corporation or otherwise, to which he or she is a party or is threatened to be made a party by reason of his or her current or former position with the corporation or by reason of the fact that he or she is or was serving, at the request of the corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture or other enterprise.

(m) Altaview Concrete, LLC, Kilgore Equipment, LLC, Kilgore Trucking, LLC, Peak Construction Materials, LLC, Peak Management, L.C. and Wasatch Concrete Pumping, LLC are limited liability companies organized under the laws of the State of Utah (collectively, the “Utah Limited Liability Companies”).

Utah Revised Limited Liability Company Act

Sections 48-2c-1802 and 48-2c-1807 of the Utah Revised Limited Liability Company Act empowers a Utah limited liability company to indemnify any manager or other person from and against liability incurred in any proceeding if (i) his conduct was in good faith, (ii) he reasonably believed that his conduct was in, or not opposed to, the company’s best interests, and (iii) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. A company may not indemnify a manager under Section 48-2c-1802 in connection with a proceeding by or in the right of the company in which the manager was adjudged liable to the company or in connection with any other proceeding charging that the manager derived an improper personal benefit, whether or not involving action in his official capacity, in which proceeding he was adjudged liable on the basis that he derived an improper personal benefit.

In accordance with this provision, the Operating Agreements of the Utah Limited Liability Companies each states that the company has the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that the person is or was, or is or was serving at the request of, a manager, member, or authorized representative of the company. Such indemnification shall be against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if the indemnified person acted in good faith and in a manner the indemnified person reasonably believed to be not opposed to the best interests of the company and, with respect to any criminal action or proceeding, had no reasonable cause to believe the indemnified person’s conduct was unlawful.

(n) Wind River Materials, LLC was organized as a limited liability company under the laws of the State of Wyoming (the “Wyoming Limited Liability Company”).

Wyoming Limited Liability Company Act

Section 17-29-408 of the Wyoming Limited Liability Company Act empowers a Wyoming limited liability company to indemnify any member of a member-manager company or any manager of a manager-managed company for any debt, obligation or other liability incurred by such member or manager in the course of the member’s or manager’s activities on behalf of the Wyoming limited liability company, if in making the payment or incurring the debt, obligation or other liability, the member or manager was acting within the scope of his or her duties.

 

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In accordance with this provision, the Operating Agreement of the Wyoming Limited Liability Company states that the company has the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that the person is or was, or is or was serving at the request of, a manager, member, or authorized representative of the company. Such indemnification shall be against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if the indemnified person acted in good faith and in a manner the indemnified person reasonably believed to be not opposed to the best interests of the company and, with respect to any criminal action or proceeding, had no reasonable cause to believe the indemnified person’s conduct was unlawful.

 

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Item 21. Exhibits and Financial Statement Schedules.

(a) Exhibits

 

Exhibit No.

  

Description

3.1*    Certificate of Formation of Summit Materials, LLC, as amended.
3.2*    Amended and Restated Limited Liability Company Agreement of Summit Materials, LLC.
3.3*    Certificate of Incorporation of Summit Materials Finance Corp.
3.4*    By-laws of Summit Materials Finance Corp.
3.5*    Certificate of Formation of Austin Materials, LLC.
3.6*    Limited Liability Company Agreement of Austin Materials, LLC.
3.7*    Certificate of Formation of Continental Cement Company, L.L.C., as amended.
3.8*    Amended and Restated Limited Liability Company Agreement of Continental Cement Company, L.L.C.
3.9*    First Amendment to Amended and Restated Limited Liability Company Agreement of Continental Cement Company, L.L.C.
3.10*    Certificate of Formation of Kilgore Companies, LLC, as amended.
3.11*    Limited Liability Company Agreement of Kilgore Companies, LLC, as amended.
3.12*    Certificate of Formation of Norris Quarries, LLC.
3.13*    Limited Liability Company Agreement of Norris Quarries, LLC.
3.14*    Certificate of Formation of RK Hall, LLC.
3.15*    Limited Liability Company Agreement of RK Hall, LLC.
3.16*    Certificate of Formation of Summit Materials Companies I, LLC, as amended.
3.17*    Limited Liability Company Agreement of Summit Materials KY Acquisition LLC, as amended.
3.18*    Certificate of Incorporation of Summit Materials Corporations I, Inc.
3.19*    By-laws of Summit Materials Corporations I, Inc.
3.20*    Certificate of Formation of Summit Materials Holdings I, LLC, as amended.
3.21*    Limited Liability Company Agreement of Summit Materials Holdings I, LLC, as amended.
3.22*    Certificate of Formation of Summit Materials Holdings II, LLC, as amended.
3.23*    Limited Liability Company Agreement of Summit Materials Holdings II, LLC.
3.24*    Amended and Restated Articles of Incorporation of Elam Construction, Inc.
3.25*    Amended and Restated By-laws of Elam Construction, Inc.
3.26*    Articles of Organization of Cornejo & Sons, L.L.C., as amended.
3.27*    Amended and Restated Limited Liability Company Operating Agreement of Cornejo & Sons, L.L.C.
3.28*    Articles of Organization of Hamm Asphalt, LLC.
3.29*    Limited Liability Company Operating Agreement of Hamm Asphalt, LLC.
3.30*    Articles of Incorporation of Hamm, Inc., as amended.

 

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Exhibit No.

  

Description

3.31*    By-laws of Hamm, Inc.
3.32*    Articles of Organization of N.R. Hamm Contractor, LLC.
3.33*    Limited Liability Company Operating Agreement of N.R. Hamm Contractor, LLC.
3.34*    Articles of Organization of N.R. Hamm Quarry, LLC.
3.35*    Limited Liability Company Operating Agreement of N.R. Hamm Quarry, LLC.
3.36*    Articles of Incorporation of Bourbon Limestone Company, as amended.
3.37*    By-laws of Bourbon Limestone Company.
3.38*    Articles of Organization of Glass Aggregates, LLC, as amended.
3.39*    Limited Liability Company Operating Agreement of Glass Aggregates, LLC.
3.40*    Articles of Organization of Hinkle Contracting Company, LLC.
3.41*    Limited Liability Company Agreement of Hinkle Contracting Company, LLC.
3.42*    Articles of Incorporation of Kentucky Hauling, Inc., as amended.
3.43*    By-laws of Kentucky Hauling, Inc., as amended.
3.44*    Articles of Organization of South Central Kentucky Limestone, LLC.
3.45*    Amended and Restated Operating Agreement of South Central Kentucky Limestone, LLC.
3.46*    Articles of Organization of Con-Agg of MO, L.L.C., as amended.
3.47*    Second Amended and Restated Operating Agreement of Con-Agg of MO, L.L.C.
3.48*    Articles of Organization of Fischer Quarries, L.L.C.
3.49*    Operating Agreement of Fischer Quarries, L.L.C.
3.50*    Articles of Organization of Quarry Properties, L.L.C.
3.51*    Operating Agreement of Quarry Properties, L.L.C.
3.52*    Articles of Incorporation of Elam Paving, Inc.
3.53*    By-laws of Elam Paving, Inc.
3.54*    Certificate of Formation of B&H Contracting, L.P.
3.55*    Amended and Restated Partnership Agreement of B&H Contracting, L.P.
3.56*    Certificate of Formation of Industrial Asphalt, LLC.
3.57*    Company Agreement of Industrial Asphalt, LLC, as amended.
3.58*    Certificate of Formation of R.K. Hall Construction, Ltd.
3.59*    Second Amended and Restated Partnership Agreement of R.K. Hall Construction, Ltd.
3.60*    Certificate of Formation of RKH Capital, L.L.C.
3.61*    Second Amended and Restated Company Agreement of RKH Capital, L.L.C.
3.62*    Certificate of Limited Partnership of SCS Materials, L.P.
3.63*    Second Amended and Restated Partnership Agreement of SCS Materials, L.P.
3.64*    Articles of Organization of Altaview Concrete, LLC, as amended.

 

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Exhibit No.

  

Description

3.65*    Amended and Restated Operating Agreement of Altaview Concrete, LLC.
3.66*    Amended Articles of Incorporation of B&B Resources, Inc.
3.67*    By-laws of B&B Resources, Inc.
3.68*    Articles of Organization of Kilgore Equipment, LLC.
3.69*    Operating Agreement of Kilgore Equipment, LLC.
3.70*    Articles of Organization of Kilgore Trucking, LLC.
3.71*    Operating Agreement of Kilgore Trucking, LLC.
3.72*    Articles of Organization of Peak Construction Materials, LLC, as amended.
3.73*    Amended and Restated Operating Agreement of Peak Construction Materials, LLC.
3.74*    Articles of Organization of Peak Management, L.C.
3.75*    Amended and Restated Operating Agreement of Peak Management, L.C.
3.76*    Articles of Incorporation of Salt Lake Valley Sand & Gravel, Inc.
3.77*    By-laws of Salt Lake Valley Sand & Gravel, Inc.
3.78*    Articles of Incorporation of Valley Ready Mix, Inc.
3.79*    By-laws of Valley Ready Mix, Inc.
3.80*    Articles of Organization of Wasatch Concrete Pumping, LLC, as amended.
3.81*    Amended and Restated Operating Agreement of Wasatch Concrete Pumping, LLC.
3.82*    Articles of Organization of Wind River Materials, LLC, as amended.
3.83*    Operating Agreement of Wind River Materials, LLC.
4.1*    Indenture, dated as of January 30, 2012, among Summit Materials, LLC, Summit Materials Finance Corp., the guarantors named therein and Wilmington Trust, National Association, as trustee.
4.2*    First Supplemental Indenture, dated as of March 13, 2012, among Norris Quarries, LLC and Wilmington Trust, National Association, as trustee.
4.3*    Form of Note (attached as exhibit to Exhibit 4.1).
4.4*    Registration Rights Agreement, dated as of January 30, 2012, among Summit Materials, LLC, Summit Materials Finance Corp., the guarantors named therein, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and the several other initial purchasers.
5.1*    Opinion of Simpson Thacher & Bartlett LLP.
5.2*    Opinion of Holland & Hart LLP.
5.3*    Opinion of Kutak Rock LLP.
5.4*    Opinion of Kutak Rock LLP.
5.5*    Opinion of Stites & Harbison PLLC.
5.6*    Opinion of Bell Nunnally & Martin LLP.

 

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Exhibit No.

 

Description

10.1*   Credit Agreement, dated as of January 30, 2012, by and among Summit Materials, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., as joint lead arrangers, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., UBS Securities LLC, Barclays Capital, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc., as joint bookrunners, Bank of America, N.A., as administrative agent, collateral agent and swing line lender, Bank of America, N.A., as letter of credit issuer, and Citigroup Global Markets Inc., as syndication agent.
10.2*   Amendment No. 1, dated as of February 5, 2013, to the Credit Agreement, dated as of January 30, 2012, by and among Summit Materials, LLC, Bank of America, N.A. as sole lead arranger, and Bank of America, N.A. and Citigroup Global Markets Inc., as joint bookrunners.
10.3*   Tranche A Revolving Credit Commitment Conversion Agreement, dated as of February 11, 2013, under the Credit Agreement, dated as of January 30, 2012, among Summit Materials, LLC, the guarantors party thereto, the several banks and other financial institutions or entities from time to time parties to the Credit Agreement, Bank of America, N.A., as administrative agent, collateral agent, L/C issuer and swing line lender and the other parties thereto.
10.4*   Security Agreement, dated as of January 30, 2012, by and among the grantors identified therein and Bank of America, N.A., as collateral agent.
10.5*†   Employment Agreement, dated July 30, 2009, by and between Summit Materials Holdings L.P. and Thomas Hill.
10.6*†   Employment Agreement, dated December 29, 2011, by and between Summit Materials Holdings L.P. and Douglas Rauh.
12*   Computation of Ratio of Earnings to Fixed Charges.
16*   Letter regarding change in certifying accountant.
21*   Subsidiaries of Summit Materials, LLC.
23.1*   Consent of KPMG LLP, Independent Registered Public Accounting Firm.
23.2*   Consent of KPMG LLP, Independent Registered Public Accounting Firm.
23.3*   Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
23.4*   Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
23.5*   Consent of Allen, Gibbs & Houlik, L.C., Independent Registered Public Accounting Firm.
23.6*   Consent of Wisan, Smith, Racker & Prescott, LLP, Independent Registered Public Accounting Firm.
23.7*   Consent of CliftonLarsonAllen LLP, Independent Registered Public Accounting Firm.
23.8*   Consent of Perryman Chaney Russell, LLP, Independent Auditors.
23.9*   Consent of Simpson Thacher & Bartlett LLP (included as part of its opinion filed as Exhibit 5.1 hereto).
23.10*   Consent of Holland & Hart LLP (included as part of its opinion filed as Exhibit 5.2 hereto).
23.11*   Consent of Kutak Rock LLP (included as part of its opinion filed as Exhibit 5.3 hereto).
23.12*   Consent of Kutak Rock LLP (included as part of its opinion filed as Exhibit 5.4 hereto).
23.13*   Consent of Stites & Harbison PLLC (included as part of its opinion filed as Exhibit 5.5 hereto).

 

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Exhibit No.

  

Description

23.14*    Consent of Bell Nunnally & Martin LLP (included as part of its opinion filed as Exhibit 5.6 hereto).
24    Power of Attorney (included in signature pages of this registration statement).
25.1*    Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust, National Association as trustee under the Indenture, dated January 30, 2013, among Summit Materials, LLC, Summit Materials Finance Corp., the guarantors named therein and Wilmington Trust, National Association, as trustee.
99.1*    Form of Letter of Transmittal.
99.2*    Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
99.3*    Form of Letter to Clients.
99.4*    Form of Notice of Guaranteed Delivery.

 

* Filed herewith.
Management contract or compensatory plan or arrangement.

Item 22. Undertakings.

(a) Each of the undersigned registrants hereby undertakes:

(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;

(4) that, for the purpose of determining liability under the Securities Act to any purchaser, if the registrants are subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a

 

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registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and

(5) that, for the purpose of determining liability of the registrants under the Securities Act to any purchaser in the initial distribution of the securities, each of the undersigned registrants undertakes that in a primary offering of securities of the undersigned registrants pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrants will be sellers to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b) Each of the undersigned registrants hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(c) Each of the undersigned registrants hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

(d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or controlling persons of each of the registrants pursuant to the foregoing provisions, or otherwise, each of the registrants has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person of the registrants in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Washington, D.C., on March 27, 2013.

 

SUMMIT MATERIALS, LLC
By:  

SUMMIT MATERIALS

INTERMEDIATE HOLDINGS, LLC, its Sole Member

 

By: Summit Materials Holdings, LLC,

its sole member

 

By: Summit Materials Holdings L.P.,

its sole member

 

By: Summit Materials Holdings GP, Ltd.,

its general partner (the “Parent”)

 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title(s)

 

Date

/s/ THOMAS HILL

Thomas Hill

   President and Chief
Executive Officer (Principal Executive Officer);
Director of Parent
  March 27, 2013

/s/ JOHN MURPHY

John Murphy

   Interim Chief Financial Officer
(Principal Financial
and Accounting Officer);
Director of Parent
  March 27, 2013

 

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Signature

  

Title(s)

 

Date

/s/ HOWARD LANCE

Howard Lance

   Director of Parent   March 27, 2013

/s/ NEIL SIMPKINS

Neil Simpkins

   Director of Parent   March 27, 2013

/s/ TED GARDNER

Ted Gardner

   Director of Parent   March 27, 2013

/s/ JULIA KAHR

Julia Kahr

   Director of Parent   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Washington, D.C., on March 27, 2013.

 

SUMMIT MATERIALS FINANCE CORP.
By:   /s/ DAPHNE TONG
  Name:    Daphne Tong
  Title:   President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ DAPHNE TONG

Daphne Tong

   President (Principal Executive Officer)   March 27, 2013

/s/ JOHN R. MURPHY

John R. Murphy

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

/s/ THOMAS HILL

Thomas Hill

   Director   March 27, 2013

/s/ NEIL SIMPKINS

Neil Simpkins

   Director   March 27, 2013

/s/ JULIA KAHR

Julia Kahr

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Austin, State of Texas, on March 27, 2013.

 

AUSTIN MATERIALS, LLC
By:  

SUMMIT MATERIALS

COMPANIES I, LLC, its Sole Member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

 

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JOHN RAMMING

John Ramming

   President (Principal Executive Officer)   March 27, 2013

/s/ CLINT PULLEY

Clint Pulley

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chesterfield, State of Missouri, on March 27, 2013.

 

CONTINENTAL CEMENT COMPANY, L.L.C.
By:   /s/ THOMAS BECK
  Name: Thomas Beck
  Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS BECK

Thomas Beck

   President and Director (Principal Executive Officer)   March 27, 2013

/s/ MARK STRIEKER

Mark Strieker

   Vice President of Finance and Administration (Principal Financial and Accounting Officer)   March 27, 2013

/s/ THOMAS HILL

Thomas Hill

   Director   March 27, 2013

/s/ JULIA KAHR

Julia Kahr

   Director   March 27, 2013

/s/ MICHAEL BRADY

Michael Brady

   Director   March 27, 2013

/s/ DAMIAN MURPHY

Damian Murphy

   Director   March 27, 2013

/s/ MICHAEL FARMER

Michael Farmer

   Director   March 27, 2013

/s/ ELLIOT FARMER

Elliot Farmer

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

KILGORE COMPANIES, LLC
By:  

SUMMIT MATERIALS

COMPANIES I, LLC, its Sole Member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

 

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

   President (Principal Executive Officer)   March 27, 2013

/s/ BRIAN HALL

Brian Hall

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Colombia, State of Missouri, on March 27, 2013.

 

NORRIS QUARRIES, LLC
By:  

CON-AGG OF MO, LLC, its Sole Member

 

By: Summit Materials Companies, I, LLC,

its sole member

 

By: /s/ THOMAS HILL

 

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ GEORGE BARNES

George Barnes

   General Manager (Principal Executive Officer)   March 27, 2013

/s/ C. SCOTT ANDERSON

C. Scott Anderson

   Treasurer (Principal
Financial and Accounting Officer)
  March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Texas, on March 27, 2013.

 

RK HALL, LLC

By:

 

SUMMIT MATERIALS

COMPANIES I, LLC, its Sole Member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ ROBERT HALL

Robert Hall

   President (Principal Executive Officer)   March 27, 2013

/s/ LEX HUIE

Lex Huie

   Vice President and Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Washington, D.C., on March 27, 2013.

 

SUMMIT MATERIALS COMPANIES I, LLC
By:   SUMMIT MATERIALS HOLDINGS I, LLC, its Sole Member
  By: Summit Materials, LLC, its sole member
 

By: /s/ THOMAS HILL

Name: Thomas Hill

 

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS HILL

Thomas Hill

   President (Principal Executive Officer)   March 27, 2013

/s/ JOHN MURPHY

John Murphy

   Interim Chief Financial Officer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Washington, D.C., on March 27, 2013.

 

SUMMIT MATERIALS CORPORATIONS I, INC.
By:   /s/ THOMAS HILL
  Name: Thomas Hill
  Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS HILL

Thomas Hill

   President (Principal Executive Officer)   March 27, 2013

/s/ JOHN MURPHY

John Murphy

  

Interim Chief Financial Officer

(Principal Financial and Accounting Officer)

  March 27, 2013

/s/ MICHAEL BRADY

Michael Brady

   Director   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Director   March 27, 2013

/S/ ANYA FONINA

Anya Fonina

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Washington, D.C., on March 27, 2013.

 

SUMMIT MATERIALS HOLDINGS I, LLC

By:

 

SUMMIT MATERIALS HOLDINGS I, LLC, its Sole Member

  By: Summit Materials, LLC, its sole member
 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS HILL

Thomas Hill

   President (Principal Executive Officer)   March 27, 2013

/s/ JOHN MURPHY

John Murphy

   Interim Chief Financial Officer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Washington, D.C., on March 27, 2013.

 

SUMMIT MATERIALS HOLDINGS II, LLC
By:   SUMMIT MATERIALS, LLC, its sole member
 

B Y : / S / THOMAS HILL

 

Name: Thomas Hill

Title: President

 

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS HILL

Thomas Hill

   President (Principal Executive Officer)   March 27, 2013

/s/ JOHN MURPHY

John Murphy

   Interim Chief Financial Officer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Grand Junction, State of Colorado, on March 27, 2013.

 

ELAM CONSTRUCTION, INC.
By:   /s/ LANE BYBEE
  Name: Lane Bybee
  Title: Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ LANE BYBEE

Lane Bybee

   Chief Executive Officer (Principal Executive Officer)   March 27, 2013

/s/ CHASE VERNIEUW

Chase Vernieuw

   Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)   March 27, 2013

/s/ SHANE EVANS

Shane Evans

   Director   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Director   March 27, 2013

/s/ ANYA FONINA

Anya Fonina

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wichita, State of Kansas, on March 27, 2013.

 

CORNEJO & SONS, L.L.C.
By:  

SUMMIT MATERIALS

COMPANIES I, LLC, its Sole Member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ RONALD CORNEJO

Ronald Cornejo

   Chief Executive Officer (Principal Executive Officer)   March 27, 2013

/s/ C. SCOTT ANDERSON

C. Scott Anderson

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Perry, State of Kansas, on March 27, 2013.

 

HAMM ASPHALT, LLC
By:   HAMM, INC., its Sole Member
 

By: /s/ GARY HAMM

 

Name: Gary Hamm

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ GARY HAMM

Gary Hamm

   President (Principal Executive Officer)   March 27, 2013

/s/ C. SCOTT ANDERSON

C. Scott Anderson

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Perry, State of Kansas, on March 27, 2013.

 

HAMM, INC.
By:   /s/ GARY HAMM
  Name: Gary Hamm
  Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ GARY HAMM

Gary Hamm

   President (Principal Executive Officer)   March 27, 2013

/s/ C. SCOTT ANDERSON

C. Scott Anderson

   Treasurer and Director (Principal Financial and Accounting Officer)   March 27, 2013

/s/ THOMAS HILL

Thomas Hill

   Director   March 27, 2013

/s/ MICHAEL BRADY

Michael Brady

   Director   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Director   March 27, 2013

/s/ N. RODNEY HAMM

N. Rodney Hamm

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Perry, State of Kansas, on March 27, 2013.

 

N.R. HAMM CONTRACTOR, LLC
By:   Hamm, Inc., its Sole Member
 

By: /s/ GARY HAMM

Name: Gary Hamm

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ GARY HAMM

Gary Hamm

   President (Principal Executive Officer)   March 27, 2013

/s/ C. SCOTT ANDERSON

C. Scott Anderson

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Perry, State of Kansas, on March 27, 2013.

 

N.R. HAMM QUARRY, LLC
By:   Hamm, Inc., its Sole Member
 

By: /s/ GARY HAMM

Name: Gary Hamm

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ GARY HAMM

Gary Hamm

   President (Principal Executive Officer)   March 27, 2013

/s/ C. SCOTT ANDERSON

C. Scott Anderson

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Kentucky, on March 27, 2013.

 

BOURBON LIMESTONE COMPANY
By:   /s/ THOMAS HINKLE
  Name: Thomas Hinkle
  Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS HINKLE

Thomas Hinkle

   President and Director (Principal Executive Officer)   March 27, 2013

/s/ STEVE HULLETT

Steve Hullett

   Chief Financial Officer, Secretary and Director (Principal Financial and Accounting Officer)   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Kentucky, on March 27, 2013.

 

GLASS AGGREGATES, LLC
By:  

/s/ LARRY GLASS

  Name: Larry Glass
  Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ LARRY GLASS

Larry Glass

   President (Principal Executive Officer)   March 27, 2013

/s/ STEVE HULLETT

Steve Hullett

   Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)   March 27, 2013

/s/ MICHAEL BRADY

Michael Brady

   Vice President and Manager   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Assistant Secretary and Manager   March 27, 2013

/s/ THOMAS HINKLE

Thomas Hinkle

   Manager   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Kentucky, on March 27, 2013.

 

HINKLE CONTRACTING COMPANY, LLC
By:  

SUMMIT MATERIALS

COMPANIES I, LLC, its Sole Member

  By: Summit Materials Holdings I, LLC,
its sole member
  By: Summit Materials, LLC,
its sole member
 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS HINKLE

Thomas Hinkle

   President (Principal Executive Officer)   March 27, 2013

/s/ STEVE HULLETT

Steve Hullett

   Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Kentucky, on March 27, 2013.

 

KENTUCKY HAULING, INC.
By:   /s/ THOMAS HINKLE
  Name: Thomas Hinkle
  Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS HINKLE

Thomas Hinkle

   President and Director (Principal Executive Officer)   March 27, 2013

/s/ STEVE HULLETT

Steve Hullett

   Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)   March 27, 2013

/s/ MICHAEL BRADY

Michael Brady

   Director   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Director   March 27, 2013

/s/ DOUG RAUH

Doug Rauh

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Kentucky, on March 27, 2013.

 

SOUTH CENTRAL KENTUCKY LIMESTONE, LLC
By:   GLASS AGGREGATES, LLC, its Sole Member
 

By: /s/ LARRY GLASS

 

Name: Larry Glass

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS HINKLE

Thomas Hinkle

  

President

(Principal Executive Officer)

  March 27, 2013

/s/ STEVE HULLETT

Steve Hullett

  

Chief Financial Officer

(Principal Financial and Accounting Officer)

  March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Columbia, State of Missouri, on March 27, 2013.

 

CON-AGG OF MO, L.L.C.
By:  

SUMMIT MATERIALS
COMPANIES I, LLC, its Sole Member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

 

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ GEORGE BARNES

George Barnes

  

President

(Principal Executive Officer)

  March 27, 2013

/s/ C. SCOTT ANDERSON

C. Scott Anderson

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Columbia, State of Missouri, on March 27, 2013.

 

FISCHER QUARRIES, L.L.C.
By:  

CON-AGG OF MO, L.L.C., its Sole Member

  By: Summit Materials Companies I, LLC,
its sole member
  By: Summit Materials Holdings I, LLC,
its sole member
  By: Summit Materials, LLC,
its sole member
  By: /s/ THOMAS HILL
 

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ THOMAS HILL

Thomas Hill

   President (Principal Executive Officer)   March 27, 2013

/s/ C. SCOTT ANDERSON

C. Scott Anderson

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Columbia, State of Missouri, on March 27, 2013.

 

QUARRY PROPERTIES, L.L.C.
By:   /s/ DAMIAN MURPHY
  Name:    Damian Murphy
  Title:  

Regional President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ DAMIAN MURPHY

Damian Murphy

  

Regional President and Manager

(Principal Executive Officer)

  March 27, 2013

/s/ C. SCOTT ANDERSON

C. Scott Anderson

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

/s/ MICHAEL BRADY

Michael Brady

   Manager   March 27, 2013

/s/ ANYA FONINA

Anya Fonina

   Manager   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Grand Junction, State of Colorado, on March 27, 2013.

 

ELAM PAVING, INC.
By:   /s/ LANE BYBEE
  Name:    Lane Bybee
  Title:   Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ LANE BYBEE

Lane Bybee

   Chief Executive Officer (Principal Executive Officer)   March 27, 2013

/s/ CHASE VERNIEUW

Chase Vernieuw

   Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)   March 27, 2013

/s/ SHANE EVANS

Shane Evans

   Director   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Director   March 27, 2013

/s/ ANYA FONINA

Anya Fonina

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Texas, on March 27, 2013.

 

B&H CONTRACTING, L.P.
By:   RKH CAPITAL, L.L.C., its General Partner
  By: RK Hall, LLC, its sole member
 

By: Summit Materials Companies I, LLC,

its sole member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

  By: /s/ THOMAS HILL
 

Name: Thomas Hill

Title:   President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ ROBERT HALL

Robert Hall

  

President

(Principal Executive Officer)

  March 27, 2013

/s/ LEX HUIE

Lex Huie

  

Vice President and Treasurer

(Principal Financial and Accounting Officer)

  March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Austin, State of Texas, on March 27, 2013.

 

INDUSTRIAL ASPHALT, LLC
By:   /s/ JOHN RAMMING
  Name:    John Ramming
  Title:   General Manager

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JOHN RAMMING

John Ramming

  

General Manager

(Principal Executive Officer)

  March 27, 2013

/s/ CLINT PULLEY

Clint Pulley

   Treasurer and Manager (Principal Financial and Accounting Officer)   March 27, 2013

/s/ ANYA FONINA

Anya Fonina

   Manager   March 27, 2013

/s/ SHANE EVANS

Shane Evans

   Manager   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Texas, on March 27, 2013.

 

R.K. HALL CONSTRUCTION, LTD.
By:   RKH CAPITAL, L.L.C., its General Partner
  By: RK Hall, LLC, its sole member
 

By: Summit Materials Companies I, LLC,

its sole member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ ROBERT HALL

Robert Hall

  

President
(Principal Executive Officer)

  March 27, 2013

/s/ LEX HUIE

Lex Huie

  

Vice President and Treasurer (Principal Accounting and Financial Officer)

  March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Texas, on March 27, 2013.

 

RKH CAPITAL, L.L.C.
By:   /s/ ROBERT HALL
  Name: Robert Hall
  Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ ROBERT HALL

Robert Hall

  

President
(Principal Executive Officer)

  March 27, 2013

/s/ LEX HUIE

Lex Huie

  

Vice President and Treasurer

(Principal Accounting and Financial Officer)

  March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, State of Texas, on March 27, 2013.

 

SCS MATERIALS, L.P.
By:   RKH CAPITAL, L.L.C., its General Partner
 

By: Summit Materials Companies I, LLC,

its sole member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ ROBERT HALL

Robert Hall

  

President

(Principal Executive Officer)

  March 27, 2013

/s/ LEX HUIE

Lex Huie

  

Vice President and Treasurer (Principal Accounting and Financial Officer)

  March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

ALTAVIEW CONCRETE, LLC
By:   KILGORE COMPANIES, LLC, its Sole Member
 

By: Summit Materials Companies I, LLC,

its sole member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

   President (Principal Executive Officer)   March 27, 2013

/s/ CLINT PULLEY

Clint Pulley

   Assistant Treasurer (Principal Accounting and Financial Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

B&B RESOURCES, INC.
By:   /s/ JASON KILGORE
  Name: Jason Kilgore
  Title: General Manager

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

  

General Manager

(Principal Executive Officer)

  March 27, 2013

/s/ BRIAN HALL

Brian Hall

   Treasurer (Principal Accounting and Financial Officer)   March 27, 2013

/s/ MICHAEL BRADY

Michael Brady

   Director   March 27, 2013

/s/ SHANE EVANS

Shane Evans

   Director   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

KILGORE EQUIPMENT, LLC
By:   /s/ JASON KILGORE
  Name: Jason Kilgore
  Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

   President (Principal Executive Officer)   March 27, 2013

/s/ BRIAN HALL

Brian Hall

   Treasurer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

KILGORE TRUCKING, LLC
By:   /s/ JASON KILGORE
  Name: Jason Kilgore
  Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

   President (Principal Executive Officer)   March 27, 2013

/s/ BRIAN HALL

Brian Hall

   Chief Financial Officer (Principal Financial and Accounting Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

PEAK CONSTRUCTION MATERIALS, LLC
By:  

KILGORE COMPANIES, LLC, its Sole Member

 

By: Summit Materials Companies I, LLC,

its sole member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

   President (Principal Executive Officer)   March 27, 2013

/s/ CLINT PULLEY

Clint Pulley

   Treasurer (Principal Accounting and Financial Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

PEAK MANAGEMENT, L.C.
By:  

KILGORE COMPANIES, LLC, its Sole Member

 

By: Summit Materials Companies I, LLC,

its sole member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

  By: /s/ THOMAS HILL
 

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

   President (Principal Executive Officer)   March 27, 2013

/s/ CLINT PULLEY

Clint Pulley

   Treasurer (Principal Accounting and Financial Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

SALT LAKE VALLEY SAND & GRAVEL, INC.
By:   /s/ JASON KILGORE
  Name: Jason Kilgore
  Title: General Manager

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

   General Manager (Principal Executive Officer)   March 27, 2013

/s/ BRIAN HALL

Brian Hall

   Treasurer (Principal Accounting and Financial Officer)   March 27, 2013

/s/ MICHAEL BRADY

Michael Brady

   Director   March 27, 2013

/s/ SHANE EVANS

Shane Evans

   Director   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

VALLEY READY MIX, INC.
By:  

/s/ JASON KILGORE

Name: Jason Kilgore

Title: General Manager

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

   General Manager (Principal Executive Officer)   March 27, 2013

/s/ BRIAN HALL

Brian Hall

   Treasurer (Principal Accounting and Financial Officer)   March 27, 2013

/s/ MICHAEL BRADY

Michael Brady

   Director   March 27, 2013

/s/ SHANE EVANS

Shane Evans

   Director   March 27, 2013

/s/ ANTHONY KEENAN

Anthony Keenan

   Director   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

WASATCH CONCRETE PUMPING, LLC
By:   KILGORE COMPANIES, LLC, its Sole Member
 

By: Summit Materials Companies I, LLC,

its sole member

 

By: Summit Materials Holdings I, LLC,

its sole member

 

By: Summit Materials, LLC,

its sole member

 

By: /s/ THOMAS HILL

Name: Thomas Hill

Title: President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

     

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

  

President (Principal Executive Officer)

  March 27, 2013

/s/ CLINT PULLEY

Clint Pulley

   Treasurer (Principal Accounting and Financial Officer)   March 27, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Valley, State of Utah, on March 27, 2013.

 

WIND RIVER MATERIALS, LLC

By:   /s/ JASON KILGORE
  Name: Jason Kilgore
  Title: General Manager and Manager

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Anthony Keenan and Jennifer Rose and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ JASON KILGORE

Jason Kilgore

   General Manager and Manager (Principal Executive Officer)   March 27, 2013

/s/ CLINT PULLEY

Clint Pulley

   Treasurer (Principal Accounting and Financial Officer)   March 27, 2013

/s/ SHANE EVANS

Shane Evans

   Manager   March 27, 2013

/s/ BRIAN HALL

Brian Hall

   Manager   March 27, 2013

/s/ RICHARD BARRETT

Richard Barrett

   Manager   March 27, 2013

 

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EXHIBIT INDEX

 

Exhibit No.

  

Description

  3.1*    Certificate of Formation of Summit Materials, LLC, as amended.
  3.2*    Amended and Restated Limited Liability Company Agreement of Summit Materials, LLC.
  3.3*    Certificate of Incorporation of Summit Materials Finance Corp.
  3.4*    By-laws of Summit Materials Finance Corp.
  3.5*    Certificate of Formation of Austin Materials, LLC.
  3.6*    Limited Liability Company Agreement of Austin Materials, LLC.
  3.7*    Certificate of Formation of Continental Cement Company, L.L.C., as amended.
  3.8*    Amended and Restated Limited Liability Company Agreement of Continental Cement Company, L.L.C.
  3.9*    First Amendment to Amended and Restated Limited Liability Company Agreement of Continental Cement Company, L.L.C.
  3.10*    Certificate of Formation of Kilgore Companies, LLC, as amended.
  3.11*    Limited Liability Company Agreement of Kilgore Companies, LLC, as amended.
  3.12*    Certificate of Formation of Norris Quarries, LLC.
  3.13*    Limited Liability Company Agreement of Norris Quarries, LLC.
  3.14*    Certificate of Formation of RK Hall, LLC.
  3.15*    Limited Liability Company Agreement of RK Hall, LLC.
  3.16*    Certificate of Formation of Summit Materials Companies I, LLC, as amended.
  3.17*    Limited Liability Company Agreement of Summit Materials KY Acquisition LLC, as amended.
  3.18*    Certificate of Incorporation of Summit Materials Corporations I, Inc.
  3.19*    By-laws of Summit Materials Corporations I, Inc.
  3.20*    Certificate of Formation of Summit Materials Holdings I, LLC, as amended.
  3.21*    Limited Liability Company Agreement of Summit Materials Holdings I, LLC, as amended.
  3.22*    Certificate of Formation of Summit Materials Holdings II, LLC, as amended.
  3.23*    Limited Liability Company Agreement of Summit Materials Holdings II, LLC.
  3.24*    Amended and Restated Articles of Incorporation of Elam Construction, Inc.
  3.25*    Amended and Restated By-laws of Elam Construction, Inc.
  3.26*    Articles of Organization of Cornejo & Sons, L.L.C., as amended.
  3.27*    Amended and Restated Limited Liability Company Operating Agreement of Cornejo & Sons, L.L.C.
  3.28*    Articles of Organization of Hamm Asphalt, LLC.
  3.29*    Limited Liability Company Operating Agreement of Hamm Asphalt, LLC.
  3.30*    Articles of Incorporation of Hamm, Inc., as amended.
  3.31*    By-laws of Hamm, Inc.


Table of Contents

Exhibit No.

  

Description

  3.32*    Articles of Organization of N.R. Hamm Contractor, LLC.
  3.33*    Limited Liability Company Operating Agreement of N.R. Hamm Contractor, LLC.
  3.34*    Articles of Organization of N.R. Hamm Quarry, LLC.
  3.35*    Limited Liability Company Operating Agreement of N.R. Hamm Quarry, LLC.
  3.36*    Articles of Incorporation of Bourbon Limestone Company, as amended.
  3.37*    By-laws of Bourbon Limestone Company.
  3.38*    Articles of Organization of Glass Aggregates, LLC, as amended.
  3.39*    Limited Liability Company Operating Agreement of Glass Aggregates, LLC.
  3.40*    Articles of Organization of Hinkle Contracting Company, LLC.
  3.41*    Limited Liability Company Agreement of Hinkle Contracting Company, LLC.
  3.42*    Articles of Incorporation of Kentucky Hauling, Inc., as amended.
  3.43*    By-laws of Kentucky Hauling, Inc., as amended.
  3.44*    Articles of Organization of South Central Kentucky Limestone, LLC.
  3.45*    Amended and Restated Operating Agreement of South Central Kentucky Limestone, LLC.
  3.46*    Articles of Organization of Con-Agg of MO, L.L.C., as amended.
  3.47*    Second Amended and Restated Operating Agreement of Con-Agg of MO, L.L.C.
  3.48*    Articles of Organization of Fischer Quarries, L.L.C.
  3.49*    Operating Agreement of Fischer Quarries, L.L.C.
  3.50*    Articles of Organization of Quarry Properties, L.L.C.
  3.51*    Operating Agreement of Quarry Properties, L.L.C.
  3.52*    Articles of Incorporation of Elam Paving, Inc.
  3.53*    By-laws of Elam Paving, Inc.
  3.54*    Certificate of Formation of B&H Contracting, L.P.
  3.55*    Amended and Restated Partnership Agreement of B&H Contracting, L.P.
  3.56*    Certificate of Formation of Industrial Asphalt, LLC.
  3.57*    Company Agreement of Industrial Asphalt, LLC, as amended.
  3.58*    Certificate of Formation of R.K. Hall Construction, Ltd.
  3.59*    Second Amended and Restated Partnership Agreement of R.K. Hall Construction, Ltd.
  3.60*    Certificate of Formation of RKH Capital, L.L.C.
  3.61*    Second Amended and Restated Company Agreement of RKH Capital, L.L.C.
  3.62*    Certificate of Limited Partnership of SCS Materials, L.P.
  3.63*    Second Amended and Restated Partnership Agreement of SCS Materials, L.P.
  3.64*    Articles of Organization of Altaview Concrete, LLC, as amended.
  3.65*    Amended and Restated Operating Agreement of Altaview Concrete, LLC.


Table of Contents

Exhibit No.

  

Description

  3.66*    Amended Articles of Incorporation of B&B Resources, Inc.
  3.67*    By-laws of B&B Resources, Inc.
  3.68*    Articles of Organization of Kilgore Equipment, LLC.
  3.69*    Operating Agreement of Kilgore Equipment, LLC.
  3.70*    Articles of Organization of Kilgore Trucking, LLC.
  3.71*    Operating Agreement of Kilgore Trucking, LLC.
  3.72*    Articles of Organization of Peak Construction Materials, LLC, as amended.
  3.73*    Amended and Restated Operating Agreement of Peak Construction Materials, LLC.
  3.74*    Articles of Organization of Peak Management, L.C.
  3.75*    Amended and Restated Operating Agreement of Peak Management, L.C.
  3.76*    Articles of Incorporation of Salt Lake Valley Sand & Gravel, Inc.
  3.77*    By-laws of Salt Lake Valley Sand & Gravel, Inc.
  3.78*    Articles of Incorporation of Valley Ready Mix, Inc.
  3.79*    By-laws of Valley Ready Mix, Inc.
  3.80*    Articles of Organization of Wasatch Concrete Pumping, LLC, as amended.
  3.81*    Amended and Restated Operating Agreement of Wasatch Concrete Pumping, LLC.
  3.82*    Articles of Organization of Wind River Materials, LLC, as amended.
  3.83*    Operating Agreement of Wind River Materials, LLC.
  4.1*    Indenture, dated as of January 30, 2012, among Summit Materials, LLC, Summit Materials Finance Corp., the guarantors named therein and Wilmington Trust, National Association, as trustee.
  4.2*    First Supplemental Indenture, dated as of March 13, 2012, among Norris Quarries, LLC and Wilmington Trust, National Association, as trustee.
  4.3*    Form of Note (attached as exhibit to Exhibit 4.1).
  4.4*    Registration Rights Agreement, dated as of January 30, 2012, among Summit Materials, LLC, Summit Materials Finance Corp., the guarantors named therein, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and the several other initial purchasers.
  5.1*    Opinion of Simpson Thacher & Bartlett LLP.
  5.2*    Opinion of Holland & Hart LLP.
  5.3*    Opinion of Kutak Rock LLP.
  5.4*    Opinion of Kutak Rock LLP.
  5.5*    Opinion of Stites & Harbison PLLC.
  5.6*    Opinion of Bell Nunnally & Martin LLP.
10.1*    Credit Agreement, dated as of January 30, 2012, by and among Summit Materials, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., as joint lead arrangers, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., UBS Securities LLC, Barclays Capital, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc., as joint bookrunners, Bank of America, N.A., as administrative agent, collateral agent and swing line lender, Bank of America, N.A., as letter of credit issuer, and Citigroup Global Markets Inc., as syndication agent.


Table of Contents

Exhibit No.

 

Description

10.2*   Amendment No. 1, dated as of February 5, 2013, to the Credit Agreement, dated as of January 30, 2012, by and among Summit Materials, LLC, Bank of America, N.A. as sole lead arranger, and Bank of America, N.A. and Citigroup Global Markets Inc., as joint bookrunners.
10.3*   Tranche A Revolving Credit Commitment Conversion Agreement, dated as of February 11, 2013, under the Credit Agreement, dated as of January 30, 2012, among Summit Materials, LLC, the guarantors party thereto, the several banks and other financial institutions or entities from time to time parties to the Credit Agreement, Bank of America, N.A., as administrative agent, collateral agent, L/C issuer and swing line lender and the other parties thereto.
10.4*   Security Agreement, dated as of January 30, 2012, by and among the grantors identified therein and Bank of America, N.A., as collateral agent.
10.5*†   Employment Agreement, dated July 30, 2009, by and between Summit Materials Holdings L.P. and Thomas Hill.
10.6*†   Employment Agreement, dated December 29, 2011, by and between Summit Materials Holdings L.P. and Douglas Rauh.
12*   Computation of Ratio of Earnings to Fixed Charges.
16*   Letter regarding change in certifying accountant.
21*   Subsidiaries of Summit Materials, LLC.
23.1*   Consent of KPMG LLP, Independent Registered Public Accounting Firm.
23.2*   Consent of KPMG LLP, Independent Registered Public Accounting Firm.
23.3*   Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
23.4*   Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
23.5*   Consent of Allen, Gibbs & Houlik, L.C., Independent Registered Public Accounting Firm.
23.6*   Consent of Wisan, Smith, Racker & Prescott, LLP, Independent Registered Public Accounting Firm.
23.7*   Consent of CliftonLarsonAllen LLP, Independent Registered Public Accounting Firm.
23.8*   Consent of Perryman Chaney Russell, LLP, Independent Auditors.
23.9*   Consent of Simpson Thacher & Bartlett LLP (included as part of its opinion filed as Exhibit 5.1 hereto).
23.10*   Consent of Holland & Hart LLP (included as part of its opinion filed as Exhibit 5.2 hereto).
23.11*   Consent of Kutak Rock LLP (included as part of its opinion filed as Exhibit 5.3 hereto).
23.12*   Consent of Kutak Rock LLP (included as part of its opinion filed as Exhibit 5.4 hereto).
23.13*   Consent of Stites & Harbison PLLC (included as part of its opinion filed as Exhibit 5.5 hereto).
23.14*   Consent of Bell Nunnally & Martin LLP (included as part of its opinion filed as Exhibit 5.6 hereto).
24   Power of Attorney (included in signature pages of this registration statement).
25.1*   Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust, National Association as trustee under the Indenture, dated January 30, 2013, among Summit Materials, LLC, Summit Materials Finance Corp., the guarantors named therein and Wilmington Trust, National Association, as trustee.
99.1*   Form of Letter of Transmittal.


Table of Contents

Exhibit No.

  

Description

99.2*    Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
99.3*    Form of Letter to Clients.
99.4*    Form of Notice of Guaranteed Delivery.

 

* Filed herewith.
Management contract or compensatory plan or arrangement.

Exhibit 3.1

STATE of DELAWARE

LIMITED LIABILITY COMPANY

CERTIFICATE of FORMATION

First: The name of the limited liability company is Summit Materials Management Company, LLC

Second: The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington Zip Code 19808. The name of its Registered agent at such address is Corporation Service Company

Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: “The latest date on which the limited liability company is to dissolve is                     .”)

Fourth: (Insert any other matters the members determine to include herein.)

 

 
 

In Witness Whereof, the undersigned have executed this Certificate of Formation this 24 th day of September, 2008.

 

By: /s/ Eric Young

Authorized Person (s)
Name: Eric Young, Esq.


STATE OF DELAWARE

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF FORMATION

OF

SUMMIT MATERIALS MANAGEMENT COMPANY, LLC

This Certificate of Amendment to the Certificate of Formation of Summit Materials Management Company, LLC (the “Company”), dated January 28, 2009, has been duly executed and is being filed by the undersigned pursuant to the provisions of Section 18-202 of the Delaware Limited Liability Company Act, to amend the Certificate of Formation of the Company, which was filed on September 24, 2008 with the Secretary of State of the State of Delaware (the “Certificate”).

1. The name of the limited liability company is Summit Materials Management Company, LLC.

2. The Certificate is amended by deleting Article First thereof in its entirety and replacing such Article with the following:

“The name of the limited liability company is Summit Materials, LLC.”

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment as of the date first written above.

 

By:  

/s/ Thomas W. Hill

Name:   Thomas W. Hill
Title:   Manager

 

2

Exhibit 3.2

EXECUTION VERSION

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

SUMMIT MATERIALS, LLC

This Amended and Restated Limited Liability Company Agreement (this “ Agreement ”) of Summit Materials, LLC (the “ Company ”) is entered into by Summit Materials Holdings L.P., as the sole member (the “ Member ”).

WHEREAS, the Company was formed on September 24, 2008 as Summit Materials Management Company, LLC, upon the filing of a Certificate of Formation with the Secretary of State of the State of Delaware, pursuant to the provisions of the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et seq.) (the “ Act ”);

WHEREAS, the name of the Company was changed to Summit Materials, LLC on January 28, 2009, upon the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, pursuant to Section 18-202 of the Act;

WHEREAS, Thomas W. Hill, Ted A. Gardner and Charles W. Goodyear IV have entered into that Limited Liability Company Agreement of the Company, dated as of February 20, 2009, with the Company (the “ Original LLC Agreement ”);

WHEREAS, the interests in the Company were contributed to the Member pursuant to that certain contribution agreement by and between Thomas W. Hill, Ted A. Gardner, Charles W. Goodyear IV, and the Member, dated as of the date hereof;

WHEREAS, the Member, by execution of this Agreement, wishes to amend and restate the Original LLC Agreement pursuant to and in accordance with the Act, and hereby agrees as follows:

1. Name . The name of the limited liability company is Summit Materials, LLC.

2. Filing of Certificates . The Member, as an authorized person within the meaning of the Act, shall execute, deliver and file all certificates (and any amendments and/or restatements thereof) required or permitted to be filed with the Secretary of State of the State of Delaware. The Member is authorized to execute, deliver and file any other certificates, notices or documents (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.


3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Delaware law on limited liability companies formed under the Act and all powers necessary, convenient or incidental to accomplish its purposes as set forth in Section 3.

5. Principal Business Office . The principal business office of the Company shall be at such location as may hereafter be determined by the Member.

6. Registered Office . The address of the registered office of the Company in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington, in the County of New Castle in the State of Delaware.

7. Registered Agent . The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington, in the County of New Castle in the State of Delaware.

8. Member . The name and the mailing address of the Member is as follows:

 

                Name                 Address
   Summit Materials Holdings L.P.    do Summit Materials, LLC
      2900 K Street NW., Suite 450
      Harbourside North Tower Building
      Washington DC, 20007

9. Limited Liability . Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

10. Capital Contributions . The Member is deemed admitted as a member of the Company upon its execution and delivery of this Agreement.

11. Additional Contributions . The Member is not required to make any capital contribution to the Company. However, the Member may voluntarily make capital contributions to the Company at any time. To the extent that the Member makes capital contributions to the Company, the Member shall cause such capital contributions to be reflected in the books and records of the Company.

12. Allocation of Profits and Losses . For so long as the Member is the sole member of the Company, the Company’s profits and losses shall be allocated solely to the Member.

 

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13. Distributions . Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to the Member on account of its interest in the Company if such distribution would violate the Act or other applicable law.

14. Management . In accordance with Section 18-402 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes of the Company described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Notwithstanding any other provision of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

15. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section 15 may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member.

16. Other Business Opportunities . The Member and any person or entity affiliated with the Member may engage in or possess an interest in other business opportunities or ventures (unconnected with the Company) of every kind and description, independently or with others, including, without limitation, businesses that may compete with the Company. Neither the Member or any person or entity affiliated with the Member shall be required to present any such business opportunity or venture to the Company, even if the opportunity is of the character that, if presented to the Company, could be taken by it. Neither the Company nor any person or entity affiliated with the Company shall have any rights in or to such business opportunities or ventures or the income or profits derived therefrom by virtue of this Agreement, notwithstanding any duty otherwise existing at law or in equity. The provisions of this Section shall apply to the Member solely in its capacity as member of the Company and shall not be deemed to modify any contract or arrangement, including, without limitation, any noncompete provisions, otherwise agreed to by the Company and the Member.

17. Exculpation and Indemnification .

(a) Neither the Member nor any duly appointed officer of the Company shall be liable to the Company or any other person or entity who is a party to or is otherwise bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by the Member or such officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on the Member or such officer by this Agreement (or by action of the Member acting in accordance herewith and the Act), except that any such officer shall be liable for any such loss, damage or claim incurred by reason of such Person’s gross negligence or willful misconduct.

 

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(b) To the fullest extent permitted by applicable law, the Member and any duly appointed officer of the Company shall be entitled to indemnification from the Company for any loss, damage or claim incurred by the Member or such officer by reason of any act or omission performed or omitted by the Member or such officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on the Member or such officer by this Agreement (or by action of the Member acting in accordance herewith and the Act), except that any such officer shall not be entitled to be indemnified in respect of any loss, damage or claim incurred by reason of such Person’s gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section shall be provided out of and to the extent of Company assets only, and no member of the Company shall have personal liability on account thereof

18. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers any of its interest in the Company pursuant to this Section, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. If a Member transfers all of its interest in the Company, such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

19. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section, an additional member shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

20. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member and upon such terms (including with respect to participation in the management, profits, losses and distributions of the Company) as may be determined by the Member and the additional persons or entities to be admitted.

21. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member, (ii) any time there are no members of the Company, unless the Company is continued in accordance with the Act, or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

 

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22. Benefits of Agreement; No Third-Party Rights . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

23. Severability of Provisions . Each provision of this Agreement shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.

24. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

25. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws.

26. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

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

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 25th day of August, 2009.

 

SUMMIT MATERIALS HOLDINGS L.P.
By:   Summit Materials Holdings GP, Ltd., its general partner
By:  

/s/ Neil P. Simpkins

Name:   Neil P. Simpkins
Title:   Director

[SIGNATURE PAGE TO A&R SUMMIT MATERIALS, LLC AGREEMENT]

Exhibit 3.3

CERTIFICATE OF INCORPORATION

OF

SUMMIT MATERIALS FINANCE CORP.

The undersigned, in order to form a corporation for the purpose hereinafter stated, under and pursuant to the provisions of the General Corporation Law of the State of Delaware, hereby certifies that:

FIRST. The name of the Corporation is Summit Materials Finance Corp.

SECOND. The registered office and registered agent of the Corporation in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808.

THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware or any successor statute.

FOURTH. The total number of shares of capital stock which the Corporation shall have authority to issue is 1,000 shares of common stock, par value $0.01 per share.

FIFTH. The name and mailing address of the incorporator is James Cross, Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York, 10017.

SIXTH. The Board of Directors of the Corporation, acting by majority vote, is expressly authorized to make, alter, amend or repeal the Bylaws of the Corporation. In furtherance and not in limitation of the powers conferred by law, subject to any limitations contained elsewhere in this Certificate of Incorporation, Bylaws of the Corporation may be adopted, amended or repealed by a majority of the Board of Directors of the Corporation, but any Bylaws adopted by the Board of Directors may be amended or repealed by the stockholders entitled to vote thereon. Election of directors need not be by written ballot.

SEVENTH. (a) No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a director, except to the extent that such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as currently in effect or as the same may hereafter be amended. Any repeal or modification of this subsection (a) of this Article SEVENTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director, officer or the Corporation existing at the time of such repeal or modification. If the General Corporation Law of the State of Delaware is amended after the filing of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware, as so amended. For purposes of this Certificate of Incorporation, all references to a director or officer shall be references to any current or former directors or officers of the Corporation.

 

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(b) The Corporation shall indemnify and hold harmless any person who was or is a party or is threatened to be made a party to, or testifies in, any threatened, pending or completed action, claim, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, against all claims, losses, liabilities, expenses (including attorneys’ fees and disbursements), damages, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding to the fullest extent permitted under the General Corporation Law of the State of Delaware, and the Corporation may adopt Bylaws or enter into agreements with any such person for the purpose of providing for such indemnification.

(c) To the extent that a director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraph (b) of this Article SEVENTH, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

(d) Expenses (including attorneys’ fees) incurred by an officer or director in defending or testifying in a civil, criminal, administrative or investigative action, claim, suit or proceeding by reason of the fact that such person is or was an officer or director of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise) shall be paid by the Corporation in advance of the final disposition of such action, claim, suit or proceeding within ten business days of the Corporation’s receipt of a request for advancement of such expenses from such director or officer and, to the extent required by law, upon receipt of an undertaking by or on behalf of any such director or officer to repay such amount if it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation against such expenses as authorized by the relevant sections of the General Corporation Law of the State of Delaware, and the Corporation may adopt Bylaws or enter into agreements with such persons for the purpose of providing for such advances.

(e) The indemnification permitted by this Article SEVENTH shall not be deemed exclusive of any other rights to which any person may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding an office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. To assure indemnification under this Article SEVENTH of all current and former directors and officers who are determined by the Corporation or otherwise to be or to have been “fiduciaries” of any employee benefit plan of the Corporation which may exist from time to time, Section 145 of the General Corporation Law of the State of Delaware shall, for the purposes of this Article SEVENTH, be interpreted as follows: “other enterprise” shall be deemed to include such an employee benefit plan, including without limitation, any plan of the Corporation which is governed by the Act of Congress entitled “Employee Retirement Income Security Act of 1974,” as amended from time to time; the Corporation shall be deemed to have requested a person to serve an employee benefit plan where

 

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the performance by such person of his duties to the Corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; and excise taxes assessed on a person with respect to an employee benefit plan pursuant to such Act of Congress shall he deemed “fines.”

(f) The Corporation shall have the power to purchase and maintain insurance to protect itself and any person who is or was a director, officer, employee or agent of the Corporation, or while a director, officer, employee or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, employee benefit plan trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the General Corporation Law of the State of Delaware or the provisions of this Article SEVENTH or otherwise.

EIGHTH. Except as otherwise agreed in writing between such director and the Corporation, or as provided below, to the fullest extent permitted by law, except as may be otherwise agreed in writing between such director and the Corporation, (a) no director of the Corporation shall have any duty (fiduciary or otherwise) or obligation, if any, to refrain from (i) engaging in the same or similar activities or lines of business as the Corporation or any of its subsidiaries or (ii) doing business with any client, customer or vendor of the Corporation or any of its subsidiaries, including, in the cases of clauses (i) or (ii), any such matters as may be Corporate Opportunities (as defined below); and (b) no officer, director or employee thereof shall be deemed to have breached any duty (fiduciary or otherwise), if any, to the Corporation or any of its subsidiaries or stockholders solely by reason of any director of the Corporation engaging in any such activity or entering into such transactions, including any Corporate Opportunities. “Corporate Opportunity” means any potential transaction, investment or business opportunity or prospective economic or competitive advantage in which the Corporation or any of its subsidiaries could have any expectancy or interest.

Without limiting the foregoing, the Corporation and its subsidiaries shall have no interest or expectation in, nor right to be informed of, any Corporate Opportunity, and in the event that any director of the Corporation acquires knowledge of a potential transaction or matter which may be a Corporate Opportunity, such director shall, to the fullest extent permitted by law, have no duty (fiduciary or otherwise) or obligation to communicate or offer such Corporate Opportunity to the Corporation or any of its subsidiaries or to any other director of the Corporation and shall not, to the fullest extent permitted by law, be liable to the Corporation or any of its subsidiaries or stockholder for breach of any fiduciary duty as a director or officer of the Corporation or any of its subsidiaries solely by reason of the fact that any director of the Corporation acquires or seeks such Corporate Opportunity for itself, directs such Corporate Opportunity to another individual, partnership, joint venture, corporation, association, joint stock company, limited liability company, trust, unincorporated organization or government or an department or agency or political subdivision thereof, or otherwise does not communicate information regarding such Corporate Opportunity to the Corporation or its subsidiaries, and the Corporation and its subsidiaries, to the fullest extent permitted by law, waive and renounce any claim that such business opportunity constituted a Corporate Opportunity that should have been presented to the Corporation or its subsidiaries; provided that if an opportunity is expressly

 

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communicated to a director of the Corporation in his or her capacity as a director as an opportunity intended exclusively for the Corporation or its subsidiaries (hereinafter called an “Identified Corporate Opportunity”), such Identified Corporate Opportunity shall belong to the Corporation and its subsidiaries and, unless the Corporation notifies the stockholders that neither the Corporation nor any of its subsidiaries intend to pursue such Identified Corporate Opportunity.

IN WITNESS WHEREOF, the undersigned has signed this Certificate of Incorporation on December 19, 2011.

 

/s/ James Cross

James Cross
Sole Incorporator

 

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Exhibit 3.4

BYLAWS

OF

SUMMIT MATERIALS FINANCE CORP.

(hereinafter, the “Corporation”)

ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1. Place of Meetings. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors.

Section 2. Annual Meetings. The Annual Meeting of Stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors, at which meeting the stockholders shall elect a Board of Directors and transact such other business as may properly be brought before the meeting.

Section 3. Special Meetings. Special Meetings of stockholders for any purpose or purposes may be called at any time by the Chairman of the Board or the Board of Directors, but such Special Meetings may not be called by any other person or persons. Business transacted at any Special Meeting shall be limited to the purposes stated in the notice.

Section 4. Notice of Meetings. Notice of an Annual Meeting or Special Meeting stating the place, date, and hour of the meeting and in the case of a Special Meeting, the purpose or purposes for which the meeting is called, shall be given by the Corporation either personally or by mail or by other lawful means not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting.

Section 5. Quorum. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority in voting power of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting of the time, place, if any, thereof and the means of remote communications, if any, by which

 

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stockholders may be deemed present in person at such adjourned meeting, until a quorum shall be present or represented. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 6. Voting. Except as otherwise provided by or pursuant to the provisions of the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders or to express consent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of stockholders need not be by written ballot. At all meetings of stockholders for the election of directors a plurality of the votes cast shall be sufficient to elect. All other elections and questions shall, unless otherwise provided by the Certificate of Incorporation, these Bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or applicable law or pursuant to any regulation applicable to the Corporation or its securities, be decided by the affirmative vote of the holders of a majority in voting power of the shares of stock of the Corporation which are present in person or by proxy and entitled to vote thereon.

Section 7. Action by Consent. Any action required to be taken at any Annual or Special meeting of stockholders, or any action which may be taken at any Annual or Special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent shall be given by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous consent shall be given to those stockholders who have not consented and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that consents given by a sufficient number of holders to take the action were delivered to the Corporation.

Section 8. List of Stockholders Entitled to Vote. The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, as required by applicable law. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

 

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Section 9. Organization. At every meeting of stockholders, the Chairman of the Board, if there be one, shall be the chairman of the meeting or, in the case of vacancy in office or absence of the Chairman of the Board, one of the following officers present shall be the Chairman of the meeting in the order stated: the Vice Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer, the President, any Vice President, or, in the absence of any of the foregoing, a Chairman chosen by the stockholders at the meeting shall act as Chairman, and the Secretary, or in his or her absence, an Assistant Secretary, or in the absence of both the Secretary and Assistant Secretaries, a person appointed by the chairman of the meeting, shall act as Secretary.

Section 10. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date: (i) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty nor less than ten days before the date of such meeting; (ii) in the case of determination of stockholders entitled to express consent to corporate action without a meeting, shall not be more than ten days from the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (iii) in the case of any other action, shall not be more than sixty days prior to such other action. If no record date is fixed: (a) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (b) the record date for determining stockholders entitled to express consent to corporate action without a meeting when no prior action of the Board of Directors is required by law, shall be the first day on which a consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (c) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided , however , that the Board of Directors may fix a new record date for the adjourned meeting.

Section 11. Conduct of Meetings. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the chairman of the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the

 

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proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The chairman of any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such chairman should so determine, such person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

ARTICLE III

DIRECTORS

Section 1. Number and Election of Directors. The number of directors that shall constitute the Board of Directors shall be not less than one nor more than twelve. The initial directors shall be determined by resolution of the sole incorporator of the Corporation. Thereafter, within the limits specified above, the number of directors shall be determined by the Board of Directors. Each elected director shall hold office until the next Annual Meeting and until his successor is duly elected and qualified, or until his earlier resignation or removal.

Section 2. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority vote of all directors then in office, even if less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified, or until their earlier resignation or removal.

Section 3. Committees. The Board of Directors may designate one or more committees, which committees shall, to the extent provided in the resolution of the Board of Directors establishing such a committee, have all authority and may exercise all the powers of the Board of Directors in the management of the business and affairs of the Corporation to the extent lawful under the General Corporation Law of the State of Delaware.

Section 4. Duties and Powers. The business of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 5. Meetings. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Regular

 

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meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the President or any one director with one day’s notice to each director, either personally or by mail, telephone, facsimile transmission or other means of electronic transmission.

Section 6. Quorum; Board Action. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business, and the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time, place, if any, thereof and the means of remote communications, if any, by which directors may be deemed present in person at such adjourned meeting, until a quorum shall be present.

Section 7. Actions of Board. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in accordance with applicable law.

Section 8. Removal. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any director or the entire Board of Directors may be removed, with or without cause, by the holders of not less than eighty percent (80%) in voting power of outstanding shares of capital stock entitled to vote at an election of directors.

Section 9. Telephonic Meetings Permitted. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this By-law shall constitute presence in person at such meeting.

ARTICLE IV

OFFICERS

The officers of the Corporation shall consist of a President, a Secretary, a Treasurer and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Corporation may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

 

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ARTICLE V

NOTICES

Section 1. Notices. Except as otherwise provided herein or permitted by applicable law, whenever notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given personally or by telegram, telecopier, telephone or other means of electronic transmission.

Section 2. Waivers of Notice. Whenever any notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, a waiver thereof, given by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

ARTICLE VI

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Corporation shall indemnify any current or former Director or officer of the Corporation and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Corporation or otherwise, to which he was or is a party or is threatened to be made a party by reason of his current or former position with the Corporation or by reason of the fact that he is or was serving, at the request of the Corporation, as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

ARTICLE VII

ISSUANCE AND TRANSFERABILITY OF SHARES

Section 1. Shares of Stock. The shares of capital stock of the Corporation shall be represented by a certificate, unless and until the Board of Directors of the Corporation adopts a resolution permitting shares to be uncertificated. Notwithstanding the adoption of any such resolution providing for uncertificated shares, every holder of capital stock of the Corporation theretofore represented by certificates and, upon request, every holder of uncertificated shares, shall be entitled to have a certificate for shares of capital stock of the Corporation signed by, or in the name of the Corporation by, (a) the Chairman of the Board, the Vice Chairman of the Board, the President or any Executive Vice President, and (b) the Secretary or an Assistant Secretary, certifying the number of shares owned by such stockholder in the Corporation.

 

6


Section 2. Transfer of Shares. Stock of the Corporation shall be transferable in the manner prescribed by applicable law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation, and in the case of certificated shares of stock, only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes; or, in the case of uncertificated shares of stock, upon receipt of proper transfer instructions from the registered holder of the shares or by such person’s attorney lawfully constituted in writing, and upon payment of all necessary transfer taxes and compliance with appropriate procedures for transferring shares in uncertificated form; provided , however , that such surrender and endorsement, compliance or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. With respect to certificated shares of stock, every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled,” with the date of cancellation, by the Secretary or Assistant Secretary of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

ARTICLE VIII

GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, may be declared by the Board of Directors at any regular or special meeting, and may be paid in cash, in property, or in shares of the capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

Section 2. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 3. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

Section 4. Amendments. These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the majority vote of the Board of Directors.

Section 5. Entire Board of Directors. As used in these Bylaws generally, the term “entire Board of Directors” means the total number of the directors which the Corporation would have if there were no vacancies or newly created directorships.

 

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Exhibit 3.5

CERTIFICATE OF FORMATION

OF

AUSTIN MATERIALS, LLC

This Certificate of Formation of AUSTIN MATERIALS, LLC (the “Company”) dated as of July 26, 2011, is being duly executed and filed by Sasha Friedman, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del . C. § 18-101, et. seq.).

FIRST. The name of the limited liability company formed hereby is AUSTIN MATERIALS, LLC.

SECOND. The address of the registered office of the Company in the State of Delaware is do Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

THIRD. The name and address of the registered agent of the Company for service of process in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

IN WITNESS HEREOF, the undersigned has executed this Certificate of Formation as of the date first above written.

 

/s/ Sasha Friedman

Sasha Friedman

Exhibit 3.6

LIMITED LIABILITY COMPANY AGREEMENT

OF

AUSTIN MATERIALS, LLC

This Limited Liability Company Agreement (this “ Agreement ”) of AUSTIN MATERIALS, LLC (the “ Company ”) is entered into by Summit Materials Companies I, LLC, as the sole member (the “ Member ”).

The Member, by execution of this Agreement, hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. §18 - 101, et seq.), as amended from time to time (the “ Act ”), and hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is Austin Materials, LLC.

2. Filing of Certificates . Sasha Friedman is hereby designated an “authorized person” within the meaning of the Act, and shall execute, deliver and file the Certificate of Formation of the Company with the Secretary of State of the State of Delaware. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, her powers as an “authorized person” shall cease, and the Member shall thereupon become the designated “authorized person” within the meaning of the Act. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Delaware law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 2900 K Street NW, Suite 100, Washington, DC 20007.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808.


7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

    
Summit Materials    2900 K Street NW, Suite 100   
Companies I, LLC    Washington, DC 20007   

8. Limited Liability . Except as required by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 18-402 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

Name

     

Title

    
Michael Brady     Vice President   
Anya Fonina     Vice President   
Shane Evans     Vice President   
Anthony Keenan     Assistant Secretary   
Glenn Culpepper     Assistant Treasurer   

 

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14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Delaware and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Delaware for directors and officers of corporations organized under the laws of the State of Delaware. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

 

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18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member, (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 26 day of July, 2011.

 

SUMMIT MATERIALS COMPANIES I, LLC, sole
member
By:  

/s/ Anya Fonina

Name:   Anya Fonina
Title:   Vice President

[Signature Page to Austin Materials, LLC Limited Liability Company Agreement]

Exhibit 3.7

CERTIFICATE OF FORMATION

OF

CONTINENTAL CEMENT COMPANY, L.L.C.

This Certificate of Formation of Continental Cement Company, L.L.C. (the “LLC”), dated as of May 3, 2010, is being duly executed and filed by the undersigned, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et

FIRST. The name of the limited liability company formed hereby is Continental Cement Company, L.L.C.

SECOND. The registered office of the LLC in the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

THIRD. The name and address of the registered agent of the LLC for service of process on the LLC in the State of Delaware shall be The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation as of the date first above written.

 

  /s/ Edwin Eshmoili
  Edwin Eshmoili
  Authorized Person


STATE OF DELAWARE

CERTIFICATE OF AMENDMENT CHANGING ONLY THE

REGISTERED OFFICE OR REGISTERED AGENT OF A

LIMITED LIABILITY COMPANY

The limited liability company organized and existing under the Limited Liability Company Act of the State of Delaware, hereby certifies as follows:

1. The name of the limited liability company is CONTINENTAL CEMENT COMPANY, L.L.C.

2. The Registered Office of the limited liability company in the State of Delaware is changed to 2711 Centerville Road, Suite 400 (street), in the City of Wilmington Zip Code 19808 . The name of the Registered Agent at such address upon whom process against this limited liability company may be served is Corporation Service Company

 

By:   /s/ Anthony Keenan
Authorized Signatory
Name: Anthony Keenan
    Print or Type

Exhibit 3.8

 

 

 

 

 

CONTINENTAL CEMENT COMPANY, L.L.C.

A Delaware Limited Liability Company

 

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

Dated as of May 27, 2010

THE LIMITED LIABILITY COMPANY UNITS EVIDENCED BY THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH LIMITED LIABILITY COMPANY UNITS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN. PURCHASERS OF LIMITED LIABILITY COMPANY UNITS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

 

 


Table of Contents

 

     Page  

ARTICLE I Definitions

     2   

SECTION 1.1. Definitions

     2   

SECTION 1.2. Terms Generally

     15   

ARTICLE II General Provisions

     15   

SECTION 2.1. Formation

     15   

SECTION 2.2. Name

     15   

SECTION 2.3. Term

     15   

SECTION 2.4. Purpose; Powers

     15   

SECTION 2.5. Foreign Qualification

     17   

SECTION 2.6. Registered Office; Registered Agent; Principal Office; Other Offices

     18   

SECTION 2.7. No State-Law Partnership

     18   

SECTION 2.8. Amendment and Restatement

     18   

SECTION 2.9. Members and Units; Classes

     18   

ARTICLE III Management

     21   

SECTION 3.1. Board; Delegation of Authority and Duties

     21   

SECTION 3.2. Establishment of the Board

     22   

SECTION 3.3. Board Meetings

     24   

SECTION 3.4. Approval or Ratification of Acts or Contracts

     28   

SECTION 3.5. Action by Written Consent

     28   

SECTION 3.6. Boards of Subsidiaries

     29   

SECTION 3.7. Officers

     29   

SECTION 3.8. Management Matters

     30   

SECTION 3.9. Liability to Members

     31   

SECTION 3.10. Fiduciary Duties

     31   

ARTICLE IV Capital Contributions; Allocations; Distributions

     33   

SECTION 4.1. Recapitalization; Initial Units; Capital Contributions

     33   

SECTION 4.2. Capital Accounts

     33   

SECTION 4.3. Allocations of Net Income and Net Loss

     34   

SECTION 4.4. Distributions

     37   

SECTION 4.5. Security Interest and Right of Set-Off

     40   

SECTION 4.6. Additional Issuances Generally

     40   

ARTICLE V Transfer of Membership Interests; Admission of New Members

     43   

SECTION 5.1. Admission of Additional or Substitute Members

     43   

SECTION 5.2. Transfers Generally

     44   

SECTION 5.3. Tag Along Rights

     45   

SECTION 5.4. Drag-Along Rights

     48   

SECTION 5.5. Rollover Exchange

     51   

SECTION 5.6. Put/Call of Class B Units

     54   

 

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ARTICLE VI Certain Obligations of the Rollover Members

     58   

SECTION 6.1. Non-Solicitation

     58   

ARTICLE VII Withdrawal; Dissolution

     60   

SECTION 7.1. Member Withdrawal

     60   

SECTION 7.2. Dissolution

     60   

ARTICLE VIII Reports to Members; Tax Matters; Affirmative covenants

     61   

SECTION 8.1. Books of Account

     61   

SECTION 8.2. Fiscal Year

     61   

SECTION 8.3. Certain Tax Matters

     61   

SECTION 8.4. Financial Statements

     62   

SECTION 8.5. Records

     63   

SECTION 8.6. Other

     64   

ARTICLE IX Liability, Exculpation, Indemnification and Insurance

     65   

SECTION 9.1. Liability

     65   

SECTION 9.2. Duties and Liabilities of Covered Persons

     65   

SECTION 9.3. Exculpation

     65   

SECTION 9.4. Indemnification

     65   

SECTION 9.5. Advancement of Expenses

     66   

SECTION 9.6. Notice of Proceedings

     66   

SECTION 9.7. Insurance

     67   

ARTICLE X Miscellaneous

     67   

SECTION 10.1. Investment Representations of Members

     67   

SECTION 10.2. Reimbursement of Summit Member(s)

     67   

SECTION 10.3. Schedules

     68   

SECTION 10.4. Governing Law

     68   

SECTION 10.5. Successors and Assigns

     68   

SECTION 10.6. Confidentiality

     68   

SECTION 10.7. Amendments

     69   

SECTION 10.8. Notices

     70   

SECTION 10.9. Counterparts

     70   

SECTION 10.10. Power of Attorney

     70   

SECTION 10.11. Entire Agreement; Third Party Beneficiaries

     71   

SECTION 10.12. Section Titles

     71   

 

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AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

CONTINENTAL CEMENT COMPANY, L.L.C.

A Delaware Limited Liability Company

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (as it may be amended, restated, supplemented or otherwise modified from time to time, this “ Agreement ”) of Continental Cement Company, L.L.C. (the “ Company ”), dated and effective as of May 27, 2010, is adopted by, and executed and agreed to, for good and valuable consideration, by and among Summit Materials Holdings II, LLC, a Delaware limited liability company (the “ Summit Member ”, and together with any of its Permitted Transferees holding Units or other Membership Interests and who have otherwise been admitted as a Member in accordance with the terms of this Agreement, the “ Summit Members ”), the other Persons listed as Members on Schedule A hereto (the “ Rollover Members ”) and each other Person who becomes a Member in accordance with the terms of this Agreement after the date hereof.

BACKGROUND

1. On May 3, 2010 the Company was formed as a limited liability company under the Act by the filing of the Certificate of Formation of Continental Cement Company, L.L.C. (the “ Certificate ”) with the office of the Secretary of State of the State of Delaware.

2. On May 27, 2010, Continental Cement Company, L.L.C., a limited liability company organized under the laws of the State of Missouri, executed the Limited Liability Company Agreement of Continental Cement Company, L.L.C. (the “ Original Agreement ”) and ratified the filing of the Certificate of Formation with the office of the Secretary of State of the State of Delaware.

3. The Company was originally a wholly-owned subsidiary of Continental Cement Company, L.L.C., a Missouri limited liability company (“ MO CCC ”).

4. On May 27, 2010, the Company and MO CCC effected a merger pursuant to which the Company and MO CCC merged with the Company surviving as the surviving entity of such merger.

5. The existing members desire to amend and restate the Original Agreement for the purpose of setting forth the agreements governing the relations among the Members and to admit additional Members as provided herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto, each intending to be legally bound, agree as follows:


ARTICLE I

DEFINITIONS

SECTION 1.1.  Definitions . Unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:

Act ” means the Delaware Limited Liability Company Act, Title 6, §§ 18-101, et seq, as it may be amended from time to time.

Additional Member ” means any Person that has been admitted to the Company as a Member pursuant to Section 5.1 by virtue of having received Membership Interests, including Units, from the Company and not from any other Member or Substitute Member.

Adjusted Capital Account Deficit ” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:

(i) decrease such deficit by any amounts which such Member is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Treasury Regulation Sections 1.704-2(i)(5) and 1.704-2(g); and

(ii) increase such deficit by the items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

Affiliate ” when used with reference to another Person means any Person (other than the Company or any of its Subsidiaries), directly or indirectly, through one or more intermediaries, Controlling, Controlled by, or under common Control with, such other Person; provided that neither the Company nor any of its Subsidiaries shall be deemed to be an Affiliate of the Summit Member(s) for any purposes under this Agreement.

Agreement ” has the meaning set forth in the preamble above.

Bankruptcy ” means, with respect to any Person, the occurrence of any of the following events: (i) the filing of an application by such Person for, or a consent to, the appointment of a trustee or custodian of such Person’s assets; (ii) the filing by such Person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing such Person’s inability to pay such Person’s debts as they become due; (iii) the failure of such Person to pay such Person’s debts as such debts become due; (iv) the making by such Person of a general assignment for the benefit of creditors; (v) the filing by such Person of an answer admitting the material allegations of, or such Person’s consenting to, or defaulting in answering, a Bankruptcy petition filed against him in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter

 

2


amended; or (vi) the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such Person a bankrupt or insolvent or for relief in respect of such Person or appointing a trustee or custodian of such Person’s assets and the continuance of such order, judgment or decree unstayed and in effect for a period of 60 consecutive days.

Blackstone ” means Blackstone Capital Partners (Cayman) V-NQ L.P., Blackstone Capital Partners (Cayman) NQ V-AC L.P., Blackstone Participation Partnership (Cayman) V-NQ L.P., Blackstone Family Investment Partnership (Cayman) V-NQ L.P. or any affiliated funds of the foregoing Persons Controlled directly or indirectly by The Blackstone Group L.P. that hold, directly or indirectly, interests in Summit Holdco.

Board ” means the Board of Directors of the Company established pursuant to Section 3.2.

Call Closing Date ” has the meaning set forth in Section 5.6(d).

Call Right ” has the meaning set forth in Section 5.6(a).

Capital Account ” means, with respect to any Member, the account maintained for such Member in accordance with the following provisions:

(a) To each Member’s Capital Account there shall be added such Member’s Capital Contributions, such Member’s share of Net Income and any items in the nature of income or gain which are specially allocated pursuant to Section 4.3(c) hereof, and the amount of any Company liabilities assumed by such Member or which are secured by any property distributed to such Member.

(b) To each Member’s Capital Account there shall be subtracted the amount of cash and the Gross Asset Value of any property distributed to such Member pursuant to any provision of this Agreement, such Member’s share of Net Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 4.3(c) hereof, and the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company.

(c) In the event any interest in the Company is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.

(d) In determining the amount of any liability for purposes of subparagraphs (a) and (b) hereof, there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.

(e) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations.

 

3


(f) Notwithstanding anything to the contrary, in determining the Capital Accounts of the Members, the Tax Matters Member may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account such facts and circumstances as they reasonably deem relevant for this purpose.

Capital Contribution ” means, with respect to any Member, the amount of cash and the initial Gross Asset Value of any property (other than money) contributed from time to time to the Company by such Member.

Certificate ” has the meaning set forth in the preamble above.

Change of Control ” means (i) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, as a whole, to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Summit Member(s) and/or any of their Affiliates, or (ii) any person or group, other than the Summit Member(s) and/or any of their Affiliates, has or obtains the right to appoint members of the Board holding a majority of the voting power of the Directors serving on the Board, including if any person or group, other than the Summit Member(s) and/or any of their Affiliates, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of Units or other Membership Interests having the right to designate Directors holding a majority of voting power of the Directors serving on the Board, including by way of merger, consolidation or otherwise.

Claims and Expenses ” has the meaning set forth in Section 9.4.

Class A Member ” has the meaning set forth in Section 2.9(a).

Class A Priority Return Amount ” means, with respect to any Class A Units, an amount equal to eleven percent (11.0%) per annum, accruing daily and compounding annually on each anniversary of the date of issuance of such Class A Units, on the amount of Capital Contributions made in respect of such Class A Units for the period from the date of this Agreement to the date on which the applicable distribution is to be made pursuant to Section 4.4(a)(ii) (or Section 4.4(a)(i) in order to calculate the Sharing Percentages applicable to such distribution); provided that in no event shall the Class A Priority Return Amount increase beyond an amount that would result in the Class A Sharing Percentage to be in excess of 80% in the absence of clause (i)(B) in the definition of Class A Sharing Percentage.

Class A Sharing Percentage ” means, subject to any modifications arising from the right of the Board to create any new Class of Units pursuant to Section 2.9, at any time:

(i) to the extent that, and for so long as, the Summit Member(s) have received aggregate cash proceeds in respect of sales of Class A Units and/or distributions pursuant to Section 4.4(a) in respect of Class A Units in an amount less than 250% of the amount of the Capital Contributions made by the initial Summit Member as of the date of this Agreement pursuant to Section 4.1(b) in respect of Class A Units, a percentage (the

 

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Base Class A Sharing Percentage ”) equal to the lesser of: (A) the percentage obtained by multiplying 100 by a fraction, the numerator of which is the sum of (x) the Class A Priority Return Amount existing as of the time of calculation of the Class A Sharing Percentage and (y) all Capital Contributions of the Class A Members in respect of Class A Units and the denominator of which is the sum of (1) the Initial Class B Unit Conversion Value, (2) the Class A Priority Return Amount existing as of the time of calculation of the Class A Sharing Percentage and (3) all Capital Contributions of the Class A Members in respect of Class A Units, and (B) 80%;

(ii) solely to the extent that, and for so long as, the Summit Member(s) have received aggregate cash proceeds in respect of sales of Class A Units and/or distributions pursuant to Sections 4.4(a) in respect of Class A Units in an amount equal to or greater than 250% but less than 300% of the amount of the Capital Contributions made by the initial Summit Member as of the date of this Agreement pursuant to Section 4.1(b) in respect of Class A Units, a percentage equal to the Base Class A Sharing Percentage minus 5%; and

(iii) solely to the extent that, and for so long as, the Summit Member(s) have received aggregate cash proceeds in respect of sales of Class A Units and/or distributions pursuant to Sections 4.4(a) in respect of Class A Units in an amount equal to or greater than 300% of the amount of the Capital Contributions made by the initial Summit Member as of the date of this Agreement pursuant to Section 4.1(b) in respect of its Class A Units, a percentage equal to the Base Class A Sharing Percentage minus 10%.

Class A Units ” means the Class A Units of the Company.

Class B Member ” has the meaning set forth in Section 2.9(a).

Class B Sharing Percentage ” means, subject to any modifications arising from the right of the Board to create any new Class of Units pursuant to Section 2.9, at any time, a percentage equal to 100 minus the Class A Sharing Percentage.

Class B Units ” means the Class B Units of the Company.

Closing ” means the closing of the purchase and sale of the Class A Units contemplated by the Subscription Agreement.

Closing Date ” means the date of the Closing.

Code ” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code shall mean, where appropriate, the corresponding provision in any successor statute.

Collateral ” means substantially all the then-owned and after-acquired tangible and intangible assets of the Company and the Subsidiary Guarantors, including (x) all capital stock held by the Company or any Subsidiary Guarantor and (y) accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real property, intercompany notes, cash and proceeds of the foregoing.

 

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Company ” has the meaning set forth in the preamble.

Company Minimum Gain ” has the meaning ascribed to “Partnership Minimum Gain” in Regulations Section 1.704-2(d).

Confidential Information ” means all confidential information (irrespective of the form of communication) obtained by or on behalf of, a Member from the Company or its Subsidiaries, another Member in its capacity as such, or their respective Representatives, other than information which (i) was or becomes generally available to the public other than as a result of a breach of this Agreement by such Member or Representative, (ii) was or becomes available to such Member on a nonconfidential basis prior to disclosure to the Member by the Company, its Subsidiaries, such other Member or their respective Representatives, (iii) was or becomes available to the Member from a source other than the Company, its Subsidiaries, such other Member or their respective Representatives, provided that such source is not known by such Member to be bound by a confidentiality agreement with the Company, its Subsidiaries or such other Member, as applicable, or (iv) is independently developed by such Member without the use of any such confidential information.

Control ” when used with reference to any Person means the power to direct the management or policies of such Person, directly or indirectly, by or through stock or other equity ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral); and the terms “ Controlling ” and “ Controlled ” shall have meanings correlative to the foregoing.

Competitive Opportunity ” has the meaning set forth in Section 3.10(d).

Covered Person ” means (a) each Officer, Director, Member or the Tax Matters Member, in each case in his, her or its capacity as such, and each such Person’s successors, heirs, estates or legal representative, (b) any Affiliate of each Member, or the Tax Matters Member and (c) any Person of which a Member is an officer, director, shareholder, partner, member, employee, representative or agent, or any Affiliate, officer, director, shareholder, partner, member, employee, representative or agent of any of the foregoing, in each case in clauses (a), (b) and (c) whether or not such Person continues to have the applicable status referred to in such clauses.

Depreciation ” means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall, except to the extent otherwise required by Regulation 1.704-3(d)(2), be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided , however, that if the federal income tax

 

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depreciation, amortization or other cost recovery deduction for such year is zero, Depreciation shall be calculated with reference to such beginning Gross Asset Value using any reasonable method selected by the Tax Matters Member.

Director ” has the meaning set forth in Section 3.2(a) of this Agreement.

Disabling Conduct ” means, in respect of any Person, an act or omission (a) that is a criminal act by such Person that such Person had no reasonable cause to believe was lawful, (b) that constitutes fraud, gross negligence or willful misconduct by such Person or (c) that is a material breach of this Agreement.

Distributable Assets ” means all cash receipts and (if distribution thereof is determined to be necessary by the Board) other assets of the Company from any and all sources, reduced by operating cash expenses, payments (if any) required to be made in connection with any loan to the Company and any reserve for contingencies or escrow required, in the judgment of the Board, applied on a good faith basis, in connection therewith.

EBITDA ” means with respect to any Person, for any period, the net income (loss) of such Person and its subsidiaries for such period determined on a consolidated basis in accordance with GAAP, plus ,

(i) net interest expense,

(ii) provision for income taxes,

(iii) depreciation, depletion, and amortization,

(iv) extraordinary, non-recurring or unusual losses (less all fees and expenses relating thereto) or expenses,

(v) noncash charges or losses,

(vi) restructuring charges, business optimization expenses or integration costs,

(vii) any deductions attributable to non-controlling interests,

(viii) the amount of the proportionate consolidated EBITDA above the net income (loss) for any investment accounted for by the equity method,

(ix) the amount of management, monitoring, consulting, transaction and advisory fees and related expenses paid, and

(x) the pro forma effect of any acquisitions or dispositions, including the related synergies and any projected cost savings (as if such acquisitions or dispositions occurring during such period had occurred on the first day of such period),

less ,

 

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(i) extraordinary, non-recurring or unusual gains (less all fees and expenses relating thereto), and

(ii) gains on asset sales (other than in the ordinary course of business),

in each case, as determined on a consolidated basis for such Person and its subsidiaries in accordance with GAAP; provided that, to the extent included in net income, the following shall be excluded in determining EBITDA:

(A) the cumulative effect of a change in accounting principles during such period,

(B) any income (loss) for such period attributable to the early extinguishment of indebtedness for such period,

(C) any mark to market adjustments on equity investments, financial instruments or hedging activities (other than in the ordinary course of business), and

(D) any effects of purchase accounting adjustments (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue, mineral reserves, landfill air space and debt line items).

ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Exit Event ” means, whether accomplished through consolidation or merger, Unit exchange, sale of assets or Units or otherwise, (x) a Change of Control or (y) the sale by the Summit Member(s) in a single transaction or series of related transactions to an unaffiliated third person or group of Units having a collective Sharing Percentage of more than 50%.

Family Affiliate ” means, with respect to any natural person, (a) a trust or custodianship the beneficiaries of which may include only such natural person and/or his or her spouse and his or her lineal descendants (including children by adoption and step children), (b) any limited liability company or partnership (whether general or limited) (i) with respect to which all of the outstanding equity interests are beneficially owned solely by such natural person and/or his or her spouse, his or her lineal descendants (including children by adoption and step children) or a trust or custodianship described in clause (a) above and (ii) with respect to which such natural person and/or his or her spouse are the sole managers or managing members (if a limited liability company) or the sole general partners (if a limited partnership) and otherwise have the sole power to direct or cause the direction of the management and policies, directly or indirectly, of such limited liability company or partnership, whether through the ownership of voting securities, by contract or otherwise or (c) such natural person, any lineal descendent of such natural person (including children by adoption and step children) or the spouse of any such

 

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natural person, but only in connection with a distribution from any trust, custodianship, limited liability company or partnership described in clauses (a) and (b) with respect to which such natural person, spouse or lineal descendent is a beneficiary, provided that such distribution is required as a result of the death or disability of such natural person or is required pursuant to the terms of such trust, custodianship, limited liability company agreement or partnership agreement.

Farmer Supply Agreement ” means that Cement Purchase Agreement, dated as of May 27, 2010, by and between Midwest Cement Company, a Missouri corporation, and the Company, as the same may be amended, restated, supplemented or otherwise modified from time to time.

Farmer Subordinated Notes ” means those Promissory Notes, dated as of May 27, 2010, issued by the Company to Farmer Holding Company, Inc., as the same may be amended, restated or otherwise modified from time to time.

First Lien Credit Agreement ” means that Second Amended and Restated Credit Agreement, dated as of May 27, 2010, among the Company, Wells Fargo Bank, National Association, as the agent and the other parties thereto, as the same may be amended, restated or otherwise modified from time to time.

GAAP ” means U.S. generally accepted accounted principles, consistently applied.

Gross Asset Value ” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(a) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset on the date of contribution, as reasonably determined by the Tax Matters Member.

(b) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market value, which value shall be reasonably determined by the Board, subject to Special Board Approval, as of the following times:

(i) the acquisition of an additional interest in the Company (other than in connection with the execution of this Agreement) by a new or existing Member in exchange for more than a de minimis Capital Contribution or for the provision of services, or the vesting of an additional interest in the Company held by a new or existing Member, if the Tax Matters Member reasonably determines that such adjustment is permitted under Regulations Section 1.704-1(b)(2)(iv)(f)(5) and is necessary or appropriate to reflect the relative economic interests of the Members in the Company as provided under this Agreement or an applicable consulting or employment agreement, subscription agreement, or other agreement with the Company and a Member;

 

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(ii) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company, if the Tax Matters Member reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the Company;

(iii) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and

(iv) such other times as the Tax Matters Member shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2.

(c) The Gross Asset Value of any Company asset distributed to a Member shall be the gross fair market value of such asset on the date of distribution, as reasonably determined by the Tax Matters Member (subject, in the case of distribution of a non-cash asset, to Special Board Approval to the extent required pursuant to Section 4.4).

(d) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided , however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to the extent that the Members determine that an adjustment pursuant to subparagraph (b) of this definition of Gross Asset Value is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d).

(e) If the Gross Asset Value of a Company asset has been determined or adjusted pursuant to subparagraph (a), (b), or (d) of this definition of Gross Asset Value, then such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Losses.

Initial Class B Unit Conversion Value ” means $57,857,142.857.

LTM EBITDA ” means, with respect to a Person, the EBITDA of such Person for the 12-month period (ending on the prior month-end) immediately prior to the time on which EBITDA is to be calculated.

Member ” means the Summit Member(s), the Rollover Members, and each other Person who is hereby or hereafter admitted as a Member in accordance with the terms of this Agreement and the Act, including any Additional Member(s) and/or Substitute Member(s). The Members shall constitute the “members” (as that term is defined in the Act) of the Company.

Member Minimum Gain ” means minimum gain attributable to Member Nonrecourse Debt determined in accordance with Regulations Section 1.704-2(i).

 

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Member Nonrecourse Debt ” has the meaning ascribed to “Partner Nonrecourse Debt” in Regulations
Section 1.704-2(b)(4).

Member Nonrecourse Deduction ” has the meaning ascribed to “Partner Nonrecourse Deduction” in Regulations Section 1.704-2(i)(2).

Membership Interest ” means the entire limited liability company interest of a Member in the Company at any particular time, including the right of such Member to any and all benefits to which a Member may be entitled as provided in this Agreement, together with the obligations of such Member to comply with all the terms and provisions of this Agreement. Membership Interests shall be expressed as a number and type of Units.

Membership Interest Pledge Agreements ” means those certain Membership Interest Pledge Agreements, each dated as of May 27, 2010, by the Summit Member and Rollover Members in favor of the lenders under the First Lien Credit Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time

Net Income ” or “ Net Loss ” means for each year of the Company, an amount equal to the Company’s taxable income or loss for such fiscal year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

(a) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be added to such taxable income or loss;

(b) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be subtracted from such taxable income or loss;

(c) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (b) or (c) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss;

(d) Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(e) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, Depreciation shall be taken into account for such fiscal year;

 

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(f) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss; and

(g) Notwithstanding any other provision of this definition of Net Income or Net Loss, any items which are specially allocated pursuant to Section 4.3(c) hereof shall not be taken into account in computing Net Income or Net Loss. The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 4.3(c) hereof shall be determined by applying rules analogous to those set forth in this definition of Net Income or Net Loss.

Net Taxable Income ” has the meaning set forth in Section 4.4(c).

Nonrecourse Deductions ” has the meaning set forth in Regulations Section 1.704-2(c). The amount of the Nonrecourse Deductions for a fiscal year equals the net increase, if any, in the amount of the Company Minimum Gain during that fiscal year, determined according to the provisions of Regulations Section 1.704-2(c).

Non-Solicitation Period ” has the meaning set forth in Section 6.1(a).

Officer ” means each Person designated as an officer of the Company pursuant to Section 3.7, subject to such Section 3.7 and any resolution of the Board appointing such Person as an officer or relating to such appointment.

Ordinary Course of Business ” means the usual, regular and ordinary course of business as conducted by the Company and/or its Subsidiaries.

Original Agreement ” has the meaning set forth in the preamble above.

Permitted Transferee ” means, with respect to a Member, any Affiliate (if such Member is an entity) or Family Affiliate (if such Member is a natural person) of such Member or, with the prior approval of the Board, the Company or any Subsidiary of the Company.

Person ” means a natural person, partnership (whether general or limited), limited liability company, trust, estate, association, corporation or any other legal entity.

Put Closing Date ” has the meaning set forth in Section 5.6(d).

Put Right ” has the meaning set forth in Section 5.6(b).

Recapitalization ” has the meaning set forth in Section 4.1(a).

 

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Regulations ” or “ Treasury Regulations ” means the Income Tax Regulations, including temporary Regulations, promulgated under the Code, as such Regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

Regulatory Allocations ” has the meaning set forth in Section 4.3(c).

Representatives ” has the meaning set forth in Section 10.6.

Rollover Exchange ” has the meaning set forth in Section 5.5(b).

Sale of Control ” of a Person means (i) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of such Person and its Subsidiaries, as a whole, to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Persons Controlling such Person immediately prior to such sale or disposition and/or any of their Affiliates, or (ii) any person or group, other than the Persons Controlling such Person immediately prior to such sale or disposition and/or any of their Affiliates, has or obtains the right to appoint a majority of the members of a board of directors, managing member or general partner having management oversight over such Person, including if any person or group, other than the Persons Controlling such Person immediately prior to such sale or disposition and/or any of their Affiliates, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the equity interests having the right to designate members of a board of directors, managing member or general partner having management oversight over such Person, including by way of merger, consolidation or otherwise.

SEC ” means the U.S. Securities and Exchange Commission.

Second Lien Credit Agreement ” means that Second Lien Credit Agreement, dated as of May 27, 2010, among the Company, Sankaty Advisors, LLC and the other parties thereto, as the same may be amended, restated or otherwise modified from time to time.

Second Lien Date ” means the earlier of (a) the date upon which the obligations outstanding under the Second Lien Credit Agreement have been repaid in full; or (b) August 27, 2013.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Sharing Percentage ” means, with respect to the Class A Units, the Class A Sharing Percentage; with respect to the Class B Units, the Class B Sharing Percentage; and with respect to any other class of Units of the Company created by the Board after the date hereof pursuant to Section 2.9, the Sharing Percentage of such new class of Units, if any, as established by the Board and set forth in any resolution of the Board creating such class and/or any amendment to this Agreement reflecting the creation of such new class of Units (in which case the Class A Sharing Percentage and Class B Sharing Percentage shall be automatically adjusted on a proportionate basis).

 

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Similar Law ” means any federal, state, local, non–U.S. or other law that could cause the underlying assets of the Company to be treated as assets of the Member(s) by virtue of its Membership Interest and thereby subject the Company and the Board (or other persons responsible for the investment and operation of the Company’s assets) to laws or regulations that are similar to the fiduciary responsibility or prohibited transaction provisions contained in Title I of ERISA or Section 4975 of the Code.

Subscription Agreement ” means the Subscription Agreement, dated as of May 27, 2010, by and among the Company, the initial Summit Member, and the Rollover Members (as such agreement may be amended, restated, supplemented or otherwise modified from time to time).

Subsidiary ” means, with respect to any Person, any entity of which a majority of the total voting power of shares of stock or equivalent ownership interests entitled to vote in the election of directors, managers, trustees or other members of the applicable governing body thereof is at the time owned or Controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

Substitute Member ” means any transferee to which a Member, including an Additional Member or Substitute Member, has transferred its Membership Interest in the Company in accordance with Article V and has been admitted to the Company as a Member in accordance with the terms and conditions of this Agreement.

Summit Holdco ” means Summit Materials Holdings L.P., any successor entity or any Affiliate of Summit Materials Holdings L.P. formed for the purposes of effecting the Summit IPO.

Summit IPO ” means the initial sale of interests or common equity of Summit Holdco to the public in an offering pursuant to an effective registration statement filed with the SEC pursuant to the Securities Act, as then in effect, provided that any offering made in connection with a business acquisition or combination or an employee benefit plan shall not be deemed to be the Summit IPO.

Tax Advances ” has the meaning set forth in Section 4.3(g).

Tax Matters Member ” has the meaning set forth in Section 8.3(c).

Transfer ” has the meaning set forth in Section 5.2(a).

Units ” means a fractional share of the Membership Interests of the Members. The number of Units outstanding, the classes of Units and the holders thereof are set forth on Schedule I , as Schedule I may be amended from time to time pursuant hereto. The classes of Units existing as of the date hereof shall be the Class A Units and Class B Units. With respect to any particular class of Units, such class of Units shall be deemed to include any equity security received in connection with any recapitalization, merger, consolidation, or other reorganization, or by way of any distribution in respect of such class of Units, in any such case, after the date hereof.

 

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SECTION 1.2.  Terms Generally . The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” All the terms herein that relate to accounting matters shall be interpreted in accordance with U.S. generally accepted accounting principles from time to time in effect. All references to “Sections” and “Articles” shall refer to Sections and Articles of this Agreement unless otherwise specified. The words “hereof” and “herein” and similar terms shall relate to this Agreement.

ARTICLE II

GENERAL PROVISIONS

SECTION 2.1.  Formation . The Company has been organized as a Delaware limited liability company by the execution and filing of the Certificate under and pursuant to the Act. The rights, powers, duties, obligations and liabilities of the Members shall be determined pursuant to the Act and this Agreement. To the extent that the rights, powers, duties, obligations and liabilities of any Member are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.

SECTION 2.2.  Name . The name of the Company is “Continental Cement Company, L.L.C.” and all Company business shall be conducted in that name or in such other names that comply with applicable law as the Board may select from time to time.

SECTION 2.3.  Term . The term of the Company commenced on the date the Certificate was filed with the office of the Secretary of State of the State of Delaware and shall continue in existence indefinitely until dissolved as determined under Section 7.2.

SECTION 2.4.  Purpose; Powers . (a) The nature of the business or purposes to be conducted or promoted by the Company is to engage in any lawful act or activity for which limited liability companies may be organized under the Act. The Company may engage in any and all activities necessary, desirable or incidental to the accomplishment of the foregoing. Notwithstanding anything herein to the contrary, nothing set forth herein shall be construed as authorizing the Company to possess any purpose or power, or to do any act or thing, forbidden by law to a limited liability company organized under the laws of the State of Delaware.

(b) In furtherance of its purposes stated in Section 2.4(a), the Company shall have all powers necessary, suitable or convenient for the accomplishment of its purposes, alone or with others, as principal or agent, including the following:

 

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(i) to conduct its business, carry on its operations and have and exercise the powers granted to a limited liability company by the Act in any state, territory, district or possession of the United States, or in any foreign country that may be necessary, convenient or incidental to the accomplishment of the purpose of the Company;

(ii) to acquire by purchase, lease, contribution of property or otherwise, own, hold, operate, maintain, finance, refinance, improve, lease, sell, convey, mortgage, transfer, demolish or dispose of any real or personal property that may be necessary, convenient or incidental to the accomplishment of the purpose of the Company;

(iii) to enter into, perform and carry out contracts of any kind, including contracts with any Member or any Affiliate thereof, or any agent of the Company necessary to, in connection with, convenient to or incidental to the accomplishment of the purpose of the Company;

(iv) to purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign corporations, associations, general or limited partnerships (including the power to be admitted as a partner thereof and to exercise the rights and perform the duties created thereby), trusts, limited liability companies (including the power to be admitted as a member or appointed as a manager thereof and to exercise the rights and perform the duties created thereby) or Persons or direct or indirect obligations of the United States or of any government, state, territory, governmental district or municipality or of any instrumentality of any of them;

(v) to lend money for any proper purpose, to invest and reinvest its funds and to take and hold real and personal property for the payment of funds so loaned or invested;

(vi) to sue and be sued, complain and defend, and participate in administrative or other proceedings, in its name;

(vii) to appoint employees and agents of the Company and define their duties and fix their compensation;

(viii) to indemnify any Person in accordance with the Act and to obtain any and all types of insurance;

(ix) to cease its activities and cancel its Certificate;

(x) to negotiate, enter into, renegotiate, extend, renew, terminate, modify, amend, waive, execute, acknowledge or take any other action with respect to any lease, contract or security agreement in respect of any assets of the Company;

 

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(xi) to borrow money and issue evidences of indebtedness and guaranty indebtedness (whether of the Company or any of its Subsidiaries), and to secure the same by a mortgage, pledge or other lien on the assets of the Company;

(xii) to pay, collect, compromise, litigate, arbitrate or otherwise adjust or settle any and all other claims or demands of or against the Company or to hold such proceeds against the payment of contingent liabilities; and

(xiii) to make, execute, acknowledge and file any and all documents or instruments, or to take such other action, necessary, convenient or incidental to the accomplishment of the purpose of the Company.

(c) Board . Subject to the provisions of this Agreement (including Sections 3.3(a)(iii) and/or 3.3(a)(iv) to the extent applicable), (i) the Company may, with the approval of the Board, enter into and perform any and all documents, agreements and instruments contemplated thereby, all without any further act, vote or approval of any Member, and (ii) the Board may authorize any Person (including any Member or Officer) to enter into and perform any document on behalf of the Company.

(d) Merger . Subject to the provisions of this Agreement (including Sections 3.3(a)(iii) and/or 3.3(a)(iv) to the extent applicable), the Company may, with approval of the Board and without the need for any further act, vote or approval of any Member, merge with, or consolidate into, another limited liability company (organized under the laws of Delaware or any other state), a corporation (organized under the laws of Delaware or any other state) or other business entity (as defined in Section 18-209(a) of the Act), regardless of whether the Company is the survivor of such merger or consolidation.

SECTION 2.5.  Foreign Qualification . The Company shall be qualified or registered under foreign limited liability company statutes or assumed or fictitious name statutes or similar laws in any jurisdiction in which the Company owns property or transacts business to the extent, in the judgment of the Board, such qualification or registration is necessary or advisable in order to protect the limited liability of the Members or to permit the Company lawfully to own property or transact business. Each Officer, as an authorized person within the meaning of §18-204(a) of the Act, shall have the power and authority to execute, file and publish any certificates, notices, statements or other documents (and any amendments and/or restatements thereof) necessary to permit the Company to conduct business as a limited liability company in each jurisdiction where the Company elects to do business. At the request of the Board or any Officer, each Member shall execute and deliver all certificates and other instruments conforming with this Agreement that are necessary or appropriate to qualify, register, continue and terminate the Company as a foreign limited liability company in all such jurisdictions in which the Company may conduct business.

 

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SECTION 2.6.  Registered Office; Registered Agent; Principal Office; Other Offices . The registered office of the Company required by the Act to be maintained in the State of Delaware shall be the office of the initial registered agent named in the Certificate or such other office (which need not be a place of business of the Company) as the Board may designate from time to time in the manner provided by law. The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person or Persons as the Board may designate from time to time in the manner provided by law. The principal office of the Company shall be at 14755 North Outer Forty Drive, Suite 514, Chesterfield, MO 63017 or at such place as the Board may designate from time to time, which need not be in the State of Delaware, and the Company shall maintain records there. The Company may have such other offices as the Board may designate from time to time.

SECTION 2.7.  No State-Law Partnership . The Members intend that the Company shall not be a partnership (including a limited partnership) or joint venture, and that no Member, Director or Officer shall be a partner or joint venturer of any other Member, Director or Officer, for any purposes other than federal and, if applicable, state or local income tax purposes, and this Agreement shall not be construed to the contrary. The Members intend that the Company shall be treated as a partnership for federal and, if applicable, state and local income tax purposes, and each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment.

SECTION 2.8.  Amendment and Restatement . This Agreement amends, restates and supersedes in its entirety the Original Agreement.

SECTION 2.9.  Members and Units; Classes .

(a) Each Member of the Company shall be a Class A Member, Class B Member or any other class of Members created after the date hereof by the Board subject to the provisions of this Agreement, and each category of Member shall have the rights set forth herein (and/or in any amendment or modification to this Agreement creating any such new class of Members). Any holder of a Class A Unit shall be a Class A Member. Any holder of a Class B Unit shall be a Class B Member. The number of Class A Units and Class B Units initially held by each Member as of the date hereof and after giving effect to the Recapitalization is set forth on Schedule I hereto, subject in the case of the Class A Member, to the receipt of the Capital Contributions from such Member as required pursuant to Section 4.1(b). The total number of Units of any such class which the Board shall have the authority to cause the Company to issue shall not be limited; provided that the Board shall not (x) issue any Class B Units after the date hereof to Persons other than the Class B Members existing as of the date hereof and their Permitted Transferees, if applicable (and on a pro rata basis to Class B Members based on a Member’s Class B Units) absent the consent of the Class B Members holding at the time of such proposed issuance a majority of the outstanding Class B Units; or (y) issue any Class A Units after the date hereof to Persons other than the Summit Member(s) absent the consent of the Summit Member(s).

(b) The Board is hereby expressly authorized to take any action, including amending this Agreement, to create (and issue, subject to the terms and conditions of this

 

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Agreement) any class of Units or Members that was not previously outstanding or existing, as applicable, each having such relative rights, powers and duties and interests in profits, losses, allocations and distributions of the Company as may be determined by the Board, in each case in its discretion; provided that the creation of any new class of Units (and corresponding class of Members) and/or the issuance of any new or existing class of Units shall be subject to Special Board Approval except with respect to (x) the issuance of Units that are equity incentive units (including profits interests) or options, restricted equity or any similar securities (and any Units underlying such options or similar securities) to be issued solely to officers, employees, directors, agents or consultants (other than a Member or an Affiliate thereof, excluding R. Michael Johnson and Thomas Beck) of the Company or any of its Subsidiaries solely to the extent that (1) such Units or securities do not represent a Sharing Percentage in excess of 5% in the aggregate and (2) such Units or securities are created by approval of the Board, subject to Special Board Approval, and (y) the creation and/or issuance of Units or options, warrants or other securities exercisable or exchangeable for or convertible into Units (and the issuance of any Units underlying such securities) to the extent that the Board determines, on a good faith basis, at a meeting of the Board duly called and held that it is advisable and in the best interests of the Company to raise equity capital in order to prevent an imminent, or cure any, default, event of default, breach, non-compliance or failure to satisfy any financial ratio or covenant or potential default, event of default, breach, non-compliance or failure to satisfy any financial ratio or covenant by the Company or any of its Subsidiaries under any agreement whereby the Company and/or its Subsidiaries are obligated to repay indebtedness in excess of Five Million Dollars, including any credit agreement, indenture, security agreement or similar agreement governing such indebtedness of the Company or any of its Subsidiaries or to otherwise prevent the Bankruptcy of the Company (any such issuance of Units, a “ Financing Issuance ”); provided , however , that the issuance of any Units in connection with a Financing Issuance shall be subject to Section 4.6. Subject to the limitations set forth in the foregoing sentence, the total number of Units of any such new class which the Board shall have the authority to cause the Company to issue shall not be limited.

(c) The Board, acting by Special Board Approval, shall have the authority to cause the Company to repurchase any Units; provided , however , that notwithstanding the foregoing, approval of only the Directors holding a majority of the voting power of the Directors shall be required in connection with (x) the repurchase or redemption of Units or other equity securities held by officers, employees, directors, agents or consultants (other than a Member or an Affiliate thereof, excluding any securities underlying equity incentive awards issued to R. Michael Johnson or Thomas Beck) of the Company or any of its Subsidiaries pursuant to the terms of an applicable grant, subscription, employment or other award agreement or (y) any repurchase of Units pursuant to Section 5.6.

(d) Unless and until the Board shall determine otherwise, Units shall be uncertificated and recorded in the books and records of the Company (including Schedule I hereto). If at any time the Board shall determine to certificate Units, such certificates will contain such legends as the Board determines are necessary or advisable. The Board may amend and revise Schedule I from time to time (which amendment or revision shall not require the approval of any Member) to properly reflect any changes to the information contained therein, including to reflect the admission or withdrawal of Members or the making of additional Capital Contributions, in each case in accordance with this Agreement.

 

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(e) Each Member’s Membership Interest and Units shall be personal property for all purposes.

(f) Subject to the conditions set forth in this Section 2.9(f), in connection with a refinancing (a “ Refinancing ”) of the debt incurred pursuant to the First Lien Credit Agreement, Second Lien Credit Agreement and/or Farmer Subordinated Notes or of any or all of the Company’s then current indebtedness at any time, in any such case, with the proceeds of an incurrence of indebtedness (the “ Summit Debt ”) by Summit Materials Holdings L.P. or any of its direct or indirect Subsidiaries acting as borrower, which borrower shall Control directly or indirectly substantially all of the material operating Subsidiaries of Summit Material Holdings L.P. (the “ Summit Borrower ”), the Board may by approval of a majority in voting power of the Directors cause (i) the Company and its Subsidiaries (any such subsidiary, a “ Subsidiary Guarantor ”) to guarantee on a senior basis (any such guarantees, collectively, the “ Company Guarantee ”) the Summit Debt and (ii) the Company and the Subsidiary Guarantors to provide perfected, first priority security interests in, and mortgages on, all or any part of the Collateral to secure the Company Guarantee; provided that the Company Guarantee shall be limited to a guarantee of any such debt in an amount that shall not exceed the Company Proceeds (as defined herein). As used herein, the term “ Company Proceeds ” means the total amount of credit extended to the Company in connection with the Summit Debt, including any amount of money used to satisfy then existing indebtedness of the Company as a Refinancing. In addition, subject to the conditions set forth in this Section 2.9(f), in connection with such a Company Guarantee of Summit Debt (or a Company Guarantee effected in connection with the incurrence of debt by the Company and not involving Summit Materials Holdings L.P. or any of its Subsidiaries (other than the Company and its Subsidiaries)), upon a Refinancing or any refinancing of the Company’s indebtedness, the Rollover Members agree to, and shall take any and all action reasonably necessary in order to, (x) guarantee on a senior basis (any such guarantees, collectively, the “ Rollover Guarantee ”) the Summit Debt or any new indebtedness of the Company, as applicable, up to the amount of the Company Proceeds and (y) pledge their Units to secure the Rollover Guarantee or any guarantee or similar security interest as it relates to Company indebtedness; provided that, in the case of the Rollover Guarantee, such Rollover Guarantee shall be recourse only to the Units so pledged. The terms of this Section 2.9(f) shall only apply in those instances in which the Summit Member(s) shall provide guarantees and pledges of Units on similar terms as those provided by the other Members and to the extent such Refinancing involves Subsidiaries of Summit Materials Holdings L.P. other than the Company and its Subsidiaries), (1) the material Subsidiaries of Summit Materials Holdings L.P. shall provide guarantees and pledges of assets on similar terms as those provided by the Company; (2) the Summit Borrower shall be the primary obligor under the Summit Debt and shall have provided a perfected, first priority security interest in, and mortgages on, all property and assets of the Summit Borrower and (3) the Summit Borrower shall have extended, or shall have caused to be extended, credit to the Company in an amount equal to the Company Proceeds, with such loan to be upon identical terms (or terms more favorable to the Company) as the Summit Debt in all material respects.

 

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ARTICLE III

MANAGEMENT

SECTION 3.1. Board; Delegation of Authority and Duties.

(a) Members and Board . The Members, acting through the Board, shall manage and control the business and affairs of the Company, and shall possess all rights and powers as provided in the Act and otherwise by law. Except as otherwise expressly provided for herein, the Members hereby consent to the exercise by the Board of all such powers and rights conferred on them by the Act with respect to the management and control of the Company. Notwithstanding the foregoing and except as explicitly set forth in this Agreement, (i) if a vote, consent or approval of the Members is required by the Act or other applicable law with respect to any act to be taken by the Company or matter considered by the Board, the Members agree that they shall be deemed to have consented to or approved such act or voted on such matter in accordance with the Board’s approval of such act or matter and (ii) the approval by the Board of any proposed action of, or relating to, the Company shall bind each Member and shall have the same legal effect as the approval of each Member of such action. No Member, in such capacity as a Member, shall have any power to act for, sign for or do any act that would bind the Company. The Members, acting through the Board, shall devote such time and effort to the affairs of the Company as they may deem appropriate for the oversight of the management and affairs of the Company. Each Member acknowledges and agrees that no Member shall, in his or its capacity as a Member, be bound to devote all of such Member’s business time to the affairs of the Company, and that each Member and such Member’s Affiliates do and will continue to engage for such Member’s own account and for the account of others in other business ventures.

(b) Delegation by Board . The Board shall have the power and authority to delegate to one or more other Persons the Board’s rights and powers to manage and control the business and affairs of the Company, including to delegate to agents and employees of the Company (including Officers) or its Subsidiaries, and to delegate by a management agreement or another agreement with, or otherwise to, other Persons; provided that the Board shall not be permitted to delegate to any other Person the right to approve any matter that requires Special Board Approval. The Board may authorize any Person (including any Member, Officer or Director) to enter into and perform under any document on behalf of the Company.

(c) Committees . The Board may, from time to time, designate one or more committees, each of which shall be comprised of at least two Directors; provided that, so long as the Rollover Members have the right to designate a Director pursuant to Section 3.2(b), at least one of the members of any such committee shall be a Rollover Director, with the identity of the Rollover Director to serve on such committee to be determined by those Rollover Members holding a majority of the Class B Units. Any such committee, to the extent provided in the enabling resolution and until dissolved by the Board, shall have and may exercise any or all of the authority of the Board, other than with respect to those matters that require Special Board Approval. At every meeting of any such committee, the presence of representatives holding a majority of the voting power of the representatives thereof shall constitute a quorum, provided

 

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that at least one Rollover Director is in attendance (so long as the Rollover Members have the right to designate a Director pursuant to Section 3.2(b)). Notwithstanding the foregoing quorum requirement, in the event that a meeting of any such committee is duly called and no such Rollover Director is in attendance, then no Rollover Director shall be required to constitute a quorum at the next meeting of such committee duly called. At any meeting of a committee at which a quorum is present, the affirmative vote of representatives holding a majority of the voting power of the representatives present shall be necessary for the adoption of any resolution. The Board may dissolve any committee at any time, unless otherwise provided in the Certificate or this Agreement.

(d) Authority as an Equity Holder . Each Member agrees that the Board, on behalf of the Company, shall have the exclusive right to vote (or cause to vote) or execute (or cause to execute) consents with respect to securities issued by other Persons held by the Company, directly or indirectly, on any matter to be voted upon at any meeting of the holders of such securities or in connection with any proposed action by written consent of the holders of such securities.

SECTION 3.2.  Establishment of the Board .

(a) Directors . There shall be established a Board composed of up to seven members (“ Directors ”), subject to Section 3.2(c), who shall be appointed as provided in Section 3.2(b) below and who need not be Members or residents of the States of Delaware or Missouri. Each Director shall remain in office until his or her death, resignation or removal. The initial Board shall consist of the seven persons set forth on Schedule II. The Board shall constitute a “manager” for purposes of the Act, but notwithstanding anything in this Agreement to the contrary, individual Directors shall not be deemed to be “members” or “managers” (as such terms are defined in the Act) of the Company. No Director has the authority or power to act for or on behalf of the Company, to do any act that would be binding on the Company or to make any expenditure or incur any obligations on behalf of the Company or authorize any of the foregoing, other than acts that are authorized by the Board.

(b) Appointment; Removal . From and after the date hereof and until the non-applicability of this Section 3.2(b) as provided for herein, the Directors serving on the Board shall be appointed as follows:

(i) the Summit Member(s) shall collectively be entitled to appoint (w) so long as any Summit Member(s) hold Units representing more than 50% of the aggregate Sharing Percentage attributable to all outstanding Units, up to four Directors, (x) to the extent that the Summit Member(s) hold at least 50% of the Units held by the Summit Member as of the date hereof after giving effect to the issuances contemplated by Section 4.1(b), up to three Directors, (y) to the extent that the Summit Member(s) hold at least 25% but less than 50% of the Units held by the Summit Member as of the date hereof after giving effect to the issuances contemplated by Section 4.1(b), up to two Directors, and (z) to the extent that the Summit Member(s) hold less than 25% of the Units held by the Summit Member as of the date hereof after giving effect to the issuances contemplated by Section 4.1(b), one Director (collectively, the “ Summit Directors ”, and individually, a “ Summit Director ”); and

 

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(ii) the Rollover Members shall collectively be entitled to appoint (w) to the extent that the Rollover Members and/or their Permitted Transferee(s) hold at least 75% of the Units held by the Rollover Members in the aggregate as of the date hereof after giving effect to the Recapitalization, up to three Directors, (x) to the extent that the Rollover Members and/or their Permitted Transferee(s) hold at least 50% but less than 75% of the Units held by the Rollover Members in the aggregate as of the date hereof after giving effect to the Recapitalization, two Directors, (y) to the extent that the Rollover Members and/or their Permitted Transferee(s) hold at least 25% but less than 50% of the Units held by the Rollover Members in the aggregate as of the date hereof after giving effect to the Recapitalization, one Director, and (z) to the extent that the Rollover Members and/or their Permitted Transferee(s) hold less than 25% of the Units held by the Rollover Members in the aggregate as of the date hereof after giving effect to the Recapitalization, no Directors (collectively, the “ Rollover Directors ” and individually, a “ Rollover Director ”), provided that, in each of clauses (w) and (x) above, one of such Directors shall be the chief executive officer of the Company, and in the case of clause (y) above, must be the chief executive officer of the Company (and to the extent that no Rollover Member or its equityholder is the chief executive officer, then the Rollover Members shall no longer be entitled to appoint any directors pursuant to such clause (y)).

Any Director may be removed from the Board with or without cause at any time by the Member(s) entitled to appoint such Director pursuant to this Section 3.2. In the event of death, resignation or removal of a Director, the Member(s) entitled to appoint such Director shall have the power to fill the vacancy created. In the event that the Member(s) entitled to appoint a Director lose their right to designate a Director, one of such Member(s)’s appointees to the Board shall resign immediately, and the Members shall take all action necessary to remove such appointee and, subject to Section 3.2(c), the size of the Board shall be reduced accordingly.

(c) Adjustments to Size of Board . The size of the Board shall (1) decrease as, when and to the extent that (x) the Rollover Members lose their right to appoint a Director pursuant to the provisions of Section 3.2(b)(ii), or (y) the Summit Member(s) loses its right to appoint a Director pursuant to the provisions of Section 3.2(b)(i) or the Summit Member(s) otherwise chooses to appoint less than its full number of appointees as provided herein ( provided that in no event shall the Board consist of less than one Director who shall, to the extent that neither the Rollover Members nor Summit Member(s) are entitled to appoint Directors pursuant to Section 3.2(b), be appointed by vote of a majority of the Members or on such other basis as agreed among all Members); and (2) increase as, when and to the extent that the Summit Member(s) has designated less than its full number of appointees and desires to designate an additional appointee or appointees to the Board (but not beyond the maximum number of Directors that the Summit Member(s) are otherwise entitled to appoint pursuant to Section 3.2(b)). In the event of any such change in the size of the Board as provided pursuant to this

 

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Section 3.2, the Board change shall be automatic and not require further action by the Company, the Board or any Member. For the avoidance of doubt, the Summit Member(s) shall not be required to appoint all of its Directors and may designate less than the maximum number of Directors which it is entitled to appoint pursuant to Section 3.2(b) from time to time as it shall determine in its sole discretion.

(d) Chairman . To the extent the Directors so desire, they may, acting by vote of a majority in voting power of the Directors, appoint one Director as Chairman of the Board (the “ Chairman ”) to preside over meetings of the Board as provided herein. If the Chairman is absent at any meeting of the Board, the Directors present may designate, acting by vote of a majority in voting power of the Directors, another Director to serve as interim Chairman for that meeting. The Chairman shall have no authority or power to act for or on behalf of the Company, to do any act that would be binding on the Company or to make any expenditure or incur any obligations on behalf of the Company or authorize any of the foregoing, unless authorized by act of the Board.

(e) Reimbursement . All Directors will be entitled to reimbursement for documented, reasonable out-of-pocket expenses incurred in attending meetings of the Board or any committee thereof and shall be indemnified by the Company pursuant to Article IX but shall not otherwise be entitled to any compensation or fees in respect of his or her services as a Director of the Company.

SECTION 3.3.  Board Meetings .

(a) Quorum; Required Vote for Board Action .

(i) Directors holding a majority of the total voting power of the Directors shall constitute a quorum for the transaction of business of the Board; provided that at least one Rollover Director is, or, solely to the extent that Special Board Approval is required in connection with any matter at the applicable Board meeting, such number of Rollover Directors required to pass an action by Special Board Approval are, in attendance. Notwithstanding the foregoing quorum requirement, in the event that a meeting of the Board is duly called and no such Rollover Director is in attendance, then no Rollover Director shall be required to constitute a quorum at the next meeting of the Board duly called ( provided that no action requiring Special Board Approval shall be passed at any such meeting where the requisite number of Rollover Directors are not in attendance unless the Rollover Members holding a majority of the Class B Units held by the Rollover Members in the aggregate waive in writing their right to have the Rollover Directors present for the transaction of business to be held at such meeting).

(ii) Each Director shall have voting power determined as follows:

(A) each of the Directors other than the Summit Directors shall have one vote; and

 

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(B) the Summit Directors collectively will have a number of votes equal to the number of Directors that the Summit Member(s) are entitled to appoint pursuant to Section 3.2(b)(i) at such time, and to the extent that less than the maximum number of Summit Directors are in attendance (in person, telephonically, by video conference or by proxy) at a meeting of the Board or any committee of the Board (including if the Summit Member(s) have appointed less than the maximum number of Summit Directors that the Summit Member(s) are entitled to appoint at such time), each Summit Director that is in attendance at the meeting of the Board (or committee of the Board, as applicable) will have a number of votes equal to the number of Directors that the Summit Member(s) are entitled to appoint pursuant to Section 3.2(b)(i) divided by the number of Summit Directors in attendance. In connection with any action by written consent the votes of Summit Directors so executing such written consent shall be allocated in a manner consistent with the foregoing.

Except as otherwise expressly provided in this Agreement, including Sections 3.3(a)(iii) and 3.3(a)(iv) below, the act of Directors holding a majority of the voting power present at a meeting of the Board at which a quorum is present shall be the act of the Board. A Director who is present at a meeting of the Board at which action on any matter is taken shall be presumed to have assented to the action unless such Director’s dissent shall be entered in the minutes of the meeting or unless he shall file such Director’s written dissent to such action with the Person acting as secretary of the meeting before the adjournment thereof or shall deliver such dissent to the Company immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.

(iii) Special Board Approval . So long as the Rollover Members are entitled to appoint a Director pursuant to Section 3.2(b)(ii), unless the Rollover Members holding a majority of the Class B Units held by the Rollover Members in the aggregate waive in writing their right to have the Rollover Directors present for the transaction of business held at such meeting, the following matters shall require the approval of (x) two Rollover Directors, to the extent that the Rollover Members are entitled to appoint at least two Directors pursuant to Section 3.2(b)(ii) and (y) one Rollover Director, to the extent that the Rollover Members are entitled to appoint only one Director pursuant to Section 3.2(b)(ii) (“ Special Board Approval ”) in addition to approval by a majority of the voting power of the Directors present at a meeting of the Board at which a quorum is present as provided in Section 3.3(a)(ii) or to the approvals required pursuant to Section 3.5 below, as applicable:

(A) any merger or consolidation of the Company or any of its Subsidiaries with or into any other Person (other than the merger of a Subsidiary with or into the Company or another Subsidiary), except in connection with a transaction subject to Section 5.4;

 

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(B) any Transfer of Units that would result in a Change of Control of the Company prior to the fifth anniversary of the date of this Agreement other than any Transfer by the equityholders of Summit Holdco of their equity interests in Summit Holdco;

(C) any acquisition or divestiture by the Company or any of its Subsidiaries, whether by equity purchase or sale, equity exchange, purchase or sale of assets, merger, consolidation or otherwise, whether involving a single transaction or a series of related transactions, of or to another Person or business involving a purchase or sale price equal to or greater than $15 million, other than (w) purchases and sales of inventory, supplies, services or products by the Company and its Subsidiaries in the Ordinary Course of Business, (x) any payments required to be made pursuant to Section 9.3 of the Amended and Restated Operating Agreement of Green America Recycling, LLC, dated as of February 19, 2008 (as the same may be amended, restated or otherwise modified in accordance with its terms) or Section 5.6 of this Agreement or (y) in connection with a transaction subject to Section 5.4;

(D) (i) except as permitted without Special Board Approval under Section 2.9(b), the creation or issuance by the Company or any Subsidiary of (1) any Units, (2) any new class of Units, or (3) any other equity securities of the Company or any Subsidiary, in each case, other than any issuance of securities by a Subsidiary of the Company to another wholly-owned Subsidiary of the Company or the Company itself or in connection with any Unit or share split or Unit or share dividend paid on a proportionate basis to all equityholders of the Company or Subsidiary, as the case may be or (ii) except as permitted without Special Board Approval under Section 2.9(c), including in connection with the exercise of the Put Right or Call Right under Section 5.6, the repurchase of any Units or other equity securities of the Company or a Subsidiary of the Company, by the Company or any such Subsidiary;

(E) any liquidation, dissolution or winding up of the Company other than (x) as a result of the entry of an order, judgment or decree by any court of competent jurisdiction in a proceeding under Title 11 of the United States Code, as now constituted or as hereafter amended, or (y) in connection with a transaction subject to Section 5.4 in which the assets of the Company are distributed to the Members in a manner consistent with Section 4.4(a)(ii);

(F) any amendment to this Agreement (except as contemplated by Sections 2.9(a), 2.9(b), 2.9(d), 4.4(a), 5.1, 5.2(d) or 5.5 or any transaction contemplated by Sections 5.4, 5.5 or 5.6);

(G) any action to modify the governing organizational documents of a Subsidiary as contemplated by Section 3.6;

 

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(H) the determination of gross fair market value of the Company’s assets in connection with any adjustment of the Gross Asset Value of the Company’s assets to their respective gross fair market value, as contemplated by paragraph (b) of the definition of Gross Asset Value;

(I) any valuation of non-cash Distributable Assets by the Board to the extent a distribution of non-cash assets is to be made by the Company pursuant to Section 4.4; and

(J) any significant change in the nature of the Company’s business.

(iv) Affiliate Transactions. In addition to the requirements set forth in Sections 3.3(a)(ii), any transaction by the Company or any of its Subsidiaries, on the one hand, and any Member or any Affiliates of any Member, on the other hand, shall require (x) Special Board Approval in connection with any such transaction involving the Summit Member(s) or their Affiliates and (y) the prior approval of a majority in voting power of the members of the Board who have not been appointed by the Member(s) or Affiliates of such Member(s) who are parties to the transaction in question in connection with any such transaction involving a Member (other than the Summit Member(s)) or Affiliates of a Member other than a Summit Member; provided, however, that no such additional approval pursuant to this Section 3.3(a)(iv) is required for:

(A) (i) any transaction or payment expressly contemplated by Sections 2.5, 2.9(f), 3.2, 8.1(b), 8.4, 10.2, 10.8 or Article IX of this Agreement, (ii) the issuance of Units and the receipt of Capital Contributions (whether or not the provisions of Section 4.6 applies to such issuance), (iii) the declaration and receipt of distributions pursuant to Section 4.4 or Section 7.2, (iv) any Refinancing that complies with Section 2.9(f), (v) any exercise of drag-along rights in a Drag-Along Sale pursuant to Section 5.4, (vi) any Rollover Exchange pursuant to Section 5.5, (vii) any exercise of the Put Right or Call Right pursuant to Section 5.6, (viii) any expense reimbursement made or to be made pursuant to Section 10.2, and (ix) any transaction contemplated by the Farmer Supply Agreement; or

(B) transactions with customers, clients, purchasers or sellers of goods or services (including the Members or any of their Affiliates), in each case, (i) in the Ordinary Course of Business and (ii) upon fair and reasonable terms no less favorable to the Company or its Subsidiary than would be obtainable in a comparable arm’s length transaction with a Person not a Member or an Affiliate of a Member.

(b) Proxy . Each Director entitled to vote at a meeting of the Board may authorize and appoint any other Director entitled to vote at such meeting to vote as his proxy for or on behalf of such Director. Each such authorization shall not require the consent or approval of any other Director (other than the Director being so authorized).

 

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(c) Place, Waiver of Notice . Meetings of the Board may be held at such place or places as shall be determined from time to time by resolution of the Board. At all meetings of the Board, business shall be transacted in such order as shall from time to time be determined by resolution of the Board. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

(d) Regular Meetings . Regular meetings of the Board shall be held at such times and places as shall be designated from time to time by resolution of the Board. Notice of such meetings shall not be required; provided , however , that copies of each such resolution establishing the dates and times of such regular meetings shall be provided to each Director as promptly as practical following the adoption thereof.

(e) Special Meetings . Special meetings of the Board may be called on at least 48 hours notice to each Director by any Director. If Special Board Approval will be sought at such a meeting, such notice shall include that this is among the purposes of the special meeting. Except in an instance described in the foregoing sentence or as may otherwise be required by law or provided for in this Agreement, such notice need not state the purpose or purposes of, nor the business to be transacted at, such meeting.

(f) Notice; Telephone or Video Conference . Notice of any special meeting of the Board or other committee may be given personally, by mail, facsimile, courier, e-mail or other means and, if other than personally, shall be deemed given when written notice (including through e-mail) is delivered to the office of the Director (or his or her e-mail address, as applicable) at the address of the Director in the books and records of the Company. The Directors, or representatives of any committee designated by the Board, shall be entitled to participate in and hold a meeting of the Board or any such committee, as the case may be, by means of a telephone or video conference or similar communications equipment by means of which all Persons participating in the meeting can hear each other, and participation in such meeting shall constitute attendance and presence in person at such meeting, except where a Person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

SECTION 3.4.  Approval or Ratification of Acts or Contracts . Any act or contract that shall be approved or be ratified by the Board (subject to the requirements of this Agreement) shall be as valid and as binding upon the Company and upon all the Members (in their capacity as Members) as if it shall have been approved or ratified by every Member of the Company.

SECTION 3.5.  Action by Written Consent . Any action permitted or required by the Act, the Certificate or this Agreement to be taken at a meeting of the Board or any committee designated by the Board may be taken without a meeting if a consent in writing, setting forth the action to be taken, is signed by the Directors holding voting power of the Board or representatives of such committee, as the case may be sufficient to approve such action if a meeting of the Board or such committee were held to approve such action. Such consent shall

 

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have the same force and effect as a vote at a meeting and may be stated as such in any document or instrument filed with the Secretary of State of Delaware, and the execution of such consent shall constitute attendance or presence in person at a meeting of the Board or any such committee, as the case may be; provided that unless written notice (including by e-mail) has been provided by the Company or the Chairman to each of the Directors then serving on the Board (to the address, facsimile number and/or e-mail address for each such Director as set forth in the books and records of the Company) at least 12 hours prior to execution of the written consent that the Board intends to submit for approval action by written consent of the Board (with such notice summarizing in reasonable detail the matters to be approved by written consent) or the Directors not executing such consent waive their right to such notice, no written consent of the Board shall be valid until 12 hours after such executed consent has been delivered to the Company, at which point the effectiveness of such consent shall be automatic, and provided that the Company and/or the Chairman gives prompt notice of any such action taken by written consent to the Directors or representatives of such committee who did not execute such written consent (provided that any failure to give such notice shall not affect the validity of any such action by written consent).

SECTION 3.6.  Boards of Subsidiaries . The Company, the Board and each of its Members shall take such actions as are required so that the board of directors or similar governing body of each Subsidiary of the Company, if any, is, comprised of members in the same proportion and with the same voting power as applies to the Board, unless otherwise approved by Special Board Approval (or set forth in the governing organizational documents of such Subsidiary of the Company existing as of the date hereof).

SECTION 3.7.  Officers .

(a) Designation and Appointment . The Board may, from time to time, employ and retain Persons as may be necessary or appropriate for the conduct of the Company’s business (subject to the supervision and control of the Board), including employees, agents and other Persons (any of whom may be a Member or Director) who may be designated as Officers of the Company, with titles including “chief executive officer,” “chairman,” “president,” “vice president,” “treasurer,” “secretary,” “director” and “chief financial officer,” as and to the extent authorized by the Board. Any number of offices may be held by the same Person. In its discretion, the Board may choose not to fill any office for any period as it may deem advisable. Officers need not be Members or residents of the States of Delaware or Missouri. Any Officers so designated shall have such authority and perform such duties as the Board may, from time to time, delegate to them. The Board may assign titles to particular Officers. Each Officer shall hold office until his or her successor shall be duly designated and shall qualify or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. The salaries or other compensation, if any, of the Officers of the Company shall be fixed from time to time by the Board.

(b) Resignation/Removal . Any Officer may resign as such at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the Board. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. Any Officer may be removed as such, either with or without cause at any time by the Board. Designation of an Officer shall not of itself create any contractual or employment rights.

 

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(c) Duties of Officers Generally . The Officers, in the performance of their duties as such, shall owe to the Company duties of loyalty and due care of the type owed by the officers of a corporation to such corporation and its stockholders under the laws of the State of Delaware.

(d) Chief Executive Officer . Subject to the powers of the Board, the chief executive officer of the Company shall be in general and active charge of the entire business and affairs of the Company, and shall be its chief policy making officer. The chief executive officer shall initially be R. Michael Johnson.

(e) Vice President of Finance and Administration . The Vice President of Finance and Administration shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses and capital. The Vice President of Finance and Administration shall have the custody of the funds and securities of the Company, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company, and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board. The Vice President of Finance and Administration shall have such other powers and perform such other duties as may from time to time be prescribed by the chief executive officer or the Board. The Vice President of Finance and Administration shall initially be Mark Strieker.

(f) Senior Vice President . The Senior Vice President shall be in general and active charge over the sale of Company products and services to the Company’s customers. The Senior Vice President shall initially be Thomas Beck.

SECTION 3.8.  Management Matters . (a) All property owned by the Company shall be registered in the Company’s name, in the name of a nominee or in “street name” as the Board may from time to time determine.

(b) The Board may take all action which may be necessary or appropriate (i) for the continuation of the Company’s valid existence as a limited liability company under the laws of the State of Delaware (and of each other jurisdiction in which such existence is necessary to enable the Company to conduct the business in which it is engaged) and (ii) for the maintenance, preservation and operation of the business of the Company in accordance with the provisions of this Agreement and applicable laws and regulations. The Board may file or cause to be filed for recordation in the office of the appropriate authorities of the State of Delaware, and in the proper office or offices in each other jurisdiction in which the Company is formed or qualified, such certificates (including certificates of limited liability companies and fictitious name certificates) and other documents as are required by the applicable statutes, rules or regulations of any such jurisdiction or as are required to reflect the identity of the Members and the amounts of their respective capital contributions.

 

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SECTION 3.9.  Liability to Members .

(a) Except as otherwise required by applicable law and as expressly set forth in this Agreement, no Member shall have any personal liability whatsoever in such Member’s capacity as a Member, whether to the Company, to any of the other Members, to the creditors of the Company or to any other third party, for the debts, liabilities, commitments or any other obligations of the Company or for any losses of the Company (other than any losses of the Company arising from a material breach of this Agreement by such Member). Each Member shall be liable only to make such Member’s Capital Contribution to the Company and the other payments provided expressly herein.

(b) In accordance with the Act and the laws of the State of Delaware, a member of a limited liability company may, under certain circumstances, be required to return amounts previously distributed to such Member. It is the intent of the Members that no distribution to any Member pursuant to Article IV hereof shall be deemed a return of money or other property paid or distributed in violation of the Act. The payment of any such money or distribution of any such property to a Member shall be deemed to be a compromise for purposes of §18-502(b) of the Act, and the Member receiving any such money or property shall not be required to return to any Person any such money or property. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated to make any such payment, such obligation shall be the obligation of such Member and not of any Director or other Member.

SECTION 3.10.  Fiduciary Duties .

(a) Notwithstanding anything to the contrary in this Agreement or at law or in equity including but not limited to the Act, each Member agrees that any fiduciary duty imposed under Delaware law (including the duty of loyalty and the duty of care) on a Member or any Director shall be defined, limited and eliminated as provided in this Section 3.10.

(b) Certain Potential Conflicts . Each Member acknowledges that:

(i) each Member and its Affiliates may engage in material business transactions with the Company or its Subsidiaries, subject to the requirements of Section 3.3(a)(iv); and

(ii) the directors, officers and/or employees of a Member and its Affiliates may serve as directors, officers and/or employees of the Company or its Subsidiaries.

(c) Limitation of Liability . To the fullest extent permitted by law, no Member or its Affiliates or any director, officer or employee of any Member or its Affiliates who may serve as a director of the Company or its Subsidiaries shall be liable to the Company or its Subsidiaries:

 

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(i) by reason of any business decision or transaction undertaken by such Member or its Affiliates which may be adverse to the interests of the Company or its Subsidiaries ( provided that such transaction is not in violation of Section 3.3(a)(iv));

(ii) by reason of any activity undertaken by such Member or its Affiliates or by any other Person in which such Member or its Affiliates may have an investment or other financial interest which is in competition with the Company or its Subsidiaries; or

(iii) by reason of any transaction with such Member or its Affiliates, or any transaction in which such Member or its Affiliates shall have a financial interest, unless (x) the party seeking to assert such liability shall prove, by clear and convincing evidence, that such transaction could not have been the product of rational business judgment at the time and under the circumstances it was authorized by the Board or a committee thereof and (y) the transaction has not otherwise been approved by Special Board Approval (and provided that such transaction is not in violation of Section 3.3(a)(iv)).

(d) Competing Activities . If any Member or an Affiliate thereof acquires knowledge of a potential transaction or matter which may be an investment or business opportunity or prospective economic or competitive advantage in which the Company could have an interest or expectancy (a “ Competitive Opportunity ”) or otherwise is then exploiting any Competitive Opportunity, the Company (and the Company’s Subsidiaries) will have no interest in, and no expectation that, such Competitive Opportunity be offered to it, any such interest or expectation being hereby renounced so that such Member shall (i) have no duty to communicate or present such Competitive Opportunity to the Company (or its Subsidiaries) unless the Competitive Opportunity is or would be principally related to a business that is both (x) presently conducted by the Company or its Subsidiaries and (y) principally located within the market areas served by the Company within the States of Missouri, Illinois and and/or Iowa, in which case such Member or its Affiliate, as applicable, shall be required to disclose such Competitive Opportunity to the Board (but shall not otherwise be obligated to present or otherwise assign or transfer such Competitive Opportunity to the Company or its Affiliates and neither such Member or any of its Affiliates shall be deemed to have relinquished any right or interest in such Competitive Opportunity by virtue of the foregoing) and (ii) have the right to hold any such Competitive Opportunity for such Member’s (and its agents’, partners’ or Affiliates’) own account and benefit, or to recommend, assign or otherwise transfer or deal in such Competitive Opportunity to Persons other than the Company or any Affiliate of the Company. For the avoidance of doubt, this Section 3.10(d) shall not limit the Company’s independent ability to pursue a Competitive Opportunity. Without limiting the generality of the foregoing, each Member acknowledges that (i) a Member or its Affiliates may engage or invest in, independently or with others, any business activity of any type or description, including those that might be the same as or similar to the Company’s business, and which from time to time compete, directly or indirectly, with the Company, and the Member and their respective Affiliates may in their sole discretion pursue such competing business without disclosure of such competition to the

 

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Company (or any Subsidiary of the Company) except as provided above and (ii) neither the Company, any Subsidiary of the Company nor any other Member shall have any right in or to the activities described in clause (i) or to receive or share in any income or proceeds derived therefrom. In connection with any Competitive Opportunity disclosed to the Board as required by this Section 3.10(d), the Company and the Directors shall agree to adhere to any obligations of confidentiality to which the disclosing Member or its Affiliate(s) are subject with respect to such Competitive Opportunity.

ARTICLE IV

CAPITAL CONTRIBUTIONS;

ALLOCATIONS; DISTRIBUTIONS

SECTION 4.1.  Recapitalization; Initial Units; Capital Contributions .

(a) Upon execution of this Agreement on the date hereof, all limited liability company interests held by each Rollover Member pursuant to the Original Agreement shall automatically and without further action by the Company or any Member or other Person be converted into the number of Class B Units set forth opposite such Member’s name on Schedule I (as it exists as of the date hereof) (the “ Recapitalization ”).

(b) Each Person set forth on Schedule I (as it exists as of the date hereof) other than the Rollover Members has agreed to make an initial capital contribution to the Company consisting of cash in the respective amounts and in exchange for the respective number and type of Units set forth on Schedule I to this Agreement (as it exists as of the date hereof) pursuant to the Subscription Agreement. The Company shall issue to each Member (other than the Rollover Members) the respective number and type of Units set forth on Schedule I to this Agreement (opposite the name of such Member) upon execution of this Agreement by such Member and the payment or delivery of such Member’s Capital Contribution in the amount set forth on Schedule I .

(c) No Member shall be required to make any Capital Contributions without such Member’s consent except as set forth in Section 4.1(b). No Member shall be permitted to make any Capital Contributions except with the prior approval of the Board and otherwise in accordance with the terms of this Agreement (including, to the extent applicable, Section 3.3(a)(iii)).

SECTION 4.2.  Capital Accounts . (a) There shall be established for each Member on the books of the Company a Capital Account which shall be increased or decreased in the manner set forth in this Agreement.

(b) A Member shall not have any obligation to the Company or to any other Member to restore any negative balance in the Capital Account of such Member.

 

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SECTION 4.3.  Allocations of Net Income and Net Loss .

(a) Timing and Amount of Allocations of Net Income and Net Loss . Net Income and Net Loss of the Company (and, to the extent necessary, individual items of income, gain, loss or deduction of the Company) shall be determined and allocated with respect to each fiscal year of the Company as of the end of each such year or as circumstances otherwise require or allow. Subject to the other provisions of this Section 4.3, an allocation to a Member of a share of Net Income or Net Loss shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Income or Net Loss. Notwithstanding anything in this Section 4.3 to the contrary (or in any other section of this Agreement), and except as otherwise required by any applicable provision of the Code or Regulation, the Rollover Members shall be allocated Net Income and Net Loss of the Company (and, to the extent necessary, individual items of income, gain, loss or deduction of the Company) as follows: (i) from January 1 through April 30, 2010 using the interim-closing-of-the-books method, and (ii) for purposes of convenience, from May 1, 2010 through and including the Closing Date by allocating such items to the Rollover Members for May, 2010 based on the number of days elapsed from May 1, 2010 through and including the Closing Date relative to 31.

(b) General Allocations . Except as otherwise provided in this Agreement, all Net Income and Net Loss shall be allocated in a manner such that the Capital Account of each Member after giving effect to the allocations set forth in Section 4.3(c) is, as nearly as possible, equal (proportionately) to (i) the distributions that would be made to such Member pursuant to Section 4.4(a)(ii) if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Gross Asset Value (determined, for the avoidance of doubt, without adjustment for the hypothetical liquidation described in this Section 4.3(b)), all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Gross Asset Value of the assets securing such liability) and the net assets of the Company were distributed in accordance with Section 4.4(a)(ii) to the Members immediately after making such allocation, minus (ii) such Member’s share of Company Minimum Gain and Member Minimum Gain, computed immediately prior to the hypothetical sale of assets.

(c) Additional Allocation Provisions . Notwithstanding the foregoing provisions of this Section 4.3:

(i) Regulatory Allocations.

(A) If there is a net decrease in Company Minimum Gain or Member Minimum Gain during any fiscal year, the Members shall be allocated items of Company income and gain for such year (and, if necessary, for subsequent years) in accordance with Regulations Section 1.704-2(f) or 1.704-2(i)(4), as applicable. It is intended that this Section 4.3(c)(i)(A) qualify and be construed as a “minimum gain chargeback” and a “chargeback of partner nonrecourse debt minimum gain” within the meaning of such Regulations, which shall be controlling in the event of a conflict between such Regulations and this Section 4.3(c)(i)(A).

 

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(B) Any Nonrecourse Deductions for any fiscal year shall be specially allocated to the Members in accordance with the number of their Units. Any Member Nonrecourse Deductions for any fiscal year shall be specially allocated to the Member(s) who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable, in accordance with Regulations Section 1.704-2(i).

(C) If any Member unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be allocated, in accordance with Regulations Section 1.704-1(b)(2)(ii)(d), to the Member in an amount and manner sufficient to eliminate, to the extent required by such Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible. It is intended that this Section 4.3(c)(i)(C) qualify and be construed as a “qualified income offset” within the meaning of Regulations 1.704-1(b)(2)(ii)(d), which shall be controlling in the event of a conflict between such Regulations and this Section 4.3(c)(i)(C).

(D) The allocations set forth in Sections 4.3(c)(i)(A), (B) and (C) (the “ Regulatory Allocations ”) are intended to comply with certain regulatory requirements, including the requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of Section 4.3(b), the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocations of other items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred.

(ii) For any fiscal year during which a Member’s interest in the Company is assigned by such Member (or by an assignee or successor in interest to a Member), the portion of the Net Income and Net Loss of the Company that is allocable in respect of such Member’s interest shall be apportioned between the assignor and the assignee of such Member’s interest using any permissible method under Code Section 706 and the Regulations thereunder (consistently applied to all Members), as determined by the Tax Matters Member.

(iii) In the event that any amount claimed by the Company to constitute a deductible expense in any fiscal year is treated for federal income tax purposes as a distribution made to a Member in its capacity as a member of the Company and not a payment to a Member not acting in its capacity as a partner under Code Section 707(a), then the Member who is deemed to have received such distribution shall first be allocated an amount of Company gross income equal to such payment, its Capital Account shall be reduced to reflect the distribution, and for purposes of Section 4.3, Net Income and Net Loss shall be determined after making the allocation required by this Section 4.3(c)(iii).

 

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(iv) In the event that any amount claimed by the Company to constitute a distribution made to a Member in its capacity as a member of the Company is treated for federal income tax purposes as a deductible expense of the Member for a payment to a Member not acting in its capacity as a member of the Company, then the Member who is deemed to have received such payment shall first be allocated the Company expense item attributable to such payment, its Capital Account shall be reduced to reflect the allocation, and for purposes of Section 4.3, Net Income and Net Loss shall be determined after making the allocation required by this Section 4.3(c)(iv).

(d) Required Tax Allocations . All items of income, gain, loss, deduction and credit for federal income tax purposes shall be allocated to each Member in the same manner as the Net Income or Net Loss (and each item of income, gain, loss and deduction related thereto) that is allocated to such Member pursuant to Section 4.3(a), (b) and (c) to which such tax items relate. Notwithstanding the foregoing provisions of this Section 4.3, income, gain, loss and deduction with respect to property contributed to the Company by a Member shall be shared among the Members for federal, state and local income tax purposes pursuant to Regulations promulgated under Section 704(c) of the Code, so as to take account of the variation, if any, between the basis of the property to the Company and its initial Gross Asset Value (using such method determined by the Tax Matters Partner and permitted under the Regulations). In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (b), (c), or (d) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and related Regulations. Any elections or other decisions relating to allocations under this Section 4.3(d) will be made in any manner that the Tax Matters Member determines in its sole discretion reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 4.3(d) are solely for purposes of federal, state and local income taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Income, Net Loss, other tax items or distributions pursuant to any provision of this Agreement.

(e) Excess Nonrecourse Liabilities . Solely for purposes of determining a Member’s share of the “excess nonrecourse liabilities” of the Company, within the meaning of Treasury Regulation Section 1.752-3(a)(3), the Members’ interests in Company profits are in proportion to the number of their Units.

(f) Members’ Tax Reporting . The Members acknowledge and are aware of the income tax consequences of the allocations made by Section 4.3 and, except as may otherwise be required by applicable law or regulatory requirements, hereby agree to be bound by the provisions of Section 4.3 in reporting their shares of Company income, gain, loss and deductions for federal, state and local income tax purposes.

(g) Withholding . To the extent the Company is required by law to withhold or to make Tax payments on behalf of or with respect to any Member (“ Tax Advances ”), the Company may withhold such amounts and make such Tax payments as so required. All Tax

 

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Advances made on behalf of a Member shall be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Member or, if such distributions are not sufficient for that purpose, by so reducing the proceeds of liquidation otherwise payable to such Member. If a distribution to a Member is actually reduced as a result of a Tax Advance, for all other purposes of this Agreement such Member shall be treated as having received the amount of the distribution that is reduced by the Tax Advance. Each Member hereby agrees to indemnify and hold harmless the Company and the other Members from and against any liability (including any liability for Taxes, penalties, additions to Tax or interest) with respect to income attributable to or distributions or other payments to such Member.

SECTION 4.4.  Distributions . (a) The timing of all distributions of Distributable Assets will be at the sole discretion of the Board. When a distribution is authorized by the Board, each Member’s allocable portion of Distributable Assets, subject to Sections 4.4(b), (c) and (d), will be distributed as follows:

(i) If such distribution is not in connection with the complete liquidation and dissolution of the Company pursuant to Section 7.2, 100% of the Distributable Assets shall be distributed to the Members on a pari passu basis, as follows:

(A) there shall be distributed to each Class A Member in respect of its Class A Units a percentage of such Distributable Assets equal to the product of (1) the Class A Sharing Percentage and (2) a fraction, the numerator of which is the number of Class A Units held by such Class A Member at the time of such distribution and the denominator of which is the aggregate number of outstanding Class A Units; and

(B) there shall be distributed to each Class B Member in respect of its Class B Units a percentage of such Distributable Assets equal to the product of (1) the Class B Sharing Percentage and (2) a fraction, the numerator of which is the number of Class B Units held by such Class B Member at the time of such distribution and the denominator of which is the aggregate number of outstanding Class B Units.

(ii) To the extent that such distribution is made in connection with the complete liquidation and dissolution of the Company pursuant to Section 7.2, the distribution shall be made either (x) in the manner specified in Section 4.4(a)(i) above or (y) in the manner specified below based upon whichever allocation will provide the greatest return to the Class A Members in respect of their Class A Units in connection with such distribution (and any reference to Section 4.4(a)(ii) in this Agreement shall be interpreted accordingly unless expressly stated otherwise):

 

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(A) First , 100% of the Distributable Assets shall be distributed to the Class A Members, pro rata based upon each Class A Member’s Class A Units until the Class A Members have received cumulative distributions pursuant to Section 4.4(a)(i)(A) (but without duplicating any amounts that were taken into account in calculating the amounts distributable pursuant to Section 4.4(a)(ii)(B)) and this Section 4.4(a)(ii)(A) equal to each such Member’s Class A Priority Return Amount attributable to the Class A Units held by it;

(B) Second , 100% of the Distributable Assets shall be distributed to the Class A Members, pro rata in proportion to the amount of their Capital Contributions made in exchange for Class A Units until the Class A Members have received cumulative distributions pursuant to Section 4.4(a)(i)(A) (but without duplicating any amounts that were taken into account in calculating the amounts distributable pursuant to Section 4.4(a)(ii)(A)) and this Section 4.4(a)(ii)(B) equal to each such Member’s aggregate Capital Contributions made in exchange for Class A Units held by it; and

(C) Third , 100% of the Distributable Assets shall be distributed to the Class B Members, pro rata in accordance with the number of each Class B Member’s Class B Units; provided , however , that if as a result of any such distribution pursuant to this Section 4.4(a)(ii) the Class B Members would have received but for this proviso distributions pursuant to Section 4.4(a)(i)(B), Section 4.4(c) and this Section 4.4(a)(ii) in an aggregate amount in excess of the amount that the Class B Members would have received had all such distributions been made at the time of the complete liquidation and dissolution of the Company pursuant to Section 7.2, as applicable, solely pursuant to Section 4.4(a)(i)(B) based upon the Class B Sharing Percentage as it exists at the time of such liquidation and dissolution, then any such excess amount shall not be distributed to the Class B Members in respect of their Class B Units but shall instead be distributed to the Class A Members, pro rata in accordance with the number of each Class A Member’s Class A Units;

provided that, if the Distributable Assets being distributed consist of more than one kind of asset, all Distributable Assets shall be allocated as determined on a good faith basis by the Board, and in the case of a distribution pursuant to this Section 4.4 of non-cash Distributable Assets, any determination by the Board as to the value of such Distributable Assets shall be subject to Special Board Approval pursuant to Section 3.3(a)(iii)(I).

Notwithstanding the foregoing, in the event of the Rollover Exchange or exercise of the Put Right where, following the consummation of the purchase or exchange of the Class B Units as contemplated in Sections 5.5 or 5.6, as applicable, certain of the Class B Units remain outstanding, then the definition of Class A Sharing Percentage, Class B Sharing Percentage, Sharing Percentage and any related terms and this Section 4.4 shall be amended by the Company and the Members to appropriately adjust such definitions and this Section 4.4 to take into account such purchase or exchange.

(b) For purposes of determining the amount of distributions under this Section 4.4, any holder of a Membership Interest (or any portion thereof), whether or not such Person is a Substitute Member, shall be treated as having received amounts received by its predecessors or successors in interest.

 

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(c) If the distributions made to a Member under Section 4.4(a) are not sufficient to permit a Member (or its beneficial owners) to pay when due its income taxes attributable to taxable income of the Company allocated to such Member for a taxable year (after giving effect to any net cumulative taxable losses from prior taxable years (“ Net Taxable Income ”)), the Board shall, to the extent that there are Distributable Assets in the form of cash (and provided that such payments would not cause a default, event of default, breach, non-compliance or failure to satisfy any financial ratio or covenant by the Company or any of its Subsidiaries under any agreement whereby the Company and/or its Subsidiaries are obligated to repay indebtedness in excess of Five Million Dollars, including any credit agreement, indenture, security agreement or similar agreement governing such indebtedness of the Company or any of its Subsidiaries or render the Company insolvent, Bankrupt or otherwise incapable of satisfying its and its Subsidiaries’ liabilities as they become due), cause the Company in no event later than 90 days after the close of each fiscal year, to make a distribution (a “ tax distribution ”) to such Member so that aggregate distributions to such Member pursuant to this Section 4.4(c) (taking into account any distributions made to such Member to pay estimated taxes) for each fiscal year (other than tax distributions to a Member made during a fiscal year in respect of income allocable to such Member in a prior fiscal year), equal the federal, state and local income tax liability that would be payable in respect of the taxable income allocable to such Member (without regard to any taxable income allocable as a result of Code Section 704(c)) determined (A) solely by reference to such Member’s allocable share of the Company’s income, (B) as if such Member were an individual resident in New York, New York, (C) as if such Member were subject to federal, state and local income tax at the highest marginal rate then in effect, taking into account the character of such income and the deductibility of state and local taxes and (D) reducing such taxable income by prior year Net Losses with respect to the Company allocable to such Member. If a Member holds more than one class of Units, then such Member’s tax distributions shall be determined separately with respect to each class of Units held by such Member, and solely with respect to allocations of taxable items to such Member in respect of such class of Units. A tax distribution to a Member in respect of any Unit shall be charged against current or future distributions to which such Member would otherwise have been entitled under Section 4.4(a) or Section 7.2 in respect of such Unit. In addition to the annual tax distribution required by this Section 4.4(c), the Company shall, to the extent of available cash, make periodic distributions to the Members (to the extent that there are Distributable Assets in the form of cash) in amounts sufficient for the Members to pay estimated taxes, calculated in accordance with the principles set forth in this Section 4.4(c).

(d) If all or a portion of a Member’s Units are transferred, sold or otherwise disposed of (including pursuant to a redemption by the Company), then subsequent distributions (i) to the transferor Member pursuant to this Agreement shall be determined without regard to amounts previously distributed to such transferor Member in respect of the Units so transferred, sold or otherwise disposed and (ii) to the transferee member pursuant to this Agreement shall be determined with regard to amounts previously distributed to the transferor Member.

 

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(e) For the avoidance of doubt, no management or other advisory fees or expense reimbursement payable to a Member or its Affiliates by the Company shall be deemed to be a distribution for purposes of this Section 4.4.

SECTION 4.5.  Security Interest and Right of Set-Off . As security for any withholding tax, the Company shall have (and each Member hereby grants to the Company) a security interest in all Distributable Assets distributable to such Member to the extent of the amount of such withholding tax. The Company shall have a right of set-off against such distributions of Distributable Assets in the amount of such withholding tax. The Company may withhold distributions or portions thereof if it is required to do so by the Code or any other provision of federal, state or local tax or other law. Any amount withheld pursuant to the Code or any other provision of federal, state or local tax or other law with respect to any distribution to a Member shall be treated as an amount distributed to such Member for all purposes under this Agreement.

SECTION 4.6.  Additional Issuances Generally .

(a) If the Company proposes to issue additional equity securities (including securities exercisable for or convertible into equity securities), the Company shall deliver to each Class A Member and Class B Member (each, a “ Participating Member ”, and, collectively, the “ Participating Members ”) a written notice of such proposed issuance at least thirty (30) days prior to the date of the proposed issuance (the period from the effectiveness pursuant to Section 10.8 of such notice until the date of such proposed issuance, the “ Subscription Period ”). Such notice shall include (i) the amount, kind and terms of the equity securities to be included in the issuance, (ii) the maximum and minimum price per unit of the equity securities to be included in the issuance, (iii) the name and address of the proposed purchaser and (iv) the proposed issuance date, if known.

(b) Each Participating Member shall have the option, exercisable at any time during the first twenty (20) days of the Subscription Period by delivering written notice to the Company, to irrevocably subscribe for not more than its Sharing Percentage (based on the Units then held by such Participating Member) of any such additional equity securities (including securities exercisable for or convertible into equity securities), on the same terms as those of the proposed issuance of such additional equity securities (including securities exercisable for or convertible into equity securities). Each Participating Member who does not exercise such option in accordance with the above requirements shall be deemed to have waived all of such Participating Member’s rights with respect to such issuance. In the event that any Participating Member does not elect to purchase its aggregate Sharing Percentage of the additional equity securities (including securities exercisable for or convertible into equity securities), the Company shall deliver to each Participating Member (other than declining Participating Members) a written notice thereof not later than the twenty-fifth day of the Subscription Period, including the number of equity securities which were subject to the purchase right of such declining Participating Member(s), and each other Participating Member may subscribe for not more than its Sharing Percentage (calculated excluding the Sharing Percentage attributable to the declining Members) of such declined equity securities before the expiration of the Subscription Period.

 

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(c) If, prior to consummation, the terms of the proposed issuance shall change with the result that the price shall be less than the minimum price set forth in the notice contemplated by clause (a) above or the other principal terms shall be more favorable to the prospective purchaser than those set forth in such notice, it shall be necessary for a separate notice to be furnished, and the terms and provisions of this Section 4.6 separately complied with.

(d) If at the end of the 90th day after the date of the effectiveness of the notice contemplated by clause (a) above as such period may be extended to obtain any required regulatory approvals, the Company has not completed the issuance, each Participating Member shall be released from such Participating Member’s obligations under the written commitment, the notice shall be null and void, and it shall be necessary for a separate notice to be furnished, and the terms and provisions of this Section 4.6 separately complied with, in order to consummate such issuance.

(e) In the event that the participation in the issuance by a Participation Member as a purchaser would require under applicable law (i) the registration or qualification of such securities or of any Person as a broker or dealer or agent with respect to such securities where such registration or qualification is not otherwise required for the issuance or (ii) the provision to any participant in the issuance of any specified information regarding the Company or any of its Subsidiaries or the securities to be issued that is not otherwise required to be provided for the issuance, such Participation Member shall not have the right to participate in the issuance.

(f) Each Participating Member shall take or cause to be taken all such reasonable actions as may be necessary or reasonably desirable in order expeditiously to consummate each issuance pursuant to this Section 4.6.

(g) Notwithstanding the requirements of this Section 4.6, the Company may proceed with any issuance prior to having complied with the provisions of this Section 4.6 so long as the Company has used reasonable best efforts to give all Class A Members and Class B Members, including the Rollover Members, the opportunity to invest in the issuance; provided that the Company shall:

(i) provide to each Member in connection with such issuance (A) with prompt notice of such issuance and (B) the notice described in clause (a) above in which the actual price per unit of the equity securities shall be set forth;

(ii) offer to issue to each such Member such number of securities of the type issued in the issuance as may be requested by such Member (up to a number of securities that would be necessary for such Member to maintain the Sharing Percentage to which such Member would have been entitled to pursuant to Section 4.6(b) (assuming full participation by all Participating Members) on the same economic terms and conditions with respect to such securities as the subscribers in the issuance received; and

(iii) keep such offer open for a period of twenty (20) business days, during which period each such Member may accept such offer by sending a written acceptance to the Company committing to purchase an amount of such securities (not in any event in excess of the number contemplated by Section 4.6(g)(ii)).

 

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(h) The provisions of this Section 4.6 shall not apply to issuances by the Company as follows:

(i) any issuance to the Company or any wholly-owned Subsidiary of the Company;

(ii) any issuance of securities upon the exercise or conversion of any stock, options, warrants or convertible securities outstanding on the date hereof or issued after the date hereof in a transaction that complied with the provisions of this Section 4.6 (other than those described in clause (iii) immediately below);

(iii) any issuance of Units or other equity securities, options, warrants or convertible securities (and Units underlying such securities) to officers, employees, directors, agents or consultants (other than a Member or an Affiliate thereof, excluding R. Michael Johnson and Thomas Beck) of the Company or its subsidiaries in connection with such Person’s employment or consulting arrangements with the Company or its subsidiaries, in each case to the extent approved by the Board or pursuant to an employment benefit plan or arrangement approved by the Board;

(iv) any issuance of equity securities, options, warrants or convertible securities, in each case to the extent approved by the Board and subject to Section 3.3(a)(iii)(D) to the extent applicable, (A) in connection with any business combination or acquisition transaction by or involving the Company or any of its Subsidiaries, including a Change of Control or other Exit Event, (B) in connection with any joint venture or strategic partnership entered into primarily for purposes other than raising capital (as determined by the Board in its sole discretion) or (C) to financial institutions, commercial lenders, broker/finders or any similar party, or their respective designees, in connection with the incurrence or guarantee of indebtedness by the Company or any of its subsidiaries;

(v) any issuance of equity securities pursuant to a public offering;

(vi) the issuance of Units to the Members on the date hereof pursuant to Section 4.1(b) or in connection with the Recapitalization and the transactions contemplated by the Subscription Agreement; or

(vii) any issuance of securities in connection with any Unit split, Unit dividend paid on a proportionate basis to all holders of the affected class of Units or recapitalization, in each such case, approved by the Board.

 

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ARTICLE V

TRANSFER OF MEMBERSHIP INTERESTS;

ADMISSION OF NEW MEMBERS

SECTION 5.1.  Admission of Additional or Substitute Members .

(a) The Board shall have the right, in its sole and absolute discretion, to admit as an Additional Member any Person who acquires an interest in the Company, including Units or any other Membership Interest. Concurrently with the admission of an Additional Member, the Board shall forthwith cause any necessary papers to be filed and recorded and notice to be given wherever and to the extent required showing the admission of an Additional Member, all at the expense, including payment of any professional and filing fees incurred, of the Additional Member.

(b) The Board shall have the right, in its sole and absolute discretion (other than as provided in Section 5.1(d)), to admit as a Substitute Member any Person who acquires a Membership Interest, including Unit(s), from a Member in accordance with this Article V and such Substitute Member shall succeed to the Membership Interest acquired from such Member. Concurrently with the admission of a Substitute Member, the Board shall forthwith cause any necessary papers to be filed and recorded and notice to be given wherever and to the extent required showing the substitution of a transferee as a Substitute Member in place of the transferring Member, all at the expense, including payment of any professional and filing fees incurred, of the Substitute Member.

(c) The admission of any Person as a Substitute or Additional Member shall be conditioned upon (i) such Person’s written acceptance and adoption of all the terms and provisions of this Agreement, either by (X) execution and delivery of a counterpart signature page to this Agreement countersigned by the Board or a duly authorized designee of the Board on behalf of the Company or (Y) any other writing evidencing the intent of such Person to become a Substitute Member or Additional Member and such writing is accepted by the Board on behalf of the Company and (ii) upon the request of the Board, such Person’s execution and delivery of such other documentation as the Board may reasonably require in connection with the issuance or Transfer of interests in the Company and the admittance of such Person as a Member.

(d) Notwithstanding anything herein to the contrary, upon exercise of their remedies pursuant to Section 8.02 of the First Lien Credit Agreement or the eleventh paragraph of the Membership Interests Pledge Agreements to the extent an Event of Default (as defined in such paragraph of the Membership Interest Pledge Agreements) has occurred under the Membership Interest Pledge Agreements and provided (x) the agent or the lenders have provided five business days’ prior notice to the Company and the Members of its or their intention to exercise such remedies and (y) such exercise of remedies is not being disputed in good faith by the Company or any Member, and subject to compliance with Section 5.1(c)(i) above (other than any requirement for any countersignature or acceptance by the Board), the agent and the lenders

 

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under the First Lien Credit Agreement (or their assignees or designees) without any further action by the Board or the Members, shall have the right to acquire the Units pledged pursuant to the First Lien Credit Agreement in connection with the enforcement of their rights under Section 8.02 of the First Lien Credit Agreement or the eleventh paragraph of the Membership Interests Pledge Agreements, to become a transferee of such pledged Units and correspondingly become a Substitute Member and/or to exercise the rights of a Member hereunder with respect to such pledged Units.

SECTION 5.2.  Transfers Generally .

(a) Except as provided in Sections 2.9(f), 5.1(d), 5.3, 5.4, 5.5 and 5.6(b)(i), in connection with a Transfer of Units to a Permitted Transferee of such Member or in connection with a pledge of Units pursuant to the First Lien Credit Agreement or Second Lien Credit Agreement, no Member other than the Summit Member(s) and their Permitted Transferees may, directly or indirectly, transfer, sell, exchange, mortgage, hypothecate, pledge, assign, securitize or otherwise dispose of (any of the foregoing, a “ Transfer ”) all or part of such Member’s Membership Interest prior to the fifth anniversary of the Closing Date without the prior written consent of the Board, which consent may be given or withheld in its sole discretion. From and after the fifth anniversary of the Closing Date, the Members other than the Summit Member(s) shall be entitled to Transfer their Units, subject to compliance with this Section 5.2. The Summit Member(s) may Transfer their Membership Interests at any time, subject to compliance with Section 5.3 and/or Section 3.3(a)(iii)(B), in each case, to the extent applicable.

(b) Notwithstanding anything in this Agreement to the contrary, without the prior written consent of the Board, no issuance or Transfer of Units otherwise permitted or required shall be made:

(i) unless such issuance or Transfer is in compliance with applicable law, including U.S. federal and applicable state securities laws, including the Securities Act and the rules and regulations thereunder. If any such Transfer is made pursuant to an exemption from the U.S. federal and state securities laws, such Transfer shall be made only (unless the Board otherwise waives in writing such requirement) upon the transferee first having delivered to the Company a favorable written opinion of counsel, reasonably satisfactory in form and substance to the Board, to the effect that the proposed Transfer is exempt from registration under the Securities Act and any applicable state securities laws; provided, however , that no such opinion of counsel shall be required for (A) a Transfer by a Member to a Permitted Transferee made in accordance with the terms of this Agreement; (B) a sale duly made in compliance with Rule 144 promulgated under the Securities Act, or any successor or analogous rule to Rule 144, or if the Member would be permitted to Transfer the securities pursuant to paragraph (d)(1) of Rule 144 (it being agreed that the Company shall have the right to receive evidence reasonably satisfactory to it regarding compliance with such Rule or any successor or analogous rule prior to the registration of any such Transfer); or (C) a Transfer pursuant to an effective registration statement;

 

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(ii) for so long as the Company is a partnership for United States federal income tax purposes, if such Transfer is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code or such Transfer would otherwise result in the Company being treated as a “publicly traded partnership,” as such term is defined in Sections 469(k)(2) or 7704(b) of the Code and the regulations promulgated thereunder;

(iii) if such issuance or Transfer subjects the Company to be regulated under the Investment Company Act of 1940 or the Investment Advisors Act of 1940; or

(iv) if such issuance or Transfer would cause (A) all or any portion of the assets of the Company to (i) constitute “plan assets” (for purposes of Title I of ERISA, Section 4975 of the Code or any applicable Similar Law) of any existing or contemplated Member, or (ii) be subject to the provisions of Title I of ERISA, Section 4975 of the Code or any applicable Similar Law, or (B) the Board or any Member (in its capacity as such) to become a fiduciary with respect to any existing or contemplated Member, pursuant to ERISA, any applicable Similar Law or otherwise.

(c) No Transfer of Interests otherwise permitted by this Agreement shall be effective unless and until any transferee who is not already a Member has complied with the requirements of Section 5.1(c) and such Person has otherwise been admitted to the Company as a Substitute Member (including pursuant to Section 5.1(d) to the extent applicable).

(d) The Members shall be permitted to assign or transfer any rights granted to such Members (or group of Members) hereunder in connection with any Transfer of Units by such Members (including any right to appoint Directors), provided that any such assignment or transfer of rights shall be proportionate to the number of Units so Transferred. To the extent that any Members so assign or transfer such rights, the Company and each of the Members shall enter into an amendment to this Agreement to appropriately reflect the assignment of such rights in accordance with the intent of this Section 5.2(d).

(e) To the extent that following a Transfer to a Permitted Transferee the status of such Permitted Transferee changes such that such transferee would no longer constitute a Permitted Transferee of the transferor, such original Transfer shall be deemed null and void ab initio .

(f) Any Transfer or attempted Transfer of any Units or Membership Interests in violation of any provision of this Agreement shall be void, and the Company shall not record such Transfer on its books or treat any purported transferee of such Units or Membership Interests as the owner of such Units or Membership Interests for any purpose.

SECTION 5.3.  Tag Along Rights .

 

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(a) Prior to any Summit Member(s) (the “ Selling Summit Member(s) ”) making any Transfer of Units, the Selling Summit Member(s) shall give prior written notice to each Class B Member and the Company, which notice (the “ Sale Notice ”) shall (A) identify the amount of Units held by the Selling Summit Holder(s) to be Transferred (the “ Offered Securities ”) and the fraction, expressed as a percentage, determined by dividing the Sharing Percentage attributable to the Offered Securities by the total Sharing Percentage attributable to all Units held by the Summit Member(s) (the “ Tag-Along Percentage ”) and (B) describe the terms and conditions of such proposed Transfer, including the per unit price of the Units held by the Selling Summit Member(s) desired to be sold, the implied equity valuation of the Company based upon such per unit price of such Units desired to be sold and the amount that would be received in exchange for each Class B Unit as determined pursuant to Section 5.3(c).

(b) Any of the Class B Members may, within 20 days of the delivery of the Sale Notice, give written notice (each, a “ Tag-Along Notice ”) to the Selling Summit Member(s) that such Class B Member wishes to participate in such proposed Transfer upon the same terms and conditions as the Selling Summit Member(s) other than as set forth in this Section 5.3(b) and Section 5.3(c). Any Class B Member who does not deliver a Tag-Along Notice within such 10 day period shall be deemed to have waived all of such Class B Member’s rights with respect to the proposed sale. A Tag-Along Notice shall specify the amount of Class B Units such Class B Member desires to include in such proposed Transfer (not in any event to exceed the Tag-Along Percentage as applied to the Class B Units held by the Class B Member). To exercise its tag-along rights hereunder, each Class B Member must agree to make the same representations, warranties, covenants, indemnities and agreements as the Selling Summit Member(s) make in connection with the Transfer of the Offered Securities (except that in the case of representations and warranties pertaining specifically to, or covenants, indemnities or other agreements made specifically by, the Selling Summit Member(s), each such Class B Member shall make, to the extent applicable, comparable representations and warranties pertaining specifically to (and, as applicable, covenants, indemnities or other agreements by) each such Class B Member), and must agree to bear his or its ratable share (which shall be several and shall be based on, and limited to, the gross proceeds received by each such Class B Member) of all liabilities arising out of representations, warranties, covenants, indemnities or other agreements (other than those representations, warranties, covenants, indemnities or other agreements that pertain specifically to a given Class B Member, who shall bear all of the liability related thereto) made in connection with the Transfer.

(c) The offer of each Class B Member contained in such Class B Member’s Tag-Along Notice shall be irrevocable and, to the extent such offer is accepted by the transferee, such Class B Member shall be obligated to Transfer Class B Units in the proposed sale by the Selling Summit Member(s) at a price per Class B Unit calculated by (1) taking the per unit price of the Units held by the Selling Summit Member(s) to be sold and calculating an implied valuation of the Company based on such price, (2) calculating the valuation that all Class B Members would receive in respect of their Class B Units in a hypothetical sale of the entire Company where proceeds equal to such implied valuation described in clause (1) immediately above were received in such hypothetical sale and were distributed to the Members pursuant to Section 4.4(a)(ii), and (3) calculating the per unit price of one Class B Unit based on the

 

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aggregate proceeds to be received by the Class B Members in respect of all Class B Units in the hypothetical sale described in clause (2) immediately above and dividing such amount by the number of outstanding Class B Units. Subject to the foregoing sentence and the last sentence of Section 5.3(b) above, the Transfer of Class B Units shall otherwise be on the same terms and conditions as the Selling Summit Member(s) Transfer Units, up to such number of Class B Units as such Class B Member shall have specified in its Tag-Along Notice; provided , however , that if the material terms of the proposed sale change with the result that the per unit price for a Class B Unit shall be less than the per unit price set forth in the Sale Notice, the form of consideration shall be different or the other terms and conditions shall be materially less favorable to the Class B Member than those set forth in the Sale Notice, each Class B Member that has previously delivered a Tag-Along Notice shall be permitted to withdraw the offer contained in such holder’s Tag-Along Notice by written notice to the Selling Summit Member(s) and upon such withdrawal shall be released from such holder’s obligations, and the Selling Summit Member(s) shall either cancel such Transfer of Units or send a new Sale Notice setting forth the revised terms and conditions of such sale.

(d) Each Member participating in any such sale will bear (x) its or his own costs of any sale of Units pursuant to this Section 5.3 and (y) its or his pro-rata share (based upon the relative amount of proceeds received for the Units sold) of the costs of any sale of Units pursuant to this Section 5.3 to the extent such costs are incurred for the benefit of all participating Members and are not otherwise paid by the Company or the transferee. Costs incurred by or on behalf of a Member for its or his sole benefit will not be considered costs of the transaction hereunder.

(e) Nothing in this Agreement shall limit any rights a Member has with respect to any agreement validly entered into with the Company or one of its Subsidiaries with respect to any advisory or similar fees.

(f) If none of the Class B Members gives the Selling Summit Member(s) a timely Tag-Along Notice with respect to the Transfer proposed in the Sale Notice, then the Selling Summit Member(s) may Transfer such Offered Securities at a per unit price no greater than the price set forth in the Sale Notice and on other terms and conditions not materially more favorable to the Selling Summit Member(s) than those set forth in the Sale Notice at any time within 120 days (subject to extension to the extent necessary to obtain required governmental or other approvals) after expiration of the 10-day period for giving Tag-Along Notices with respect to such Transfer. Any such Offered Securities not Transferred by the Selling Summit Member(s) during such period will again be subject to the provisions of this Section 5.3 upon a proposed subsequent Transfer. If one or more Class B Members give the Selling Summit Member(s) a timely Tag-Along Notice, then the Selling Summit Member(s) shall use their reasonable efforts to obtain the agreement of the prospective transferee(s) to the participation of the Class B Members in any contemplated Transfer, on the same terms and conditions as are applicable to the Offered Securities, except as otherwise provided in Sections 5.3(b) and 5.3(c) above. If the prospective transferee(s) is unwilling or unable to acquire all of the Offered Securities specified in a timely Tag-Along Notice upon such terms, then the Selling Summit Member(s) shall elect either to cancel such proposed Transfer or to reduce the number of Class A Units and Class B Units on a proportionate basis to a number that the prospective transferee(s) are willing to purchase.

 

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(g) Notwithstanding anything contained in this Section 5.3 to the contrary, there shall be no liability or obligation on behalf of any Summit Member or the Company if the Selling Summit Member(s) determine, for any reason, not to consummate a Transfer referred to in this Section 5.3.

(h) Excluded Transfers . The rights and restrictions contained in Sections 5.3(a) through (g) shall not apply with respect to any of the following Transfers of Units:

(i) any Transfer of Units to any Permitted Transferee of a Summit Member;

(ii) any Transfer by the equityholders of Summit Holdco of their equity interests in Summit Holdco;

(iii) any Transfer of Units held by a Summit Member to and among the members or partners of the Summit Member(s) and the members, partners and employees of such members and partners;

(iv) any Transfer of Units in accordance with Section 5.4; and

(v) any Transfer of Units held by a Summit Member to employees or directors of, or consultants to, any of the Company or its Subsidiaries.

SECTION 5.4.  Drag-Along Rights .

(a) If at any time following the fifth anniversary of the Closing Date, subject to the limitations and conditions set forth in this Section 5.4, (x) the Summit Member(s) elect to consummate, or to cause the Company to consummate, a sale of all of the assets or all of the equity interests in the Company by whatever means (including merger, consolidation, equity purchase, sale of assets or otherwise) or (y) the equityholders of Summit Holdco elect to consummate a Sale of Control of Summit Holdco (or any Subsidiary of Summit Holdco holding, directly or indirectly, Summit Holdco’s equity interest in the Company), to the extent the Summit Member(s) or the equityholders of Summit Holdco, as applicable, choose to notify the Company and the other Members in writing of that election, the other Members and the Board will consent to and raise no objections to the proposed transaction, and the other Members, the Board and the Company will take all other actions reasonably necessary or desirable to cause the consummation of such transaction on the terms proposed by the Summit Member(s) or the equityholders of Summit Holdco, as applicable (a “ Drag Along Sale ”). Without limiting the foregoing and subject to the limitations and conditions set forth in this Section 5.4, (i) if the proposed Drag Along Sale requires approval of the Members, the Members will vote or cause to be voted all Units that they hold or with respect to which the Members have the power to direct the voting and which are entitled to vote on such transaction in favor of such transaction and will waive any statutory appraisal rights which the Members may have in connection therewith, and

 

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(ii) if the proposed Drag Along Sale is structured as or involves a sale or redemption of Units or other equity interests, each Member other than the Summit Member(s) will agree to sell all of the Units held by such Member. The Members will execute any merger, asset purchase, security purchase, recapitalization or other sale agreement approved by the Summit Member(s) or the equityholders of Summit Holdco, as applicable, in connection with such Drag Along Sale provided that in the event that (x) the Class B Members will not be entitled to proceeds in the Drag Along Sale (with respect to Class B Units, calculated pursuant to clause (iv) of Section 5.4(b)), (A) the Class B Members shall not be required to make any representations, warranties, covenants, indemnities or agreements other than customary representations and warranties as to due organization, authority to enter into the applicable transaction agreement, enforceability, non-contravention and title to the Units held by such Class B Member, and (B) each Class B Member shall not be liable for any representations, warranties, covenants, indemnities or other agreements other than those representations and warranties that pertain specifically to such Member, or (y) in the event that clause (x) immediately above does not apply, the Class B Members shall be required to make the same representations, warranties, covenants, indemnities and agreements that the Summit Member(s) make in the applicable transaction agreement, including, if applicable, agreeing to bear, his, her or its ratable share (which may be joint and several but shall be based on, and limited to, the gross proceeds to be received by each such Member from the Drag Along Sale, which limit shall be reduced on a proportionate basis to the extent the liability of the Company or the selling Members has been limited to an amount less than gross proceeds in such Drag Along Sale) of all liabilities arising out of representations, warranties, covenants, indemnities or other agreements (other than those representations, warranties, covenants, indemnities or other agreements that pertain specifically to a given Member (or group of Members) other than such Member, with such given Member (or group of Members) to bear all of the liabilities related thereto) made in connection with the Drag Along Sale (except that (i) in the case of representations and warranties pertaining specifically to the Summit Member(s) or another Member, each Member shall make the comparable representations and warranties pertaining specifically to itself, (ii) in the case of covenants or agreements capable of performance only by certain Members, such covenants or agreements shall be made only by such certain Members and (iii) in the case of a Sale of Control of Summit Holdco (or any Subsidiary of Summit Holdco holding, directly or indirectly, Summit Holdco’s equity interest in the Company), the other Members shall not be required to make any representations or warranties relating to Summit Holdco or any of its Subsidiaries other than the Company and its Subsidiaries). In the event that, due to the joint and several obligation of a Member to satisfy the aforementioned liabilities in such Drag Along Sale, the purchaser or its related party in such Drag Along Sale seeks a payment from such Member in excess of such Member’s pro-rata portion of the gross proceeds in such Drag-Along Sale (which pro-rata portion shall be based upon the gross proceeds received by such Member in the Drag Along Sale, as compared to the gross proceeds received by all Members in the Drag Along Sale), then each of the other Members participating in such sale shall contribute to such Member an amount up to the contributing Member’s pro-rata portion of the gross proceeds in such Drag Along Sale sufficient to give effect to the limitation on liability as provided in this Section 5.4(a) and in any instance, subject to the limits as provided in the foregoing sentence, with any such limit to be applied to each Member in accordance with this pro-rata portion of the gross proceeds.

 

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(b) The obligations of the Members other than the Summit Member(s) with respect to the Drag Along Sale are subject to the satisfaction of the following conditions: (i) in connection with any Drag Along Sale of the Company not involving Summit Holdco or any of its Subsidiaries other than the Company and its Subsidiaries requiring participation by the Company or any Members other than the Summit Member(s), the Company shall be required to engage an independent investment banking firm selected by the Board, which investment banking firm shall manage a sale process designed to maximize the price taking into account certainty and other non-financial terms and conditions of such Drag Along Sale and otherwise assist the Company and its Members with such Drag Along Sale; (ii) in connection with any Drag Along Sale in which an independent investment banking firm is required to be hired pursuant to clause (i) immediately above, the receipt by the Company and the Board of a fairness opinion of such independent investment bank as to the fairness, from a financial point of view, of the consideration to be received by the Class B Members in respect of their Class B Units in the Drag Along Sale; (iii) all of the Members shall receive the same form of consideration, or if any Members are given an option as to the form and amount of consideration to be received, all Members will be given the same option; and (iv) the consideration to be received by Class B Members in respect of their Class B Units (A) in a Drag Along Sale of the Company not involving Summit Holdco or any of its Subsidiaries other than the Company and its Subsidiaries will be at a price per Class B Unit calculated by taking the aggregate proceeds from such Drag Along Sale and allocating such proceeds based upon a hypothetical distribution of such proceeds by the Company pursuant to Section 4.4(a)(ii), and (B) in a Drag Along Sale of the Company involving Summit Holdco or its Subsidiaries in addition to the Company and its Subsidiaries will be at a price per Class B Unit determined through the valuation methodology set forth in Section 5.6(d)(ii)(A) as if such Class B Units were purchased through the exercise of the Put Right for cash pursuant to such Section.

(c) Each Member will bear (x) its or his own costs of any sale of Units pursuant to a Drag Along Sale and (y) its or his pro-rata share (based upon the relative amount of proceeds received for the Units and other equity interests sold) of the costs of any sale of Units or other equity interests pursuant to a Drag Along Sale to the extent such costs are incurred for the benefit of all participating Members (or selling equityholders in any Drag Along Sale involving Summit Holdco or its Subsidiaries in addition to the Company and its Subsidiaries) and are not otherwise paid by the Company, Summit Holdco or the transferee (provided that Section 10.2 to apply to such Drag Along Sale unless otherwise agreed by the Summit Member(s)). Costs incurred by or on behalf of a Member for its or his sole benefit will not be considered costs of the transaction hereunder. In the event that any transaction that the Summit Member(s) or the equityholders of Summit Holdco, as applicable, elect to consummate or cause to be consummated pursuant to this Section 5.4 is not consummated for any reason, the Company will reimburse the Summit Member(s) or the equityholders of Summit Holdco, as applicable, for all actual and reasonable expenses paid or incurred by the Summit Member(s) or the equityholders of Summit Holdco, as applicable, for the benefit of the Company and/or all of its Members in connection therewith (in the case of a Drag Along Sale involving Summit Holdco or its Subsidiaries in addition to the Company and its Subsidiaries, based upon a reasonable allocation of expense as between Summit Holdco and the Company as agreed between the Board (subject to Section 3.3(a)(iv)) and Summit Holdco).

 

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(d) Nothing in this Agreement shall limit any rights a Member has with respect to any agreement validly entered into with the Company or one of its Subsidiaries with respect to any advisory or similar fees.

(e) Notwithstanding anything contained in this Section 5.4 to the contrary, there shall be no liability or obligation on behalf of any Summit Member, any equityholder of Summit Holdco, their respective Affiliates or the Company if the Summit Member(s) or equityholders of Summit Holdco, as applicable, determine, for any reason, not to consummate a Drag Along Sale, and the Summit Member(s) or equityholders of Summit Holdco, as applicable, shall be permitted to, and shall have the authority to cause the Company to, discontinue at any time any Drag Along Sale initiated by the Summit Member(s) or equityholders of Summit Holdco, as applicable, by providing written notice to the Company.

SECTION 5.5.  Rollover Exchange .

(a) To the extent that the equityholders of Summit Holdco or the board of directors or similar governing body thereof resolve or otherwise determine to undertake a Summit IPO (and so long as Summit Holdco, through the Summit Member(s), continues to Control the Company at such time), then, following the engagement of any lead underwriting bank(s) in connection therewith, the Summit Member(s) shall cause such lead underwriting bank(s) (the “ Underwriters ”) to, as part of their valuation analysis of Summit Holdco and its subsidiaries, undertake to complete a valuation of the Company and of the Class B Members’ interest in the Company relative to the value of Summit Holdco and its subsidiaries on a consolidated basis (assuming for such purposes 100% ownership of the Company by the Summit Member(s)), in each case, based upon the valuation methodology set forth in Schedule III to this Agreement, which valuation shall be final and binding on the parties for purposes of this Section 5.5. The Summit Member(s) shall cause such valuation to be reduced to writing (the “ IPO Valuation Notice ”) and delivered to each of the Class B Members promptly following the completion of such valuation and, to the extent reasonably practicable, no later than 15 days prior to the filing of the initial registration statement under the Securities Act relating to the Summit IPO.

(b) If Summit Holdco, through the Summit Member(s), continues to Control the Company at such time, each Class B Member shall have the right, but not the obligation (subject to the requirements of Section 5.6 to the extent applicable), exercisable within fifteen days after receipt of the IPO Valuation Notice by delivering written notice thereof to the Company and to the Summit Member(s), to exchange or otherwise transfer in a manner determined by the Summit Member(s) in their discretion, subject to and contingent upon consummation of the Summit IPO, all, but not less than all, of the Class B Units held by such Class B Member for common equity of Summit Holdco (“ Summit Holdco Common Shares ”) pursuant to the terms and conditions of this Section 5.5 (the “ Rollover Exchange ”). Any written notice by a Class B Member to participate in a Rollover Exchange shall be irrevocable, and to the extent that a Class B Member fails to timely deliver or otherwise does not deliver a written notice electing to participate in the Rollover Exchange within the time period required above such Member shall be deemed to have irrevocably waived its, his or her right to participate in the Rollover Exchange absent a written agreement otherwise by the Summit Member(s) (but any such waiver shall not otherwise affect the rights a Class B Member may have pursuant to Section 5.6).

 

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(c) In connection with the Rollover Exchange:

(i) Each participating Class B Member shall receive in respect of their Class B Units, substantially concurrent with the consummation of the Summit IPO, a number of Summit Holdco Common Shares (rounded to the nearest share) calculated based on the following:

S = (IRP * MP) * CS

(1- (IRP * MP))

where:

S = the number of Summit Holdco Common Shares to be issued to such participating Member

IRP = the Class B Indirect Rollover Percentage (as defined in Schedule III hereto) attributable to all Class B Members

MP = a fraction, the numerator of which is the number of Class B Units held by such participating Member and the denominator of which is the number of Class B Units held by all Class B Members including such participating Member

CS = the number of Summit Holdco Common Shares outstanding or to be outstanding immediately prior to the consummation of the Rollover Exchange but disregarding for such purposes (1) any issuance of shares by Summit Holdco occurring in connection with the Summit IPO, (2) any Summit Holdco Common Shares issued in respect of, or underlying, equity incentive or similar awards (including upon any conversion or reorganization of Summit Holdco undertaken in connection with the Summit IPO) to directors, officers, employees, consultants or agents of Summit Holdco or any of its Subsidiaries pursuant to a plan or arrangement established by the board of directors or similar managing body of Summit Holdco or its predecessors or by the equityholders of Summit Holdco, and (3) any Summit Holdco Common Shares, if any, underlying warrants, options or other securities exercisable for such Summit Holdco Common Shares and held by Persons other than Summit Holdco, its Subsidiaries, Blackstone and the other equityholders of Summit Holdco existing as of the date of this Agreement

(ii) The Members participating in the Rollover Exchange shall receive customary registration rights with respect to the Summit Holdco Common Shares received in respect of the Rollover Exchange based upon a registration rights

 

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agreement to be negotiated in good faith between Summit Holdco and such participating Members concurrently with the Rollover Exchange, which registration rights agreement will include the following terms (in the case of clause (A), to the extent applicable):

(A) in the event that all (but not less than all) of the Class B Members elect to participate in the Rollover Exchange in connection with the Summit IPO, such Class B Members holding a majority of the Summit Holdco Common Shares received in connection with the Rollover Exchange shall be entitled to one customary “demand” registration right covering the Summit Holdco Common Shares received by the Class B Members participating in the Rollover Exchange, provided that the market value of such shares is at least $40 million, which right shall be exercisable at any time from and after the third anniversary of the Summit IPO; and

(B) each Member participating in the Rollover Exchange shall receive customary “piggyback” registration rights on any underwritten registered offering following the Summit IPO in which Blackstone participates.

No Member participating in the Rollover Exchange shall be entitled to participate and sell Summit Holdco Common Shares in the Summit IPO without the prior written consent of Blackstone.

(iii) Each participating Member shall, and hereby agrees to, provide such representations, warranties and covenants as would be customary in such a transaction of this nature, including the following:

(A) representations and warranties as to ownership and title to the Units held by such Member, including that it is the sole beneficial and record owner of such Class B Units with the full right, power and authority to convey such Class B Units to Summit Holdco, free and clear of all liens and encumbrances;

(B) representations and warranties customarily required in order to establish that the Rollover Exchange satisfies the requirements necessary in order for the issuance of the Summit Holdco Common Shares in connection with the Rollover Exchange to be exempt from registration under the Securities Act;

(C) agreeing to, in connection with any underwritten offering of Summit Holdco Common Shares, including the Summit IPO, abide by any underwriter’s lockup restrictions requested of them by the underwriters in such underwritten offering and any lockup restrictions imposed on Blackstone;

(D) providing to the Company, Summit Holdco, and any underwriters in an underwritten public offering such information regarding itself or its ownership of Units or Summit Holdco equity as is requested by any of them to be included in a registration statement relating to the equity securities of Summit Holdco; and

 

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(E) providing the Company, Summit Holdco, any underwriter and any of their officers, directors, affiliates or controlling persons customary indemnification protection in connection with representations and warranties made, or information otherwise provided for use in a registration statement by such Member in connection with the Summit IPO or any subsequent underwritten offering in which such Member participates.

(iv) Without limiting the requirements of Section 5.5(c)(iii), each participating Member shall, and hereby agrees to, promptly take such actions and execute, deliver and perform any and all agreements and other documentation as are necessary or reasonably requested by the Company, Summit Holdco or its equityholders in collection with the Rollover Exchange and Summit IPO, including to effect any of the provisions in this Section 5.5.

(v) Each participating Member shall bear its, his or her own costs and expenses of participating in the Rollover Exchange, including any and all transfer taxes arising from the exchange of the Class B Units for Summit Holdco Common Shares.

SECTION 5.6.  Put/Call of Class B Units .

(a) Subject to the terms and conditions set forth in this Section 5.6, the Summit Member(s) shall have the right (but not the obligation) to require the Company to purchase all (but not less than all) of the Class B Units held by Class B Members (the “ Call Right ”) at any time after the sixth anniversary of the Closing Date either (x) in anticipation of the Summit IPO (but concurrently with and contingent upon completion of the Summit IPO) or (y) if the Summit IPO has already occurred. Notwithstanding the foregoing, in the event of a Sale of Control of Summit Holdco occurring prior to the fifth anniversary of the Closing Date, the Summit Member(s), or the Person succeeding to the interest of the Summit Member(s), following such Sale of Control shall not be entitled to exercise the Call Right for any reason prior to the later of the sixth anniversary of the Closing Date and the third anniversary of the date of consummation of the Sale of Control of Summit Holdco. To exercise the Call Right, the Summit Member(s) shall deliver to the Company, which in turn shall deliver to the Rollover Members, a written notice that the Summit Member(s) have elected to exercise the Call Right.

(b) Subject to the terms and conditions set forth in this Section 5.6, each Class B Member shall have the right (but not the obligation) to require the Company to purchase all (but not less than all) of the Class B Units held by such Class B Member and its Permitted Transferee(s) holding Class B Units (the “ Put Right ”) (i) in connection with a Sale of Control of Summit Holdco occurring after the Second Lien Date and prior to the sixth anniversary of the Closing Date (but subject to and contingent upon the consummation of such Sale of Control); or (ii) at any time following the sixth anniversary of the Closing Date (whether or not a Sale of Control has previously occurred). The Summit Member(s) shall, prior to any anticipated Sale of

 

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Control of Summit Holdco occurring prior to the fifth anniversary of the Closing Date, provide written notice thereof. To exercise its Put Right, a Class B Member shall deliver to the Company a written notice informing the Company that such Class B Member has elected to exercise its Put Right and, in the case where such Class B Member has the option to choose between cash and stock consideration pursuant to Section 5.6(c) below, stating whether it elects to receive cash or stock consideration; provided that in the case of an anticipated Sale of Control of Summit Holdco occurring prior to the fifth anniversary of the Closing Date, such written notice must be delivered to the Company and the Summit Member(s) no later than 10 days following receipt by the Class B Members of the written notice from the Summit Member(s) of the anticipated Sale of Control. Any failure to provide written notice within the 10 day period set forth in the provisio in the foregoing sentence shall be deemed an irrevocable waiver of such Class B Member’s right to exercise its Put Right in connection with such Sale of Control, but shall not otherwise affect its right to exercise the Put Right following the sixth anniversary of the Closing Date. Any written notice of exercise of the Put Right by a Class B Member shall be irrevocable absent the written consent of the Summit Member(s).

(c) In connection with any exercise of the Put Right or Call Right where Summit Holdco Common Shares are then publicly-traded or in connection with the exercise of the Call Right made in anticipation of the Summit IPO (and where Summit Holdco, through the Summit Member(s), continues to Control the Company), each Class B Member shall be entitled to elect to receive for its Class B Units cash consideration or, in lieu of cash, a number of Summit Holdco Common Shares, in each case, as determined pursuant to Section 5.6(d) below.

(d) The value for each Class B Unit to be purchased pursuant to the Call Right or Put Right, as applicable, will be calculated based on the fair market value as agreed upon by the Board and the Class B Members selling Class B Units pursuant to the Call Right or Put Right, as applicable, provided that if no amount can be agreed upon within 10 days of delivery of the Call Right or Put Right notice, as applicable, or if the parties otherwise so desire, then such amount shall be determined as follows:

(i) where the exercise of the Call Right is made in anticipation of the Summit IPO and where a Class B Member elects to receive Summit Holdco Common Shares as consideration, then such Class B Member shall receive a number of Summit Holdco Common Shares calculated in the manner set forth in Section 5.5 as if such Class B Member had elected to participate in a Rollover Exchange;

(ii) in the event of exercise of the Call Right or Put Right in all scenarios provided in Sections 5.6(a) and (b) other than that described in Section 5.6(d)(i):

(A) the value of the Class B Units being purchased will be determined by an independent investment banking or other valuation firm selected jointly (and equally paid for) by the Class B Members and the Company and applying the valuation methodologies set forth on Schedule IV hereto; provided , however , if either the Class B Member(s) or the Board gives written notice to the

 

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other within 5 days after the expiration of the foregoing 10 day period that it desires to have three investment banks determine the fair market value, or if the Class B Member(s) and the Board cannot agree on one investment bank within such 10 day period, the fair market value shall be determined by three investment banks each applying the valuation methodologies set forth on Schedule IV hereto, one selected and paid by the participating Class B Member(s), one selected by the Board (both within 10 days after the expiration of the foregoing 10 day period), and the third selected by the other two within 10 days of the foregoing 10 day period (and paid equally by the participating Class B Member(s) and the Company). If one investment bank or valuation firm is selected, then its determination is the fair market value. If three investment banks are selected, the fair market value shall be the average of the two closest determinations in dollar value made by the three. Such determination shall be final and binding on all parties. To the extent one or more investment banks or valuation firms are engaged as provided above, the purchase price shall be determined within 30 days of appointment of the independent valuation firm or investment bank(s). Notwithstanding the foregoing, in the event of exercise of a Put Right where a valuation by one or more independent investment banking or other valuation firms in a valuation process conducted pursuant to this Section 5.6 has occurred in the nine months prior to the date on which the written notice of exercise of such Put Right is delivered, then the value of the Class B Units being purchased will be based upon such prior valuation unless the Company elects, in its discretion as determined by the Board, to require a new valuation in accordance with the principles set forth above to be undertaken; and

(B) to the extent that a Class B Member has elected to receive Summit Holdco Common Shares as consideration for its Class B Units where the valuation of such Class B Units has been determined pursuant to this Section 5.6(d)(ii), then such Class B Member shall receive a number of Summit Holdco Common Shares equal to the value of such Class B Member’s Class B Units as determined pursuant to Section 5.6(d)(ii)(A) above divided by the volume weighted average trading price of the Summit Holdco Common Shares as reported by Bloomberg L.P. (based on composite trading) for the 10 trading days ending on the trading day immediately prior to the date of the Put Right or Call Right, as applicable, exercise notice.

(e) Each Class B Member shall, and hereby agrees to, promptly take such actions and execute, deliver and perform any and all agreements and other documentation as are necessary or reasonably requested by the Company and/or Summit Holdco in connection with the exercise of the Put Right or Call Right. Without limiting the foregoing, each Class B Member shall, and hereby agrees to, provide representations, warranties and covenants as would be customary in a transaction of the nature contemplated in this Section 5.6, which representations and warranties shall be limited to customary representations and warranties as to due organization, authority to enter into the applicable documentation, enforceability, non-contravention, title to the Units held by such Class B Member and representations and warranties

 

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customarily required in order to establish that any exchange of Class B Units satisfies the requirements necessary in order for the issuance of Summit Holdco Common Shares in connection with such exchange to be exempt from registration under the Securities Act.

(f) In the event that the Summit Member(s) exercise the Call Right or where none of the Class B Members elect to participate in the Rollover Exchange but all Class B Members subsequently elect at the same time to exercise their Put Right and, in either such case, all such Class B Members elect to receive Summit Holdco Common Shares as consideration, then the Class B Members shall collectively be entitled to one “demand” registration right on the same terms and conditions as set forth under Section 5.5(c)(ii). Any Class B Members receiving Summit Holdco Common Shares as consideration for their Class B Units in connection with the exercise of the Call Right or Put Right shall also be entitled to “piggyback” registration rights on the same terms and conditions as described under Section 5.5(c)(ii).

(g) Subject to Section 5.6(h), the closing of the purchase of the Class B Units pursuant to this Section 5.6 shall occur on a date designated by the Board, and in any event within forty-five (45) days of the date on which the purchase price/value for the Class B Units is determined (unless the purchase is subject to and contingent upon the occurrence of another event (e.g., the Summit IPO), in which case, the 45 day requirement shall not apply) (such date, with respect to the Call Right, the “ Call Closing Date ”, and with respect to the Put Right, the “ Put Closing Date ”); provided that if such purchase is subject to any prior regulatory approval, then such 45-day period shall be extended until the expiration of ten business days after all such approvals shall have been received and the Company shall use its commercially reasonable efforts to obtain any such regulatory approvals as promptly as possible. Without limiting the generality of Section 5.5(e), on or prior to the Call Closing Date or Put Closing Date, as applicable, the Class B Members subject to the Put Right or Call Right, as applicable, shall execute applicable transfer instruments representing their Class B Units, duly endorsed for transfer and accompanied by all requisite transfer taxes, if any, and such Class B Units shall be free and clear of any liens, and each Class B Member subject to the Put Right or Call Right, as applicable, shall so represent and warrant, and shall further represent and warrant that it is the sole beneficial and record owner of such Class B Units with the full right, power and authority to convey such Class B Units to the Company or to Summit Holdco (if so directed by the Company). Where a Class B Member is to receive cash consideration in respect of its Class B Units, such Class B Units may be purchased by delivery of funds deposited into an account designated by such Member, a bank cashier’s check, a certified check or a company check of the Company for the purchase price.

(h) Notwithstanding anything to the contrary elsewhere herein, the Company shall not be obligated to purchase any Class B Units at any time pursuant to this Section 5.6 in connection with the exercise of the Put Right, (i) to the extent that the purchase of such Class B Units would result (x) in a violation of any law or (y) after giving effect thereto (including any dividends or other distributions or loans from a Subsidiary of the Company to the Company in connection therewith), in a default or event of default under any bona fide financing agreement of the Company or its Subsidiaries (a “ Financing Default ”), (ii) if immediately prior to such purchase of Class B Units there exists a Financing Default which prohibits such purchase

 

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(including any dividends or other distributions or loans from a Subsidiary of the Company to the Company in connection therewith), or (iii) if the Company does not have funds available to effect such purchase of Class B Units and to concurrently maintain its operations in the Ordinary Course of Business (and the Class B Member has not otherwise elected to receive Summit Holdco Common Shares), in which case (1) the Company shall within fifteen days of learning of any such fact so notify the Members in writing that it is not currently capable of purchasing such Class B Units and giving the reasons therefor, and (2) the Company shall be entitled to delay the consummation of the purchase of the Class B Units pursuant to this Section 5.6 until the earlier of (A) a date that is no later than 20 days after the date on which such facts prohibiting the purchase of the Class B Units cease to exist and (B) the date that is nine months after the Class B Members receive notice from the Company of its inability to consummate the purchase, unless at the end of such nine month period the purchase of the Class B Units would continue to result in a violation of any law (in which case the Company shall use its best efforts to provide a means to acquire such Class B Units in a manner that does not result in a violation of law as promptly as reasonably practicable at the end of such nine month period).

(i) In the event the Company purchases the Class B Units pursuant to this Section 5.6, the selling Class B Member shall thereafter not be entitled to any distributions in respect of the Class B Units which have been purchased or which are to be purchased by the Company pursuant to this Section 5.6 where the Class B Members or the Summit Member(s) have already delivered a notice of their election to exercise the Put Right or Call Right, respectively, and the purchase price is not otherwise equitably adjusted to take into account the receipt of the proposed distribution to be made by the Company.

ARTICLE VI

CERTAIN OBLIGATIONS OF THE ROLLOVER MEMBERS

SECTION 6.1.  Non-Solicitation .

(a) In order that the Summit Member(s) may have and enjoy the full benefit of their investment in the Company and in consideration of, among other things, the Capital Contributions provided by the Summit Member(s) in respect of their Class A Units pursuant to the Subscription Agreement, during the period from the date of this Agreement through the later of (x) such time as the Rollover Members and their Permitted Transferees cease to own any Units; and (y) the seventh anniversary of the Closing Date (the “ Non-Solicitation Period ”), no Rollover Member (or Permitted Transferee acquiring Units after the date hereof) will, and will cause each of its Affiliates and Family Affiliates not to:

(i) directly or indirectly, either for himself, herself, itself or any other Person or entity, hire any of the officers or directors or other persons employed by the Summit Member(s), their respective Affiliates (including, for these purposes, the Company and its Subsidiaries) and their respective successors or assigns, or solicit or induce such persons to leave the employ of the Summit Member(s), their

 

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respective Affiliates (including, for these purposes, the Company and its Subsidiaries) or their respective successors or assigns (it being acknowledged that to the extent any such officer, director or other person is fired from employment, this Section 6.1(a)(i) shall not apply to such officer, director or other person); or

(ii) disparage the business of the Company, its Subsidiaries, the Summit Member(s) or any of their Affiliates in any way which could adversely affect the goodwill, reputation or business relationships of the foregoing with the public generally, or with any of their customers, suppliers or employees.

(b) Each Rollover Member (and each Permitted Transferee acquiring Units from a Rollover Member (or other Permitted Transferee of a Rollover Member) after the date hereof) acknowledges that the restrictions imposed by this Agreement are fully understood by such Person, are fair and reasonable, and will not preclude such Person from becoming gainfully employed following the execution of this Agreement.

(c) If any of the provisions of this Section 6.1 shall otherwise contravene or be invalid under the laws of any state or other jurisdiction where it is applicable but for such contravention or invalidity, such contravention or invalidity shall not invalidate all of the provisions of this Section 6.1, but rather this Section 6.1 shall be reformed and construed, insofar as the laws of that state or jurisdiction are concerned, as not containing the provision or provisions, but only to the extent that they are contravening or are invalid under the laws of that state or jurisdiction, and the rights and obligations created hereby shall be reformed and construed and enforced accordingly. In the event of a breach or violation by any Rollover Member (or Permitted Transferee acquiring Units from a Rollover Member (or other Permitted Transferee of a Rollover Member) after the date hereof) of this Section 6.1, the Company and any Summit Member shall have the right to pursue all legal remedies available at law, including under this Agreement, and, notwithstanding recovery of any such remedy, the Non-Solicitation Period as to such Seller shall be tolled until such breach or violation has been cured.

(d) Each Rollover Member (and each Permitted Transferee acquiring Units from a Rollover Member (or other Permitted Transferee of a Rollover Member) after the date hereof) acknowledges that the Company and each Summit Member will have no adequate remedy at law and may suffer irreparable damage if any Rollover Member (or Permitted Transferee acquiring Units from a Rollover Member (or other Permitted Transferee of a Rollover Member) after the date hereof) breaches or fails to perform any of their obligations in this Section 6.1. Accordingly, each Rollover Member (and each Permitted Transferee acquiring Units from a Rollover Member (or other Permitted Transferee of a Rollover Member) after the date hereof) agrees that each of the Company and each Summit Member shall have the right, in addition to any other rights which it may have, to specific performance and equitable injunctive relief if any Rollover Member (or other Permitted Transferee of a Rollover Member) after the date hereof) shall fail or threaten to fail to perform any of their obligations hereunder. In connection therewith, each Rollover Member (and each Permitted Transferee acquiring Units from a Rollover Member (or other Permitted Transferee of a Rollover Member) after the date hereof) waives the claim or defense that adequate remedy at law exists.

 

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ARTICLE VII

WITHDRAWAL; DISSOLUTION

SECTION 7.1.  Member Withdrawal . Except in connection with a transfer of all of a Member’s Units in accordance with this Agreement, withdrawal by a Member shall not be permitted. Withdrawal of a Member pursuant to this Agreement shall not dissolve the Company if at the time of such event of withdrawal there are one or more remaining Members, each of which hereby agrees to continue the business of the Company. If upon an event of withdrawal with respect to a Member there shall be no remaining Members, the Company nonetheless shall not be dissolved and shall not be required to be wound up if, within 90 days after the occurrence of such event of withdrawal, the Board agrees in writing to continue the business of the Company and to the appointment, effective as of the date of such withdrawal, of one or more Members.

SECTION 7.2.  Dissolution .

(a) The Company shall be dissolved and its affairs shall be wound up on the first to occur of the following:

(i) the approval of the Board, subject to the requirements of Section 3.3(a)(iii)(E) to the extent applicable;

(ii) the written consent of Members holding a majority of the outstanding Class A, subject to the requirements of Section 3.3(a)(iii)(E) to the extent applicable; and

(iii) the entry of a decree of judicial dissolution of the Company under Section 18-802 of the Act.

Except as provided in this Agreement, the death, retirement, resignation, expulsion, incapacity, bankruptcy or dissolution of a Member, or the occurrence of any other event that terminates the continued membership of a Member in the Company, shall not cause a dissolution of the Company, and the Company shall continue in existence subject to the terms and conditions of this Agreement.

(b) If the Company is dissolved, the business and property of the Company shall be wound up and liquidated by the Board or, in the event of the unavailability of the Board, such Member or other liquidating trustee as shall be named by the Board.

(c) Within 120 calendar days after the effective date of dissolution of the Company, the assets of the Company shall be distributed in the following manner and order:

(i) All debts and obligations of the Company, if any, shall be paid, discharged or provided for by adequate reserves;

 

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(ii) The balance, to the Members in accordance with Section 4.4(a)(ii).

(d) Cancellation of Certificate . On completion of the distribution of Company assets as provided herein, the Company is terminated, and shall file a certificate of cancellation with the Secretary of State of the State of Delaware, cancel any other filings made and take such other actions as may be necessary to terminate the Company.

ARTICLE VIII

REPORTS TO MEMBERS; TAX MATTERS; AFFIRMATIVE COVENANTS

SECTION 8.1.  Books of Account . (a) Appropriate books of account shall be kept by the Board, in accordance with U.S. generally accepted accounting principles, at the principal place of business of the Company, and each Summit Member shall have access to all books, records and accounts of the Company and the right to make copies thereof for any purpose reasonably related to such Summit Member’s interest as a member of the Company, in each case, under such conditions and restrictions as the Board may reasonably prescribe.

(b) The Members (i) shall be supplied with all Company information necessary to enable each Member to prepare its federal income tax returns within 90 days after the end of the Company’s fiscal year (an estimate of such information shall be supplied within 75 days after the end of the Company’s fiscal year) and (ii) shall be supplied with all Company information necessary to enable each Member to prepare its state and local income tax returns within 120 days after the end of the Company’s fiscal year.

(c) Except as otherwise expressly provided herein, all determinations, valuations and other matters of judgment required to be made for accounting purposes under this Agreement shall be made by the Board on a good faith basis and shall be conclusive and binding on all Members, their successors, heirs, estates or legal representatives and any other Person, and to the fullest extent permitted by law no such Person shall have the right to an accounting or an appraisal of the assets of the Company or any successor thereto.

SECTION 8.2.  Fiscal Year . The fiscal year of the Company shall end on December 31 of each calendar year unless otherwise determined by the Board in accordance with Section 706 of the Code.

SECTION 8.3.  Certain Tax Matters .

(a) The Tax Matters Member (as defined below) shall cause to be prepared all federal, state and local tax returns of the Company for each year for which such returns are required to be filed and shall cause such returns to be timely filed, and, except as herein otherwise provided shall reasonably determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Company and the accounting methods and conventions under the tax laws of the United States, the several states and other relevant jurisdictions as to the

 

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treatment of any such item or any other method or procedure related to the preparation of such tax returns. The Tax Matters Member may cause the Company to make or refrain from making any and all elections permitted by such tax laws. Each Member agrees that he shall not, except as otherwise required or provided by applicable law or regulatory requirements, (i) treat, on such Member’s individual income tax returns, any item of income, gain, loss, deduction or credit relating to such Member’s interest in the Company in a manner inconsistent with the treatment of such item by the Company as reflected on the Form K-1 or other information statement furnished by the Company to such Member for use in preparing such Member’s income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any tax return of the Company, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Company, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, (A) the Tax Matters Member shall be authorized to act for, and the Tax Matters Member’s decision shall be final and binding upon, the Company and all Members except to the extent a Member shall properly elect to be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Member in connection therewith (including attorneys’, accountants’ and other experts’ fees and disbursements) shall be expenses of, and payable by, the Company and (C) no Member shall have the right to (1) participate in the audit of any Company tax return, or (2) participate in any administrative or judicial proceedings conducted by the Company or the Tax Matters Member arising out of or in connection with any such audit; provided that the Company or the Tax Matters Member will keep the Members reasonably informed of any such audit or proceeding. Except as otherwise provided by applicable law or regulatory requirements, all Members agree that all tax filings they may make will be consistent with the tax returns prepared by the Tax Matters Member and shall not take any tax position inconsistent with the tax positions taken by the Company. The Members agree that the Capital Account of the Rollover Members as of the date of this Agreement shall be zero and all tax returns will be filed in a manner consistent therewith.

(b) The Company intends to be classified and treated as a partnership for United States federal tax purposes. In connection therewith, the Members hereby consent to the making of any elections pursuant to Treasury Regulations Section 301.7701-3 consistent with such treatment and agree not to revoke such elections except as permitted by the terms of this Agreement.

(c) The Company and each Member hereby designate the Summit Member as the “tax matters partner” for federal income tax purposes (the “ Tax Matters Member ”). The Tax Matters Member shall have all of the rights, duties, powers and obligations provided for in Sections 6221 through 6232 of the Code with respect to the Company. For the avoidance of doubt, the provisions relating to liability and indemnification of Members set forth in Section 3.9 and Article IX of this Agreement shall be fully applicable to the Tax Matters Member in its capacity as such.

 

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SECTION 8.4.  Financial Statements» .

At all times during the continuance of the Company, the Company will keep or cause to be kept full and true books of account in which will be entered fully and accurately each transaction of the Company, and which books of account are to be kept on the basis of GAAP for financial reporting purposes. The Company will deliver to each of the Members each of the following:

(a) as soon as available and in any event within ninety (90) days after the end of each fiscal year, or as soon thereafter as is practicable, annual financial statements of the Company containing the following: (i) a profit and loss statement and a balance sheet (including notes thereto) each of the Company and its Subsidiaries; and (ii) an audited consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, members’ capital and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by and accompanied by the opinion of independent public accountants of recognized standing selected by the Company, together with management discussion and analysis relating to important operational and financial developments during such fiscal period;

(b) as soon as available and in any event within one hundred twenty (120) days after the end of each fiscal year, a statement of the Capital Account of each Member;

(c) as soon as available and in any event within thirty (30) days after the end of each fiscal month (other than the last fiscal month of each fiscal year), consolidated balance sheets of the Company and its Subsidiaries as of the end of such fiscal month and the related consolidated statements of income and cash flows for such fiscal month and for the portion of the fiscal year ended at the end of such fiscal month, setting forth in the case of the consolidated income statement only in comparative form the figures for the corresponding portion of the previous fiscal year;

(d) as soon as available and in any event at least thirty (30) days after the beginning of each fiscal year, consolidated balance sheet, income statement and cash flow projections for the Company and its Subsidiaries for such fiscal year on a month-by-month basis (including the principal assumptions upon which such projections were based); and

(e) within ten business days after any officer of the Company obtains knowledge thereof, written notice of, and reasonable detail concerning, the institution of any litigation, arbitration proceeding or governmental or regulatory proceeding against or affecting the Company or any Subsidiary, whether or not considered to be covered by insurance, in which the prayer or claim for relief seeks recovery of an amount in excess of $1,000,000 (or, if no dollar amount is specified in the prayer or claim for relief, in which there is a reasonable likelihood of recovery of an amount in excess of $1,000,000) or any form of equitable relief which, if granted, could reasonably be expected to have a material adverse effect on the Company and its Subsidiaries, taken as a whole; provided that no such disclosure shall be required to the extent that such disclosure could result in the loss of attorney-client privilege.

 

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SECTION 8.5.  Records.»

The Company shall keep at its principal place of business such records as are required to be kept there under the Act, including or along with the following: (i) a current and a past list, setting forth the full name and last known address of each Member; (ii) a copy of the Certificate of Formation; (iii) copies of the Company’s tax returns for the three most recent fiscal years; (iv) copies of this Agreement; (v) copies of the financial statements described above for the three most recent fiscal years; (vi) the amount of cash and a statement of the agreed value of other property or services contributed by each Member and the times at which or events upon the happening of which any additional contributions agreed to be made by each Member are to be made; (vii) information that would enable a Member to determine the relative voting rights of the Directors on a particular matter; and (viii) copies of any written consents or Board minutes. Each Member or its designated representative, upon reasonable notice to the Company, at the Member’s expense, and in addition to any additional rights of inspection or for accounting contained in the Act, may inspect and copy any document required to be kept by the Company under this Section during ordinary business hours; provided that the Company shall not be required to provide access to or copies of any such documentation or materials to the extent that the Board reasonably determines that any such disclosure could result in the loss of attorney-client privilege. Any disclosure of information provided pursuant to Section 8.4 or this Section 8.5 shall be subject to the requirements of Section 10.6.

SECTION 8.6.  Other .

(a) Notices of Material Events . Upon receipt of actual knowledge thereof, the Company will furnish the Members written notice, as promptly as reasonably practicable, of any other development that results in a material adverse effect on the assets, properties, income or interests of the Company; provided that no such disclosure shall be required to the extent that such disclosure could result in the loss of attorney-client privilege. Each such notice shall be accompanied by a statement setting forth the material details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

(b) Existence; Conduct of Business . The Company will, and will cause each Subsidiary to, use its commercially reasonable efforts to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business.

(c) Maintenance of Properties; Insurance . The Company will, and will cause each of its Subsidiaries to, use commercially reasonable efforts to (i) keep and maintain all tangible property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (ii) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.

(d) Compliance with Laws and Material Contractual Obligations . The Company will, and will cause each of its Subsidiaries to, use commercially reasonable efforts to (i) comply in all material respects with all laws, rules, regulations and orders of any governmental authority applicable to it or its property and (ii) all material contractual obligations.

 

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ARTICLE IX

LIABILITY, EXCULPATION, INDEMNIFICATION AND INSURANCE

SECTION 9.1.  Liability . To the fullest extent permitted by law, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Covered Person shall be obligated personally for the repayment, satisfaction or discharge of any such debt, obligation or liability of the Company solely by reason of being a Covered Person.

SECTION 9.2.  Duties and Liabilities of Covered Persons . No Covered Person shall be liable or accountable in damages or otherwise to the Company or to any Member for any loss or liability arising out of any act or omission on behalf of the Company taken or omitted by such Covered Person, so long as such act or omission did not constitute Disabling Conduct. To the fullest extent permitted by law, no Covered Person shall be required to consider the interests of, or have any duty stated or implied by law or equity (including any fiduciary duty) to any other Covered Person by virtue of owning any interest in the Company or being a Director.

SECTION 9.3.  Exculpation . To the fullest extent permitted by law, and except as otherwise expressly provided herein, no Covered Person shall be liable to the Company or any Member for any Claims and Expenses arising out of any act or omission of such Covered Person on behalf of the Company to the extent that such act or omission did not constitute Disabling Conduct. A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of assets, liabilities, profits or losses or any other facts pertinent to the existence and amount of assets from which distributions to Members might properly be paid.

SECTION 9.4.  Indemnification . To the fullest extent permitted by applicable law, the Company shall indemnify and hold harmless each of the Covered Persons from and against any and all liabilities, obligations, losses, damages, fines, taxes and interest and penalties thereon (other than taxes based on fees or other compensation received by such Covered Person from the Company), claims, demands, actions, suits, proceedings (whether civil, criminal, administrative, investigative or otherwise), costs, expenses and disbursements (including reasonable and documented legal and accounting fees and expenses, costs of investigation and sums paid in settlement) of any kind or nature whatsoever (collectively, “ Claims and Expenses ”) which may be imposed on, incurred by or asserted at any time against such Covered Person in any way related to or arising out of this Agreement, the Company or the management or administration of the Company or in connection with the business or affairs of the Company or

 

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the activities of such Covered Person on behalf of the Company; provided , that a Covered Person shall not be entitled to indemnification hereunder against Claims and Expenses that are finally determined by a court of competent jurisdiction to have resulted from such Covered Person’s Disabling Conduct.

SECTION 9.5.  Advancement of Expenses . To the fullest extent permitted by applicable law, the Company shall pay the expenses (including reasonable legal fees and expenses and costs of investigation) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding (other than a claim, demand, action, suit or proceeding brought by the Company against a Member for such Member’s material breach or violation of this Agreement) as such expenses are incurred by such Covered Person and in advance of the final disposition of such matter, provided that such Covered Person undertakes to repay such expenses if it is determined by agreement between such Covered Person and the Company or, in the absence of such an agreement, by a final judgment of a court of competent jurisdiction that such Covered Person is not entitled to be indemnified pursuant to Section 9.4.

SECTION 9.6.  Notice of Proceedings . Promptly after receipt by a Covered Person of notice of the commencement of any proceeding against such Covered Person, such Covered Person shall, if a claim for indemnification in respect thereof is to be made against the Company, give written notice to the Board of the commencement of such proceeding, provided that the failure of a Covered Person to give notice as provided herein shall not relieve the Company of its obligations under Sections 9.4 and 9.5, except to the extent that the Company is prejudiced by such failure to give notice. In case any such proceeding is brought against a Covered Person (other than a proceeding by or in the right of the Company), after the Company has acknowledged in writing its obligation to indemnify and hold harmless the Covered Person, the Company will be entitled to assume the defense of such proceeding; provided , that (i) the Covered Person shall be entitled to participate in such proceeding and to retain its own counsel at its own expense and (ii) if the Covered Person shall give notice to the Company that in its good faith judgment certain claims made against it in such proceeding could have a material adverse effect on the Covered Person or its Affiliates other than as a result of monetary damages, the Covered Person shall have the right to control (at its own expense and with counsel reasonably satisfactory to the Company) the defense of such specific claims with respect to the Covered Person (but not with respect to the Company or any other Member); and provided , further , that if a Covered Person elects to control the defense of a specific claim with respect to such Covered Person, such Covered Person shall not consent to the entry of a judgment or enter into a settlement that would require the Company to pay any amounts under Section 9.4 without the prior written consent of the Company, such consent not to be unreasonably withheld. After notice from the Company to such Covered Person acknowledging the Company’s obligation to indemnify and hold harmless the Covered Person and electing to assume the defense of such proceeding, the Company will not be liable for expenses subsequently incurred by such Covered Person in connection with the defense thereof. Without the consent of such Covered Person, the Company will not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Covered Person of a release from all liability arising out of the proceeding and claims asserted therein.

 

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SECTION 9.7.  Insurance . The Company shall, or shall cause an Affiliate to, purchase and maintain directors and officers insurance, to the extent and in such amounts as the Board may, in its discretion, deem reasonable.

ARTICLE X

MISCELLANEOUS

SECTION 10.1.  Investment Representations of Members . Each Member hereby represents and warrants to and acknowledges with the Company that: (i) such Member has such knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of an investment in the Company and making an informed investment decision with respect thereto; (ii) such Member is able to bear the economic and financial risk of an investment in the Company for an indefinite period of time; (iii) such Member is acquiring interests in the Company for investment only and not with a view to, or for resale in connection with, any distribution to the public or public offering thereof; (iv) such Member is an “accredited investor” as such term is defined under Regulation D under the Securities Act; (v) the interests in the Company have not been registered under the securities laws of any jurisdiction and cannot be disposed of unless they are subsequently registered and/or qualified under applicable securities laws (or there is an exemption therefrom) and the provisions of this Agreement have been complied with; (vi) the execution, delivery and performance of this Agreement have been duly authorized by such Member and do not require such Member to obtain any consent or approval that has not been obtained and do not contravene or result in a default under any provision of any law or regulation applicable to such Member or other governing documents or any agreement or instrument to which such Member is a party or by which such Member is bound; and (vii) this Agreement is valid, binding and enforceable against such Member in accordance with its terms, except as such enforceability may be subject to the effects of bankruptcy, insolvency, reorganization, or other laws relating to or affecting the rights of creditors, and general principles of equity. Each Member further represents and warrants to the Company and the other Members that, as of any time such Member makes a Capital Contribution to the Company or otherwise acquires Units, no portion of the assets used by such Member to acquire its Units constitutes, and no portion of the assets used by such Partner to hold its Units will constitute, the assets of any (a) “employee benefit plan” (within the meaning of Section 3(3) of ERISA), which is subject to Title I of ERISA, (b) a plan, individual retirement account or other arrangement that is subject to Section 4975 of Code or any Similar Law, (c) an insurance company using general account assets which may be deemed to include the assets of any of the foregoing types of plans, accounts or arrangements under Section 401(c)(1)(A) of ERISA or the regulations promulgated thereunder, or (d) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements, pursuant to ERISA or otherwise.

SECTION 10.2.  Reimbursement of Summit Member(s) . The Company shall reimburse the Summit Member(s) for all out-of-pocket expenses, disbursements and advances reasonably incurred or made on behalf of, or for the benefit of, the Company and/or its Subsidiaries, and other expenses reasonably necessary or appropriate to the conduct of the

 

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Company’s business (or that of any of its Subsidiaries) and allocable to the Company or its Subsidiaries; provided that reimbursement by the Company of any individual expense or group of individual expenses that are substantially related to the same service provided or cost incurred in connection with a particular event or series of related events, in either case in an amount equal to or in excess of $50,000 where such amount has been determined based upon an allocation of expenses among the Company and other subsidiaries of Summit Materials Holdings L.P. shall require Special Board Approval.

SECTION 10.3.  Schedules . The Board may from time to time execute and deliver to the Members schedules which set forth the then current Capital Account balances of each Member and any other matters deemed appropriate by the Board or required by applicable law. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever.

SECTION 10.4.  Governing Law . THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the event of a direct conflict between the provisions of this Agreement and any provision of the Certificate or any mandatory provision of the Act, the applicable provision of the Certificate or the Act shall control. If any provision of this Agreement or the application thereof to any Person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of that provision to other Persons or circumstances is not affected thereby and that provision shall be enforced to the greatest extent permitted by law.

SECTION 10.5.  Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective heirs and personal representatives; provided that no Person claiming by, through or under a Member (whether such Member’s heir, personal representative or otherwise), as distinct from such Member itself, shall have any rights as, or in respect to, a Member (including the right to approve or vote on any matter or to notice thereof).

SECTION 10.6.  Confidentiality . Each Member agrees that all Confidential Information shall be kept confidential by such Member and shall not be disclosed by such Member in any manner whatsoever; provided, however , that (i) any of such Confidential Information may be disclosed by a Member to managers, officers, employees and authorized representatives (including attorneys, accountants, consultants, bankers and financial advisors of such Member (collectively, for purposes of this Section 10.6, “ Representatives ”)), each of which Representatives shall be bound by the provisions of this Section 10.6, (ii) any disclosure of Confidential Information may be made by a Member or its Representatives to the extent the Company consents in writing (as approved by the Board, with such approval to be granted or withheld on a good faith basis), (iii) any disclosure may be made by a Member or its Representatives of the terms of such Member’s investment in the Company pursuant to this Agreement and the performance of that investment to the extent in compliance with applicable law (whether in the Member’s fundraising materials or otherwise), (iv) any disclosure may be

 

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made of Confidential Information relating to the historical performance of the Company, the Subsidiaries of the Company and their investments (but not with respect to any prospective financial information or investments) by a Member to a Member’s partners, members, stockholders, prospective partners, members, stockholders or Affiliates or their authorized representatives, each of whom shall (A) be bound by the provisions of this Section 10.6 as if a Member, (B) be subject to a similar confidentiality provision or agreement with such disclosing Member with respect to the Confidential Information or (C) be required to hold such historical performance information confidential pursuant to the disclosing Member’s customary confidentiality practices and be advised of such confidentiality requirements with respect to such information, (v) Confidential Information may be disclosed by a Member or its Representatives to the extent reasonably necessary in connection with such Member’s enforcement of its rights under this Agreement, (vi) Confidential Information may be disclosed by a Member or its Representatives to any Person in connection with a proposed Transfer of Units in accordance with this Agreement, provided that such Person shall enter into a confidentiality agreement with such Member containing terms no less favorable than those contained herein and the Company shall be a third party beneficiary of such confidentiality agreement, and (vii) Confidential Information may be disclosed by any Member or Representative to the extent that the Member or its Representative has received advice from its counsel that it is legally compelled to do so, provided that, prior to making such disclosure, the Member or Representative, as the case may be, uses commercially reasonable efforts to preserve the confidentiality of the Confidential Information, including consulting with the Company regarding such disclosure and, if reasonably requested by the Company, assisting the Company, at the Company’s expense, in seeking a protective order to prevent the requested disclosure, and provided further that the Member or Representative, as the case may be, discloses only that portion of the Confidential Information as is, based on the advice of its counsel, legally required.

SECTION 10.7.  Amendments . The Board may, in its sole discretion and to the fullest extent allowable under Delaware law, but subject to Section 3.3(a)(iii)(F) to the extent applicable, amend this Agreement without the consent or approval of the Members, including such amendments to (i) admit Substitute Members and Additional Members, (ii) create and issue new classes of Units (or Members) (subject to the requirements of Section 3.3(a)(iii)(D), to the extent applicable) and (iii) take any action necessary and related to clause (i) and (ii), except that (x) this Agreement may not be amended so as to discriminate among Members of the same class of Units without the approval of the Members so discriminated against within such class, and (y) an amendment to this Agreement that adversely affects the rights of one class of Units (other than the creation and issuance of Units (or Members) or any other amendment expressly permitted by this Agreement to be undertaken without the consent of the Members) must be approved by the Members holding a majority of the outstanding Units the rights of which are so adversely affected. Any issuance of any additional Units by the Company (whether of a new or existing class) and related amendments to this Agreement, including Section 4.4 (Distributions), shall not be considered an amendment that requires the approval contemplated by clause (x) or clause (y) of the preceding sentence (but any such issuance shall be subject to the requirements of Section 3.3(a)(iii)(D), to the extent applicable).

 

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SECTION 10.8.  Notices . Whenever notice is required or permitted by this Agreement to be given, such notice shall be in writing and shall be given to any Member at its address or facsimile number shown in the Company’s books and records or, if given to the Company, at the following address or facsimile number:

Continental Cement Company, L.L.C.

14755 North Outer Forty Drive, Suite 514

Chesterfield, MO 63017

Facsimile:     (636) 532-7445

Attention:     Chief Executive Officer

with copies to:

Summit Materials Holdings L.P.

2900 K Street, NW, #450

Harbourside NorthTower Building

Washington, D.C. 20007

Facsimile:     (212) 583-5257

                      (202) 339-9517

Attention:     Neil Simpkins

                     Tom Hill

and:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017-3954

Facsimile:     (212) 455-2502

Attention:     Wilson Neely

Notices will be deemed to have been given hereunder when sent by facsimile (receipt confirmed), delivered personally, five days after deposit in the U.S. mail and one day after deposit with a reputable overnight courier service.

SECTION 10.9.  Counterparts . This Agreement may be executed in any number of counterparts, all of which together shall constitute a single instrument.

SECTION 10.10.  Power of Attorney . Each non-Summit Member hereby irrevocably appoints the chief executive officer of the Company as such non-Summit Member’s true and lawful representative and attorney-in-fact, each acting alone, in such non-Summit Member’s name, place and stead, to make, execute, sign and file all instruments, documents and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the State of Delaware or any other state in which the Company shall determine to do business, or any political subdivision or agency thereof, solely to execute, implement and continue the valid and subsisting existence of the Company. Such power of attorney is coupled with an interest and

 

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shall survive and continue in full force and effect notwithstanding the subsequent withdrawal from the Company of any non-Summit Member for any reason and shall survive and shall not be affected by the disability or incapacity of such non-Summit Member.

SECTION 10.11.  Entire Agreement; Third Party Beneficiaries . This Agreement, including the Schedules hereto, and the other documents and agreements referred to herein embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein; provided that such other agreements and documents shall not be deemed to be a part of, a modification of or an amendment to this Agreement. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. Except for the provisions of Article IX which shall be enforceable by a Covered Person, this Agreement is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies.

SECTION 10.12.  Section Titles . Section titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text hereof.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

 

CONTINENTAL CEMENT COMPANY, L.L.C.
By:   /s/ R. Michael Johnson
 

Name: R. Michael Johnson

Title: CEO

 

SUMMIT MATERIALS HOLDINGS II, LLC
By:   /s/ Thomas W. Hill
 

Name: Thomas W. Hill

Title: President

[Signature Page to the Amended and Restated Limited Liability Company Agreement of Continental Cement Company, L.L.C.]


MISSOURI MATERIALS COMPANY, L.L.C.
By:   /s/ Michael K. Farmer
 

Name: Michael K. Farmer

Title: Managing Member

 

J & J MIDWEST GROUP, L.L.C.
By:   /s/ Michael K. Farmer
 

Name: Michael K. Farmer

Title: Managing Member

 

R. MICHAEL JOHNSON FAMILY LIMITED LIABILITY COMPANY
By:   /s/ R. Michael Johnson
 

Name: R. Michael Johnson

Title: CEO

 

THOMAS A. BECK FAMILY, LLC
By:   /s/ Thomas A. Beck
 

Name: Thomas A. Beck

Title: Member

[Signature Page to the Amended and Restated Limited Liability Company Agreement of Continental Cement Company, L.L.C.]


SCHEDULE I

MEMBER CAPITAL CONTRIBUTIONS AND UNITS

Class A Units

 

Name and Address of Member

   Capital Contribution      Number of Units  

Summit Materials Holdings II, LLC

   $ 135,000,000.00         100.00   

Total:

   $ 135,000,000.00         100.00   

Class B Units

 

Name and Address of Member

   Capital Contribution      Number of Units  

Missouri Materials Company, L.L.C.

   $ 0.00         85,421,703.00   

J & J Midwest Group, L.L.C.

   $ 0.00         2,744,363.00   

R. Michael Johnson Family Limited Liability Company

   $ 0.00         10,097,730.00   

Thomas A. Beck Family, LLC

   $ 0.00         1,736,204.00   

Total:

   $ 0.00         100,000,000.00   


SCHEDULE II

BOARD MEMBERS

Tom Hill

Julia Kahr

Michael Brady

Damian Murphy

Michael K. Farmer

Elliot E. Farmer

R. Michael Johnson


SCHEDULE III

ROLLOVER EXCHANGE VALUATION METHODOLOGY

The following principles shall apply to any determination of the value of the Company and of the interest of the Class B Members in the Company relative to the value of Summit Holdco and its subsidiaries on a consolidated basis (assuming for such purposes 100% ownership of the Company by the Summit Member(s)) in connection with a Rollover Exchange to be made pursuant to Section 5.5 of the Agreement:

 

  1. The Underwriters shall (with the assistance of Summit Holdco’s accountants, to the extent so requested, but in any event based on the financial statements and books and records of Summit Holdco) calculate LTM EBITDA for the Company on a standalone basis and for Summit Holdco and its subsidiaries on a consolidated basis (assuming 100% ownership of the Company for such purposes).

 

  2. The Underwriters shall determine the implied value for Summit Holdco and its subsidiaries on a consolidated basis (assuming 100% ownership of the Company for such purposes), by multiplying the LTM EBITDA for Summit Holdco as determined pursuant to Step 1 above by a multiple selected by the Underwriters based upon the Underwriters’ good faith determination as to the anticipated value of Summit Holdco on a consolidated basis at the time of and after giving effect to the Summit IPO. In the event that the Underwriters select a range of multiples, the multiple to be used for purposes of this Step 2 shall be the mid-point of such range.

 

  3. The implied value of the Company on a standalone basis shall be determined by multiplying the LTM EBITDA for the Company as determined pursuant to Step 1 above by the same multiple used in Step 2 with respect to Summit Holdco.

 

  4. The relative value of the Company within the overall Summit Holdco structure (the “ Company Percentage ”) shall be determined by dividing the value of the Company on a standalone basis by the value of Summit Holdco on a consolidated basis (assuming 100% ownership of the Company for such purposes), in each case, as determined based on the Steps above.

 

  5. The percentage interest of the Class B Members in the value of the Company (the “ Class B Percentage ”) shall be determined based upon the percentage of the overall distribution amount that the Class B Members would be entitled to receive if an amount equal to the value of the Company determined based upon the methodology above were distributed to the Members pursuant to Section 4.4(a)(ii) of the Agreement.

 

  6. The Company Percentage will then be multiplied by the Class B Percentage (in each case, expressed as a decimal to eight decimal places) to establish the “ Class B Indirect Rollover Percentage ” (to be expressed as a decimal to eight decimal places).

 

  7. As a clarification, the determinations hereunder shall not take into account a non-control discount, illiquidity discount or similar factors that would not be incorporated in valuing the entire equity value of the Company.


SCHEDULE IV

PUT/CALL VALUATION METHODOLOGY

The following principles shall apply to any determination of the purchase price of the Class B Units in connection with the exercise of the Call Right or Put Right, as applicable, pursuant to Section 5.6(d)(ii) of the Agreement:

 

  1. The fair market value shall be based on the equity value of the Company as a going concern;

 

  2. The purchase price shall be the price of the Class B Units being sold determined by applying the fair market value determined on the basis above and based on a hypothetical liquidation and distribution of the Company to the Members in respect of their Units pursuant to Section 4.4(a)(ii) of the Agreement; and

 

  3. In determining the purchase price of the Class B Units being sold, such determination shall not take into account a non-control discount, illiquidity discount or similar factors that would not be incorporated in valuing the entire equity value of the Company.

Exhibit 3.9

FIRST AMENDMENT TO

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF

CONTINENTAL CEMENT COMPANY, LLC

A DELAWARE LIMITED LIABILITY COMPANY

This FIRST AMENDMENT (the “Amendment”) to the Amended and Restated Limited Liability Company Agreement (the “Original Agreement”) of Continental Cement Company, LLC (the “Company”) is entered into, effective as of January 26, 2012, is adopted by, and executed and agreed to, for good and valuable consideration, by and among the Company, Summit Materials Holdings II, LLC, a Delaware limited liability company (the “Summit Member”, and together with any of its Permitted Transferees holding Units or other Membership Interests and who have otherwise been admitted as a Member in accordance with the terms of this Agreement, the “Summit Members”), the Rollover Members, as defined in the Original Agreement and each other Person who becomes a Member in accordance with the terms of the Original Agreement after the date hereof.

RECITALS:

A. The Members and the Company entered into the Original Agreement, on May 27, 2010.

B. The Members and the Company desire to amend the Original Agreement as set forth herein.

NOW, THEREFORE, pursuant to the provisions, covenants, and mutual promises contained in this Amendment, the Members and the Company hereby agree as follows:

1) Capitalized terms used in this Amendment, including the Recitals and introductory paragraph hereto, unless otherwise defined herein, shall have the meaning given them in the Original Agreement.

2) Schedule IV to the Original Agreement is hereby amended to read in its entirety as set forth on Exhibit A attached to this Amendment.

3) Except as expressly amended pursuant to this Amendment, the Original Agreement shall remain unamended and in full force and effect.

[The remainder of this page is intentionally blank. The next page is the signature page.]


In witness whereof, the undersigned have executed this Amendment effective as of the date first set forth above.

 

COMPANY     MEMBERS
CONTINENTAL CEMENT COMPANY, LLC     Class B Units
      Summit Materials Holdings II, LLC
By:  

/s/ R. Michael Johnson

     
Name:   R. Michael Johnson      
Title:   President / CEO     By:  

/s/ Thomas W. Hill

      Name:   Thomas W. Hill
      Title:   CEO/Member
      Class B Units
      Missouri Materials Company, L.L.C.
      By:  

/s/ Mike Farmer

      Name:   Mike Farmer
      Title:   Member
      J & J Midwest Group, L.L.C.
      By:  

/s/ Mike Farmer

      Name:   Mike Farmer
      Title:   Member
      R. Michael Johnson Family Limited Liability Company
      By:  

/s/ R. Michael Johnson

      Name:   R. Michael Johnson
      Title:   Pres/CEO
      Thomas A. Beck Family, LLC
      By:  

/s/ Thomas A. Beck

      Name:   Thomas A. Beck
      Title:   Member

 

2


Exhibit A to Amendment

SCHEDULE IV

PUT/CALL VALUATION METHODOLOGY

The following principles shall apply to any determination of the purchase price of the Class B Units in connection with the exercise of the Call Right or Put Right, as applicable, pursuant to Section 5.6(d)(ii) of the Agreement:

 

  1.

The fair market value shall be based on the equity value of the Company as a going concern, assuming, for such purposes, that the indebtedness of the Company and its Subsidiaries shall be based on current amounts outstanding (principal and accrued but unpaid interest) at such time but deemed not to exceed $172 million 1 ;

 

  2. The purchase price shall be the price of the Class B Units being sold determined by applying the fair market value determined on the basis above and based on a hypothetical liquidation and distribution of the Company to the Members in respect of their Units pursuant to Section 4.4(a)(ii) of the Agreement;

 

  3. In determining the purchase price of the Class B Units being sold, such determination shall not take into account a non-control discount, illiquidity discount or similar factors that would not be incorporated in valuing the entire equity value of the Company; and

 

  4. In determining the purchase price of the Class B Units being sold, such determination shall not take into account any Company guarantee of any indebtedness of the Summit Member or any of its Affiliates to the extent (and only to the extent) such guarantee relates to any such indebtedness in excess of $172 million.

 

1  

Includes (i) $39 million first lien term loan, (ii) $20 million first lien revolver; (iii) $100 million second lien term loan and (iv) $13 million subordinated note.

 

3

Exhibit 3.10

CERTIFICATE OF FORMATION

OF

HARPER-KILGORE, LLC

This Certificate of Formation of HARPER-KILGORE, LLC (the “ Company ”), dated as of June 23, 2010, is being duly executed and filed by Sasha Friedman, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del C. § 18-101, et . seq .).

FIRST. The name of the limited liability company formed hereby is HARPER-KILGORE, LLC.

SECOND. The address of the registered office of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

THIRD. The name and address of the registered agent of the Company for service of process in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

IN WITNESS HEREOF, the undersigned has executed this Certificate of Formation as of the date first above written.

 

/s/ Sasha Friedman
Sasha Friedman


STATE OF DELAWARE

CERTIFICATE OF AMENDMENT

 

1. Name of Limited Liability Company: Harper-Kilgore, LLC

 

2. The Certificate of Formation of the limited liability company is hereby amended as follows:

Article I is amended to read as follows:

“FIRST. The name of the limited liability company formed hereby is Kilgore Companies, LLC.”

IN WITNESS WHEREOF, the undersigned have executed this Certificate on the 29 day of December, A.D. 2010.

 

By:  

/s/ Anya Fonina

       Authorized Person
Name:  

Anya Fonina

  Print or Type

Exhibit 3.11

LIMITED LIABILITY COMPANY AGREEMENT

OF

HARPER-KILGORE, LLC

This Limited Liability Company Agreement (this “ Agreement ”) of Harper-Kilgore, LLC (the “ Company ”) is entered into by Summit Materials Companies I, LLC, as the sole member (the “ Member ”).

The Member, by execution of this Agreement, hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. §18- 101, et seq.), as amended from time to time (the “ Act ”), and hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is Harper-Kilgore, LLC.

2. Filing of Certificates . Sasha Friedman is hereby designated an “authorized person” within the meaning of the Act, and shall execute, deliver and file the Certificate of Formation of the Company with the Secretary of State of the State of Delaware. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, her powers as an “authorized person” shall cease, and the Member shall thereupon become the designated “authorized person” within the meaning of the Act. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Delaware law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 2900 K Street NW, Suite 450, Washington, DC 20007.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808.


7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Summit Materials

   2900 K Street NW, Suite 450

Companies I, LLC

   Washington, DC 20007

8. Limited Liability . Except as required by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 18-402 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

2


Name

  

Address

Michael Brady

   Vice President

Damian Murphy

   Vice President

Anthony Keenan

   Assistant Secretary and
   Assistant Treasurer

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Delaware and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Delaware for directors and officers of corporations organized under the laws of the State of Delaware. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

 

3


18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member, (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

 

4


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 23 day of June, 2010.

 

SUMMIT MATERIALS COMPANIES I, LLC, sole member
By:   /s/ Michael Brady
  Name: Michael Brady
  Title: Vice President

Signature Page to Limited Liability Company Agreement


AMENDMENT NO. 1

TO

LIMITED LIABILITY COMPANY AGREEMENT

OF

HARPER-KILGORE, LLC

Pursuant to Section 23 of the Limited Liability Company Agreement of Harper-Kilgore, LLC (the “ LLC Agreement ”) , the LLC Agreement is hereby amended as follows, effective as of December 29, 2010:

1. Section 1 of the LLC Agreement is hereby deleted in its entirety and replaced with the following:

“1. Name . The name of the limited liability company formed hereby is Kilgore Companies, LLC.”

2. Except as modified hereby, the LLC Agreement shall remain in full force and effect and unmodified.

Exhibit 3.12

STATE of DELAWARE

LIMITED LIABILITY COMPANY

CERTIFICATE of FORMATION

First: The name of the limited liability company is Norris Quarries, LLC.

Second: The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the city of Wilmington. Zip code 19808. The name of its Registered agent at such address is Corporation Service Company.

Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: “The latest date on which the limited liability company is to dissolve is                                         .”)

Fourth: (Insert any other matters the members determine to include herein.)

In Witness Whereof, the undersigned have executed this Certificate of Formation this 9 th day of February, 2012.

 

By:   /s/ Sasha Friedman
  Authorized Person(s)
Name:   Sasha Friedman

Exhibit 3.13

LIMITED LIABILITY COMPANY AGREEMENT

OF

NORRIS QUARRIES, LLC

This Limited Liability Company Agreement (this “ Agreement ”) of NORRIS QUARRIES, LLC (the “ Company ”) is entered into by Con-Agg of MO, L.L.C., as the sole member (the “ Member ”).

The Member, by execution of this Agreement, hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del.C. §18-101, et seq .), as amended from time to time (the “ Act ”), and hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is Norris Quarries, LLC.

2. Filing of Certificates . Sasha Friedman is hereby designated an “authorized person” within the meaning of the Act, and shall execute, deliver and file the Certificate of Formation of the Company with the Secretary of State of the State of Delaware. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, her powers as an “authorized person” shall cease, and the Member shall thereupon become the designated “authorized person” within the meaning of the Act. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Delaware law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 2604 North Stadium Blvd., Columbia, MO 65202.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808.


7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Con-Agg of MO, L.L.C.

   2604 North Stadium Blvd.
   Columbia, MO 65202

8. Limited Liability . Except as required by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 18-402 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

2


Name

  

Title

Michael Brady    Vice President
Anya Fonina    Vice President
Damian Murphy    Vice President
George A. Barnes    Vice President
Anthony Keenan    Assistant Secretary
Glenn Culpepper    Assistant Treasurer

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Delaware and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Delaware for directors and officers of corporations organized under the laws of the State of Delaware. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

 

3


18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member, (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles).

23. Amendments. This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

 

4


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 9th day of February, 2012.

 

CON-AGG OF MO, L.L.C.
By: Summit Materials Companies I, LLC
By:   /s/ Michael Brady
  Name: Michael Brady
  Title: Vice President

[Signature Page to Norris Quarries, LLC Limited Liability Company Agreement]

Exhibit 3.14

CERTIFICATE OF FORMATION

OF

RK HALL, LLC

This Certificate of Formation of RK HALL, LLC (the “ Company ”), dated as of October 19, 2010, is being duly executed and filed by Sasha Friedman, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del C. § 18-101, et . seq .).

FIRST. The name of the limited liability company formed hereby is RK HALL, LLC.

SECOND. The address of the registered office of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

THIRD. The name and address of the registered agent of the Company for service of process in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

IN WITNESS HEREOF, the undersigned has executed this Certificate of Formation as of the date first above written.

 

/s/ Sasha Friedman
Sasha Friedman

Exhibit 3.15

LIMITED LIABILITY COMPANY AGREEMENT

OF

RK HALL, LLC

This Limited Liability Company Agreement (this “ Agreement ”) of RK HALL, LLC (the “ Company ”) is entered into by Summit Materials Companies I, LLC, as the sole member (the “ Member ”).

The Member, by execution of this Agreement, hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. §18- 101, et seq.), as amended from time to time (the “ Act ”), and hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is RK Hall, LLC.

2. Filing of Certificates . Sasha Friedman is hereby designated an “authorized person” within the meaning of the Act, and shall execute, deliver and file the Certificate of Formation of the Company with the Secretary of State of the State of Delaware. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, her powers as an “authorized person” shall cease, and the Member shall thereupon become the designated “authorized person” within the meaning of the Act. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Delaware law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 2900 K Street NW, Suite 450, Washington, DC 20007.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808.


7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Summit Materials    2900 K Street NW, Suite 450
Companies I, LLC    Washington, DC 20007

8. Limited Liability . Except as required by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 18-402 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

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Name

  

Address

Tom Hill    President
Michael Brady    Vice President
Damian Murphy    Vice President
Anya Fonina    Vice President
Anthony Keenan    Assistant Secretary and Assistant Treasurer

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Delaware and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Delaware for directors and officers of corporations organized under the laws of the State of Delaware. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

 

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18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member, (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 19 day of October, 2010.

 

SUMMIT MATERIALS COMPANIES I, LLC, sole member
By:   /s/ Michael Brady
  Name: Michael Brady
  Title: Vice President

[Signature Page to RK Hall, LLC Limited Liability Company Agreement]

Exhibit 3.16

CERTIFICATE OF FORMATION

OF

SUMMIT MATERIALS KY ACQUISITION LLC

This Certificate of Formation of SUMMIT MATERIALS KY ACQUISITION LLC (the “ Company ”), dated as of November 12, 2009, is being duly executed and filed by Jason Neal, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del C. § 18-101, et. seq. ).

FIRST. The name of the limited liability company formed hereby is SUMMIT MATERIALS KY ACQUISITION LLC.

SECOND. The address of the registered office of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

THIRD. The name and address of the registered agent of the Company for service of process in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

IN WITNESS HEREOF, the undersigned has executed this Certificate of Formation as of the date first above written.

 

/s/ Jason Neal
Jason Neal


STATE OF DELAWARE

CERTIFICATE OF AMENDMENT

1. Name of Limited Liability Company:

Summit Materials KY Acquisition LLC

2. The Certificate of Formation of the limited liability company is hereby amended as follows:

“FIRST. The name of the limited liability company formed hereby is SUMMIT MATERIALS COMPANIES I, LLC.”

IN WITNESS WHEREOF, the undersigned have executed this Certificate on the 12 th day of April, A.D. 2010.

 

By:   /s/ Anthony Keenan
  Authorized Person(s)

 

Name:   Anthony Keenan
  Print or Type

Exhibit 3.17

LIMITED LIABILITY COMPANY AGREEMENT

OF

SUMMIT MATERIALS KY ACQUISITION LLC

This Limited Liability Company Agreement (this “ Agreement ”) of Summit Materials KY Acquisition LLC (the “ Company ”) is entered into by Summit Materials KY Holdings LLC, as the sole member (the “ Member ”).

The Member, by execution of this Agreement, hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del.C. §18- 101, et seq. ), as amended from time to time (the “ Act ”), and hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is Summit Materials KY Acquisition LLC.

2. Filing of Certificates . The Member, as an authorized person, within the meaning of the Act, shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates required or permitted by the Act to be filed in the Office of the Secretary of State of the State of Delaware. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The purpose of the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Delaware law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 2900 K Street NW, Suite 450, Washington, DC 20007.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808.


7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Summit Materials KY    c/o Summit Materials, LLC
Holdings LLC    2900 K Street NW, Suite 450
   Washington, DC 20007

8. Limited Liability . Except as required by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 18-402 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

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Name

  

Title

Thomas W. Hill    President
Michael Brady    Vice President
Tony Keenan    Chief Financial Officer

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Delaware and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Delaware for directors and officers of corporations organized under the laws of the State of Delaware. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

 

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19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 16 th day of November, 2009.

 

SUMMIT MATERIALS KY HOLDINGS LLC
By:   Summit Materials, LLC,
  its sole member

 

By:   Summit Materials Holdings L.P.,
  its sole member

 

By:   Summit Materials Holdings GP. Ltd.,
  its general partner

 

By:   /s/ Thomas W. Hill
  Name: Thomas W. Hill
  Title: Chief Executive Officer

 

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AMENDMENT NO. 1

TO

LIMITED LIABILITY COMPANY AGREEMENT

OF

SUMMIT MATERIALS KY ACQUISITION LLC

Pursuant to Section 23 of the Limited Liability Company Agreement of Summit Materials KY Acquisition LLC (the “ LLC Agreement ”), the LLC Agreement is hereby amended as follows, effective as of April 12, 2010:

1. Section 1 of the LLC Agreement is hereby deleted in its entirety and replaced with the following:

“1. Name . The name of the limited liability company formed hereby is Summit Materials Companies I, LLC.”

2. Except as modified hereby, the LLC Agreement shall remain in full force and effect and unmodified.

Exhibit 3.18

CERTIFICATE OF INCORPORATION

OF

SUMMIT MATERIALS CORPORATIONS I, INC.

ARTICLE I

NAME OF CORPORATION

The corporation’s name is Summit Materials Corporations I, Inc. (the “ Corporation ”).

ARTICLE II

REGISTERED OFFICE

The address of the registered office of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808, and the name of its registered agent at that address is Corporation Service Company.

ARTICLE III

PURPOSE

The purpose of the Corporation is to conduct any lawful business, to promote any lawful purpose, and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

AUTHORIZED CAPITAL STOCK

(a) Authorized Capital . The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000). The par value of each of such shares is $0.01. All such shares are of one class and are shares of Common Stock.

ARTICLE V

BOARD POWER REGARDING BYLAWS

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind the bylaws of the Corporation.

ARTICLE VI

ELECTION OF DIRECTORS

Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide.


ARTICLE VII

LIABILITY

A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

ARTICLE VIII

CORPORATE POWER

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at any time in force may be added or inserted, in the manner now or hereafter prescribed by statute, and all rights, preferences and privileges of any nature conferred on stockholders, directors or any other persons by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to this reservation.

ARTICLE IX

INCORPORATOR

The name and mailing address of the incorporator of the Corporation is:

Sasha Friedman

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, NY 10166-0193

ARTICLE X

ELECTION OF INITIAL DIRECTORS

The powers of the incorporator are to terminate upon the filing of this Certificate of Incorporation with the Secretary of State of the State of Delaware. The name and mailing address of the persons who are to serve as the initial directors of the Corporation until the first annual meeting of stockholders of the Corporation, or until their successors are duly elected and qualified, are:

Michael Brady

2900 K Street NW, Suite 100

Washington, DC 20007

Glenn Culpepper

2900 K Street NW, Suite 100

Washington, DC 20007

 

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Anthony Keenan

2900 K Street NW, Suite 100

Washington, DC 20007

[The remainder of this page has been intentionally left blank.]

 

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THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of incorporating and organizing a corporation under the General Corporation Law of the State of Delaware, does make and file this Certificate of Incorporation.

Dated: February 24, 2011

 

Sasha Friedman
/s/ Sasha Friedman

C ERTIFICATE OF I NCORPORATION

S UMMIT M ATERIALS C ORPORATIONS I, I NC .

Exhibit 3.19

SUMMIT MATERIALS CORPORATIONS I, INC.

(a Delaware corporation)

BYLAWS

ARTICLE I

OFFICES

Section 1.1 Registered Office . The registered office of the Corporation shall be fixed in the Certificate of Incorporation of the Corporation.

Section 1.2 Other Offices . The Corporation may also have offices in such other places within or without the State of Delaware as the Board of Directors may, from time to time, determine or as the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 2.1 Annual Meetings . Meetings of stockholders may be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors shall determine. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as described in Section 2.3 of these Bylaws in accordance with Section 211(a)(2) of the General Corporation Law of the State of Delaware. Stockholders may act by written consent to elect directors; provided , however , that if such consent is less than unanimous, such action by written consent may be in lieu of holding an annual meeting only if all of the directorships to which directors could have been elected at an annual meeting held at the effective time of such action are vacant and are filled by such action.

Section 2.2 Special Meetings . Special meetings of stockholders, unless otherwise prescribed by statute, may be called by the Chairman of the Board of Directors, the President or by resolution of the Board of Directors. Notice of each special meeting shall be given in accordance with Section 2.4 of these Bylaws. Unless otherwise permitted by law, business transacted at any special meeting of stockholders shall be limited to the purpose stated in the notice.

Section 2.3 Meetings by Remote Communications . If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:

(a) participate in a meeting of stockholders; and


(b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication,

provided that

(i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder;

(ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and

(iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

Section 2.4 Notice of Meetings . Whenever stockholders are required or permitted to take any action at a meeting, a written notice or electronic transmission, in the manner provided in Section 232 of the General Corporation Law of the State of Delaware, of notice of the meeting, which shall state the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining the stockholders entitled to notice of the meeting and, in the case of a special meeting, the purposes for which the meeting is called, shall be mailed to or transmitted electronically to each stockholder of record entitled to vote thereat. Except as otherwise provided by law, the Certificate of Incorporation or these bylaws, such notice shall be given not less than 10 days nor more than 60 days before the date of any such meeting as of the record date for determining the stockholders entitled to notice of the meeting. If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.

Section 2.5 Quorum . Unless otherwise required by law or the Certificate of Incorporation, the holders of a majority in voting power of the issued and outstanding stock entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of stockholders. When a quorum is once present to organize a meeting, the quorum is not broken by the subsequent withdrawal of any stockholders. In the absence of a quorum, the stockholders so present may, by a majority in voting power thereof, adjourn the meeting from time to time in the manner provided in Section 2.10 of these Bylaws until a quorum shall attend. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided , however , that the foregoing shall not limit the right of the Corporation or any subsidiary of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

 

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Section 2.6 Voting . Unless otherwise provided in the Certificate of Incorporation, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder. All elections of directors and, except as otherwise required by law, the Certificate of Incorporation or these bylaws, all other matters shall be determined by a majority of the votes cast. Unless determined by the Chairman of the meeting to be advisable, the vote on any matter, including the election of directors, need not be by written ballot.

Section 2.7 Proxy Representation . Any stockholder may authorize another person or persons to act for him by proxy in all matters in which a stockholder is entitled to participate, whether by waiving notice of any meeting, voting or participating at a meeting, or expressing consent or dissent without a meeting. Every proxy must be signed by the stockholder or by his attorney-in-fact. No proxy shall be voted or acted upon after three years from its date, unless such proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date.

Section 2.8 Organization .

(a) The Chairman of the Board of Directors, if one is elected, or, in his or her absence or disability, the President of the Corporation, shall preside at all meetings of the stockholders.

(b) The Secretary of the Corporation shall act as Secretary at all meetings of the stockholders. In the absence or disability of the Secretary, the Chairman of the Board of Directors or the President shall appoint a person to act as Secretary at such meetings.

Section 2.9 Conduct of Meeting . The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding person of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time

 

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allotted to questions or comments by participants. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 2.10 Adjournment . At any meeting of stockholders of the Corporation, whether or not a quorum is present, a majority in voting power of the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time without notice. Any business may be transacted at the adjourned meeting that might have been transacted at the meeting originally noticed. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for notice of such adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date for notice of such adjourned meeting.

Section 2.11 Consent of Stockholders in Lieu of Meeting .

(a) Unless otherwise restricted by the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested.

(b) Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the date the earliest dated consent is delivered to the Corporation, a written consent or consents signed by a sufficient number of holders to take action are delivered to the Corporation in the manner prescribed in the first paragraph of this Section 2.11. A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of these Bylaws to the extent permitted by law. Any such consent shall be delivered in accordance with Section 228(d)(1) of the General Corporation Law of the State of Delaware. Prompt notice

 

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of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing or electronic transmission and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the Corporation as provided by law.

(c) Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

Section 2.12 List of Stockholders Entitled to Vote . The officer who has charge of the stock ledger shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, provided , however , that if the record date for determining the stockholders entitled to vote is less than 10 days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the 10th day before the meeting date. Such list shall be arranged in alphabetical order and shall show the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting at least 10 days prior to the meeting (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (b) during ordinary business hours at the principal place of business of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 2.12 or to vote in person or by proxy at any meeting of stockholders.

ARTICLE III

BOARD OF DIRECTORS

Section 3.1 Powers . The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. The Board of Directors shall exercise all of the powers and duties conferred by law except as provided by the Certificate of Incorporation or these Bylaws.

Section 3.2 Number and Term . The number of directors of the Corporation shall be determined from time to time by resolution of the Board of Directors. The Board of Directors shall be elected by the stockholders at their annual meeting, and each director shall be elected to serve for the term of one year or until his or her successor is elected and qualified or until his or her earlier death, resignation, disqualification or removal. Directors need not be stockholders.

 

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Section 3.3 Resignations . Any director may resign at any time upon notice given in writing or by electronic transmission to the Board of Directors, the Chairman of the Board of Directors, the President or the Secretary. The resignation shall take effect at the time specified therein, and if no time is specified, at the time of its receipt by the Board of Directors, the Chairman of the Board of Directors, the President or Secretary, as the case may be. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 3.4 Removal . Any director or the entire Board of Directors may be removed either with or without cause at any time by the affirmative vote of the holders of a majority in voting power of the outstanding shares then entitled to vote for the election of directors at any annual or special meeting of the stockholders called for that purpose or by written consent as permitted by law.

Section 3.5 Newly Created Directorships and Vacancies . Unless otherwise provided by law or in the Certificate of Incorporation, any newly created directorship or any vacancy occurring in the Board of Directors for any cause may be filled by a majority of the remaining members of the Board of Directors, although such majority is less than a quorum, or by a plurality of the votes cast at a meeting of stockholders, and each director so elected shall hold office until the expiration of the term of office of the director whom he or she has replaced or until his or her successor is elected and qualified.

Section 3.6 Meetings .

(a) The initial directors shall hold their first meeting to organize the Corporation, elect officers and transact any other business that may properly come before the meeting. An annual meeting of the Board of Directors shall be held immediately after each annual meeting of the stockholders, or at such time and place as may be noticed for the meeting.

(b) Regular meetings of the Board of Directors may be held at such places and times as shall be determined from time to time by written or electronic transmission of consent of a resolution of the directors.

(c) Special meetings of the Board of Directors shall be called by the President or by the Secretary on the written or electronic transmission of such request of any director and shall be held at such place as may be determined by the directors or as shall be stated in the notice of the meeting.

Section 3.7 Notice of Meetings . Except as provided by law, notice of regular meetings need not be given. Notice of the time and place of any special meeting shall be given to each director by the Secretary. Notice of each such meeting shall be given to each director, if by mail, addressed to such director as his or her residence or usual place of business, at least five days before the day on which such meeting is to be held, or shall be sent to such director at such place by telecopy, telegraph, electronic transmission or other form of recorded communication, or be delivered personally or by telephone, in each case at least 24 hours prior to the time set for such meeting. The notice of any meeting need not specify the purpose thereof.

 

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Section 3.8 Quorum, Voting and Adjournment . A majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the directors present thereat may adjourn such meeting to another time and place. Notice of such adjourned meeting need not be given if the time and place of such adjourned meeting are announced at the meeting so adjourned.

Section 3.9 Committees . The Board of Directors may, by resolution, designate one or more committees, each such committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the General Corporation Law of the State of Delaware to be submitted to stockholders for approval or (b) adopting, amending or repealing any bylaw of the Corporation. All committees of the Board of Directors shall keep minutes of their meetings and shall report their proceedings to the Board of Directors when requested or required by the Board of Directors.

Section 3.10 Action Without a Meeting . Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or any committee thereof, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed in the minutes of proceedings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form or shall be in electronic form if the minutes are maintained in electronic form.

Section 3.11 Compensation . The Board of Directors shall have the authority to fix the compensation of directors for their services. In addition, as determined by the Board of Directors, directors may be reimbursed by the Corporation for their expenses, if any, in the performance of their duties as directors. A director may also serve the Corporation in other capacities and receive compensation therefor.

Section 3.12 Remote Meeting . Unless otherwise restricted by the Certificate of Incorporation, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting by means of conference telephone or other communications equipment in which all persons participating in the meeting can hear each other. Participation in a meeting by means of conference telephone or other communications equipment shall constitute the presence in person at such meeting.

 

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ARTICLE IV

OFFICERS

Section 4.1 Number . The officers of the Corporation shall include a President and a Secretary, both of whom shall be elected by the Board of Directors and who shall hold office for a term of one year and until their successors are elected and qualified or until their earlier resignation or removal. In addition, the Board of Directors may elect a Chairman of the Board of Directors, one or more Vice Presidents, including an Executive Vice President, a Treasurer and one or more Assistant Treasurers and one or more Assistant Secretaries, who shall hold their office for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. The initial officers shall be elected at the first meeting of the Board of Directors and, thereafter, at the annual organizational meeting of the Board of Directors. Any number of offices may be held by the same person.

Section 4.2 Other Officers and Agents . The Board of Directors may appoint such other officers and agents as it deems advisable, who shall hold their office for such terms and shall exercise and perform such powers and duties as shall be determined from time to time by the Board of Directors.

Section 4.3 Chairman . The Chairman of the Board of Directors shall be a member of the Board of Directors and shall preside at all meetings of the Board of Directors and of the stockholders. In addition, the Chairman of the Board of Directors shall have such powers and perform such other duties as from time to time may be assigned to him or her by the Board of Directors.

Section 4.4 President . The President shall be the Chief Executive Officer of the Corporation. He or she shall exercise such duties as customarily pertain to the office of President and Chief Executive Officer, and shall have general and active management of the property, business and affairs of the Corporation, subject to the supervision and control of the Board of Directors. He or she shall perform such other duties as prescribed from time to time by the Board of Directors or these Bylaws. In the absence, disability or refusal of the Chairman of the Board of Directors to act, or the vacancy of such office, the President shall preside at all meetings of the stockholders and of the Board of Directors. Except as the Board of Directors shall otherwise authorize, the President shall execute bonds, mortgages and other contracts on behalf of the Corporation, and shall cause the seal to be affixed to any instrument requiring it and, when so affixed, the seal shall be attested by the signature of the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer.

Section 4.5 Vice Presidents . Each Vice President, if any are elected, of whom one or more may be designated an Executive Vice President, shall have such powers and shall perform such duties as shall be assigned to him or her by the President or the Board of Directors.

 

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Section 4.6 Treasurer . The Treasurer shall have the general care and custody of the funds and securities of the Corporation, and shall deposit all such funds in the name of the Corporation in such banks, trust companies or other depositories as shall be selected by the Board of Directors. He or she shall receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever. He or she shall exercise general supervision over expenditures and disbursements made by officers, agents and employees of the Corporation and the preparation of such records and reports in connection therewith as may be necessary or desirable. He or she shall, in general, perform all other duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the Board of Directors.

Section 4.7 Secretary . The Secretary shall be the Chief Administrative Officer of the Corporation and shall: (a) cause minutes of all meetings of the stockholders and directors to be recorded and kept; (b) cause all notices required by these Bylaws or otherwise to be given properly; (c) see that the minute books, stock books, and other nonfinancial books, records and papers of the Corporation are kept properly; and (d) cause all reports, statements, returns, certificates and other documents to be prepared and filed when and as required. The Secretary shall have such further powers and perform such other duties as prescribed from time to time by the Board of Directors.

Section 4.8 Assistant Treasurers and Assistant Secretaries . Each Assistant Treasurer and each Assistant Secretary, if any are elected, shall be vested with all the powers and shall perform all the duties of the Treasurer and Secretary, respectively, in the absence or disability of such officer, unless or until the Board of Directors shall otherwise determine. In addition, Assistant Treasurers and Assistant Secretaries shall have such powers and shall perform such duties as shall be assigned to them by the Board of Directors.

Section 4.9 Corporate Funds and Checks . The funds of the Corporation shall be kept in such depositories as shall from time to time be prescribed by the Board of Directors. All checks or other orders for the payment of money shall be signed by the President or the Treasurer or such other person or agent as may from time to time be authorized and with such countersignature, if any, as may be required by the Board of Directors.

Section 4.10 Contracts and Other Documents . The President, Vice President, Secretary or Treasurer, or such other officer or officers as may from time to time be authorized by the Board of Directors or any other committee given specific authority by the Board of Directors during the intervals between the meetings of the Board of Directors, shall have power to sign and execute on behalf of the Corporation deeds, conveyances and contracts, and any and all other documents requiring execution by the Corporation.

Section 4.11 Compensation . The compensation of the officers of the Corporation shall be fixed from time to time by the Board of Directors (subject to any employment agreements that may then be in effect between the Corporation and the relevant officer). None of such officers shall be prevented from receiving such compensation by reason of the fact that he or she is also a director of the Corporation. Nothing contained herein shall preclude any officer from serving the Corporation, or any subsidiary, in any other capacity and receiving such compensation by reason of the fact that he or she is also a director of the Corporation.

 

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Section 4.12 Ownership of Stock of Another Corporation . Unless otherwise directed by the Board of Directors, the President or the Treasurer, or such other officer or agent as shall be authorized by the Board of Directors, shall have the power and authority, on behalf of the Corporation, to attend and to vote at any meeting of stockholders of any corporation in which the Corporation holds stock and may exercise, on behalf of the Corporation, any and all of the rights and powers incident to the ownership of such stock at any such meeting, including the authority to execute and deliver proxies and consents on behalf of the Corporation.

Section 4.13 Delegation of Duties . In the absence, disability or refusal of any officer to exercise and perform his or her duties, the Board of Directors may delegate to another officer such powers or duties.

Section 4.14 Resignation and Removal . Any officer may resign at any time in the same manner prescribed under Section 3.3 of these Bylaws. Any officer of the Corporation may be removed from office for or without cause at any time by the Board of Directors.

Section 4.15 Vacancies . The Board of Directors shall have power to fill vacancies occurring in any office.

ARTICLE V

STOCK

Section 5.1 Certificates of Stock . The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Every holder of stock represented by certificates shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, if any, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation certifying the number of shares owned by such holder in the Corporation. Any or all of the signatures on the certificate may be a facsimile. The Board of Directors shall have the power to appoint one or more transfer agents and/or registrars for the transfer or registration of certificates of stock of any class, and may require stock certificates to be countersigned or registered by one or more of such transfer agents and/or registrars.

Section 5.2 Transfer of Shares . Shares of stock of the Corporation shall be transferable upon its books by the holders thereof, in person or by their duly authorized attorneys or legal representatives, upon surrender and delivery to the Corporation of the certificate representing such shares and a duly executed instrument authorizing transfer of such shares, if certificated, or delivery of a duly executed instrument authorizing transfer of such shares, if uncertificated, to the person in charge of the stock and transfer books and ledgers. If certificated, such certificates shall be cancelled and new certificates shall thereupon be issued. A record shall be made of each transfer. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented, both the transferor and transferee request the Corporation to do so. The Board of Directors shall have power and authority to make such rules and regulations as it may deem necessary or proper concerning the issue, transfer and registration of certificates for shares of stock of the Corporation.

 

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Section 5.3 Lost, Stolen, Destroyed or Mutilated Certificates . A new certificate of stock may be issued in the place of any certificate previously issued by the Corporation alleged to have been lost, stolen or destroyed, and the Board of Directors may, in its discretion, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to give the Corporation a bond, in such sum as the Board of Directors may direct, in order to indemnify the Corporation against any claims that may be made against it in connection therewith. A new certificate of stock may be issued in the place of any certificate previously issued by the Corporation that has become mutilated without the posting by the owner of any bond upon the surrender by such owner of such mutilated certificate.

Section 5.4 List of Stockholders Entitled To Vote . The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list required by General Corporation Law of the State of Delaware § 219 or to vote in person or by proxy at any meeting of stockholders.

Section 5.5 Dividends . Subject to the provisions of the Certificate of Incorporation, the Board of Directors may at any regular or special meeting, declare dividends upon the stock of the Corporation either (a) out of its surplus, as defined in and computed in accordance with General Corporation Law of the State of Delaware § 154 and § 244 or (b) in case there shall be no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Before the declaration of any dividend, the Board of Directors may set apart, out of any funds of the Corporation available for dividends, such sum or sums as from time to time in its discretion may be deemed proper for working capital or as a reserve fund to meet contingencies or for such other purposes as shall be deemed conducive to the interests of the Corporation.

Section 5.6 Fixing Date for Determination of Stockholders of Record .

(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, unless otherwise required by law, not be more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the

 

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record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

(b) In order that the Corporation may determine the stockholders entitled to express consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date for determining stockholders entitled to express consent to corporate action in writing without a meeting is fixed by the Board of Directors, (i) when no prior action of the Board of Directors is required by law, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, and (ii) if prior action by the Board of Directors is required by law, the record date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

(c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which shall not be more than 60 days prior to such other action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 5.7 Registered Stockholders . Prior to the surrender to the Corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the Corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. Except as otherwise required by law, the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.

ARTICLE VI

INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

Section 6.1 Right to Indemnification .

(a) Each person who was or is a party or is threatened to be made a party to, or was or is otherwise involved in, any action, suit, arbitration, alternative dispute mechanism, inquiry, judicial, administrative or legislative hearing, investigation or any other threatened, pending or completed proceeding, whether brought by or in the right of the Corporation or otherwise, including any and all appeals, whether of a civil, criminal, administrative, legislative, investigative or other nature (hereinafter a “ proceeding ”), by reason of the fact that he or she is or was a director or an officer of the Corporation or while a director or officer of the Corporation is or was serving at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise,

 

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including service with respect to an employee benefit plan (hereinafter an “ indemnitee ”), or by reason of anything done or not done by him or her in any such capacity, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement by or on behalf of the indemnitee) actually and reasonably incurred by such indemnitee in connection therewith; provided , however , that, except as otherwise required by law or provided in Section 6.3 with respect to proceedings to enforce rights under this Article VI, the Corporation shall indemnify any such indemnitee in connection with a proceeding, or part thereof, initiated by such indemnitee (including claims and counterclaims, whether such counterclaims are asserted by (i) such indemnitee, or (ii) the Corporation in a proceeding initiated by such indemnitee) only if such proceeding, or part thereof, was authorized or ratified by the Board of Directors.

(b) To receive indemnification under this Section 6.1, an indemnitee shall submit a written request to the Secretary of the Corporation. Such request shall include documentation or information that is necessary to determine the entitlement of the indemnitee to indemnification and that is reasonably available to the indemnitee. Upon receipt by the Secretary of the Corporation of such a written request, the entitlement of the indemnitee to indemnification shall be determined by the following person or persons who shall be empowered to make such determination: (i) the Board of Directors by a majority vote of the directors who are not parties to such proceeding, whether or not such majority constitutes a quorum, (ii) a committee of such directors designated by a majority vote of such directors, whether or not such majority constitutes a quorum, (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee, (iv) the stockholders of the Corporation or (v) in the event that a change of control (as defined below) has occurred, by independent legal counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee. The determination of entitlement to indemnification shall be made and, unless a contrary determination is made, such indemnification shall be paid in full by the Corporation not later than 60 days after receipt by the Secretary of the Corporation of a written request for indemnification. For purposes of this Section 6.1(b), a “ change of control ” will be deemed to have occurred if the individuals who, as of the effective date of these Bylaws, constitute the Board of Directors (the “ incumbent board ”) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to such effective date whose election, or nomination for election by the stockholders of the Corporation, was approved by a vote of at least a majority of the directors then comprising the incumbent board shall be considered as though such individual were a member of the incumbent board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors.

Section 6.2 Right to Advancement of Expenses .

(a) In addition to the right to indemnification conferred in Section 6.1, an indemnitee shall, to the fullest extent not prohibited by law, also have the right to be paid by the Corporation the expenses (including attorneys’ fees) incurred in defending any proceeding with

 

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respect to which indemnification is required under Section 6.1 in advance of its final disposition (hereinafter an “ advancement of expenses ”); provided , however , that an advancement of expenses shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “ undertaking ”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal (hereinafter a “ final adjudication ”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 6.2 or otherwise.

(b) To receive an advancement of expenses under this Section 6.2, an indemnitee shall submit a written request to the Secretary of the Corporation. Such request shall reasonably evidence the expenses incurred by the indemnitee and shall include or be accompanied by the undertaking required by Section 6.2(a). Each such advancement of expenses shall be made within 20 days after the receipt by the Secretary of the Corporation of a written request for advancement of expenses.

Section 6.3 Right of Indemnitee to Bring Suit . In the event that a determination is made that the indemnitee is not entitled to indemnification or if payment is not timely made following a determination of entitlement to indemnification pursuant to Section 6.1(b) or if an advancement of expenses is not timely made under Section 6.2(b), the indemnitee may at any time thereafter bring suit against the Corporation in a court of competent jurisdiction in the State of Delaware seeking an adjudication of entitlement to such indemnification or advancement of expenses. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit to the fullest extent permitted by law. In any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that the indemnitee has not met any applicable standard of conduct for indemnification set forth in the DGCL. Further, in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the indemnitee has not met any applicable standard of conduct for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VI or otherwise shall be on the Corporation.

 

14


Section 6.4 Non-Exclusivity of Rights . The rights to indemnification and to the advancement of expenses conferred in this Article VI shall not be exclusive of any other right which any person may have or hereafter acquire under any law, agreement, vote of stockholders or directors, provisions of the Certificate of Incorporation or these Bylaws or otherwise.

Section 6.5 Insurance . The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Section 6.6 Indemnification of Employees and Agents of the Corporation . The Corporation may, to the extent authorized from time to time, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article VI with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

Section 6.7 Nature of Rights . The rights conferred upon indemnitees in this Article VI shall be contract rights that shall vest at the time an individual becomes a director or officer of the Corporation and such rights shall continue as to an indemnitee who has ceased to be a director, officer or trustee and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article VI that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment, alteration or repeal.

Section 6.8 Settlement of Claims . The Corporation shall not be liable to indemnify any indemnitee under this Article VI for any amounts paid in settlement of any proceeding effected without the Corporation’s written consent, which consent shall not be unreasonably withheld, or for any judicial award if the Corporation was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such proceeding.

Section 6.9 Subrogation . In the event of payment under this Article VI, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Corporation effectively to bring suit to enforce such rights.

Section 6.10 Severability . If any provision or provisions of this Article VI shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (a) the validity, legality and enforceability of the remaining provisions of this Article VI (including, without limitation, all portions of any paragraph of this Article VI containing any such provision held to be invalid, illegal or unenforceable, that are not by themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Article VI (including, without limitation, all portions of any paragraph of this Article VI containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent of the parties that the Corporation provide protection to the indemnitee to the fullest enforceable extent.

 

15


ARTICLE VII

MISCELLANEOUS

Section 7.1 Amendments . These Bylaws may be altered, amended or repealed, and new Bylaws made, by the Board of Directors, but the stockholders may make additional Bylaws and may alter and repeal any Bylaws whether adopted by them or otherwise.

Section 7.2 Electronic Transmission . For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

Section 7.3 Corporate Seal . The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.

Section 7.4 Fiscal Year . The fiscal year of the Corporation shall begin on the first day of January of each year and end on the last day of December of the same year, or such other 12 consecutive months as the Board of Directors may designate.

Section 7.5 Waiver of Notice . A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such person, whether given before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting shall constitute waiver of notice except attendance for the sole purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Section 7.6 Section Headings . Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

Section 7.7 Inconsistent Provisions; Changes in Delaware Law . If any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. If any of the provisions of the General Corporation Law of the State of Delaware referred to above are modified or superseded, the references to those provisions is to be interpreted to refer to the provisions as so modified or superseded.

 

16

Exhibit 3.20

CERTIFICATE OF FORMATION

OF

SUMMIT MATERIALS KY HOLDINGS LLC

This Certificate of Formation of SUMMIT MATERIALS KY HOLDINGS LLC (the “ Company ”), dated as of November 12, 2009, is being duly executed and filed by Jason Neal, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del C. § 18-101, et. seq. ).

FIRST. The name of the limited liability company formed hereby is SUMMIT MATERIALS KY HOLDINGS LLC.

SECOND. The address of the registered office of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

THIRD. The name and address of the registered agent of the Company for service of process in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle.

IN WITNESS HEREOF, the undersigned has executed this Certificate of Formation as of the date first above written.

 

/s/ Jason Neal
Jason Neal


STATE OF DELAWARE

CERTIFICATE OF AMENDMENT

1. Name of Limited Liability Company: Summit Materials KY Holdings LLC

2. The Certificate of Formation of the limited liability company is hereby amended as follows:

Article I is amended to read as follows:

“FIRST. The name of the limited liability company formed hereby is SUMMIT MATERIALS HOLDINGS I, LLC.”

IN WITNESS WHEREOF , the undersigned have executed this Certificate on the 12 th day of April, A.D. 2010.

 

By:   /s/ Anthony Keenan
      Authorized Person(s)
Name:   Anthony Keenan
  Print or Type

Exhibit 3.21

LIMITED LIABILITY COMPANY AGREEMENT

OF

SUMMIT MATERIALS KY HOLDINGS LLC

This Limited Liability Company Agreement (this “ Agreement ”) of Summit Materials KY Holdings LLC (the “ Company ”) is entered into by Summit Materials, LLC, as the sole member (the “ Member ”).

The Member, by execution of this Agreement, hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del.C. §18- 101, et seq. ), as amended from time to time (the “ Act ”), and hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is Summit Materials KY Holdings LLC.

2. Filing of Certificates . The Member, as an authorized person, within the meaning of the Act, shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates required or permitted by the Act to be filed in the Office of the Secretary of State of the State of Delaware. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The purpose of the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Delaware law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 2900 K Street NW, Suite 450, Washington, DC 20007.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808.


7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Summit Materials, LLC    Summit Materials, LLC
   2900 K Street NW, Suite 450
   Washington, DC 20007

8. Limited Liability . Except as required by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 18-402 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

2


Name

  

Title

Thomas W. Hill    President
Michael Brady    Vice President
Tony Keenan    Chief Financial Officer

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Delaware and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Delaware for directors and officers of corporations organized under the laws of the State of Delaware. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

 

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18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

 

4


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 16th day of November, 2009.

 

SUMMIT MATERIALS, LLC
By:   Summit Materials Holdings L.P.,
  its sole member

 

By:   Summit Materials Holdings GP, Ltd.,
  its general partner

 

By:   /s/ Thomas W. Hill
  Name: Thomas W. Hill
  Title: Chief Executive Officer

 

5


AMENDMENT NO. 1

TO

LIMITED LIABILITY COMPANY AGREEMENT

OF

SUMMIT MATERIALS KY HOLDINGS LLC

Pursuant to Section 23 of the Limited Liability Company Agreement of Summit Materials KY Holdings LLC (the “ LLC Agreement ”), the LLC Agreement is hereby amended as follows, effective as of April 12, 2010:

1. Section 1 of the LLC Agreement is hereby deleted in its entirety and replaced with the following:

“1. Name . The name of the limited liability company formed hereby is

Summit Materials Holdings I, LLC.”

2. Except as modified hereby, the LLC Agreement shall remain in full force and effect and unmodified.

Exhibit 3.22

CERTIFICATE OF FORMATION

OF

SUMMIT MATERIALS CONTINENTAL ACQUISITION, LLC

This Certificate of Formation of SUMMIT MATERIALS CONTINENTAL ACQUISITION, LLC (the “ Company ”), dated as of May 14, 2010, is being duly executed and filed by Sasha Friedman, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del C. § 18-101, et. seq. ).

FIRST. The name of the limited liability company formed hereby is SUMMIT MATERIALS CONTINENTAL ACQUISITION, LLC.

SECOND. The address of the registered office of the Company in the State of Delaware is c/o The Corporation Trust Center, 1209 Orange Street, in the City of Wilmington 19801, County of New Castle.

THIRD. The name and address of the registered agent of the Company for service of process in the State of Delaware is The Corporation Trust Company, 1209 Orange Street in the City of Wilmington 19801, County of New Castle.

IN WITNESS HEREOF, the undersigned has executed this Certificate of Formation as of the date first above written.

 

/s/ Sasha Friedman
Sasha Friedman
Authorized Person


CERTIFICATE OF AMENDMENT TO CERTIFICATE OF FORMATION

OF

SUMMIT MATERIALS CONTINENTAL ACQUISITION, LLC

It is hereby certified that:

1. The name of the limited liability company (hereinafter called the “Limited Liability Company”) is Summit Materials Continental Acquisition, LLC.

2. The Certificate of Formation of the Limited Liability Company is hereby amended by striking out Article First thereof and by substituting in lieu of said Article the following new Article:

FIRST: The name of the limited liability company formed hereby is: SUMMIT MATERIALS HOLDINGS II, LLC.

Executed on May 19, 2010

 

/s/ Sasha Friedman
Sasha Friedman
Authorized Person

Exhibit 3.23

LIMITED LIABILITY COMPANY AGREEMENT

OF

SUMMIT MATERIALS HOLDINGS II, LLC

This Limited Liability Company Agreement (this “ Agreement ”) of Summit Materials Holdings II, LLC (the “ Company ”) is entered into by Summit Materials, LLC, as the sole member (the “ Member ”).

The Member, by execution of this Agreement, hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del.C. §18-101, et seq .), as amended from time to time (the “ Act ”), and hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is Summit Materials Holdings II, LLC.

2. Filing of Certificates . Sasha Friedman is hereby designated an “authorized person” within the meaning of the Act, and shall execute, deliver and file the Certificate of Formation of the Company with the Secretary of State of the State of Delaware. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, her powers as an “authorized person” shall cease, and the Member shall thereupon become the designated “authorized person” within the meaning of the Act. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Delaware law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 2900 K Street NW, Suite 450, Washington, DC 20007.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808.


7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Summit Materials, LLC    2900 K Street NW, Suite 450
   Washington, DC 20007

8. Limited Liability . Except as required by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 18-402 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

2


Name

  

Title

Thomas W. Hill    President
Michael Brady    Vice President
Tony Keenan    Chief Financial Officer

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Delaware and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Delaware for directors and officers of corporations organized under the laws of the State of Delaware. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

 

3


18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles).

23. Amendments. This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

 

4


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 20th day of May, 2010.

 

SUMMIT MATERIALS, LLC
By:   /s/ Thomas W. Hill
  Name: Thomas W. Hill
  Title: President and Chief Executive Officer

Signature Page to Limited Liability Company Agreement

Exhibit 3.24

AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

ELAM CONSTRUCTION, INC.

Harold F. Elam, under the provisions and subject to the requirements of the laws of the State of Colorado, hereby certifies that:

ONE: The name of this corporation is Elam Construction, Inc., and the date of filing of the original Articles of Incorporation of this corporation with the Secretary of State of the State of Colorado was March 26, 1959.

TWO: He is the duly elected and acting Vice President of Elam Construction, Inc., a Colorado corporation.

THREE: The Articles of Incorporation of this corporation are hereby amended and restated to read as follows:

ARTICLE ONE

COMPANY NAME

The name of this corporation is Elam Construction, Inc. (the “ Company ”).

ARTICLE TWO

AUTHORIZED CAPITAL

The Company is authorized to issue one class of stock to be designated “ Common Stock .” The total number of shares of Common Stock that the Company is authorized to issue is 250,000. Shares of Common Stock shall have no par value.

The rights, privileges and restrictions and other matters relating to Common Stock are as set forth in the Bylaws of the Company and as follows:

 

  (i) The holders of Common Stock shall be entitled to receive, when and as declared by the Board of Directors of the Company (the “ Board ”), out of any assets of the Company legally available therefore, such dividends as may be declared from time to time by the Board; and

 

  (ii) Upon dissolution of the Company, the assets available for distribution to the Company’s shareholders shall be distributed to the holders of Common Stock.


ARTICLE THREE

OFFICES

The street address of the registered office of the Company is 556 Struthers Avenue, Grand Junction, Colorado 81501, and the name of the registered agent at that address is Harold F. Elam. The address of the Company’s principal office is 556 Struthers Avenue, Grand Junction, Colorado 81501.

ARTICLE FOUR

PURPOSES

The purposes for which the Company is organized and its powers are to engage in all lawful business; and to have, enjoy, and exercise all of the rights, powers, and privileges conferred upon corporations incorporated pursuant to Colorado law, whether now or hereafter in effect, and whether or not herein specifically mentioned.

ARTICLE FIVE

LIMITATION ON DIRECTOR LIABILITY

A director of the Company shall not be personally liable to the Company or to its shareholders for monetary damages for breach of fiduciary duty as a director, except that this provision shall not eliminate or limit the liability of a director to the Company or to its shareholders for monetary damages otherwise existing for:

 

  (i) any breach of the director’s duty of loyalty to the Company or to its shareholders;

 

  (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

 

  (iii) acts specified in Section 7-108-403 of the Colorado Business Corporation Act (the “ Act ”); or

 

  (iv) any transaction from which the director directly or indirectly derived any improper personal benefit.

If the Act is hereafter amended or superseded to eliminate or limit further the liability of a director, then, in addition to the elimination and limitation of liability provided by the preceding sentence, the liability of each director shall be eliminated or limited to the fullest extent permitted by the Act as so amended or superseded. Any repeal or modification of this Article Five shall not adversely affect any right or protection of a director of the Company under this Article Five, as in effect immediately prior to such repeal or modification, with respect to any liability that would have accrued, but for this Article Five, prior to such repeal or modification.

 

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ARTICLE SIX

INDEMNIFICATION

The Company shall indemnify, to the fullest extent permitted by applicable law in effect from time to time, any person, and the estate and personal representative of any such person, against all liability and expense (including attorneys’ fees) incurred by reason of the fact that the person is or was a director or officer of the Company or, while serving as a director or officer of the Company, such person is or was serving at the request of the Company as a director, officer, partner, trustee, employee, fiduciary, or agent of, or in any similar managerial or fiduciary position of, another domestic or foreign corporation or other individual or entity or of an employee benefit plan. The Company shall also indemnify any person who is serving or has served the Company as director, officer, employee, fiduciary, or agent, and that person’s estate and personal representative, to the extent and in the manner provided in any bylaw, resolution of the shareholders or directors, contract, or otherwise, so long as such provision is legally permissible. Any repeal or modification of this Article Six shall only be prospective and shall not affect the rights under this Article Six in effect at the time of the alleged occurrence of any action or omission to act giving rise to liability.

ARTICLE SEVEN

SHAREHOLDER ACTION WITHOUT A MEETING

Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if the shareholders holding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all of the shares entitled to vote thereon were present and voted consent to such action in writing. Action taken under this Article Seven has the same force and effect as an action taken at a meeting of shareholders and may be described as such in any document. Action taken under this Article Seven is effective as of the date of the last writing necessary to effect the action is received by the Company, unless all of the writings specify a different effective date, in which case such specified date shall be the effective date for such action. The record date for determining shareholders entitled to take action without a meeting is the date the Company first receives a writing upon which the action is taken. Any shareholder who has signed a writing describing and consenting to action taken pursuant to this Article Seven may revoke such consent by a writing signed by the shareholder describing the action and stating the shareholder’s prior consent thereto is revoked, if such writing is received by the Company before the effectiveness of the action.

ARTICLE EIGHT

VOTING

Each outstanding share of Common Stock shall be entitled to one vote and each outstanding fractional share of Common Stock shall be entitled to a corresponding fractional vote on each matter submitted to a vote of shareholders. Cumulative voting shall not be allowed in the election of directors or for any other purpose.

 

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Notwithstanding that which is set forth in Section 7-117-101 of the Act, it shall require the affirmative vote of a majority of the outstanding shares of Common Stock to: (i) approve an amendment to these Amended and Restated Articles of Incorporation as contemplated in Section 7-110-103 of the Act; (ii) approve a plan of merger or a plan of share exchange as contemplated in Section 7-111-103 of the Act; (iii) approve a transaction involving a sale, lease, exchange, or other disposition of all, or substantially all, of the Company’s property, with or without good will, otherwise than in the usual and regular course of business, as contemplated in Section 7-112-102(1) of the Act; or (iv) approve a proposal to dissolve the Company as contemplated in Section 7-114-102 of the Act.

ARTICLE NINE

PREEMPTIVE RIGHTS

Unless otherwise provided in any agreement by and among the Company and its shareholders, the holders of Common Stock shall not have preemptive rights with respect to any securities issued by the Company after the date of these Amended and Restated Articles of Incorporation.

ARTICLE TEN

TERM OF EXISTENCE

The Company shall exist in perpetuity from the date of filing of these Amended and Restated Articles of Incorporation with the Secretary of State of the State of Colorado unless dissolved according to the Act.

FOUR: These Amended and Restated Articles of Incorporation have been duly approved by the Board and the Company’s shareholders.

FIVE: These Amended and Restated Articles of Incorporation have been duly adopted in accordance with the provisions of Section 7-110-107 of the Act.

*  *  *  *  *

 

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Exhibit 3.25

AMENDED AND RESTATED BYLAWS

OF

ELAM CONSTRUCTION, INC.

ARTICLE I

Offices

Section 1.1 Principal Offices . The principal office of Elam Construction, Inc. (the “ Corporation ”) shall be designated from time to time by the Corporation and may be within or outside of Colorado.

Section 1.2 Additional Offices . The Corporation may have such other offices, either within or outside Colorado, as the Board of Directors of the Corporation (the “ Board ”) may designate or as the business of the Corporation may require from time to time.

Section 1.3 Registered Office . The registered office of the Corporation required by the Colorado Business Corporation Act (as such is amended from time to time, the “ Act ”) to be maintained in Colorado may be, but need not be, identical with the principal office, and the address of the registered office may be changed from time to time by the Board.

ARTICLE II

Shareholders

Section 2.1 Annual Meeting . The annual meeting of the shareholders shall be held on a date and at a time fixed by the Board, for the transaction of such business as may come before the meeting. A shareholder may apply to the district court in the county in Colorado where the Corporation’s principal office is located or, if the Corporation has no principal office in Colorado, to the district court of the county in which the Corporation’s registered office is located to seek an order that a shareholder meeting be held (a) if an annual meeting was not held within six months after the close of the Corporation’s most recently ended fiscal year or fifteen months after its last annual meeting, whichever is earlier, or (b) if the shareholder participated in a proper call of or proper demand for a special meeting and notice of the special meeting was not given within 30 days after the date of the call or the date the last of the demands necessary to require calling of the meeting was received by the Corporation pursuant to C.R.S. §7-107-102(1)(b), or the special meeting was not held in accordance with the notice.

Section 2.2 Special Meetings . Unless otherwise prescribed by statute, special meetings of the shareholders may be called for any purpose by the Board. The President shall call a special meeting of the shareholders if the Corporation receives one or more written demands for the meeting, stating the purpose or purposes for which it is to be held, signed and dated by holders of shares representing at least ten percent of all the votes entitled to be cast on any issue proposed to be considered at the meeting.

Section 2.3 Place of Meeting . The Board may designate any place, either within or outside Colorado, as the place for any annual meeting or any special meeting called by the Board. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place, either within or outside Colorado, as the place for such meeting. If no designation is made, or if a special meeting is called other than by the Board, the place of meeting shall be the principal office of the Corporation.


Section 2.4 Notice of Meeting . Written notice stating the place, date and hour of the meeting shall be given not less than ten nor more than 60 days before the date of the meeting, except that (a) if the number of authorized shares is to be increased, at least 30 days’ notice shall be given, or (b) if any other longer notice period is required by the Act, such period shall be observed. Notice of a special meeting shall include a description of the purpose or purposes of the meeting. Notice of an annual meeting need not include a description of the purpose or purposes of the meeting except the purpose or purposes shall be stated with respect to (v) an amendment to the Amended and Restated Articles of Incorporation of the Corporation, as they may be amended from time to time (the “ Articles ”), (w) a merger or share exchange in which the Corporation is a party and, with respect to a share exchange, in which the Corporation’s shares will be acquired, (x) a sale, lease, exchange or other disposition, other than in the usual and regular course of business, of all or substantially all of the property of the Corporation or of another entity which this Corporation controls, in each case with or without the goodwill, (y) a dissolution of the Corporation, or (z) any other purpose for which a statement of purpose is required by the Act. Notice shall be given personally or by mail, private carrier, telegraph, teletype, electronic mail, electronically transmitted facsimile or other form of wire or wireless communication by or at the direction of the President, the Secretary or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed and if in a comprehensible form, such notice shall be deemed to be given and effective when deposited in the United States mail, addressed to the shareholder at his address as it appears in the Corporation’s current record of shareholders, with postage prepaid. If notice is given other than by mail, and provided that such notice is in a comprehensible form, the notice is given and effective on the date receipt by the shareholders is confirmed.

If requested by the person or persons lawfully calling such meeting, the Secretary shall give notice thereof at corporate expense. No notice need be sent to any shareholder if three successive notices mailed to the last known address of such shareholder have been returned as undeliverable until such time as another address for such shareholder is made known to the Corporation by such shareholder. In order to be entitled to receive notice of any meeting, a shareholder shall advise the Corporation in writing of any change in such shareholder’s mailing address as shown on the Corporation’s books and records.

When a meeting is adjourned to another date, time or place, notice need not be given of the new date, time or place if the new date, time or place of such meeting is announced before adjournment at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which may have been transacted at the original meeting. If the adjournment is for more than 120 days, or if a new record date is fixed for the adjourned meeting, a new notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting as of the new record date.

A shareholder may waive notice of a meeting before or after the time and date of the meeting by a writing signed by such shareholder. Such waiver shall be delivered to the Corporation for filing with the corporate records. Further, by attending a meeting either in person or by proxy, a shareholder waives objection to lack of notice or defective notice of the

 

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meeting unless the shareholder objects at the beginning of the meeting to the holding of the meeting or the transaction of business at the meeting because of lack of notice or defective notice. By attending the meeting, the shareholder also waives any objection to consideration at the meeting of a particular matter not within the purpose or purposes described in the meeting notice unless the shareholder objects to considering the matter when it is presented.

Section 2.5 Fixing of Record Date . For the purpose of determining shareholders entitled to (a) notice of or vote at any meeting of shareholders or any adjournment thereof, (b) receive distributions or share dividends, or (c) demand a special meeting, or to make a determination of shareholders for any other proper purpose, the Board may fix a future date as the record date for any such determination of shareholders, such date in any case to be not more than 70 days, and, in case of a meeting of shareholders, not less than ten days, prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no record date is fixed by the directors, the record date shall be the date on which notice of the meeting is mailed to the shareholders, or the date on which the resolution of the Board providing for a distribution is adopted, as the case may be. When a determination of shareholders entitled to vote at any meeting of shareholders is made as provided in this Section, such determination shall apply to any adjournment thereof unless the Board fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.

Notwithstanding the above, the record date for determining the shareholders entitled to take action without a meeting or entitled to be given notice of action so taken shall be the date a writing upon which the action is taken is first received by the Corporation. The record date for determining shareholders entitled to demand a special meeting shall be the date of the earliest of any of the demands pursuant to which the meeting is called.

Section 2.6 Voting Lists . The Secretary shall make, at the earlier of ten days before each meeting of shareholders or two business days after notice of the meeting has been given, a complete list of the shareholders entitled to be given notice of such meeting or any adjournment thereof. The list shall be arranged by voting groups and within each voting group by class or series of shares, shall be in alphabetical order within each class or series, and shall show the address of and the number of shares of each class or series held by each shareholder. For the period beginning the earlier of ten days prior to the meeting or two business days after notice of the meeting is given and continuing through the meeting and any adjournment thereof, this list shall be kept on file at the principal office of the Corporation, or at a place (which shall be identified in the notice) in the city where the meeting will be held. Such list shall be available for inspection on written demand by any shareholder (including for the purpose of this Section 2.6 any holder of voting trust certificates) or his agent or attorney during regular business hours and during the period available for inspection. The original stock transfer books shall be prima facie evidence as to the shareholders entitled to examine such list or to vote at any meeting of shareholders.

Any shareholder, his agent or attorney may copy the list during regular business hours and during the period it is available for inspection, provided (a) the shareholder has been a shareholder for at least one hundred twenty days immediately preceding the demand or holds at least five percent of all outstanding shares of any class of shares as of the date of the demand, (b) the demand is made in good faith and for a purpose reasonably related to the demanding

 

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shareholder’s interest as a shareholder, (c) the shareholder describes with reasonable particularity the purpose and the records the shareholder desires to inspect, (d) the records are directly connected with the described purpose, and (e) the shareholder pays a reasonable charge covering the costs of labor and material for such copies, not to exceed the estimated cost of production and reproduction.

Section 2.7 Recognition Procedure for Beneficial Owners . The Board may adopt by resolution a procedure whereby a shareholder of the Corporation may certify in writing to the Corporation that all or a portion of the shares registered in the name of such shareholder are held for the account of a specified person or persons. The resolution may set forth (a) the types of nominees to which it applies, (b) the rights or privileges that the Corporation will recognize in a beneficial owner, which may include rights and privileges other than voting,(c) the form of certification and the information to be contained therein, (d) if the certification is with respect to a record date, the time within which the certification must be received by the Corporation, (e) the period for which the nominee’s use of the procedure is effective, and (f) such other provisions with respect to the procedure as the Board deems necessary or desirable. Upon receipt by the Corporation of a certificate complying with the procedure established by the Board, the persons specified in the certification shall be deemed, for the purpose or purposes set forth in the certification, to be the registered holders of the number of shares specified in place of the shareholder making the certification.

Section 2.8 Quorum and Manner of Acting . A majority of the votes entitled to be cast on a matter by a voting group shall constitute a quorum of that voting group for action on the matter. If less than a majority of such votes are represented at a meeting, a majority of the votes so represented may adjourn the meeting from time to time without further notice, for a period not to exceed 30 days for any one adjournment. If a quorum is present at such adjourned meeting, any business may be transacted which might have been transacted at the meeting as originally noticed. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, unless the meeting is adjourned and a new record date is set for the adjourned meeting.

If a quorum exists, action on a matter other than the election of directors by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast within the voting group opposing the action, unless the vote of a greater number or voting by classes is required by law or the Articles.

Section 2.9 Proxies . At all meetings of shareholders, a shareholder may vote by proxy by signing an appointment form or similar writing, either personally or by his duly authorized attorney-in-fact. A shareholder may also appoint a proxy by transmitting or authorizing the transmission of a telegram, teletype, or other electronic transmission providing a written statement of the appointment to the proxy, a proxy solicitor, proxy support service organization, or other person duly authorized by the proxy to receive appointments as agent for the proxy, or to the Corporation. The transmitted appointment shall set forth or be transmitted with written evidence from which it can be determined that the shareholder transmitted or authorized the transmission of the appointment. The proxy appointment form or similar writing shall be filed with the Secretary before or at the time of the meeting. The appointment of a proxy is effective when received by the Corporation and is valid for eleven months unless a different period is expressly provided in the appointment form or similar writing.

 

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Any complete copy, including an electronically transmitted facsimile or copy, of an appointment of a proxy may be substituted for or used in lieu of the original appointment for any purpose for which the original appointment could be used.

Revocation of a proxy does not affect the right of the Corporation to accept the proxy’s authority unless (a) the Corporation had notice that the appointment was coupled with an interest and notice that such interest is extinguished is received by the, Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment, or (b) other notice of the revocation of the appointment is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment. Other notice of revocation may, in the discretion of the Corporation, be deemed to include the appearance at a shareholders’ meeting of the shareholder who granted the proxy and his voting in person on any matter subject to a vote at such meeting.

The death or incapacity of the shareholder appointing a proxy does not affect the right of the Corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment.

The Corporation shall not be required to recognize an appointment made irrevocable if it has received a writing revoking the appointment signed by the shareholder (including a shareholder who is a successor to the shareholder who granted the proxy) either personally or by his attorney-in-fact, notwithstanding that the revocation may be a breach of an obligation of the shareholder to another person not to revoke the appointment.

Subject to Section 2.11 and any express limitation on the proxy’s authority appearing on the appointment form, the Corporation is entitled to accept the proxy’s vote or other action as that of the shareholder making the appointment.

Section 2.10 Voting of Shares . Each outstanding share, regardless of class shall be entitled to one vote and shall vote as a single class on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or classes are limited or denied by the Articles as permitted by the Act. Cumulative voting shall not be permitted in the election of directors or for any other purpose. Each record holder of stock shall be entitled to vote in the election of directors and for any other purpose. Each record holder of stock shall be entitled to vote in the election of directors and shall have as many votes for each of the shares owned by him as there are directors to be elected and for whose election he has the right to vote.

At each election of directors, that number of candidates equaling the number of directors to be elected, having the highest number of votes cast in favor of their election, shall be elected to the Board.

Redeemable shares are not entitled to be voted after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been paid to such holders or deposited with a bank, trust company or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.

 

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Section 2.11 Corporation’s Acceptance of Votes . If the name signed on a vote, consent, waiver, proxy appointment, or proxy appointment revocation corresponds to the name of a shareholder, the Corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, proxy appointment or proxy appointment revocation and give it effect as the act of the shareholder. If the name signed on a vote, consent, waiver, proxy appointment or proxy appointment revocation does not correspond to the name of a shareholder, the Corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, proxy appointment or proxy appointment revocation and to give it effect as the act of the shareholder if: (a) the shareholder is an entity and the name signed purports to be that of an officer or agent of the entity; (b) the name signed purports to be that of an administrator, executor, guardian or conservator representing the shareholder and, if the Corporation requests, evidence of fiduciary status acceptable to the Corporation has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation; (c) the name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the Corporation requests, evidence of this status acceptable to the Corporation has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation; (d) the name signed purports to be that of a pledgee, beneficial owner or attorney-in-fact of the shareholder and, if the Corporation requests, evidence acceptable to the Corporation of the signatory’s authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation; (e) two or more persons are the shareholder as co-tenants or fiduciaries and the name signed purports to be the name of at least one of the co-tenants or fiduciaries, and the person signing appears to be acting on behalf of all the co-tenants or fiduciaries; or (f) the acceptance of the vote, consent, waiver, proxy appointment or proxy appointment revocation is otherwise proper under rules established by the Corporation that are not inconsistent with this Section 2.11.

The Corporation is entitled to reject a vote, consent, waiver, proxy appointment or proxy appointment revocation if the Secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory’s authority to sign for the shareholder. Neither the Corporation nor its officers nor any agent who accepts or rejects a vote, consent, waiver, proxy appointment or proxy appointment revocation in good faith and in accordance with the standards of this Section 2.11 is liable in damages for the consequences of the acceptance or rejection.

Section 2.12 Informal Action by Shareholders . Pursuant to C.R.S. § 7-107-104, any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if the shareholders holding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all of the shares entitled to vote thereon were present and voted consent to such action in writing. Action taken under this Section 2.12 has the same force and effect as an action taken at a meeting of shareholders and may be described as such in any document. Action taken under this Section 2.12 is effective as of the date of the last writing necessary to effect the action is received by the Corporation, unless all of the writings specify a different effective date, in which case such specified date shall be the effective date for such action. The record date for determining shareholders entitled to take action without a meeting is the date the Corporation first receives a writing upon which the action is taken.

 

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Any shareholder who has signed a writing describing and consenting to action taken pursuant to this Section 2.12 may revoke such consent by a writing signed by the shareholder describing the action and stating the shareholder’s prior consent thereto is revoked, if such writing is received by the Corporation before the effectiveness of the action.

Section 2.13 Meetings by Telecommunication . Any or all of the shareholders may participate in an annual or special shareholders’ meeting by, or the meeting may be conducted through the use of, any means of communication by which - all persons participating in the meeting may hear each other during the meeting. A shareholder participating in a meeting by this means is deemed to be present in person at the meeting.

ARTICLE III

Board of Directors

Section 3.1 General Powers . All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of the Board, except as otherwise provided in the Act or the Articles.

Section 3.2 Number, Qualifications and Tenure . The authorized number of directors serving on the Board shall be determined from time to time by resolution of the Board, provided the Board shall consist of at least one (1) director and no more than five (5) directors. Each director shall be a natural person who is eighteen years of age or older. A director need not be a resident of Colorado or a shareholder of the Corporation.

Directors shall be elected at each annual meeting of the shareholders. Each director shall hold office until the next annual meeting of shareholders following his election and thereafter until his successor shall have been elected and qualified. Directors shall be removed in the manner provided by the Act.

Section 3.3 Resignation; Vacancies . Any director may resign at any time by giving written notice to the Corporation. Such resignation shall take effect at the time the notice is received by the Corporation unless the notice specifies a later effective date. Unless otherwise specified in the notice of resignation, the Corporation’s acceptance of such resignation shall not be necessary to make it effective. Any vacancy on the Board must be filled in accordance with the Act. If the directors remaining in office constitute fewer than a quorum of the Board, the directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. If elected by the directors, the director shall hold office until the next annual shareholders’ meeting at which directors are elected. If elected by the shareholders, the director shall hold office for the unexpired term of his predecessor in office; except that, if the director’s predecessor was elected by the directors to fill a vacancy, the director elected by the shareholders shall hold office for the unexpired term of the last predecessor elected by the shareholders.

Section 3.4 Regular Meetings . A regular meeting of the Board shall be held without notice immediately after and at the same place as the annual meeting of shareholders. The Board may provide by resolution the time and place, either within or outside Colorado, for the holding of additional regular meetings without other notice.

 

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Section 3.5 Special Meetings . Special meetings of the Board may be called by or at the request of any one director. The person or persons authorized to call special meetings of the Board may fix any place, either within or outside Colorado, as the place for holding any special meeting of the Board called by them, provided that no meeting shall be called outside the state of Colorado unless a majority of the Board has so authorized.

Section 3.6 Notice . Notice of any special meeting shall be given at least two days prior to the meeting by written notice either personally delivered or mailed to each director at his business address, or by notice transmitted by telegraph, telex, electronic mail, electronically transmitted facsimile or other form of wire or wireless communication. If mailed, such notice shall be deemed to be given and to be effective on the earlier of (a) three days after such notice is deposited in the United States mail, properly addressed, with postage prepaid, or (b) the date shown on the return receipt, if mailed by registered or certified mail return receipt requested. If notice is given by telex, electronic mail, electronically transmitted facsimile or other similar form of wire or wireless communication, such notice shall be deemed to be given and to be effective when sent, and with respect to a telegram, such notice shall be deemed to be given and to be effective when the telegram is delivered to the telegraph company. If a director has designated in writing one or more reasonable addresses or facsimile numbers for delivery of notice to him, notice sent by mail, telegraph, telex, electronic mail, electronically transmitted facsimile or other form of wire or wireless communication shall not be deemed to have been given or to be effective unless sent to such addresses or facsimile numbers, as the case may be.

A director may waive notice of a meeting before or after the time and date of the meeting by a writing signed by such director. Such waiver shall be delivered to the Corporation for filing with the corporate records. Further, a director’s attendance at or participation in a meeting waives any required notice to him of the meeting unless at the beginning of the meeting, or promptly upon his later arrival, the director objects to holding the meeting or transacting business at the meeting because of lack of notice or defective notice and does not thereafter vote for or assent to action taken at the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice or waiver of notice of such meeting.

Section 3.7 Quorum . A majority of the number of directors fixed by the Board pursuant to Section 3.2 shall constitute a quorum for the transaction of business at any meeting of the Board. If less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice, for a period not to exceed 60 days at any one adjournment.

Section 3.8 Manner of Acting . The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board.

Section 3.9 Compensation . By resolution of the Board, any director may be paid any one or more of the following: (a) his expenses, if any, of attendance at meetings; (b) a fixed sum for attendance at each meeting; (c) a stated salary as director; or (d) such other compensation as the Corporation and the director may reasonably agree upon. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

 

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Section 3.10 Presumption of Assent . A director of the Corporation who is present at a meeting of the Board or committee of the Board at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless (a) the director objects at the beginning of the meeting, or promptly upon his arrival, to the holding of the meeting or the transaction of business at the meeting and does not thereafter vote for or assent to any action taken at the meeting, (b) the director contemporaneously requests that his dissent or abstention as to any specific action taken be entered in the minutes of the meeting, or (c) the director causes written notice of his dissent or abstention as to any specific action to be received by the presiding officer of the meeting before its adjournment or by the Corporation within five business days after the adjournment of the meeting. A director may dissent to a specific action at a meeting while assenting to others. The right to dissent to a specific action taken at a meeting of the Board or a committee of the Board shall not be available to a director who voted in favor of such action.

Section 3.11 Committees . By resolution of the Board, the Board may designate from among it members an executive committee and one or more other committees, and appoint one or more members of the Board to serve on them. To the extent provided in the resolution, each committee shall have all the authority of the Board, except that no such committee shall have the authority to (a) authorize distributions, (b) approve or propose to shareholders actions or proposals required by the Act to be approved by shareholders, (c) fill vacancies on the Board or any committee thereof, (d) amend the Articles, (e) adopt, amend or repeal the Bylaws, (f) approve a plan of merger not requiring shareholder approval, (g) authorize or approve the reacquisition of shares unless pursuant to a formula or method prescribed by the Board, or (h) authorize or approve the issuance or sale of shares, or contract for the sale of shares or determine the designations and relative rights, preferences and limitations of a class or series of shares, except that the Board may authorize a committee or officer to do so within limits specifically prescribed by the Board. The committee shall then have full power within the limits set by the Board to adopt any final resolution setting forth all preferences, limitations and relative rights of such class or series and to authorize an amendment of the Articles stating the preferences, limitations and relative rights of a class or series for filing with the Secretary of State under the Act.

Sections 3.4, 3.5, 3.6, 3.7, 3.8, and 3.12 of these Bylaws, which govern meetings, notice, waiver of notice, quorum, voting requirements- and action without a meeting of the Board, shall apply to committees and their members appointed under this Section 3.11.

Neither the designation of any such committee, the delegation of authority to such committee, nor any action by such committee pursuant to its authority shall alone constitute compliance by any member of the Board or a member of the committee in question with his responsibility to conform to the standard of care required by law.

Section 3.12 Informal Action by Directors . Any action required or permitted to be taken at a meeting of the directors or any committee designated by the Board may be taken without a meeting if a written consent (or counterparts thereof) that sets forth the action so taken is signed by all of the directors entitled to vote with respect to the action taken. Such consent shall have

 

9


the same force and effect as a unanimous vote of the directors or committee members and may be stated as such in any document. Unless the consent specifies a different effective date, action taken under this Section 3.12 is effective at the time the last director signs a writing describing the action taken, unless, before such time, any director has revoked his consent by a writing signed by the director and received by the President or the Secretary.

Section 3.13 Telephonic Meetings . The Board may permit any director (or any member of a committee designated by the Board) to participate in a regular or special meeting of the Board or a committee thereof through the use of any means of communication by which all directors participating in the meeting can hear each other during the meeting. A director participating in a meeting in this manner is deemed to be present in person at the meeting.

ARTICLE IV

Officers and Agents

Section 4.1 General . The officers of the Corporation shall be as designated by the Board from time to time, each of whom shall be a natural person eighteen years of age or older. Notwithstanding the foregoing, the Board shall delegate to one or more of the officers the responsibility of the Secretary as provided in Section 4.7. The Board or an officer or officers authorized by the Board may appoint such other officers, assistant officers, committees and agents, including a chairman of the Board, assistant secretaries and assistant treasurers, as they may consider necessary. The Board or the officer or officers authorized by the Board shall from time to time determine the procedure for the appointment of officer, their term of office, their authority and duties and their compensation. One person may hold more than one office. In all cases where the duties of any officer, agent or employee are not prescribed by the Bylaws or by the Board, such officer, agent or employee shall follow the order and instructions of the President.

Section 4.2 Appointment and Term of Office . The officer of the Corporation shall be appointed by the Board at each annual meeting of the Board held after each annual meeting of the shareholders. If the appointment of officers is not made at such meeting or if an officer or officers are to be appointed by another officer or officers of the Corporation, such appointments shall be made as soon thereafter as conveniently may be. Each officer shall hold office until the first of the following occurs; his successor shall have been duly appointed and qualified, his death, his resignation, or his removal in the manner as provided in Section 4.3.

Section 4.3 Resignation and Removal . An officer may resign at any time by giving written notice of resignation to the Corporation. The resignation is effective when the notice is received by the Corporation unless the notice specifies a later effective date.

Any officer or agent may be removed at any time with or without cause by the Board or an officer or officers authorized by the Board. Such removal does not affect the contract rights, if any, of the Corporation or of the person so removed. The appointment of an officer or agent shall not in itself create contract rights.

Section 4.4 Vacancies . A vacancy in any office, however occurring, may be filled by the Board, or by the officer or officers authorized by the Board, for the unexpired portion of the

 

10


officer’s term. If an officer resigns and his resignation is made effective at a later date, the Board, or officer or officers authorized by the Board may permit the officer to remain in office until the effective date. In the alternative the Board, or officer or officers authorized by the Board, may remove the officer at any time before the effective date and may fill the resulting vacancy.

Section 4.5 President . The President shall have general and active control of the Corporation’s affairs and business and general supervision of its officers, agents and employees. Unless otherwise directed by the Board, the President shall attend in person or by substitute appointed by him, or shall execute on behalf of the Corporation written instruments appointing a proxy or proxies to represent the Corporation, at all meetings of the shareholders of any other corporation or other entity in which the Corporation holds any stock. On behalf of the Corporation, the President may in person or by substitute or by proxy execute written waivers of notice and consents with respect to any such meetings. At all such meetings and otherwise, the President, in person or by substitute or proxy, may vote the stock held by the Corporation, execute written consents and other instruments with respect to such stock, and exercise any and all rights and powers incident to the ownership of said stock, subject to the instructions, if any, of the Board.

Section 4.6 Vice Presidents . The Vice Presidents shall assist the President and shall perform such duties as may be assigned to them by the President or by the Board. In the absence of the President, the Vice President, if any (or, if more than one, the Vice Presidents in the order designated by the Board, or if the Board makes no such designation, then the Vice President designated by the President, or if nether the Board nor the President makes any such designation, the senior Vice President as determined by first election to that office), shall have the powers and perform the duties of the President.

Section 4.7 Secretary . The Secretary shall (a) prepare and maintain as permanent records the minutes of the proceedings of the shareholders and the Board, a record of all actions taken by the shareholders or Board without a meeting, a record of all actions taken by a committee of the Board in place of the Board on behalf of the Corporation, and a record of all waivers of notice of meetings or shareholders and of the Board or any committee thereof, (b) see that all notices are duly given in accordance with the provisions of the Bylaws and as required by law, (c) serve as custodian of the corporate records and of the seal of the Corporation and affix the seal to all documents when authorized by the Board, (d) keep at the Corporation’s registered office or principal place of business a record containing the names and addresses of all shareholders in a form that permits preparation of a list of shareholders arranged by voting group and by class or series of shares within each voting group, that is alphabetical within each class or series and that shows the address of, and the number of shares of each class or series held by, each shareholder, unless such a record shall be kept at the office of the Corporation’s transfer agent or registrar, (e) maintain at the Corporation’s principal office the original or copies of the Articles, Bylaws, minutes of all shareholders’ meetings and records of all action taken by shareholders without a meeting for the past three years, all written communications within the past three years to shareholders as a group or to the holders of any class or series of shares as a group, a list of the names and business addresses of the current directors and officers, a copy of the Corporation’s most recent corporate report filed with the Secretary of State, and financial statement showing in reasonable detail the Corporation’s assets and liabilities and results of operations for the last

 

11


three years, (f) have general charge of the stock transfer books of the Corporation unless the Corporation has a transfer agent, (g) authenticate records of the Corporation, and (h) in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President or by the Board, and prepare and maintain such records and information as required by C.R.S. § 7-116-101. Assistant secretaries, if any, shall have the same duties and powers, subject to supervision by the Secretary. The directors and/or shareholders may however respectively designate a person other than the Secretary or assistant secretary to keep the minutes of their respective meetings.

Any books, records, or minutes of the Corporation may be in written form or in any form capable of being converted into written form within a reasonable time.

Section 4.8 Treasurer . The Treasurer shall be the principal financial officer of the Corporation, shall have the care and custody of all funds, securities, evidences of indebtedness and other personal property of the Corporation and shall deposit the same in accordance with the instructions of the Board. He shall receive and give receipts for money paid in on account of the Corporation, and shall pay out of the Corporation’s funds on hand all bills, payrolls and other just debts of the Corporation of whatever nature upon maturity. He shall perform all other duties incident to the office of the Treasurer and, upon request of the Board, shall make such reports to it as may be required at any time. He shall, if required by the Board, give the Corporation a bond in such sums and with such sureties as shall be satisfactory to the Board, conditioned upon the faithful performance of his duties and for the restoration to the Corporation all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. He shall have such powers and perform such other duties as may from time to time be prescribed by the Board or the President. The assistant treasurers, if any, shall have the same powers and duties, subject to the supervision of the Treasurer. The Treasurer shall also be the principal accounting officer of the Corporation. He shall prescribe and maintain the methods and systems of accounting to be followed, keep complete books and records of account as required by the Act, prepare and file all local, state and federal tax returns, prescribe and maintain an adequate system of internal audit and prepare and furnish to the President and the Board statements of account showing the financial position of the Corporation and the results of its operations.

ARTICLE V

Stock

Section 5.1 Certificates . The Board shall be authorized to issue any of its classes of shares with or without certificates. The fact that the shares are not represented by certificates shall have no effect on the rights and obligations of shareholders. If the shares are represented by certificates, such shares shall be represented by consecutively numbered certificates signed, either manually or by facsimile, in the name of the Corporation by one or more persons designated by the Board. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, such certificate may nonetheless be issued by the Corporation, with the same effect as if he were such officer at the date of its issue. Certificates of stock shall be in such form and shall contain such information consistent with law as shall be prescribed by the Board. If shares are not represented by certificates, within a reasonable time following the issue or transfer of such shares, the Corporation shall send the shareholder a complete written statement of all of the information required to be provided to holders of uncertificated shares by the Act.

 

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Section 5.2 Consideration for Shares . Certificated or uncertificated shares shall not be issued until the shares represented thereby are fully paid. The Board may authorize the issuance of shares for consideration consisting of any tangible or intangible property or benefit to the Corporation, including cash, promissory notes, services performed or other securities of the Corporation. Future services shall not constitute payment or partial payment for shares of the Corporation. The promissory note of a subscriber or an affiliate of a subscriber shall not constitute payment or partial payment for shares of the Corporation unless the note is negotiable and is secured by collateral, other than the shares being purchased, having a fair market value at least equal to the principal amount of the note. For purposes of this Section 5.2, “promissory note” means a negotiable instrument on which there is an obligation to pay independent of collateral and does not include a non-recourse note.

Section 5.3 Lost Certificates . In case of the alleged loss, destruction or mutilation of a certificate of stock, the Board may direct the issuance of a new certificate in lieu thereof upon such terms and conditions in conformity with law as the Board may prescribe. The Board may in it discretion require an affidavit of lost certificate and/or a bond in such form and amount and with such surety as it may determine before issuing a new certificate.

Section 5.4 Transfer of Shares . Upon surrender to the Corporation or to a transfer agent of the Corporation of a certificate of stock duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, and receipt of such documentary stamps as may be required by law and evidence of compliance with all applicable securities laws and other restrictions, the Corporation shall issue a new certificate to the person entitled thereto, and cancel the old certificate. If there shall be a proper transfer of uncertificated shares, upon delivery to the Corporation of proper evidence of succession, assignment or authority to transfer and evidence of compliance with all applicable securities laws and other restrictions, the Corporation shall take the necessary measures to reflect such transfer in its records. Every transfer of stock described in this Section 5.4 shall be entered on the stock books of the Corporation, which shall be kept at its principal office or by the person and the place designated by the Board.

Except as otherwise expressly provided in Sections 2.7 and 2.11, and except for the assertion of dissenters’ rights to the extent provided in Article 113 of the Act, the Corporation shall be entitled to treat the registered holder of any shares of the Corporation as the owner thereof for all purposes, and the Corporation shall not be bound to recognize any equitable or other claim to, or interest in, such shares or rights deriving from such shares on the part of any person other than the registered holder, including without limitation, any purchaser, assignee or transferee of such shares or rights deriving from such shares, unless and until such other person becomes the registered holder of such shares, whether or not the Corporation shall have either actual or constructive notice of the claimed interest of such other person.

Section 5.5 Transfer Agent, Registrars and Paving Agents . The Board may at it discretion appoint one or more transfer agents, registrars and agents for making payment upon any class of stock, bond, debenture or other security of the Corporation. Such agents and registrars may be located either within or outside Colorado. They shall have such rights and duties and shall be entitled to such compensation as may be agreed.

 

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ARTICLE VI

Indemnification of Certain Persons

Section 6.1 Indemnification . For purposes of this Article VI: (a) a “ Required Indemnitee ” means any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, by reason of the fact that he is or was a director or officer of the Corporation, or such person, while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, fiduciary or agent of any foreign or domestic profit or nonprofit corporation or of any partnership, joint venture, trust, profit or nonprofit unincorporated association, limited liability company, or other enterprise or employee benefit plan; (b) a “ Discretionary Indemnitee ” means any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, by reason of the fact that he is or was an employee, fiduciary or agent of the Corporation (other than a director or officer of the Corporation), or such person is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, fiduciary or agent of any foreign or domestic profit or nonprofit corporation or of any partnership, joint venture, trust, profit or nonprofit unincorporated association, limited liability company, or other enterprise or employee benefit plan; and (c) a Proper Person shall mean a person that is either a Required Indemnitee or a Discretionary Indemnitee. The Corporation shall indemnify any Required Indemnitee, and may, at the Board’s discretion, indemnify any Discretionary Indemnitee, against reasonably incurred expenses (including attorneys’ fees), judgments, penalties, fines (including any excise tax assessed with respect to an employee benefit plan) and amounts paid in settlement reasonably incurred by him in connection with such action, suit or proceeding if it is determined by the groups set forth in Section 6.4 that he conducted himself in good faith and that he reasonably believed (x) in the case of conduct in his official capacity with the Corporation, that such conduct was in the Corporation’s best interests, (y) in all other cases (except criminal cases), that his conduct was at least not opposed to the Corporation’s best interests, or (z) in the case of any criminal proceeding, that he had no reasonable cause to believe his conduct was unlawful. A Proper Person will be deemed to be acting in his official capacity while acting as a director, officer, employee, fiduciary or agent on behalf of this Corporation and not while acting on this Corporation’s behalf for some other entity.

No indemnification shall be made under this Article VI to a Proper Person with respect to any claim, issue or matter in connection with a proceeding by or in the right of the Corporation in which the Proper Person was adjudged liable to the Corporation or in connection with any proceeding charging that the Proper Person derived an improper personal benefit, whether or not involving action in an official capacity, in which he was adjudged liable on the basis that he derived an improper personal benefit. Further, indemnification under this Article VI in connection with a proceeding brought by or in the right of the Corporation shall be limited to reasonable expenses, including attorneys’ fees, incurred in connection with the proceeding.

 

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Section 6.2 Right to Indemnification . The Corporation shall indemnify any Required Indemnitee, and may, at the Board’s discretion, indemnify any Discretionary Indemnitee, who was wholly successful, on the merits or otherwise, in defense of any action, suit, or proceeding as to which he was entitled to indemnification under Section 6.1 against expenses (including attorneys’ fees) reasonably incurred by him in connection with the proceeding without the necessity of any action by the Corporation other than the determination in good faith that the defense has been wholly successful.

Section 6.3 Effect of Termination of Action . The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person seeking indemnification did not meet the standards of conduct described in Section 6.1. Entry of judgment by consent as part of a settlement shall not be deemed an adjudication of liability.

Section 6.4 Groups Authorized to Make Indemnification Determination . Except where there is a right to indemnification as set forth in Section 6.1 or 6.2, or where indemnification is ordered by a court in Section 6.5, any indemnification shall be made by the Corporation only as authorized in the specific case upon a determination by a proper group that indemnification of the Proper Person is permissible under the circumstances because he has met the applicable standards of conduct set forth in Section 6.1. This determination shall be made by the Board by a majority vote of those present at a meeting at which a quorum is present, which quorum shall consist of directors not parties to the proceeding (“ Quorum ”). If a Quorum cannot be obtained, the determination shall be made by a majority vote of a committee of the Board designated by the Board, which committee shall consist of two or more directors not parties to the proceeding, except that directors who are parties to the proceeding may participate in the designation of directors for the committee. If a Quorum cannot be obtained and the committee cannot be established or even if a Quorum is obtained or the committee is designated and a majority of the directors constituting such Quorum or committee so directs, the determination shall be made by (a) independent legal counsel selected by a vote of the Board or the committee in the manner specified in this Section 6.4 or, if a Quorum of the full Board cannot be obtained and a committee cannot be established, by independent legal counsel selected by a majority vote of the full Board (including directors who are parties to the action) or (b) a vote of the shareholders.

Section 6.5 Court-Ordered Indemnification . Any Required Indemnitee may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction for mandatory indemnification under Section 6.2, including indemnification for reasonable expenses incurred to obtain court-ordered indemnification. If the court determines that such Required Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standards of conduct set forth in Section 6.1 or was adjudged liable in the proceeding, the court may order such indemnification as the court deems proper except that if the Required Indemnitee has been adjudged liable, indemnification shall be limited to reasonable expenses incurred in connection with the proceeding and reasonable expenses incurred to obtain court-ordered indemnification.

Section 6.6 Advance of Expenses . Reasonable expenses (including attorney’s fees) incurred in defending an action, suit or proceeding as described in Section 6.1 may, at the Board’s discretion, be paid by the Corporation to any Proper Person in advance of the final

 

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disposition of such action, suit or proceeding upon receipt of (a) a written affirmation of such Proper Person’s good faith belief that he has met the standards of conduct prescribed by Section 6.1, (b) a written undertaking, executed personally or on the Proper Person’s behalf, to repay such advances if it is ultimately determined that he did not meet the prescribed standards of conduct (the undertaking shall be an unlimited general obligation of the Proper Person but need not be secured and may be accepted without reference to financial ability to make repayment), and (c) a determination is made by the proper group (as described in Section 6.4) that the facts as then known to the group would not preclude indemnification. Determination and authorization of payments shall be made in the same manner specified in Section 6.4.

Section 6.7 Witness Expenses . This Article VI does not limit the Corporation’s authority to pay or reimburse expenses incurred by a director in connection with an appearance as a witness in a proceeding at a time when he has not been made named defendant or respondent in the proceeding.

Section 6.8 Report to Shareholders . Any indemnification of or advance of expenses to a director in accordance with this Article VI, if arising out of a proceeding by or on behalf of the Corporation, shall be reported in writing to the shareholders with or before the notice of the next shareholders’ meeting. If the next shareholder action is taken without a meeting at the instigation of the Board, such notice shall be given to the shareholders at or before the time the first shareholder signs a writing consenting to such action.

ARTICLE VII

Provision of Insurance

By action of the Board, notwithstanding any interest of the directors in the action, the Corporation may purchase and maintain insurance, in such scope and amounts as the Board deems appropriate on behalf of any person who is or was a director, officer, employee, fiduciary or agent of the Corporation, or who while a director, officer, employee, fiduciary or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, fiduciary or agent of any other foreign or domestic corporation or of any partnership, joint venture, trust, profit or nonprofit unincorporated association, limited liability company or other enterprise or employee benefit plan, against any liability asserted against, or incurred by, him in that capacity or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of Article VI or applicable law. Any such insurance may be procured from any insurance company designed by the Board, whether such insurance company is formed under the laws of Colorado or any other jurisdiction of the United States or elsewhere, including any insurance company in which the Corporation has an equity interest or any other interest, through stock ownership or otherwise.

ARTICLE VIII

Miscellaneous

Section 8.1 Seal . The Board may adopt a corporate seal of the Corporation which shall be in such form as they determine from time to time.

 

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Section 8.2 Fiscal Year . The fiscal year of the Corporation shall be determined by the Board.

Section 8.3 Amendments . The Board shall have power, to the maximum extent permitted by the Act, to make, amend and repeal the Bylaws of the Corporation at any regular or special meeting of the Board unless the shareholders, in making, amending or repealing a particular bylaw, expressly provide that the directors may not amend or repeal such bylaw. The shareholders also shall have the power to make, amend or repeal the Bylaws of the Corporation at any annual meeting or at any special meeting called for that purpose.

Section 8.4 Gender . The masculine gender is used in these Bylaws as a matter of convenience only and shall be interpreted to include the feminine and neuter genders, and visa versa, as the circumstances indicate.

Section 8.5 Conflicts . In the event of any irreconcilable conflict between these Bylaws and either the Articles or applicable law, the latter shall control.

 

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Exhibit 3.26

ARTICLES OF ORGANIZATION

OF

C&S TRANSITION, L.L.C.

KNOW ALL MEN BY THESE PRESENTS:

The undersigned hereby forms and establishes a limited liability company under the laws of the State of Kansas as follows:

I.

The name of the company is C&S Transition, L.L.C.

II.

The period of duration of the company shall be perpetual, unless earlier terminated by law or in accordance with the terms and conditions as may be set forth in the company’s Operating Agreement.

III.

The purpose of the company is to engage in any lawful act or activity for which limited liability companies maybe organized under the Limited Liability Company Act.

IV.

The registered office of the company is located at 2060 East Tulsa, Sedgwick County, Kansas 67216, and the company’s resident agent at such address is Morgan Koon.

V.

The name and mailing address of the organizer is as follows:

Michael R. Biggs

Biggs Law Group,

3500 North Rock Road

Building 1100

Wichita, Kansas’ 67226

IN WITNESS WHEREOF, the undersigned organizer has subscribed his name hereto this 13th day of April, 2010.

 

/s/ Michael R. Biggs
Michael R. Biggs


AGREEMENT AND PLAN OF MERGER

OF

CORNEJO & SONS, INC.

a Kansas corporation

INTO

C & S TRANSITION, L.L.C.

a Kansas limited liability company

This AGREEMENT AND PLAN OF MERGER, dated as of April 15, 2010 (this “ Agreement ”), is by and between CORNEJO & SONS, INC., a Kansas corporation (“ CSI ”), and C & S TRANSITION, L.L.C., a Kansas limited liability company (“ CS Transition L.L.C. ”).

WHEREAS, C&S GROUP, INC. (“Parent”), the sole member of CS Transition L.L.C. has determined that it is advisable and in the best interests of CS Transition L.L.C. that CSI be merged with and into CS Transition L.L.C. with CS Transition L.L.C. being the surviving entity (the “ Merger ”) on the terms and subject to the conditions contained herein and in accordance with the laws of Kansas; and

WHEREAS, Parent, the sole stockholder of CSI and the Board of Directors of CSI have determined that the Merger, on the terms and subject to the conditions contained herein and in accordance with the laws of Kansas is advisable and in the best interests of CSI and its sole stockholder,

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual agreements and covenants herein contained, and intending to be legally bound, the patties hereby agree as follows:

1. The Merger . At the Effective Time (as defined in Section 2), CSI shall be merged with and into CS Transition L.L.C., the separate corporate existence of CSI shall cease, and CS Transition L.L.C. shall continue as the surviving entity. Further, upon the effectiveness of the Merger, the name of the surviving entity shall be “Cornejo & Sons, L.L.C.” (hereinafter sometimes referred to as the “ Surviving Entity ”).

2. Effective Time of the Merger . The parties shall file this Agreement with the Secretary of State of the State of Kansas in accordance with K.S.A. §17-7706(a). The Merger shall become effective upon the latter of (i) 1:01 p.m., April 15” 2010, or (ii) the time of filing of this Agreement with the Secretary of State of the State of-Kansas (the “ Effective Time ”).

3. Effect of the Merger . At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of K.S.A. §17-7707. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of CSI shall vest in the Surviving Entity, and all debts, liabilities, obligations, restrictions, disabilities and duties of CSI shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Entity.


4. Articles of Organization and Limited Liability Company Agreement . The articles of organization and limited liability company operating agreement of CS Transition L.L.C. (together, the “ Organizational Documents ”) in effect immediately prior to the Effective Time shall continue to be the articles of organization and limited liability company operating agreement of the Surviving Entity without change or amendment until duly amended in accordance with the provisions thereof and applicable law.

5. Sole Member of the Surviving Entity . Parent, which is both the sole member of CS Transition L.L.C. and the sole stockholder of CSI immediately prior to the Effective Time shall continue to be the sole member of the Surviving Entity, until its status is otherwise terminated in accordance with the Organizational Documents.

6. Officers of the Surviving Company . The officers of CS Transition L.L.C. immediately prior to the Effective Time shall continue to be the officers of the Surviving Entity until their successors have been duly elected or appointed and qualified, or until their earlier death, resignation or removal in accordance with the Organizational Documents.

7. Treatment of Shares and Interests . At the Effective Time, all of the outstanding shares of capital stock of CSI shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into 1,000 membership units in the Surviving Entity, and no payment shall be due or made with respect thereto. At the Effective Time, each outstanding membership unit of CS Transition L.L.C. shall remain outstanding and shall be unaffected by the Merger.

8. Termination . This Agreement may be terminated and the Merger abandoned at any time prior to the Effective Time only upon the mutual written consent of both parties.

9. Governing Law . This Agreement shall be governed by and construed in accordance with the internal laws, and not the conflicts of laws provisions, of the State of Kansas.

10. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be as effective as delivery of a manually executed counterpart of this Agreement.

11. Certification . The undersigned, being the duly elected President and Secretary of CSI, and the sole member of CS Transition L.L.C., hereby certify that this Agreement has been authorized and approved in accordance with K.S.A. 17-7705 by the board of directors and sole stockholder of CSI, and by the sole member of CS Transition L.L.C., respectively.

 

2


IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly executed as of the day and year first above written.

 

CORNEJO & SONS, INC.
By:  

/s/ Ronald J. Cornejo

Name:   Ronald J. Cornejo
Title:   Chief Executive Officer
Attest:
By:  

/s/ Richard J. Cornejo

Name:   Richard J. Cornejo
Title:   Secretary
C & S TRANSITION, L.L.C.
By: C&S GROUP, INC., its sole member
By:  

/s/ Ronald J. Cornejo

Name:   Ronald J. Cornejo
Title:   Chief Executive Officer
Attest:
By:  

/s/ Richard J. Cornejo

Name:   Richard J. Cornejo
Title:   Secretary

 

3


STATE OF KANSAS

Secretary of State

Memorial Hall, Floor

120 SW 10th Avenue

Topeka, KS 66612-1594

CERTIFICATE OF MERGER OR CONSOLIDATION

December 21, 2010

 

1. The name and jurisdiction of formation of each of the limited liability companies which are to merge or consolidate is:

 

  a) CONCRETE MATERIALS COMPANY OF KANSAS, L.L.C. (Kansas);

 

  b) CORNEJO MATERIALS, L.L.C. (Kansas); and

 

  c) CORNEJO & SONS, L.L.C. (Kansas).

 

2. An Agreement of Merger has been executed and approved by the sole member of each of CONCRETE MATERIALS COMPANY OF KANSAS, L.L.C., CORNEJO MATERIALS, L.L.C. AND CORNEJO & SONS, L.L.C.

 

3. The name of the surviving limited liability company is: CORNEJO & SONS, L.L.C.

 

4. The effective date of the merger or consolidation is December 31, 2010.

 

5. The executed Agreement of Merger is on file at the principal place of business of CORNEJO & SONS, L.L.C., the surviving entity, at 2060 East Tulsa, Wichita, Kansas 67216.

 

6. A copy of the Agreement of Merger will be furnished by CORNEJO & SONS, L.L.C., on request and without cost, to any member of each of CORNEJO & SONS, L.L.C., CONCRETE MATERIALS COMPANY OF KANSAS, L.L.C. and CORNEJO MATERIALS, L.L.C.

[ Signature page follows. ]


IN AFFIRMATION THEREOF, THE FACTS STATED ABOVE ARE TRUE:

 

CORNEJO & SONS, L.L.C.
By:  

/s/ Michael Brady

Name:   Michael J. Brady
Title:   Vice President

 

2

Exhibit 3.27

AMENDED AND RESTATED LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

OF

CORNEJO & SONS, L.L.C.

This Amended and Restated Limited Liability Company Operating Agreement (this “ Agreement ”) of CORNEJO & SONS, L.L.C. (the “ Company ”) is entered into by SUMMIT MATERIALS COMPANIES I, LLC , as the sole member (the “ Member ”).

WHEREAS, the Company was formed as a limited liability company on April 13, 2010 pursuant to and in accordance with the Kansas Revised Limited Liability Company Act, as amended from time to time (the “ Act ”);

WHEREAS, the Company, formerly named C&S Transition, L.L.C. (“ CS Transition LLC ”), was previously organized by C&S Group, Inc. (the “ Original Member ”) under that certain Limited Liability Company Operating Agreement, dated as of April 13, 2010 (the “ Original Agreement ”);

WHEREAS, pursuant to that certain Plan of Merger dated as of April 15, 2010 between Cornejo & Sons, Inc. (“ CSI ”) and CS Transition LLC (i) CSI merged with and into CS Transition LLC (the “ Merger ”), and effective upon the Merger the surviving entity was renamed Cornejo & Sons, L.L.C., and (ii) the Original Member acquired an additional 1,000 membership units of the Company thereby making the Original Member the holder of an aggregate of 2,000 membership units of the Company;

WHEREAS, on April 14, 2010 the Member executed and entered into that certain Membership Interest Purchase Agreement among the Member, the Original Member, CSI, Cornejo Materials, Inc., Concrete Materials Company of Kansas, L.L.C., the shareholders of the Original Member and Ronald J. Cornejo as Sellers Representative, pursuant to which on April 16, 2010 the Member purchased all of the outstanding membership interests of the Company and became the sole member of the Company; and

WHEREAS, the Member, wishes to enter into this Agreement in order to (i) reflect the name change of “C&S Transition, L.L.C.” to “Cornejo & Sons, L.L.C.”, and (ii) amend Exhibit A hereto in order to reflect the Member’s current unit ownership.

NOW THEREFORE, the Member, intending to be legally bound, hereby agrees that the Original Agreement is superseded, amended and restated in its entirety to read as follows:

1. Name . The name of the limited liability company formed hereby is CORNEJO & SONS, L.L.C.

2. Filing of Certificates . The Member, as an authorized person, within the meaning of the Act, shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates required or permitted by the Act to be filed in the Office of the Secretary of State of


Kansas. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The purpose of the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Kansas law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 2060 East Tulsa, Wichita, Kansas 67216.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Kansas is c/o Morgan Koon, 2060 East Tulsa, Wichita, Kansas 67216.

7. Member . Effective as of the date hereof the Member of the Company is that Person listed on the attached Exhibit A , as properly amended from time to time.

8. Membership Units .

(a) Membership interests in the Company shall be represented by units (the “ Units ”). The number of Units available for issuance shall be 100,000. All Units shall be uncertificated unless otherwise determined by the Member. Units may be issued in fractions. The number of Units available for issuance may be increased by the Member. The Member is the holder of the number of Units set forth opposite such Member’s name on Exhibit A hereto, as properly amended from time to time, and no other units or interests in the Company are outstanding.

(b) Except as otherwise required by this Agreement, each Unit shall be entitled to one vote and shall be considered a voting unit under the Act.

9. Limited Liability . As set forth in the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

10. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

 

2


11 Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

12. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

13. Management . Management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Kansas. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

14. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “Officers”) and assign titles (including, without limitation, Chief Executive Officer, President, Vice President, Secretary, and Treasurer) to any such person. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member.

15. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

16. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Kansas and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Kansas for directors and officers of corporations organized under the laws of the State of Kansas. Any indemnity under this Section 16 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

 

3


17. Assignments . The Member may at any time assign or transfer all of its Units. If the Member assigns or transfers all of its Units pursuant to this Section 17, the transferee shall be admitted to the Company as a member and shall become the Member for all purposes hereunder. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor member shall cease to be a member of the Company. Upon such a transfer, the transferee member shall amend Exhibit A hereto, to reflect the name and ownership of such member.

18. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 18, an additional Member shall be admitted to the Company, subject to Section 19 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

19. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

20. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) any order of a court of competent jurisdiction requiring dissolution under K.S.A. 17-76,117, and amendments thereto.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 11 hereto.

21. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

22. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

23. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Kansas (without regard to conflict of laws principles).

24. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

25. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed

 

4


as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

26. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

 

5


IN WITNESS WHEREOF , the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 4 th day of May, 2010.

 

SUMMIT MATERIALS COMPANIES I, LLC,

sole member

By:   /s/ Michael Brady
  Name: Michael Brady
  Title: Vice President

 

6


EXHIBIT A

UNIT OWNERSHIP

May 4, 2010

 

Member

   Total Units  

SUMMIT MATERIALS COMPANIES I, LLC

     2,000   

Exhibit 3.28

 

Kansas Secretary of State
Kansas Limited Liability Company
Articles of Organization

CONTACT: Kansas Secretary of State, Chris Biggs

 

Memorial Hall, 1 st Floor

   (785) 296-4564    02771535

120 S.W. 10 th Avenue

   kssos@kssos.org   

Topeka, KS 66612-1594

   www.kssos.org   

INSTRUCTIONS: All information must be completed or this document will not be accepted for filing.

Please read instructions sheet before completing.

 

1. Name of the limited liability company:

Hamm Asphalt, LLC

 

2. Name of the resident agent and address of the registered office in Kansas:

Address must be a street address

A P.O. box is unacceptable

C. Scott Anderson, 609 Perry Place

Perry, Kansas 66073 USA

 

3. Mailing address:

This address will be used to send official mail from the Secretary of State’s office

C. Scott Anderson, 609 Perry Place

Perry, Kansas 66073 USA

 

4. Tax closing month:

December

 

5. Effective date:

A future effective date must be

within 90 days of the filing date

          Upon filing

          Future effective date December 31, 2010

 

6. I declare under penalty of perjury pursuant to the laws of the state of Kansas that the foregoing is true and correct, and I have remitted the required fee.

 

/s/ Michael Brady     December 22, 2010
Signature of organizer     Date (month, day, year)

Exhibit 3.29

LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

OF

HAMM ASPHALT, LLC

December 31, 2010

This Limited Liability Company Operating Agreement (this “ Agreement ”) of HAMM ASPHALT, LLC (the “ Company ”) is entered into by HAMM, INC., as the sole member (the “ Member ”).

WHEREAS, on December 31, 2010, the Company was converted from a Kansas corporation into a Kansas limited liability company, and upon such conversion, the Member was admitted as the sole member of the Company; and

WHEREAS, the Member desires to enter into the following Agreement.

NOW THEREFORE, the Member, intending to be legally bound, hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is HAMM ASPHALT, LLC.

2. Filing of Certificates . The Member, as an authorized person, within the meaning of the Kansas Revised Limited Liability Company Act (the “ Act ”), shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates required or permitted by the Act to be filed in the Office of the Secretary of State of Kansas. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The purpose of the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Kansas law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 609 Perry Place, Perry, Kansas 66073.


6. Registered Office; Registered Agent . The address of the registered office of the Company is 609 Perry Place, Perry, Kansas, 66073, and the name of the registered agent of the Company is Scott Anderson, unless otherwise changed pursuant to a duly authorized action of the Member.

7. Member . Effective as of the date hereof the Member of the Company is that Person listed on the attached Exhibit A , as properly amended from time to time.

8. Limited Liability . As set forth in the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . Management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Kansas. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, Chief Executive Officer, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Act, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

Name

  

Title

N. Rodney Hamm

   President

Gary E. Hamm

   Vice President

 

2


C. Scott Anderson

   Treasurer

Ramona A. Gray

   Secretary

Michael Brady

   Vice President

Damian Murphy

   Vice President

Glenn Culpepper

   Assistant Treasurer

Anthony Keenan

   Assistant Secretary

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Kansas and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Kansas for directors and officers of corporations organized under the laws of the State of Kansas. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof

16. Assignments . The Member may at any time assign or transfer in whole or in part its limited liability company interest in the Company. If the Member assigns or transfers all of its interest pursuant to this Section 16, the transferee shall be admitted to the Company as a member and shall become the Member for all purposes hereunder. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor member shall cease to be a member of the Company. Upon such a transfer, the transferee member shall amend Exhibit A hereto, to reflect the name and ownership of such member.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

 

3


18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) any order of a court of competent jurisdiction requiring dissolution under Section 17-76,117 of the Act, and amendments thereto.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 11 hereto.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Kansas (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

[Signature page follows.]

 

4


IN WITNESS WHEREOF , the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the date first written above.

 

HAMM, INC.
By:   /s/ Michael Brady
  Name: Michael Brady
  Title: Vice President

 

5


EXHIBIT A

OWNERSHIP

December 31, 2010

 

Member

  

Percentage Interest

HAMM, INC.    100%
  

 

 

6

Exhibit 3.30

ARTICLES OF INCORPORATION

OF

HAMM, INC.

ARTICLE I

Name

The name of this corporation is Hamm, Inc.

ARTICLE II

Registered Office And Resident Agent

The registered office of the Corporation in the State of Kansas is at 609 Perry Place, City of Perry, and County of Jefferson, Kansas 66073. The resident agent at that address is Deloris Myers-Robb.

ARTICLE III

Nature Of Business

The nature of the business or purposes to be conducted or promoted are:

(a) To be a holding company for subsidiaries operating in the construction, waste management and rock mining industries.

(b) To engage in any lawful conduct or activity for which Corporations may be organized under the Kansas Corporation Code.

ARTICLE IV

Capital Stock

This Corporation is authorized to issue One Million (1,000,000) shares of common stock without par value.

ARTICLE V

Incorporator

The name and mailing address of the incorporator is: C. Scott Anderson, 609 Perry Place, Perry, Kansas 66073.

ARTICLE VI

Directors

The powers of the incorporator are to terminate upon the filing of these Articles of Incorporation, and the name and mailing address of each person who is to serve as director until the first annual meeting of stockholders or until his successor is elected and qualified, is:


Gary L. Hamm

  

418 Elm Street

Perry, Kansas 66073

Gary E. Hamm

  

1907 Quail Creek Drive

Lawrence, Kansas 66047

Bradley T. Hamm

  

2471 Elsworth Road

Perry, Kansas 66073

Jeremy R. Hamm

  

P.O. Box 662

9A Quarry Lane, Perry, Kansas 66073

Ramona A. Gray

  

16056 U.S. 24 Highway

Lawrence, Kansas 66044

N. Rodney Hamm

  

4604 Nicklaus Drive

Lawrence, Kansas 66049

Voting for directors shall not be by written ballot, unless requested by any shareholder.

ARTICLE VII

Property of Stockholders

The private property or assets of the stockholders of the Corporation shall not to any extent whatsoever be subject to the payment of the debts of the Corporation.

ARTICLE VIII

Limitation of Director Liability

No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law (i) for breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under the provisions of K.S.A. 17-6424 and any amendments thereto, or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to the date when such provision becomes effective.

It is the intention of the foregoing to limit the liability of the board of directors to the fullest extent permitted by law. Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a director of the corporation existing hereunder with respect to any act or omission occurring prior to or at the time of such repeal or modification.

 

Articles of Incorporation - Hamm, Inc.

2


ARTICLE IX

Bylaws

The power to adopt, repeal and amend the bylaws of this Corporation shall reside in the Board of Directors of this Corporation.

IN TESTIMONY WHEREOF, I have hereunto set my name this 23rd day of March, 2001.

 

/s/ C. Scott Anderson
C. Scott Anderson

 

Articles of Incorporation - Hamm, Inc.

3


Hamm, Inc.

Certificate of

Amendment to Articles of Incorporation

The undersigned, being all of the Directors named in the Articles of Incorporation of Hamm, Inc. (the “Corporation”), do hereby state as follows:

 

  1. On March 29, 2001, Articles of Incorporation for Hamm, Inc. were filed with the Kansas Secretary of State.

 

  2. The Corporation has received no payment for any of its stock, nor has it issued any stock.

 

  3. Pursuant to K.S.A. 17-6601, the Articles of Incorporation of this Corporation are hereby amended, effective as of the date the Articles of Incorporation were originally filed, by deleting Articles IV and VI substituting therefor the following new Articles IV and VI, and by adding the following new Article X:

ARTICLE IV

Capital Stock

This Corporation is authorized to issue One Million (1,000,000) shares of common stock, without par value, consisting of Five Hundred Thousand (500,000) shares Class A Common Stock and Five Hundred Thousand (500,000) shares Class B Common Stock, and there shall be no preferences, qualifications, limitations, restrictions, special or relative rights in respect to such shares of Class A Common Stock or Class B Common Stock, except as follows :

All dividends declared and paid by the Corporation shall be payable only to the holders of the Class B Common Stock so long as any portion of that certain loan from The Merchants Bank (the “Lender”), to the Hamm Companies Employees Stock Ownership Trust (“Borrower”) made pursuant to that certain Loan Agreement among the Lender, the Borrower, N. R. Hamm Quarry, Inc., a Kansas corporation, N. R. Hamm Contractor, Inc., a Kansas corporation, and Hamm Asphalt, Inc., a Kansas corporation, as may be amended from time to time, or any renewal or refinancing thereof, shall be due and payable.

….

ARTICLE VI

Directors

The powers of the incorporator are to terminate upon the filing of these Articles of Incorporation, and the name and mailing address of each person who is to serve as director until the first annual meeting of stockholders or until his successor is elected and qualified, is:


Gary L. Hamm

  

418 Elm Street

Perry, Kansas 66073

Gary E. Hamm

  

1907 Quail Creek Drive

Lawrence, Kansas 66047

Bradley T. Hamm

  

2471 Elsworth Road

Perry, Kansas 66073

N. Rodney Hamm

  

4604 Nicklaus Drive

Lawrence, Kansas 66049

Deloris Myers-Robb

  

609 Perry Place

Perry, Kansas 66073

Voting for directors shall not be by written ballot, unless requested by any shareholder.

ARTICLE X

Treatment of Dividends

So long as any portion of that certain loan from The Merchants Bank (the “Lender”), to the Hamm Companies Employees Stock Ownership Trust (“Borrower”) made pursuant to that certain Loan Agreement among the Lender, Borrower, N. R. Hamm Quarry, Inc., a Kansas corporation, N. R. Hamm Contractor, Inc., a Kansas corporation, and Hamm Asphalt, Inc., a Kansas corporation, as may be amended from time to time, or any renewal or refinancing thereof, shall be due and payable, any dividends received by the Corporation with respect to shares of Class B Common Stock of N. R. Hamm Quarry, Inc., N. R. Hamm Contractor, Inc. or Hamm Asphalt, Inc. owned by the Corporation shall be used solely for the purpose of either (i) paying dividends to the holders of the Class B Common Stock of the Corporation, or (ii) purchasing or redeeming shares of the Corporation’s Class A or Class B Common Stock.

IN TESTIMONY WHEREOF, we have hereunto set our names this 29th day of March, 2001

 

/s/ N. Rodney Hamm     /s/ Gary L. Hamm
N. Rodney Hamm     Gary L. Hamm
/s/ Gary E. Hamm     /s/ Bradley T. Hamm
Gary E. Hamm     Bradley T. Hamm
/s/ Jeremy R. Hamm     /s/ Ramona A. Gray
Jeremy R. Hamm     Ramona A. Gray

Exhibit 3.31

Hamm, Inc.

BYLAWS

Article I

Offices

Section 1. Principal Office . The principal office for the transaction of the business of the corporation is hereby located at 609 Perry Place, City of Perry, County of Jefferson, Kansas 66073.

Section 2. Registered Office . The corporation, by resolution of its Board of Directors, may change the location of its registered office as designated in the Articles of Incorporation to any other place in Kansas. By like resolution the resident agent at such registered office may be changed to any other person or corporation, including itself. Upon adoption of such a resolution, a certificate certifying the change shall be executed, acknowledged and filed with the secretary of State, and a certified copy thereof shall be recorded in the office of the Register of Deeds for the county in which the new registered office is located (and in the old county, if such registered office is moved from one county to another).

Section 3. Other Offices . Branch or subordinate offices may at any time be established by the Board of Directors at any place or places where the corporation is qualified to do business.

Article II

Shareholders

Section 1. Place of Meetings . All annual meetings of shareholders and all other meetings of shareholders shall be held at the principal office of the corporation unless another place within or without the State of Kansas is designated either by the Board of Directors pursuant to authority hereinafter granted to said board, or by the written consent of all shareholders entitled to vote thereat, given either before or after the meeting and filed with the secretary of the corporation.

Section 2. Annual Meetings . The annual meetings of the shareholders shall be held on the last Friday of the fiscal year, in each year at 10:00 o’clock, a.m. of said day; provided, however, that should said day fall upon a legal holiday, then such annual meeting of shareholders shall be held at the same time and place on the Friday preceding such designated meeting date. At such meeting, directors shall be elected, reports of the affairs of the corporation shall be considered, and any other business may be transacted which is within the power of the shareholders.

Written notice of each annual meeting shall be given to each shareholder entitled to vote, except as provided by K.S.A. 17-6520(b), either personally or by mail or other means of written communication, charges prepaid, addressed to such shareholder at his address appearing on the books of the corporation or given by him to the corporation for the purpose of notice. If a shareholder gives no address, notice shall be deemed to have been given if sent by mail or other means of written communication addressed to the place where the principal office of the


corporation is situated, or if published at least once in some newspaper of general circulation in the county in which said office is located. All such notices shall be sent to each shareholder entitled thereto not less than ten (10) days nor more than sixty (60) days before each annual meeting, and shall specify the place, the day and the hour of such meeting, and shall state such other matters, if any, as may be expressly required by statute. If this bylaw as to the time and place of election of directors is changed, such notice shall be given to shareholders at least twenty (20) days prior to such meeting.

Section 3. Special Meetings . Special meetings of the shareholders, for any purpose or purposes whatsoever, may be called at any time by the president or by the Board of Directors, or by one or more shareholders holding not less than one-fifth of the voting power of the corporation. Except in special cases where other express provision is made by statute, notice of such special meetings shall be given in the same manner as for annual meetings of shareholders. Notices of any special meeting shall specify in addition to the place, day and hour of such meeting, the general nature of the business to be transacted.

Section 4. Adjourned Meetings and Notice Thereof . Any shareholders’ meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat, but in the absence of a quorum, no other business may be transacted at such meeting.

When any shareholders’ meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Except as aforesaid, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting, if the time and place thereof are announced at the meeting at which such adjournment is taken.

Section 5. Voting . Unless the Board of Directors has fixed in advance (pursuant to Article V, Section 1) a record date for purposes of determining entitlement to vote at the meeting, the record date shall be as of the close of business on the day next preceding the date on which the meeting shall be held. If the Articles of Incorporation permit the election of directors without written ballot, then such election of directors shall be without written ballot, unless requested by any shareholder, in which case the election of directors shall be by written ballot. Every shareholder entitled to vote at any election for directors shall have the right to cumulate his votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which his shares are entitled, or to distribute his votes on the same principle among as many candidates as he shall think fit. The candidates receiving the highest number of votes up to the number of directors to be elected shall be elected.

Section 6. Quorum . The presence in person or by proxy of persons entitled to vote a majority of the voting shares at any meeting shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.


Section 7. Consent of Absentees . The transactions of any meeting of shareholders, either annual or special, however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of such meeting, or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 8. Action Without Meeting . Any action which under any provision of the Kansas Corporation Code, may be taken at a meeting of the shareholders, except approval of an agreement for merger or consolidation of the corporation with other corporations, or a sale of all or substantially all of the corporate property, may be taken without a meeting if authorized by a writing signed by all of the persons who would be entitled to vote upon such action at a meeting, and filed with the secretary of the corporation, or such other procedure followed as may be prescribed by statute.

Section 9. Proxies . Every person entitled to vote or execute consents shall have the right to do so either in person or by one or more agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the secretary of the corporation; provided that no such proxy shall be valid after the expiration of three (3) years from the date of its execution, unless the person executing it specified therein the length of time for which such proxy is to continue in force, and provided further, that no proxy may be given to a person who is not a shareholder of the corporation.

Section 10. Inspection of Corporate Records . The stock ledger or duplicate stock ledger, the books of account, and minutes of proceedings of the shareholders, the Board of Directors and of executive committees of directors shall be open to inspection upon the written demand of any shareholder or the holder of a voting trust certificate within five (5) days of such demand during ordinary business hours if for a purpose reasonably related to his interests as a shareholder, or as the holder of such voting trust certificate. The list of shareholders entitled to vote shall be prepared at least ten (10) days before every meeting of stockholders by the officer in charge of the stock ledger, which shall be the secretary, and shall be open to inspection by any shareholder, for any purpose germane to the meeting, during ordinary business hours for at least ten (10) days prior to such meeting. Such inspection may be made in person or by an agent or attorney authorized in writing by a shareholder, and shall include the right to make abstracts. Demand of inspection other than at a shareholders’ meeting shall be made in writing upon the president, secretary, assistant secretary or general manager of the corporation.

Section 11. Inspection of Bylaws . The corporation shall keep in its principal office for the transaction of business the original or a copy of these bylaws as amended or otherwise altered to date, certified by the secretary, which shall be open to inspection by the shareholders at all reasonable times during ordinary business hours.


Article III

Directors

Section 1. Powers . Subject to limitations of the Articles of Incorporation, of the bylaws, and of the Kansas Corporation Code as to action which shall be authorized or approved by the shareholders, and subject to the duties of directors as prescribed by the bylaws; all corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be controlled by, the Board of Directors. Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the directors shall have the following powers, to-wit:

First—If allowed by the Articles of Incorporation, to alter, amend or repeal the bylaws of the corporation.

Second—To select and remove all the other officers, agents and employees of the corporation, prescribe such powers and duties for them as may not be inconsistent with law, or with the Articles of Incorporation or the bylaws, fix their compensation, and require from them security for faithful service, or to delegate this authority to such person or persons as the Board of Directors may determine from time to time.

Third—To conduct, manage, and control the affairs and business of the corporation, and to make such rules and regulations therefor not inconsistent with the law, or with the Articles of Incorporation or the bylaws, as they may deem best.

Fourth—To change the principal office and registered office for the transaction of the business of the corporation from one location to another as provided in Article I hereof; to fix and locate from time to time one or more subsidiary offices of the corporation within or without the State of Kansas, as provided in Article I, Section 3 hereof; to designate any place within or without the State of Kansas for the holding of any shareholders’ meeting or meetings except annual meetings; to adopt, make and use a corporate seal, to prescribe the forms of certificates of stock, and to alter the forms of such seal and of such certificates from time to time, as in their judgment they may deem best, provided such seal and such certificate shall at all times comply with the provisions of law.

Fifth—To authorize the issue of shares of stock of the corporation from time to time, upon such terms as may be lawful, for such consideration as the Board of Directors may determine.

Sixth—To borrow money and incur indebtedness for purposes of the corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor.

Seventh—To appoint an executive committee and other committees, and to delegate to such committees any of the powers and authority of the board in the management of the business and affairs of the corporation, except as limited by K.S.A. 17-6301(c). Any such committee shall be composed of two (2) or more directors.


Section 2. Number and Qualification of Directors . The authorized number of directors of the corporation shall be six (6) until changed by amendment to this bylaw. Directors need not be shareholders.

Section 3. Election and Term of Office . The directors shall be elected at each annual meeting of shareholders, but if any such annual meeting is not held, or the directors are not elected thereat, the directors may be elected at a special meeting of shareholders held for that purpose as soon thereafter as conveniently may be. All directors shall hold office until their respective successors are elected. A director may be removed from office at any time for cause, however, by the shareholders or directors, and he may be removed without cause by the shareholders or directors, without a hearing, unless the director sought to be removed has sufficient shareholder support that by use of cumulative voting, if required by law or the Articles of Incorporation, he would otherwise be able to maintain his position on the board in a regular election of board members.

Section 4. Vacancies . Vacancies on the Board of Directors may be filled by a majority of the remaining directors, although less than a quorum, or by a sole remaining director. If the Articles of Incorporation permit the election of directors without written ballot, then the election of directors to fill vacancies shall be without written ballot, unless requested by any director. If at any time, by reason of death, resignation, or other cause, the corporation should have no directors in office, then any officer or any stockholder or any executor, administrator, trustee or guardian of a stockholder or other fiduciary entrusted with like responsibility for the person or estate of a stockholder may call a special meeting of the stockholders in accordance with the provisions of these bylaws, or may apply to the District Court for a decree summarily ordering election as provided for by the Kansas Corporation Code. Each director so elected shall hold office until his successor is elected at an annual or a special meeting of the shareholders.

A vacancy or vacancies on the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any director or directors are elected to elect the full authorized number of directors to be voted for at the meeting, or if any director or directors elected shall refuse to serve.

The shareholders holding at least ten percent (10%) of the outstanding voting stock may call a meeting at any time to fill any vacancy or vacancies not filled by the directors in accordance with the above procedures. If the Board of Directors accepts the resignation of a director tendered to take effect at a future time, the board or the shareholders shall have power to elect a successor to take office when the resignation is to become effective.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office.

Section 5. Place of Meeting . Regular and special meetings of the Board of Directors shall be held at any place within or without the State of Kansas which has been designated from time to time by resolution of the board or by written consent of all members of the board. In the absence of such designation, all meetings shall be held at the principal office of the corporation.


Section 6. Organizational Meeting . Immediately following each annual meeting of shareholders, the Board of Directors shall hold a regular meeting for the purpose of organization, election of officers, and the transaction of other business. Notice of such meeting is hereby waived.

Section 7. Other Regular Meetings . Other regular meetings of the Board of Directors shall be held without call at such time as the Board of Directors may from time to time designate in advance of such meetings; provided, however, should said day fall upon a legal holiday, then said meeting shall be held at the same time on the next day thereafter ensuing which is not a legal holiday. Notice of all such regular meetings of the Board of Directors is hereby waived.

Section 8. Special Meetings . Special meetings of the Board of Directors for any purpose or purposes shall be called at any time by the president or, if he is absent or unable or refuses to act, by the secretary or by any other director. Notice of such special meetings, unless waived by attendance thereat or by written consent to the holding of the meeting, shall be given by written notice mailed at least five (5) days before the date of such meeting or be hand delivered or notified by facsimile or electronic mail at least two (2) days before the date such meeting is to be held. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon addressed to the director at his residence or usual place of business. If notice be given by facsimile or electronic mail, such notice shall be deemed to be delivered when transmitted by the sender.

Section 9. Attendance of Non-Board Members at Board Meetings . Individuals who are not members of the Board of Directors of the Corporation may not attend, observe, listen to or otherwise participate in meetings of the Board of Directors of the Corporation; provided, however, that, from time to time, a majority of the entire Board, acting by a vote taken at a duly called meeting, may invite individuals who are not members of the Board (such as legal counsel, accountants, investment bankers and other advisors to the Corporation) to attend, and provide counsel at, meetings of the Board so long as, in their judgment, any such individual is subject to a binding written confidentiality obligation owed to the Corporation and covering any and all confidential information of the Corporation to which any such individual may obtain access at a Board meeting or otherwise.

Section 10. No Recording of Board Meetings . No Board member may record or cause to be recorded (by tape recording or other means) any Board meeting (whether all Board members are physically present in the same location or whether one or more Board members are participating by telephone or video conference), unless the entire Board of Directors unanimously consents to such recording in advance.

Section 11. Notice of Adjournment . Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place be fixed at the meeting adjourned.

Section 12. Waiver of Notice . The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, or a consent to holding such meeting, or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.


Section 13. Quorum . A majority of the total number of directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of those directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number be required by law or by the Articles of Incorporation. The directors present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum.

Section 14. Meetings by Telephone . Members of the Board of Directors of the corporation, or any committee designated by such board, may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment, by means of which all persons participating in the meeting can hear one another, and such participation in a meeting shall constitute presence in person at the meeting.

Section 15. Adjournment . A majority of the directors present may adjourn any directors’ meeting to meet again at a stated day and hour or until the time fixed for the next regular meeting of the board.

Section 16. Action Without Meeting . Any action which under any provision of the Kansas Corporation Code, may be taken at a meeting of the Board of Directors, may be taken without a meeting if authorized by a writing signed by all of the persons who would be entitled to vote upon such action at a meeting, and filed with the secretary of the corporation, or such other procedure followed as may be prescribed by statute.

Section 17. Votes and Voting . All votes required of directors hereunder may be by voice vote or show of hands, unless a written ballot is requested, which request may be made by any one director. Each director shall have one vote, unless the Articles of Incorporation provide that directors elected by the holders of a class or series of stock shall have more or less than one vote per director on any matter. Every reference to a majority or other proportion of directors shall refer to a majority or other proportion of the votes of such directors.

Section 18. Inspection of Books and Records . Any director shall have the right to examine the corporation’s stock ledger, a list of its stockholders entitled to vote and its other books and records for a purpose reasonably related to such director’s position as a director. When there is any doubt concerning the inspection rights of a director, the parties may petition the District Court, which may, in its discretion, determine whether an inspection may be made and whether any limitations or conditions should be imposed upon the same.

Section 19. Fees and Compensation . Directors shall not receive any stated salary for their services as directors, but, by resolution of the board, adopted in advance of, or after the meeting for which payment is to be made, a fixed fee, with or without expenses of attendance, may be allowed one or more of the directors for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation therefor.


Article IV

Officers

Section 1. Officers . The officers of the corporation shall be a president, a secretary, and a treasurer. The corporation may also have, at the discretion of the Board of Directors, a chairman of the board, one or more vice-presidents, one or more assistant secretaries and one or more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article IV. Any number of offices may be held by the same person.

Section 2. Election . The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Section 3 or Section 5 of this Article IV, shall be chosen annually by the Board of Directors, and each shall hold his office until he shall resign or shall be removed or otherwise disqualified to serve, or his successor shall be elected and qualified.

Section 3. Subordinate Officers, Etc . The Board of Directors may appoint such other officers as the business of the corporation may require, each of whom shall have authority and perform such duties as are provided in these bylaws or as the Board of Directors may from time to time specify, and shall hold office until he shall resign or shall be removed or otherwise disqualified to serve.

Section 4. Compensation of Officers . Officers and other employees of the corporation shall receive such salaries or other compensation as shall be determined by resolution of the Board of Directors, adopted in advance or after the rendering of the services, or by employment contracts entered into by the Board of Directors. The power to establish salaries of officers, other than the president or chairman of the board, may be delegated to the president, chairman of the board, or a committee.

Section 5. Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these bylaws for regular appointments to such office.

Section 6. Removal and Resignation . Any officer may be removed, either with or without cause, by a majority of the directors at the time in office, at any regular or special meeting of the board. Any officer may resign at any time upon written notice to the corporation.

Section 7. Chairman of the Board . The chairman of the board, if there be such an officer, shall, if present, preside at all meetings of the Board of Directors, and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed by these bylaws.

Section 8. President . Subject to such supervisory powers, if any, as may be given by the Board of Directors to the chairman of the board, if there be such an officer, the president shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. He shall preside at all meetings of the shareholders and, in the absence of the chairman of the board, at all meetings of the Board of Directors. He shall be ex officio a


member of all the standing committees, including the executive committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a corporation, including the right to hire and fire employees and agents (except shareholders who are employees), and shall have such other powers and duties as may be prescribed by the Board of Directors or these bylaws.

Section 9. Vice-President . In the absence or disability of the president, the vice-president or vice-presidents, if there be such an officer or officers, in order of their rank as fixed by the Board of Directors, or if not ranked, the vice-president designated by the Board of Directors, shall perform all the duties of the president, and when so acting shall have all the powers of and be subject to all the restrictions upon, the president. The vice-presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors or these bylaws.

Section 10. Secretary . The secretary shall keep, or cause to be kept, a book of minutes at the principal office or such other place as the Board of Directors may order, of all meetings of directors and shareholders, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at directors’ meetings, the number of shares present or represented at shareholders’ meetings and the proceedings thereof.

The secretary shall keep, or cause to be kept, at the principal office or at the office of the corporation’s transfer agent, a stock ledger, or a duplicate stock ledger, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same; and the number and date of cancellation of every certificate surrendered for cancellation.

The secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board of Directors required by these bylaws or by law to be given, and he shall keep the seal of the corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or these bylaws.

Section 11. Treasurer . The treasurer shall keep and maintain or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all reasonable times be open to inspection by any director.

The treasurer shall deposit all monies and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as treasurer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or these bylaws. He shall be bonded, if required by the Board of Directors.


Article V

Miscellaneous

Section 1. Record Date and Closing Stock Books .

(a) Record Date for Shareholders’ Meetings . The Board of Directors may by resolution fix a time in the future as a record date for the determination of the shareholders entitled to notice of and to vote at any meeting of shareholders or to execute a written consent to action in lieu of a shareholders’ meeting. The record date so fixed shall be not less than ten (10) days nor more than sixty (60) days prior to the date of the meeting or event for purposes of which it is fixed, and in no event can the record date be a date prior to the Board of Directors meeting at which the record date is fixed. When a record date is so fixed, only shareholders who are such of record on that date are entitled to notice of and to vote at the meeting, notwithstanding any transfer of any shares on the books of the corporation after the record date.

(b) Record Date for Dividends or Distributions . The Board of Directors may by resolution fix a time in the future as a record date for the determination of the shareholders entitled to receive any dividend or distribution, or any allotment of rights, or to exercise rights in respect to any change, conversion or exchange of shares, or for the purpose of any other lawful action, which record date shall not be more than sixty (60) days prior to the date of the meeting or event for purposes of which it is fixed, and in no event can the record date be a date prior to the Board of Directors meeting at which the record date is fixed.

The Board of Directors may close the books of the corporation against transfers of shares during the whole or any part of a period not more than sixty (60) days prior to the date of a shareholder’s meeting, the date when the right to any dividend, distribution, or allotment of rights vest, or the effective date of any change, conversion or exchange of shares.

Section 2. Indemnification of Directors and Officers . When a person is sued, either alone or with others, because he is or was a director or officer of the corporation, or of another corporation serving at the request of this corporation, in any proceeding arising out of his alleged misfeasance or nonfeasance in the performance of his duties or out of any alleged wrongful act against the corporation or by the corporation, he shall be indemnified for his reasonable expenses, including attorneys’ fees incurred in the defense of the proceeding, if both of the following conditions exist:

(a) The person sued is successful in whole or in part, or the proceeding against him is settled with the approval of the court.

(b) The court finds that his conduct fairly and equitably merits such indemnity.

Section 3. Checks, Drafts, Etc . All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors.


Section 4. Annual Report . No annual report to shareholders shall be required, but the Board of Directors may cause to be sent to the shareholders reports in such form and at such times as may be deemed appropriate by the Board of Directors.

Section 5. Contracts, Deeds, Etc., How Executed . The Board of Directors, except as in these bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose in any amount; provided, however, that any contracts, agreements, deeds or other instruments conveying lands or any interest therein, and any other documents shall be executed on behalf of the corporation by the president (or by a vice-president, if there be one, serving in the absence of the president), or by any other specific officer or agent or attorney so authorized under letter of attorney or other written power which was executed on behalf of the corporation by the president (or vice-president serving in the absence of the president).

Section 6. Certificates of Stock . A certificate or certificates for shares of the capital stock of the corporation shall be issued to each shareholder when any such shares are fully paid up. All such certificates shall be signed by the president or vice-president, if there be any, and the secretary, or an assistant secretary, or be authenticated by facsimiles of the signatures of the president and secretary, or by a facsimile of the signature of the president and the written signature of the secretary or an assistant secretary. Every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk, and be registered by an incorporated bank or trust company, either domestic or foreign, as registrar of transfers, before issuance.

Certificates for shares may be issued prior to full payment under such restrictions and for such purposes as the Board of Directors or these bylaws may provide; provided, however, that any such certificate so issued prior to full payment shall state on its face or back the total amount of the consideration to be paid, the amount paid thereon and the terms by which the amount remaining unpaid is to be paid.

Section 7. Representation of Securities of Other Corporations or Entities . The president or any vice-president and the secretary or assistant secretary of this corporation are authorized to vote, represent and exercise on behalf of this corporation all rights incident to any and all securities of any other corporation or entity standing in the name of this corporation. The authority herein granted to said officers to vote or represent on behalf of this corporation any and all securities held by the corporation in any other corporation or entity may be exercised either by such officers in person or by any person authorized to do so by proxy or power of attorney duly executed by said officers.

Section 8. Fiscal Year . The Board of Directors shall have the power to fix and from time to time change the fiscal year of the corporation. In the absence of action by the Board of Directors, however, the fiscal year of the corporation shall end each year on the date which the corporation treated as the close of its first fiscal year, until such time, if any, as the fiscal year shall be changed by the Board of Directors.


Section 9. Corporate Automobiles . In the event corporate automobiles are purchased and made available for use by corporate employees, then any employee utilizing such corporate automobile shall reimburse the Corporation for personal use of such corporate automobile at a rate to be determined from time to time by the Board of Directors, unless the board decides otherwise. If personal use is determined to exceed the amount reimbursed, then such additional personal use shall be treated as additional compensation and reported on the employee’s W-2.

Section 10. Conflict with Shareholders’ Agreement . In the event that any Shareholders’ Buy-Sell Agreement or similar Agreement, executed by all shareholders who own stock in the corporation at the date of such Agreement, provides for a procedure which is in conflict with these Bylaws, the provisions of such Agreement shall supersede these Bylaws and these Bylaws shall be deemed to be amended by unanimous consent of the Shareholders and Directors by virtue of the existence of such Agreement.

Article VI

Amendments

Section 1. Power of Shareholders or Directors . The bylaws of the corporation may from time to time be repealed, amended or altered, or new bylaws may be adopted, by either of the following ways:

(i) By the stockholders, by unanimous written consent, or at any annual, regular or special meeting thereof (except, however, that non-voting stockholders may not vote on said adoption, repeal or amendment of the bylaws); or

(ii) If allowed by the Articles of Incorporation, by resolution adopted by the Board of Directors then in office; provided, however, that the power of the directors to suspend, repeal, amend or otherwise alter the bylaws or any portion thereof may be denied as to any bylaws or portion thereof enacted by the stockholders, if at the time of such enactment the stockholders shall so expressly provide. Notice of any amendment of the bylaws by the Board of Directors shall be given to each stockholder having voting rights within ten (10) days after the date of such amendment by the board.


C E R T I F I C A T E O F S E C R E T A R Y

I, the undersigned, do hereby certify:

(1) That I am the duly elected and acting secretary of Hamm, Inc., a Kansas corporation; and

(2) That the foregoing bylaws, comprising twelve (12) pages, constitute the original bylaws of said corporation, as duly adopted by unanimous consent of the Board of Directors thereof duly executed as of the 29th day of March, 2001.

IN TESTIMONY WHEREOF, I have hereunto subscribed my name as of the 30 day of MARCH, 2001.

 

/s/ Deloris Myers-Robb
Deloris Myers-Robb, Secretary

Exhibit 3.32

 

Kansas Secretary of State
Kansas Limited Liability Company
Articles of Organization

CONTACT: Kansas Secretary of State, Chris Biggs

 

Memorial Hall, 1 st Floor    (785) 296-4564    02771533
120 S.W. 10 th Avenue    kssos@kssos.org   
Topeka, KS 66612-1594    www.kssos.org   

INSTRUCTIONS: All information must be completed or this document will not be accepted for filing.

Please read instructions sheet before completing.

 

1. Name of the limited liability company:

N.R. Hamm Contractor, LLC

 

2. Name of the resident agent and address of the registered office in Kansas:

Address must be a street address

A P.O. box is unacceptable

C. Scott Anderson, 609 Perry Place

Perry, Kansas 66073

 

3. Mailing address:

This address will be used to send official mail from the Secretary of State’s office

C. Scott Anderson, 609 Perry Place

Perry, Kansas 66073 USA

 

4. Tax closing month:

December

 

5. Effective date:

A future effective date must be

within 90 days of the filing date

          Upon filing

          Future effective date December 31, 2010

 

6. I declare under penalty of perjury pursuant to the laws of the state of Kansas that the foregoing is true and correct, and I have remitted the required fee.

 

/s/ Michael Brady     December 22, 2010
Signature of organizer     Date (month, day, year)

Exhibit 3.33

LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

OF

N. R. HAMM CONTRACTOR, LLC

December 31, 2010

This Limited Liability Company Operating Agreement (this “ Agreement ”) of N. R. HAMM CONTRACTOR, LLC (the “ Company ”) is entered into by HAMM, INC., as the sole member (the “ Member ”).

WHEREAS, on December 31, 2010, the Company was converted from a Kansas corporation into a Kansas limited liability company, and upon such conversion, the Member was admitted as the sole member of the Company; and

WHEREAS, the Member desires to enter into the following Agreement.

NOW THEREFORE, the Member, intending to be legally bound, hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is N. R. HAMM CONTRACTOR, LLC.

2. Filing of Certificates . The Member, as an authorized person, within the meaning of the Kansas Revised Limited Liability Company Act (the “ Act ”), shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates required or permitted by the Act to be filed in the Office of the Secretary of State of Kansas. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The purpose of the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Kansas law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 609 Perry Place, Perry, Kansas 66073.


6. Registered Office; Registered Agent . The address of the registered office of the Company is 609 Perry Place, Perry, Kansas, 66073, and the name of the registered agent of the Company is Scott Anderson, unless otherwise changed pursuant to a duly authorized action of the Member.

7. Member . Effective as of the date hereof the Member of the Company is that Person listed on the attached Exhibit A , as properly amended from time to time.

8. Limited Liability . As set forth in the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . Management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Kansas. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, Chief Executive Officer, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Act, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that officer. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

Name

  

Title

N. Rodney Hamm

   President

Gary E. Hamm

   Vice President

C. Scott Anderson

   Treasurer

 

2


Name

  

Title

Ramona A. Gray

   Secretary

Michael Brady

   Vice President

Damian Murphy

   Vice President

Glenn Culpepper

   Assistant Treasurer

Anthony Keenan

   Assistant Secretary

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Kansas and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Kansas for directors and officers of corporations organized under the laws of the State of Kansas. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign or transfer in whole or in part its limited liability company interest in the Company. If the Member assigns or transfers all of its interest pursuant to this Section 16, the transferee shall be admitted to the Company as a member and shall become the Member for all purposes hereunder. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor member shall cease to be a member of the Company. Upon such a transfer, the transferee member shall amend Exhibit A hereto, to reflect the name and ownership of such member.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

 

3


18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) any order of a court of competent jurisdiction requiring dissolution under Section 17-76,117 of the Act, and amendments thereto.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 11 hereto.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Kansas (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

[Signature page follows.]

 

4


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the date first written above.

 

HAMM, INC.
By:   /s/ Michael Brady
  Name: Michael Brady
  Title: Vice President


EXHIBIT A

OWNERSHIP

December 31, 2010

 

Member

   Percentage Interest

HAMM, INC.

   100%

Exhibit 3.34

 

Kansas Secretary of State
Kansas Limited Liability Company
Articles of Organization

CONTACT: Kansas Secretary of State, Chris Biggs

 

Memorial Hall, 1 st Floor    (785) 296-4564    02772041
120 S.W. 10 th Avenue    kssos@kssos.org   
Topeka, KS 66612-1594    www.kssos.org   

INSTRUCTIONS: All information must be completed or this document will not be accepted for filing.

Please read instructions sheet before completing.

 

1. Name of the limited liability company:

N.R. Hamm Quarry, LLC

 

2. Name of the resident agent and address of the registered office in Kansas:

Address must be a street address

A P.O. box is unacceptable

C. Scott Anderson, 609 Perry Place

Perry, Kansas 66073

 

3. Mailing address:

This address will be used to send official mail from the Secretary of State’s office

C. Scott Anderson, 609 Perry Place

Perry, Kansas 66073 USA

 

4. Tax closing month:

December

 

5. Effective date:

A future effective date must be

within 90 days of the filing date

          Upon filing

          Future effective date December 31, 2010

 

6. I declare under penalty of perjury pursuant to the laws of the state of Kansas that the foregoing is true and correct, and I have remitted the required fee.

 

/s/ Michael Brady     December 22, 2010
Signature of organizer     Date (month, day, year)

Exhibit 3.35

LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

OF

N. R. HAMM QUARRY, LLC

December 31, 2010

This Limited Liability Company Operating Agreement (this “ Agreement ”) of N. R. HAMM QUARRY, LLC (the “ Company ”) is entered into by HAMM, INC., as the sole member (the “ Member ”).

WHEREAS, on December 31, 2010, the Company was converted from a Kansas corporation into a Kansas limited liability company, and upon such conversion, the Member was admitted as the sole member of the Company; and

WHEREAS, the Member desires to enter into the following Agreement.

NOW THEREFORE, the Member, intending to be legally bound, hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is N. R. HAMM QUARRY, LLC.

2. Filing of Certificates . The Member, as an authorized person, within the meaning of the Kansas Revised Limited Liability Company Act (the “ Act ”), shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates required or permitted by the Act to be filed in the Office of the Secretary of State of Kansas. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The purpose of the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Kansas law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 609 Perry Place, Perry, Kansas 66073.


6. Registered Office; Registered Agent . The address of the registered office of the Company is 609 Perry Place, Perry, Kansas, 66073, and the name of the registered agent of the Company is Scott Anderson, unless otherwise changed pursuant to a duly authorized action of the Member.

7. Member . Effective as of the date hereof the Member of the Company is that Person listed on the attached Exhibit A , as properly amended from time to time.

8. Limited Liability . As set forth in the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . Management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Kansas. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, Chief Executive Officer, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Act, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

2


Name

  

Title

N. Rodney Hamm

   President

Gary E. Hamm

   Vice President

C. Scott Anderson

   Treasurer

Ramona A. Gray

   Secretary

Michael Brady

   Vice President

Damian Murphy

   Vice President

Glenn Culpepper

   Assistant Treasurer

Anthony Keenan

   Assistant Secretary

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Kansas and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Kansas for directors and officers of corporations organized under the laws of the State of Kansas. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof

16. Assignments . The Member may at any time assign or transfer in whole or in part its limited liability company interest in the Company. If the Member assigns or transfers all of its interest pursuant to this Section 16, the transferee shall be admitted to the Company as a member and shall become the Member for all purposes hereunder. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor member shall cease to be a member of the Company. Upon such a transfer, the transferee member shall amend Exhibit A hereto, to reflect the name and ownership of such member.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

 

3


18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iii) any order of a court of competent jurisdiction requiring dissolution under Section 17-76,117 of the Act, and amendments thereto.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 11 hereto.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Kansas (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

[ Signature page follows .]

 

4


IN WITNESS WHEREOF , the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the date first written above.

 

HAMM, INC.
By:   /s/ Michael Brady
 

Name: Michael Brady

Title: Vice President


EXHIBIT A

OWNERSHIP

December 31, 2010

 

Member

  

Percentage Interest

HAMM, INC.

   100%

Exhibit 3.36

ARTICLES OF INCORPORATION

QUINCY QUARRIES, INC.

KNOW ALL MEN BY THESE PRESENTS:

That I, Dan Rogers Adams, of Springfield, Kentucky, do hereby form a corporation under the laws of Kentucky.

ARTICLE I. The name of the corporation shall be QUINCY QUARRIES, INC.

ARTICLE II. The objects and purposes for which this corporation is formed and the nature of the business proposed to be transacted and carried on by it is:

To mine, quarry, reduce, treat, prepare for use, transport, and deal in ores, minerals, metals, coal, stone, clay, and raw materials generally, and their products, direct and incidental.

To carry on and conduct in every phase the general contracting and construction business, including the construction of all types and kinds of public works and private works and structures.

To purchase, own, hold, lease and otherwise acquire all real estate or personal property which may be necessary or convenient in the operation of said business and to engage in and do all things incident, necessary or convenient to any of said operations or businesses above set forth.


The foregoing shall be construed both as objects and powers; it being expressly provided that such enumeration of powers is intended to be general and shall not limit or restrict in any manner the powers of the corporation; and it shall exercise all powers granted to corporations under the provisions of Chapter 271, Kentucky Revised Statutes, and other laws in force at this time.

ARTICLE III. The corporation shall have perpetual existence.

ARTICLE IV. The registered office of the corporation shall be at Springfield, Kentucky, and the resident agent is Dan Rogers Adams, Springfield, Kentucky.

ARTICLE V. The total authorized capital stock of the corporation shall be One Hundred Thousand ($100,000.00) Dollars, divided into one thousand (1,000) shares of common stock, each being of equal dignity and of the par value of one hundred ($100.00) dollars each. All of the stock issued and outstanding, at any time, shall have equal privileges, preferences, voting powers, restrictions and qualifications with all other stock then issued and outstanding.

ARTICLE VI. The corporation shall commence business with a paid-in capital of One Thousand ($1,000.00) Dollars. All shares not subscribed for may be issued at such times and upon such terms as the Board of Directors may, from time to time, direct.


ARTICLE VII. The incorporator and the number of shares for which he has subscribed is as follows;

Dan Rogers Adams, Springfield, Kentucky 10 shares

ARTICLE VIII. There shall be three (3) directors elected at the first meeting of the shareholders.

ARTICLE IX. The Board of Directors may adopt bylaws for the corporation and may amend same, from time to time, subject to the power of the shareholders to amend or repeal same.

ARTICLE X. The private property of the shareholders shall not be subject to payment of the debts of the corporation.


IN WITNESS WHEREOF, the said Dan Rogers Adams has subscribed his name this 18 day of November, 1961.

 

/s/ Dan Rogers Adams

 

STATE OF KENTUCKY    )
   ) SCT.
COUNTY OF WASHINGTON    )

I, Helen Mullican, a Notary Public for the State and County a o said, do certify that this day Dan Rogers Adams produced the foregoing Articles of Incorporation before me in my County and acknowledged same to be his act and deed for the purposes therein stated.

Witness my hand and seal this 18 day of November, 1961. My Commission expires the 20 day of May , 1962 .

 

/s/ Helen Mullican
Notary Public,
Washington County,
Kentucky


AMENDMENT TO ARTICLES OF INCORPORATION

OF

QUINCY QUARRIES, INC.

Article One of the Articles of Incorporation of Quincy Quarries, Inc. is amended as follows:

ARTICLE ONE         The name of the Corporation shall be:

 

 

BOURBON LIMESTONE COMPANY
/s/ Buckner Hinkle
Buckner Hinkle, President

 

/s/ W. W. Walker
W. W. Walker, Secretary

 

STATE OF OHIO    )
   ) SS:
COUNTY OF HAMILTON    )

The undersigned, a Notary Public in and for said state, does hereby certify that on this 7 day of November, 1979, personally appeared H. W. Walker, who, being first duly sworn, declared that he is the secretary of the corporation, that the Amendment to the Articles of Incorporation set forth above was unanimously adopted by the Board of Directors and the Shareholders of the corporation at meetings duly called and held on June 6, 1979, pursuant to proper notice duly given, and that the statements above set forth and set out in the Amendment to the Articles of Incorporation are true.

 

/s/ John L. Campbell
NOTARY PUBLIC

 

5


STATE OF KENTUCKY    )
   ) SS:
COUNTY OF BOURBON    )

The undersigned, a Notary Public in and for said state, does hereby certify that an this 14th day of November, 1979, personally appeared Buckner Hinkle, who, being first duly sworn, declared that he is the president of the corporation, that the Amendment to the Articles of Incorporation set forth above was unanimously adopted by the Board of Directors and the Shareholders of the corporation at meetings duly called and held on June 6, 1979, pursuant to proper notice duly given, and that the statements above set forth and set out in the Amendment to the Articles of Incorporation are true.

 

/s/ Debbie Pridemore
NOTARY PUBLIC

 

6


COMMONWEALTH OF KENTUCKY

OFFICE OF

SECRETARY OF STATE

 

DREXELL R. DAVIS

Secretary

 

FRANKFORT,

KENTUCKY

CERTIFICATE OF AMENDMENT

TO ARTICLES OF INCORPORATION

DREXELL R. DAVIS, Secretary of State of the Commonwealth of Kentucky, do hereby certify that Amended Articles of Incorporation of

 

                                         QUINCY QUARRIES, INC.                          Changing Name to

                                         BOURBON LIMESTONE COMPANY

amended pursuant to Kentucky Revised Statutes, 2714, 2 8 duly signed and verified or acknowledged according to law, have been filed in my office by said corporation, and that all taxes, fees and charges payable upon the filing of said Articles of Amendment have been paid,

     Given under my hand and seal of Office as Secretary of State, at Frankfort, Kentucky,
this 19 TH day of NOVEMBER , 19 79
  

/s/ Drexell R. Davis

   SECRETARY OF STATE
  

 

   ASSISTANT SECRETARY OF STATE
SECRETARY OF STATE   


AMENDMENT TO ARTICLES OF INCORPORATION

OF

QUINCY QUARRIES, INC.

Article One of the Articles of Incorporation of Quincy Quarries, Inc. is amended as follows:

ARTICLE ONE The name of the Corporation shall be:

BOURBON LIMESTONE COMPANY

 

/s/ Buckner Hinkle

Buckner Hinkle, President

/s/ H.W. Walker

H. W. Walker, Secretary

 

STATE OF OHIO   )  
  )   SS:
COUNTY OF HAMILTON   )  

The undersigned, a Notary Public in and for said state, does hereby certify that on this 7th day of November, 1979, personally appeared Buckner Hinkle, who, being first duly sworn, declared that he is the president of the corporation, that the Amendment to the Articles of Incorporation set forth above was unanimously adopted by the Board of Directors and the Shareholders of the corporation at meetings duly called and held on June 6, 1979, pursuant to proper notice duly given, and that the statements above set forth and set out in the Amendment to the Articles of Incorporation are true.

 

/s/ John L. Campbell

Notary Public


STATE OF KENTUCKY   )  
  )   SS:
COUNTY OF BOURBON    

The undersigned, a Notary Public in and for said state, does hereby certify that on this 14 th day of November, 1979, personally appeared Buckner Hinkle, who, being first duly sworn, declared that he is the president of the corporation, that the Amendment to the Articles of Incorporation set forth above was unanimously adopted by the Board of Directors and the Shareholders of the corporation at meetings duly called and held on June 6, 1979, pursuant to proper notice duly given, and that the statements above set forth and set out in the Amendment to the Articles Incorporation are true.

 

/s/ Debbie Pridemore
Notary Public
My commission expires March 3, 1983


ARTICLES OF AMENDMENT

TO THE

ARTICLES OF INCORPORATION

OF

BOURBON LIMESTONE COMPANY

Bourbon Limestone Company, a Kentucky corporation (the “ Corporation ”), sets forth the following Articles of Amendment to its Articles of Incorporation:

ARTICLE I

The name of the Corporation is: Bourbon Limestone Company.

ARTICLE H

The text of the amendment to the Corporation’s Articles of Incorporation is: A new Article XI shall be added to the Corporation’s Articles of Incorporation which shall read in its entirety as follows:

ARTICLE XI.

Section 1 . No director of the Corporation shall be personally liable to the Corporation or its shareholders for monetary damages for any breach of his duties as a director, except for liability (i) for any transaction in which the director’s personal financial interest is in conflict with the financial interests of the corporation or its shareholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or are known to the director to be a violation of law; (iii) for any vote for or assent to an unlawful distribution to shareholders as prohibited under KRS 2718.8-330; or (iv) for any transaction from which the director derived an improper personal benefit.

Section 2 . The Corporation shall, to the fullest extent permitted by Kentucky law, indemnify any director of the Corporation from and against any and all reasonable costs and expenses (including, but not limited to, attorneys’ fees) and any liabilities (including, but not limited to, judgments, fines, penalties and reasonable settlements) paid by or on behalf of, or imposed against, such person in connection with any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative, investigative or other (including any appeal relating thereto), whether formal or informal, and whether made or brought


by or in the right of the Corporation or otherwise, in which such person is, was or at any time becomes a party or witness, or is threatened to be made a party or witness, or otherwise, by reason of the fact that such person is, was or at any time becomes a director of the Corporation or, at the Corporation’s request, a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

Section 3 . The indemnification authorized by Section 2 shall not be exclusive of any other right of indemnification which any such person may have or hereafter acquire under any provision of these Articles or. the Bylaws of the Corporation, agreement, vote of shareholders or disinterested directors or otherwise. The

Corporation may take such steps as may be deemed appropriate by the board of directors to provide and secure indemnification to any such person, including, without limitation, the execution of agreements for indemnification between the Corporation and individual directors which may provide rights to indemnification which are broader or otherwise different than the rights authorized by Section 2.

ARTICLE III

The amendment does not provide for an exchange, reclassification or cancellation of issued shares.

ARTICLE IV

The amendment was duly adopted by the Corporation’s board of directors by unanimous written consent dated June 17 , 2011 and by the Corporation’s sole shareholder by written consent dated June 17 , 2011.

ARTICLE V

(a) There were 400 of the Corporation’s common shares outstanding on June 17 , 2011. The sole shareholder of the Corporation’s common shares constituted the only voting group entitled to vote on the amendment. There were 400 votes entitled to be cast by the sole shareholder of the Corporation’s common shares.

(b) The written consent of the sole shareholder dated June 17 , 2011 had the effect of a unanimous vote at a meeting. Accordingly, the total number of undisputed votes cast for the amendment was 400. The number of votes cast for the amendment was sufficient to approve and adopt the amendment.

 

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ARTICLE VI

These Articles of Amendment shall be effective when filed.

Date: June 17 , 2011

BOURBON LIMESTONE COMPANY
By:  

/s/ Thomas S. Hinkle

Printed Name: Thomas S. Hinkle
Title:   Executive Vice President

 

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Exhibit 3.37

BYLAWS

QUINCY QUARRIES, INC.

Article I.

MEETINGS OF STOCKHOLDERS.

Sec. 1. ANNUAL MEETING. The annual meeting of Stockholders shall be held at the principal office of the Corporation in Springfield, Kentucky, or at such other place as the Board of Directors may determine, on the third Saturday in December of each year, at 10:00 o’clock in the forenoon. If the day so designated falls upon a legal holiday, then the meeting shall be held upon the first secular day thereafter. The Secretary shall serve a written notice thereof to each stockholder at his address as it appears on the stock book, or he may serve same in person; but at any meeting at which all stockholders shall be present, or of which all stockholders not present have waived notice in writing, the giving of notice may be dispensed with.

Sec. 2. QUORUM. The presence, in person or by proxy, of the holders of a majority of the outstanding stock entitled to vote shall constitute a quorum for the transaction of business, but a lesser number may adjourn to some future time, and the Secretary shall thereupon give at least five days notice by mail to each stockholder entitled to vote who was absent from such meeting.

 

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Sec. 3. SPECIAL MEETINGS. Special Meetings of Stockholders, other than those regulated by statute, may be called at any time by the President or by a majority of the Directors. Notice of such meeting, stating the purpose for which it is called, shall be served personally or by mail not less than ten days before the date set for such meeting. If mailed, it shall be directed to a stockholder at his address as it appears on the stock book; but at any meeting at which all stockholders shall be present, or of which stockholders not present have waived notice in writing, the giving of notice may be dispensed with. The Board of Directors shall also, in like manner, call a special meeting of stockholders whenever so requested in writing by stockholders representing not less than one-fifth of the capital stock of the company. No business other than that specified in the call shall be transacted at any special meeting of the stockholders.

Sec. 4. VOTING. At all meetings of the Stockholders all questions, the manner of deciding which is not specifically regulated by statute, shall be determined by a majority vote of the Stockholders present in person or by proxy; provided, however, that any qualified voter may demand a stock vote, in which case each Stockholder present, in person or by proxy, shall be entitled to cast one vote for each share of stock owned or represented by him. All voting shall be viva voce, except

 

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that a stock vote shall be by ballot, each of which ballots shall state the name of the Stockholder voting and the number of shares owned by him, and in addition, if such ballot be cast by proxy, the name of the proxy shall be stated. The casting of all votes at special meetings of stockholders shall be governed by the provisions of the Corporation Laws of this State.

Sec. 5. ORDER OF BUSINESS. The order of business at all meetings of the stockholders, shall be as follows:

1. Roll Call.

2. Proof of notice of meeting or waiver of notice.

3. Reading of minutes of preceding meeting.

4. Reports of Officers.

5. Reports of Committees.

6. Election of Directors.

7. Unfinished Business.

8. New Business.

Article II.

DIRECTORS.

Sec. 1. NUMBER. The affairs and business of this Corporation shall be managed by a Board of Directors, who need not be stockholders of record, at least one of whom shall be a resident of the State of Kentucky and a citizen of the United States. The number of directors shall be determined each year by the stockholders at their annual meeting.

 

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Sec. 2. HOW ELECTED. At the annual meeting of Stockholders, the persons receiving a majority of the votes cast shall be directors and shall constitute the Board of Directors for the ensuing year.

Sec. 3. TERM OF OFFICE. The term of office of each Director shall be one year, and thereafter until his successor has been elected.

Sec. 4. DUTIES OF DIRECTORS. The Board of Directors shall have the control and general management of the affairs and business of the Company. Such Directors shall in all cases act as a Board, regularly convened, by a majority, and they may adopt such rules and regulations for the conduct of their meetings and the management of the Company, as they may deem proper, not inconsistent with these Bylaws, the Articles of Incorporation and the laws of the State of Kentucky.

Sec. 5. DIRECTORS’ MEETINGS. Regular meetings of the Board of Directors shall be held immediately following the annual meeting of the Stockholders, and at such other times as the Board of Directors may determine. Special meetings of the Board of Directors may be called by the President at any time, and shall be called by the President or the Secretary upon the written request of two directors.

 

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Sec. 6. NOTICE OF MEETINGS. Notice of meetings, other than regular meetings, shall be given by service upon each Director in person, or by mailing to him at his last known post-office address, at least five days before the date therein designated for such meeting, of a written or printed notice thereof specifying the time, place and the business to be brought before the meeting. No business other than that specified in the notice shall be transacted at any special meeting. At any meeting at which every member of the Board of Directors shall be present, although held without notice, any business may be transacted which might have been transacted if the meeting had been duly called.

Sec. 7. QUORUM. At any meeting of the Board of Directors, a majority of the Board shall constitute a quorum for the transaction of business; but in the event of a quorum not being present, a less number may adjourn the meeting to some future time, not more than ten days later.

Sec. 8. VOTING. At all meetings of the Board of Directors, each Director shall have one vote, irrespective of the number of shares of stock that he may hold.

Sec. 9. VACANCIES. Vacancies in the Board occurring between annual meetings shall be filled for the unexpired portion of the term by a majority of the remaining Directors.

 

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Article III.

OFFICERS.

Sec. 1. NUMBER, The officers of this Company shall be:

1. President.

2. Vice-President.

3. Secretary.

4. Treasurer.

Any two of said offices may be combined.

Sec. 2. ELECTION. All officers of the Company shall be elected annually by the Board of Directors at its meeting held immediately after the annual meeting of stockholders, and they shall hold office at the will of the Board.

Sec. 3. DUTIES OF OFFICERS. The duties and powers of the officers of the Company shall be as follows:

PRESIDENT.

The President shall preside at all meetings of the Board of Directors and Stockholders.

He shall present at each annual meeting of the Stockholders and Directors a report of the condition of the business of the Company.

He shall cause to be called regular and special meetings of the Stockholders and Directors in accordance with these Bylaws.

He shall appoint and remove, employ and discharge, and fix the compensation of all servants, agents, employees and clerks of the Corporation other than the duly appointed officers, subject to the approval of the Board of Directors.

 

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He shall sign and make all contracts, deeds and agreements in the name of the Corporation.

He shall see that the books, reports, statements and certificates are properly kept and filed.

He shall sign all certificates of stock.

He shall enforce these Bylaws and perform all the duties incident to the position and office, and which are required by law.

VICE-PRESIDENT.

During the absence and inability of the President to render and perform his duties or exercise his powers, as set forth in these Bylaws or the laws under which this Corporation is organized, the same shall be performed and exercised by the Vice-President; and when so acting, he shall have all the powers and be subject to all the responsibilities hereby given to or imposed upon such President.

SECRETARY.

The Secretary shall keep the minutes of the meetings of the Board of Directors and of the Stockholders.

He shall give and serve all notices of the corporation.

He shall be custodian of the records and of the seal, and affix the latter when required.

 

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He shall keep the stock and transfer books in the manner prescribed by law, so as to show at all times the amount of capital stock, the manner and the time the same was paid in, the names of the owners thereof, their respective places of residence, their post-office address, the number of shares owned by each, the time at which each person became such owner, and the amounts paid thereon; and keep such stock and transfer books open daily during business hours at the office of the Corporation, subject to the inspection of any Stockholder of the corporation, and permit such Stockholder to make extracts from said books to the extent and as prescribed by law.

He shall sign all certificates of stock.

He shall attend to all correspondence and perform all the duties incident to the office of Secretary.

TREASURER.

The Treasurer shall have the care and custody of and be responsible for all the funds and securities of the Corporation, and shall deposit all such funds in the name of the Corporation in such bank or banks, trust company or trust companies or safe deposit vaults as the Board of Directors may designate.

He shall exhibit at all reasonable times his books and accounts to any director or stockholder of the Company upon application at the office of the Corporation during business hours.

 

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He shall render a statement of the condition of the finances of the Corporation at each regular meeting of the Board of Directors, and at such other times as shall be required of him, and a full financial report at the annual meeting of the stockholders.

He shall keep at the office of the Corporation, correct books of account of all its business and transactions and such other books of account as the Board of Directors may require.

He shall do and perform all duties pertaining to the office of Treasurer.

Sec. 4. VACANCIES, HOW FILLED. All vacancies in any office, shall be filled by the Board of Directors without undue delay, at its regular meeting, or at a meeting specially called for that purpose.

Sec. 5. COMPENSATION OF OFFICERS. The officers shall receive such salary or compensation as may be determined by the Board of Directors.

Sec. 6. The Board of Directors may remove any officer, by a majority vote, at any time with or without cause.

Article IV.

Sec. 1. SEAL. The seal of the corporation shall be as follows:

 

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Article V.

Sec. 1. FISCAL YEAR. The books of the corporation shall be kept and maintained on a fiscal year, commencing the first day of January in each year and ending the thirty-first day of December of that year.

Article VI.

CERTIFICATES OF STOCK.

Sec. 1. DESCRIPTION OF STOCK CERTIFICATES. The certificates of stock shall be numbered and registered in the order in which they are issued. They shall be issued in consecutive order, and in the stock book or books shall be entered the name of the person owning the shares therein represented, with the number of shares and the date of issue. They shall be signed by the President or Vice-President, and countersigned by the Secretary and sealed with the seal of the Corporation.

Sec. 2. TRANSFER OF STOCK. The stock of the corporation shall be assignable and transferable on the books of the corporation only by the person in whose name it appears on said books, or his legal representative. In all cases of transfer, the former certificate must be surrendered and cancelled before a new certificate may be issued. No transfer shall be made upon the books of the corporation within ten days next preceding the annual meeting of the shareholders.

 

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Article VII.

DIVIDENDS.

Sec. 1. WHEN DECLARED. The Board of Directors shall by vote declare dividends from the surplus profits of the Corporation whenever, in their opinion, the condition of the Corporation’s affairs will render it expedient.

Article VIII.

BILLS, NOTES, ETC.

Sec. 1. HOW MADE. All bills payable, notes, checks or other negotiable instruments of the Corporation shall be made in the name of the Corporation, and shall be signed by the President, Vice-President, Treasurer or Secretary. No officer or agent of the Corporation, either singly or jointly with others, shall have the power to make any bill payable, note, check, draft or warrant or other negotiable instrument, or endorse the same in the name of the Corporation, or contract or cause to be contracted any debt or liability in the name or in behalf of the Corporation, except as herein expressly prescribed and provided.

Article IX.

AMENDMENTS.

Sec. 1. HOW AMENDED. These Bylaws may be altered, amended or repealed by an affirmative vote of the stockholders representing a majority of the stock present, at an annual meeting or at a special meeting called for that purpose.

 

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Article X.

ENACTMENT.

Adopted at a meeting of the Directors held on the first  day of December  , 1961, to take immediate effect.

 

/s/ J.C. Codell, Jr.
        President

 

Attest:
/s/ Beverly White
        Secretary

 

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Exhibit 3.38

ARTICLES OF ORGANIZATION

OF

GLASS PAVING AND STONE, LLC

 

 

The undersigned hereby forms and organizes a limited liability company pursuant to the Kentucky Limited Liability Company Act and adopts the following Articles of Organization of such limited liability company.

Article I

The name of the limited liability company is Glass Paving and Stone, LLC.

Article II

The name and street address of the registered agent is:

Mr. Henry Hinkle

395 North Middletown Road

Paris, KY 40361

Article III

The mailing address of the initial principal place of business of the limited liability company is:

2870 Jackson Highway

Glasgow, KY 42141

Article IV

The company shall be manager managed.

Article V

The duration a the limited liability company shall be perpetual, save and until its dissolution in accordance with the Kentucky Limited Liability Company Act and the operating agreement of the limited liability company.


Article VI

No member, manager, officer, employee or agent of the limited liability company shall be personally liable by reason of being a member, manager, officer, employee or agent of the limited liability company, under a judgment, decree or order of a court, agency or tribunal of any type, or in any manner, in this or any other state, or on any other basis, for a debt, obligation or liability of the limited liability company, whether arising in contract, tort or otherwise.

The status of a person as a member, manager, officer, employee, or agent of the limited liability company, shall not subject them to personal liability for the acts or omissions, including any negligence, wrongful act or actionable misconduct, of any other member, manager, officer, agent or employee of the limited liability company.

No member, manager or officer of the limited liability company shall be liable, responsible or accountable in damages or otherwise to the limited liability company or the members thereof for any action taken or failure to act on behalf of the limited liability company unless the act or omission constitutes wanton or reckless misconduct.

The limited liability company shall indemnify any member, officer and/or manager for any judgments, settlements, penalties, fines or expenses incurred in a proceeding to which a person is a party because the person is or was a member of the limited liability company.

 

Date: 04/12/06

  BY:   /s/ Henry Hinkle
    HENRY HINKLE

 

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Consent of Initial Agent for Service of Process

I, Henry Hinkle, 395 North Middletown Road, Paris, Kentucky 40361, hereby agree and consent to serve as registered office and agent for service of process of Glass Paving and Stone, LLC.

 

Date: 04/12/06

    /s/ Henry Hinkle
    HENRY HINKLE

This Instrument Prepared By:

ENGLISH, LUCAS, PRIEST & OWSLEY, LLP

Attorneys at Law

11-01 College Street

P.O. Box 770

Bowling Green, KY 42102-0770

Phone: (270) 781-6500

By:   /s/ Brett A. Reynolds
  BRETT A. REYNOLDS

 

 

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ARTICLES OF AMENDMENT

TO THE

ARTICLES OF ORGANIZATION

OF

GLASS PAVING AND STONE, LLC

GLASS PAVING AND STONE, LLC, a Kentucky limited liability company (the “ Company ”), sets forth the following Articles of Amendment to its Articles of Organization:

Article I. The name of the Company is: Glass Paving and Stone, LLC.

Article II. Article I of the Company’s Articles of Organization is hereby amended to read in its entirety as follows:

ARTICLE I

NAME

The name of the Company is: Glass Aggregates, LLC.

Article III. The foregoing amendment was duly adopted by the Company’s managers and members in accordance with Chapter 275 of the Kentucky Revised Statutes.

Dated: July 26, 2010.

 

GLASS PAVING AND STONE, LLC
By:   /s/ Thomas Hinkle
  Thomas Hinkle, a Manager


COMMONWEALTH OF KENTUCKY

TREY GRAYSON, SECRETARY OF STATE

 

Division of Corporations

Business Filings

PO Box 718

Frankfort, KY 40602

(502) 564-3490 www.sos.ky.gov

  

Certificate of Assumed Name

(Domestic or Foreign Business Entity)

  

ASN

 

Pursuant to the provisions of KRS 365, the undersigned applies to assume a name and, for that purpose, submits the following statement:

 

1. The assumed name is:

Glass Sand and Gravel

 

 

2. The name of the business entity (and in the case of general partnership, the partners) that is/are adopting the assumed name:

Glass Paving and Stone, LLC

 

Name must be identical to the name on record with the Secretary of State.)

 

3. The “real name” is (you must check one):

 

¨ a Domestic General Partnership   ¨ a Foreign General Partnership
¨ a Domestic Limited Liability Partnership   ¨ a Foreign Limited Liability Partnership
¨ a Domestic Limited Partnership   ¨ a Foreign Limited Partnership
¨ a Domestic Business Trust   ¨ a Foreign Business Trust
¨ a Domestic Corporation   ¨ a Foreign Corporation
x a Domestic Limited Liability Company   ¨ a Foreign Limited Liability Company

 

4. The business Is organized and existing in the state or country of Kentucky

 

5. This application will be effective upon filing, unless a delayed effective date and/or time is provided. The effective date or the delayed effective cannot be prior to the date the application Is filed. The date and/or time is _____________________________

(Delayed effective data  

and /or time    

 

6.   The Mailing address is:         
  2870 Jackson Highway    Glasgow    KY    42141
 

 

  Street Address or Post Office Box Numbers    City    State    Zip

I declare under penalty of perjury under the laws of Kentucky that the forgoing is true and correct.

 

/s/ Henry Hinkle    Henry Hinkle    Chairman    11/20/09
Authorize Party Signature    Printed name    Title    Date


ARTICLES OF AMENDMENT

TO THE

ARTICLES OF ORGANIZATION

OF

GLASS PAVING AND STONE, LLC

GLASS PAVING AND STONE, LLC, a Kentucky limited liability company (the “ Company ”), sets forth the following Articles of Amendment to its Articles of Organization:

Article I. The name of the Company is: Glass Paving and Stone, LLC.

Article II . Article I of the Company’s Articles of Organization is hereby amended to read in its entirety as follows:

ARTICLE I

NAME

The name of the Company is: Glass Aggregates, LLC.

Article III. The foregoing amendment was duly adopted by the Company’s managers and members in accordance with Chapter 275 of the Kentucky Revised Statutes.

Dated: July 26, 2010.

 

GLASS PAVING AND STONE, LLC
By:  

/s/ Thomas Hinkle

  Thomas Hinkle, a Manager

Exhibit 3.39

GLASS PAVING AND STONE, LLC

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

 

 

This LIMITED LIABILITY COMPANY OPERATING AGREEMENT (the “Agreement”), is effective on the 17 day of April, 2006, among the parties executing the signature page hereto as Members.

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

1.1 Formation and Effective Date of Agreement . The Members have formed a limited liability company (the “LLC”) pursuant to the Kentucky Limited Liability Company Act, by causing Articles of Organization for the LLC conforming to the requirements of the Act to be filed with the Secretary of State of the Commonwealth of Kentucky on April 13, 2006.

1.2 Name and Principal Place of Business . Until amended in accordance with this Agreement and the Act, the name of the LLC will be “GLASS PAVING AND STONE, LLC.” The principal place of business of the LLC shall initially be 2870 Jackson Highway, Glasgow, Kentucky 42141, or in such other place as the Members from time to time determine.

1.3 Agent for Service of Process . Until such time as the Members have appointed a different person to act in the Commonwealth of Kentucky as agent of the LLC for service of process, the LLC’s agent for service of process in the Commonwealth of Kentucky shall be Henry Hinkle whose address is P. O. Box 200, 395 North Middletown Road, Paris, Kentucky 40361.


1.4 Agreement . For and in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Members executing this Agreement hereby agree to the terms and conditions of this Agreement, as it may from time to time be amended. It is the express intention of the parties hereto that this Agreement shall be the sole statement of agreement among them, and, except to the extent a provision of this Agreement expressly incorporates another document, federal income tax laws by reference to sections of the Code or Treasury Regulations or is expressly prohibited or ineffective under the Act, the Agreement shall govern even when inconsistent with or different from the provisions of the Act or any other law or rule. To the extent any provision of the Agreement is prohibited or ineffective under the Act, the Agreement shall be considered amended to the smallest degree possible in order to make the Agreement effective under the Act. In the event the Act is subsequently amended or interpreted in such a way to make valid any provision of the Agreement that was formerly invalid, such provision shall be considered to be a part of this Agreement from and after the date of such interpretation or amendment.

1.5 Purpose and Powers of Company . The purposes of the LLC shall be to engage in the transaction of any and all lawful businesses for which limited liability companies may be organized under the Act. The LLC shall have all powers and rights of a limited liability company organized under the Act to the extent such powers and rights are not limited by this Operating Agreement.

1.6 Definitions . Terms not otherwise defined in this Agreement shall have the meanings set forth in Article XIII.

 

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1.7 Term . The term of the LLC shall begin upon the filing of the Articles of Organization and its duration shall be perpetual unless its existence is sooner terminated pursuant to Article XII of this Agreement.

ARTICLE II

MEMBERSHIP

2.1 Initial Members . The Initial Members of the LLC are set forth on EXHIBIT A hereto, each of whom is admitted to the LLC as a Member as of the date this Agreement becomes effective.

2.2 LLC Shares . Ownership of the LLC shall be divided into and represented by one class of shares (“Shares”), all of which shall have identical rights to distributions and liquidation proceeds. Each Share shall be entitled to one vote. The total number of Shares which the LLC is authorized to issue shall be ONE THOUSAND (1,000). Fractional Shares may be issued.

2.3 Preemptive rights . The Members shall have a preemptive right granted on uniform terms and conditions prescribed by the Board of Managers, to provide a fair and reasonable opportunity to exercise the right to acquire proportional amounts of the LLC’s unissued Shares upon the decision of the Board of Managers to issue them.

2.4 New Classes of Shares . No new class of shares or interests having rights or preferences different to those of the existing Shares may be issued, nor may the Board of Managers issue more than the total number of authorized Shares of the LLC without the unanimous approval of the Members.

 

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ARTICLE III

CONTRIBUTIONS TO CAPITAL

3.1 Initial Contributions . Contemporaneously with the execution of this Agreement, each Member has paid in cash to the LLC the amount set forth in exchange for its Shares.

3.2 Issuance of Shares . In exchange for the payments of the Members, the Members shall be issued that number of Shares set forth opposite their names on EXHIBIT A.

3.3 Additional Contributions . No Member shall be permitted or required to make any additional contribution to the capital of the LLC without the .consent of the Board of Managers and the unanimous consent of the Members.

3.4 Interest . No Member shall be entitled to payment of interest with respect its Shares.

ARTICLE IV

MANAGEMENT OF THE COMPANY AND ITS OPERATIONS

4.1 Management of the LLC Vested in the Board of Managers . A corporate form of governance is adopted by the LLC; therefore, except as otherwise provided in Article IV, Section 4.3(b), management of the LLC shall be vested in Managers who shall comprise the Board of Managers, and who shall elect officers.

4.2 Meetings of the Members .

(a) Annual meetings . An annual meeting of the Members shall be held at the principal office of the LLC between the hours of 10 a.m. and 12 noon, local prevailing time, on the first Tuesday of May of each and every year for the purpose of electing Managers and for such other business as may be authorized by the Members. The notice of the annual meeting shall be given to each Member by the Secretary no fewer than ten (10) days and no more than seventy (70) days prior to the date of the meeting.

 

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(b) Special Meetings . Special meetings of the Members which may be held for any purpose or purposes, may be called by the Chairman of the Board (if any), by the President, by the Board of Managers, or by Members owning not less than fifty percent (50%) of the Shares issued and outstanding.

(c) Place of Meeting . Meetings of the Members shall be held at the principal office of the LLC or such other place within or without the Commonwealth of Kentucky as may be designated by the person or persons calling the meeting.

(d) Notice of Meetings . Unless waived, written notice of each meeting of Members stating the place, day, and hour of the meeting, and the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than seventy (70) days before the date of the meeting, either personally or by mail, by or at the direction of the person or persons calling the meeting, to each Member.

(e) Quorum . Eighty percent (80%) or more of the issued and outstanding Shares represented in person or by proxy shall constitute a quorum. If a quorum exists, action on a matter (other than the election of a Manager) shall be approved if the votes cast in favor exceed the votes cast against, unless otherwise provided in this Agreement or in the Act.

(f) Proxies . A Member, at any meeting of Members, may vote either in person or by proxy executed in writing by the Member or by the Member’s duly authorized attorney in fact. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. Proxies shall be filed with the Secretary of the LLC before or at the time of such meeting.

 

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(g) Convening Members Meetings . The Chairman of the Board of Managers (if any), or in his absence, the President, or in the absence of any of the foregoing, any other officer designated by the Board of Managers shall call meetings of Members to order and act as chairman thereof; provided, however, that notwithstanding the foregoing, the Members present may elect the chairman of such meeting from among the Members. The Secretary shall act as secretary of all meetings of Members, but in the absence of the Secretary, or if the Secretary is serving as chairman, the chairman may appoint any person to act as secretary.

4.3 Board of Managers .

(a) General Powers . The Board of Managers shall have full and exclusive right, power, and authority to manage the business and affairs of the LLC and make all decisions with respect thereto, except for those matters expressly reserved to the Members by this Agreement or the Act. The Board of Managers shall have the right, power and authority, in the conduct and management of the business of the LLC, to do or cause to be done any and all acts or things deemed by the Board of Managers to be necessary, appropriate, or desirable to carry out or further the business of the LLC. The right, power, and authority of the Board of Managers pursuant to this Agreement shall be liberally construed to encompass all acts and activities in which a limited liability company may engage under the Act.

(b) Actions Requiring Approval of Members . Notwithstanding any other provisions of this Operating Agreement, the written vote, approval, or consent of eighty percent (80%) of the Members shall be required in order for any of the following actions to be taken on behalf of the Company:

(i) Amending the Operating Agreement in any manner.

 

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(ii) Authorizing a Member to do any act on behalf of the Company that contravenes this Operating Agreement, including any written provision hereof which expressly limits the purpose, business, or affairs of the Company or the conduct thereof.

(iii) Taking any action which would make it impossible to carry on the ordinary business of the Company.

(iv) Confessing a judgment against the Company.

(v) Filing or consenting to filing a petition for or against the Company under any federal or state bankruptcy, insolvency or reorganization act.

(vi) Loaning Company funds to any Member.

(c) Number, Term, and Election . The number of Managers constituting the full Board of Managers of the LLC shall be at least three (3) and no more than five (5). The name of the Managers constituting the initial Board of Managers are: Larry D. Glass, Henry Hinkle, Tom Hinkle and Tom Brannock. Each Manager shall hold office until his or her resignation, removal, or death. Upon the resignation, removal, or death of a Manager, the Members shall elect his successor at a special meeting called for such purpose. Managers need not be residents of the Commonwealth of Kentucky and need not be Members of the LLC.

(d) Voting at Meetings, Cumulative Voting . Each Member shall have one (1) vote for each Share owned by a Member. At each election for Manager, each Member shall have the right to cast, in person or by proxy, as many votes in the aggregate as he shall be entitled to vote multiplied by the number of Managers to be elected at such election; and each Member may cast the whole number of votes for one (1) candidate, or distribute such votes among two (2) or more candidates. The Managers shall not be elected in any other manner.

 

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(e) Removal of Managers . One or more Managers or the entire Board of Managers may be removed, with or without cause, at a meeting of Members called expressly for such purpose. Any Manager may also be removed for cause by action of a majority of the entire Board of Managers if the Manager to be removed shall, at the time of removal, fail to meet the qualifications, if any, stated herein for election as a Manager or shall be in breach of any agreement between such Manager and the LLC relating to such Manager’s services as a Manager or employee of the LLC. Notice of the proposed removal shall be given to all Managers of the LLC prior to the action thereon.

(f) Regular Meetings . A regular annual meeting of the Board of Managers shall be held without notice immediately following the annual meeting of the Members, beginning with the year 2006, or on such other day within such month as shall be fixed by the Board of Managers. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day. The Board of Managers may provide, by resolution fixing the time and place thereof, for the holding of additional regular meetings, which may thereafter be held at the designated time and place, without further notice thereof to the Managers.

(g) Special Meetings . Special meetings of the Board of Managers may be called by or at the request of the Chairman of the Board (if any), the President, or by any Manager. Unless waived, written notice of any special meeting, stating the place, day, and hour thereof shall be given at least five (5) days prior thereto by the person or persons calling the meeting, to each Manager. Neither the business to be transacted at, nor the purpose of, any meeting of the Board of Managers need be specified in the notice or waiver of notice of such meeting.

 

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(h) Place of Meetings . Meetings of the Board of Managers or of any committee designated by the Board of Managers may be held at any place either within or without the Commonwealth of Kentucky.

(i) Quorum . A majority of the number fixed as the full Board of Managers by this Agreement shall constitute a quorum for the transaction of business. The act of the majority of the Managers present at a meeting at which a quorum is present shall be the act of the Board of Managers.

(j) Committees . The Board of Managers, by resolution adopted by a majority of the number of Managers fixed as the full Board of Managers by this Agreement, may designate one (1) or more Managers to constitute a committee. Each such committee, to the extent provided in the resolution, shall have and exercise all of the authority of the Board of Managers in the management of the LLC; provided, however, that any or all members of each such committee may be removed at any time, with or without cause, by vote of a majority of the number of Managers fixed as the full Board of Managers by this Agreement. Unless the Board of Managers provides for a greater number, a majority of the members constituting each such committee shall be a quorum and the act of such majority shall be the act of such committee.

(k) Compensation . Each Manager may be reimbursed for the expenses, if any, incurred by him in attending each meeting of the Board of Managers, and may be paid such compensation as the Board of Managers may from time to time determine.

4.4 Officers .

(a) General . The principal executive officers of the LLC (in addition to the Chairman of the Board of Managers, if any) shall be a President, one (1) or more Vice Presidents (any of whom may be designated with descriptive titles), a Secretary, and a Treasurer; provided,

 

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that the Board of Managers may, in its discretion, limit the principal executive officers of the LLC to a President and a Secretary. The Board of Managers may appoint such other officers and agents (including, but not limited to, a Chairman of the Board of Managers and one or more Assistant Vice Presidents, Assistant Secretaries, and Assistant Treasurers), as it shall deem necessary, who shall have such authority and shall perform such duties as are set out in this Agreement or as from time to time shall be prescribed by the Board of Managers. Any two (2) or more of the aforesaid offices may be filled by the same person. The Board of Managers, at its first annual meeting and thereafter from time to time, shall elect the principal executive officers and other officers of the LLC, who shall serve at the pleasure of the Board of Managers. Any officer or agent may be removed by the Board of Managers, with or without cause, whenever in its judgment the best interests of the LLC will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. The Board of Managers shall determine the salary and other compensation of all officers and agents of the LLC.

(b) Chairman of the Board . The Chairman of the Board (if any) shall preside at meetings of the Board of Managers and shall have such other powers and duties as the Board of Managers shall assign to the Chairman of the Board.

(c) President . The President shall be the chief executive officer of the LLC, with the powers and duties which attach to such position. If no Chairman of the Board is serving, or in the absence of the Chairman of the Board, the President shall preside at the meetings of the Board of Managers.

 

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(d) Vice Presidents . Vice Presidents shall perform such duties and exercise such powers as shall be delegated by the chief executive officer or as shall be designated by the Board of Managers.

(e) Secretary . The Secretary shall attend all meetings of the Board of Managers and the Members, except as otherwise provided in this Agreement, shall act as clerk thereof and record all votes and the minutes of all proceedings in the book to be kept for that purpose. The Secretary shall keep in safe custody the seal of the LLC (if one) and, when authorized by the Board of Managers, affix the seal to any instrument requiring the attention thereof. The Secretary shall give, or cause to be given, a notice as required of all meetings of the Members and of the Board of Managers; the Secretary shall keep or cause to be kept Share certificates (if any) and a transfer book and a list of all the Members and their respective addresses and shall perform such other duties as may be prescribed by the Board of Managers or by the chief executive officer, under whose supervision the Secretary shall be.

(f) Treasurer . The Treasurer shall have the custody of the LLC’s funds and securities and shall keep or cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the LLC and shall deposit all monies and other valuable effects in the name and to the credit of the LLC in such depositaries as may be designated by the Board of Managers. The Treasurer shall disburse the funds of the LLC as may be ordered by the Board of Managers, taking proper vouchers for such disbursements and shall render to the chief executive officer and Managers at the regular meetings of the Board of Managers, an account of all the Treasurer’s transactions as the Treasurer and of the financial condition of the LLC.

 

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(g) Assistant Secretaries and Assistant Treasurers . The Assistant Secretary or Secretaries, if one (1) or more, shall be elected by the Board of Managers, shall perform such duties and exercise such powers as shall be delegated by the Secretary or as shall be designated by the chief executive officer or by the Board of Managers. An Assistant Secretary may, in the absence or disability of the Secretary, perform all the duties and exercise all the powers of the Secretary. The Assistant Treasurer or Treasurers, if one (1) or more, shall be elected by the Board of Managers, shall perform such duties and exercise such powers as shall be delegated by the Treasurer or as shall be designated by the chief executive officer or by the Board of Managers. An Assistant Treasurer may, in the absence or disability of the Treasurer, perform all the duties and exercise all the powers of the Treasurer.

(h) Vacancies . If the office of any officer of the LLC becomes vacant because of death, resignation, removal, or for any other reason, or if any officer of the LLC is unable to perform the duties of his office for any reason, the Board of Managers may choose a successor who shall replace such officer or the Board of Managers may delegate the duties of any such vacant office to any other officer or to any Manager of the LLC for the unexpired portion of the term.

4.5 Insurance . The Board of Managers shall have the power to cause the LLC to purchase and maintain insurance on behalf of any person who is or was a Manager, officer, employee, or agent of the LLC, or is or was serving at the request of the LLC as a Manager, director, trustee, officer, employee, or agent of another limited liability company, corporation, partnership, joint venture, trust, or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the LLC would have the power to indemnify him against such liability under the provisions of this Agreement.

 

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4.6 Conflicts of Interest .

(a) Unless otherwise prohibited by separate legal agreements from this Operating Agreement, a Member or Manager shall be entitled to enter into transactions that may be considered to be competitive with, or a business opportunity that may be beneficial to, the LLC, it being expressly understood that one or more of the Members or Managers may enter into transactions that are similar to the transactions into which the LLC may enter. Notwithstanding the foregoing, a Member or Manager shall account to the LLC and hold as a trustee for it any property, profit or benefit derived by a Member or a Manager, without the consent of the other Members, in the conduct of the LLC business or from a use or appropriation by the Member or Manager of LLC property including information developed exclusively for the LLC and opportunities expressly offered by third parties to the LLC.

(b) A Member does not violate a duty or obligation to the LLC merely because the Member’s or Manager’s conduct furthers the Member’s or Manager’s own interest. A Member or Manager may lend money at commercially reasonable rates and transact other business with the LLC. The rights and obligations of a Member or Manager who lends money to or transacts business with the LLC are the same as those of a person who is not a Member or Manager, subject to other applicable law. No transaction with the LLC shall be voidable solely because a Member or Manager has a direct or indirect interest in the transaction if either the transaction is fair to the LLC or the disinterested Members, knowing the material facts of the transaction and the Member’s or Manager’s interest, authorize, approve or ratify the transaction.

4.7 Books of Account . At all times during the existence of the LLC, books of account shall be maintained as directed by the Board of Managers, in which an accurate record of the transactions of the LLC shall be kept.

 

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4.8 Miscellaneous .

(a) Resignations . Any Manager or officer of the LLC may resign from such position at any time by giving written notice to the President or the Secretary.

(b) Fiscal Year . The fiscal year of the LLC shall end on December 31.

(c) Participation in Meetings by Telephone . Members or Managers, as the case may be, may participate in any meeting of the Members, or of the Board of Managers, or of any committee of the Board of Managers, by means of conference telephone or similar communications equipment whereby all persons participating in the meeting can hear each other, and participation in a meeting in this manner shall constitute presence in person at the meeting.

(d) Action Without Meetings . Any action which is required to or may be taken at a meeting of the Members or of the Board of Managers or of any committee of the Board of Managers, may be taken without a meeting if consents in writing, setting forth the action so taken, are signed by all of the Members, or all of the Managers constituting the Board of Managers or such committee, as the case may be. The consents shall have the same force and effect as unanimous vote at a meeting duly held. The Secretary shall file the consents with the minutes of the meetings of the Members or of the Board of Managers or of the committee, as the case may be.

ARTICLE V

NOTICES

5.1 Notices . Whenever, under the provisions of the Act, the Articles of Organization, or this Agreement, notice is required to be given to any Member or Manager, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such Member or Manager at his address as it appears on the records of the LLC with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States Mail. Notice to Members and Managers may also be given by telegram or facsimile.

 

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5.2 Waiver of Notice . Whenever any notice is required to be given under the provisions of the Act, the Certificate of Formation or this Agreement, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE VI

SHARE CERTIFICATES

6.1 Certificates . Every Member of the LLC shall be entitled to have a certificate, signed by the President or a Vice President and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the LLC, certifying the number of Shares owned by him in the LLC.

6.2 Replacement Certificates . The Board of Managers may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the LLC alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the Shares to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Managers may, in their discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificates or certificates, or his legal representative, to give the LLC a bond in such sum as it may direct as indemnity against any claim that may be made against the LLC with respect to the certificates alleged to have been lost, stolen or destroyed.

 

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6.3 Transfers . Upon surrender to the LLC of a certificate for Shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the LLC, provided that the transfer is in compliance with the terms of this Agreement, to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

6.4 Share Register . In order that the LLC may determine the Members entitled to notice of or to consent, approve or vote on any matter, or the Members of Assignees entitled to receive payment of any distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of Shares or for the purpose of any other lawful action, the Board of Managers may fix, in advance, a record date, which shall not be more than seventy (70) nor less than ten (10) days before the date of such action or event.

6.5 Rights of Registered Owner . The LLC shall be entitled to recognize the exclusive right of a person registered on its books as the owner of Shares to receive distributions and to vote as such owner, and to hold liable for any responsibilities of the owner of Shares a person registered on its books as the owner of Shares and shall not be bound to recognize any equitable or other claim to or interest in such Share of Shares on the part of any other person, whether or not it shall have express or other notice thereof.

ARTICLE VII

ACCOUNTING RECORDS AND SPECIAL TAX PROVISION

7.1 Financial and Tax Reporting . The LLC shall prepare its financial statements in accordance with generally accepted accounting principles as from time to time in effect and shall prepare its income tax information returns using such methods of accounting as the Board of Managers deem necessary or appropriate under the Code and Treasury Regulations.

 

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7.2 Supervision, Inspection of Books . Proper and complete books of account and records of the business of the LLC shall be kept under the supervision of the Board of Managers at the LLC’s Financial Office located at P.O. Box 200, North Middletown Road, Paris, Kentucky and at such other place as designated by the Board of Managers. The Board of Managers shall give notice to each Member of any changes in the location of such books and records. Such books and records shall be open to inspection, audit and copying by any Member, or his designated representative, upon reasonable notice at any time during business hours for any purpose reasonably related to the Member’s ownership in the LLC. Any information so obtained or copied shall be kept and maintained in strictest confidence except as required by law.

7.3 Reliance on Records and Books of Account . Any Member or Manager shall be fully protected in relying in good faith upon the records and books of account of the LLC and upon such information, opinions, reports or statements presented to the LLC by its Board of Managers, any of its Members, officers, employees or committees, or by any other person, as to matters the Board of Managers or Members reasonably believe are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the LLC, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits or losses of the LLC or any other facts pertinent to the existence and amount of assets from which distributions to Members might properly be paid.

7.4 Annual Reports . The annual financial statements of the LLC shall be reviewed and reported on as of the end of each Fiscal Year by a firm of independent certified public accountants selected by the Managers, provided that the Managers may waive the requirement of a review at any time and for any reason. A copy of the annual report shall be transmitted to the Members within one hundred and five (105) days after the end of each Fiscal Year.

 

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7.5 Tax Returns . The Board of Managers shall, within one hundred five (105) days after the end of each Fiscal Year, file a Federal income tax information return and transmit to each Member a copy of same and all other information necessary for the Members to timely file their Federal income tax returns. The Board of Managers similarly shall file, and provide information to the Members regarding, all appropriate state and local income tax returns.

7.6 Special Tax Provisions .

(a) The Members expect and intend that the LLC shall be treated as a partnership for all federal income tax purposes and each Member and the Board of Managers agree that they (i) will not on any federal, state, local or other tax return take a position, and shall not otherwise assert, inconsistent with such expectation and intent; or (ii) do any act or thing which could cause the LLC to be treated as other than as a partnership for federal income tax purposes.

(b) No Member shall be permitted to sell, transfer or assign any of his or her Shares, regardless of whether any such sale, transfer or assignment would be voluntary or involuntary, if the effect of any such purported sale, transfer, or assignment of Shares would be to cause a revocation or termination of the election by the LLC to be taxed as a partnership, unless that Member first obtains the prior written consent of the holders of at least eighty percent (80%) of all of the Shares. Any such attempt to sell, transfer or assign any Shares, without the prior written consent of the holders of at least eighty percent (80%) of all of the Shares, shall be null and void and of no force or effect.

ARTICLE VIII

DISTRIBUTIONS

8.1 Distribution With Respect to Shares . All distributions by the LLC to Members shall be made to the Members in proportion to their ownership of Shares.

 

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8.2 Discretionary Distributions . To the extent the LLC’s cash on hand exceeds its current and anticipated needs, including, without limitation, needs for operating expenses, debt service, acquisitions, and reserves, the Board of Managers may cause the LLC to make distributions to the Members in proportion to their ownership of Shares.

8.3 Distributions in Kind . All distributions shall be made in cash unless the Board of Managers shall have approved a distribution of assets in kind.

ARTICLE IX

VOLUNTARY WITHDRAWALS

No Member shall have the right or power to withdraw from the LLC without the written consent of all other Members remaining at the time. Any attempt to withdraw from the LLC shall constitute wrongful conduct and shall be a breach of this Agreement which will authorize the LLC to recover from the withdrawing Member damages, costs, and expenses (including attorney’s fees) and any other remedies provided by applicable law.

ARTICLE X

ASSIGNMENT; RESIGNATION

10.1 Assignment Generally . Except as provided in Section 10.2 of this Operating Agreement, each minority shareholder Member hereby covenants and agrees that it will not sell, assign, transfer, mortgage, pledge, encumber, hypothecate or otherwise dispose of all or any part of its interest in the Company to any person, firm, corporation, trust or other entity without first offering in writing to sell such interest to the Company. The Company shall have the right to accept the offer at any time during the thirty (30) days following the date on which the written offer is delivered to the Company. The consent of eighty percent (80%) of the Members shall be required to authorize the exercise of such option by the Company. If the Company shall fail to

 

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accept the offer within the thirty (30)-day period, such interest may during the following sixty (60) days be disposed of free of the restrictions imposed by this Operating Agreement; provided, however, that the purchase price for such interest shall not be less and the terms of purchase for such interest shall not be more favorable than the purchase price and terms of purchase that would have been applicable to the Company had the Company purchased the interest; provided further that the purchaser shall first become a Member pursuant to this Operating Agreement; and provided further that any interest not so disposed of within the sixty (60)day period shall thereafter remain subject to the terms of this Operating Agreement. Notwithstanding the preceding sentence, no assignee of a Membership Interest shall become a Member of the Company except upon the unanimous written consent of the non-assigning Members.

10.2 Purchase of Certain Membership Interest .

(a) If an Option Event (as defined below) occurs with respect to any minority Member (an “Option Member”), the Company shall have the option to purchase the Option Member’s Shares upon the terms and conditions set forth in this Section 10.2. For purposes of the foregoing, an “Option Event” shall mean the (i) the occurrence of any event set forth in Section 12.1 hereof, if all or the requisite remaining Members consent to continue the business of the Company as provided therein, and (ii) the inability of a Member to pay its debts generally as they become due, or any assignment by a Member for the benefit of its creditors, or the filing by a Member of a voluntary petition in bankruptcy or similar insolvency proceedings, or the filing against a Member of an involuntary petition in bankruptcy or similar insolvency proceeding that is not dismissed within ninety (90) days thereafter. The term “Option Member” shall include an Option Member’s trustee in bankruptcy, to the extent applicable.

 

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(b) Upon any Option Event occurring to an Option Member, the Option Member shall deliver written notice of the occurrence of such Option Event to the Company. The Company shall have the option, but not the obligation, to purchase the Option Member’s Shares at any time during the sixty (60) day period immediately following the date on which it receives notice of the occurrence of the Option Event. Such option shall entitle the Company to purchase such Shares for the fair market value of such Shares. The fair market value of the interest shall be the amount that the Option Member would receive in exchange for its entire interest in the Company if the Company sold all of its assets, subject to their liabilities, at their fair market value as of the date on which the Option Event occurred and distributed the net proceeds from such sale in complete liquidation to authorize the exercise of such option by the Company. Such option must be exercised by delivery of a written notice from the Company to the Option Member during the aforementioned period. Upon delivery of such notice the exercise of such option shall be final and binding on the Company and the Option Member.

(c) If the foregoing option is not exercised, the business of the Company shall continue, and the Option Member shall retain its Membership Interest.

(d) The fair market value of the Option Member’s Shares shall be determined as expeditiously as possible by a disinterested appraiser mutually selected by the Option Member and the Company (the Company’s selection being made by the remaining Members). If the Option Member and the Company are unable to agree on a disinterested appraiser, then the Option Member and the Company shall each select a disinterested appraiser and if the disinterested appraisers selected are not able to agree as to the fair market value of the interest, then the two disinterested appraisers shall select a third disinterested appraiser who shall determine the fair market value. The determination of the fair market value of the Option

 

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Member’s Shares by the appraiser or appraisers shall be conclusive and binding on all parties. All costs of an appraiser mutually selected by the Option Member and the Company or the two disinterested appraisers shall be shared equally by the Option Member and the Company. All costs of an individually selected appraiser shall be borne by the parties selecting such appraiser.

(e) If the option to purchase the Option Member’s Shares is exercised by the Company, then not later than thirty (30) days after the date on which the appraisal described above is complete (the “Appraisal Date”), the Company shall make a distribution of property (which may be cash or other assets of the Company) to the Option Member with a value equal in amount to the fair market value of the Option Member’s Shares; provided, however, that at the election of the Company such distribution to the Option Member may be made in five (5) equal annual installments, the first of which shall be made on the thirtieth (30th) day after the Appraisal Date, and one of which shall be made on the same date in each of the four (4) years thereafter, provided, further, however, that notwithstanding an election by the Company to make the distribution to the Option Member in five equal annual installments, the Company may accelerate without penalty all of such installments at any time or any part of such installment at any time. If the Company elects to make distributions to the Option Member in five (5) equal annual installments as provided herein, the Company, in addition to such annual installments, shall pay the Option Member additional amounts computed as if the Option Member were entitled to interest on the undistributed amount of the total distribution to which the Option Member is entitled hereunder at an annual rate equal to the annual Federal Med-Term Rate in effect under Section 1274(d) of the Code, as determined on the 30th day after the Appraisal Date, which additional amounts, computed like interest, shall be due and payable on the same dates as the annual installments of the distribution payable to the Option Member hereunder. Any unpaid

 

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capital contributions of the Option Member and any damages occurring to the Company as a result of the Option Event shall be taken into account in determining the net amount due the Option Member at the closing, and any excess of such unpaid capital contributions or damages over the amount due at closing shall be netted against subsequent installment payments as they become due.

(f) In order to fund any obligations under this Operating Agreement, the Company or the Members may maintain such life insurance policies on the lives of one or more Members as the Members determine from time to time to be desirable.

10.3 Absolute Prohibition . Notwithstanding any other provision in this Article X, the Shares of the Minority Member, in whole or in part, or any rights to distributions therefrom, shall not be sold, exchanged, conveyed, assigned, pledged, hypothecated, subjected to a security interest or otherwise transferred or encumbered, if, as a result thereof, the Company would be terminated for federal income tax purposes in the opinion of counsel for the Company or such action would result in a violation of federal or state securities laws in the opinion of counsel for the Company.

10.4 Tag Along Provision . In the event the Majority Shareholder receives and accepts an offer for the sale of its interest, the Minority Shareholder shall have the right to require the purchase of his Shares upon the same terms and conditions or he may retain same, but should the purchaser require the sale of all of the Shares the Minority Shareholder agrees to sell all of his Shares upon the same terms and conditions as the Majority Shareholder.

10.5 Members Acquiring Membership Interest from Company . No Person, other than the initial Members, who acquires Shares from the Company shall be admitted as a Member of the Company, except upon the unanimous written consent of the Members.

 

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10.6 Resignation . No Member shall be entitled to withdraw or resign by voluntary act from the Company except upon consent of eighty percent (80%) of the Members. Any attempted withdrawal or resignation by voluntary act, without such consent shall be of no force or effect.

10.7 Effect of Prohibited Action . Any transfer or other action in violation of this Article shall be void ab initio and of no force or effect.

10.8 Rights of an Assignee . If an assignee of Shares is not admitted as a Member because of the failure to satisfy the requirements of Sections 10.1, 10.2, 10.3 or 10.5 hereof, such assignee shall nevertheless be entitled to receive such distributions from the Company as the assigning Member would have been entitled to receive under Article VIII of this Operating Agreement with respect to such Shares had the assigning Member retained such Shares.

10.9 Assignee as a Member . If an assignee of Shares is admitted as a Member, such assignee’s rights shall be determined as expressly provided in the Act, the Articles, or this Operating Agreement. The assignor’s rights shall be determined as expressly provided in the Act, the Articles, or this Operating Agreement.

ARTICLE XI

INDEMNIFICATION AND LIMITATION OF LIABILITY

11.1 Right to Indemnification . The LLC shall indemnify and hold harmless, to the fullest extent permitted by the Act as it presently exists or as it may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that he, or a person for whom he is the legal representative, is or was a Manager, Member, officer, employee or agent of the LLC or is or was serving at the request of the LLC as a director, trustee, officer, Manager, employee or agent of another

 

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corporation or of a partnership, joint venture, trust, enterprise, limited liability company, or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person. The LLC shall be required to indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the Board of Managers of the LLC.

11.2 Prepayment of Expenses . The LLC shall pay the expenses incurred by a person described in this Article in defending any proceeding in advance of its final disposition; provided, however, that the payment of expenses incurred by a person described in this Article in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by such person to repay all amounts advanced if it should be ultimately determined that such person is not entitled to be indemnified under this Article or otherwise.

11.3 Claims . If a claim for indemnification or payment of expenses under this Article is not paid in full within sixty (60) days after a written claim therefor has been received by the LLC, the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action, the LLC shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.

11.4 Non-Exclusivity of Rights . The rights conferred on any person by this Article shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Certificate of Formation, the Agreement, other agreements, vote of Members or disinterested Managers, or otherwise.

11.5 Other Indemnification . The LLC’s obligation, if any, to indemnify any person who was or is serving at its request as director, trustee, Manager, officer, employee or agent of

 

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another corporation, partnership, joint venture, limited liability company, trust, enterprise or nonprofit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, limited liability company, trust, enterprise or non-profit enterprise.

11.6 Amendment or Repeal . Any repeal or modification of the foregoing provisions of this Article shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.

11.7 Limitations of Liability .

(a) No Member, Manager, employee, officer, or agent of the LLC shall be personally liable by reason of being a Member, Manager, employee, officer, or agent of the LLC, under a judgment, decree or order of a court, agency or tribunal of any type, or in any manner, in this or any other state, or on any other basis, for a debt, obligation or liability of the LLC whether arising in contract, tort or otherwise.

(b) The status of a person as a Member, Manager, employee, officer, or agent of the LLC shall not subject them to personal liability for the acts or omissions, including any negligence, wrongful act or actionable misconduct, of any other Member, Manager, agent, officer or employee of the LLC.

(c) No Member or Manager of the LLC shall be liable, responsible or accountable in damages or otherwise to the LLC or the Members thereof for any action taken or failure to act on behalf of the LLC unless the act or omission constitutes wanton or reckless misconduct.

 

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ARTICLE XII

TERMINATION

12.1 Termination . The LLC shall be dissolved, its assets disposed of and its affairs wound up upon the entry of a decree of judicial dissolution under the Act.

12.2 Articles of Dissolution . Upon the dissolution of the LLC, the Board of Managers shall file articles of dissolution with the Kentucky Secretary of State.

12.3 Authority to Wind Up . The Board of Managers shall have all necessary power and authority required to marshall assets of the LLC, to pay its creditors, to distribute assets and otherwise wind up the business and affairs of the LLC. In particular, the Board of Managers shall have the authority to continue to conduct the business and affairs of the LLC insofar as such continued operation remains consistent, in the judgment of the Board of Managers, with the orderly winding up of the LLC.

12.4 Winding Up . The winding up of the LLC shall be completed when all debts, liabilities and obligations of the LLC have been paid and discharged or reasonably adequate provision therefor has been made, and all of the remaining property and assets of the LLC have been distributed by the Board of Managers.

12.5 Distribution of Assets . Upon dissolution and winding up of the LLC, the affairs of the LLC shall be wound up and the LLC liquidated by the Board of Managers. The assets of the LLC shall be distributed as follows in accordance with the Act:

 

  (a) to creditors of the LLC in order of priority provided by law; then

 

  (b) to the Members in proportion to their ownership of Shares.

 

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ARTICLE XIII

DEFINITIONS

13.1 Definitions . The following terms shall have the meanings set forth for the purposes of this Agreement:

(a) “ Agreement shall mean this Limited Liability Company Operating Agreement as the same shall be amended from time to time.

(b) “ Code” and “IRC shall mean the Internal Revenue Code of 1986, as amended from time to time.

(c) “ Person shall mean a natural person, partnership (whether general or limited and whether domestic or foreign), limited liability company, foreign limited liability company, trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or representative capacity.

(d) “ Treasury Regulations means regulations issued pursuant to the Code.

ARTICLE XIV

MISCELLANEOUS

14.1 Amendment . This Agreement may be amended only with the consent of the Members.

14.2 Power of Attorney . By signing this Agreement, each Member designates and appoints the Board of Managers as his true and lawful attorney, in his name, place and stead, to make, execute, sign and file such instruments, documents or certificates which may from time to time be required by the laws of the United States of America and the State of Delaware and any political subdivision thereof or any other state or political subdivision in which the LLC shall do business to carry out the purposes of this Agreement, except where such action requires the express approval of the Members hereunder. Such attorney is not hereby granted any authority on behalf of the undersigned Members to amend this Agreement.

 

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14.3 Further Assurances . The parties agree to execute and deliver any further instruments or documents and perform any additional acts which are or may become necessary to effectuate and carry on the LLC created by this Agreement.

14.4 Binding Effect . This Agreement shall be binding on and inures to the benefit of the Members and their respective transferees, successors, assigns and legal representatives.

14.5 Governing Law . This Agreement shall be construed in accordance with, and governed by, the laws of the Commonwealth of Kentucky, without regard to, or application of, its conflict of law principles. All of the parties hereto unequivocally and without reservation consent to the sole and exclusive jurisdiction of the Courts of the Commonwealth of Kentucky as the exclusive tribunals in which to file suit over any matter or dispute involving this Agreement including, but not limited to, the interpretation and performance of this Agreement.

14.6 Entire Agreement . This Agreement constitutes the entire agreement among the parties with respect to the subject matter herein.

14.7 Counterparts . This Agreement may be executed in two (2) or more counterparts with the same force and effect as if each of the signatories had executed the same instrument.

14.8 Personal Pronouns . Wherever a personal pronoun is to be used to refer to any of the parties hereto, either the masculine or the neuter form of said pronoun may be used, even though the person to whom it applies is a female. Where required by the sense hereof the singular shall include the plural and the plural the singular.

 

29


IN WITNESS WHEREOF, the parties hereto have executed this Limited Liability Company Agreement effective as of the day and year first above written.

 

MEMBERS:
HINKLE CONTRACTING CORPORATION
BY:   /s/ Henry Hinkle
ITS:   President

 

GLASS PAVING, INC.
BY:   /s/ Larry D. Glass
ITS:   President

 

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EXHIBIT A

TO THE OPERATING AGREEMENT OF

GLASS PAVING AND STONE, LLC

 

 

LIST OF MEMBERS AND CAPITAL CONTRIBUTIONS

The following constitutes a list of all Members names, capital contribution amounts, dates of contributions and Shares. As this is amended from time to time, a revised Exhibit A shall be signed by all the Members of the LLC, said exhibit shall further evidence approval of any new Member and that new Member’s agreement to be fully subject to all terms and provisions of said operating agreement, together with enjoying all benefits thereof. The information is as follows:

 

MEMBERS:

  

INITIAL
CONTRIBUTION

   DATE
CONTRIBUTED
     SHARES:  

Hinkle Contracting Corporation

   $800,000 cash and all assets and real property acquired In Asset Purchase Agreement executed on April 17, 2006.      April 17, 2006         800   

Glass Paving, Inc.

   $200,000 cash and twenty Percent (20%) ownership in all assets still held after execution of Asset Purchase Agreement on April 17, 2006, 2006 all interest in Quarry Assets acquired by Hinkle Contracting Corporation and conveyed to Glass Paving, Inc. in accordance with the terms of said Asset Purchase Agreement      April 17, 2006         200   

Effective the             day of April, 2006.

 

HINKLE CONTRACTING CORPORATION

    GLASS PAVING, INC.

BY:  /s/ Henry Hinkle                                                  

    BY:  /s/ Larry D. Glass                                                  

ITS:  President                                                              

    ITS:  President                                                                

Exhibit 3.40

ARTICLES OF ORGANIZATION

OF

HINKLE CONTRACTING COMPANY, LLC

Hinkle Contracting Corporation, a Kentucky corporation, sets forth the following Articles of Organization for the purpose of organizing and converting to a limited liability company (the “ Company ”) under the Kentucky Limited Liability Company Act:

ARTICLE I

NAME

The name of the Company is: Hinkle Contracting Company, LLC

ARTICLE H

REGISTERED OFFICE AND AGENT

The street address of the Company’s initial registered office is 395 North Middletown Road, Paris, Kentucky 40361, and the name of the Company’s initial registered agent at that office is Henry L. Hinkle.

ARTICLE III

PRINCIPAL OFFICE

The mailing address of the initial principal office of the Company is P.O. Box 200, North Middletown Road, Paris, Kentucky 40361.

ARTICLE IV

MANAGEMENT

The Company is to be managed by its members.

ARTICLE V

EFFECTIVE TIME

These Articles of Organization shall be effective at the time of filing on the date filed with the Kentucky Secretary of State.


ARTICLE VI

CONVERSION

The Company was converted to a limited liability company.

ARTICLE VII

FORMER NAME

The former name of the Company was: Hinkle Contracting Corporation.

ARTICLE VIII

ASSUMED NAMES

Any assumed names held by the Company have been cancelled.

ARTICLE IX

APPROVAL

The designation, number of outstanding shares, number of votes to be cast by each voting group entitled to vote separately on the plan of conversion, and the total number of undisputed votes cast for the plan of conversion separately by each voting group are as follows

 

Designation

   Number of Shares
Outstanding
     Number of Votes Entitled
to be Cast
     Total Number of Votes
Cast for the Plan
 

Class A Nonvoting Common Stock

     0         0         0   

Class B Voting Common Stock

     36,997         36,997         36,997   

Dated: January 28, 2010

 

HINKLE CONTRACTING CORPORATION, a Kentucky corporation
By:   /s/ Henry L. Hinkle
  Henry L. Hinkle, President

 

2

Exhibit 3.41

LIMITED LIABILITY COMPANY AGREEMENT

OF

HINKLE CONTRACTING COMPANY, LLC

This Limited Liability Company Agreement (this “ Agreement ”) of Hinkle Contracting Company, LLC (the “ Company ”) is entered into by Hinkle Family Assets Holding Company, LLC, as the sole member (the “ Member ”).

The Member, hereby forms a limited liability company, effective as of the filing of the Company’s Articles of Organization with the Kentucky Secretary of State and pursuant to and in accordance with the Kentucky Limited Liability Company Act (KRS Chapter 275), as amended from time to time (the “ Act ”), and hereby agrees as follows:

1. Name . The name of the limited liability company formed hereby is Hinkle Contracting Company, LLC.

2. Filing of Certificates . The Member, as an authorized person, within the meaning of the Act, shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates required or permitted by the Act to be filed in the Office of the Secretary of State of the Commonwealth of Kentucky. The Member shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.

3. Purposes . The purpose of the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Kentucky law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at P.O. Box 200, North Middletown Road, Paris, Kentucky 40361.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Kentucky is Henry L. Hinkle, 395 North Middletown Road, Paris, Kentucky 40361.


7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Hinkle Family    P.O. Box 200
Holding Company, LLC    395 North Middletown Road
   Paris, Kentucky 40362-0200

8. Limited Liability . As set forth in Section 275.150 of the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9. Capital Contributions . The Member is deemed admitted as the member of the Company upon its execution and delivery of this Agreement. The Member may, but is not obligated to make any capital contribution to the Company.

 

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

12. Management . Management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the Commonwealth of Kentucky. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, Chief Executive Officer, President, Vice President, Secretary, and Treasurer) to any such person. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member.

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

 

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15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the Commonwealth of Kentucky and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member or Officer by this Agreement.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the Commonwealth of Kentucky for directors and officers of corporations organized under the laws of the Commonwealth of Kentucky. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company as a member and shall become the Member for all purposes hereunder. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution.

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member (ii) any time there are no members of the Company unless the Company is continued in accordance with the Act, (iii) any order of a court of competent jurisdiction requiring dissolution, or (iv the filing of a certificate of dissolution by the Secretary of State under Section 275.295 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 11 hereto.

 

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20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the Commonwealth of Kentucky (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 28 th day January , 20 10 .

 

HINKLE FAMILY ASSETS HOLDING COMPANY, LLC, a Kentucky limited liability company
By:   /s/ Henry Hinkle
  Name: Henry Hinkle

Signature Page to Limited Liability Company Agreement

Exhibit 3.42

ARTICLES OF INCORPORATION

OF

SPENCER TRUCKING COMPANY, INC.

The undersigned, acting as incorporator of a corporation under the Kentucky Business Corporation Act (KRS Chapter 271A), adopts the following Articles of Incorporation for such corporation:

ARTICLE I

The name of the corporation is Spencer Trucking Company, Inc.

ARTICLE II

The period of its duration is perpetual.

ARTICLE III

The purpose or purposes for which the corporation is organized are to engage in the business of hauling and transporting coal, cement, sand, rock, asphalt, i.e. concrete, liquid asphalt and all related materials and derivatives; to own, hold, lease, sell, or otherwise dispose of and deal in trucks, trucking equipment and all necessary machinery, fixtures, plants, shops, buildings, apparatus, tools and equipment now or hereafter in use which are necessary or convenient to carry on its business; and to such extent as a corporation organized under the Kentucky Business Corporation Act may now or hereafter lawfully do, and either as principal or agent, and either alone or in connection with other corporations, firms, or individuals, to do all and everything necessary, suitable, convenient or proper for, or in connection with, or incident to, the accomplishment of any of the purposes, or the attainment of any one or more of the objects herein enumerated, or designed directly or indirectly to promote the interest of the corporation, or to enhance the value of its properties; and in general to do any and all things and exercise any and all powers, rights and privileges which a corporation may now or hereafter be organized to do, or to exercise under the Kentucky Business Corporation Act or any laws supplemental or substituted therefore; and to do any or all of the things hereinabove set forth to the same extent as natural persons might or could do.


ARTICLE IV

The aggregate number of shares which the corporation shall have authority to issue is two thousand (2,000), without par value.

ARTICLE V

The address of the initial registered office of the corporation is 400 Bank of Lexington Building, 101 East Vine Street, Lexington, Kentucky 40507, and the name of its initial registered agent at such address is Buckner Hinkle, Jr.

ARTICLE VI

The number Directors constituting the initial Board of Directors of the corporation is one (1), and the name and address of the person who is to serve as Director until the first annual meeting of Shareholders or until his successor is elected and shall qualify is:

Buckner Hinkle, Jr.

400 Bank of Lexington Building

101 East Vine Street

Lexington, Kentucky 40507

ARTICLE VII

The name and address of each incorporator is:

Buckner Hinkle, Jr.

400 Bank of Lexington Building

101 East Vine Street

Lexington, Kentucky 40507

DATED at Lexington, Kentucky, this 28th day of February, 1978.

 

/s/ Buckner Hinkle, Jr.
BUCKNER HINKLE, JR.

 

2


ARTICLES OF AMENDMENT

TO

ARTICLES OF INCORPORATION

OF

SPENCER TRUCKING COMPANY, INC.

Pursuant to the applicable provisions of the Kentucky Business Corporation Act, SPENCER TRUCKING COMPANY, INC., a , Kentucky corporation, hereby adopts the following Articles of Amendment to its Articles of Incorporation:

FIRST: The name of the corporation is SPENCER TRUCKING COMPANY, INC.

SECOND: The following amendment of the Articles of Incorporation was adopted upon receiving the written consent of the sole shareholder in lieu of a special meeting:

RESOLVED, that Article I of the Articles of Incorporation be and the same is hereby amended so that said Article I as amended shall hereafter provide as follows:

ARTICLE I

The name of the corporation is

HINKLE HAULING COMPANY, INC.

IN TESTIMONY WHEREOF, these Articles of Amendment have been executed on behalf of the undersigned corporation, by and through its duly authorized officers, this 31 st day of March, 1983.

 

SPENCER TRUCKING COMPANY, INC.
/s/ Henry L. Hinkle
Henry L. Hinkle, President
/s/ Susan T. Hinkle
Susan T. Hinkle, Secretary

 

3


ARTICLES OF AMENDMENT

TO THE ARTICLES OF INCORPORATION OF

HINKLE HAULING COMPANY, INC.

Pursuant to the provisions of KRS 271B.10-060, the undersigned corporation adopts the following Articles of Amendment to its Articles of Incorporation:

FIRST: The name of the corporation is Hinkle Hauling Company, Inc.

SECOND: Article I of the Articles of Incorporation of Hinkle Hauling Company, Inc. is deleted, and shall be replaced with the following article:

ARTICLE I

The name of the corporation is Kentucky Hauling, Inc.

THIRD: This amendment does not provide for an exchange, reclassification, or cancellation of issued shares.

FOURTH: One Thousand (1,000) common no-par shares of the corporation are outstanding. The corporation’s sole shareholder adopted and approved the foregoing amendment by virtue of a written consent executed as of March 2, 1990. This written consent has the effect of a unanimous vote of the shareholders.

DATED: March 2, 1990.

HINKLE HAULING, INC.
By:   /s/ Henry L. Hinkle
  Henry L. Hinkle, President

 

4


ARTICLES OF AMENDMENT

TO

ARTICLES OF INCORPORATION

OF

SPENCER TRUCKING COMPANY, INC.

Pursuant to the applicable provisions of the Kentucky Business Corporation Act, SPENCER TRUCKING COMPANY, INC., a Kentucky corporation, hereby adopts the following Articles of Amendment to its Articles of Incorporation:

FIRST: The name of the corporation is SPENCER TRUCKING COMPANY, INC.

SECOND: The following amendment of the Articles of Incorporation was adopted upon receiving the written consent of the sole shareholder in lieu of a special meeting:

RESOLVED, that Article I of the Articles of Incorporation be and the same is hereby amended so that said Article I as amended shall hereafter provide as follows:

ARTICLE I

The name of the corporation is

HINKLE HAULING COMPANY, INC.

IN TESTIMONY WHEREOF, these Articles of Amendment have been executed on behalf of the undersigned corporation, by and through its duly authorized officers, this 31st day of March, 1983.

 

SPENCER TRUCKING COMPANY, INC.

/s/ Henry L. Hinkle

Henry L. Hinkle, President

/s/ Susan T. Hinkle

Susan T. Hinkle, Secretary


COMMONWEALTH OF KENTUCKY    )   
   )    SS:
COUNTY OF BOURBON    )   

 

The undersigned, a Notary Public in and for the State and County aforesaid, does hereby certify that on this day personally appeared before me HENRY L. HINKLE and SUSAN T. HINKLE, who, being by me first duly sworn declared that they are the President and Secretary of SPENCER TRUCKING COMPANY, INC., that they signed the foregoing Articles of Amendment as the President and Secretary, respectively, of the corporation, and that the statements therein contained are true.

Witness my signature this 31st day of March, 1983.

My Commission Expires: 4-12-86

 

/s/ Rita Davis

NOTARY PUBLIC

 

THIS INSTRUMENT PREPARED BY:

/s/ Marsha Theiss

Marsha Theiss

STITES & HARBISON

400 Bank of Lexington Building

101 East Vine Street

Lexington, Kentucky 40507

Telephone: 606-253-0373

 

2


ARTICLES OF AMENDMENT

TO THE ARTICLES OP INCORPORATION OF

HINKLE HAULING COMPANY, INC.

Pursuant to the provisions of KRS 271.B.10-080, the undersigned corporation adopts the following Articles of Amendment to its Articles of Incorporation:

FIRST: The name of the corporation is Hinkle Hauling Company, Inc.

SECOND: Article I of the Articles of Incorporation of Hinkle Hauling Company Inc. is deleted, and shall be replaced with the following Inc. article:

ARTICLE I

The name of the corporation is Kentucky Hauling, Inc.

THIRD: This amendment does not provide for an exchange, reclassification, or cancellation of issued shares.

FOURTH: One Thousand (1,000) common no-par shares of the corporation are outstanding. The corporation’s sole shareholder adopted and approved the foregoing amendment by virtue of a written consent executed as of March 2 , 1990. This written consent has the effect of a unanimous vote of the shareholders.

DATED: March 2 , 1990.

 

HINKLE HAULING, INC.
By:  

/s/ Henry L. Hinkle

  Henry L. Hinkle, President


STATE OF KENTUCKY    )   
   )    SS.
COUNTY OF FAYETTE    )   

The foregoing instrument was acknowledged before me on this 2 nd day of March, 1990, by Henry L. Hinkle, President of Hinkle Hauling Company, a Kentucky corporation, on behalf of the corporation, Inc.

 

My Commission Expires:  

June 29, 1991

 
  /s/ [Illegible Signature]  

NOTARY PUBLIC

THIS INSTRUMENT PREPARED BY:

STITES & HARBISON

2300 Lexington Financial Center

250 West Main Street

Lexington, Kentucky 40507

 

By   

/s/ Garry A. Perry

  Garry A. Perry

 

2

Exhibit 3.43

BYLAWS

OF

SPENCER TRUCKING COMPANY, INC.

ARTICLE I

SHAREHOLDERS

Section 1. Annual Meeting . The annual meeting of the shareholders shall be held on the first Monday in February at 10:00 o’clock, A.M., for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the State of Kentucky, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for an annual meeting of the shareholders, or at any adjournment thereof, the board of directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be.

Section 2. Special Meetings . Special meetings of the shareholders, for any purpose or purposes, may be called by the Board of Directors, and by the holders of at least twenty (20%) percent of the outstanding stock of the corporation.

Section 3. Place of Meeting . The Board of Directors may designate any place, either within or without the State of Kentucky or United States as the place of meeting for any annual meeting or any special meeting called by the Board of Directors. If no designation is made, the place of meeting shall be the office of Hinkle Contracting Corporation in Paris, Kentucky.

Section 4. Notice of Meeting . The Secretary of the corporation shall give notice of any and all annual and special meetings to each shareholder appearing upon the books of the corporation by mailing same to his last known address at least ten (10) days before such meeting.


It shall be the duty of the Secretary of the corporation to send such notice, by certified or registered mail, upon the request of the person or persons authorized to call the meeting, as provided for above. The attendance of a Shareholder at a meeting shall constitute a waiver of notice of such meeting.

Section 5. Quorum . A majority of the outstanding shares of stock of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of the shareholders.

Section 6. Proxies . At all meetings of shareholders, a shareholder may vote by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the corporation before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy, but in no event shall a proxy, unless coupled with an interest, be voted after three (3) years from the date of its execution.

Section 7. Voting of Shares . Subject to the provisions of Section 8 of this Article I, each outstanding share of stock shall be entitled to one vote upon each matter submitted to a vote at a meeting of the shareholders. Shares of its own stock belonging to the corporation or held by it in a fiduciary capacity shall not be voted, directly or indirectly, at any meeting, and shall not be counted in determining the total number of outstanding shares of stock at any given time.

Section 8. Cumulative Voting . At each election for Directors every shareholder shall have the right to cast as many votes, in person or by proxy, as equals the number of shares of stock owned by him multiplied by the number of Directors to be elected at such election; and each shareholder may cast the whole number of votes for one candidate, or distribute such votes among two or more candidates.

 

2


Section 9. Informal Action By Shareholders . Unless otherwise provided by law, any action required to be taken at a meeting of the shareholders may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be executed by all of the shareholders entitled to vote with respect to the subject matter thereof.

Section 10. Who May Vote At Shareholders Meeting . Only such persons shall be entitled to vote at meetings of the shareholders of the corporation as appear upon the books of the corporation fifteen (15) days preceding the particular meeting of the shareholders.

ARTICLE II

BOARD OF DIRECTORS

Section 1. General Powers . The business and affairs of the corporation shall be managed by its Board of Directors.

Section 2. Election, Number, Tenure and Qualifications . The election of directors shall be held at the annual meetings of the shareholders, or at any special meetings regularly called for said purpose, and shall be by written ballot. The first Board of Directors shall consist of three (3) members, but the number of the members of the Board may, at any time, be increased or decreased upon vote of the shareholders. Each - Director shall hold office until the next annual meeting of shareholders and until his successor shall have been elected and qualified.

Section 3. Regular Meetings . The regular meeting of the Board of Directors shall be held on the first Monday in February at 10:30 o’clock, a.m., or as soon thereafter as the annual meeting of shareholders has concluded, or such other date and time as may be fixed by the Board of Directors.

Section 4. Special Meetings . Special meetings of the Board of Directors may be called by the President or by two Directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place within the State of Kentucky, as the place for holding any special meeting of the Board called by them.

 

3


Section 5. Notice . Notice of any special meeting shall be given by the Secretary of the corporation at least seven (7) days previous thereto by written notice delivered personally or mailed to each director at his last known address. The attendance of a Director at a meeting shall constitute a waiver of notice of such meeting.

Section 6. Quorum . A majority of the number of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors.

Section 7. Manner of Acting . The act of the majority of Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

Section 8. Vacancies . Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board. A Director entitled to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any Directorship to be filled by reason of an increase in the number of Directors shall be filled by election at an annual meeting of the shareholders or at a special meeting of the shareholders called for that purpose.

Section 9. Compensation . By resolution of the shareholders, the Directors may be paid their expenses, if any, of attendance at each meeting of the Board and receive other compensation approved by the shareholders.

ARTICLE III

OFFICERS

Section 1. Number . The officers of the corporation shall be a President, two Vice Presidents, a Secretary-Treasurer and Assistant Secretary. The Board of Directors may appoint

 

4


assistant officers and may, from time to time, elect such other officers and agents as it shall deem necessary who shall have such authority and shall perform such duties as from time to time shall be assigned by the Board of Directors. Any two or more offices may be held by the same person, as permitted by the laws of the Commonwealth of Kentucky. The salaries of all officers and agents shall be fixed by the Board of Directors.

Section 2. Election and Term of Office . The officers shall be elected by the Board of Directors, by majority vote, at its annual meeting or at any special meeting duly called upon notice of the specific purpose. Each officer shall hold office for one year, or until his successor shall have been duly elected and shall have qualified or until his death, or until he shall resign or shall have been removed in the manner hereinafter provided.

Section 3. Removal . Any officer or agent elected or appointed by the Board of Directors may be removed by the Board whenever in its judgment the best interests of the corporation would be served thereby.

Section 4. Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors set for the unexpired portion of their term.

Section 5. Duties . The President shall preside at all meetings of shareholders and Directors; shall be the chief administrative officer of the corporation and have general supervision of the affairs of the corporation; shall sign or countersign all certificates, contracts, and other instruments, as authorized by the Board of Directors; shall make reports to the Board of Directors and stockholders; and shall perform all such other duties as are incident to this office or are properly required of him by the Board of Directors.

 

5


The Vice Presidents shall perform the duties of the President in case of his absence or disability; and such other duties as may be assigned to them, from time to time, by the President or Board of Directors.

The Secretary-Treasurer shall issue notices of all meetings as required, shall keep minutes of all meetings, shall have charge of the seal and the corporate books, and shall make such reports and perform such other duties as are incident to his office, or are properly required of him by the Board of Directors. The Assistant-Secretary shall assist the Secretary-Treasurer in the aforementioned secretarial duties as directed by the Board of Directors or Secretary-Treasurer.

The Secretary-Treasurer shall also have the custody of all monies and securities of the corporation and shall keep regular books of account. He shall disburse the funds of the corporation in payment of the just demands against the corporation, or as may be ordered by the Board of Directors, taking proper vouchers from such disbursements, and shall render to the Board of Directors, from time to time, as may be required of him, an account of all his transactions as Treasurer and of the financial condition of the corporation. He shall perform all duties incident to his office which are properly required of him by the Board of Directors.

In case of absence or inability to act of any officer of the corporation and of any person herein authorized to act in his place, the Board of Directors may, from time to time, delegate the powers or duties of such officer to any other officer, or any Director or other person whom it may select.

Section 6. Compensation . The compensation of the officers of this corporation shall be as fixed by the Board of Directors, from time to time, or in such manner as the Board of Directors shall direct. The officers, if required by the Board of Directors, shall furnish bond for the faithful performance of their duties, in such amount and with such surety as may be required by the Board of Directors. The corporation shall bear the expense, including the premiums, of any and all such bonds.

 

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ARTICLE IV

SEAL OF THE CORPORATION

The seal of the corporation shall be circular, with the words, “Spencer Trucking Company, Inc.”, and “Kentucky” circumscribing the words “Corporate Seal”.

ARTICLE V

DIVIDENDS

The Board of Directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by the law of the Commonwealth of Kentucky.

ARTICLE VI

WAIVER OF NOTICE

Whenever any notice is required to be given to any shareholder or director of the corporation under the provisions of these bylaws or under the Articles of Incorporation or by statute, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated herein, shall be deemed equivalent to the giving of such notice.

ARTICLE VII

AMENDMENTS

Subject to the power of the Shareholders to amend or repeal amendments, these bylaws may be altered, amended or repealed and new by-laws may be adopted by the Board of Directors

 

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at any regular or special meeting of the Board of Directors, provided that at least ten (10) days written notice of the proposed amendment shall be given each shareholder or seven (7) days written notice shall be given each director, as the case may be, prior to such meeting.

ARTICLE VIII

ADJOURNMENT OF SHAREHOLDER’S MEETINGS

When a regular or special meeting of the shareholders is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment it taken; provided, however, that if the adjournment is for more than seven (7) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.

ARTICLE IX

LOANS

Unless explicitly authorized by majority vote of Directors at a regular or special meeting of the Board of Directors, no officer, director or agent of the corporation shall agree, execute, effectuate, renew, or extend loans to the corporation, nor shall he pledge any assets of the corporation as security for such loans.

ARTICLE X

INDEMNIFICATION

Section 1. Any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,

 

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administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified by this corporation against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

Section 2. Any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, of is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall be indemnified by the corporation against expenses (including attorney’s fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the corporation and except that no indemnification shall be made in respect of any

 

9


claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

Section 3. The indemnification provided in Sections 1 and 2 of this Article may be made only upon specific authority of the Board of Directors or shareholders as provided in the Kentucky Business Corporation Act (KRS Chapter 271A).

 

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CERTIFICATE OF ADOPTION

KNOW ALL MEN BY THESE PRESENTS:

That I, Michael Hendrix, the undersigned, the duly elected and acting Secretary-Treasurer of Spencer Trucking Company, Inc., a Kentucky corporation, do hereby certify that the within and foregoing Bylaws of said corporation were duly adopted on the 21st day of August, 1978, and that the same do now constitute the Bylaws of said corporation.

IN WITNESS WHEREOF, I have hereunto subscribed my name as Secretary-Treasurer of the corporation, this 21st day of August, 1978.

 

/s/ Michael Hendrix
Secretary-Treasurer

 

11


PLAN TO ISSUE 1244 STOCK

1. The plan as herein set forth upon its adoption by the Board of Directors of Spencer Trucking Company, Inc., shall become effective on August  21 , 1978.

2. The Corporation is authorized to offer and issue 1,000 shares of common stock of no par value at $100.00 per share.

3. The Corporation shall offer and issue such 1,000 shares of no par value common stock from the date hereof to December 31, 1978, or to the date when the Corporation shall make a subsequent offering of any stock, whichever shall sooner occur.

4. During such period as set forth in paragraph 3 the Corporation shall offer and issue only such common stock.

5. The maximum amount of money or property to be received by the Corporation in consideration of the stock to be issued pursuant to this Plan shall be $100,000.00.

6. Such common stock shall be issued only for money and other property (other than stock or securities).

7. Such other action shall be taken by the Corporation as shall qualify the stock offered and issued under this Plan as Section 1244 stock as such term is defined in the Internal Revenue Code and regulations issued thereunder.

 

12


AMENDMENT TO THE BYLAWS

OF HINKLE HAULING COMPANY, INC.

(formerly Spencer Trucking Company, Inc.)

ARTICLE I

SHAREHOLDERS

Section 1. Annual Meeting . The annual meeting of the shareholders shall be held on the third Friday in July, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the State of Kentucky, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for an annual adjournment thereof, the board of directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be.

ARTICLE II

BOARD OF DIRECTORS

Section 3. Regular Meetings . The regular meeting of the board of directors shall be held on the third Friday of July, immediately following the conclusion of the annual meeting of shareholders, or such other date and time as may be fixed by the board of directors.

ARTICLE III

OFFICERS

Section 5. Duties . The President shall preside at all meetings of shareholders and directors; shall be the chief administrative officer of the corporation and have general supervision of the affairs of the corporation; shall sign or countersign all certificates, contracts, and other instruments, as authorized by the board of directors; shall make reports to the board of directors and shareholders; and shall perform all such other duties as are incident to this office or are properly required of him by the board of directors.

 

13


The Vice President shall perform the duties of the President in case of his absence or disability; and such other duties as may be assigned to them, from time to time, by the President or board of directors.

The Secretary shall issue notices of all meetings as required, shall keep minutes of all meetings, shall have charge of the seal and corporate books, and shall make such reports and perform such other duties as are incident to his office, or are properly required of him by the board of directors. The Assistant Secretary shall assist the Secretary in the aforementioned secretarial duties as directed by the board of directors or Secretary.

The Treasurer shall also have the custody of all monies and securities of the corporation and shall keep regular books of account. He shall disburse the funds of the corporation in payment of the just demands against the corporation, or as may be ordered by the board of directors, taking proper vouchers from such disbursements, and shall render to the board of directors, from time to time, as may be required of him, an account of all his transactions as Treasurer and of the financial condition of the corporation. He shall perform all duties incident to his office which are properly required of him by the board of directors.

In case of absence or inability to act of any officer of the corporation and of any person herein authorized to act in his place, the board of directors may, from time to time, delegate the powers or duties of such officer to any other officer, or any director or other person whom it may select.

 

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I, Susan T. Hinkle, corporate secretary of Hinkle Hauling Company, Inc., do hereby certify that the foregoing Amendment to the Bylaws of the corporation were unanimously adopted by the Board of Directors at a duly called Special Meeting on May 16, 1983, and that said Amendment is now in effect.

 

/s/ Susan T. Hinkle
Secretary

APPROVED:

 

/s/ Henry L. Hinkle
President

 

15


AMENDMENT TO THE BYLAWS

OF HINKLE HAULING COMPANY, INC.

(formerly Spencer Trucking Company, Inc.)

ARTICLE I

SHAREHOLDERS

Section 1. Annual Meeting . The annual meeting of the shareholders shall be held on the third Friday in July, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the State of Kentucky, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for an annual adjournment thereof, the board of directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be.

ARTICLE II

BOARD OF DIRECTORS

Section 3. Regular Meetings . The regular meeting of the board of directors shall be held on the third Friday of July, immediately following the conclusion of the annual meeting of shareholders, or such other date and time as may be fixed by the board of directors.

ARTICLE III

OFFICERS

Section 5. Duties . The President shall preside at all meetings of shareholders and directors; shall be the chief administrative officer of the corporation and have general supervision of the affairs of the corporation; shall sign or countersign all certificates, contracts, and other instruments, as authorized by the board of directors; shall make reports to the board of directors and shareholders; and shall perform all such other duties as are incident to this office or are properly required of him by the board of directors.


The Vice President shall perform the duties of the President in case of his absence or disability; and such other duties as may be assigned to them, from time to time, by the President or board of directors.

The Secretary shall issue notices of all meetings as required, shall keep minutes of all meetings, shall have charge of the seal and corporate books, and shall make such reports and perform such other duties as are incident to his office, or are properly required of him by the board of directors. The Assistant Secretary shall assist the Secretary in the aforementioned secretarial duties as directed by the board of directors or Secretary.

The Treasurer shall also have the custody of all monies and securities of the corporation and shall keep regular books of account. He shall disburse the funds of the corporation in payment of the just demands against the corporation, or as may be ordered by the board of directors, taking proper vouchers from such disbursements, and shall render to the board of directors, from time to time, as may be required of him, an account of all his transactions as Treasurer and of the financial condition of the corporation. He shall perform all duties incident to his office which are properly required of him by the board of directors.

In case of absence or inability to act of any officer of the corporation and of any person herein authorized to act in his place, the board of directors may, from time to time, delegate the powers or duties of such officer to any other officer, or any director or other person whom it may select.

 

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I , Susan T. Hinkle , corporate secretary of Hinkle Hauling Company, Inc., do hereby certify that the foregoing Amendment to the Bylaws of the corporation were unanimously adopted by the Board of Directors at a duly called Special Meeting on May 16, 1983, and that said Amendment is now in effect.

 

/s/ Susan T. Hinkle

Secretary

APPROVED:

 

/s/ Henry L. Hinkle

President

 

3

Exhibit 3.44

ARTICLES OF ORGANIZATION

OF

SOUTH CENTRAL KENTUCKY LIMESTONE, LLC

The undersigned organizer sets forth the following Articles of Organization for the purpose of organizing a limited liability company (the “ Company ”) under the Kentucky Limited Liability Company Act:

ARTICLE I

NAME

The name of the Company is: South Central Kentucky Limestone, LLC

ARTICLE II

REGISTERED OFFICE AND AGENT

The street address of the Company’s initial registered office is 2300 Barren River Road, Bowling Green, Kentucky 42101 and the name of the Company’s initial registered agent at that office is James D. Scott.

ARTICLE III

PRINCIPAL OFFICE

The mailing address of the initial principal office of the Company is 2300 Barren River Road, Bowling Green, Kentucky 42101.

ARTICLE IV

MANAGEMENT

The Company is to be managed by its members.

ARTICLE V

LIMITED LIABILITY

No member, employee or agent of the Company will be personally liable by reason of being a member, employee or agent of the Company under a judgment, decree or order of a court, agency or tribunal of any type, or in any other manner, or on any other basis, for a debt, obligation or liability of the Company, whether arising in contract, tort or otherwise, except as specifically set forth in the Kentucky Limited Liability Act. The status of an entity or a person as a member, employee or agent of the Company will not subject the entity or person to personal liability for the acts or omissions, including without limitation any negligence, wrongful act or actionable misconduct, of any other member, employee or agent of the Company.


Dated: July 6, 2010

 

SCOTTY’S CONTRACTING & STONE, LLC
/s/ James D. Scott
By: James D. Scott
Title: Manager

Exhibit 3.45

AMENDED AND RESTATED OPERATING AGREEMENT OF

SOUTH CENTRAL KENTUCKY LIMESTONE, LLC

THIS AMENDED AND RESTATED OPERATING AGREEMENT (the “ Agreement ”) is made and entered into effective as of July 23, 2010 by and among SOUTH CENTRAL KENTUCKY LIMESTONE, LLC, a Kentucky limited liability company (the “ Company ”), and its sole member, GLASS PAVING AND STONE, LLC, a Kentucky limited liability company (the “ Member ”).

ARTICLE I

FORMATION; PURPOSES; DEFINITIONS

Section 1.1. Formation of Company . The Company was formed as a limited liability company under the laws of the Commonwealth of Kentucky by the filing of Articles of Organization (the “ Articles of Organization ”) for SOUTH CENTRAL KENTUCKY LIMESTONE, LLC pursuant to the Kentucky Limited Liability Company Act. This Agreement is subject to, and governed by, the Kentucky Limited Liability Company Act and the Articles of Organization.

Section 1.2. Purposes . The purposes of the Company shall be to engage in the road paving, asphalt and grading business, to do all things necessary or convenient to transact its business and affairs, and to transact any other lawful business.

Section 1.3. Defined Terms . The terms used in the Agreement with their initial letters capitalized will, unless the context otherwise requires or unless otherwise expressly provided herein, have the meanings specified in this Section 13 or elsewhere in this Agreement. When used in this Agreement, the following terms will have the meanings set forth below:

(a) “ Act ” means the Kentucky Limited Liability Company Act, Kentucky Revised Statutes Chapter 275, as it may he amended from time to time.

(b) “ Capital Account ” means the individual accounts established and maintained pursuant to Section 2.2 of this Agreement.

(c) “ Capital Contribution ” means the total value of cash and agreed fair market value of property contributed and agreed to be contributed to the Company by the Member, as shown in Exhibit A , as the same may be amended from time to time.

(d) “ Code ” means the Internal Revenue Code of 1986, as amended. All references herein to sections of the Code will include any corresponding provision or provisions of succeeding law.

(e) “ Person ” means any natural person, association, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, joint stock association, joint venture, firm, trust, business trust, cooperative or other entity, domestic or foreign.


(f) “ Units ” means the units of membership in the Company described in Section 2.3. Distributions made in proportion to or in accordance with the Units shall be based upon relative Units as of the record date for distributions and in accordance with IRC §706(c) and (d).

ARTICLE II

MEMBER

Section 2.1. Name, Address and Capital Contributions of Member . The Member’s address, initial Capital Contribution and Units are set forth on Exhibit A attached hereto.

Section 2.2. Capital Contributions and Capital Accounts.

(a) The initial Member will make Capital Contributions in the form and amount set forth on Exhibit A . No interest will be paid on any Capital Contribution.

(b) A Capital Account will be established and maintained on behalf of the Member, which will be maintained in accordance with all applicable federal and state laws and regulations.

(c) The Member shall have no liability or obligation to restore a negative or deficit balance in the Member’s Capital Account.

Section 2.3. Units . The Company is authorized to issue one hundred (100) Units, all of which shall be of a single class and shall have the voting and other rights, powers, privileges and authority described in this Agreement or the Act, and which may be represented in certificate form.

ARTICLE III

MANAGEMENT AND CONTROL OF BUSINESS

Section 3.1. Management Vested in Member . Management of the Company shall be vested in the Member, who shall have the authority to direct, manage and control the business and affairs of the Company in accordance with the terms of this Agreement and the Act.

Section 3.2. Authority to Bind the Company . The Member shall have the authority to bind the Company and may execute any document or take any action on behalf of the Company and such execution or action shall be binding upon the Company.

ARTICLE IV

LIMITATION ON LIABILITY; INDEMNIFICATION

Section 4.1. Limitation on Liability . No Member, employee or agent of the Company will be personally liable by reason of being a Member, employee or agent of the Company under a judgment, decree or order of a court, agency or tribunal of any type, or in any other manner, or on any other basis, for a debt, obligation or liability of the Company, whether arising in contract, tort or otherwise, except as specifically set forth in the Act. The status of a Person as a Member, employee or agent of the Company will not subject the person to personal liability for the acts or

 

2


omissions, including without limitation any negligence, wrongful act or actionable misconduct, of any other Member, employee or agent of the Company. The Member shall not be required to loan any funds to the Company. Except as otherwise required hereunder, the Member shall not be required to make any Capital Contribution to the Company by reason of any negative balance in the Member’s Capital Account, nor will any negative balance in the Member’s Capital Account create any liability on the part of the Member to any third party.

Section 4.2. Indemnification.

(a) To the greatest extent allowed by the laws of the Commonwealth of Kentucky, the Company will indemnify the Member if made a party to any proceeding because the Member is or was a Member against all liability incurred by the Member in connection with any proceeding and pay for or reimburse the reasonable expenses incurred by the Member in connection with any such proceeding in advance of final disposition thereof. The indemnification and advancement of expenses provided for under this Section 4.2 will be applicable to any proceeding arising from acts or omissions occurring before or after the date of this Agreement.

(b) The Company will have the power, but not the obligation, to indemnify any Person who is or was an employee or agent of the Company to the same extent as if such Person was a Member.

(c) Nothing contained in this Section 4.2 will limit or preclude, or be deemed, exclusive of any right under applicable law or contract relating to, indemnification for or advancement of expenses to any Person who is or was a Member of the Company or who is or was serving at the Company’s request as a director, officer, partner, manager, trustee, employee, or agent of another Person, employee benefit plan, or other enterprise, whether for-profit or not. Nothing contained in this Section 4.2 will limit the ability of the Company to otherwise indemnify or advance expenses to any Person,

(d) For purposes of this Section 4.2:

(i) The term “expenses” includes all direct and indirect costs (including without limitation counsel fees, retainers, court costs, transcripts, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or out-of-pocket expenses) actually incurred in connection with the investigation, defense, settlement or appeal of a proceeding or establishing or enforcing a right to indemnification under this Section 4.2, applicable law or otherwise.

(ii) The term “liability” means the obligation to pay a judgment, settlement, penalty, fine, excise tax (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding.

(iii) The term “party” includes a Person who was, is or is threatened to be made a named defendant or respondent in a proceeding.

 

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(iv) The term “proceeding” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal.

ARTICLE V

TAX MATTERS

Section 5.1. Disregarded Entity . The Company has only a single member and shall be a disregarded entity for Federal income tax purposes.

Section 5.2. Fiscal Year . The Company’s fiscal year shall be from January 1 to December 31 of each year.

ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

Section 6.1. Allocation of Net Income, Net Loss or Capital Gains . Subject to this Agreement and applicable law, all net income, net loss or capital gains of the Company for each fiscal year of the Company shall be allocated to the Member.

Section 6.2. Distribution of Available Cash . Periodically, the available cash of the Company, if any, shall be distributed to the Member, at its discretion,

ARTICLE VII

CESSATION OF MEMBERSHIP

Section 7.1. Cessation of Membership . The Member shall cease to be a Member upon the occurrence of an event of disassociation as described in Section 275.280 of the Act, in which case the Company shall be dissolved in accordance with Article VIII unless:

(a) A new or substitute member is admitted to the Company effective as of the occurrence of the event that terminated the continued membership of the Member; or

(b) Within ninety (90) days after the occurrence of the event that terminated the continued membership of the Member, the successor-in-interest of the Member agrees in writing to continue the Company and to the admission of the successor-in-interest of the Member or its designee to the Company as a new or substitute member, effective as of the occurrence of the event that terminated the continued membership of the Member.

ARTICLE VIII

DISSOLUTION

Section 8.1. Dissolution of the Company.

(a) The Company shall be dissolved, its assets disposed of, and its affairs wound up upon the happening of the first to occur of the following:

 

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(i) A vote or consent by the Member that the Company should be dissolved.

(ii) The stated date for dissolution of the Company, if any, set forth in the Articles of Organization.

(iii) A dissolution event as may he provided by applicable law, to the extent not overridden by this Agreement.

(b) Upon dissolution, the Company shall continue its existence but shall not carry on any business except that appropriate to wind up and liquidate its business and affairs, including without limitation collecting its assets, disposing of its properties not to be distributed in kind to the Member, discharging or making provision for discharging its liabilities, distributing its remaining property to the Member, and doing any other act necessary to wind up and liquidate its business and affairs.

Section 8.2. Winding Up, Liquidation and Distribution of Assets . Upon dissolution, an accounting shall be made of the accounts of the Company and of the Company’s assets, liabilities, and operations. The Member shall immediately proceed to wind up the affairs of the Company in accordance with the Act.

Section 8.3. Articles of Dissolution . After the dissolution of the Company, articles of dissolution shall be executed and delivered to the Kentucky Secretary of State for filing in accordance with the Act. The Member or other appropriate party shall have authority to distribute any Company property discovered after dissolution, to convey real estate, and to take such other action as may be necessary on behalf of and in the name of the Company.

ARTICLE IX

MISCELLANEOUS

Section 9.1. Effect of Amendment . This Agreement amends, restates and supersedes in its entirety the Operating Agreement of the Company dated July 8, 2010.

Section 9.2. Governing Law . This Agreement and the rights of the parties hereunder will he governed by, interpreted and enforced in accordance with the laws of the Commonwealth of Kentucky.

Section 9.3. Binding Effect . This Agreement is binding upon and inures to the benefit of the Company, the Member and the Member’s successors and assigns.

Section 9.4. No Third Party Beneficiary . This Agreement is made solely and specifically among and for the benefit of the parties hereto and their respective successors and assigns, subject to the express provisions hereof relating to successors and assigns, and no other Person will have any rights, interests, or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise.

Section 9.5. Amendments . All amendments to this Agreement must be in writing and signed by the Member.

 

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Section 9.6. Title to Company Property . Legal title to all property of the Company will be held and conveyed in the name of the Company.

[Remainder of page intentionally left blank; signature page follows.]

 

6


IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the date set forth in the caption.

 

SOUTH CENTRAL KENTUCKY

LIMESTONE, LLC

By:   Glass Paving and Stone, LLC, its Sole Member
   
  By:   /s/ James D. Scott
  Title:   Manager
   

 

(the “ Company ”)

   
GLASS PAVING AND STONE, LLC
   
  By:  

/s/ James D. Scott

  Title:  

Manager

   

(the “ Member ”)

 

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EXHIBIT A

 

NAME OF MEMBER

  

ADDRESS

  

INITIAL CAPITAL CONTRIBUTION

   UNITS  

Glass Paving and

Stone, LLC

   395 North Middletown Road, Paris, KY 40361   

(a) a fee simple interest in that real property referred to as the “Monroe County Quarry” as described in Schedule 1.4(a) of that certain Membership Unit Purchase Agreement dated July 23, 2010 among the Company, Member, Scotty’s Contracting & Stone, LLC and Quality Asphalt, LLC (the “ Purchase Agreement ”);

 

(b) a fee simple interest in that portion of the real property referred to as the “Barren County Quarry” described in Schedule 1.4(b) of the Purchase Agreement;

 

(c) a fee simple interest in that portion of the real property referred to as the “Metcalfe County Quarry” described in Schedule 1.4(e) of the Purchase Agreement;

 

(d) a fee simple interest in that real property referred to as “Summer Shade Quarry” as described in Schedule 1.4(d) of the Purchase Agreement;

 

(e) a leasehold interest in the real property known as the “Barren East Quarry” as described in Schedule 1.4(e) of the Purchase Agreement;

 

(f) a fee simple interest in that real property known as “Pace Quarry” as described in Schedule 1.4(f) of the Purchase Agreement;

 

(g) a fee simple interest in that real property known as “McMurtrey Quarry” as described in Schedule 1.4(g) of the Purchase Agreement;

 

(h) SCS Stockpile Inventory and Liquid Inventory on site at the SCS Quarries;

 

(i) crushing and mobile equipment set forth in Schedule 1.4(i) of the Purchase Agreement;

     100   

 

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               UNITS
     

(j) all right, title and interest in the unregistered trade names set forth in Section 1.4(j) of the Purchase Agreement;

 

(k) any Permits associated with the SCS Quarries;

 

(l) the stone and mineral rights (but not the surface rights) with respect to the real property described in Schedule 1.4(c) of the Purchase Agreement; and

 

(m) any mineral leases on reserves at the SCS Quarries.

(Capitalized terms used but not defined above have the meanings given to them in the Purchase Agreement.)

  

 

9

Exhibit 3.46

ARTICLES OF ORGANIZATION

OF

CON-AGG L.L.C.

The undersigned organizers hereby form and establish a limited liability company under the Missouri Limited Liability Company Act (the “ Act ”).

ARTICLE I

The name of the limited liability company is Con-Agg L.L.C. (the “ Company ”).

ARTICLE II

The latest date on which the Company is to dissolve shall be January 1, 2046.

ARTICLE III

The Company is organized for profit and the nature of its business and purposes to be conducted or promoted are:

 

  A. To operate quarries;

 

  B. To produce and sell ready mix concrete and related products;

 

  C. To develop, construct and lease real estate; and

 

  D. To engage in any lawful act or activities for which limited liability companies may be organized under the Act.

ARTICLE IV

The location of the registered office of the Company in the state of Missouri is 2604 N. Stadium Blvd., Columbia, Missouri 65202, and the initial registered agent of the Company is BSMWL, Inc., located at 2300 Main, Suite 1100, Kansas City, Missouri 64108.

ARTICLE V

The management of the Company shall be vested in two managers.

ARTICLE VI

Upon the occurrence of any event described in R.S.Mo. Section 347.123 or any other event causing a member to cease to be a member of the Company, the members have the right to continue uninterrupted the Company’s business and affairs in accordance with the terms of the Company’s Operating Agreement (as may then be amended).


ARTICLE VII

The Company’s organizers are:

 

Larry W. Moore

   3401 Westwind Drive
   Columbia, Missouri 65202

Billy G. Sapp

   8730 Highway AB
   Columbia, Missouri 65206

ARTICLE VIII

Additional provisions relating to the formation, management, ownership, and operation of the Company are set forth in the Company’s Operating Agreement.

ARTICLE IX

The Company reserves the right to amend, alter, change, or repeal any provision contained in these Articles of Organization in the manner now or hereafter prescribed by the Act and the Company’s Operating Agreement.

ARTICLE X

These Articles of Organization shall be effective upon the filing hereof in the Office of the Secretary of State of Missouri.

IN WITNESS WHEREOF , the organizers have hereunto subscribed their names this 20th day of December, 1996.

 

/s/ Larry W. Moore
Name: Larry W. Moore
/s/ Billy G. Sapp
Name: Billy G. Sapp

 

2


Amendment of Articles of Organization

 

1. The current name of the limited liability company is CON-AGG OF MO, L.L.C. Charter #: LC0010685.

 

2. The effective date of this document is the date it is filed by the Secretary of State of Missouri unless a future date is otherwise indicated: Upon Filing. (Date may not be more than 90 days after the filing date in this Office)

 

3. State date of occurrence that required this amendment: September 14, 2010.

 

4. The articles of organization are hereby amended as follows: Article V. The management of the Company shall be vested in its members.

 

5. (Check if applicable) This amendment is required to be filed because:

          management of the limited liability company is vested in one or more managers where management had not been so previously vested.

          management of the limited liability company is no longer vested in one or more managers where management was previously so vested.

          a change in the name of the limited liability company.

          a change in the time set forth in the-articles of organization for the limited liability company to dissolve.

 

6. This amendment is (check either or both):

          authorized under the operating agreement

          required to he filed under the provisions of RSMo Chapter 347

In Affirmation thereof, the facts stated above are true and correct:

(The undersigned understands that false statements made in this filing arc subject to the penalties provided under Section 575.040, RSMo)

 

/s/ Michael Brady

   Summit Materials Companies I, LLC,    September 14, 2010

Authorized Signature

   a Delaware Limited liability company, member    Date
   By: Michael Brady, Vice President   


State of Missouri

Rebecca McDowell Cook, Secretary of State

P.O. Box 778, Jefferson City, Mo. 65102

Corporation Division

Amendment of Articles of Organization

(Submit in duplicate with filing fee of $25)

 

1. The name of the limited liability company is:

 

CON -AGG , L.L.C.

 

2. The effective date of this document is the date it is filed by the Secretary of State of Missouri, unless a future date is indicated, as follows:

 

 

(Date may not be more than 90 days after the filing date in this office)

 

3.      State date of occurrence that required this amendment:

 

March 12, 1998

 

Month/Day/Year

 

4. (Check as applicable) This amendment is required to be filed because:

 

  ¨ management of the limited liability company is vested in one or more managers where management had not been so previously vested.

 

  ¨ management of the limited liability company is no longer vested in one or more managers where management was previously so vested.

 

  x a change in the name of the limited liability company. CI

 

  ¨ a change in the time set for in the articles of organization for the limited liability company to dissolve.

The articles of organization are hereby amended as follows:

Section 2.1 of Article II shall be amended to read as follows:

2.1 Name. The name of the Company is Con-Agg of MO, L.L.C., and all business of the Company shall be conducted under that name, or such other fictitious .name as .approved-by-the-Managers.

 

5. This amendment is (check either or both):

 

  ¨ authorized under the operating agreement

 

  x required to be filed under the provisions of RSMo Chapter 347

In affirmation thereof, the facts stated above are true:

 

/s/ Larry W. Morre

  Authorized signature

/s/ Billy Sapp

  Authorized signature

 

  Authorized signature

LLC-12 (12-94)


State of Missouri

Robin Carnahan, Secretary of State

Corporations Division

PO Box 778 / 600 W. Main St., Rm. 322

Jefferson City, MO 65102

Amendment of Articles of Organization

(Submit with filing fee of $25.00)

 

1.   The current name of the limited liability company is CON-AGG OF MO, LLC . Charter # LC0010685
2.   The effective date of this document is the date it is filed by the Secretary of State of Missouri unless a. future date is otherwise
  indicated:  

Upon Filing

 

(Date may not be more than 90 days alter the filing dale in this Office)

3.       State date of occurrence that required this amendment:  

September 14, 2010

   

Month/Day/Year

4.      

The articles of organization are hereby amended as follows:

 

 

 

Article V. The management of the Company shall be vested in its members.

 

 

5.   (Check if applicable) This amendment is required to be filed because:

 

  x management of the limited liability company is vested in one or more managers where management had not been so previously vested.

 

  ¨ management of the limited liability company is no longer vested in one or more managers where management was previously so vested.

 

  ¨ a change in the name of the limited liability company.

 

  ¨ a change in the time set forth in the-articles of organization for the limited liability company to dissolve.

 

6. This amendment is (check either or both);

 

  x authorized under the operating agreement

 

  x required to he filed under the provisions of RSMo Chapter 347

In Affirmation thereof, the facts stated above are true and correct:

(The undersigned understands that false statements made in this tiling are subject to the penalties provided under Section 575.040, RSMo)

 

/s/ Michael Brady    Summit Materials Companies 1, LLC, a Delaware limited liability company, member By Michael Brady, Vice President   September 14, 2010
Authorized Signature   

Printed Name

 

  Date
Authorized Signature   

Printed Name

 

  Date

 

Name and address to return file document:

Name:

 

 

Address:  

 

City, State, And Zip Code:  

 

 

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Exhibit 3.47

SECOND AMENDED AND RESTATED

OPERATING AGREEMENT

OF

CON-AGG OF MO, L.L.C.

THIS SECOND AMENDED AND RESTATED OPERATING AGREEMENT (this “ Agreement ”) of Con-Agg of MO, L.L.C., a Missouri limited liability company (the “ Company ”) is effective as of this 13th day of September, 2010, by Summit Materials Companies I, LLC, a Delaware limited liability company, hereinafter sometimes referred to as the “ Member ”.

RECITALS

A. On December 30, 1996, The Harold E. Johnson Companies, Inc., a Missouri corporation (“ HEJ ”) and Columbia Ready-Mix, Inc., a Missouri corporation (“ CRM ” and together with HEJ, the “ Original Members ”) caused the Company to be formed as a limited liability company under the laws of the State of Missouri.

B. On January 2, 1997, the Original Members adopted an Operating Agreement of the Company (the “ Original Agreement ”), and effective as of September 9, 2010, the Original Members contributed all of their membership interests in the Company to HEJCRM, LLC, a Missouri limited liability company (“ HEJCRM ”).

C. Immediately following the transfer of the membership interests in the Company to HEJCRM, HEJCRM amended and restated Original Agreement and adopted an amended and restated operating agreement of the Company effective immediately after the transfer of the membership interests of the Company to HEJCRM.

D. On the date hereof, the Member and HEJCRM, among others, entered into a Membership Interest Purchase Agreement (the “ Purchase Agreement ”), pursuant to which, among other things, HEJCRM agreed to sell and transfer all of its membership interests in the Company to the Member, and, as required by the terms of the Purchase Agreement, HEJCRM transferred all of its membership interests in the Company pursuant to an Assignment of Membership Interests of even date herewith.

E. The Member does hereby adopt this Agreement as the new Operating Agreement of the Company effective immediately after the transfer of the membership interests of the Company to the Member on the date set forth above.

AGREEMENT

NOW, THEREFORE, in consideration of mutual covenants and for other good and valuable consideration, the Member agrees as follows:


ARTICLE I

THE LIMITED LIABILITY COMPANY

Section 1.01. Formation of Limited Liability Company .

(a) By Articles of Organization filed with the Missouri Secretary of State on the 30th day of December, 1996, the Original Members formed the Company for the limited purposes and scope set forth in the Original Agreement and this Agreement. The business and affairs of the Company shall be conducted solely under the name “Con-Agg of MO, L.L.C.” and such name shall be used at all times in connection with the Company’s business and affairs.

(b) Except as expressly provided in this Agreement to the contrary, the rights and obligations of the Member and the administration and termination of the Company shall be governed by the Missouri Limited Liability Company Act (the “ Act ”).

(c) The Member’s interest in the Company (“ Membership Interest ”) shall be comprised of any and all rights accorded the Member under this Agreement, the Company’s Articles of Organization or the Act. The Member’s Membership Interest is personal property for all purposes. All real and other property (irrespective of its nature) owned by the Company shall be deemed owned by the Company as an entity, and the Member shall not have any ownership of such property.

Section 1.02. Purposes and Scope of the Company .

The business of the Company (the “ Business ”) shall be in the business of operating quarries, producing and selling ready mix concrete and related products, and to engage in any lawful act or activities for which limited liability companies may be organized pursuant to the Act.

Section 1.03. Title to Property .

The legal title to all assets and properties of the Company shall be held in the name of the Company.

Section 1.04. Registered Agent; Principal Place of Business .

The registered office of the Company shall be as set forth in the Company’s Articles of Organization or as provided in the Act. The location of the office of the Company shall be 2604 N. Stadium Blvd., Columbia, Missouri 65202, or at such other place or places as the Member shall designate.

Section 1.05. Company Certificate .

The Member shall execute any certificate or document required by law to be filed in connection with the formation and operation of the Company and to cause such certificate or document to be filed in the appropriate governmental office.

 

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ARTICLE II

MANAGEMENT

Section 2.01. Management of the Company .

The business and affairs of the Company shall be managed by the Member.

ARTICLE III

CAPITAL CONTRIBUTIONS

Section 3.01. Initial Contributions and Capital Accounts .

The initial capital contributions of the Member shall be as set forth on the books of the Company, which shall reflect the fair market value and related debt obligations of all property contributed by the Member.

Section 3.02. Additional Capital .

No additional capital shall be required to be contributed by the Member, but the Member may agree to contribute such additional capital as it shall determine, in its sole discretion, is appropriate.

Section 3.03. No Interest on Capital .

No interest shall be payable on the capital contributions of the Member.

ARTICLE IV

ACCOUNTING AND DISTRIBUTION; TAXES

Section 4.01. Profits and Losses and Allocations .

For accounting and federal and state income tax purposes, all profits and losses of the Company and all income, deductions and credits shall be allocated to the Member pursuant to the treatment of the Company, for tax purposes.

Section 4.02. Tax Status .

Any provision of this Agreement to the contrary notwithstanding, solely for federal income tax purposes, the Member hereby recognizes that the Company will be a disregarded entity for tax purposes, but this tax treatment shall not be construed to extend the purposes of the Company or expand the obligations or liabilities of the Company or the Member.

Section 4.03 . Distribution to Member .

The Company shall make such distributions to the Member as may be authorized by the Member from time to time.

 

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Section 4.04. Accounting .

 

  (a) The fiscal year of the Company shall be the calendar year.

 

  (b) The Company shall maintain proper and complete books of account for federal tax and state business law purposes.

ARTICLE V

TERM AND TERMINATION

Section 5.01. Term.

(a) The Company shall continue and not terminate, notwithstanding any termination provisions under the Act, until the Member elects to terminate the Company, unless sooner dissolved and liquidated as elsewhere in this Agreement expressly set forth.

(b) If the Company shall terminate, as set forth in this Agreement, the affairs of the Company shall be wound up, and, during the winding up period and until such time as the Company’s interest in all of its property and assets have been sold and the proceeds therefrom collected and distributed, the rights and obligations of the Member and other persons owning an interest in the Company shall be governed and controlled by all of the provisions of this Agreement. This paragraph shall only apply to a dissolution of the Company if there is no reconstitution of the Company pursuant to the provisions of this Agreement.

Section 5.02. Winding Up .

In the event of the sale or other disposition of all or substantially all of the assets of the Company or the dissolution and termination of the Company for any other reason, the Company shall be dissolved and liquidated and all of the property and assets of the Company shall be distributed or applied as follows and in the following order of priority:

(a) First, all Company debts, liabilities and obligations (excluding any loans or advances from the Member) shall be paid in full or reserves therefor shall be set aside.

(b) Second, all Company debts, liabilities and obligations to the Member shall be paid, but if the amount available therefor shall be insufficient, then pro rata on account thereof.

(c) Third, any amount remaining after the payment of the items referred to in paragraphs (a) and (b) above shall be distributed to the Member.

ARTICLE VI

GENERAL

Section 6.01. Governing Law .

This Agreement and the obligations of the Member and its successors and assigns hereunder shall be interpreted, construed and enforced in accordance with the laws of the State of Missouri, without regard to the conflict-of-laws rules of such state.

 

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IN WITNESS WHEREOF, this Agreement is executed effective as of the date first above written.

 

MEMBER:

 

Summit Materials Companies I, LLC
By:   /s/ Michael Brady
Name: Michael Brady
Title: Vice President

 

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Exhibit 3.48

State of Missouri

Rebecca McDowell Cook, Secretary of State

P.O. Box 778, Jefferson City, MO 65102

Corporation Division

Articles of Organization

(Submit in duplicate with filing fee of $105)

 

1. The name of the limited liability company is Fischer Quarries, L.L.C.

 

2. The purpose(s) for which the limited liability company is organized: Quarrying and Manufacture of rock for commercial purposes.

 

3. The name and address of the limited liability company’s registered agent in Missouri is: Joseph M. Fischer, 2300 Clinton Road, Sedalia, MO 65301.

 

4. The management of the limited liability company is vested in one or more managers.           Yes           No

 

5. The latest date on which the limited liability company is to dissolve is: 12/31/50.

 

6. Upon the withdrawal of any member, the remaining member(s) have the following right(s) (if any) to continue the business and affairs of the limited liability company:

The Limited Liability Company shall terminate unless all remaining members agree to continue the business of the Limited Liability Company.

 

7. The name(s) and addresses of each organizer:

Daniel W. Fischer, 2425 Woodland Drive, Sedalia, MO 65301

Joseph M. Fischer, 27701 Hackberry, Sedalia, MO 65301

 

8. For tax purposes, is the limited liability company considered a corporation?           Yes           No

In affirmation thereof, the facts stated above are true:

 

/s/ Joseph M. Fischer

   Organizer

/s/ Daniel W. Fischer

   Organizer

/s/ Daniel W. Fischer

   Organizer

Exhibit 3.49

OPERATING AGREEMENT

OF

FISCHER QUARRIES, L.L.C.,

a Missouri Limited Liability Company

THIS OPERATING AGREEMENT is made and entered into as of the 21st day of April, 1996, by and between the members of FISCHER QUARRIES, L.L.C., a Missouri Limited Liability Company.

ARTICLE I – FORMATION AND CONTINUANCE

Section 1.1 Intent . The Members hereto desire to form a limited liability company (the “LLC” pursuant to the terms and conditions set forth herein and in the Missouri Limited Liability Company Act, R.S.Mo. Sec. 347.010, et . seq ., as amended (the “Act”). In the event of a conflict between the Act and this Agreement, this Agreement shall control.

Section 1.2 Articles of Organization . The Members shall file an original and one copy of the Articles of Organization (the “Articles”) in the Office of the Secretary of State of Missouri. There shall promptly be filed an amendment to the Articles eliminating any inconsistency between the Articles and Section 1.5 hereof or any other provision hereof.

Section 1.3 Name and Principal Office . The name of the LLC is Fischer Quarries, L.L.C. The LLC’s principal office is 2300 Clinton Road, Sedalia, MO 65301, and thereafter, at such other place or places as the Members may from time to time designate. Such name shall be used at all times in connection with the business and affairs of the LLC. The LLC and its trade name shall be registered with the appropriate authorities in any jurisdiction in which the LLC conducts its business.

Section 1.4 Term . The LLC shall commence as of the date of filing of the original Articles and shall continue until December 31, 2050, unless sooner wound up, dissolved and terminated under the terms, conditions and agreements set forth herein.

Section 1.5 Purpose of LLC . The LLC is formed by the purpose of acquiring, owning and managing a rock quarry and/or other real and personal property. In addition, the LLC may engage in all other general business activities related to or incidental to said stated purpose.

Section 1.6 Registered Office and Agent . The LLC’s registered office shall be 2300 Clinton Road, Sedalia, Missouri 65301, and the LLC’s registered agent at this address shall be Joseph M. Fischer.

Section 1.7 Defined Terms . The following terms used in this Agreement shall have the following meanings (unless other provided herein):

“Agreement” shall mean this Operating Agreement of Fischer Quarries, L.L.C., as amended from time to time.


“Affiliate” shall mean any person or entity which: (i) directly or indirectly controls, is controlled by, or is under common control with a Member; or (ii) owns or controls 10% of more of the outstanding voting securities of a Member; or (iii) is an officer, director, employee, partner or trustee of any entity described above; or (iv) is an entity for which a Member is an officer, director, partner or trustee.

“Appraised Value” shall mean a M.A.I. appraisal of the LLC Property prepared in accordance with M.A.I. requirements, and which is approved by a majority of the Ownership Interest exclusive of those Ownership Interests being sold, redeemed or otherwise transferred.

“Articles” shall mean the Articles of Organization of the LLC, as amended from time to time.

“Bank” shall mean the bank designated by the Manager as the LLC’s primary bank.

“Bankruptcy” shall mean the initiation of proceedings under the Title XI of the United State Code for any Member, whether voluntarily or involuntarily; or, the appointment of a trustee, administrator, receiver or other entity for the purpose of administering assets of any Member for the benefit of creditors; or any other transfer of assets by a Member, whether voluntarily or involuntarily, for the benefit of creditors.

“Bankruptcy Code” shall mean Title XI of the United States Code as now or hereafter amended.

“Business” shall mean the business of the LLC.

“Capital Accounts” shall mean the accounts maintained with respect to Members as described in Section 2.4.

“Capital Contributions” shall mean the contributions of the Members, in cash and property, to the capital of the LLC as described on Exhibit B attached hereto and made a part hereof as though set out herein verbatim .

“Code” shall mean the Internal Revenue Code of 1986, as now or hereafter amended.

“Deferred Capital Contribution” shall mean the future Capital Contribution obligation, if any, of each member which may be called by the Manager as provided in Section 2.5.

“Distributable Net Proceeds” shall mean, as of any date, all cash funds of the LLC from whatever source derived on hand at such date, after:

(a) payment of all operating expenses of the LLC payable at such time;

(b) payment of then due principal and all accrued interest on the Property Loan;

(c) payment of all costs of purchase, sale, refinance, condemnation or other disposition, including any fees paid to a Member or an Affiliate of a Member;

 

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(d) payment of all then due unsecured indebtedness of the LLC; and

(e) provision for LLC Reserves.

“LLC” shall mean Fischer Quarries, L.L.C., a Missouri Limited Liability Company.

“LLC Property” shall mean all real and personal property owned by the LLC, including the Property.

“LLC Reserves” shall mean the cash reserves established by the Members for any expenses related to the LLC Property, and for the payment of any future contingencies and anticipated obligations considering, among other things, projects cash requirements for the LLC, the amount and source of cash on hand, and the projected receipt of cash by the LLC from operations.

“Managing Member” shall initially mean Daniel W. Fischer and Joseph M. Fischer, and any successors, replacements or other parties elected or appointed as provided herein who must be a member of the LLC. The Managing Member’s authority shall be limited to routine day-to-day business as described in Section 3. There shall be no requirement that the LLC have a Managing Member.

“Members” shall mean those parties who have been admitted as Members in the LLC.

“Members’ Loan” shall mean any loan the Member make to the LLC at any time during the LLC’s existence not including the Property Loan as provided in Section 2.8.1.

“Ownership Interest” shall mean the capital and profits ownership of a Member in the LLC, as generally described in Section 4.2, and shall include all rights to participate in the management of the LLC granted to Members. For purposes of voting, the Distributable Net Proceeds allocation percentages set forth in Section 4.2 shall be deemed to be the “Ownership Interest Percentages”.

“Ownership Interest Value” shall mean the value of an Ownership Interest equal to the product of the Ownership Interest and the Appraised Value of the LLC Property, reduced by all Property Debt and all obligations of the LLC.

“Prime Rate” shall mean the prime rate of interest announced or published from time to time by the Bank.

“Pro Rata” shall mean the ratio that each Member’s Ownership Interest bears to the Ownership Interest of all the Members.

“Property” shall mean all real and personal property described on Exhibit A attached hereto and made a part hereof as though set out herein verbatim .

“Property Loan” shall mean that certain loan made for the purchase of the Property and secured by a first mortgage on said Property.

 

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“Property Mortgage” shall mean a mortgage and/or other security instrument of the Property which secures the Property Loan.

“Regulations” shall mean the Treasury Department Regulations issued pursuant to the Code.

“Sale Notice” shall mean a written notice delivered in connection with a sale of a Member’s Ownership Interest setting forth (a) the names of the persons to whom a sale is proposed to be made, (b) the purchase price to be paid for the Ownership Interest, including a complete description of any and all non-cash consideration to be derived, (c) the terms and conditions of the sale, (d) the date of the closing of the sale, and (e) all other pertinent details of the transaction.

“Service” shall mean the Internal Revenue Service.

ARTICLE 2 – CAPITAL

Section 2.1 Capital Contributions/Admission of Members . The Members who have made the required Capital Contribution set forth on Exhibit B shall be admitted. Members shall also agree to contribute the Deferred Capital Contributions, if any, specified, in the Agreement when called by the Members. Each Member shall be severally liable for his own Capital Contribution and Deferred Capital Contribution and not jointly and severally liable for the Capital Contribution and Deferred Capital Contribution of any other Member.

Section 2.2 Use of Capital . All capital contributed to the LLC shall only be employed in the business and for the benefit and advantage of the LLC.

Section 2.3 Return of Capital . Except as expressly provided herein, no Member shall be entitled to the return of his Capital Contributions. No Capital Account of any Member shall earn interest.

Section 2.4 Capital Account . The LLC shall maintain a Capital Account for each Member. The Capital Account shall be increased by Capital Contributions and income and shall be decreased by distributions and losses. The Capital Account shall be generally maintained in conformity with Code Sec. 704 and Regulations Sec. 1.704.1(b)(2)(iv). All decisions regarding the Capital Accounts shall be made by Members holding a majority of the Ownership Interests.

Section 2.5 Additional Capital .

2.5.1 Deferred Capital Contributions . Additional Capital Contributions as set forth on Exhibit B may be required from the Members from time to time as requested by Members holding a majority of the Ownership Interests thirty (30) days after written notice.

2.5.2 New Capital . If at any time during the LLC’s term there are insufficient LLC Reserves (after consideration of Deferred Capital Contributions) to pay the debt service, operating expenses, or other expenses or costs necessary to operate the Property, the Members shall have the authority to raise additional capital by selling additional Ownership Interests, first to Members and, if necessary, to non-Members. The Members must first offer any new

 

4


Ownership Interest pro rata to the existing Members, excluding any Members in default under Section 2.5, upon such terms and conditions, and for such prices, as are proposed for sale to third parties. If the Members do not purchase all the new Ownership Interests within twenty (20) days of notice, then the remaining new Ownership Interests may be offered to non-Members on the same terms and conditions. Such new Members shall be admitted to the LLC upon purchase of the new interests and completion of all required documentation.

Section 2.6 Failure to Contribute .

2.6.1 Material Breach . The Members agree that any failure to make a required Deferred Capital Contribution is critical to the success of the LLC and will jeopardize the investment of all Members. The failure of any Member to make any Deferred Capital Contribution when due (a “Payment Default”) shall constitute a material breach of this agreement, and shall forthwith, upon such Payment Default, give rise to the remedies set forth in this Section (any one or more of which may be pursued by the Members by vote of a majority of the remaining Ownership Interests) in addition to all other remedies which the LLC and all non-defaulting Members may otherwise have under Missouri law excluding consequential damages and damages for lost profits.

2.6.2 Interest on Defaulted Amounts . If any Member is in Payment Default and does not cure such default within fifteen (15) days after notice of such default, he shall pay an interest charge at an annual rate equal to two percent (2%) over Prime Rate, at the time such default occurs, or the then legal maximum, whichever is lower. Such interest rate shall be adjusted every six (6) months during the period of default.

2.6.3 Purchase and Sale of Interest . If any Member is in Payment Default, and the Member does not cure the default within fifteen (15) days by payment of the full amount of the Deferred Capital Contribution which is due, plus accrued interest on the defaulted amount, the Managing Member may send a notice to all non-defaulting Members stating that those non-defaulting Members wishing to purchase said interest shall have the prorata right to do so by giving notice of such intent to the Managing Member within fifteen (15) says of their receipt of the notice. Any Member failing to give such notice of intent within such fifteen (15) day period shall be deemed to have waved such right and any portion of the defaulting Member’s interest not so acquired by non-defaulting Members shall be offered to the remaining non-defaulting Members by notice from the Managing Member and any such non-defaulting Member shall have a pro rata right to acquire the interest offered by giving the Managing Member notice within fifteen (15) days of their receipt of the notice. This procedure will be followed until all of the defaulting Member’s interest has been acquired by the non-defaulting Members if they so elect. (Any Member acquiring such interest is sometimes hereinafter referred to as a “Replacement Member”.)

The total purchase price for any purchase under this Section shall be 100% of the defaulting Member’s Ownership Interest Value, less all interest accrued on the defaulted amount to the date of such purchase, such 100% discount representing the risk, hardship and administrative costs of the default to the LLC. The purchase price shall be payable in cash. Notwithstanding the foregoing, if Replacement Member or Members purchase the defaulting Member’s interest, the Replacement Member shall have all rights associated with the entire interest. Any purchaser acquiring a defaulting Member’s interest pursuant to this Section shall be obligated to contribute any remaining additional contributions required of such Member under this Agreement.

 

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2.6.4 Foreclosure of Security Interest . To secure the obligations of the Members to make Deferred Capital Contributions, each Member expressly grants the LLC a personal property security lien upon the interest of each Member. If a Member is in Payment Default for fifteen (15) days end does not cure such Payment Default by payment of the full amount of the Capital Contribution which is due, plus accrued interest before the end of the fifteen (15) day period, the LLC shall have the right on ten (10) days written notice to foreclose the lien and have the interest of the defaulting Member sold at a public or private sale, at the election of the LLC, the foreclosure sale to be conducted in accordance with the applicable provisions of the Uniform Commercial Code of the State of Missouri pertaining to the foreclosure of a personal property security lien; provided, however, that the remedy provided by this section shall be pursued only after the remedy provided by Section 2.6.3 has been exhausted without Replacement Members purchasing 100%, of the defaulting Member’s interest.

Each Member acknowledges that it will not be feasible to have a public sale for various reasons, including required compliance with provisions concerning registration, qualification or compliance with, the Securities Act of 1933, any successor statute thereto, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder, or in any other applicable securities law or any rule or regulation promulgated thereunder. The Members, therefore, consent and agree that the Ownership Interests may be sold in one or more private sales to a restricted group of purchasers who may be obliged to agree, among other things, to acquire such Ownership Interest(s) for their own account for investment and not with the view to the distribution or resale thereof, and each member acknowledges that any such private sale may be at prices and on other terms less favorable to the defaulting Member than if such Ownership Interest were sold at a public sale. Each Member agrees that any private sales made under the foregoing circumstances shall be deemed to have been made in a commercially reasonable manner under the Uniform Commercial Code as enforced in the State of Missouri or any other jurisdiction.

2.6.5 Suspension of Defaulting Members’ Rights . All rights and benefits of a defaulting Member attributable to the defaulting Member’s Ownership Interest, including the right to receive distributions of LLC Reserves and Distributable Net Proceeds, shall be suspended during the period of default and the Managing Member shall have the right to exercise all voting rights attributable to the defaulting Member during the period of default; provided, however , that if any distribution of funds is made during the period of default, then the defaulted amounts plus accrued interest will be deducted from any distribution otherwise payable to such defaulting Member; provided, further , that if the amount of the defaulting Member’s allocable share of such distribution does not exceed such Member’s defaulted amount plus accrued interest, then the default shall not be cured, the Member shall continue to be in default to the extent that his defaulted amount plus accrued interest exceeds his allocable share of the distributions to the Members. If the defaulting Member is also a Managing Member, then such member shall be deemed to have resigned as of the date any applicable cure period lapses and shall be replaced as provided in Section 3.2.

 

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2.6.6 Redemption Rights of Defaulting Members . A Member whose Ownership Interest will be sold at foreclosure sale under this Section 2.6 shall have the right only until the transfer of such Ownership Interest to redeem the Ownership Interest by payment, in cash, to the LLC of (a) all costs and expenses, including legal fees associated with any enforcement actions; (b) payment of all Deferred Capital Contributions associated with the Ownership Interest (whether called or not); (c) interest on all amounts owed under (a) and (b) at the lesser of eighteen percent (18%) per annum or the maximum rate allowed by law from the date such costs and expenses were incurred in the case of (a) and from the date of delinquency in the case of (b).

Section 2.7 Limited Liability of Members . Notwithstanding anything to the contrary herein contained, however, the liability of a Member for the operating or other losses of the LLC shall in no event exceed, in the aggregate, the amount of his Capital Contributions and obligation to the make Deferred Capital Contributions under Section 2.1 and 2.5. Members shall not be obligated to restore any negative Capital Account balances. No creditor or any party other than the Manager or other Members shall have the right to enforce any obligation to make Deferred Capital Contributions pursuant to Section 2.5 against the Members.

Section 2.8 Loans .

2.8.1 Member’s Loans .

(a) Member’s Loans . Members may make a “Member’s Loan” to the LLC for any purpose determined to be necessary or desirable by the holders of a majority of the Ownership Interests. The Members shall give ten (10) days written notice of such recommendation which shall be approved or rejected as provided in Section 6.14.

(b) Repayment of Member’s Loans . Member’s Loan shall be repaid as funds are available out of: (i) subsequent Capital Contributions; (ii) cash proceeds generated from the ownership and operation of the LLC’s business; and/or (iii) cash proceeds generated from the LLC Property. Member’s Loans shall be repaid prior to any distribution to Members under Article 4.

(c) Interest Rate . Member’s Loans to the LLC shall bear interest at an annual rate equal to the Prime Rate at the time such loan is made, or the then legal maximum rate, whichever is lower, unless otherwise approved by Members holding a majority of the Ownership Interests. The Prime Rate shall be adjusted (increased or decreased) every six (6) months during the period of the loan.

(d) Obligation to Loan . No Member shall in any way be obligated or required to make loans to the LLC except as specifically set forth herein. If a Member’s Loan is to be made, all Members shall have an opportunity, but not an obligation, to participate in the loan on the basis of their Ownership Interest.

ARTICLE 3 – MANAGEMENT OF LLC & AGREEMENTS AMONG MEMBERS

Section 3.1 Authority of the Managing Member . Except as expressly provided to the contrary in this Agreement, the Managing Member shall have co-existent authority with the Members over the daily routine and ordinary management and control of the LLC Business.

 

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Except as expressly provided in this Agreement or as expressly directed by a vote of the holders of a majority of the Ownership Interests, the Managing Member shall have no additional authority regarding management of the LLC. All of the authority to manage the LLC and make all decisions and bind and obligate the LLC shall remain with the Members. The Members shall retain all rights to manage the LLC, which shall include, but not be limited to, the following:

(a) take all action necessary or desirable to acquire the Property and own, manage and operate the Business of the LLC as set forth herein;

(b) sell or mortgage or otherwise dispose of or encumber or take any action with regard to the LLC property;

(c) acquire such insurance as the Members deem reasonable and advisable;

(d) pay, collect, compromise, arbitrate or otherwise adjust any and all Claims or demands of or against the LLC;

(e) act for the LLC in all transactions concerning the LLC Business and/or the LLC Property or underlying property, including execution on behalf of the LLC of all documents in connection therewith;

(f) employ at the LLC’s expense such persons, firms, companies, agents, employees, attorneys, accountants, financial advisors, business consultants, and such other professional personnel, including Affiliates of the Members;

(g) establish bank accounts for the LLC funds, authorize designees to disburse such funds on behalf of the LLC, and for such purpose;

(h) negotiate with and compensate, as required, any governmental authorities regarding assessment, taxes and related matters;

(i) invest LLC funds in any form of bank accounts, government obligations, stocks, bonds or any other investment;

(j) admit Members to the. LLC as provided herein;

(k) distribute to Members their share of Distributable Net Proceeds;

(1) perform all other acts reasonable and necessary in connection with the LLC business.

The execution and delivery of any instrument described above that is signed by any Member shall be sufficient to bind the LLC. Notwithstanding the above, Members holding a majority of the Ownership Interests shall approve any action regarding the Property or the Business of the LLC which falls outside of the routine day-to-day management of the LLC.

 

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Section 3.2 Liability of Members; Indemnification . No Member shall be liable under a judgment, decree or order of a court, or in any other manner, for any debt, obligation or liability of the LLC. A member of the LLC shall not be personally liable to the LLC or its Members for any monetary damages for breach of fiduciary duty, except for liability for any acts or omissions which involve intentional misconduct, fraud or knowing violation of law or for a distribution, redemption or purchase of or with respect to a Member’s Ownership Interest in the LLC in violation of Missouri law. Any repeal or modification of this Section by the Members of the LLC shall be prospective only, and shall not adversely affect any limitation on the personal liability of a Member of the LLC existing at the time of such repeal or modification or thereafter arising as a result of the acts or omissions prior to the time of such repeal or modification. The LLC shall indemnify, save and hold harmless a Member from any loss, damage, liability or expense incurred or sustained by him by reason of any act performed by him or on behalf of the LLC and in furtherance of its interest; provided, however , that such right to indemnification shall not apply to relieve the Member from liability for gross negligence or willful malfeasance.

Section 3.3 Compensation of Managing Member, Members or Affiliates .

3.3.1 Compensation/Reimbursement of Expenses . No Member, including the Managing Member, shall receive compensation for managing the LLC. The Members will receive reimbursement for all direct out-of-pocket expenses incurred for and on behalf of the LLC when acting within the course and scope of their authority hereunder.

Section 3.4 Title to Property . Title to the Property and to all other LLC assets shall be held in the name of the LLC.

Section 3.5 Special Power of Attorney . Each Member hereby constitutes and appoints the Managing Member of the LLC, or any of them, and any successor of a Managing Member, and any duly appointed officer or general partner of an entity which is a Managing Member, with full power of substitution, the true and lawful attorney-in-fact of the undersigned, with the power to execute, acknowledge, record, file and/or publish:

(a) any amendment to the Articles pursuant to the Act or the laws of any state in which such documents are required to be filed; provided such document is not inconsistent with the terms of this Agreement;

(b) any instrument, certificate, or document required by any regulatory agency, laws of the United States, any state, or any other jurisdiction in which the LLC is doing or intends to do business or which the Members direct, by majority vote, the Managing Member to file or record; provided that such instrument, certificate or document is not inconsistent with the terms of this Agreement as in effect at that time; and

(c) any documents which may be required to continue the business of the LLC, to admit additional or substitute Members or to dissolve and terminate the LLC pursuant to the terms of this Agreement.

This power of attorney is expressly limited to those matters set forth in (a)—(c) above and no Managing Member shall take any action as attorney-in-fact for the Members beyond the authority expressly set forth in this Agreement or alter the rights of the Members with regard to allocations, distributions or other financial matters, voting, receipt of reports and information, or limitations on actions by a Managing Member under the Agreement, unless the Member has given a power of attorney to a Managing Member expressly for that purpose.

 

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The foregoing grant of authority:

(a) is a special power of attorney coupled with an interest in favor of the Managing Member and as such, shall be irrevocable and shall survive and shall not be affected by the subsequent disability, incapacity, death, incompetency, dissolution, or insanity of all or any of the Members;

(b) may be exercised for each Member by a signature of any Managing Member or by listing the names of all the Members and executing any instrument with the single signature of the Managing Member acting as attorney-in-fact for all of them; and

(c) shall survive the assignment by a Member of the whole or any portion of such Member’s interest in the LLC, except that where the assignee of the entire interest of a Member has furnished a power of attorney and has been approved by the Members for admission to the LLC as a substitute Member, this power of attorney shall survive the assignment for the sole purpose of enabling the Managing Member to execute, acknowledge, and file any instrument necessary to effect the substitution, and this power shall terminate thereafter.

ARTICLES 4 – DISTRIBUTIONS AND ALLOCATIONS

Section 4.1 Distributions and Allocations Generally . All distributions of LLC funds to the Members and allocations of taxable income and loss shall be allocated according to this Article 4 and shall be made in accordance with good and sound business and accounting practices at such times as the Members, by majority vote, may determine in their sole discretion. The LLC shall account for income, losses and distributions as if the LLC were a partnership, and shall file all tax returns and reports on that basis under Subchapter K of the Code.

Section 4.2 Distributable Net Proceeds . Subject to Section 4.1, the Distributable Net Proceeds shall be allocated and distributed periodically to the Members in the Ownership Interest Percentages set forth on Exhibit B, as they may change from time to time.

Section 4.3 Net Losses, Income and Gain . Except as otherwise provided in the Special Allocation Provisions if any, set forth in Exhibit C, which is attached hereto and made a part hereof as though set out herein verbatim , all taxable income, loss or capital gains or losses, or any other item reportable by the LLC for tax purposes shall be allocated in the Ownership Interest Percentages set forth in Section 4.2 and Exhibit B as they may change from time to time.

Section 4.4 LLC Reserves . The LLC shall at all times maintain sufficient reserves to pay its debts as they become due in the normal course of business. LLC Reserves that are distributed to the Member shall be allocated and distributed to the Members as provided above for Distributable Net Proceeds,

 

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ARTICLE 5 – BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS

Section 5.1 Books and Records . At all times during the LLC’s existence, the Members shall keep or cause to be kept true and accurate books of account. Such books and records shall be kept in accordance with the method of accounting selected by the Members for federal income tax purposes. Each Member, or his duly appointed representative, shall, at all reasonable times, have access to such books. The Members shall maintain, at the registered office of the LLC, the following:

(a) a list of all Members’ names and addresses, together with their Capital Contributions;

(b) a copy of the Articles, this Agreement and all amendments thereto;

(c) copies of minutes of all meetings, including written consents obtained from Members in lieu of meetings;

(d) copies of LLC tax returns and financial statements; and

(e) any other record required to be maintained by law.

Section 5.2 Annual Reports . Within seventy-five (75) days after the end of each fiscal year, the Managing Member shall cause to be delivered to each person who was a Member at any time during the fiscal year, an annual report containing the following:

(a) unaudited financial statements of the LLC, including without limitation, a balance sheet as of the end of the LLC’s fiscal year, and a statement of income and expenses;

(b) a general description of the activities of the LLC during the period covered by the report; and

(c) a report of any material transactions between the LLC and any Members, or any of their Affiliates, including fees or compensation paid by the LLC and the services performed by such Members, or any such Affiliates, for such fees and compensation.

Section 5.3 Tax Information . The Managing Member shall deliver to each of the Members, within seventy-five (75) days after the expiration of each tax year of the LLC, IRS Form 1065, including a “K-1” Statement and applicable state tax return information. This statement shall show the allocation of profit or loss of the LLC for federal income tax purposes, including all separately stated items, to each Member. The Members shall arrange for the preparation and filing of all necessary information returns of the LLC and shall make all necessary elections, determinations and allocations. The LLC shall bear all costs incurred by the Managing Member in connection with the requirements of this Section.

Section 5.4 Bank Accounts . The Member shall, in the name of the LLC, open and maintain a bank account or accounts to deposit all LLC funds, and shall use such funds solely for the LLC’s business.

 

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Section 5.5 LLC Elections . The LLC shall be taxed as a partnership for tax purposes. The Managing Member shall make all elections for the LLC provided for in the Code as directed by the Members, including, but not limited to, the elections provided for in Section 754 of the Code.

Section 5.6 Fiscal Year . The fiscal year of the LLC shall be the calendar year.

ARTICLE 6 – MEMBERS’ RELATIONSHIPS

Section 6.1 Transfer of a Member’s Interest—Approval . Except as provided in this Article 6, no Member shall sell, transfer, assign, convey, encumber or otherwise dispose of, by operation of law or otherwise, the whole or any part of his interest in the LLC, without the prior express written consent of Members holding one hundred percent (100%) of the Ownership Interests. The approved right regarding the transfer of Ownership Interests may be unreasonably withheld. Any such unauthorized transfer shall not vest the transferee with any rights as a Member other than the transferor’s right to receive distributions.

Section 6.2 Assignment of Member’s Interest as Security for Loan . A Member shall not be entitled to assign his Ownership Interest as security for a loan, unless approved under the same criteria as a transfer under Section 6.1.

Section 6.3 Right of First Refusal . If a sale or other transfer of a Member’s interest to a third party is otherwise approved, the remaining Members shall have a right of first refusal to match any bona fide offer to purchase a Member’s interest in the LLC on the same terms and price as such bona fide offer, to be elected and exercised within thirty (30) days after delivery of a Sale Notice by the selling Member to the remaining Members. The Members shall have the right to purchase not less than all of such Members’ Ownership Interests at such time.

Section 6.4 Additional Restrictions . No Member shall sell, transfer or dispose of, by operation of law or otherwise, all or any part of his interest in the LLC except by written instrument satisfactory to the Members, accompanied by such assurance of the genuineness and effectiveness of each such signature. No assignment shall be valid or effective unless such assignment is in compliance with the conditions contained in this Article 6. Any unauthorized assignment or transfer shall be void ab initio .

Section 6.5 Legend Conditions . Any documents and records evidencing a Member’s Interest in the LLC, whether issued originally or subsequently, shall bear and be subject to legend conditions as follows:

“Ownership Interests evidenced by this certificate, or otherwise, may not be sold, assigned, transferred, or otherwise disposed of to any person or entity, unless authorized or approved pursuant to the Articles of Organization and Operating Agreement. Any unauthorized assignment or transfer shall be void ab initio . Assignees of an Ownership Interest may become substituted Members only as provided in the Articles of Organization and Operating Agreement.”

 

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Section 6.6 Substituted Members . No assignee of the whole or any portion of a Member’s Ownership Interest (which shall include any purchaser, transferee, donee, testate or intestate transferee or any other recipient receiving such Ownership Interest for any reason) shall have the right to become a substituted Member in place of his assignor, unless:

(a) his assignor designates such an intention in the instrument of assignment;

(b) the Members holding one hundred percent (100%) of the remaining Ownership Interests consent (which consent may be unreasonably withheld);

(c) the form and substance of the assignment instrument are satisfactory to the Members;

(d) the assignor and assignee execute and acknowledge any other instrument or instruments necessary or desirable to effectuate the admission, including, but not limited to, a power of attorney with provisions more fully described in this Agreement;

(e) the assignee accepts, adopts and approves in writing all of the terms and provisions of this Agreement and any amendments; and

(f) the assignee pays all reasonable expenses connected with the admission. After all necessary approvals have been obtained, transfers shall be considered effective for LLC administration purposes on the first day after the execution of all necessary documents by the assignor, the assignee and the Managing Member, as appropriate.

Except for a transferee admitted as a Member pursuant to this Section, any transferee shall hold his Ownership interest as an assignee and shall at all times be entitled to the proportionate share of such transferee’s interest in the profits of the LLC distributed in accordance with the terms and conditions of this Agreement, but such transferee shall not become a Member and shall have no voting rights in any LLC decisions or be entitled to any other rights of a Member unless he becomes a Member.

Section 6.7 Withdrawal of a Member . Except as provided in this Agreement, no Member shall be entitled to withdraw or retire from the LLC. The amount that such Member is entitled to shall be determined as provided in Section 2.6.3 and shall include any discount in value set forth therein and all other expenses associated with a withdrawal transaction and determination of value. A Member shall be liable to the LLC and other members for any damages caused by any withdrawal or attempted withdrawal. The LLC shall not be required to make any distributions to such Member until the amount of such damages are finally determined and shall have the right to set off such damages against any distributions.

Section 6.8 Terminating Events . The death, insanity, dissolution, termination, retirement, expulsion or bankruptcy of a member shall dissolve and terminate the LLC, unless members owning one hundred percent (100%) of the remaining Ownership Interests and the Managing Member elect to continue the LLC. Upon the death, dissolution, termination, incapacity or bankruptcy of a Member, the personal representative, trustee or successor in interest of the deceased, incapacitated, dissolved or bankrupt Member shall become an assignee of the Ownership Interest of the deceased, incapacitated, dissolved or bankrupt Member; provided, however , that such assignee may become a substituted Member only in compliance with the terms set forth in Section 6.6.

 

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Section 6.9 Repurchase of Ownership Interests . The LLC shall have the right to purchase any Member’s Ownership Interests in the LLC upon request of a Member, upon terms mutually agreeable to it and the Member, if the purchase does not impair the capital or the operation of the LLC and is approved by Members holding a majority of the remaining Ownership Interests. The LLC is under no obligation to ever repurchase any member’s interest in the LLC, and there is no assurance that the LLC will ever repurchase any member’s interest in the LLC.

Section 6.10 Rights of Members to Receive Property Other than Cash . No right is given to a Member to demand and receive property other than cash in return for his Capital Contributions.

Section 6.11 Encumbrance of a Member’s Interest . Except as otherwise provided herein, no Member may encumber his interest in the LLC.

Section 6.12 Dissolution or Partition . Except as provided in Section 7.1(c), no Member shall have the right to, and each Member hereby agrees that, it shall not seek to dissolve or cause the dissolution of the LLC or to seek to partition or otherwise cause a partition of the LLC Property, whether by court action or otherwise, it being agreed that such a dissolution (or attempted dissolution) or partition (or attempted partition) would cause a substantial hardship to the LLC and the remaining Members.

Section 6.13 Right to Purchase Other Property . Nothing contained in this Agreement shall be deemed to restrict in any way the freedom of each Member to conduct any other business or any other activity whatsoever, including without limitation, the acquisition, ownership, development, construction, leasing, operation, management and sale of real property, without notice or accountability to the LLC or Members, without participation by the LLC or members, and without liability to any of them, even if such business or activity competes with the LLC’s business.

Section 6.14 Meetings of, or Actions by, the Members . Meetings of the Members to vote upon any matters under this Agreement or any amendments, may be called at any time by any Managing Member, or by any two or more Members, by delivering written notice to the remaining Members, either in person or by first class mail. Within ten (10) days following receipt of such request, the Managing Member shall cause a written notice, either in person or by first class mail to be given to the Members entitled to vote at such meeting that a meeting will be held at a time and place fixed by the Managing Member not less than one (1) day nor more than ten (10) days after the mailing of the notice of the meeting. A detailed statement of the proposed action, including a verbatim statement of the wording of any resolution proposed for adoption by the Members and of any proposed amendment to this Agreement shall be included with the notice of a meeting. The meeting shall be held at the principal office of the LLC. All expenses of the meeting and notification shall be borne by the LLC. Only Members who are not in default shall be entitled to vote as Members.

Members who hold a majority of the then Ownership Interests eligible to vote on any matter shall constitute a quorum for the transaction of that specific action at any meeting. Personal presence of the Members shall not be required; provided that an effective written

 

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consent to or rejection of such proposed action is submitted. Attendance and voting in-person by a Member at any meeting shall revoke any previously submitted written consents or rejections of the proposed action. Submission of a later written consent or rejections with respect to any action shall revoke an earlier one as to that action.

Any matter on which the Members are authorized to take action, under this Agreement or under law, which may be taken by the Members without a meeting and shall be as valid and effective as an action taken by the Members at a meeting, if written consents to such action by the required number of Members are signed by all the Members entitled to vote upon such action at a meeting.

Section 6.15 Election and Removal of Managing Members .

6.15.1 Election of Managing Members . The Members may initially appoint and elect by majority vote of the Ownership Interests (excluding the Ownership Interests held by the Managing Member) a Managing Member to perform the duties set forth in Section 2.1. Such appointment shall continue until such Managing Member shall resign, be removed, or otherwise be unable to serve.

6.15.2 Removal of a Managing Member . During the term of this LLC, a Managing Member may be removed for any reason by a vote of those Members who hold a majority of the then Ownership Interests (excluding the Ownership Interests held by the Managing Member).

6.15.3 Status of Managing Member . A Managing Member must always be a Member in good standing. There shall be no requirement that the LLC shall have a Managing Member at any time. Such office shall be filled in the discretion of the Members.

6.15.4 Resignation of a Managing Member . A Managing Member may resign on thirty (30) days notice to the Members. A Managing Member who shall voluntarily or involuntarily be subject to bankruptcy or who shall have defaulted as a Member for failure to pay a Deferred Capital Contribution under Section 2.5 shall be deemed to have resigned.

ARTICLE 7 – DISSOLUTION AND WINDING UP

Section 7.1 Dissolving Events . This LLC shall be dissolved upon the occurrence of any one of the following events:

(a) on the dissolution, termination, death or bankruptcy of Member unless Members holding one hundred percent (100%) of the remaining Ownership Interests elect to continue the business within ninety (90) days after the occurrence of such event;

(b) on the voluntary sale, condemnation or foreclosure of all, or substantially all, of the LLC Property;

(c) on the election to dissolve evidenced by the affirmative vote or written consent of all Members; or

 

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(d) on the expiration of the term of the LLC.

Section 7.2 Liquidation and Final Distribution of Proceeds . On dissolution for any reason whatsoever, the LLC shall thereafter engage in no further business other than that necessary to wind up the business and net profits or net losses during the wilding-up period shall be allocated in the same ration as net profits and net losses were allocated prior to dissolution. The Members shall file any required statement of intent to dissolve. The proceeds from the liquidation of the LLC assets shall be distributed in the following order:

(a) the expenses of liquidation and the debts of the LLC shall be paid;

(b) to the establishment of any reserves which the Members may deem reasonable and necessary for any contingent or unforeseen liabilities or obligations of the LLC. Such reserves shall be paid to a trust to be held for the purpose of disbursing any such reserves in payment of any such liabilities or obligations and, at the expiration of such period as the Members shall deem advisable, the trust balance remaining shall be distributed in the manner provided below by this Section 7.2;

(c) to the Members in accordance with their positive Capital Account balances (after all allocations of gain or Loss) in the manner provided in Section 4.3 within the later of: (i) the end of the taxable year in which the liquidation occurs; or (ii) ninety (90) days from the date of liquidation;

(d) any remainder in accordance with the Members’ Ownership Interest percentages.

Any shortages in any category (a), (b) or (c) above shall be allocated first based on the priority of claims and then ratably among claims and obligations of equal priority.

Section 7.3 Time of Liquidation . A reasonable time shall be allowed for the orderly liquidation of the LLC’s assets and the discharge of liabilities to creditors so as to enable the Members to minimize the losses attendant upon a liquidation.

Section 7.4 Liquidation Statement . Each of the Members shall be furnished a statement prepared by a Member, which shall set forth assets and liabilities of the LLC as of the date of complete liquidation. Upon the Members complying with the foregoing liquidation distribution plan, the Members shall cease to be members, and shall execute, acknowledge and cause to be filed any appropriate certificate of cancellation of the LLC.

ARTICLE 8 – MISCELLANEOUS

Section 8.1 Voting and Approval . All voting and approvals by Members under this LLC Agreement shall be by Ownership Interest and Ownership Interest Percentage, and not by per capita vote of the members. A “majority vote” shall mean a vote of more than fifty percent (50%) of the Ownership Interests entitled to vote and voting or approving any matter. Those Members who are in default shall not be allowed to vote on any matter and their Ownership Interests shall be excluded (from both numerator and denominator) in determining voting percentages. Likewise, the Ownership Interests of Members in certain other situations as specified in the LLC Agreement (such as Members requesting approval of a transfer of their Ownership Interest) shall be excluded in determining voting percentages.

 

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Section 8.2 Amendment of the Agreement . Except as otherwise stated in this Agreement, the approval of the Members who hold at least one hundred percent (100%) of the then Ownership Interests shall be required to amend this Agreement, it being hereby agreed, however, that no change the amount of Capital Contributions may be made without the written consent of all Members.

Section 8.3 Notices . Any and all written communications required to permitted by this Agreement or by law shall be in writing and shall be deemed served or given: (a) when personally delivered; or, (b) one business day following its deposit in the United States Mail, postage prepaid, addressed to the Member(s) to be so served at the addresses set forth on the signature page. Any member may change his forwarding address for notices by delivering written notice to the remaining Members of such change of address.

Section 8.4 Tax Controversies . Should there be any controversy with the service or any other taxing authority involving the LLC or any individual Member or Members, the outcome of which may adversely affect the LLC, either directly or indirectly, the LLC may incur expense it deems necessary and advisable in the interest of the LLC to oppose such proposed deficiency, including, but not limited to, attorneys’ and accountants’ fees. Alan R. Wilson is hereby designated as the “Tax Matters Partner” pursuant to the requirements of Section 6231(a)(7) of the Code and in such capacity shall represent the LLC in any disputes, controversies or proceedings with the Service.

Section 8.5 Captions and Pronouns . Any titles or captions of sections contained in this Agreement are for convenience only and shall not be deemed part of the text of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as required for the identification of the person or persons, firm or firms, corporation or corporations.

Section 8.6 Binding Effect . Except as otherwise herein provided, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, executors, administrators, successors and all persons hereafter holding or having an interest in this LLC, whether as assignees or otherwise.

Section 8.7 Entire Agreement . This Agreement contains the entire understanding between the parties respecting the within subject matter and supersedes any prior understanding and agreements between them with respect thereto. All representations, agreements, arrangements or understandings, oral or written, between and among the parties hereto are fully expressed herein.

Section 8.8 Choice of Law . This Agreement is made pursuant to and shall be construed in accordance with the laws of the State of Missouri.

Section 8.9 Severability . If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement, and this Agreement shall be valid and enforced to the fullest extent permitted by law.

 

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Section 8.10 Rebates, Kickbacks and Reciprocal Arrangements . No Member nor its Affiliates shall receive any rebates or kickbacks or participate in any reciprocal business arrangements that would circumvent any federal or state securities laws or participate in any reciprocal business arrangements that would circumvent the restrictions against dealing with affiliates or promoters or would lower the profits or increase the losses of the LLC.

Section 8.11 Counterparts and Execution . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original Agreement, and all of which shall constitute one agreement among each of the parties, notwithstanding that all of the parties are not signatories to the original or the same counterpart, to be effective as of the day and year first set forth above. This Agreement may also be executed by facsimile followed by overnight transmission of the original execution copy.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

 

MEMBERS:

   ADDRESSES

/s/ Daniel W. Fischer

   2425 Woodland Dr.,
Daniel W. Fischer, Individually    Sedalia MO 65301

/s/ Joseph M. Fischer

   27701 Hackberry,
Joseph M. Fischer, Individually    Sedalia, MO 65301

 

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STATE OF MISSOURI

   )
   ) ss.

COUNTY OF PETTIS

   )

I, Dianne M. Simon, a Notary Public, do hereby certify that on the 21st day of April, 1996, before me personally appeared Daniel W. Fischer and Joseph M. Fischer, and being by me duly sworn, did state that they signed the foregoing as their free act and deed in their respective capacity therein set forth and declared that the statements herein contained are true according to their best knowledge and belief.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the year and day last above written.

 

/s/ Dianne M. Simon

Dianne M. Simon, Notary Public

Commissioned in Benton County, MO

My commission expires: June 1, 1999

 

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EXHIBIT A

INITIAL PROPERTY OF LLC

Account #049999, Third National Bank, Sedalia, Missouri

Lease Agreement dated April 24, 1996 on the following described real estate:

ALL THAT PART OF THE WEST HALF OF THE NORTHEAST QUARTER OF SECTION NUMBER SEVENTEEN (17), IN TOWNSHIP NUMBER FORTY-SIX (46) NORTH, OF RANGE NUMBER TWENTY-ONE (21) WEST OF THE FIFTH PRINCIPAL MERIDIAN, LYING WEST OF THE RIGHT OF WAY OF THE LEXINGTON AND ST. LOUIS RAIL-WAY; ALSO, THE EAST HALF OF THE NORTHWEST QUARTER OF SECTION NUMBER SEVENTEEN, IN TOWNSHIP NUMBER FORTY SIX (46) NORTH, OF RANGE NUMBER TWENTY-ONE (21) WEST OF THE FIFTH PRINCIPAL MERIDIAN, PETTIS COUNTY, MISSOURI.

ALSO, ALL THAT PART OF THE EAST HALF OF THE SOUTHWEST QUARTER OF SECTION SEVENTEEN (17) WHICH LIES NORTH OF THE GEORGETOWN AND HUGHESVILLE PUBLIC ROAD; THE NORTH HALF OF THE SOUTHEAST QUARTER OF SECTION NUMBER SEVENTEEN (17) LYING WEST OF THE SEDALIA AND MARSHALL PUBLIC ROAD EXCEPT THAT PART OF THE NORTH 672 FEET THEREOF LYING EAST OF THE LEXINGTON AND ST. LOUIS RAILROAD RIGHT OF WAY BEING A TRACT HERETOFORE OWNED BY JACOB KLEINER; ALL THAT PART OF THE SOUTH HALF OF THE SOUTHEAST QUARTER OF SECTION SEVENTEEN (17) WHICH LIES NORTH OF THE GEORGETOWN AND HUGHESVILLE PUBLIC ROAD AND WEST OF THE SEDALIA AND MARSHALL PUBLIC ROAD; ALL IN TOWNSHIP FORTY-SIX (46) NORTH, OF RANGE TWENTY-ONE (21) WEST OF THE FIFTH PRINCIPAL MERIDIAN, PETTIS COUNTY, MISSOURI.


EXHIBIT B

 

MEMBER

   CAPITAL
CONTRIBUTION
     DEFERRED
CONTRIBUTION

Daniel W. Fischer

   $ 500.00      

Joseph M. Fischer

   $ 500.00      


EXHIBIT C

SPECIAL ALLOCATION PROVISIONS

Notwithstanding any other provision of Article 4 regarding allocations of income, gain and loss, and other items, the following “Special Allocation Provisions” shall apply for such taxable periods to the extent applicable to reflect member guaranties of nonrecourse debt, contribution of property and other issues requiring special allocations. The additional definitions set forth below shall apply to such Special Allocation Provisions. All references to the Code of Regulations have been modified to insert Member or LLC in place of partner or Partnership, respectively.

Nonrecourse Deductions . Nonrecourse Deductions for a taxable period shall be allocated to the Members in accordance with their respective Ownership Interest percentages. If the Manager determines in its good faith discretion that the LLC’s Nonrecourse Deductions must be allocated in a different ratio to satisfy the safe harbor requirements of the Regulations promulgated under Code Sec. 704(b), the Manager is authorized, upon notice to the Members, to revise the prescribed ratio to the numerically closest ration that does satisfy such requirements.

Member Nonrecourse Deductions . Notwithstanding the Nonrecourse Deductions provision above and any other provision in this Exhibit “C”, Member Nonrecourse Deductions for any taxable period shall be allocated 100% to the Member that bears the Economic Risk of Loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Sec. 1.704-2(i). If more than one Member bears the Economic Risk of Loss with respect to Member Nonrecourse Debt, such Member Nonrecourse Deduction attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such Economic Risk of Loss.

LLC Minimum Gain Chargeback . Notwithstanding any other provision herein, if there is a net decrease in LLC Minimum Gain during any LLC taxable period, each Member shall be allocated items of LLC income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Regulations Sec. 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of determining minimum gain, each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this LLC Minimum Gain Chargeback provision with respect to such taxable period (other than allocations under the headings Nonrecourse Deductions and Member Nonrecourse Deductions below). This Section is intended to comply with the LLC Minimum Gain Chargeback requirement in Regulations Sec. 1.704-2(f) Ownership Interest Percentages set forth in Section 4.2.

Code Section 754 Adjustments . To the extent an adjustment to the adjusted tax basis of any LLC asset pursuant to Sec. 734(b) or 743(b) of the Code is required, pursuant to Regulations Sec. 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts, the amount of such adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such section of the Regulations.


Contributed Property . Notwithstanding the foregoing provisions, to the extent Code Sec. 704(c) or Code Sec. 704(c) principles applicable under Regulations Sec. 1.704-1(b)(2)(iv) require allocations of taxable items of income or loss in a manner different from that set forth above, the provisions of Code Sec. 704(c) and Regulations promulgated thereunder shall control such allocations of taxable items.

Additional Definitions Applicable to Special Allocation Provisions .

“Adjusted Capital Account” means the Capital Account maintained for each Member as of the end of each fiscal year of the LLC, (a) increased by any amounts that such Member is obligated to restore under the standards set by Regulations Sec. 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Regulations Sec. 1.704-2(g) and 1.704-2(i)(5) and (b) decreased by (i) the amount of all losses and deductions that, as of the end of such fiscal year, are reasonably expected to be allocated to such Member in subsequent years under Sec. 704(e)(2) and 706(d) of the Code and Regulations Sec. 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such fiscal year, are reasonably expected to be made to such Member in subsequent years in accordance with the terms of this Agreement or otherwise to the extent that they exceed offsetting increases to such Member’s Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably expected to be made (other than increases as a result of a Minimum Gain Chargeback). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Regulations Sec. 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“Economic Risk of Loss” has the meaning set forth in Regulations Sec. 1.752-2(a).

“LLC Minimum Gain” means that amount determined in accordance with the principles of Regulations Sec. 1.704-2(d).

“Member Nonrecourse Debt” has the meaning set forth in Regulations Sec. 1.704-2(b)(4).

“Member Nonrecourse Debt Minimum Gain” has the meaning set forth in Regulations Sec. 1.704-2(i)(2).

“Member Nonrecourse Deductions” means any and all items of loss, deduction or expenditures (including, without limitation, any expenditure described in Sec. 705(a)(2)(b) of the Code) that, in accordance with the principles of Regulations Sec. 1.704-2(i), are attributable to a Member Nonrecourse Debt.

“Nonrecourse Deductions” means any and all items of loss, deduction or expenditures (described in Sec. 705(a)(2)(b) of the Code) that, in accordance with the principles of Regulations Sec. 1.704-2(b), are attributable to a Nonrecourse Liability.

“Nonrecourse Liability” has the meaning set forth in Regulations Sec. 1.752-1(a)(2).

Exhibit 3.50

ARTICLES OF ORGANIZATION

OF

QUARRY PROPERTIES, L.L.C.

The undersigned, for the purpose of forming a limited liability company under the Missouri Limited Liability Company Act (the “ Act ”), hereby makes, acknowledges and files the following Articles of Organization:

FIRST . The name of the limited liability company (the “ Company ”) is:

QUARRY PROPERTIES, L.L.C.

SECOND . The purpose or purposes for which the company is organized are as follows:

(a) To engage in any lawful business or which a limited liability company may be organized under the Act;

(b) To own, operate, lease, mortgage, encumber, construct, and develop real estate and/or personal property for any lawful purpose, including, without limitation thereby, underground and subterranean rental space, warehouse space and storage space; and

(c) To engage in the business of dredging and producing sand and aggregate, including but not limited to the operation of quarries for the production of limestone crushed aggregate and the investment in and rental of such facilities and quarries.

In addition to the powers and privileges conferred upon the Company by law, and those incidental thereto, the Company shall possess and may exercise all the powers and privileges that are necessary or convenient to effect any or all of the purposes for which the Company is organized.

THIRD . The address of the Company’s registered office in the State of Missouri is 2604 North Stadium Boulevard, Columbia, Missouri, 65202. The name of its registered agent at such address is Larry W. Moore.

FOURTH . The Company shall be dissolved upon the occurrence of any of the following:

(a) A Member withdraws from the Company by giving ninety (90) days prior written notice of such Member’s withdrawal to the other Member; (provided, however, such withdrawal may constitute a breach of the outstanding contractual obligations between such Member and), the company, and such Member may be liable to the Company for any damages sustained by the Company as a result of such withdrawal;


(b) A Member:

i) Makes an assignment for the benefit of creditors;

ii) Files a petition or answer seeking for such Member any reorganization, arrangement, composition, readjustment, liquidation, or similar relief under any statute, law or regulation or files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Member in a proceeding of such nature; or

iii) Seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for such Member or of all or any substantial part of such Member’s property.

(c) With respect to any Member, one hundred twenty (120) days after the commencement of any proceeding against the Member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or if, within ninety (90) days after the appointment, without such member’s consent or acquiescence, of a trustee, receiver or liquidator of the Member or of all or any substantial part of such Member’s property, the appointment Is not vacated or stayed, or, within ninety (90) days after the expiration of any such stay, the appointment is not vacated;

(d) In the case of a Member who is a natural person, the entry by a court of competent jurisdiction adjudicating such member incapacitated to manage such Member’s person or estate;

(e) In the case of a Member that is a trust, a distribution of is entire interest in the Company;

(f) In the case of a Member that is a general or limited partnership, a distribution of its entire interest in the Company;

(g) In the case of a Member that is a corporation, the revocation of its charter or a distribution of its entire interest in the Company; or

(h) In the case of a Member that is a limited liability company, a distribution of its entire Interest in the Company;

The Members have agreed that, if, within ninety (90) days after the occurrence of any of the foregoing, the Members holding a majority of the remaining Percentage Interests agree to continue the Company, the Company will not be dissolved and the Company will continue its business and affairs.

The Members have agreed that the company will not be dissolved and that the Company will continue its business and affairs. Upon the occurrence of any of the following:

 

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(a) In the case of a Member who is a natural person, the death of the Member;

(b) In the case of a Member that is a trust, the termination of the trust;

(c) In the case of a Member that is a general or limited partnership, the dissolution and commencement of winding up of the partnership;

(d) In the case of a Member that is a corporation, the filing of articles of dissolution, or their equivalent, for the corporation;

(e) In the case of a Member that is an estate, the distribution by the fiduciary of the estate’s entire interest in the Company;

(F) In the case of a Member that is a limited liability company, the filing of articles of dissolution nor termination, or their equivalent, for the limited liability company; or

(g) Any Member is the subject of a Bankruptcy;

FIFTH . The name and address of the organizer of the Company is as follows:

 

Name of Organizer

   Address

William D. Powell

   1201 West Broadway
   Columbia, MO 65201

SIXTH . No Member, solely by reason of being a Member, shall be liable, under a judgment, decree or order of a court, or in any manner, for a debt, obligation or liability of the Company, whether arising in contract, tort or otherwise, or for the acts or omissions of any other Member of the Company. The failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business or affairs shall not be grounds for imposing liability on the Members for liabilities of the Company.

SEVENTH . The Company shall be managed by one or more Managers. No Member shall have the authority to act on behalf of the Company unless the transaction, agreement or action with respect to which such member is acting has been approved by the Members in writing.

EIGHTH . The Company reserves the right to amend these Articles of Organization in the manner now or hereafter permitted by the Act, and all rights and powers conferred herein are granted subject to this reservation.

NINTH . For Federal and state income tax purposes, the Company will be operating as a partnership.

 

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The undersigned, for the purpose of forming a limited liability company under the Act, does hereby execute these Articles of Organization, this 25th day of November, 2003, and does hereby affirm, under penalties of perjury, that the facts stated herein are true.

 

Organizer:
/s/ William D. Powell
WILLIAM D. POWELL

 

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Exhibit 3.51

OPERATING AGREEMENT

OF

QUARRY PROPERTIES, L.L.C.

THIS OPERATING AGREEMENT (this “Agreement”) is made and entered into effective this 10 th day of December, 2003, by and between CON-AGG OF MO, L.L.C., a Missouri limited liability company.

WITNESSETH:

WHEREAS, Con-Agg of MO, L.L.C. has caused Quarry Properties, L.L.C. (the “Company”) to be formed as a limited liability company under the Missouri Limited Liability Company Act and, as required thereunder, the parties hereto do hereby adopt this Agreement as the Operating Agreement of the Company.

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:

ARTICLE 1—DEFINITIONS

1.1 Terms Defined Herein . As used herein, the following terms shall have the following meanings, unless the context clearly indicates otherwise:

Act ” means the Missouri Limited Liability Company Act, as amended from time to time.

Agreement ” means this Operating Agreement of Company as amended from time to time.

Articles ” means the Articles of Organization of the Company filed with the Missouri Secretary of State, as amended from time to time.

Bankruptcy ”, with respect to any Person, means the entry of an order for relief against such Person under the Federal Bankruptcy Code or the insolvency of such Person under any state insolvency act.

Capital Account ” means the separate account established and maintained by the Company for each Member and/or each Transferee.

Capital Contribution ” means, with respect to a Member, the total amount of cash and the agreed upon net Fair Value of property contributed by such Member (or such Member’s predecessor in interest) to the capital of the Company for such Member’s Interest.


Code ” means the Internal Revenue Code of 1986, as amended from time to time, or the corresponding provisions of future laws.

Distributions ” means any distributions by the Company to the Members of Available cash, Property and/or Liquidation Proceeds or other amounts.

Event of Withdrawal ” means an event upon the occurrence of which a Member ceases to be a Member of the Company pursuant to Section 7.6.

Income” and “Loss ” means, respectively, for each fiscal year or other period, an amount equal to the Company’s taxable income or loss for such period, determined in accordance with the Code.

Initial Capital Contributions ” means the Capital Contributions made by the Members pursuant to this Agreement.

Interest ” refers to the entirety of a Member’s rights and interests in the Company in such Member’s capacity as a Member, all as provided in the Articles, this Agreement and the Act, including, without limitation, the Member’s interest in the total capital, profits and losses of the Company and shall include ownership and profit and loss sharing ratio which shall be the same percentage.

Liquidation Proceeds ” means all Property at the time of liquidation of the Company and all proceeds thereof.

Majority in Interest ” means any group of Members holding an aggregate of more than fifty percent (50%) of the Percentage Interests held by all Members and/or Transferees of the Company.

Manager ” means the person or persons designated pursuant to Section 5.1 from time to time as the Manager or Managers of the Company.

Member ” means each Person executing this Agreement and each Person who is subsequently admitted to the Company as a Member.

Percentage Interest , with respect to a Member, means such Member’s percentage interest in the Company including such Member’s percentage of the ownership and sharing ratio with respects to the net income, gain, loss, deduction and credits of the Company. The initial percentage interest of each Member, shall be as follows:

 

Member

   Percentage Interest  

Con-Agg of MO, L.L.C.

     100

 

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Percentage of ownership and profit and loss ratio shall be the same.

Person ” means any individual, partnership, limited liability company, corporation, trust or other entity.

Property ” means all properties and assets that the Company may own or otherwise have an interest in from time to time.

Substitute Member ” shall have the meaning set forth in Section 7.3.

Percentage Interest Certificate ” means a written certificate issued by the Company stating the Percentage Interest of each member.

Super-Majority in Interest ” means any group of Members holding an aggregate of more than sixty-six percent (66%) of the Percentage Interests held by all Members.

Treasury Regulations ” means the regulations promulgated by the Treasury Department with respect to the Code, as such regulations are amended from time to time, or the corresponding provisions of future regulations.

 

1.2 Other Definitional Provisions .

(a) As used in this Agreement, accounting terms shall have the respective meanings given to them under generally accepted accounting principles.

(b) The words “hereof’, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and any “section”, “subsection”, “schedule” and “exhibit references” are all to this Agreement unless otherwise specified.

(c) Words of the masculine gender shall be deemed to include the feminine or neuter genders, and vice versa, where applicable. Words of the singular number shall be deemed to include the plural number, and vice versa, where applicable.

ARTICLE II—BUSINESS PURPOSES AND OFFICES

2.1 Name; Business Purpose . The name and business purposes of the Company shall be as stated in the Articles. The Company is formed only for such purposes and shall not be deemed to constitute any agreement among the Members with respect to any other activities whatsoever other than the activities within such purposes. The Company is formed to function

 

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as a limited liability company formed pursuant to the Act and shall not be construed to be a joint venture, partnership, employment relationship, or any other entity other than a limited liability company formed pursuant to the Act. The name and/or purposes of the Company may be changed by the written and documented determination of a Majority in Interest.

2.2 Powers . In addition to the powers and privileges conferred upon the Company by law and those incidental thereto, the Company shall have the same powers as a natural person to do all things necessary or convenient to carry out its business and affairs, including, without limitation, the power to do the following:

(a) Sue and be sued, complain and defend, and participate in administrative or other proceedings, in its name;

(b) Have a seal, which may be altered at pleasure, and use the same by causing it, or a facsimile thereof, to be impressed or affixed or in any other manner reproduced, provided that the affixing of a seal to an instrument shall not give the instrument additional force or effect, or change the construction thereof, and the use of a seal is not mandatory;

(c) Purchase, take, receive, lease as lessee, take by gift, legacy, or otherwise acquire, own, hold, improve, use, and otherwise deal in and with any real or personal property, or any interest therein, wherever situated;

(d) Sell, convey, mortgage, pledge, lease as lessor, exchange, transfer, and otherwise dispose of all, any part of, or any interest in, its property and assets;

(e) Lend money to, and/or otherwise assist, its members and employees, except as otherwise provided in this Agreement or the Articles.

(f) Purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, loan, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in, or obligations of, other domestic or foreign limited liability companies, corporations, associations, trusts, general or limited partnerships, or individuals, or direct or indirect obligations of the United States or of any other government, state, territory, governmental district or municipality or of any instrumentality thereof;

 

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(g) Incur liabilities, borrow money for its proper purposes at any rate of interest that the Company may determine without regard to the restrictions of any usury law of the State of Missouri, issue notes, bonds, and other obligations, secure any of its obligations by mortgage or pledge or deed of trust of all or any part of its property, franchises, and income, and make contracts, including contracts of guaranty and suretyship;

(h) Invest its surplus funds from time to time, lend money for its proper purposes, and take and hold real and personal property as security for payment of funds so loaned for investment;

(i) Conduct its business, carry on its operations, have and maintain offices, both within and/or without the State of Missouri, and exercise in any other state, territory, district, or possession of the United States or in any foreign country the powers granted by the Act, the Articles or this Agreement;

(j) Appoint agents, retain and employ accountants and/or attorneys, and hire employees of the Company, define their duties, fix their compensation and to indemnify them to the extent and in the manner permitted by law;

(k) Make donations for the public welfare or for charitable, scientific, religious, or educational purposes, lend money to the government, and transact any lawful business with the government;

(l) Establish deferred compensation plans, pension plans, profit-sharing plans, bonus plans, option plans, and other incentive plans for its employees and make the payments and/or contributions provided for therein;

(m) Become a promoter, partner, member, associate, or manager of any general partnership, limited partnership, trust, joint venture or similar association, any other limited liability company, or other enterprise; and

(n) Cease the activities of the Company and surrender the franchise of the Company;

2.3 Principal Office . The principal office of the Company shall be located at 2604 North Stadium Boulevard, Columbia, Missouri, 65202, or at such other place(s) as the Members may determine from time to time.

 

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2.4 Registered Office and Registered Agent . The location of the registered office and the name of the resident agent of the Company in the State of Missouri shall be as stated in the Articles. The registered office and registered agent of the Company in the State of Missouri may be changed, from time to time, by the Members.

2.5 Amendment of the Articles . The Company shall amend the Articles at such time or times and in such manner as may be required by the Act, by a Majority in Interest, or as otherwise set forth herein.

2.6 Effective Date . This Agreement shall be effective upon the date that the Articles are filed with the Secretary of State of Missouri.

2.7 Liability of Members . No Member, solely by reason of being a Member, shall be liable, under a judgment, decree or order of a court, or in any other manner, for a debt, obligation or liability of the Company, whether arising in contract, tort or otherwise, or for the acts or omissions of any other Member of the Company.

ARTICLE III—CAPITAL CONTRIBUTIONS AND LOANS

3.1 Capital Contributions . Upon the execution of this Agreement, each Member shall make an initial contribution of cash and/or property to the capital of the Company in the amounts set forth opposite their names:

 

Member

  

Initial Contribution

Con-Agg of MO, L.L.C.    Lot Three (3), in Block One (1) of BEAR CREEK SUBDIVISION NO. ONE (1), as shown by plat recorded in Plat Book 8, Page 38, Boone County, Missouri, Records. EXCEPT the West 187.5 feet (W 187.5’) thereof.
   AND all of that land lying East of Lot Three (3) in Block One (1) bounded on the North by the North line of Lot Three (3) Block One (1) extended Easterly to Bear Creek and bounded on the South by the South line of Lot Three (3) Block One (1) extended to Bear Creek. EXCEPT for that portion of the platted cul-de-sac extending North of said lot line, and bounded on the East by the now existing center line of Bear Creek, all in Section Six (6), Township Forty-eight (48) North, Range
  

 

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  Twelve (12) West, in Boone County, Missouri.
  AND
  The West 187.5 feet (W 187.5’) of Lot Three (3) in Block One (1) of BEAR CREEK SUBDIVISION NO. ONE (1), as shown on plat recorded in Plat Book 8, Page 38, Boone County, Missouri Records.
  AND
  Lot Ten (10) in Block Two (2) of BEAR CREEK SUBDIVISION, as shown on plat recorded in Plat Book 8, Page 38, Boone County, Missouri Records.

3.2 Capital Accounts . A separate Capital Account shall be maintained for each Member and/or each transferee in accordance with the Code and applicable Treasury Regulations.

3.3 Capital Withdrawal Rights, Interest and Priority . Except as expressly provided in this Agreement, no Member shall be entitled to withdraw or reduce such Member’s Capital Account or to receive any Distributions. No Member shall be entitled to demand or receive any Distribution in any form other than in cash. No Member shall be entitled to receive or be credited with any interest on the balance in such Member’s Capital Account at any time. Except as may be otherwise expressly provided herein, no Member shall have any priority over any other Member as to the ultimate return of the balance in such Member’s Capital Account.

3.4 Loans . Any Member may make a loan to the Company in such amounts, at such times and on such terms and conditions as may be approved by a Majority in Interest. Loans by any Member to the Company shall not be considered as contributions to the capital of the Company.

ARTICLE IV—ALLOCATIONS AND DISTRIBUTIONS

4.1 Liquidation Distributions . Liquidation Proceeds shall be distributed in the following order of priority:

(a) To the payment of debts and liabilities of the Company (including to Members to the extent permitted by law) and the payment of costs and expenses of liquidation.

 

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(b) Next, to the setting up of such reserves as the Person required or authorized by law to wind up the Company’s affairs may reasonably deem necessary or appropriate for any disputed, contingent or unforeseen liabilities or obligations of the Company, provided that any such reserves shall be paid over by such person to an independent escrow agent, to be held by such agent or its successor for such period as such person shall deem advisable for the purpose of applying such reserves to the payment of such liabilities or obligations and, at the expiration of such period, the balance of such reserves, if any, shall be distributed as hereinafter provided.

(c) The remainder to the Members in accordance with, based upon, their respective Capital Account balances after taking into account the allocations of all Income or Loss pursuant to this agreement for the fiscal year(s) in which the Company is liquidated.

4.2 Allocation of Income, Loss, and Credits . Income or Loss (other than from transactions in liquidation of the Company) and Credits for each fiscal year shall be allocated among the Members in accordance with their Percentage Interests.

4.3 Allocation of Tax Items . All of the provisions of this Agreement are intended to comply with applicable provisions of the Code and Treasury Regulations, and shall be interpreted and applied in a manner consistent with the Code and such Treasury Regulations.

ARTICLE V—MANAGEMENT

5.1 Management . The business and affairs of the Company shall be initially managed by Two (2) Managers. The initial Managers shall be Larry W. Moore and Billy G. Sapp. The number of Managers may thereafter be altered only by a vote of Super-Majority in Interest. A Successor Manager or Managers shall be elected by a Majority in Interest. The Manager shall have full authority to bind the Company and to execute deeds, deeds of trust, contracts and all documents of conveyance on behalf of the Company. Any person or entity dealing with the Manager shall be entitled to rely on his or her authority without further documentation from the Company or the Members. Notwithstanding the foregoing, all of the Members, by unanimous written consent, may authorize a single Member or multiple Members to perform acts and execute documents in the name of the Company for the specific purposes set forth in said written consent; and all such acts and documents shall be binding upon the Company. No Manager shall receive any compensation from the Company.

 

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5.2 Meetings of Members; Place of Meetings . Except as provided in Section 5.5, all decisions of the Members shall be made at a meeting duly held in accordance with this Article V. Meeting of the Members may be held for any purpose, and may be called by any Manager or by Members holding not less than forty percent (40%) of the Percentage Interests. All meetings of the Members shall be held at the principal office of the Company or at such other place, within or without the State of Missouri, as shall be designated from time to time by the Members and stated in the notice of the meeting or in a duly executed waiver of the notice thereof. Members may participate in a meeting of the Members by means of telephone conference whereby all Members participating in the meeting can hear each other and participation in a meeting in this manner shall be deemed to constitute presence in person at the meeting.

5.3 Quorum . The presence, in person or by proxy, of a Majority in Interest shall constitute a quorum for the transaction of business by the Members. If less than a Majority in Interest are represented at a meeting, a majority of the Interests so represented may adjourn the meeting to a specified date not longer than ninety (90) days after such adjournment, without further notice. At any time that an Event of Withdrawal has occurred with respect to a Member and, as a result, no Person shall have the right to vote or to participate in the management of the business and affairs of the Company with respect to the Interest held by such Member, then the Percentage Interest represented by such Interest shall be disregarded in determining whether the requisite Percentage Interest necessary for a quorum is present at a meeting of Members, with the effect that such Interest shall be treated as if such interest had not been issued and the requisite percentage necessary for a quorum shall be applied against the remaining total Percentage Interests.

5.4 Proxies . At any meeting of the Members, every Member having the right to vote thereat shall be entitled to vote in person or by proxy appointed by an instrument in writing signed by such member and bearing a date not more than three years prior to such meeting.

5.5 Action Without Meeting . Any action required or permitted to be taken at any meeting of the Members of the Company may be taken without a meeting if the action is evidenced by one or more written consents of a Majority in Interest setting forth the action to be taken and signed by each Member entitled to vote.

5.6 Notice of Meetings . Notice stating the place, day, hour, and the purpose for which the meeting is called shall be given, not less than 10 days nor more that 60 days before the date of the meeting, by or at the direction of the Members calling the meeting, to each Member entitled to vote at such meeting.

 

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5.7 Waiver of Notice . When any notice of any meeting is required to be given to any Member of the Company hereunder, a waiver thereof in writing signed by the Member entitled to such notice, whether before, at or after the time of the meeting, shall be equivalent to the giving of such notice.

5.8 Voting by Certain Members . In the case of a Member that is a corporation, its Interest may be voted by such officer, agent or proxy as the bylaws of such corporation may prescribe, either in person or by proxy. In the case of a Member that is another limited liability company, its Interest may be voted, in person or by proxy, by such Person as is designated by the operating agreement of such other limited liability company. In the case of a member that is a general or limited partnership, its interest may be voted by any general partner having written authorization from the partnership.

5.9 Voting Requirement . Each Member shall have the right to vote in accordance with such Member’s Percentage Interest. Except as otherwise expressly provided in this Agreement, the affirmative vote of a Majority in Interest shall be required for a valid decision of the Members, including any decision regarding any transaction, agreement or action that is not within the usual course of business of the Company; provided, however, that the vote of a Super-Majority in Interest shall be required for the following:

(a) The approval of a merger or consolidation with another Person;

(b) Change of the status of the Company from one in which management is vested in the Members to one in which management is vested in one or more managers;

(c) The sale, lease, exchange, or other disposition, other than by mortgage, deed of trust, or pledge, of all, or substantially all, of the Property;

(d) Compromise and/or waiver of the amount and character of the contributions that a Member shall make as consideration for the issuance of an Interest;

(e) Confession of any judgment on behalf of the Company;

(f) Any assignment of the Property for the benefit of creditors of the Company;

 

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(g) The authorization of any transaction, agreement or action that is unrelated to the Company’s purposes as set forth in the Articles; or

(h) The authorization of any transaction, agreement or action that otherwise contravenes this Agreement.

At any time that an Event of Withdrawal has occurred with respect to a Member and, as a result, no Person shall have the right to vote or to participate in the management of the business and affairs of the Company with respect to the Interest held by such Member, then the Percentage Interest represented by such Interest shall be disregarded in determining whether the requisite percentage necessary for a valid decision of the Members has been obtained, with the effect that such Interest shall be treated as if such Interest had not been issued and the requisite percentage necessary for a valid decision shall be applied against the remaining total Percentage Interests.

5.10 Minutes of Meetings and Record of Other Actions . The Company shall endeavor to keep at its principal office minutes of meetings of the Members and records of actions which may be taken by the Members without a meeting.

5.11 Limitation of Liability . No Person shall be liable to the Company or its Members for any loss, damage, liability or expense suffered by the Company or its Members on account of any action taken or omitted to be taken by such person as a Member or as Manager of the Company or by such Person while serving at the request of the Company as a director, officer or in any other comparable position of any Other Enterprise, if such Person discharges such Person’s duties in good faith, exercising the same degree of care and skill that a prudent person would have exercised under the circumstances in the conduct of such prudent person’s own affairs, and in a manner such Person reasonably believes to be in the best interest of the Company. A Member’s liability hereunder shall be so limited for those actions taken or omitted to be taken by such Member in connection with the management of the business and affairs of the Company.

5.12 Right to Indemnification . The Company shall indemnify each Person who has been or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or appellate (regardless of whether such action, suit or proceeding is by or the Company or by third parties) by reason of the fact that such Person is or was a Member or Manager of the Company, or is or was serving at the request of the Company as a director, officer or in any other comparable position of any

 

11


Other Enterprise, such indemnity shall apply against all liabilities and expenses, including, without limitation, judgments, amounts paid in settlement, attorneys’ fees, ERISA excise taxes or penalties, fines and other expenses, actually and reasonably incurred by such Person in connection with any such action, suit or proceeding (including, without limitation, the investigation, defense, settlement or appeal of any such action, suit or proceeding); provided, however, that the Company shall not be required to indemnify or advance expenses to any Person from or on account of such Person’s conduct that was finally adjudged to have been knowingly fraudulent, deliberately dishonest, or willful misconduct; provided further that the Company shall not be required to indemnify or advance expenses to any Person in connection with an action, suit or proceeding initiated by such Person unless the initiation of such action, suit or proceeding was authorized in advance by the Members of the Company; provided further that a Member shall be indemnified hereunder only for those actions taken or omitted to be taken by such Member in connection with the management of the business and affairs of the Company. The provisions of this Article V are not intended to extend indemnification to any Member for any actions taken or omitted to be taken by such Member in any other connection, including, but not limited to, any obligation of such member undertaken in this Agreement. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or under a plea of nolo contendere or its equivalent, shall not, in and of itself, create a presumption that such Person’s conduct was finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful misconduct.

5.13 Enforcement of Indemnification . In the event the Company refuses to indemnify any Person who may be entitled to be indemnified or to have expenses advanced under this Article V, such Person shall have the right to maintain an action in any court of competent jurisdiction against the Company to determine whether or not such person is entitled to such indemnification or advancement of expenses hereunder. If such court action is successful and the Person is determined to be entitled to such indemnification or advancement of expenses, such Person shall be reimbursed by the Company for all fees and expenses (including attorneys’ fees) actually and reasonably incurred in connection with any such action (including, without limitation, the investigation, defense, settlement or appeal of such action).

5.14 Advancement of Expenses . Expenses (including attorneys’ fees) reasonably incurred in defending an action, suit or proceeding, whether civil, criminal, administrative, investigative or appellate, shall be paid by the Company in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Person to

 

12


repay such amount if it shall ultimately be determined that such Person is not entitled to indemnification by the Company. In no event shall any advance be made in instances where the Members or independent legal counsel reasonably determines that such person would not be entitled to indemnification hereunder.

5.15 Non-Exclusivity . The indemnification and the advancement of expenses provided by this Article V shall not be exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any statute, or any agreement, vote of Members, policy of insurance or otherwise, both as to any action in their official capacity and as to any action in another capacity while holding their respective offices, and shall not limit in any way any right that the Company may have to make additional indemnifications with respect to the same or different Persons or classes of Persons. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article V shall continue as to a Person who has ceased to be a Member or Manager of the Company, and as to a Person who has ceased serving at the request of the Company as a director, officer or in any other comparable position of any Other Enterprise and shall inure to the benefit of the heirs, executors and administrators of such Person.

5.16 Insurance . Upon the approval of the Members, the Company may purchase and maintain liability insurance on behalf of any Person who is or was a Member, Administration, agent, or employee of the Company, or is or was serving at the request of the Company as a director, officer or in any other comparable position of any Other Enterprise, against any liability asserted against such Person in any such capacity, or arising out of such Person’s status as such, whether or not the Company would have the power, or the obligation, to indemnify such Person against such liability under the provisions of this Article V.

5.17 Severability . If any provision of this Article V or the application of any such provision to any Person or circumstance is held invalid, illegal or unenforceable for any reason whatsoever, the remaining provisions of this Article V and the application of such provision to other Persons or circumstances shall not be affected thereby and, to the fullest extent possible, the court finding such provision invalid, illegal or unenforceable shall modify and construe the provision so as to render it valid and enforceable as against all persons and to give the maximum possible protection to Persons subject to indemnification hereby within the bounds of validity, legality and enforceability.

 

13


5.18 Contracts with Members or their Affiliates . No contract or transaction between the Company and one of its Members or between the Company and any Person in which one of its Members is a director or officer, or has a financial interest, shall be void or voidable solely for this reason, or solely because such Member is present at or participates in the meeting of the Members at which the contract or transaction is authorized, or solely because such Member’s vote is counted for such purpose, and such member shall not be obligated to account to the Company for any profit or benefit derived by such member if the material facts as to such Member’s relationship are known to the Members, and the Members holding a majority of the Percentage Interests held by all those Members who are disinterested with respect to any such contract or transaction authorize such contract or transaction, even though the disinterested Members be less than a quorum.

5.19 Other Business Ventures . Any Member or Manager may engage in, or possess an interest in, other business ventures of any and every nature and description, independently or with others, whether or not similar to or in competition with the business of the Company, and neither the Company nor the Members shall have any right by virtue of this Agreement in or to such other business ventures or to the income or profits derived therefrom. Neither the Members nor the Manager shall be required to devote all of their time or business efforts to the affairs of the Company, but shall devote so much of their time and attention to the Company as is reasonably necessary and advisable to manage the affairs of the Company to the best advantage of the Company.

ARTICLE VI—ACCOUNTING AND BANK ACCOUNTS

6.1 Fiscal Year . The fiscal year and taxable year of the Company shall end on December 31 of each year, unless a different year is required by the Code or adopted by a Majority in Interest.

6.2 Books and Records . At all times during the existence of the Company, the Company shall cause to be maintained books and records as prescribed by § 347.091 of the Act. The books and records of the Company shall be maintained at the principal office of the Company. Each Member (or such Member’s designated representative) shall have the right during ordinary business hours and upon reasonable notice to inspect and copy (at such Member’s own expense) any and all books and records of the Company.

6.3 Financial Reports .

(a) Within Ninety (90) days after the end of each fiscal year, and upon written request there shall be prepared and delivered to each Member;

 

14


i) a balance sheet as of the end of such year and related financial statements for the year then ended; and

ii) Other pertinent information regarding the Company;

(b) Within Ninety (90) days after the end of each fiscal year, there shall be prepared and delivered to each member all information with respect to the Company necessary for the preparation of the Members’ Federal and state income tax returns.

6.4 Tax Returns and Elections . The Company shall cause to be prepared and timely filed all federal, state and local income tax returns or other returns or statements as may be required by applicable law. The Company shall claim all deductions and make such elections for federal or state income tax purposes that the Members reasonably believe will produce the most favorable tax results for the Members.

6.5 Bank Accounts . All funds of the Company shall be deposited in a separate bank, money market or similar account(s) and in the Company’s name. Withdrawals therefrom shall be made only by the Manager or other persons authorized in writing to do so by the Members.

ARTICLE VII—TRANSFERS OF INTERESTS AND EVENTS OF WITHDRAWAL

7.1 General Restrictions . Except as expressly provided in this Agreement, no Member may Transfer all or any part of such Member’s Interest. Any purported Transfer of an Interest in violation of the terms of this Agreement shall be null and void and of no effect. A permitted Transfer shall be effective as of the date specified in the instruments relating thereto. Any Transferee desiring to make a further Transfer shall become subject to all of the provisions of this Article VII to the same extent and in the same manner as any Member desiring to make any Transfer.

7.2 Permitted Transfers . Each Member (a “Transferor”) shall have the right to transfer and/or assign (but not to substitute the assignee as a Substitute Member in such Member’s place, except in accordance with Section 7.3), by a writing or written endorsement on a Percentage Interest Certificate, all or any part of such Member’s Interest to Immediate Family. Any transfer and/or assignment to any other person (except for Transfers upon death), shall require that the Members holding a majority of the remaining Percentage Interests consent in writing, to any such Transfer.

7.3 Substitute Members . No transferee and/or assignee of all or part of a Member’s Interest shall become a Member in place of the Transferor (a “Substitute Member”) unless and until:

 

15


(a) The Transferee is already a Member; or

(b) The Transferor (if living) has stated such intention in the instrument of assignment; and

(c) The Transferee has executed an instrument accepting and adopting the terms and provisions of this Agreement; and

(d) The Members holding a majority of the remaining Percentage Interests (all Percentage Interests except for the Percentage Interest being transferred), in their sole and absolute discretion, shall have consented in writing to such Transferee becoming a Substitute Member.

Upon satisfaction of all of the foregoing conditions with respect to a Transferee, any Manager shall cause this Agreement to be duly amended to reflect the admission of the Transferee as a Substitute Member.

7.4 Effects of Admission as a Substitute Member . Unless and until admitted as a Substitute Member pursuant to Section 7.3, a Transferee shall not be entitled to exercise any rights of a Member in the Company, including the right to vote, grant approvals or give consents with respect to such Interest, the right to require any information or accounting of the Company’s business or the right to inspect the Company’s books and records, but a Transferee shall only be entitled to receive, to the extent of the Interest transferred to such Transferee, the Distributions to which the Transferor would be entitled. A Transferee who has become a Substitute Member has, to the extent of the Interest transferred to such Transferee, all the rights and powers of the Member for whom such Transferee is substituted and is subject to the restrictions and liabilities of a Member under this Agreement and the Act. Upon admission of a Transferee as a Substitute Member, the Transferor shall cease to be a Member of the Company only to the extent of such transferred Interest. Further, a Person shall not cease to be a Member upon assignment of all of such Member’s Interest unless and until the Transferee becomes a Substitute Member.

7.5 Additional Members . Additional Members may be admitted to the Company and additional Interests may be issued only by the consent of a Super-Majority in Interest.

7.6 Events of Withdrawal . A Member shall cease to be a Member of the Company upon the occurrence of any of the following events (“Event of Withdrawal”):

 

16


(a) A Member withdraws from the Company by giving ninety (90) days prior written notice of such Member’s withdrawal to the other Members, provided, however, such withdrawal shall constitute a breach of this Agreement and such Member shall be liable to the Company for any damages sustained by the Company as a result of such withdrawal and the Company may offset such damages against any amount otherwise distributable to such Member pursuant to Article IV of this Agreement;

(b) A Member:

i) Makes an assignment for the benefit of creditors;

ii) Is the subject of a Bankruptcy

iii) Files a petition or answer seeking (for such Member) any reorganization, arrangement, composition, readjustment, liquidation, or similar relief under any statute, law or regulation or files an answer or other pleading admitting or failing to contest the material allegations of any petition filed against such Member in a proceeding of such nature; or

iv) Seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for such Member;

(c) With respect to any Member, if within One Hundred Twenty (120) days after the commencement of any proceeding against the Member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or if, within ninety (90) days after the appointment without such member’s consent or acquiescence, of a trustee, receiver or liquidator of the Member or of all or any substantial part of such Member’s property, the appointment is not vacated or stayed, or, if within ninety (90) days after the expiration of any such stay, the appointment is not vacated;

(d) In the case of a Member who is a natural person;

i) Such Member’s death; or

ii) The entry by a court of competent jurisdiction adjudicating such Member incapacitated to manage such Member’s person or estate;

 

17


(e) In the case of a Member that is a trust, the termination of the trust or a distribution of its entire interest in the Company (but not merely the substitution of a new trustee);

(f) In the case of a Member that is a general or limited partnership, the dissolution and commencement of winding up of the partnership or a distribution of its entire interest in the Company;

(g) In the case of a Member that is a corporation, the filing of articles of dissolution, or their equivalent, for the corporation or revocation of its charter or a distribution of its entire interest in the Company;

(h) In the case of a Member that is an estate, the distribution by the fiduciary of the estate’s entire interest in the Company; or

(i) In the case of a Member that is a limited liability company, the filing of articles of dissolution or termination, or their equivalent, for the limited liability company or a distribution of its entire interest in the Company.

Except as provided in Section 8.1 of this Agreement, upon the occurrence of an Event of Withdrawal, the Company shall not be dissolved and the Member with respect to whom an Event of Withdrawal has occurred, as the case may be, shall be deemed to be a Transferee under the provisions of Section 7.2, and the rights and obligations of such Member or such Person shall be governed by Section 7.2 of this Agreement; provided, however, that such Member or Person shall thereafter have no right to vote as a Member or to participate in the management of the business and affairs of the Company as a Member.

7.7 Shotgun Buy/Sell . Should any Member, or Members acting together, desire to initiate this shot gun buy/sell (the “Initiation”), such Member or Members (in the plural, neutral, irrespective of number, the “Initiating Members”) shall first give each of the remaining Members (in the plural, neutral, irrespective of number, the “Remaining Members”) written notice of the Initiating Members’ intention to effectuate an Initiation (the “Initiation Notice”). Such Initiation Notice shall contain a cash offer by the Initiating Members to sell all of the Initiating Members’ total Percentage Interest in the Company to the Remaining Members for a stated sum certain for each One Percent (1%) Members’ Percentage Interest owned by the Initiating Members and, alternatively, offering to purchase all of the Remaining Members’ Percentage Interests in the Company for the same sum certain for each One Percent (1%) Members’ Percentage Interest. The Remaining Members shall be compelled to elect to either purchase the

 

18


Percentage Interest of the Initiating Members at the price contained in the Initiating Notice from the Initiating Members (a “Purchase Election”) or sell such Remaining Members’ Percentage Interest at the price contained in the Initiating Notice (a “Sale Election”). Such election by the Remaining Members shall be made by written notice given by each of the Remaining Members to the Initiating Members within Twenty (20) days of the date of such Initiating Notice. In the event that any of the Remaining Members shall fail or refuse to make such election within such Twenty (20) day period, then for purposes herein any such Remaining Members shall be deemed to have made a Sale Election. The comprehensive and controlling election of the Remaining Members shall be calculated by comparing the aggregate Member’s Percentage Interest of those Remaining Members making a Purchase Election to the aggregate Member Percentage Interest of those Remaining Members making a Sale Election with the election with the greater aggregate Member’s Percentage Interest to constitute the comprehensive and controlling election of all Remaining Members. In the event such aggregate Member’s Percentage Interest of those Remaining Members making a Purchase Election equals the aggregate Member Percentage Interest of those Remaining Members making a Sale Election, then the comprehensive and controlling election of all Remaining Members shall be a Sale Election. The purchase and sale shall be closed on the first business day following the thirtieth calendar day after the Initiating Members shall have given the original written notice at the offices of the bank at which the Company then keeps its primary checking account. The purchase price shall be paid at closing, in cash, and whichever Member is selling their interest in the Company shall execute such documents and instruments evidencing the sale of their interest as the Purchasing Member may reasonably require. During said 30 day period no distribution of monies shall be made from the Company’s operating account except to pay routine operating expenses of the Company. At closing, all sums remaining in said Company’s operating account shall be equally divided between the Members. The proceeds of any accounts receivable in existence as of the date of closing which are subsequently paid shall likewise be equally divided between the Members at such time as any such accounts receivable is actually paid. Upon closing, the Purchasing Member shall be deemed to have assumed all debts and obligations of the Company, and the purchasing Member shall indemnify the selling Member against all debts and liabilities of which the purchasing Member has knowledge and/or which are not the result of any negligent act or intentional act on the part of the selling Member.

ARTICLE VIII—DISSOLUTION AND TERMINATION

8.1 Events Causing Dissolution . The Company shall be dissolved upon the first to occur of the following events:

 

19


(a) The expiration of the term of the Company, as set forth in the Articles; or

(b) The unanimous written agreement of the Members to dissolve; and at any time that the Company does not then consist of at least two Members or at least one Member and one Transferee then the Company shall be dissolved upon the occurrence of any of the following:

i) In the case of a sole Member who is a natural person, the death of the Member;

ii) In the case of a sole Member that is a trust, the termination of the trust;

iii) In the case of a sole Member that is a general or limited partnership, the dissolution and commencement of winding up of the partnership;

iv) In the case of a sole Member that is a corporation, the filing of articles of dissolution, or their equivalent, for the corporation;

v) In the case of a sole Member that is an estate, the distribution by the fiduciary of the estate’s entire interest in the Company;

vi) In the case of a sole Member that is a limited liability company, the filing of articles of dissolution or termination, or their equivalent, for the limited liability company;

(c) Any sole Member is the subject of a Bankruptcy; unless, within ninety (90) days after the occurrence of any of the foregoing, the Members holding a majority of the remaining Percentage Interests agree to continue the Company.

(d) Upon the approval to dissolve of a Super-Majority in Interest.

(e) Upon the entry of a decree of dissolution with respect to the Company by a court of competent jurisdiction.

(f) When the Company is not the surviving entity in a merger or consolidation under the Act.

 

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8.2 Effect of Dissolution . Except as otherwise provided in this Agreement, upon the dissolution of the Company, the Members shall take such actions as may be required pursuant to the Act and shall proceed to wind up, liquidate and terminate the business and affairs of the Company. In connection with such winding up, the Members shall have the authority to liquidate and reduce to cash (to the extent necessary or appropriate) the assets of the Company as promptly as is consistent with obtaining Fair Value therefor, to apply and distribute the proceeds of such liquidation and any remaining assets in accordance with the provisions of Section 8.3, and to do any and all acts and things authorized by, and in accordance with, the Act and any other applicable laws for the purpose of winding up and liquidation.

8.3 Application of Proceeds . Upon dissolution and liquidation of the Company, the assets of the Company shall be applied and distributed in the order of priority set forth in Section 4.2.

ARTICLE IX—MISCELLANEOUS

9.1 Title to Assets . Title to the Property and to all other assets acquired by the Company shall be held in the name of the Company. No Member shall individually have any ownership interest or rights in the Property or any other assets of the Company, except indirectly by virtue of such member’s ownership of an Interest. No Member shall have any right to seek or obtain a partition of the Property or other assets of the Company, nor shall any Member have the right to any specific assets of the Company upon the liquidation of or any distribution from the Company.

9.2 Nature of Interest in the Company . An Interest shall be personal property for all purposes.

9.3 Percentage Interest Certificate . Each member shall be issued a certificate from the Company stating thereon the Member’s percentage ownership and sharing ratio interest in the Company; and if a transferee (rather than a Member) with such certificate bearing a notation that the same is non-voting; stating that thereon that transfer is limited by this Operating Agreement; and being signed by the Manager or by all Members of the Company.

9.4 Notices . Any notice, demand, request or other communication (a “Notice”) required or permitted to be given by this Agreement or the Act to the Company, any Member, or any other Person shall be sufficient if in writing and if hand delivered or mailed by registered or certified mail to the Company at its principal office or to a Member or any other Person at the address of such Member or such other Person as appears on the records of the Company or sent by facsimile\transmission to the telephone number, of

 

21


the recipient’s facsimile machine as such telephone number appears on the records of the Company. All Notices that are mailed shall be deemed to be given when deposited in the United States mail, postage prepaid. All Notices that are hand delivered shall be deemed to be given upon delivery. All Notices that are given by facsimile transmission shall be deemed to be given upon receipt, it being agreed that the burden of proving receipt shall be on the sender of such Notice and such burden shall not be satisfied by a transmission report generated by the sender’s facsimile machine.

9.5 Waiver of Default . No consent or waiver, express or implied, by the Company or a Member with respect to any breach or default by another Member hereunder shall be deemed or construed to be a consent or waiver with respect to any other breach or default by such Member of the same provision or of any other provision of this Agreement. Failure on the part of the Company or a Member to complain of any act or failure to act of another Member or to declare such other Member in default shall not be deemed or constitute a waiver by the Company or the Member of any rights hereunder.

9.6 No Third Party Rights . None of the provisions contained in this Agreement shall be for the benefit of, or enforceable by, any third parties, including, but not limited to, any creditors of the Company; provided, however, the Company may enforce any rights granted to the Company under the Act, the Articles, or this Agreement.

9.7 Entire Agreement . This Agreement, together with the Articles, constitutes the entire agreement between the Members, in such capacity, relative to the formation, operation and continuation of the Company.

9.8 Amendments to this Agreement .

(a) Except as otherwise provided herein, this Agreement shall not be modified or amended in any manner other than by the written agreement of a Super-Majority in Interest at the time of such modification or amendment.

(b) This Agreement may be amended by the Manager, without any execution of any amendment document by the Members, in order to reflect the occurrence of any of the following events provided that all of the conditions, if any, contained in the relevant sections of this Agreement with respect to such event have been satisfied:

(1) an adjustment of the Percentage Interests of the Members upon making a Capital Contribution (Section 3.2(b) hereof);

 

22


(2) the modification of this Agreement to comply with any relevant tax laws.

(3) the admission of a Substitute Member (Section 7.3 hereof).

(4) Transfer of all or any part of a Percentage Interest.

(c) Anything in this Section 9.7 to the contrary notwithstanding, without the unanimous written consent of all Members, no amendment to this Agreement may:

(1) enlarge the obligations of any Member under this Agreement; or

(2) amend any provisions of Article IV other than an amendment to comply with the relevant tax laws as provided in Section 4.5(g).

9.9 Severability . In the event any provision of this Agreement is held to be illegal, invalid or unenforceable to any extent, the legality, validity and enforceability of the remainder of this Agreement shall not be affected thereby and shall remain in full force and effect and shall be enforced to the greatest extent permitted by law.

9.10 Binding Agreement . Subject to the restrictions on the disposition of Percentage Interests herein contained, the provisions of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, personal representatives, successors and permitted assigns.

9.11 Headings . The headings of the Articles and Sections of this Agreement are for convenience only and shall not be considered in construing or interpreting any of the terms or provisions hereof.

9.12 Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute one agreement that is binding upon all of the parties hereto, notwithstanding that all parties may not be signatories to the same counterpart.

9.13 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of Missouri.

 

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9.14 Remedies . In the event of a default by any party in the performance of any obligation undertaken in this Agreement, in addition to any other remedy available to the non-defaulting parties, the defaulting party shall pay to each of the non-defaulting parties all costs, damages, and expenses, including reasonable attorney’s fees, incurred by the non-defaulting parties as a result of such default. In the event that any dispute arises with respect to the enforcement, interpretation, or application of this Agreement and court proceedings are instituted to resolve such dispute, the prevailing party in such Court proceedings shall be entitled to recover from the non-prevailing party all costs and expenses, including, but not limited to, reasonable attorney’s fees, incurred by the prevailing party in such court proceedings.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

 

/s/ Larry W. Moore
LARRY W. MOORE, Manager

 

/s/ Billy G. Sapp
BILLY G. SAPP, Manager

 

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Exhibit 3.52

CERTIFICATE OF INCORPORATION

OF

ELAM PAVING, INC.

2097251

The Public Regulation Commission certifies that duplicate originals of the Articles of Incorporation attached hereto, duly signed and verified pursuant to the provisions of the

BUSINESS CORPORATION ACT

(53-11-1 to 53-18-12 NMSA 1978)

have been received by it & are found to conform to law.

Accordingly, by virtue of the authority vested in it by law, the Public Regulation Commission issues this Certificate of Incorporation & attaches hereto, a duplicate original of the Articles of Incorporation.

Dated: JUNE 29, 2000

 

In testimony whereof, the State Public Regulation Commission of the State of New Mexico has caused this certificate to be signed by its Chairman and the seal of said Commission to be affixed at the City of Santa Fe
  /s/ Bill Pope
Chairman

 

  /s/ Tillig M. Martinez
        for Bureau Chief


ARTICLES OF INCORPORATION

of

ELAM PAVING, INC.

I, the undersigned natural person, being over the age of twenty-one years acting as incorporator of a corporation under the New Mexico Business Corporation Act, adopts the following Articles of Incorporation for such corporation.

 

I. The name of the corporation is Elam Paving, Inc.

 

II. The period of its duration is perpetual.

 

III. The purposes for which the Corporation is organized are to engage in the business of construction, including but not limited to excavation, earth moving, paving and repair of streets, roads and highways, and to engage in any lawful business permitted to a corporation organized under the New Mexico Business Corporation Act.

 

IV. The aggregate number of shares which the corporation shall have authority to issue is 100,000 shares of a single class, with no par value.

 

V. At each election for directors every shareholder entitled to vote at the election has the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote, or to cumulate his votes by giving one candidate as many votes as the number of such directors multiplied by the number of his shares shall equal, or by distributing such votes on the same principle among any number of the candidates.

 

VI. Provisions limiting or denying to shareholders the preemptive right to acquire unissued shares or securities convertible into such shares or carrying a right to subscribe to or acquire shares of the corporation are: None.

 

VII. Provisions for the regulation of the internal affairs of the corporation are listed in the By-Laws.

 

VIII. The address of the initial registered office of the corporation is 200 West De Vargas Street, Suite 9, Santa Fe, New Mexico 87501 and the name of its initial registered agent at such address is Wayne H. Bladh.

 

IX. The number of directors constituting the initial Board of Directors of the corporation is three (3) and the names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and shall qualify are:

Harold F. Elam

293 Chinle Ct.

Grand Junction, Colorado 81503


ARTICLES OF INCORPORATION OF

ELAM PAVING, INC.

Page 2

John R. Elam

1111 Horizon Dr.

Suite 401

Grand Junction, Colorado 81506

Matthew P. Elam

1111 Horizon Dr.

Suite 401

Grand Junction, Colorado 81506

 

X. The name and address of the incorporator is Wayne H. Bladh, 200 West De Vargas Street, Suite 9, Santa Fe, New Mexico.

 

Xl. The stock of this corporation shall be qualified as Internal Revenue Code Section 1244 stock.

 

XII. A director of the corporation shall not be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director unless: (1) the director has breached or failed to perform the duties of the director’s office established by Subsection B of Section 53-11-35 NMSA 1978 (1993 Repl.) and (2) the breach or failure to perform constitutes (a) negligence, willful misconduct or recklessness in the case of a director who has an ownership interest in the corporation or receives in his capacity as a director or as an employee of the corporation compensation of more than $2,000 from the corporation in any calendar year, or (b) willful misconduct or recklessness in the case of a director who does not have an ownership interest in the corporation and does not receive in his capacity as a director or as an employee of the corporation compensation of more than $2,000 from the corporation in any calendar year.

 

/s/ Wayne H. Bladh

    29 June 2000

Signature of Incorporator

    Date

June 29, 2000


AFFIDAVIT OF APPOINTMENT

BY INITIAL DESIGNATED AGENT

 

TO: THE STATE PUBLIC REGULATION COMMISSION
     STATE OF NEW MEXICO

 

STATE OF NEW MEXICO    )
   ) ss.
COUNTY OF SANTA FE    )

On this 29 day of June, 2000, before me a Notary Public in and for the State and County aforesaid, appeared WAYNE H. BLADH, who is to be known to be the person and who acknowledged to me that the undersigned individual does hereby accept the appointment as the Initial Registered Agent of Elam Paving, Inc., the corporation named in the annexed Articles of Incorporation, and which is applying for a Certificate of Incorporation pursuant to the provisions of the Business Corporation Act of the State of New Mexico.

 

/s/ Wayne H. Bladh
Signature of Registered Agent

 

/s/ Donna Dee Gilliland
NOTARY PUBLIC

 

Exhibit 3.53

Elam Paving, Inc.

(A New Mexico corporation)

BYLAWS

ARTICLE I

OFFICES

Section 1.1 Registered Office . The registered office of the Corporation shall be fixed in the Certificate of Incorporation of the Corporation.

Section 1.2 Other Offices . The Corporation may also have offices in such other places within or without the State of New Mexico as the Board of Directors may, from time to time, determine or as the business of the Corporation may require.

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 2.1 Annual Meetings . Meetings of shareholders may be held at such place, either within or without the State of New Mexico, and at such time and date as the Board of Directors shall determine. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as described in Section 2.3 of these Bylaws in accordance with Section 53-11-28 of the Business Corporation Act of the State of New Mexico. Shareholders may act by written consent to elect directors; provided , however , that if such consent is less than unanimous, such action by written consent may be in lieu of holding an annual meeting only if all of the directorships to which directors could have been elected at an annual meeting held at the effective time of such action are vacant and are filled by such action.

Section 2.2 Special Meetings . Special meetings of shareholders, unless otherwise prescribed by statute, may be called by the Board of Directors, the holders of not less than 10% of all the outstanding stock entitled to vote at the meeting, or such other persons as may be authorized in the Certificate of Incorporation or these bylaws. Notice of each special meeting shall be given in accordance with Section 2.4 of these Bylaws. Unless otherwise permitted by law, business transacted at any special meeting of shareholders shall be limited to the purpose stated in the notice.

Section 2.3 Meetings by Remote Communications . If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, shareholders and proxy holders not physically present at a meeting of shareholders may, by means of remote communication:

(a) participate in a meeting of shareholders; and

(b) be deemed present in person and vote at a meeting of shareholders whether such meeting is to be held at a designated place or solely by means of remote communication,


provided that

(i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder;

(ii) the Corporation shall implement reasonable measures to provide such shareholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and

(iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

Section 2.4 Notice of Meetings . Whenever shareholders are required or permitted to take any action at a meeting, a written notice or electronic transmission, in the manner provided in Section 53-11-29 of the Business Corporation Act of the State of New Mexico, of notice of the meeting, which shall state the place, if any, date and time of the meeting, the means of remote communications, if any, by which shareholders and proxyholders may be deemed to be present in person and vote at such meeting, the record date for determining the shareholders entitled to vote at the meeting, if such date is different from the record date for determining the shareholders entitled to notice of the meeting and, in the case of a special meeting, the purposes for which the meeting is called, shall be mailed to or transmitted electronically to each stockholder of record entitled to vote thereat. Except as otherwise provided by law, the Certificate of Incorporation or these bylaws, such notice shall be given not less than 10 days nor more than 50 days before the date of any such meeting as of the record date for determining the shareholders entitled to notice of the meeting. If mailed, notice to shareholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the stock transfer books of the Corporation.

Section 2.5 Quorum . Unless otherwise required by law or the Certificate of Incorporation, the holders of a majority in voting power of the issued and outstanding stock entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of shareholders, but in no event shall a quorum consist of less than one-third of the shares entitled to vote at the meeting. When a quorum is once present to organize a meeting, the quorum is not broken by the subsequent withdrawal of any shareholders. In the absence of a quorum, the shareholders so present may, by a majority in voting power thereof, adjourn the meeting from time to time in the manner provided in Section 2.10 of these Bylaws until a quorum shall attend. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided , however , that the foregoing shall not limit the right of the Corporation or any subsidiary of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

 

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Section 2.6 Voting . Unless otherwise provided in the Certificate of Incorporation, each shareholder shall be entitled to one vote for each share of capital stock held by such shareholder. All elections of directors and, except as otherwise required by law, the Certificate of Incorporation or these bylaws, all other matters shall be determined by a majority of the votes cast. Unless determined by the Chairman of the meeting to be advisable, the vote on any matter, including the election of directors, need not be by written ballot.

Section 2.7 Proxy Representation . Any shareholder may authorize another person or persons to act for him by proxy in all matters in which a shareholder is entitled to participate, whether by waiving notice of any meeting, voting or participating at a meeting, or expressing consent or dissent without a meeting. Every proxy must be signed by the shareholder or by his attorney-in-fact. No proxy shall be valid after eleven months from the date of its execution, unless such proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A shareholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date.

Section 2.8 Organization .

(a) The Chairman of the Board of Directors, if one is elected, or, in his or her absence or disability, the President of the Corporation, shall preside at all meetings of the shareholders.

(b) The Secretary of the Corporation shall act as Secretary at all meetings of the shareholders. In the absence or disability of the Secretary, the Chairman of the Board of Directors or the President shall appoint a person to act as Secretary at such meetings.

Section 2.9 Conduct of Meeting . The date and time of the opening and the closing of the polls for each matter upon which the shareholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of shareholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of shareholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding person of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to shareholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding person at any meeting of shareholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a

 

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matter or business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 2.10 Adjournment . At any meeting of shareholders of the Corporation, whether or not a quorum is present, a majority in voting power of the shareholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time without notice. Any business may be transacted at the adjourned meeting that might have been transacted at the meeting originally noticed. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for shareholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for notice of such adjourned meeting, and shall give notice of the adjourned meeting to each shareholder of record entitled to vote at such adjourned meeting as of the record date for notice of such adjourned meeting.

Section 2.11 Consent of Shareholders in Lieu of Meeting .

(a) Unless otherwise restricted by the Certificate of Incorporation, any action required to be taken at any annual or special meeting of shareholders of the Corporation, or any action which may be taken at any annual or special meeting of the shareholders, may be taken without a meeting, if a consent or consents in writing, setting forth the action so taken, shall be signed by the all of the shareholders entitled to vote with respect to the subject matter thereof and shall be delivered to the Corporation by delivery to its registered office in New Mexico, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to the Corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested.

(b) Every written consent shall bear the date of signature of each shareholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the date the earliest dated consent is delivered to the Corporation, a written consent or consents signed by a sufficient number of holders to take action are delivered to the Corporation in the manner prescribed in the first paragraph of this Section 2.11. A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a shareholder or proxyholder, or by a person or persons authorized to act for a shareholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of these Bylaws to the extent permitted by law. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

 

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Section 2.12 List of Shareholders Entitled to Vote . The officer who has charge of the stock ledger shall prepare and make, at least 10 days before every meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting or any adjournment thereof. Such list shall be arranged in alphabetical order and shall show the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder at least 10 days prior to the meeting during ordinary business hours at the principal place of business of the Corporation. If the meeting is to be held at a place, then a list of shareholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any shareholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any shareholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be prima facie evidence as to who are the shareholders entitled to examine the list of shareholders required by this Section 2.12 or to vote in person or by proxy at any meeting of shareholders.

ARTICLE III

BOARD OF DIRECTORS

Section 3.1 Powers . The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. The Board of Directors shall exercise all of the powers and duties conferred by law except as provided by the Certificate of Incorporation or these Bylaws.

Section 3.2 Number and Term . The number of directors of the Corporation shall be determined from time to time by resolution of the Board of Directors. The Board of Directors shall be elected by the shareholders at their annual meeting, and each director shall be elected to serve for the term of one year or until his or her successor is elected and qualified or until his or her earlier death, resignation, disqualification or removal. Directors need not be shareholders.

Section 3.3 Resignations . Any director may resign at any time upon notice given in writing or by electronic transmission to the Board of Directors, the Chairman of the Board of Directors, the President or the Secretary. The resignation shall take effect at the time specified therein, and if no time is specified, at the time of its receipt by the Board of Directors, the Chairman of the Board of Directors, the President or Secretary, as the case may be. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 3.4 Removal . Any director or the entire Board of Directors may be removed either with or without cause at any time by the affirmative vote of the holders of a majority in voting power of the outstanding shares then entitled to vote for the election of directors at a meeting of the shareholders called expressly for that purpose.

Section 3.5 Newly Created Directorships and Vacancies . Unless otherwise provided by law or in the Certificate of Incorporation, any newly created directorship or any vacancy occurring in the Board of Directors for any cause may be filled by a majority of the remaining members of the Board of Directors, although such majority is less than a quorum.

 

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Section 3.6 Meetings .

(a) The initial directors shall hold their first meeting to organize the Corporation, elect officers and transact any other business that may properly come before the meeting. An annual meeting of the Board of Directors shall be held immediately after each annual meeting of the shareholders, or at such time and place as may be noticed for the meeting.

(b) Regular meetings of the Board of Directors may be held at such places and times as shall be determined from time to time by written or electronic transmission of consent of a resolution of the directors.

(c) Special meetings of the Board of Directors shall be called by the President or by the Secretary on the written or electronic transmission of such request of a majority of the Board of Directors and shall be held at such place as may be determined by the directors or as shall be stated in the notice of the meeting.

Section 3.7 Notice of Meetings . Except as provided by law, notice of regular meetings need not be given. Notice of the time and place of any special meeting shall be given to each director by the Secretary. Notice of each such meeting shall be given to each director, if by mail, addressed to such director as his or her residence or usual place of business, at least five days before the day on which such meeting is to be held, or shall be sent to such director at such place by telecopy, telegraph, electronic transmission or other form of recorded communication, or be delivered personally or by telephone, in each case at least 24 hours prior to the time set for such meeting. The notice of any meeting need not specify the purpose thereof.

Section 3.8 Quorum, Voting and Adjournment . A majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the directors present thereat may adjourn such meeting to another time and place. Notice of such adjourned meeting need not be given if the time and place of such adjourned meeting are announced at the meeting so adjourned.

Section 3.9 Committees . The Board of Directors may, by resolution, designate one or more committees, each such committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) declare dividends or authorize distributions; (b) approve or recommend to shareholders actions or proposals required by the Business Corporation Act of the State of New Mexico to be approved by shareholders; (c) designate

 

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candidates for the office of director, for purposes of proxy solicitation or otherwise, or fill vacancies on the board of directors or any committee thereof; (d) amend the bylaws; (e) approve a plan of merger not requiring shareholder approval; (f) authorize or approve the reacquisition of shares unless pursuant to a general formula or method specified by the board of directors; or (g) authorize or approve the issuance or sale of, or any contract to issue or sell, shares or designate the terms of a series of a class of shares, provided that the board of directors, having acted regarding general authorization for the issuance or sale of shares, or any contract therefor, and, in the case of a series, the designation thereof, may, pursuant to a general formula or method specified by the board of resolution or by adoption of a stock option or other plan, authorize a committee to fix the terms of any contract for the sale of the shares and to fix the terms upon which such shares may be issued or sold, including, without limitation, the price, the dividend rate, provisions for redemption, sinking fund, conversion, voting or preferential rights, and provisions for other features of a class of shares, or a series of a class of shares, with full power in such committee to adopt any final resolution setting forth all the terms thereof and to authorize the statement of the terms of a series for filing pursuant to the requirements of the Business Corporation Act of New Mexico. All committees of the Board of Directors shall keep minutes of their meetings and shall report their proceedings to the Board of Directors when requested or required by the Board of Directors.

Section 3.10 Action Without a Meeting . Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or any committee thereof, as the case may be, consent thereto in writing or by electronic transmission, setting forth the action so taken, and the writing or writings or electronic transmission or transmissions are filed in the minutes of proceedings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form or shall be in electronic form if the minutes are maintained in electronic form.

Section 3.11 Compensation . The Board of Directors shall have the authority to fix the compensation of directors for their services. In addition, as determined by the Board of Directors, directors may be reimbursed by the Corporation for their expenses, if any, in the performance of their duties as directors. A director may also serve the Corporation in other capacities and receive compensation therefor.

Section 3.12 Remote Meeting . Unless otherwise restricted by the Certificate of Incorporation, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting by means of conference telephone or other communications equipment in which all persons participating in the meeting can hear each other. Participation in a meeting by means of conference telephone or other communications equipment shall constitute the presence in person at such meeting.

ARTICLE IV

OFFICERS

Section 4.1 Number . The officers of the Corporation shall include a President and a Secretary, both of whom shall be elected by the Board of Directors and who shall hold office for a term of one year and until their successors are elected and qualified or until their earlier

 

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resignation or removal. In addition, the Board of Directors may elect a Chairman of the Board of Directors, one or more Vice Presidents, including an Executive Vice President, a Treasurer and one or more Assistant Treasurers and one or more Assistant Secretaries, who shall hold their office for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. The initial officers shall be elected at the first meeting of the Board of Directors and, thereafter, at the annual organizational meeting of the Board of Directors. Any number of offices may be held by the same person.

Section 4.2 Other Officers and Agents . The Board of Directors may appoint such other officers and agents as it deems advisable, who shall hold their office for such terms and shall exercise and perform such powers and duties as shall be determined from time to time by the Board of Directors.

Section 4.3 Chairman . The Chairman of the Board of Directors shall be a member of the Board of Directors and shall preside at all meetings of the Board of Directors and of the shareholders. In addition, the Chairman of the Board of Directors shall have such powers and perform such other duties as from time to time may be assigned to him or her by the Board of Directors.

Section 4.4 President . The President shall be the Chief Executive Officer of the Corporation. He or she shall exercise such duties as customarily pertain to the office of President and Chief Executive Officer, and shall have general and active management of the property, business and affairs of the Corporation, subject to the supervision and control of the Board of Directors. He or she shall perform such other duties as prescribed from time to time by the Board of Directors or these Bylaws. In the absence, disability or refusal of the Chairman of the Board of Directors to act, or the vacancy of such office, the President shall preside at all meetings of the shareholders and of the Board of Directors. Except as the Board of Directors shall otherwise authorize, the President shall execute bonds, mortgages and other contracts on behalf of the Corporation, and shall cause the seal to be affixed to any instrument requiring it and, when so affixed, the seal shall be attested by the signature of the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer.

Section 4.5 Vice Presidents . Each Vice President, if any are elected, of whom one or more may be designated an Executive Vice President, shall have such powers and shall perform such duties as shall be assigned to him or her by the President or the Board of Directors.

Section 4.6 Treasurer . The Treasurer shall have the general care and custody of the funds and securities of the Corporation, and shall deposit all such funds in the name of the Corporation in such banks, trust companies or other depositories as shall be selected by the Board of Directors. He or she shall receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever. He or she shall exercise general supervision over expenditures and disbursements made by officers, agents and employees of the Corporation and the preparation of such records and reports in connection therewith as may be necessary or desirable. He or she shall, in general, perform all other duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the Board of Directors.

 

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Section 4.7 Secretary . The Secretary shall be the Chief Administrative Officer of the Corporation and shall: (a) cause minutes of all meetings of the shareholders and directors to be recorded and kept; (b) cause all notices required by these Bylaws or otherwise to be given properly; (c) see that the minute books, stock books, and other nonfinancial books, records and papers of the Corporation are kept properly; and (d) cause all reports, statements, returns, certificates and other documents to be prepared and filed when and as required. The Secretary shall have such further powers and perform such other duties as prescribed from time to time by the Board of Directors.

Section 4.8 Assistant Treasurers and Assistant Secretaries . Each Assistant Treasurer and each Assistant Secretary, if any are elected, shall be vested with all the powers and shall perform all the duties of the Treasurer and Secretary, respectively, in the absence or disability of such officer, unless or until the Board of Directors shall otherwise determine. In addition, Assistant Treasurers and Assistant Secretaries shall have such powers and shall perform such duties as shall be assigned to them by the Board of Directors.

Section 4.9 Corporate Funds and Checks . The funds of the Corporation shall be kept in such depositories as shall from time to time be prescribed by the Board of Directors. All checks or other orders for the payment of money shall be signed by the President or the Treasurer or such other person or agent as may from time to time be authorized and with such countersignature, if any, as may be required by the Board of Directors.

Section 4.10 Contracts and Other Documents . The President or the Treasurer, or such other officer or officers as may from time to time be authorized by the Board of Directors or any other committee given specific authority by the Board of Directors during the intervals between the meetings of the Board of Directors, shall have power to sign and execute on behalf of the Corporation deeds, conveyances and contracts, and any and all other documents requiring execution by the Corporation.

Section 4.11 Compensation . The compensation of the officers of the Corporation shall be fixed from time to time by the Board of Directors (subject to any employment agreements that may then be in effect between the Corporation and the relevant officer). None of such officers shall be prevented from receiving such compensation by reason of the fact that he or she is also a director of the Corporation. Nothing contained herein shall preclude any officer from serving the Corporation, or any subsidiary, in any other capacity and receiving such compensation by reason of the fact that he or she is also a director of the Corporation.

Section 4.12 Ownership of Stock of Another Corporation . Unless otherwise directed by the Board of Directors, the President or the Treasurer, or such other officer or agent as shall be authorized by the Board of Directors, shall have the power and authority, on behalf of the Corporation, to attend and to vote at any meeting of shareholders of any corporation in which the Corporation holds stock and may exercise, on behalf of the Corporation, any and all of the rights and powers incident to the ownership of such stock at any such meeting, including the authority to execute and deliver proxies and consents on behalf of the Corporation.

 

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Section 4.13 Delegation of Duties . In the absence, disability or refusal of any officer to exercise and perform his or her duties, the Board of Directors may delegate to another officer such powers or duties.

Section 4.14 Resignation and Removal . Any officer may resign at any time in the same manner prescribed under Section 3.3 of these Bylaws. Any officer of the Corporation may be removed from office for or without cause at any time by the Board of Directors; provided that such removal shall be without prejudice to the contract rights, if any, of the person removed.

Section 4.15 Vacancies . The Board of Directors shall have power to fill vacancies occurring in any office.

ARTICLE V

STOCK

Section 5.1 Certificates of Stock . The shares of the Corporation shall be issued in uncertificated form unless otherwise provided by the Board of Directors by resolution. Every holder of stock represented by certificates, if any, shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, if any, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation certifying the number of shares owned by such holder in the Corporation. Any or all of the signatures on the certificate may be a facsimile. The Board of Directors shall have the power to appoint one or more transfer agents and/or registrars for the transfer or registration of certificates of stock of any class, and may require stock certificates to be countersigned or registered by one or more of such transfer agents and/or registrars.

Section 5.2 Transfer of Shares . Shares of stock of the Corporation shall be transferable upon its books by the holders thereof, in person or by their duly authorized attorneys or legal representatives, upon surrender and delivery to the Corporation of the certificate representing such shares and a duly executed instrument authorizing transfer of such shares, if certificated, or delivery of a duly executed instrument authorizing transfer of such shares, if uncertificated, to the person in charge of the stock and transfer books and ledgers. If certificated, such certificates shall be cancelled and new certificates shall thereupon be issued. A record shall be made of each transfer. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented, both the transferor and transferee request the Corporation to do so. The Board of Directors shall have power and authority to make such rules and regulations as it may deem necessary or proper concerning the issue, transfer and registration of certificates for shares of stock of the Corporation.

Section 5.3 Lost, Stolen, Destroyed or Mutilated Certificates . A new certificate of stock may be issued in the place of any certificate previously issued by the Corporation alleged to have been lost, stolen or destroyed, and the Board of Directors may, in its discretion, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to give the Corporation a bond, in such sum as the Board of Directors may direct, in order to indemnify the Corporation against any claims that may be made against it in connection therewith. A new

 

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certificate of stock may be issued in the place of any certificate previously issued by the Corporation that has become mutilated without the posting by the owner of any bond upon the surrender by such owner of such mutilated certificate.

Section 5.4 List of Shareholders Entitled To Vote . The stock ledger shall be prima facie evidence as to who are the shareholders entitled to examine the list required by Section 53-11-31 of the Business Corporation Act of New Mexico or to vote in person or by proxy at any meeting of shareholders.

Section 5.5 Dividends . Subject to the provisions of the Certificate of Incorporation, the Board of Directors may at any regular or special meeting, declare dividends upon the stock of the Corporation either (a) out of its surplus or (b) in case there shall be no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Before the declaration of any dividend, the Board of Directors may set apart, out of any funds of the Corporation available for dividends, such sum or sums as from time to time in its discretion may be deemed proper for working capital or as a reserve fund to meet contingencies or for such other purposes as shall be deemed conducive to the interests of the Corporation.

Section 5.6 Fixing Date for Determination of Shareholders of Record . For the purpose of determining shareholders entitled to notice of, or to vote at, any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may provide that the stock transfer books shall be closed for a stated period not to exceed fifty days. If the stock transfer books are closed for the purpose of determining shareholders entitled to notice of, or to vote at, a meeting of shareholders, the books shall be closed for at least ten days immediately preceding the meeting. In lieu of closing the stock transfer books, these bylaws, or in the absence of an applicable bylaw, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, the date to be not more than fifty days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of, or to vote at, a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring the dividend is adopted, as the case may be, shall be the record date for the determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, the determination shall apply to any adjournment thereof.

Section 5.7 Registered Shareholders . Prior to the surrender to the Corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the Corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. Except as otherwise required by law, the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.

 

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ARTICLE VI

INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

Section 6.1 Right to Indemnification .

(a) Each person who was or is a party or is threatened to be made a party to, or was or is otherwise involved in, any action, suit, arbitration, alternative dispute mechanism, inquiry, judicial, administrative or legislative hearing, investigation or any other threatened, pending or completed proceeding, whether brought by or in the right of the Corporation or otherwise, including any and all appeals, whether of a civil, criminal, administrative, legislative, investigative or other nature (hereinafter a “ proceeding ”), by reason of the fact that he or she is or was a director or an officer of the Corporation or while a director or officer of the Corporation is or was serving at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “ indemnitee ”), or by reason of anything done or not done by him or her in any such capacity, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the New Mexico Business Corporation Act, as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement by or on behalf of the indemnitee) actually and reasonably incurred by such indemnitee in connection therewith; provided , however , that, except as otherwise required by law or provided in Section 6.3 with respect to proceedings to enforce rights under this Article VI, the Corporation shall indemnify any such indemnitee in connection with a proceeding, or part thereof, initiated by such indemnitee (including claims and counterclaims, whether such counterclaims are asserted by (i) such indemnitee, or (ii) the Corporation in a proceeding initiated by such indemnitee) only if such proceeding, or part thereof, was authorized or ratified by the Board of Directors.

(b) To receive indemnification under this Section 6.1, an indemnitee shall submit a written request to the Secretary of the Corporation. Such request shall include documentation or information that is necessary to determine the entitlement of the indemnitee to indemnification and that is reasonably available to the indemnitee. Upon receipt by the Secretary of the Corporation of such a written request, the entitlement of the indemnitee to indemnification shall be determined by the following person or persons who shall be empowered to make such determination: (i) the Board of Directors by a majority vote of a quorum consisting of directors not at the time parties to the proceeding, (ii) if such a quorum cannot be obtained, by a majority vote of a committee of the board duly designated to act in the matter by a majority vote of the full board, in which designation directors who are parties may participate, and consisting solely of two or more directors not at the time parties to the proceeding, (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee, (iv) the shareholders of the Corporation or (v) in the event that a change of control (as defined below) has occurred, by independent legal counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee. The determination of entitlement to indemnification shall be made and, unless a contrary determination is made, such indemnification shall be paid in full by the Corporation not later than 60 days after receipt by the Secretary of the Corporation of a written request for indemnification. For purposes of this

 

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Section 6.1(b), a “ change of control ” will be deemed to have occurred if the individuals who, as of the effective date of these Bylaws, constitute the Board of Directors (the “ incumbent board ”) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to such effective date whose election, or nomination for election by the shareholders of the Corporation, was approved by a vote of at least a majority of the directors then comprising the incumbent board shall be considered as though such individual were a member of the incumbent board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors.

Section 6.2 Right to Advancement of Expenses .

(a) In addition to the right to indemnification conferred in Section 6.1, an indemnitee shall, to the fullest extent not prohibited by law, also have the right to be paid by the Corporation the expenses (including attorneys’ fees) incurred in defending any proceeding with respect to which indemnification is required under Section 6.1 in advance of its final disposition (hereinafter an “ advancement of expenses ”); provided , however , that an advancement of expenses shall be made only if (i) the indemnitee furnishes the Corporation a written affirmation of his good faith belief that the indemnitee has met the standard of conduct necessary for indemnification by the Corporation as authorized by Section 53-11-4.1 of the New Mexico Business Corporation Act, (ii) the indemnitee furnishes the Corporation a written undertaking (hereinafter an “ undertaking ”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such indemnitee has not met such standards of conduct; and (iii) a determination is made that the facts then known to those making the determination would not preclude indemnification under Section 53-11-4.1 of the New Mexico Business Corporation Act.

(b) To receive an advancement of expenses under this Section 6.2, an indemnitee shall submit a written request to the Secretary of the Corporation. Such request shall reasonably evidence the expenses incurred by the indemnitee and shall include or be accompanied by the undertaking required by Section 6.2(a). Each such advancement of expenses shall be made within 20 days after the receipt by the Secretary of the Corporation of a written request for advancement of expenses.

(c) Notwithstanding the foregoing Section 6.2(a), the Corporation shall not make or continue to make advancements of expenses to an indemnitee (except by reason of the fact that the indemnitee is or was a director of the Corporation, in which event this Section 6.2(c) shall not apply) if a determination is reasonably made that the facts known at the time such determination is made demonstrate clearly and convincingly that the indemnitee acted in bad faith and in a manner that the Indemnitee did not believe to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal proceeding, that the indemnitee had reasonable cause to believe his or her conduct was unlawful. Such determination shall be made: (i) by the Board of Directors by a majority vote of a quorum consisting of directors not at the time parties to the proceeding, (ii) if such a quorum cannot be obtained, by a majority vote of a committee of the board duly designated to act in the matter by a majority vote of the full board,

 

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in which designation directors who are parties may participate, and consisting solely of two or more directors not at the time parties to the proceeding, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee.

Section 6.3 Right of Indemnitee to Bring Suit . In the event that a determination is made that the indemnitee is not entitled to indemnification or if payment is not timely made following a determination of entitlement to indemnification pursuant to Section 6.1(b) or if an advancement of expenses is not timely made under Section 6.2(b), the indemnitee may at any time thereafter bring suit against the Corporation in a court of competent jurisdiction in the State of New Mexico seeking an adjudication of entitlement to such indemnification or advancement of expenses. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit to the fullest extent permitted by law. In any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that the indemnitee has not met any applicable standard of conduct for indemnification set forth in the New Mexico Business Corporation Act. Further, in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the indemnitee has not met any applicable standard of conduct for indemnification set forth in the New Mexico Business Corporation Act. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the New Mexico Business Corporation Act, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its shareholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VI or otherwise shall be on the Corporation.

Section 6.4 Non-Exclusivity of Rights . The rights to indemnification and to the advancement of expenses conferred in this Article VI shall not be exclusive of any other right which any person may have or hereafter acquire under any law, agreement, vote of shareholders or directors, provisions of the Certificate of Incorporation or these Bylaws or otherwise.

Section 6.5 Insurance . The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the New Mexico Business Corporation Act.

 

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Section 6.6 Indemnification of Employees and Agents of the Corporation . The Corporation may, to the extent authorized from time to time, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article VI with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

Section 6.7 Nature of Rights . The rights conferred upon indemnitees in this Article VI shall be contract rights that shall vest at the time an individual becomes a director or officer of the Corporation and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee, agent or trustee and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article VI that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment, alteration or repeal.

Section 6.8 Settlement of Claims . The Corporation shall not be liable to indemnify any indemnitee under this Article VI for any amounts paid in settlement of any proceeding effected without the Corporation’s written consent, which consent shall not be unreasonably withheld, or for any judicial award if the Corporation was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such proceeding.

Section 6.9 Subrogation . In the event of payment under this Article VI, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Corporation effectively to bring suit to enforce such rights.

Section 6.10 Severability . If any provision or provisions of this Article VI shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (a) the validity, legality and enforceability of the remaining provisions of this Article VI (including, without limitation, all portions of any paragraph of this Article VI containing any such provision held to be invalid, illegal or unenforceable, that are not by themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Article VI (including, without limitation, all portions of any paragraph of this Article VI containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent of the parties that the Corporation provide protection to the indemnitee to the fullest enforceable extent.

ARTICLE VII

MISCELLANEOUS

Section 7.1 Amendments . These Bylaws may be altered, amended or repealed, and new Bylaws made, by the Board of Directors, but the shareholders may make additional Bylaws and may alter and repeal any Bylaws whether adopted by them or otherwise.

 

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Section 7.2 Electronic Transmission . For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

Section 7.3 Corporate Seal . The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.

Section 7.4 Fiscal Year . The fiscal year of the Corporation shall begin on the first day of January of each year and end on the last day of December of the same year, or such other 12 consecutive months as the Board of Directors may designate.

Section 7.5 Waiver of Notice . A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such person, whether given before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting shall constitute waiver of notice except attendance for the sole purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Section 7.6 Section Headings . Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

Section 7.7 Inconsistent Provisions; Changes in Delaware Law . If any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the Business Corporation Act of the State of New Mexico or any other applicable law, the provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. If any of the provisions of the Business Corporation Act of the State of New Mexico referred to above are modified or superseded, the references to those provisions are to be interpreted to refer to the provisions as so modified or superseded.

Date of Adoption: March 31, 2011

 

16

Exhibit 3.54

CERTIFICATE OF FORMATION OF A

LIMITED PARTNERSHIP

 

1. The entity being formed by this Certificate of Formation is a Texas limited partnership. The name of the entity is B&H Contracting, L.P. , which is a Texas limited partnership.

 

2. The street address of this entity’s registered office in Texas is (a P.O. Box is not sufficient): 165 S.E. 6th Street, Paris, Texas, 75460

and the name of its individual registered agent, who is a resident of the State of Texas, is: Robert K. Hall

 

3.

The principal office in the United States where records of the limited partnership are to be kept or made available under Section 153.551 of the Texas Business Organizations Code is: 165 S.E. 6 th Street, Paris, Texas, 75460

 

4. The name, the mailing address, and the street address of the business or residence of each general partner, each general partner being the governing authority of the limited partnership, is as follows:

 

NAME

 

MAILING ADDRESS

 

STREET ADDRESS

B&H Equity, L.L.C.

  165 S.E. 6th Street, Paris,   165 S.E. 6th Street, Paris,
  Texas, 75460   Texas, 75460

 

5. This Certificate of Formation becomes effective when it is filed with the Office of the Texas Secretary of State.

The undersigned signs this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument.

 

B&H Equity, L.L.C.:
By:   /s/ Robert K. Hall
Mr. Robert K. Hall, President

Exhibit 3.55

AMENDED AND RESTATED

PARTNERSHIP AGREEMENT

OF

B&H CONTRACTING, L.P.

This Amended and Restated Partnership Agreement (this “ Agreement ”) of B&H Contracting, L.P., a Texas limited partnership (the “ Partnership ”), is entered into as of November 30, 2010 by and between RKH Capital, L.L.C., a Texas limited liability company (the “ General Partner ”), as the sole general partner, RK Hall, LLC, a Delaware limited liability company (the “ Limited Partner ” and, together with the General Partner, the “ Partners ”), as the sole limited partner, Robert K. Hall, an individual (“ Hall ”), David Mark Buster, an individual (“ Buster ” and, together with Hall, the “ Former Limited Partners ”), and B&H Equity, L.L.C., a Texas limited liability company (the “ Former General Partner ”).

WHEREAS, the Partners, the Former Limited Partners, the Former General Partner, the Partnership and the other parties thereto entered into an Interest Purchase Agreement (the “ Purchase Agreement ”), dated as of November 12, 2010 and effective simultaneously with the effectiveness of this Agreement;

WHEREAS, the Former General Partner and Former Limited Partners entered into that certain Partnership Agreement dated August 7, 2008, as amended (the “ Pre-Existing Partnership Agreement ”);

WHEREAS, the Partners, the Former General Partner and the Former Limited Partners wish to amend and restate the Partnership’s Pre-Existing Partnership Agreement in order to (i) appoint the General Partner and the Limited Partner as the new general partner and new limited partner, respectively, of the Partnership and (ii) amend and restate the Pre-Existing Partnership Agreement as set forth herein;

WHEREAS, the Pre-Existing Partnership Agreement requires that any amendment thereto be approved by the Former General Partner and the Former Limited Partners; and

WHEREAS, the Former General Partner and the Former Limited Partners have joined in this Agreement solely for purposes of approving the following amendments.

NOW THEREFORE, the Partners, the Former General Partner and the Former Limited Partners, intending to be legally bound, hereby agree that the Pre-Existing Partnership Agreement is superseded, amended and restated in its entirety to read as follows:

1. Name . The name of the limited partnership formed hereby is B&H Contracting, L.P.

2. Purpose . The Partnership is organized for the object and purpose of, and the nature of the business to be conducted and promoted by the Partnership is, engaging in any and all activities permitted under the Texas Limited Partnership Law, a Part of the Texas Business Organizations Code, as amended (the “ TLPL ”). The rights and liabilities of the Partners shall be as provided in the TLPL, except as otherwise expressly provided herein.


3. Registered Office; Registered Agent . The registered office of the Partnership required by the TLPL to be maintained in the State of Texas shall be the office of the registered agent named in the Partnership’s Certificate of Formation, as amended (the “ Certificate ”) or such other office (which need not be a place of business of the Partnership) as the General Partner may designate in the manner provided by law. The registered agent of the Partnership in the State of Texas shall be the registered agent named in the Certificate or such other person as the General Partner may designate in the manner provided by law.

4. Principal Office in the United States; Other Offices . The principal office of the Partnership in the United States where records are to be kept or made available under Section 153.551 of the TLPL is 165 SE 6th Street, Paris, Texas, 75460, or such other office as the General Partner may designate, which need not be in the State of Texas. The Partnership may have such other offices as the General Partner may designate.

5. Powers . The Partnership shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, convenient, or incidental to or for the furtherance of the purposes set forth in Section 2 herein, including any and all powers set forth in the TLPL.

6. Term . The Partnership shall have perpetual existence, unless it is wound up sooner as a result of: (a) an event of withdrawal of a general partner described in Section 153.155 of the TLPL, (b) the written consent of all of the Partners, (c) a judicial decree ordering the winding up and termination of the Partnership under Section 11.314 of the TLPL, or (d) any other event requiring the winding up of the Partnership under the TLPL.

 

7. Partners . The names, addresses and Sharing Ratios of the General Partner and the Limited Partner are as follows:

 

NAME

 

BUSINESS ADDRESS

 

SHARING RATIO

General Partner:

   

RKH Capital, L.L.C.

  2810 NW Loop 286
Paris, TX 75460
  0%

Limited Partner:

   

RK Hall, LLC

  2900 K Street NW, Suite 100
Harbourside North Tower Building
Washington, DC 20007
  100%

8. Capital Contributions . The Partners may make capital contributions at such times and in such amounts, in cash or other property, to the Partnership as they may agree from time to time with the prior consent of the General Partner.

9. No Further Liability . The liability of the Limited Partner to the Partnership shall be limited to the amount of its capital contributions made pursuant to Section 8 , and the Limited Partner shall not have any further liability to contribute money to, or in respect of, the liabilities or the obligations of the Partnership unless the Limited Partner agrees in writing to make additional capital contributions to the Partnership, nor shall the Limited Partner be personally liable for any obligations of the Partnership, except as provided in the TLPL.

 

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10. Allocations of Profit and Losses . The Partnership’s profits and losses shall be allocated among the Partners in proportion to their Sharing Ratios.

11. Distributions . Subject to Section 153.210 of the TLPL, the General Partner shall, at such times and in such amounts as may be determined by the General Partner in its sole discretion, cause the Partnership to make distributions of cash and other property to the Partners in proportion to their Sharing Ratios.

12. Additional Partners .

(a) The General Partner may not admit additional limited partners to the Partnership without first obtaining the consent of the Limited Partner.

(b) After the admission of any additional limited partners pursuant to this Section 12 , the Partnership shall continue as a limited partnership under the TLPL.

(c) The admission of additional limited partners to the Partnership pursuant to this Section 12 shall be accomplished by the amendment of this Agreement and, if required by the TLPL, the filing of an appropriate amendment to the Partnership’s Certificate.

13. Management .

(a) Except as otherwise provided in this Agreement, the powers of the Partnership shall be exercised by or under the authority of, and the business and affairs of the Partnership shall be managed under the direction of, the General Partner, who shall make all decisions and take all actions for the Partnership. No Limited Partner, acting in its capacity as a limited partner, has the right, power or authority to act for or on behalf of the Partnership, to do any act that would be binding on the Partnership, or to incur any expenditures on behalf of the Partnership.

(b) In managing the business and affairs of the Partnership and exercising its powers as a general partner, the General Partner may, but is not required to, act through resolutions adopted at meetings or in written consents. Decisions or actions taken by the General Partner in accordance with this Agreement shall constitute decisions or actions by the Partnership and shall be binding on each Partner.

14. Tax Matters . For so long as the General Partner is disregarded as an entity separate from the Limited Partner for U.S. federal tax purposes, the Partners intend for the Partnership to be disregarded as an entity separate from the Limited Partner for U.S. federal tax purposes (and applicable state and local tax purposes) and that the activities of the Partnership be deemed to be the activities of the Limited Partner for such tax purposes. Notwithstanding the foregoing, the Partnership is not intended to be and shall not be disregarded as an entity for any purpose other than tax purposes. All provisions of the Certificate and this Agreement are to be construed so as to preserve that tax status under those circumstances. At such time as the Partnership has more than one partner that is recognized for U.S. federal tax purposes, appropriate adjustments shall be made to this Agreement to account for the formation of a partnership for U.S. federal tax purposes as well as for distributions, maintenance of capital accounts, and the allocation of profits and losses.

 

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15. Exculpation . Neither the General Partner, or its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner, nor an affiliate or owner, manager, officer, director, partner, employee or agent of the Partnership, shall be liable, responsible or accountable in damages or otherwise to the Partnership or any Partner for any action taken or failure to act (even if such action or failure to act constituted the negligence of a person) on behalf of the Partnership unless such act or omission was performed or omitted fraudulently or constituted willful misconduct. To the extent that, at law or in equity, the General Partner or its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner or of the Partnership have duties (including fiduciary duties) and liabilities relating to the Partnership or to another Partner, the General Partner, its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner acting under this Agreement shall not be liable to the Partnership or to any Partner for their reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of the General Partner, its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner or of the Partnership otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of the General Partner, its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner or of the Partnership. THE PARTNERS RECOGNIZE THAT THIS PROVISION SHALL RELIEVE THE GENERAL PARTNER AND ITS AFFILIATES AND ANY OWNER, MANAGER, OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT OF THE GENERAL PARTNER OR OF THE PARTNERSHIP FROM ANY AND ALL LIABILITY ARISING OR TO ARISE OUT OF ACTIONS OR INACTIONS DESCRIBED ABOVE EVEN IF THE ACTIONS OR INACTIONS CONSTITUTE NEGLIGENCE BY ANY SUCH PERSON.

16. Indemnification .

(a) The Partners, and their affiliates, officers, directors, employees and agents or any person performing a similar function on behalf of the Partnership (individually, an “ Indemnitee ”) may be indemnified and held harmless by the Partnership from and against any and all judgments, penalties, settlements and reasonable expenses actually incurred by any Indemnitee who was, is or is threatened to be made a named defendant or respondent in any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise, by reason of its status as (x) a Partner or an affiliate thereof or (y) an officer, director, employee or agent of the Partnership, or a Partner or an affiliate thereof, if the Indemnitee acted in good faith and in a manner it reasonably believed to be in, or not opposed to, the best interest of the Partnership. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere , or its equivalent, shall not, of itself, create a presumption that the Indemnitee acted in a manner contrary to that specified above.

(b) The Partnership through the General Partner, in its sole discretion, may purchase and maintain insurance on behalf of the General Partner and such other persons as the General Partner shall determine, in its sole discretion, against any liability that may be asserted against or expense that may be incurred by such person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such person against such liability under the provisions of this Agreement.

 

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(c) Expenses incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding subject to this Section 16 may, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding (i) upon a written affirmation by the Indemnitee of its good faith belief that it has met the standard of conduct necessary for indemnification and (ii) upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that such person is not entitled to be indemnified as authorized in this Section 16 .

(d) The indemnification provided in this Section 16 is for the benefit of the Indemnitees and shall not be deemed to create any right to indemnification for any other persons.

17. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Texas (without regard to principles of conflict of laws), all rights and remedies being governed by said laws.

18. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one instrument. A copy of this Agreement, signed and delivered by facsimile or electronic transmission, shall be considered an original, executed instrument.

[S IGNATURE P AGE T O F OLLOW ]

 

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IN WITNESS WHEREOF, the undersigned, intending to be bound hereby, have duly executed this Agreement as of the date first written above.

 

GENERAL PARTNER:
RKH CAPITAL, L.L.C.

By:  /s/ Anya Fonina                                              

Name: Anya Fonina

Title: Vice President

LIMITED PARTNER:
RK HALL, LLC

By: /s/ Anya Fonina                                                  

Name: Anya Fonina

Title: Vice President

FORMER GENERAL PARTNER:
B&H EQUITY, L.L.C.

By: /s/ Robert K. Hall                                              

Name: Robert K. Hall

Title: Managing Member

FORMER LIMITED PARTNERS:

By: /s/ David Mark Buster                                     

Name: David Mark Buster

By: /s/ Robert K. Hall                                              

Name: Robert K. Hall

[Signature Page to B&H Contracting, L.P. Amended and Restated Partnership Agreement]

Exhibit 3.56

CERTIFICATE OF FORMATION

OF

INDUSTRIAL ASPHALT, LLC

ARTICLE I.

The name of the filing entity being formed is Industrial Asphalt, LLC.

ARTICLE II.

The filing entity being formed is a limited liability company.

ARTICLE III.

The purpose for which the limited liability company is formed is to transact any and all lawful business for which a limited liability company may be formed under the Texas Business Organizations Code.

ARTICLE IV.

The address of the initial registered office of the limited liability company is 1114 Lost Creek Blvd., Suite 410, Austin, Texas 78746, and the name of the initial registered agent at such address is S. Jill Shackelford.

ARTICLE V.

The name and address of the organizer are as follows:

 

Name:

  

Address:

Elsbeth T. Peshel   

Graves Dougherty Hearon & Moody

401 Congress Avenue, Suite 2200

Austin, Texas 78701


ARTICLE VI.

The limited liability company is to be managed by managers. The name and address of the person who is to serve as the initial manager is:

 

Name:

  

Address:

S. Jill Shackelford   

1114 Lost Creek Blvd., Suite 410

Austin, Texas 78746

ARTICLE VII.

In accordance with the provisions of Section 3.005 of the Texas Business Organizations Code, the limited liability company is being created pursuant to a plan of conversion dated July 28, 2011 by and between Industrial Asphalt, Inc., a Texas corporation formed on December 12, 1995, whose address is 1114 Lost Creek Blvd., Suite 410, Austin, Texas 78746, as the converting entity, and the limited liability company as the converted entity.

EXECUTED BY THE UNDERSIGNED ORGANIZER on July 28, 2011.

 

/s/ Elsbeth T. Peshel

Elsbeth T. Peshel, Organizer

 

2

Exhibit 3.57

COMPANY AGREEMENT

OF

INDUSTRIAL ASPHALT, LLC

This COMPANY AGREEMENT is initially made and entered into as of July 28, 2011, by the Initial Member and Manager (as defined below).

ARTICLE 1

FORMATION OF COMPANY; DEFINITIONS

1.1 Formation . For the purpose of, and in connection with, the conversion of Industrial Asphalt, Inc., a Texas corporation, into Industrial Asphalt, LLC, a Texas limited liability company (the “Company”), the Company was formed as a limited liability company under and pursuant to the Texas Business Organizations Code (the “TBOC”) and other relevant laws of the State of Texas by the filing of a certificate of formation with the Secretary of State of the State of Texas on July 28, 2011.

1.2 Name . The name of the Company shall be Industrial Asphalt, LLC. The Company shall conduct business under that name or such other names complying with applicable law as the Manager may determine from time to time.

1.3 Duration . The Company commenced upon the filing of the certificate of formation of the Company as provided in Section 3.005 of the TBOC and shall continue until its business and affairs are wound up as provided in Article 6.

1.4 Purpose . The purpose of the Company shall be to transact any and all lawful business for which a limited liability company may be formed under the TBOC.

1.5 Principal Place of Business . The Company’s principal place of business shall be 1114 Lost Creek Blvd., Suite 410, Austin, Texas 78746 or such other place as the Manager may determine from time to time.

1.6 Registered Office and Registered Agent . The initial address of the registered office of the Company in the State of Texas shall be 1114 Lost Creek Blvd., Suite 410, Austin, Texas 78746 and the name of the Company’s initial registered agent at that address shall be S. Jill Shackelford. The Manager may change the registered office and the registered agent of the Company from time to time. The Manager may cause the Company to qualify to do business as a limited liability company (or other entity in which the Members have limited liability) in any other jurisdiction and to designate any registered office or registered agent in any such jurisdiction.

1.7 Company Property . All real and personal property owned by the Company shall be deemed owned by the Company as an entity and held in its name. No Member shall have any ownership interest in any such property.


1.8 Merger and Conversion . The Company may merge with, or convert into, another entity only in accordance with a plan of merger or conversion approved by the Required Members.

1.9 Certain Definitions and Construction .

(a) As used in this Agreement, the following terms have the following meanings:

“Agreement” means this Company Agreement as it may be amended from time to time as provided herein.

“Capital Account” has the meaning specified in Section 3.3.

“Claim” has the meaning specified in Section 4.5.

“Company” has the meaning specified in Section 1.1.

“Covered Person” has the meaning specified in Section 4.5.

“Initial Members” has the meaning specified in Section 2.1.

“IRC” means the Internal Revenue Code of 1986.

“Liquidating Agent” has the meaning specified in Section 6.2(a).

“Member” means any Person admitted to the Company as a member as provided in this Agreement but excludes any such Person that has ceased to be a member as provided in this Agreement or the TBOC.

“Membership Interest” means, with respect to any Member at any time, that Member’s entire beneficial ownership interest in the Company at such time, including that Member’s Capital Account, voting rights, and right to share in profits, losses, cash distributions and all other benefits of the Company as specified in this Agreement, together with that Member’s obligations to comply with all of the terms of this Agreement.

“Offer” has the meaning specified in Section 5.4(a).

“Percentage” for any Member means the Membership interest of the Member expressed as a percentage, which percentage shall be determined from time to time by dividing the number of Units held by such Member by the Units held by all Members of the Company.

“Person” means any individual, corporation, partnership, limited liability company, business trust or other entity, government or governmental agency or instrumentality.

“Personal Representative” has the meaning specified in Section 5.5.

“Required Members” means Members owning at least a majority of the Percentages of all Members.

 

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“TBOC” has the meaning specified in Section 1.1.

“Transfer” has the meaning specified in Section 5.1.

“Treasury Regulations” means all temporary or final Treasury Regulations promulgated in respect of the IRC.

“Units” means units of Membership Interest in the Company.

(b) In this Agreement:

(i) Terms defined in the singular have the corresponding meaning in the plural and vice versa.

(ii) All pronouns and any variations thereof contained herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person, persons, entity or entities may require.

(iii) The word “include” and its derivatives means “include without limitation.”

(iv) References to Articles, Sections and Exhibits are to the specified Articles and Sections of, and Exhibits to, this Agreement unless the context otherwise requires. Each Exhibit to this Agreement is made a part of this Agreement for all purposes.

(v) References to statutes or regulations are to those statutes or regulations as currently amended and to the corresponding provisions as they may be amended or superseded in the future.

ARTICLE 2

MEMBERS AND MEMBERSHIP INTERESTS

2.1 Initial Members . In connection with the formation of the Company, the Persons executing this Agreement as of the date of this Agreement (“Initial Members”) are admitted to the Company as Members effective as of the commencement of the Company as provided in Section 1.3. The number of Units held by each of the Initial Members as of the commencement of the Company is set forth next to each Initial Member’s name on Exhibit A .

2.2 Representations and Warranties . Each Member hereby represents and warrants to the Company and each other Member that (a) the Member has duly executed and delivered this Agreement; and (b) the Member’s authorization, execution, delivery, and performance of this Agreement do not conflict with any other agreement or arrangement to which that Member is a party or by which it is bound.

 

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2.3 Additional Members . The Manager may cause the Company to issue additional Units and may admit additional Persons to the Company as members on such terms as the Manager and all of the Members shall determine, if but only if each such new Member agrees in writing to be bound by the provisions of this Agreement as a Member and notifies the other Members of its address for notices under this Agreement.

2.4 Authority . No Member shall have the authority or power to:

(a) withdraw from the Company or withdraw any part of its contributions to the Company or its Capital Account except as a result of the winding up of the Company as provided in Article 6 or as otherwise provided by nonwaivable provisions of law;

(b) bring an action for partition of Company property;

(c) cause the winding up of the Company, except as set forth in this Agreement;

(d) demand or receive (i) interest on its contributions to the Company or its Capital Account or (ii) any cash or other property from the Company except as provided in Section 3.4; or

(e) act for or on behalf of the Company, do any act that would be binding on the Company, or incur any expenditures, obligations or indebtedness of any nature on behalf of the Company, except as provided in this Agreement.

2.5 Liability to Third Parties . Except as provided in the TBOC, no Member shall be personally liable for the debts, obligations or liabilities of the Company, whether that debt, obligation or liability arises in contract, tort or otherwise, including under a judgment decree or order of a court.

2.6 Priority and Return of Capital . Except as may be provided in this Agreement, no Member shall have priority over any other Member, either as to the return of capital contributions or as to profits, losses or distributions; provided, that this Section shall not apply to loans (as distinguished from capital contributions) that a Member has made to the Company.

2.7 Annual Meeting . At the election of the Manager, an annual meeting of the Members for the transaction of all business as may properly come before the meeting may be held on such date and at such time as the Person or Persons calling the meeting shall fix and set forth in the notice of the meeting.

2.8 Special Meetings . Special meetings of the Members may be called at the request of the Manager, or the Members holding at least ten percent (10%) of the Percentages of all Members.

2.9 Notice . Notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting by or at the direction of the Person calling the meeting, to each Member entitled to vote at the meeting, provided that such notice may be waived as provided in the TBOC.

 

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2.10 Place and Manner of Meeting . All meetings of the Members shall be held at such time and place, within or without the State of Texas, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Members may participate in such meetings by means of conference telephone or similar communications equipment by means of which all Persons participating in the meeting can hear each other, and participation in a meeting as provided herein shall constitute presence in person at such meeting, except where a Person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

2.11 Conduct of Meetings . The chairman of any meeting of Members shall determine the order of business and the procedure at the meeting, including the regulation of the manner of voting and the conduct of discussion.

2.12 Quorum of Members; Majority Vote . The holders of a majority of the Percentages entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of Members. The vote of the holders of a majority of the Percentages entitled to vote for each class, if more than one class, and thus represented at a meeting at which a quorum is present shall be the act of the Members’ meeting, unless the vote of a greater number is required by law, the certificate of formation or this Agreement.

2.13 Voting of Membership Interest . Each Member shall be entitled to vote the Percentage represented by the Units owned by the Member on each matter submitted to a vote at a meeting of Members. A Member may vote either in person or by proxy executed in writing by the Member or by its duly authorized attorney in fact. No proxy shall be valid after eleven (11) months from the date of its execution unless otherwise provided in the proxy. Each proxy shall be revocable unless the proxy form conspicuously states that the proxy is irrevocable and the proxy is coupled with an interest.

2.14 Action by Written Consent . Any action that may be taken at a meeting of the Members may be taken without a meeting if a consent in writing, setting forth the action to be taken, shall be signed by the Members having not fewer than the minimum number of votes that would be necessary to take the action at a meeting at which all Members entitled to vote on the action were present and voted, and such consent shall have the same force and effect as a vote of the Members. No notice shall be required in connection with the use of a written consent pursuant to this Section 2.14.

ARTICLE 3

FINANCIAL MATTERS

3.1 Capital Contributions . The consideration paid by the Initial Member for his 1,000 shares of Common Stock of Industrial Asphalt, Inc., which shares are being converted into 1,000 Units, shall be deemed to be the capital contribution of the Initial Member. For and in consideration of the initial capital contribution of the Initial Member, the Initial Member shall be deemed to hold the number of Units set opposite his name on the attached Exhibit A .

 

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3.2 Additional Capital Contributions . The Manager may request, but may not require, that the Members make additional contributions to the capital of the Company (“Additional Capital Contributions”).

3.3 Capital Accounts . Each Member shall have a single capital account (its “Capital Account”), which shall be (a) increased by the amount of cash and the fair market value of any property (net of liabilities assumed by the Company and liabilities to which the property is subject) that the Member contributes to the Company, plus all items of income and gain of the Company (including tax-exempt income) allocated to that Member, (b) decreased by the amount of distributions the Company makes to that Member of cash or other property (net of liabilities assumed by that Member and liabilities to which the property is subject), plus all items of loss and deduction of the Company allocated to that Member, as well as Company expenditures that are neither deductible by the Company nor properly capitalized by the Company allocated to that Member. The provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulation Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with the Treasury Regulations promulgated under Code Section 704.

3.4 Cash Distributions . The Manager may, subject to all requirements of the TBOC, from time to time and at his or her sole discretion, distribute to the Members such amounts of cash as the Manager determines to be available for distributions, pro rata in accordance with the Members’ respective Percentages.

3.5 Distributions with Respect to Membership Interests Transferred . Distributions with respect to Membership Interests shall be made only to the persons or entities who, according to the Company’s books and records, are the holders of record of the membership Interest on the record date as determined by the Members. Neither the Company nor any Member shall incur any liability for making distributions in accordance with the provisions of the preceding sentence, whether or not the Company or such Member has knowledge or notice of any transfer or purported transfer of a Membership Interest.

3.6 Allocations . All items of income, gain, loss, deduction and credit of the Company shall be allocated to the Members for accounting and tax purposes pro rata according to their Percentages; provided, however, that any allocations pursuant to this Agreement shall comply with the qualified income offset requirements of Treasury Regulation Section 1.704- 1(b)(2)(ii)(d) and the nonrecourse deduction or minimum gain chargeback requirements of Treasury Regulation Section 1.704-2.

3.7 Tax Matters .

(a) The Members intend that the Company be treated as a partnership for federal income tax purposes and any similar provisions of state or local law.

(b) Ronald L. Miller or such other Member as the Required Members may designate shall be the “tax matters partner” for purposes of IRC Section 6231(a)(7). The tax matters partner shall cause to be prepared and shall sign all returns of the Company, make any election which is available to the Company, and monitor any governmental tax authority in any

 

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audit that the authority may conduct of the Company’s books and records or other documents. If requested by the tax matters partner, each Member shall take all actions required to authorize the tax matters partner as that party with the sole authority to handle all tax matters of the Company. Each Member agrees to execute, certify, deliver, file and record at appropriate public offices or deliver to the tax matters partner such documents as may be requested by the tax matters partner to facilitate the handling of any tax matter as the tax matters partner deems necessary.

(c) After the end of each fiscal year of the Company, the Company shall cause to be prepared and transmitted to each Member, as promptly as possible, and in any event by the end of the third month following the close of the fiscal year, a federal income tax Form K-1 and any required similar state and local income tax form for each Member.

ARTICLE 4

MANAGEMENT OF THE COMPANY

4.1 Manager .

(a) Subject to the other provisions of this Agreement, the Manager shall have the right to, and shall be fully responsible for, the management and control over the business of the Company. The Manager shall make all decisions affecting the business of the Company, except to the extent that this Agreement or nonwaivable provisions of the TBOC require the consent or approval of some or all other Members. The Manager shall have all rights, powers and authority generally conferred by the TBOC on a manager of a limited liability company managed by a manager or as otherwise provided by law or necessary, advisable or consistent with accomplishing the purposes of the Company.

(b) Without limiting the other provisions of Section 4.1, the Manager shall have the power:

(i) to cause this Company to enter into partnerships or become a member of other limited liability companies and to exercise the authority and to perform the duties required of the Company as such a partner or member;

(ii) to acquire, hold and dispose of property or any interest in it;

(iii) to protect and preserve the title to and the interest of the Company in all of its property and assets, real, personal and mixed;

(iv) to borrow money on behalf of the Company and to encumber the Company assets or place title in the name of a nominee for purposes of obtaining financing;

(v) to employ from time to time, at the expense of the Company, consultants, accountants and attorneys;

 

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(vi) to pay all expenses incurred in the operation of the Company and all taxes, assessments, rents and other impositions applicable to the Company or any part thereof;

(vii) to sign deeds, notes, contracts and other instruments in the name and on behalf of the Company;

(viii) to make all filings with governmental authorities, including tax returns; and

(ix) to assume any and all overall duties imposed on a manager of a limited liability company managed by a manager by the TBOC.

(c) Notwithstanding any other provision of this Agreement to the contrary, the Manager may do any of the following only with the prior written consent of all the Members or such other number of Members as may be specified:

(i) do any act in contravention of this Agreement;

(ii) do any act that would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Agreement;

(iii) knowingly do any act that would subject any Member to liability for the obligations of the Company in any jurisdiction;

(iv) knowingly do any act that would cause the Company to be treated as an association taxable as, or otherwise taxed as, a corporation for federal income tax purposes unless at the time it already is so taxed;

(v) wind up the Company or authorize or agree to do so, other than in accordance with Article 6;

(vi) consolidate or merge the Company with, or convert the Company into, another entity, other than in accordance with Section 1.8;

(vii) sell, lease or otherwise dispose of all or substantially all of the assets of the Company, unless the Required Members consent in writing; or

(viii) amend this Agreement, other than in accordance with Section 7.3.

(d) The Manager may appoint such officers of the Company as he or she may deem appropriate and may remove any such officer at any time with or without cause. The Manager may delegate to the Company’s officers such powers and duties as he or she may deem appropriate and subsequently revoke or modify those powers and duties, and except to the extent that the Manager determines otherwise, each officer will have the powers and duties normally associated with an officer having a similar title with a Texas corporation. The Manager also may delegate authority to other Persons and revoke that delegation as it may deem appropriate include the power to delegate authority.

 

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(e) Subject to the provisions of any agreement with the Company entered into as provided in Section 4.1(g), (i) the Manager may resign at any time by notice to the Members and (ii) the Required Members by notice to the Manager, may remove the Manager if, but only if, in the notice the signing Members appoint a successor Manager in accordance with Section 4.1 (f).

(f) In connection with the resignation or removal of the Manager as provided in Section 4.1(e), Required Members, by notice to the other Members, may appoint a new Manager provided that new Manager agrees in writing to be bound by the provisions of this Agreement as the Manager.

(g) The Required Members must approve any agreement for the employment or compensation of the Manager or the amendment or termination of any such agreement.

4.2 Members Generally . The Members shall have no authority to take part in the control, conduct or operation of the Company and shall have no right or authority to act for or bind the Company, including during the winding up of the Company. Other than as specifically provided in this Agreement or nonwaivable provisions of the TBOC, no Member shall have the right to vote upon any matter concerning the business and affairs of the Company.

4.3 Compensation of Members and Affiliates . No Member shall receive any compensation for its services to the Company, except compensation paid to Members and affiliates of Members that are engaged on behalf of the Company to provide services or materials that are, in the reasonable judgment of the Manager, necessary or desirable for the Company.

4.4 Good Faith Actions . No Member or the Manager, or any of its officers, directors, shareholders, officers, constituent partners, managers, members, trustees, representatives, agents or employees, shall be liable to the Company or to any of the other Members for any action taken (or any failure to act) by it in good faith on behalf of the Company and reasonably believed by it to be authorized or within the scope of its authority, unless that action (or failure to act) constitutes fraud, gross negligence, bad faith or willful misconduct, and then only to the extent otherwise provided by law.

4.5 Indemnification . To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Member, the Manager and its respective officers, directors, shareholders, managers, members, employees, agents, subsidiaries and assigns (each, a “Covered Person”) from and against any and all losses, claims, demands, liabilities, expenses, judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (each a “Claim”), in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, which relates to or arises out of the Company or its property, business or affairs; provided, however, that a Covered Person shall not be entitled to indemnification under this Section 4.5 with respect to (a) any Claim with respect to which the Covered Person has engaged in fraud, willful misconduct, bad faith or gross negligence or (b) any Claim initiated by a Covered Person unless that Claim (or part thereof) was brought to enforce that Covered Person’s rights to indemnification under this Section 4.5. The Company shall pay in advance of the final disposition of any such Claim expenses incurred by a Covered Person in defending that Claim if,

 

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but only if, that Covered Person so requests and delivers to the Company of an undertaking by or on behalf of that Covered Person to repay amounts so advanced if it ultimately is determined that the Covered Person is not entitled indemnification under this Section 4.5.

ARTICLE 5

TRANSFER RESTRICTIONS

5.1 Restrictions on Sales, Assignments, Transfers or Other Dispositions . Each of the Members agrees during the term hereof that he shall not sell, assign, transfer or otherwise dispose of (collectively referred to as “Transfer”) all or any part of its Membership Interest except (a) as otherwise specifically authorized or permitted by the terms and provisions of this Agreement, or (b) with the express written consent of all of the other Members.

5.2 Membership Interest Remains Subject to Agreement . Each Member agrees that notwithstanding the provisions for Transfer of any Membership Interest contained herein, the Membership Interest, when and if transferred, shall remain subject to all of the terms and conditions of this Agreement.

5.3 Conditions to Transfer . With respect to any Transfer of a Membership Interest, excluding a Transfer to the Company or to another Member pursuant to this Agreement, each Person to whom a Membership Interest is transferred shall, as conditions to such Transfer, deliver to the Company (a) an opinion of counsel addressed to the Company and in form and substance satisfactory to the Company and its counsel to the effect that (i) the Transfer of such Membership Interest does not require registration under the Securities Act of 1933, as amended, or under applicable state securities or blue sky laws, and (ii) after giving effect to such Transfer, the Company will not be subject to registration under the Investment Company Act of 1940, as amended; and (b) a document that includes the Person’s notice address and the Person’s agreement to be bound by the terms and provisions hereof.

5.4 Offer to the Company and the Members .

(a) Any Member desiring to make a Transfer of all or any part of its Membership Interest shall first make an offer (the “Offer”) to sell such Membership Interest to the Company and to the other Members.

(b) The Offer shall be sent to the Company and to the other Members and shall state the Membership Interest involved; the names of, and the price to be paid by, any proposed purchasers; and the terms of the proposed Transfer. The date of the Offer shall be the date on which a notice containing the Offer has been so sent to all parties entitled to receive it. The Offer may be withdrawn prior to the exercise of any of the options granted in Section 5.4(c) and Section 5.4(d). Once an Offer has arisen, or any other event giving rise to an option to purchase or an obligation to sell a Membership Interest has occurred, pursuant to any provision of this Agreement, no subsequent Offers that may arise with respect to the same Membership Interest (or any portion thereof) shall be deemed to be made unless and until all options under this Article 5 applicable to the first Offer or event shall have expired or been satisfied.

 

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(c) The Company shall have the option for forty five (45) days following the Offer to purchase the Membership Interest subject to the Offer. The Company shall not buy any portion of the Membership Interest unless the Company or the Company and the other Members (exercising their option pursuant to Section 5.4(d) purchase all of the Membership Interest subject to the Offer.

(d) If the Company does not fully exercise its option to purchase all of the Membership Interest subject to the Offer, the other Members shall have the option, for thirty (30) days following the expiration of the Company’s option, to purchase not less than all of the remaining Membership Interest subject to the Offer in such proportions as they mutually agree; provided, however, that each Member electing to purchase a portion of such Membership Interest shall have the right to purchase, at a minimum, that proportion of the Membership Interest subject to the Offer which the Percentage of such Member bears to the total Percentages of all Members electing to purchase.

(e) If the Company and the other Members do not purchase all the Membership Interest subject to an Offer, the Member making such Transfer or other party making the Transfer (hereinafter the “Offeror”) shall be permitted, at any time or times within sixty (60) days after the lapse of all options arising in connection with such Offer, to Transfer the Membership Interest that was subject to such Offer; provided, however, that no such Transfer shall be made at a lower price (if the Transfer involves a sale) or on different terms or to any person other than as specified in such Offer. If no such Transfer is made within such sixty day period, the Offeror must make a new Offer prior to making any Transfer of such Membership Interest.

(f) Unless otherwise agreed, the price to be paid upon any purchase of a Membership Interest under either Section 5.4(c) or Section 5.4(d) shall be the lower of the price to be paid by any proposed bona fide purchaser or purchasers of the Membership Interest or the price determined under Section 5.4(0(i) or Section 5.4(f)(ii) below, whichever is applicable:

(i) At every annual meeting of Members (or other mutually agreed time), the Members shall agree upon the value of Membership Interests for purposes of this Article 5. Such value shall be computed as of December 31 of the previous year, or as of such other time as may be agreed upon, and such value shall be stipulated in the minutes of the meeting or otherwise in writing by the Members. Failure of the Members to stipulate the value of the Membership Interests at any time when such stipulation is provided for herein shall not affect the validity or enforceability of this Article 5. If all the Members have stipulated the value of the Membership Interests as of a date not more than two (2) years prior to the Offer, the price for the purpose of this Article 5 shall be such agreed value.

(ii) In the absence of a statement of agreed value complying with the preceding Section 5.4(0(0, the price shall be an amount determined by an appraiser agreed upon by the remaining Members and by the Offeror. If such parties fail to agree upon the appointment of an appraiser within ten (10) days of the Offer, then the price shall be determined by an appraisal in the following manner: One appraiser shall be named by the remaining Members and one appraiser shall be named by the Offeror. The

 

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initial selection of an appraiser shall be made by the remaining Members within ten (10) days of the Offer by sending notification of such selection to the Offeror. Unless the party entitled to select the other appraiser does so within ten (10) days of such notification, and unless such party notifies the remaining Members of such selection within such ten (10) day period, the decision of the appraiser selected by the remaining Members shall be final and binding on all parties. If a second appraiser is selected, and if the two appraisers cannot agree upon the price of the Membership Interest within ten (10) days after the appointment of the second appraiser, the appraisers shall immediately appoint a third appraiser and the decision of the majority shall be made within ten (10) days thereafter and shall be final and binding on all parties. The cost of any appraisal undertaken pursuant to the terms of this Section 5.4(f)(ii) shall be shared equally by the Company and by the Offeror.

(g) Unless otherwise agreed, and subject to the other terms of this Article 5, the closing of all purchases under this Article 5 shall be seventy five (75) days after the date of the Offer and shall take place at the offices of the Company. Unless otherwise agreed, at least twenty percent (20%) of the purchase price determined under Section 5.4(f) of the Membership Interest being acquired by each purchaser shall be paid in cash or by certified or cashier’s check at the closing, and any balance shall be evidenced at such time by the negotiable promissory note of such purchaser, payable in sixty (60) or fewer equal monthly installments beginning thirty (30) days after the date of the closing, bearing interest at the rate set forth in Section 5.4(i) and secured by the Membership Interest purchased; provided, however, that if the Offer arises out of a Transfer involving a sale to a bona fide purchaser, unless otherwise agreed the purchaser under this Section 5.4(g) may elect to pay the purchase price in the same manner and on the same terms and conditions as are proposed to be paid by such bona fide purchaser in the proposed Transfer. Such notes shall provide that the maker shall have the privilege of prepaying without penalty all or any part thereof at any time with interest to date of prepayment; that a default in any payment when due or under any security agreement securing the same shall cause the remaining unpaid balance, at the option of the holder, to become due and payable forthwith; and that the maker shall pay all costs and expenses of collection, including reasonable attorneys’ fees. Such notes shall be executed and delivered to the Offeror at the closing.

(h) Any option to purchase a Membership Interest hereunder may be exercised by, and any obligation to purchase a Membership Interest hereunder may be fulfilled by, the purchasing party’s giving the Offeror, the Company and the Members notice of intent to purchase such Membership Interest in accordance with the notice provisions of this Agreement.

(i) The interest rate applicable to all promissory notes delivered pursuant to Section 5.4 shall be the lesser of the maximum interest allowed by applicable law or the “Prime Rate” quoted in the “Money Rate” section of the Wall Street Journal (or in the event that such Prime Rate quotation is not available, the prime rate quoted in another nationally distributed newspaper or periodical designated by the CEO or President of the Company) on the closing date or, if the closing date is not a business day, on the immediately preceding business day.

5.5 Transfer upon Death of a Member . Upon the death of a Member, the executor, administrator or personal representative (the “Personal Representative”) of the deceased Member shall promptly notify the Company and the remaining Members of the deceased Member’s death.

 

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The death of a Member shall be considered an Offer of all of such Member’s Membership Interest. Unless the remaining Members vote or consent to wind up the affairs of the Company pursuant to Section 6.1(a), the Company and the other Members shall have the option to purchase all of the deceased Member’s Membership Interest; and such deceased Member’s surviving spouse, if any, and executor or administrator shall be obligated to offer such Membership Interest to the Company and the remaining Members in accordance with Sections 5.4(c) and Section 5.4(d), the date of the Offer thereunder being sixty (60) days after the date of death of the Member. Such options may be exercised in accordance with Section 5.4(h). The price per share at which such Membership Interest shall be purchased shall be an amount equal to the purchase price determined as provided in Section 5.4(f) (the date of the Offer thereunder being the date of death of the Member). Unless otherwise agreed, such purchase shall be consummated on the later of (a) forty (40) days after the date of the Offer (determined pursuant to this Section) and (b) ten (10) days after the date of the appointment of a personal representative of such deceased Member; but shall otherwise be made in accordance with Sections 5.4(g) and 5.4(i).

5.6 Transfer upon Termination of Marital Relationship . If the marital relationship of a Member is terminated by the death of such Member’s spouse or by divorce and (a) such Member does not succeed to his or her spouse’s community Membership Interest, if any, in the Member’s Membership Interest, or (b) if any Membership Interest owned by the Member devolves to his or her spouse as a result of divorce, then such Member shall promptly notify the Company and the remaining Member or Members, as the case may be, of that fact, stating the date of such death or divorce. Such Member shall then have the option to purchase all of his or her spouse’s Membership Interest, and the spouse or the personal representative of the spouse shall be obligated to sell such Membership Interest. Such option may be exercised by such Member in accordance with Section 5.4(h) within ninety (90) days after such death or divorce. The price at which such Membership Interest shall be purchased shall be an amount equal to the purchase price determined as provided in Section 5.4(f) (the date of the Offer thereunder being the date of such death or divorce). The purchase price shall be payable as provided in Sections 5.4(g) and Section 5.4(i) (provided that unless otherwise agreed, the closing shall be held thirty (30) days after the date such Member exercises such option). Should such Member fail to exercise such option and to deliver notice of such exercise to the Company and the remaining Members within such ninety (90) day period, or to close such purchase within thirty (30) days after exercise, such failure shall constitute an Offer as of the first day after such failure, and the provisions of Section 5.4(c) through Section 5.4(i) (with the exception of Section 5.4(e)) shall apply to such Membership Interest, provided that unless otherwise agreed, the closing of any purchases shall take place on the later of (i) seventy five (75) days after the date of the Offer (determined pursuant to this sentence) and (ii) in the case of death of the Member’s spouse, ten (10) days after the date of the appointment of a Personal Representative of such deceased spouse (provided, however, that in such case the closing shall in any event take place within one hundred eighty (180) days after the date of death of such spouse).

5.7 Involuntary Transfers . Prior to or upon any involuntary Transfer of a Membership Interest not specifically covered by another Section of this Article 5, the Member who owns such Membership Interest or the representative or successor in Membership Interest of such Member shall send written notice thereof to the Company and the other Members disclosing in full the nature and details of such involuntary Transfer. Such notice shall constitute an Offer,

 

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and the provisions of Section 5.4(c) through Section 5.4(i) (with the exception of Section 5.4(e)) shall apply. The date of the Offer shall be the later of (i) the date of such involuntary Transfer or (ii) the date upon which the Company and all the other Members learn of such involuntary Transfer, whether by virtue of receipt of the above referenced notice or otherwise.

5.8 Interests in a Member . A Member that is not a natural person may not cause or permit an equity interest, direct or indirect, in itself to be disposed of such that, after the disposition, the Company would be considered to have terminated within the meaning of Section 708 of the IRC.

5.9 Void Assignments . Any purported sale, transfer, assignment, hypothecation, pledge or other disposition or encumbrance by a Member of all or any part of any Membership Interest not made strictly in accordance with the provisions of this Article 5 or otherwise permitted by this Agreement shall be entirely null and void, and of no force or effect.

ARTICLE 6

WINDING UP

6.1 Events Requiring Winding Up . The Company shall be wound up only on the first to occur of any one or more of the following:

(a) the vote or written consent of the Required Members;

(b) at such time as there is no Member remaining; or

(c) entry of a judicial order to wind up the Company.

6.2 Winding Up Affairs and Distribution of Assets.

(a) If an event requiring the wind up of the Company occurs, a Person designated for this purpose by the Required Members (the Person so designated being called the “Liquidating Agent”), as soon as practicable shall wind up the affairs of the Company and sell and/or distribute the assets of the Company. The Liquidating Agent is expressly authorized and empowered to execute any and all documents necessary or desirable to effectuate the liquidation and termination of the Company and the transfer of any assets. The Liquidating Agent shall apply and distribute the proceeds of the sale or liquidation of the assets and property of the Company in the following order of priority, unless otherwise required by nonwaivable provisions of applicable law:

(i) to pay (or to make provision for the payment of) all creditors of the Company (including Members who are creditors of the Company), in the order of priority provided by law or otherwise, in satisfaction of all debts, liabilities or obligations of the Company due its creditors;

(ii) after the payment (or the provision for payment) of all debts, liabilities and obligations of the Company in accordance with clause (i) above, any balance remaining shall be distributed to the Members having positive Capital Accounts in relative proportion to those Capital Accounts.

 

14


(b) The Liquidating Agent shall have sole discretion to determine whether to liquidate all or any portion of the assets and property of the Company and the consideration to be received for that property.

(c) Except as required by nonwaivable provisions of the TBOC, no Member shall have any obligation at any time to contribute any funds to replenish any negative balance in its Capital Account.

6.3 Termination . On compliance with the distribution plan described in Section 6.2, the Liquidating Agent shall execute, acknowledge and cause to be filed a certificate of termination, at which time the Company shall cease to exist as a limited liability company.

ARTICLE 7

MISCELLANEOUS

7.1 Notices . Any notice to be given under this Agreement must be in writing and delivered personally (including by courier), electronically, by facsimile transmission, or by express, certified or registered mail (a) if to the Company, to the registered agent of the Company at the registered address of the Company, (b) if to any Initial Member, to such Member at its address set forth on Exhibit A or, (c) if to any Member subsequently admitted, to the address set forth in the document in which it agreed to be bound by this Agreement, or in each case at such other address as any Person entitled to notice hereunder may designate by notice to the Company and all of the Members. A notice is deemed given on receipt at the address so provided.

7.2 Entire Agreement . This Agreement supersedes all prior agreements and understandings among the Members with respect to the Company.

7.3 Amendments . This Agreement may be modified only on the written consent of the Required Members; provided, however, that no amendment or alteration that affects any provision of this Agreement requiring the vote, consent or approval of a specified number of Members or holders of a specified Percentage shall be effective unless the same has been approved by the number of Members or holders of the Percentage, as the case may be, specified in the provision being amended or altered; and provided further, that any other amendment adversely affecting a Member’s distributions, allocations, obligation to make contributions to the Company or rights to consent or approve is effective against that Member only if that Member agrees in writing.

7.4 Waivers . A waiver of any breach of any of the terms of this Agreement shall be effective only if in writing and signed by the Member against whom such waiver or breach is claimed. No waiver of any breach shall be deemed a waiver of any other subsequent breach.

7.5 Severability . If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired, unless that provision was fundamental to the objectives of this Agreement.

 

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7.6 Further Assurances . Each Member shall execute such deeds, assignments, endorsements and other instruments and documents and shall give such further assurances as shall be reasonably necessary to perform its obligations under this Agreement.

7.7 Governing Law . This Agreement shall be governed by and construed in accordance with the law of Texas.

7.8 Power of Attorney . Each Member constitutes and appoints the Managers its true and lawful attorney with full power of substitution to make, execute, sign, acknowledge and file all certificates and instruments necessary to form or qualify, or continue the existence or qualification of, the Company in any jurisdiction or before any governmental authority. This grant of a power of attorney is coupled with an interest and shall survive a Member’s disability, incompetence, death or assignment by such Member of its Membership Interest pursuant to this Agreement.

7.9 Successors and Assigns . Except as expressly provided to the contrary in this Agreement, this Agreement shall be binding on and inure to the benefit of the Members and their respective successors and permitted assigns.

7.10 Counterparts . This Agreement may be executed in any number of counterparts or with counterpart signature pages, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned Member and Manager have duly executed this Agreement as of the day and year first above written.

 

MEMBER:
Industrial Asphalt Holdings, Inc.
/s/ S. Jill Shackelford
By: S. Jill Shackelford, President

 

MANAGER:
/s/ S. Jill Shackelford
S. Jill Shackelford

 

17


EXHIBIT A

NAME, ADDRESS, PERCENTAGE AND CAPITAL

CONTRIBUTION OF INITIAL MEMBER

 

Name and Address for Notice

   Number of Unite      Capital Contribution  

Industrial Asphalt Holdings, Inc.

1114 Lost Creek Blvd.,

Suite 410

Austin, Texas 78746

     1,000       $ 1,000.00   

 

18


FIRST AMENDMENT TO

LIMITED LIABILITY COMPANY AGREEMENT

OF

INDUSTRIAL ASPHALT, LLC

A Texas Limited Liability Company

This First Amendment to Limited Liability Company Agreement (the “ First Amendment ) of INDUSTRIAL ASPHALT, LLC (the “ Company ), is dated to be effective as of August 1, 2011 (the “ Effective Date ).

RECITALS

 

A. On July 28, 2011, the Members entered into that certain Limited Liability Company Agreement for INDUSTRIAL ASPHALT, LLC (the “ Original Agreement ”).

 

B. Section 7.3 of the Original Agreement provides that the Original Agreement may be amended with the approval of the Required Members.

 

C. The Members executing this First Amendment wish to amend the Original Agreement and constitute all of the Required Members.

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

1. Definitions . Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Original Agreement.

2. Amendments . Section 4.1(a) of the Original Agreement is amended by adding the following sentences before the existing text:

“The Company shall be managed by one or more Managers. The number of Managers shall be determined by the Required Members from time to time. Each Manager shall have the authority set forth herein.”

The remainder of Section 4.1(a) is unchanged.

MISCELLANEOUS

1. Continuation of Original Agreement . Other than is amended by this First Amendment, the Original Agreement shall remain in full force and effect in accordance with its terms and conditions.

2. Binding on Successors and Assigns . This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, devisees, personal and legal representatives, and assigns.

 

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3. Applicable Law . This Amendment shall be construed with, and governed by, the laws of the State of Texas.

4. Counterparts . This Amendment may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall constitute one instrument binding on all the parties, notwithstanding that all of the parties hereto are not signatories to the original or same counterpart.

[Signatures on next page]

 

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Executed to be effective as of the Effective Date set forth above.

 

MEMBERS:
INDUSTRIAL ASPHALT HOLDINGS, INC.
By:    /s/ S. Jill Shackelford
  Jill Shackelford, President

 

21

Exhibit 3.58

CERTIFICATE OF FORMATION OF A

LIMITED PARTNERSHIP

 

1. The entity being formed by this Certificate of Formation is a Texas limited partnership. The name of the entity is: R. K HALL CONSTRUCTION, LTD. which is a Texas limited partnership.

 

2. The street address of this entity’s registered office in Texas is (a P.O. Box is not sufficient):

2165 NW Loop 286, Paris, Texas, 75460

and the name of its individual registered agent, who is a resident of the State of Texas, is:

Robert K. Hall

 

3. The principal office in the United States where records of the limited partnership are to be kept or made available under Section 153.551 of the Texas Business Organizations Code is:

2165 NW Loop 286, Paris, Texas, 75460

 

4. The name, the mailing address, and the street address of the business or residence of each general partner, each general partner being the governing authority of the limited partnership, is as follows:

 

NAME

  

MAILING ADDRESS

  

STREET ADDRESS

RKH CAPITAL, L.L.C.

   2165 NW Loop 286    2165 NW Loop 286
   Paris, Texas, 75460    Paris, Texas, 75460

 

5. R. K. HALL CONSTRUCTION, LTD. is being created pursuant to a Certificate of Conversion and related Plan of Conversion which was approved, adopted, certified, executed, and acknowledged by the members of R. K. HALL CONSTRUCTION, L.L.C. , the Converting Entity, in the manner prescribed by the Texas Business Organizations Code.

 

6. The name, address, form of organization and date of organization of the Converting Entity and the state under the laws of which it is organized is:

 

Name of Converting Entity

  

Type

  

State

  

Date of Organization

R. K. Hall Construction, L.L.C.

   Limited Liability    Texas    February 11, 2005

2165 NW Loop 286

   Company      

Paris, Texas, 75460

        

 

7. This Certificate of Formation becomes effective when it is filed with the Office of the Texas Secretary of State.

Date Signed: This the 28 day of March, 2006.


The undersigned signs this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument.

 

GENERAL PARTNER:
By:   /s/ Robert K. Hall
 

Robert K. Hall, President of

RKH CAPITAL, L.L.C., General Partner

Exhibit 3.59

SECOND AMENDED AND RESTATED

PARTNERSHIP AGREEMENT

OF

R.K. HALL CONSTRUCTION, LTD.

This Second Amended and Restated Partnership Agreement (this “ Agreement ”) of R.K. Hall Construction, Ltd., a Texas limited partnership (the “ Partnership ”), is entered into as of November 30, 2010 by and between RKH Capital, L.L.C., a Texas limited liability company (the “ General Partner ”), as the sole general partner, RK Hall, LLC, a Delaware limited liability company (the “ Limited Partner ” and, together with the General Partner, the “ Partners ”), as the sole limited partner, Robert K. Hall, an individual (“ Hall ”), and David Mark Buster, an individual (“ Buster ” and, together with Hall, the “ Former Limited Partners ”).

WHEREAS, the Partners, the Former Limited Partners, the Partnership and the other parties thereto entered into an Interest Purchase Agreement (the “ Purchase Agreement ”), dated as of November 12, 2010 and effective simultaneously with the effectiveness of this Agreement;

WHEREAS, the General Partner and Former Limited Partners entered into that certain First Amended Limited Partnership Agreement dated November 1, 2006, as amended (the “ Pre-Existing Partnership Agreement ”);

WHEREAS, the Partners and the Former Limited Partners wish to amend and restate the Partnership’s Pre-Existing Partnership Agreement in order to (i) appoint the Limited Partner as the new limited partner of the Partnership and (ii) amend and restate the Pre-Existing Partnership Agreement as set forth herein;

WHEREAS, the Pre-Existing Partnership Agreement requires that any amendment thereto be approved by the General Partner and the Former Limited Partners; and

WHEREAS, the Former Limited Partners have joined in this Agreement solely for purposes of approving the following amendments.

NOW THEREFORE, the Partners and the Former Limited Partners, intending to be legally bound, hereby agree that the Pre-Existing Partnership Agreement is superseded, amended and restated in its entirety to read as follows:

1. Name . The name of the limited partnership formed hereby is R.K. Hall Construction, Ltd.

2. Purpose . The Partnership is organized for the object and purpose of, and the nature of the business to be conducted and promoted by the Partnership is, engaging in any and all activities permitted under the Texas Limited Partnership Law, a Part of the Texas Business Organizations Code, as amended (the “ TLPL ”). The rights and liabilities of the Partners shall be as provided in the TLPL, except as otherwise expressly provided herein.

3. Registered Office; Registered Agent . The registered office of the Partnership required by the TLPL to be maintained in the State of Texas shall be the office of the registered agent named in the Partnership’s Certificate of Formation, as amended (the “ Certificate ”) or such other office (which need not be a place of business of the Partnership) as the General Partner may


designate in the manner provided by law. The registered agent of the Partnership in the State of Texas shall be the registered agent named in the Certificate or such other person as the General Partner may designate in the manner provided by law.

4. Principal Office in the United States; Other Offices . The principal office of the Partnership in the United States where records are to be kept or made available under Section 153.551 of the TLPL is 2810 NW Loop 286, Paris, Texas, 75460, or such other office as the General Partner may designate, which need not be in the State of Texas. The Partnership may have such other offices as the General Partner may designate.

5. Powers . The Partnership shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, convenient, or incidental to or for the furtherance of the purposes set forth in Section 2 herein, including any and all powers set forth in the TLPL.

6. Term . The Partnership shall have perpetual existence, unless it is wound up sooner as a result of: (a) an event of withdrawal of a general partner described in Section 153.155 of the TLPL, (b) the written consent of all of the Partners, (c) a judicial decree ordering the winding up and termination of the Partnership under Section 11.314 of the TLPL, or (d) any other event requiring the winding up of the Partnership under the TLPL.

7. Partners . The names, addresses and Sharing Ratios of the General Partner and the Limited Partner are as follows:

 

NAME

   BUSINESS ADDRESS    SHARING RATIO  

General Partner:

     

RKH Capital, L.L.C.

   2810 NW Loop 286

Paris, TX 75460

     0

Limited Partner:

     

RK Hall, LLC

   2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, DC 20007

     100

8. Capital Contributions . The Partners may make capital contributions at such times and in such amounts, in cash or other property, to the Partnership as they may agree from time to time with the prior consent of the General Partner.

9. No Further Liability . The liability of the Limited Partner to the Partnership shall be limited to the amount of its capital contributions made pursuant to Section 8 , and the Limited Partner shall not have any further liability to contribute money to, or in respect of, the liabilities or the obligations of the Partnership unless the Limited Partner agrees in writing to make additional capital contributions to the Partnership, nor shall the Limited Partner be personally liable for any obligations of the Partnership, except as provided in the TLPL.

10. Allocations of Profit and Losses . The Partnership’s profits and losses shall be allocated among the Partners in proportion to their Sharing Ratios.

 

2


11. Distributions . Subject to Section 153.210 of the TLPL, the General Partner shall, at such times and in such amounts as may be determined by the General Partner in its sole discretion, cause the Partnership to make distributions of cash and other property to the Partners in proportion to their Sharing Ratios.

12. Additional Partners .

(a) The General Partner may not admit additional limited partners to the Partnership without first obtaining the consent of the Limited Partner.

(b) After the admission of any additional limited partners pursuant to this Section 12 , the Partnership shall continue as a limited partnership under the TLPL.

(c) The admission of additional limited partners to the Partnership pursuant to this Section 12 shall be accomplished by the amendment of this Agreement and, if required by the TLPL, the filing of an appropriate amendment to the Partnership’s Certificate.

13. Management .

(a) Except as otherwise provided in this Agreement, the powers of the Partnership shall be exercised by or under the authority of, and the business and affairs of the Partnership shall be managed under the direction of, the General Partner, who shall make all decisions and take all actions for the Partnership. No Limited Partner, acting in its capacity as a limited partner, has the right, power or authority to act for or on behalf of the Partnership, to do any act that would be binding on the Partnership, or to incur any expenditures on behalf of the Partnership.

(b) In managing the business and affairs of the Partnership and exercising its powers as a general partner, the General Partner may, but is not required to, act through resolutions adopted at meetings or in written consents. Decisions or actions taken by the General Partner in accordance with this Agreement shall constitute decisions or actions by the Partnership and shall be binding on each Partner.

14. Tax Matters . For so long as the General Partner is disregarded as an entity separate from the Limited Partner for U.S. federal tax purposes, the Partners intend for the Partnership to be disregarded as an entity separate from the Limited Partner for U.S. federal tax purposes (and applicable state and local tax purposes) and that the activities of the Partnership be deemed to be the activities of the Limited Partner for such tax purposes. Notwithstanding the foregoing, the Partnership is not intended to be and shall not be disregarded as an entity for any purpose other than tax purposes. All provisions of the Certificate and this Agreement are to be construed so as to preserve that tax status under those circumstances. At such time as the Partnership has more than one partner that is recognized for U.S. federal tax purposes, appropriate adjustments shall be made to this Agreement to account for the formation of a partnership for U.S. federal tax purposes as well as for distributions, maintenance of capital accounts, and the allocation of profits and losses.

15. Exculpation . Neither the General Partner, or its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner, nor an affiliate or owner, manager, officer, director, partner, employee or agent of the Partnership, shall be liable, responsible or accountable in damages or otherwise to the Partnership or any Partner for any action taken or

 

3


failure to act (even if such action or failure to act constituted the negligence of a person) on behalf of the Partnership unless such act or omission was performed or omitted fraudulently or constituted willful misconduct. To the extent that, at law or in equity, the General Partner or its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner or of the Partnership have duties (including fiduciary duties) and liabilities relating to the Partnership or to another Partner, the General Partner, its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner acting under this Agreement shall not be liable to the Partnership or to any Partner for their reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of the General Partner, its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner or of the Partnership otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of the General Partner, its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner or of the Partnership. THE PARTNERS RECOGNIZE THAT THIS PROVISION SHALL RELIEVE THE GENERAL PARTNER AND ITS AFFILIATES AND ANY OWNER, MANAGER, OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT OF THE GENERAL PARTNER OR OF THE PARTNERSHIP FROM ANY AND ALL LIABILITY ARISING OR TO ARISE OUT OF ACTIONS OR INACTIONS DESCRIBED ABOVE EVEN IF THE ACTIONS OR INACTIONS CONSTITUTE NEGLIGENCE BY ANY SUCH PERSON.

16. Indemnification .

(a) The Partners, and their affiliates, officers, directors, employees and agents or any person performing a similar function on behalf of the Partnership (individually, an “ Indemnitee ”) may be indemnified and held harmless by the Partnership from and against any and all judgments, penalties, settlements and reasonable expenses actually incurred by any Indemnitee who was, is or is threatened to be made a named defendant or respondent in any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise, by reason of its status as (x) a Partner or an affiliate thereof or (y) an officer, director, employee or agent of the Partnership, or a Partner or an affiliate thereof, if the Indemnitee acted in good faith and in a manner it reasonably believed to be in, or not opposed to, the best interest of the Partnership. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere , or its equivalent, shall not, of itself, create a presumption that the Indemnitee acted in a manner contrary to that specified above.

(b) The Partnership through the General Partner, in its sole discretion, may purchase and maintain insurance on behalf of the General Partner and such other persons as the General Partner shall determine, in its sole discretion, against any liability that may be asserted against or expense that may be incurred by such person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such person against such liability under the provisions of this Agreement.

(c) Expenses incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding subject to this Section 16 may, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding (i) upon a written affirmation by the Indemnitee of its good faith belief that it has met the standard of conduct necessary for indemnification and (ii) upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that such person is not entitled to be indemnified as authorized in this Section 16 .

 

4


(d) The indemnification provided in this Section 16 is for the benefit of the Indemnitees and shall not be deemed to create any right to indemnification for any other persons.

17. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Texas (without regard to principles of conflict of laws), all rights and remedies being governed by said laws.

18. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one instrument. A copy of this Agreement, signed and delivered by facsimile or electronic transmission, shall be considered an original, executed instrument.

[S IGNATURE P AGE T O F OLLOW ]

 

5


IN WITNESS WHEREOF, the undersigned, intending to be bound hereby, have duly executed this Agreement as of the date first written above.

 

GENERAL PARTNER:
RKH CAPITAL, L.L.C.

By: /s/ Anya Fonina                                                

Name: Anya Fonina

Title: Vice President

LIMITED PARTNER:
RK HALL, LLC

By: /s/ Anya Fonina                                                

Name: Anya Fonina

Title: Vice President

FORMER LIMITED PARTNERS:

By: /s/ David Mark Buster                                     

Name: David Mark Buster

By: /s/ Robert K. Hall                                              

Name: Robert K. Hall

[Signature Page to R.K. Hall Construction, Ltd. Second Amended and Restated Partnership Agreement]

Exhibit 3.60

CERTIFICATE OF FORMATION

OF

RKH CAPITAL, L.L.C.

I, the undersigned natural person of the age of eighteen (18) years or more, acting as organizer of a limited liability company under Title 3, Chapter 101 of the Texas Business Organizations Code, do hereby adopt the following Certificate of Formation for such Limited Liability Company.

ARTICLE ONE

The name of the Limited Liability Company is: RICH CAPITAL, L.L.C.

ARTICLE TWO

The period of duration of this Limited Liability Company is perpetual or until the earlier dissolution of the Limited Liability Company in accordance with the provisions of its Company Agreement.

ARTICLE THREE

The purpose for which the Limited Liability Company is organized is to conduct any lawful business, to promote any lawful purpose and to engage in any lawful act or activity for which limited liability companies may be organized under the Texas Business Organizations Code,

ARTICLE FOUR

The Limited Liability Company shall have all of the powers provided a limited liability company or other Texas domestic business entity under the Texas Business Organizations Code.

ARTICLE FIVE

The Limited Liability Company will not commence business until it has received for the issuance of its certificates of membership interest consideration consisting of money, labor done, a promissory note, or property received.

ARTICLE SIX

On each matter on which the membership interest is entitled to vote, a member will have one (1) vote or a fraction of one vote per one percent of membership interest or fraction of membership interest owned by the member. Cumulative voting is not allowed. Preemptive rights do not exist.

ARTICLE SEVEN

The street address of the initial registered office of the Limited Liability Company is Robert K. Hall, 2165 NW Loop 286, Paris, Texas, 75460, and the name of its initial registered agent at such address is Robert K. Hall. The address of the principal place of business is 2165 NW Loop 286, Paris, Texas, 75460.


ARTICLE EIGHT

The management of the Limited Liability Company is hereby reserved to the members, and the names and addresses of such members are as follows:

 

Robert K. Hall

   2165 NW Loop 286, Paris, Texas, 75460

Kayla Hall

   2165 NW Loop 286, Paris, Texas, 75460

The Limited Liability Company will not have managers.

ARTICLE NINE

The name and address of the organizer is: Robert K. Hall, 2165 NW Loop 286, Paris, Texas, 75460.

ARTICLE TEN

The initial Company Agreement will be adopted by the Members. The powers to alter, amend, or repeal the Company Agreement or adopt new Company Agreement is vested in the Members.

ARTICLE ELEVEN

To the full extent permitted by Texas law, no Member of the Limited Liability Company shall be liable to the Limited Liability Company or the other Members for monetary damages for an act or omission in such Member’s capacity as a Member of the Limited Liability Company, except that this Article does not eliminate or limit the Liability of a Member to the extent the Member is found liable for (i) a breach of the Member’s duty of loyalty to the Company or its members; (ii) an act or omission not in good faith that constitutes a breach of duty of the Member to the Company or an act or omission that involves intentional misconduct or a knowing violation of the law; (iii) a transaction from which the Member received an improper benefit whether or not the benefit resulted from an action taken within the scope of the Member’s office; or (iv) an act or omission for which the Liability of a Member is expressly provided by an applicable statute. Any repeal or amendment of this Article by the members of the Company shall be prospective only and shall not adversely affect any limitation on the Liability of a Member of the Company existing at the time of such repeal or amendment. In addition to the circumstances in which the Member of the Company is not liable as set forth in the preceding sentences, the Member shall not be liable to the fullest extent permitted by any provision of the statutes of Texas hereafter enacted that further limits the Liability of a member or manager of a limited liability company or of a director of a corporation. The foregoing elimination of the liability to the Limited Liability Company or the other Members for monetary damages shall not be deemed exclusive of any other rights or limitations of liability or indemnity to which a Member may be entitled under any other provision of the Certificate of Formation or the Company Agreement of the Limited Liability Company, contract or agreement, vote of Members and/or disinterested Members of the Limited Liability Company, or otherwise. The Limited Liability Company is hereby empowered to indemnify Members to the maximum extent provided in the Texas Business Organizations Code or any applicable provision of Texas law, whether in existence now or hereinafter enacted.

 

2


ARTICLE TWELVE

Any action required by Title 3, Chapter 101 of the Texas Business Organizations Code, and any amendments thereto, to be taken at any annual or special meeting of Members of the Limited Liability Company, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holder or holders of membership interest having not less than the minimum number of votes that would be necessary to take such action at a meeting at which the holders of all membership interest entitled to vote on the action were present and voted. Any such written consent must be dated, signed and delivered in the manner required by applicable provisions of Texas law and/or the Company Agreement. Any such written consent shall be effective as set forth therein. The taking of any such action by written consent shall be subject to satisfaction of all applicable requirements of the Texas Business Organizations Code and/or the Company Agreement.

Prompt notice of the taking of any action by Members without a meeting by less than unanimous written consent shall be given to those Members who did not consent in writing to the action.

ARTICLE THIRTEEN

The membership interest of the Limited Liability Company will be subject to restrictions on its transferability as set out in the Company Agreement of the Limited Liability Company, which Company Agreement will be kept with the records of the Limited Liability Company. The Limited Liability Company will provide a copy of the Company Agreement without charge to any record holder of a membership interest upon written request addressed to the Limited Liability Company at its principal business office or its registered agent’s address.

ARTICLE FOURTEEN

This Certificate of Formation may be amended, modified, supplemented or restated in any manner permitted by applicable law and approved by the affirmative vote of members owning more than fifty percent (50%) in interest of all of the membership interests in the Company then outstanding.

ARTICLE FIFTEEN

This Certificate of Formation is effective when the document is filed by the Office of the Texas Secretary of State.

 

3


IN WITNESS WHEREOF, I have hereunto set my hand this the 28 day of March, 2006.

The undersigned signs this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument.

 

/s/ Robert K. Hall
Robert K. Hall

 

4

Exhibit 3.61

SECOND AMENDED AND RESTATED

COMPANY AGREEMENT

OF

RKH CAPITAL, L.L.C.

This Second Amended and Restated Company Agreement (this “ Agreement ”) of RKH Capital, L.L.C., a Texas limited liability company (the “ Company ”), is made and entered into as of November 30, 2010 by RK Hall, LLC, a Delaware limited liability company, as the sole member (the “ Member ”) of the Company.

The Member, by execution of this Agreement, hereby agrees as follows:

ARTICLE I

ORGANIZATIONAL MATTERS

 

1.1 Formation .

Subject to the provisions of this Agreement, the Member has formed the Company as a limited liability company pursuant to Texas Law. Except as expressly provided herein, the rights and obligations of the Member and the administration, operations and termination of the Company shall be governed by Texas Law.

 

1.2 Name .

The name of the Company shall be, and the business of the Company shall be conducted under the name of RKH Capital, L.L.C. Subject to the requirements of Texas Law, the Member may change the name of the Company at any time and from time to time by filing with the Texas Secretary of State a Certificate of Amendment to that effect.

 

1.3 Term .

The Company’s existence shall begin upon the filing of the Certificate with the Texas Secretary of State and shall continue until the occurrence of an event requiring the winding up of the Company in accordance with Section 9.1 herein.

 

1.4 Registered Agent and Registered Office; Principal Office; Address of the Member .

(a) Registered Agent and Registered Office . The registered office of the Company shall be 2165 NW Loop 286, Paris, Texas, 75460, and the registered agent for service of process on the Company at such registered office shall be Robert K. Hall, or such other registered office or registered agent as the Member may from time to time designate by filing with the Texas Secretary of State a Certificate of Amendment.

(b) Principal Office . The principal office of the Company shall be at 2165 NW Loop 286, Paris, Texas, 75460, or such other place as the Member may from time to time designate. The Company may maintain offices at such other place or places as the Member deems advisable.


(c) Address of the Member . The address of the Member is 2900 K Street NW, Suite 100, Washington, DC, 20007.

 

1.5 State Law Limited Liability Company .

The Member intends that the Company be treated as a limited liability company in accordance with Texas Law for all purposes under state law. The Company is not a sole proprietorship, joint venture, or partnership, and this Agreement shall not be construed to provide otherwise.

 

1.6 Fiscal Year .

The fiscal year of the Company shall end on December 31 of each calendar year. The Company shall have the same fiscal year for income tax purposes and for accounting purposes.

ARTICLE II

DEFINITIONS

The following definitions shall apply to the terms used in this Agreement, unless otherwise clearly indicated to the contrary in this Agreement:

Capital Account ” means the capital account maintained for the Member pursuant to Section 4.2 herein.

Capital Contribution ” means any cash or other property contributed by the Member to the Company pursuant to the provisions of this Agreement.

Certificate ” means the Certificate of Formation filed with the Secretary of State of the State of Texas, as such Certificate may be amended or restated from time to time.

Tax Code ” means the Internal Revenue Code of 1986, as amended and in effect from time to time.

Losses ” means the deductions, items of deductions, losses and credits of the Company determined in accordance with accounting principles consistently applied from year to year.

Membership Interest ” means the interest of the Member in the Company, including the Member’s Capital Account and the Member’s rights to all of the Profits and Losses of the Company, and to receive distributions (liquidating or otherwise) from the Company.

Person ” means a corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity.

Profits ” means the income and gain of the Company determined in accordance with accounting principles consistently applied from year to year.

Property ” means all of the real and personal property owned by the Company, whether tangible or intangible, and any interest in such property.

 

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Texas Law ” means Texas Limited Liability Company Law, as it may be amended from time to time, and any successor to such Texas Law.

ARTICLE III

PURPOSES AND POWERS

 

3.1 Purposes .

The purpose for which the Company is formed is for the transaction of any and all lawful purposes for which a limited liability company may be formed under Texas Law. The Company shall serve as the general partner of R.K. Hall Construction, Ltd., a Texas limited partnership, Hall Materials, Ltd., a Texas limited partnership, SCS Materials, L.P., a Texas limited partnership, and B&H Contracting, L.P., a Texas limited partnership.

 

3.2 Powers .

In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Texas Law, and all powers necessary, convenient or incidental to accomplish its purposes.

ARTICLE IV

CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS

 

4.1 Capital Contributions .

The Member will, in its sole and absolute discretion, make Capital Contributions in such amounts as it deems necessary. The Member has no obligation and shall not be required to make any Capital Contributions or loans to the Company.

 

4.2 Capital Account .

A Capital Account may be established and maintained for the Member in accordance with accounting principles selected by the Member and consistently applied.

 

4.3 Negative Capital Account .

The Member will not at any time have any liability to the Company for any negative balance in its Capital Account.

 

4.4 Limited Liability of the Member .

The Member shall not be liable for the debts, obligations, or liabilities of the Company, including a debt, obligation, or liability under a judgment, decree, or order of a court.

 

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ARTICLE V

ALLOCATIONS AND DISTRIBUTIONS

 

5.1 Allocation of Profits and Losses .

All Profits and Losses of the Company will be allocated entirely to the Member.

 

5.2 Distributions .

Subject to the limitations of Texas Law and any other applicable law, distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

 

5.3 Distributions on Termination .

Upon the winding up and termination of the Company, its assets will be distributed in the manner prescribed in Article IX herein.

ARTICLE VI

MANAGEMENT

 

6.1 Designation and Authority of Member .

The Member shall conduct, direct and exercise full control over all activities of the Company. All management powers over the business and affairs of the Company shall be vested in the Member. Notwithstanding any other provision of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

 

6.2 Officers .

The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a limited liability company formed under Texas Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member. The names of the Officers of the Company from and after the date of this Agreement until removal, replacement or resignation are as set forth below.

 

Name

  

Title

Anya Fonina

   Vice President

 

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6.3 Indemnification .

The Company may indemnify any person who was or is a party defendant or is threatened to be made a party defendant, in any pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the Company) by reason of the fact that he or she is or was the Member of the Company, employee or agent of the Company, or is or was serving at the request of the Company, for expenses (including attorney’s fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if the Member determines that he or she acted in good faith and in an manner he or she reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

ARTICLE VII

ACCOUNTING AND TAX MATTERS

 

7.1 Records and Accounting .

The Member shall keep or cause to be kept appropriate books and records of account with respect to the Company’s business and any other documents required by Texas Law including: (a) books and records of accounts; (b) a current record of the name and address of each member; (c) a current list of each member of a class or group of membership interests in the Company; (d) a copy of the Company’s federal, state, and local tax information or income tax returns for each of the six preceding tax years; (e) a copy of the Company’s Certificate, including any amendments to or restatements of the Certificate; (f) a copy of this Agreement, including any amendments to or restatements of same; (g) an executed copy of any powers of attorney; (h) a copy of any document that establishes a class or group of members of the Company as provided herein; and (i) contribution information to the extent required by Texas Law. These books and records shall at all times be kept at the principal office of the Company or such other office as the Member may designate for such purposes. Any books and records of accounts maintained by the Company in the regular course of its business, including books of account and records of Company proceedings, may be kept on any information storage device, provided that the books and records so kept are convertible into clearly legible written form within a reasonable time.

ARTICLE VIII

TRANSFERS OF MEMBERSHIP INTERESTS

 

8.1 Member .

The Member shall own and have all rights in and to the entire Membership Interest and the entire initial Capital Account balance of the Company.

 

8.2 Restrictions on the Disposition of a Membership Interest .

There are no limitations on the Member’s right to sell, transfer, encumber or assign all or any part of his Membership Interest in the Company. Any sale, transfer or assignment of the Member’s Membership interest shall be effective only on the admission of the transferee or assignee as a member of the Company as provided by Texas Law.

 

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ARTICLE IX

WINDING UP AND TERMINATION

 

9.1 Winding Up .

Winding up of the Company is required upon the first to occur of any of the following:

 

  (a) an election to dissolve the Company by the Member; or

 

  (b) any other event that, under Texas Law, would require the winding up or termination of the Company.

 

9.2 Effect of Winding Up .

Upon the occurrence of an event requiring winding up of the Company, the Company will cease to carry on its business, except insofar as may be necessary for the winding up of its business, and the assets of the Company will be determined and valued effective as of the day on which the event occurs that results in such dissolution. The Company will terminate only after there has been a winding up of the Company’s business and affairs and the assets of the Company have been liquidated and distributed as provided in this Agreement. Upon the occurrence of an event requiring winding up of the Company, the Company will cause prior written notice of its intention to dissolve to be mailed to each known creditor of and claimant against the Company to the extent and in the manner required by Texas Law.

 

9.3 Winding Up Procedures .

Upon the dissolution of the Company, the Company will: (a) proceed to collect its assets; (b) apply and distribute its Property to discharge, or make adequate provision for the discharge of, all of the Company’s liabilities and obligations; (c) dispose of such of its properties as are not to be distributed in kind to the Member; and (d) perform any other act required to wind up its business and affairs.

 

9.4 Distribution of Assets Upon Dissolution .

In settling the accounts of the Company after its dissolution, the assets of the Company will be applied and distributed in the following order of priority: (a) first, to the extent permitted by law, and in accordance with the priorities, if any, established by applicable law, to creditors in satisfaction of liabilities of the Company, including liabilities of the Company to its Member as a creditor (other than for distributions and Capital Contributions), whether by payment or establishment of reserves; (b) second, to its Member.

 

9.5 Distributions in Kind .

Any assets of the Company remaining after the satisfaction of the liabilities of the Company may be distributed in kind to the Member in accordance with the provisions of Section 9.4 herein.

 

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9.6 Filing of Certificate of Termination .

When the Company has paid or discharged all liabilities and obligations or made adequate provision for such liabilities, or, in case its Property and assets are not sufficient to satisfy and discharge all of the liabilities and obligations of the Company, when the Company has applied all of its Property and assets to the extent available to its bona fide liabilities and obligations, and distributed all its remaining Property and assets to its Member, a Certificate of Termination (including a certificate from the comptroller that all taxes have been paid) will be executed on behalf of the Company by the Member and will be filed with the Secretary of State of the State of Texas, and the Member will execute, acknowledge and file any and all other instruments necessary or appropriate to terminate the Company.

ARTICLE X

GENERAL PROVISIONS

 

10.1 Titles and Captions .

All article and section titles and captions in this Agreement are for convenience only, shall not be deemed part of this Agreement, and in no way shall define, limit, extend, or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to “Articles” and “Sections” are to Articles and Sections of this Agreement.

 

10.2 Pronouns and Plurals .

Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine, or neuter forms, and the singular form of nouns, pronouns, and verbs shall include the plural and vice versa.

 

10.3 Further Action .

The Member shall execute all documents, provide all information, and take or refrain from taking all actions as may be necessary or appropriate to achieve the purposes of this Agreement.

 

10.4 Binding Effect .

This Agreement shall be binding upon and inure to the benefit of the Member and its successors and assigns.

 

10.5 Creditors .

None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company.

 

10.6 Waiver .

No failure by any party to insist upon the strict performance of any covenant, duty, agreement, or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement, or condition.

 

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10.7 Applicable Law .

This Agreement shall be construed in accordance with and governed by the laws of the State of Texas, without regard to the principles of conflicts of law that would apply any other law.

 

10.8 Invalidity of Provisions .

If any provision of this Agreement is declared or found to be illegal, unenforceable, or void, in whole or in part, then the parties shall be relieved of all obligations arising under such provision, but only to the extent that it is illegal, unenforceable, or void, it being the intent and agreement of the parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent or, if that is not possible, by substituting therefor another provision that is legal and enforceable and achieves the same objectives.

[S IGNATURE P AGE T O F OLLOW ]

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 30 day of November, 2010.

 

RK HALL, LLC, sole member
By:   /s/ Anya Fonina
 

Name: Anya Fonina

Title: Vice President

[Signature Page to RKH Capital, L.L.C. Amended and Restated Limited Liability Company Agreement]

Exhibit 3.62

CERTIFICATE OF LIMITED PARTNERSHIP

OF

SCS MATERIALS, L.P.

This Certificate of Limited Partnership is prepared in accordance with Article 6132a-1 of Vernon’s Civil Statutes.

1. The name of the limited partnership is SCS Materials, L.P.

2. The address of the registered office and the name and the address of the registered agent for service of process required to be maintained by Section I 06 of the Texas Revised Limited Partnership Act (“Act”) is: Eddie Smith, 915 Hills Creek Drive, McKinney, Texas 75070.

3. The address of the principal office in the United States where records are to be kept or made available under Section 1.07 of the Act is: 915 Hills Creek Drive, McKinney, Texas 75070.

4. The name, mailing address, and street address of the business or residence of the general partner is Smith Crushed Stone, Inc., 915 Hills Creek Drive, McKinney, Texas 75070.

 

SCS Materials, L.P.
By:   Smith Crushed Stone, Inc., general partner
By:   /s/ Eddie Smith
 

Name: Eddie Smith

Office: President

Exhibit 3.63

SECOND AMENDED AND RESTATED

PARTNERSHIP AGREEMENT

OF

SCS MATERIALS, L.P.

This Second Amended and Restated Partnership Agreement (this “ Agreement ”) of SCS Materials, L.P., a Texas limited partnership (the “ Partnership ”), is entered into as of November 30, 2010 by and between RKH Capital, L.L.C., a Texas limited liability company (the “ General Partner ”), as the sole general partner, RK Hall, LLC, a Delaware limited liability company (the “ Limited Partner ” and, together with the General Partner, the “ Partners ”), as the sole limited partner, Robert K. Hall, an individual (“ Hall ”), David Mark Buster, an individual (“ Buster ” and, together with Hall, the “ Former Limited Partners ”), and Paris Rock LLC, a Texas limited liability company (the “ Former General Partner ”).

WHEREAS, the Partners, the Former Limited Partners, the Former General Partner, the Partnership and the other parties thereto entered into an Interest Purchase Agreement (the “ Purchase Agreement ”), dated as of November 12, 2010 and effective simultaneously with the effectiveness of this Agreement;

WHEREAS, the Former General Partner and Former Limited Partners entered into that certain First Amended and Restated Agreement of Limited Partnership dated June 1, 2004, as amended (the “ Pre-Existing Partnership Agreement ”);

WHEREAS, the Partners, the Former General Partner and the Former Limited Partners wish to amend and restate the Partnership’s Pre-Existing Partnership Agreement in order to (i) appoint the General Partner and the Limited Partner as the new general partner and new limited partner, respectively, of the Partnership and (ii) amend and restate the Pre-Existing Partnership Agreement as set forth herein;

WHEREAS, the Pre-Existing Partnership Agreement requires that any amendment thereto be approved by the Former General Partner and the Former Limited Partners; and

WHEREAS, the Former General Partner and the Former Limited Partners have joined in this Agreement solely for purposes of approving the following amendments.

NOW THEREFORE, the Partners, the Former General Partner and the Former Limited Partners, intending to be legally bound, hereby agree that the Pre-Existing Partnership Agreement is superseded, amended and restated in its entirety to read as follows:

1. Name . The name of the limited partnership formed hereby is SCS Materials, L.P.

2. Purpose . The Partnership is organized for the object and purpose of, and the nature of the business to be conducted and promoted by the Partnership is, engaging in any and all activities permitted under the Texas Limited Partnership Law, a Part of the Texas Business Organizations Code, as amended (the “ TLPL ”). The rights and liabilities of the Partners shall be as provided in the TLPL, except as otherwise expressly provided herein.


3. Registered Office; Registered Agent . The registered office of the Partnership required by the TLPL to be maintained in the State of Texas shall be the office of the registered agent named in the Partnership’s Certificate of Formation, as amended (the “ Certificate ”) or such other office (which need not be a place of business of the Partnership) as the General Partner may designate in the manner provided by law. The registered agent of the Partnership in the State of Texas shall be the registered agent named in the Certificate or such other person as the General Partner may designate in the manner provided by law.

4. Principal Office in the United States; Other Offices . The principal office of the Partnership in the United States where records are to be kept or made available under Section 153.551 of the TLPL is 165 SE 6th Street, Paris, Texas, 75460, or such other office as the General Partner may designate, which need not be in the State of Texas. The Partnership may have such other offices as the General Partner may designate.

5. Powers . The Partnership shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, convenient, or incidental to or for the furtherance of the purposes set forth in Section 2 herein, including any and all powers set forth in the TLPL.

6. Term . The Partnership shall have perpetual existence, unless it is wound up sooner as a result of: (a) an event of withdrawal of a general partner described in Section 153.155 of the TLPL, (b) the written consent of all of the Partners, (c) a judicial decree ordering the winding up and termination of the Partnership under Section 11.314 of the TLPL, or (d) any other event requiring the winding up of the Partnership under the TLPL.

 

7. Partners . The names, addresses and Sharing Ratios of the General Partner and the Limited Partner are as follows:

 

NAME

  

BUSINESS ADDRESS

   SHARING RATIO  

General Partner:

     

RKH Capital, L.L.C.

  

2810 NW Loop 286

Paris, TX 75460

     0

Limited Partner:

     

RK Hall, LLC

  

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, DC 20007

     100

8. Capital Contributions . The Partners may make capital contributions at such times and in such amounts, in cash or other property, to the Partnership as they may agree from time to time with the prior consent of the General Partner.

9. No Further Liability . The liability of the Limited Partner to the Partnership shall be limited to the amount of its capital contributions made pursuant to Section 8 , and the Limited Partner shall not have any further liability to contribute money to, or in respect of, the liabilities or the obligations of the Partnership unless the Limited Partner agrees in writing to make additional capital contributions to the Partnership, nor shall the Limited Partner be personally liable for any obligations of the Partnership, except as provided in the TLPL.

 

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10. Allocations of Profit and Losses . The Partnership’s profits and losses shall be allocated among the Partners in proportion to their Sharing Ratios.

11. Distributions . Subject to Section 153.210 of the TLPL, the General Partner shall, at such times and in such amounts as may be determined by the General Partner in its sole discretion, cause the Partnership to make distributions of cash and other property to the Partners in proportion to their Sharing Ratios.

12. Additional Partners .

(a) The General Partner may not admit additional limited partners to the Partnership without first obtaining the consent of the Limited Partner.

(b) After the admission of any additional limited partners pursuant to this Section 12 , the Partnership shall continue as a limited partnership under the TLPL.

(c) The admission of additional limited partners to the Partnership pursuant to this Section 12 shall be accomplished by the amendment of this Agreement and, if required by the TLPL, the filing of an appropriate amendment to the Partnership’s Certificate.

13. Management .

(a) Except as otherwise provided in this Agreement, the powers of the Partnership shall be exercised by or under the authority of, and the business and affairs of the Partnership shall be managed under the direction of, the General Partner, who shall make all decisions and take all actions for the Partnership. No Limited Partner, acting in its capacity as a limited partner, has the right, power or authority to act for or on behalf of the Partnership, to do any act that would be binding on the Partnership, or to incur any expenditures on behalf of the Partnership.

(b) In managing the business and affairs of the Partnership and exercising its powers as a general partner, the General Partner may, but is not required to, act through resolutions adopted at meetings or in written consents. Decisions or actions taken by the General Partner in accordance with this Agreement shall constitute decisions or actions by the Partnership and shall be binding on each Partner.

14. Tax Matters . For so long as the General Partner is disregarded as an entity separate from the Limited Partner for U.S. federal tax purposes, the Partners intend for the Partnership to be disregarded as an entity separate from the Limited Partner for U.S. federal tax purposes (and applicable state and local tax purposes) and that the activities of the Partnership be deemed to be the activities of the Limited Partner for such tax purposes. Notwithstanding the foregoing, the Partnership is not intended to be and shall not be disregarded as an entity for any purpose other than tax purposes. All provisions of the Certificate and this Agreement are to be construed so as to preserve that tax status under those circumstances. At such time as the Partnership has more than one partner that is recognized for U.S. federal tax purposes, appropriate adjustments shall be made to this Agreement to account for the formation of a partnership for U.S. federal tax purposes as well as for distributions, maintenance of capital accounts, and the allocation of profits and losses.

 

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15. Exculpation . Neither the General Partner, or its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner, nor an affiliate or owner, manager, officer, director, partner, employee or agent of the Partnership, shall be liable, responsible or accountable in damages or otherwise to the Partnership or any Partner for any action taken or failure to act (even if such action or failure to act constituted the negligence of a person) on behalf of the Partnership unless such act or omission was performed or omitted fraudulently or constituted willful misconduct. To the extent that, at law or in equity, the General Partner or its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner or of the Partnership have duties (including fiduciary duties) and liabilities relating to the Partnership or to another Partner, the General Partner, its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner acting under this Agreement shall not be liable to the Partnership or to any Partner for their reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of the General Partner, its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner or of the Partnership otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of the General Partner, its affiliates, or any owner, manager, officer, director, partner, employee or agent of the General Partner or of the Partnership. THE PARTNERS RECOGNIZE THAT THIS PROVISION SHALL RELIEVE THE GENERAL PARTNER AND ITS AFFILIATES AND ANY OWNER, MANAGER, OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT OF THE GENERAL PARTNER OR OF THE PARTNERSHIP FROM ANY AND ALL LIABILITY ARISING OR TO ARISE OUT OF ACTIONS OR INACTIONS DESCRIBED ABOVE EVEN IF THE ACTIONS OR INACTIONS CONSTITUTE NEGLIGENCE BY ANY SUCH PERSON.

16. Indemnification .

(a) The Partners, and their affiliates, officers, directors, employees and agents or any person performing a similar function on behalf of the Partnership (individually, an “ Indemnitee ”) may be indemnified and held harmless by the Partnership from and against any and all judgments, penalties, settlements and reasonable expenses actually incurred by any Indemnitee who was, is or is threatened to be made a named defendant or respondent in any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise, by reason of its status as (x) a Partner or an affiliate thereof or (y) an officer, director, employee or agent of the Partnership, or a Partner or an affiliate thereof, if the Indemnitee acted in good faith and in a manner it reasonably believed to be in, or not opposed to, the best interest of the Partnership. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere , or its equivalent, shall not, of itself, create a presumption that the Indemnitee acted in a manner contrary to that specified above.

(b) The Partnership through the General Partner, in its sole discretion, may purchase and maintain insurance on behalf of the General Partner and such other persons as the General Partner shall determine, in its sole discretion, against any liability that may be asserted against or expense that may be incurred by such person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such person against such liability under the provisions of this Agreement.

 

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(c) Expenses incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding subject to this Section 16 may, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding (i) upon a written affirmation by the Indemnitee of its good faith belief that it has met the standard of conduct necessary for indemnification and (ii) upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that such person is not entitled to be indemnified as authorized in this Section 16 .

(d) The indemnification provided in this Section 16 is for the benefit of the Indemnitees and shall not be deemed to create any right to indemnification for any other persons.

17. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Texas (without regard to principles of conflict of laws), all rights and remedies being governed by said laws.

18. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one instrument. A copy of this Agreement, signed and delivered by facsimile or electronic transmission, shall be considered an original, executed instrument.

[S IGNATURE P AGE T O F OLLOW ]

 

5


IN WITNESS WHEREOF, the undersigned, intending to be bound hereby, have duly executed this Agreement as of the date first written above.

GENERAL PARTNER:

RKH CAPITAL, L.L.C.

By: /s/ Anya Fonina                                                

Name: Anya Fonina

Title: Vice President

LIMITED PARTNER:

RK HALL, LLC

By: /s/ Anya Fonina                                                  

Name: Anya Fonina

Title: Vice President

FORMER GENERAL PARTNER:

PARIS ROCK, LLC

By: /s/ David Mark Buster                                     

Name: David Mark Buster

Title: Managing Member

FORMER LIMITED PARTNERS:

By: /s/ David Mark Buster                                     

Name: David Mark Buster

By: /s/ Robert K. Hall                                              

Name: Robert K. Hall

[Signature Page to SCS Materials, L.P. Second Amended and Restated Partnership Agreement]

Exhibit 3.64

ARTICLES OF ORGANIZATION

OF

ALTAVIEW CONCRETE, LLC

The undersigned, acting pursuant to the Utah Revised Limited Liability Company Act (the “Act”), adopts the following Articles of Organization for the purpose of organizing a Utah limited liability company (the “Company”):

 

FIRST:    The Company’s name is Altaview Concrete, LLC.
SECOND :    The Company will continue until September 1, 2109, unless sooner dissolved by law or as provided in the Company’s operating agreement.
THIRD :    The Company is organized for any and all legal and lawful purposes pursuant to the Act.
FOURTH :    The address of the initial registered office of the Company and the name of its initial registered agent at such address are: Corporation Service Company, 2180 South 1300 East, Suite 650, Salt Lake City, UT 84106.
FIFTH :    The management of the Company shall be vested in its members. The name and street address of the initial member of the Company are: RSR Altaview Holdings, Inc., 9547 South 500 West, Sandy, UT 84070.

IN WITNESS WHEREOF, the undersigned member of Altaview Concrete, LLC has executed these Articles of Organization as of this 13 day of September, 2010.

 

RSR ALTAVIEW HOLDINGS, INC., a Utah corporation
By:   /s R. Scott Reynolds
  R. Scott Reynolds, President


CERTIFICATE OF AMENDMENT

TO ARTICLES OF ORGANIZATION OF

ALTAVIEW CONCRETE, LLC

Pursuant to Section 48-2c-408 of the Utah Revised Limited Liability Company Act, as amended (the “ Act ”), the undersigned hereby causes this Certificate of Amendment (this “ Certificate ”) to be delivered to the Utah Department of Commerce, Division of Corporations and Commercial Code for filing, and states as follows:

FIRST: The name of the company is Altaview Concrete, LLC (the “ Company ”).

SECOND: The Fifth Article of the Articles of Organization of the Company (the “ Articles ”), is hereby amended and restated in its entirety to read as follows:

 

  FIFTH: The Company shall be managed by its sole member. The name and street address of the sole member of the Company are Harper- Kilgore, LLC, a Delaware limited liability company, P.O. Box 189 Magna, UT 84044.

THIRD: On September 15, 2010, the amendments to the Articles set forth above were adopted by the sole member of the Company, as required by Section 48-2c-803 of the Act, or as otherwise required by the Articles or the Company’s operating agreement.

[Signature page follows.]


IN WITNESS WHEREOF, the undersigned, in accordance with Section 48-2c-204 of the Act, hereby executes this Certificate as of September 15, 2010.

 

HARPER-KILGORE, LLC, a Delaware limited liability company, in its capacity as the sole member of the Company
By:   /s/ Anya Fonina

Name: Anya Fonina

Title: Vice President

 

2

Exhibit 3.65

AMENDED AND RESTATED OPERATING AGREEMENT

OF

ALTAVIEW CONCRETE, LLC

This Amended and Restated Operating Agreement (this “ Agreement ”) of Altaview Concrete, LLC (the “ Company ”) is entered into by Harper-Kilgore, LLC, as the sole member of the Company (as defined below) (the “ Member ”).

RECITALS

WHEREAS, on September 13, 2010, the Company was converted from a Utah corporation to a Utah limited liability company, and upon such conversion RSR Altaview Holdings, Inc., a Utah corporation (“ RSR ”), was admitted as the sole member of the Company and executed the operating agreement of the Company, dated as of September 13, 2010 (the “ Original Operating Agreement ”);

WHEREAS, upon the closing of the transactions contemplated by the Membership Interest Purchase Agreement, dated as of September 15, 2010, among the Company, Peak Construction Materials, LLC, Peak Management, L.C., Wasatch Concrete Pumping, LLC, R. Scott Reynolds, RSR and the Member, the Member acquired all of the issued and outstanding membership interests of the Company; and

WHEREAS, the Member desires to amend and restated the Original Operating Agreement in its entirety to reflect that it is the sole member of the Company.

AGREEMENT

The Company is a limited liability company subject to the Utah Revised Limited Liability Company Act (§ 48-2c-101, et seq., Utah Code Ann.), as amended from time to time (the “ Act ”) and the Member, agreeing to be bound by this Agreement, hereby declares as follows.

1. Name . The name of the Company is Altaview Concrete, LLC.

2. Filing of Certificates . So long as the Company is member-managed, the Member shall be the person authorized to sign documents and reports required by the Act. The Member, or other person required by law, shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business. This Agreement does not limit the power of any person to sign, in accordance with the Act, any document or report required by the Act pursuant to a power of attorney duly executed by a person otherwise authorized to sign such document or report.


3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Utah law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 9547 South 500 West, Sandy, Utah 84070.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Utah is Corporation Service Company, 2180 South 1300 East, Suite 650, Salt Lake City, Utah 84106.

7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Harper-Kilgore, LLC    P.O. Box 189
   Magna, UT 84044

8. Limited Liability . Except as provided in Section 48-2c-602 of Act, the debts, obligations and liabilities of the Company shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company or for the acts or omissions of the Company or of any other member, manager or employee of the Company.

9. Capital Contributions . The Member is the sole member of the Company, having been admitted upon its acquisition of the entire interest of the predecessor member in the Company and having agreed to be bound by the Company’s operating agreement in effect at that time. The Member may, but is not obligated to make any capital contribution to the Company. The capital account of the Member shall be adjusted only at the time and in the manner determined by the Member.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member only at the times and in the aggregate amounts determined by the Member.

 

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12. Management . In accordance with Section 48-2c-803 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Utah. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document or report on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Utah Revised Business Corporation Act, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member.

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Utah and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be in, or not opposed to, the Company’s best interests.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Utah for directors and officers of corporations organized under the laws of the State of Utah. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

 

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17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member, (ii) any time there are no members of the Company, or (iii) the entry of a decree of judicial dissolution under Section 48-2c-1213 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Part 13 of the Act, except, to the extent permitted under the Act, as determined by the Member.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof. To the extent that the Act permits this Agreement to provide for, or otherwise does not prohibit this Agreement from providing for, any term or condition for which provision is made in this Agreement, this Agreement shall control to the extent of any inconsistency between this Agreement and the Act. This Agreement is a declaration of the sole member of the Company and this declaration constitutes the operating agreement of the Company pursuant to Section 48-2c-504 of the Act.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Utah (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

 

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24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

[Signature page follows.]

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 15 th   day of September 2010.

 

HARPER-KILGORE, LLC., sole member
By:   /s/ Anya Fonina
  Name: Anya Fonina
  Title: Vice President

[Signature Page to Altaview Concrete, LLC Operating Agreement]

Exhibit 3.66

AMENDED

Articles of Incorporation

Of B&B Resources, Inc.

We, the undersigned, as officers of B & B Resources, Inc, adopt the following amendments to the Articles of Incorporation of B & B Resources, Inc.:

ARTICLE IX

REGISTERED OFFICE AND REGISTERED AGENT

Section 1: Registered Office .

The address of the registered office of the Corporation is 189 E. Weber Canyon Road, PO Box 685, Oakley, Utah 84055.

Section 2: Registered Agent .

The name of the registered agent at the above address is Laurie Balls.

 

/s/ Laurie Balls
Laurie Balls
Registered Agent

ARTICLE X

OFFICERS AND DIRECTORS

Section 1: Members of the Board of Directors .

The Board of Directors of the Corporation shall consist of four members and their respective names and address are

 

NAME

  

ADDRESS

Brent Baker   

2001 Hidden Creek Lane

Heber City, UT 84032

Ryan Balls   

14426 Muirwood Cir.

Herriman, UT 84096

Laurie Balls   

189 E. Weber Canyon Rd.

PO Box 685

Oakley, UT 84055

Ginger Baker   

2001 Hidden Creek Lane

Heber City, UT 84032


Section 4: Officers .

The officers of the Corporation shall be elected by the Board of Directors but may or may not also serve as directors. File officers shall include: President, Vice President, Secretary, and Treasurer, as the Board of Directors may nominate and direct. One person may hold the offices of Secretary and Treasurer simultaneously.

Section 4b :

Until their successors are elected and qualified, the officers of the corporation shall be as follows:

 

NAME

  

OFFICE

Brent Baker    President
Ryan Balls    Vice President
Laurie Balls    Secretary
Ginger Baker    Treasurer

EXECUTED this 7th day of March, 2008.

 

/s/ Brent Baker
Name

 

/s/ Ryan Balls
Name

 

/s/ Laurie Balls
Name

SWORN to before me on this 7 day of March, 2008.

 

My commission expires:   /s/ Pamela Marrett
  NOTARY PUBLIC

 

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Exhibit 3.67

BY-LAWS OF

B & B RESOURCES, INC.

Article One – Organization

1. The name of this Company shall be B & B Resources, Inc.

2. The Company shall have a seal which shall be in the following form attached.

3. The Company may at its pleasure by a vote of the shareholders change its name.

Article Two – Purposes

The following are the purposes for which this Company has been organized:

To manage other related businesses.

To provide financial resources and assets necessary for the operation of related businesses.

For any other legal and lawful purpose as established by the Officers of the Company.

Article Three – Membership

Membership in this Company shall be open to all shareholders who have ownership interest in the Company.

Article Four – Meetings

The annual shareholder meeting of this Company shall be held on the first Tuesday of October each and every year except if such day is a legal holiday then and in that event the Lard of Directors shall fix the day but it shall not be more than two weeks from the date fixed by these by-laws. The secretary shall cause to be mailed to every shareholder in good standing at his or her address as it appears in the shareholder roll book of this Company a notice telling the time and place of such annual meeting.

Regular meetings of the Officers of this Company shall be held each Tuesday morning.

The presence of not less than two members shall constitute a quorum and shall be necessary to conduct the business of this Company. A quorum as hereinbefore set forth shall be required at any adjourned meeting.

Special meetings of this Company may be called by the president when he deems it for the best interest of the Company. Notices of such meeting shall be mailed to all shareholders at their addresses as they appear in the shareholder roll book at least but not more than five days before the scheduled date set for such special meeting. Such notice shall state the reasons that such meeting has been called, the business to be transacted at such meeting and by whom called.


At the request of any one member of the Board of Directors the president shall cause a special meeting to be called but such request must be made in writing at least five days before the requested scheduled date.

No other business but that specified in the notice may be transacted at such special meeting without the unanimous consent of all present at such meeting.

Article Five – Voting

At all meetings, except for the election of officers and directors, all votes shall be viva voce, except that for the election of officers ballots may be provided and there shall not appear any place on such ballot any mark or marking that might tend to indicate the person who cast such ballot.

At any regular or special meeting if a majority so required any question may be voted upon in the manner and style provided for election of officers and directors.

At all votes by ballot the chairman of such meeting may immediately prior to the commencement of balloting appoint a committee who shall act as “Inspectors of Election” and who shall at the conclusion of such balloting certify in writing to the chairperson the results and the certified copy shall be physically affixed in the minute book to the minutes of that meeting.

No inspector of election shall be a candidate for office or shall be personally interested in the question voted upon.

Article Six – Order of Business

1. Roll Call
2. Reading of the minutes of the preceding meeting.
3. Reports of Committees
4. Reports of Officers
5. Old and unfinished business
6. New business
7. Adjournments

Article Seven – Board of Directors

The business of this Company shall be managed by a Board of Directors consisting of at least two members together with the officers of this Company.

The directors to be chosen for the ensuing year shall be chosen at the annual meeting of this Company in the same manner and style as the officers of this Company and ‘they shall serve for a term of two years.

 

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The Board of Directors shall have the control and management of the affairs and business of this Company. Such Board of Directors shall only act in the name of the Company when it shall be regularly convened by its chairman after due notice to all the directors of such meeting.

Two of the members of the Board of Directors shall constitute a quorum and the meetings of the Board of Directors shall be held at least annually.

Each director shall have one vote and such voting may not be done by proxy.

The Board of Directors may make such rules and regulations covering its meetings as it may in its discretion determine necessary.

Vacancies in the Board of Directors shall be filled by a vote of the majority of the remaining members of the Board of Directors for the balance of the year.

The president of the Company by virtue of the office shall be chairperson of the Board of Directors. The Board of Directors shall select from one of their number a secretary.

A director may be removed when sufficient cause exists for such removal. The Board of Directors may entertain charges against any director. A director may be represented by counsel upon any removal hearing. The Board of Directors shall adopt such rules as it may in its discretion consider necessary for the best interest of the Company for this hearing.

Article Eight – Officers

The officers of the Company shall be as follows:

President

Vice President, if desired

Secretary

Treasurer

The president shall preside at all shareholder meetings, by virtue of the office be chairperson of the Board of Directors, present at each annual meeting of the Company an annual report of the work of the Company, appoint all committees temporary or permanent, see that all books, reports and certificates as required by law are properly kept or filed, be one of the officers who may sign the checks or drafts of the Company, and have such powers as may be reasonably construed as belonging to the chief executive of any Company.

The vice president shall in the event of the absence or inability of the president to exercise his or her office become acting president of the Company with all rights, privileges and powers as if he or she had been the duly elected president.

 

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The secretary shall keep the minutes and records of the Company in appropriate books, file any certificates required by any statute, federal or state, give and serve all notices to shareholders of the Company, be the official custodian of the records and seal of the Company, be one of the officers required to sign the checks and drafts of the Company, present to the shareholders at any meetings any communication addressed to the secretary of the Company, submit to the Board of Directors any communications which shall be addressed to the secretary, attend to all correspondence of the Company and exercise all duties incident to the office of the secretary.

The Treasurer shall have the care and custody of all monies belonging to the Company, be solely responsible for such monies or securities of the Company and be one of the officers who shall sign the checks or drafts of the Company. No special fund may be set aside that shall make it unnecessary for the Treasurer to sign the checks issued upon it.

The Treasurer shall render at stated periods as the Board of Directors shall determine a written account of the finances of the Company and such report shall be physically affixed to the minutes of the Board of Directors of such meeting and shall exercise all duties incident to the office of the Treasurer.

Officers shall by virtue of their office be members of the Board of Directors.

No officer or director shall for reason of the office be entitled to receive any salary or compensation, but nothing herein shall be construed to prevent an officer or director for receiving any compensation from the Company for duties other than as a director or officer.

Article Nine – Salaries

The Board of Directors shall hire and fix the compensation of any and all employees which they in their discretion may determine to be necessary in the conduct of the business of the Company.

Article Ten – Committees

All committees of this Company shall be appointed by the President and their term of notice shall be for a period of one year or less if sooner terminated by the action of the President.

Article Eleven – Amendments

These by-laws may be altered, amended, repealed or added to by an affirmative vote of not less a majority of the shareholders but not less than two shareholders.

 

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Exhibit 3.68

ARTICLES OF ORGANIZATION

OF

KILGORE EQUIPMENT, LLC

I, THE UNDERSIGNED, as the sole member of the above-named limited liability company, and acting pursuant to the Utah Limited Liability Company Act, hereby adopt the following Articles of Organization in formation of a limited liability company:

ARTICLE I

COMPANY NAME

The name of this limited liability company is Kilgore Equipment, LLC.

ARTICLE II

DURATION OF COMPANY

The company is to exist for a period of thirty (30) years from the date of filing of these Articles of Organization with the Division of Corporations and Commercial Code of the Utah Department of Commerce.

ARTICLE III

COMPANY PURPOSES

The business purpose and object for which this company is organized shall be to conduct any or all lawful business for which limited liability companies may be organized, including, but not limited to, the following:

(a) To acquire by purchase, exchange, lease, hire or otherwise, real property of every kind, character and description whatever, wherever located, and interests of all kinds therein, and (i) to hold, own, develop, improve, manage, operate, let as lessor or sublessor, and mortgage such property; (ii) to sell and exchange such property and interests therein; (iii) to obtain, use, dispose of and deal in and with such property in every other manner, either alone or in conjunction with others, as partners, joint venturers or otherwise; and, (iv) to carry on the business of managing agent, broker, finder, consultant and all other functions in connection therewith.


(b) To acquire, own, hold, use and employ, sell, lease, exchange, transfer and otherwise dispose of, mortgage, lend, pledge and otherwise deal in and with securities of any persons, domestic and foreign firms, associations and corporations, and any government or agency or instrumentality thereof; and while owner of such securities, to exercise any and all rights, powers and privileges in respect thereof.

(c) To transact any and all other businesses for which limited liability companies may be formed under Utah law.

(d) To accomplish any of the foregoing purposes for its own account or as nominee, agent or trustee for others.

The foregoing paragraphs shall be construed both as objects and powers and shall not be held to limit or restrict in any manner the general powers of the company and the enjoyment and exercise thereof, as conferred by the laws of the State of Utah; and it is intended that the purposes, objects, and powers specified in each of the paragraphs of this ARTICLE III, COMPANY PURPOSES, of these Articles of Organization shall be regarded as independent purposes, objects, and powers.

ARTICLE IV

REGISTERED OFFICE AND AGENT

The address of this company’s initial registered office and the name of its original registered agent at such address is:

Graden P. Jackson

Strong & Hanni

9 Exchange Place

Sixth Floor, Boston Building

Salt Lake City, Utah 84111

The Division of Corporations and Commercial Code of the Utah Department of Commerce is hereby appointed as the agent of this company for service of process in the event of the resignation of the above agent, or revocation of said agent’s authority, or if said agent cannot be found or served with the exercise of reasonable diligence.

 

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ARTICLE V

DESIGNATED OFFICE

The designated office of this company is:

1655 West 1900 North

Salt Lake City, UT 84116

ARTICLE VI

MANAGER

The company will be managed by a manager or managers, as provided in an Operating Agreement to be executed by the members. Management is not reserved to the members. The initial manager shall be Jason T. Kilgore, who shall serve as manager until the first meeting of members or until its successor is elected and qualified. The business address of said manager is as follows:

1655 West 1900 North

Salt Lake City, UT 84116

ARTICLE VII

MEMBERS’ CONTRACTS

No contracts or other transactions between the company and any other entity shall in any way be affected or invalidated by the fact that any of the members of the company are pecuniarily or otherwise interested in, or are members, trustees, partners, directors or officers of such other entity.

Any member individually, or any entity with which any member may be associated, may be a party to or may be pecuniarily or otherwise interested in, any contracts or transactions of the company, provided that the fact that such member or such trust, organization or corporation is so interested shall be disclosed to or shall have been known by the members or a majority thereof.

 

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ARTICLE VIII

OPERATING AGREEMENT

The member of the company shall have the right to enter into an Operating Agreement to regulate and manage the affairs of the company in any manner not inconsistent with law or these articles. The power to adopt, alter, amend or repeal the Operating Agreement shall be vested in the members.

DATED this 13 th  day of May, 2002.

 

REGISTERED AGENT:     MEMBER:
/s/ Graden P. Jackson     /s/ Jason T. Kilgore
Graden P. Jackson     Jason T. Kilgore, Managing Member
    1655 West 1900 North
    Salt Lake City, UT 84116

 

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Exhibit 3.69

OPERATING AGREEMENT

FOR

KILGORE EQUIPMENT, LLC

THIS OPERATING AGREEMENT (the “Agreement”) is made and entered into effective as of the 1st day of June, 2002, by Jason T. Kilgore, (hereinafter referred to as “Member”), as the sole Member of Company.

ARTICLE I

THE LIMITED LIABILITY COMPANY

1.1 Organization . Member hereby organizes the limited liability company, Kilgore Equipment, LLC, (the “Company”), subject to the provisions of the Utah Limited Liability Company Act as amended from time to time (the “Act”). It is the desire and intent of the Member that this entity be ignored for income tax purposes.

The Company shall be a single member, manager-managed limited liability company. It is anticipated, however, that the addition of another Member or Members may be important to meet the objectives of the Company. Therefore, this Agreement is created with the perspective that an additional Member or Members may be added. All references to the plural “Members” in this Agreement shall not limit in any way the right and authority of Member to act as the sole Member or manager unless and until another Member or Members are added hereto. If another Member of Members are added, Member shall only be limited by the provisions of this Agreement.

Member desires to organize a limited liability company pursuant to the laws of the State of Utah. Accordingly, in consideration of the mutual covenants contained herein, and Member certifies as follows:

1.2 Filing . In connection with the execution of this Operating Agreement, Member shall cause Articles of Organization that comply with the requirements of the Act to be properly filed with the Utah Division of Corporations and Commercial Code, and shall execute such further documents (including amendments to the Articles of Organization) and take such further action as is appropriate to comply with the requirements of law for the formation or operation of a limited liability company in all states and counties where the Company may conduct its business.

1.3 Name . The name of the Company shall be Kilgore Equipment, LLC.

1.4 Registered Office, Registered Agent . The location of the registered office of the Company shall be 3 Triad Center, Suite 500, Salt Lake City, Utah 84180, and thereafter at such other location as the Member may designate. The Company’s registered agent at such address shall be Graden P. Jackson.


1.5 Events of Dissolution . The Company shall continue for a period of ninety-nine (99) years from the date of the filing of its Articles of Organization with the State of Utah, unless sooner dissolved by:

(a) the vote of a majority in profits interest of the Members;

(b) the Manager may elect to dissolve the Company; or

(c) any event which makes it unlawful for the business of the Company to be carried on by the Members.

1.6 Management of Business . The management of the business of the Company shall be managed by a Manager, pursuant to the provisions of Article IV below. The name and place of business of the initial Manager of the Company is as follows: Jason T. Kilgore, 7057 West 2100 South, Magna, Utah 84044.

The above Manager shall serve until its successor is appointed according to this Agreement. Management is not reserved to the Members.

1.7 Character of Business . The business of the Company shall be any and all lawful business, including, but not limited to:

(a) To acquire by purchase, exchange, lease, hire or otherwise, real property of every kind, character and description whatever, wherever located, and interests of all kinds therein, and (i) to hold, own, develop, improve, manage, operate, let as lessor or sublessor, and mortgage such property; (ii) to sell and exchange such property and interests therein; (iii) to obtain, use, dispose of and deal in and with such property in every other manner, either alone or in conjunction with others, as partners, joint venturers or otherwise; and, (iv) to carry on the business of managing agent, broker, finder, consultant and all other functions in connection therewith.

(b) To acquire, own, hold, use and employ, sell, lease, exchange, transfer and otherwise dispose of, mortgage, lend, pledge and otherwise deal in and with securities of any persons, domestic and foreign firms, associations and corporations, and any government or agency or instrumentality thereof; and while owner of such securities, to exercise any and all rights, powers and privileges in respect thereof.

(c) To transact any and all other businesses for which limited liability companies may be formed under Utah law.

(d) To accomplish any of the foregoing purposes for its own account or as nominee, agent or trustee for others.

1.8 Principal Place of Business . The location of the principal place of business of the Company shall initially be at 7057 West 2100 South, Magna, Utah 84044, or at such other place as the Manager from time to time may select.

 

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1.9 Member . The name and address of the initial Member is as follows:

Jason T. Kilgore, 7057 West 2100 South, Magna, Utah 84044.

ARTICLE II

CAPITAL CONTRIBUTIONS

2.1 Capitalization . The Member will initially contribute the following assets to the Company’s capital:

2.2 Interests in Capital . The respective interests of the Members in the capital contributions to the Company are as follows:

 

Member

   Interest in Capital  

Jason T. Kilgore

     100

2.3 Additional Contributions . Except as provided herein, no Member shall be obligated to make any additional contribution(s) to the capital of the Company once all contributions have been provided as described above. If additional capital is needed, contributions may be requested upon the consent of the Manager. The Manager may allow additional contributions of capital at any time and in disproportionate amounts by any Member or Members.

2.4 Allocation . In accordance with §704(c) of the Internal Revenue Code (“IRC”) and applicable Treasury Regulations, income, gain, loss and deductions with respect to any property contributed to the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal tax purposes and its fair market value or its adjusted value under IRC §704(c) and applicable Treasury Regulations. Allocations pursuant to this Section 2.3 are solely for purposes of federal and state taxes, as appropriate, and shall not affect, or in any way be taken into account, in computing any Member’s capital account or share of profits, losses, or other items or distributions pursuant to any provision of this Agreement.

2.5 Interest . No interest shall be paid on the capital accounts of the Members.

2.6 Capital Accounts . A separate capital account shall be maintained by the Company for each Member in accordance with IRC §704(b) and Treasury Regulations promulgated thereunder.

(a) Increases . There shall be credited to each Member’s capital account:

 

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  (i) the amount of money contributed by the Member to the Company;

 

  (ii) the fair market value of property contributed by a Member to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under IRC §752); and

 

  (iii) allocations to a Member of Company income and gain (or items thereof), including income and gain exempt from tax and income and gain, as computed for book purposes, in accordance with Treas. Reg. §1.704-1(b)(2)(iv)(g).

(b) Decreases . Each Member’s capital account shall be decreased by:

 

  (i) the amount of money distributed to the Member by the Company;

 

  (ii) the fair market value of property distributed to the Member by the Company (net of liabilities secured by such property that such Member is considered to assume or take pursuant to IRC §752);

 

  (iii) allocations to such Member of expenditures of the Company described in IRC §705(a)(2)(B);

 

  (iv) allocations of Company loss and deduction (or items thereof), including loss of deduction, computed for book, purposes, as described in Treas. Reg. §1.704-1(b)(2)(iv)(g); and

 

  (v) amounts made available for withdrawal by Company (even if not withdrawn by a Member).

2.7 Loans to Company . If any Member shall, with the Manager’s prior consent, make any loan to the Company or advance money on its behalf, the loan or advance shall not increase the lending Member’s capital account, entitle the lending Member to any greater share of Company distributions, or subject the Member to any greater proportion of Company losses. The amount of the loan or advance shall be a debt owed by the Company to the lender Member, repayable on the terms and conditions, and bearing interest at the rate agreed upon between the lending Member and the Manager.

ARTICLE III

PROFITS, LOSSES AND DISTRIBUTIONS

3.1 Profits and Losses . Once capitalized, the Company’s net profits or net losses shall be determined on an annual basis in accordance with generally accepted accounting principles, consistently applied, and shall be allocated to the Members’ capital accounts in proportion to their Sharing Ratios, but taking into account each Member’s varying interests in the Company during the fiscal year. The Sharing Ratio of each Member is set forth below:

 

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Member’s capital account X

100 Total capital accounts

of all Members

“Capital account” is defined in Section 2.6 above.

3.2 Distributions . Annually, or at more frequent intervals, the Manager may, in Manager’s discretion, distribute available funds to the Members in proportion to their Sharing Ratios distributions. “Available funds” for this purpose means the Company’s gross cash receipts, less the Company’s cash expenditures, and less the amount that, in the Manager’s reasonable judgment, the Company should retain in order to fulfill its business purposes. The business purposes shall include the growth and preservation of capital by reinvestment of all profits. The Manager shall have no obligation to make distributions of income.

3.3 No Shift of Recapture Responsibility . In making the allocation among the Members of gain or profit, the ordinary income portion, if any, of such gain or profit caused by the recapture of cost recovery or any other deductions shall be allocated among those Members who were previously allocated the cost recovery or any other deductions in proportion to the amount of such deductions previously allocated to them. It is intended that the Members, as among themselves, shall bear the burden of recapture caused by cost recovery or other deductions which were previously allocated to them, in proportion to the amount of such deductions which have been allocated to them, notwithstanding that a Member’s share of profits, losses or liabilities may increase or decrease from time to time. Nothing in this Article, however, shall cause the Members to be allocated more or less gain or profit than would otherwise be allocated to them pursuant to this Article.

3.4 Loans to Members . The Manager shall have the right to make loans to Members in such amounts and upon such terms as may be determined by the Manager (so long as the loan bears interest at least at the applicable “Federal Rate” determined under the Federal Internal Revenue Code and Regulations). Such loans may be secured or unsecured, but at all times shall be deemed secured by the Member’s interest in Company.

ARTICLE IV

MANAGEMENT

4.1 Members . The liability of Member and other Members that may be subsequently added hereto shall be limited as provided in the Act. The Members shall take no part whatever in the control, management, direction or operation of the Company’s affairs and shall have no power to bind the Company. The Manager may, from time to time, seek advice from the Members on major policy decisions, but the Manager need not accept such advice, and at all times the Manager shall have the exclusive right to control and manage the Company.

4.2 Powers of Manager . The Manager is authorized on the Company’s behalf to make all decisions as to:

(a) the development, sale, lease or other disposition of the Company’s assets;

 

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(b) the purchase or other acquisition of other assets of all kinds;

(c) the management of all or any part of the Company’s assets and business;

(d) the borrowing of money and the granting of security interests in the Company’s assets (including loans from Members);

(e) the prepayment, refinancing or extension of any mortgage affecting the Company’s assets;

(f) the compromise or release of any of the Company’s claims or debts;

(g) the employment of persons, firms or corporations for the operation and management of the business of the Company;

(h) the admittance of new Members to the Company (with concurrence of a majority in profits interest in the Company); and

(i) the increase in interest in Company of any Member.

In exercise of management powers, the Manager is authorized to execute and deliver all contracts, conveyances, assignments, leases, subleases, franchise agreements, licensing agreements, management contracts and maintenance contracts covering or affecting the assets of the Company; all checks, drafts, and other orders for the payment of the Company’s funds; all promissory notes, mortgages, deeds of trust, security agreements and other similar documents; and all other instruments of any kind or charter relating to the Company’s affairs, whether like or unlike the foregoing.

4.3 Nominee . The title for the Company’s assets shall be held in the Company’s name or in the name of any nominee (including a Manager so acting) that the Manager may designate. The Manager shall have the power to enter into a nominee agreement with any such person, and such agreement may contain provisions indemnifying the nominee, except for his willful misconduct.

4.4 Time Devoted to Business . The Manager shall devote such time to the business of the Company as the Manager, in Manager’s discretion, deems necessary for the efficient operation of the Company’s business. The Manager shall at all times be free to engage for the Manager’s own account in all aspects of any business or investment in which the Company is involved.

 

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4.5 Information Relating to Company . Upon request, the Manager shall supply to any Member information regarding the Company or its activities. Each Member or the Member’s authorized representative shall have access to and may inspect and copy all books, records, and materials in the possession of the Manager regarding the Company or its activities. The exercise of the rights contained in this Section 4.5 shall be at the requesting Member’s expense.

4.6 Exculpation . Any act or omission of the Manager, the effect of which may cause or result in loss or damage to the Company or the Members, if done in good faith to promote the best interests of the Company, shall not subject the Manager to any liability to the Members.

4.7 Records at Principal Place of Business . The Manager shall cause the Company to keep at its principal place of business the following:

(a) a current list in alphabetical order of the full name and last known business street address of each Member;

(b) a copy of the stamped Articles of Organization and all certificates of amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate of amendment has been executed;

(c) copies of the Company’s federal, state and local income tax returns and reports, if any, for the three most recent years;

(d) copies of any financial statements of the Company, if any, for the three most recent years; and

(e) unless otherwise set forth in the Articles of Organization, a written statement setting forth:

 

  (i) the amount of cash and a description and statement of the agreed value of the other property or services contributed by each Member and which each Member has agreed to contribute. The value of each such contribution shall be subject to the absolute control and discretion of Manager;

 

  (ii) the times at which, or the events on the happening of which, any additional contributions agreed to be made by each Member are to be made;

 

  (iii) any right of a Member to receive distributions which include a return of all or any part of the Member’s contributions; and

 

  (iv) any event upon the happening of which the Company is to be dissolved and its affairs wound up.

4.8 Manager and Successors . The current Manager of the Company is and shall be Brett E. Cox. Upon the addition of other Members, the Members shall not have the right to remove or replace said Manager except for cause. The Manager need not be a Member of the Company.

 

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ARTICLE V

COMPENSATION

5.1 Reimbursements of Expenses to Manager . The Manager shall be entitled at all times, on demand, to reimbursement from the Company’s funds for Manager’s Reimbursable Expenses. “Reimbursable Expenses”, as that term is used herein, are expenses incurred by the Manager in furthering the Company’s business and for which the Manager has approved reimbursement to be made. Reimbursable Expenses shall have priority over all other distributions to the Members, and if not reimbursed within 30 days after demand, such amounts shall become interest-bearing debts of the Company, payable at a rate and upon terms agreed upon between the creditor/Manager and the Company.

5.2 Fee . In addition to reimbursements under Section 5.1 above, the Manager shall be entitled to be paid reasonable compensation for services in managing the Company’s business and affairs. The Manager shall have discretion to set the amount of the Manager’s Fee and to adjust it from time to time. Since available cash flow may be of concern for the Company from time to time, such fee may be assessed and accrued retroactively by Manager without approval of the Members.

5.3 Accrual . In the event there is insufficient cash available to pay Reimbursable Expenses or fees owed to the Manager, such amounts shall be accrued as payables or indebtedness until such time as cash becomes available for payment of such accrued amounts.

ARTICLE VI

ACCOUNTS

6.1 Books . The Manager shall maintain complete and accurate books of account of the Company’s affairs at the Company’s principal place of business. Such books shall be kept on such method of accounting as Manager may select. The Company’s accounting period shall be the calendar year.

6.2 Reports . The Manager shall close the books of account promptly after the close of each calendar year, and shall prepare and send to each Member a statement of such Member’s distributive share of income and expense for federal income tax reporting purposes.

ARTICLE VII

TRANSFERS OF MEMBER’S INTERESTS

7.0 Purpose . As stated above, Jason T. Kilgore is currently the only Member of the Company. However, to achieve the goals of the Company, it is possible that additional Members may be added. In contemplation of these additional Members, the following provisions for transfers of Member’s interests have been included herein. Until other Members are added to the Company, Member shall not be restricted in any way in the transfer of Member’s interest except as may be provided by law.

 

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7.1 Lifetime Restriction . Except as provided otherwise in this Article VII, and except for transfers to other Members, no Member may, during the Member’s lifetime, sell, assign, transfer, or otherwise encumber any part of the Member’s membership interest which the Member now owns or hereafter acquires.

7.2 Related Parties . At any time, a Member may make an inter vivos transfer of all or part of the Member’s membership interest to a trust or trusts for the benefit of any of the following related parties: Member, Member’s spouse, Member’s children and/or grandchildren. Provided, however, that a Member shall have this right to transfer only if all of the following conditions are met:

(a) The assignor shall state assignor’s intention in the instrument of assignment that the assignee shall become a substituted Member;

(b) The assignor and assignee shall execute such other instruments as the Manager deems necessary or desirable to effect admission of the substituted Member;

(c) The assignee shall execute this Agreement;

(d) The assignee shall bear all reasonable expenses incurred in effecting the substitution;

(e) The Member making the transfer shall remain the Trustee of the Trust to which the conveyance is made, or shall retain the right to revoke or amend the Trust in its entirety; and

(f) The death, divorce, bankruptcy, dissolution, or other event described herein of said Member shall still give rise to purchase rights provided in this Article VII to Company and its Members.

The assignee shall not become a substituted Member (i.e., the assignee shall be entitled to receive only the share of profits or other compensation by way of income and the return of contribution to which the assignor would have been entitled and shall have no right to participate in voting or the management of the business and affairs of the Company) until a majority of the nontransferring Members (voting by profits interest) have consented to the transfer or assignment and the Manager has executed an acceptance with the Member. Further, if such a transfer into trust is made, the Trustee shall be bound as if Trustee were the Member, and unless otherwise agreed upon, in the event of the death, divorce, bankruptcy, or dissolution of the transferring Member, the Trustee shall be bound as if the event affecting the transferor Member had occurred to the transferee Member.

7.3 Right of First Refusal . If at any time a Member receives a bona fide written offer from a third party for the purchase of all or a part of that Member’s membership interest, and if the Member desires to accept the offer, or, if a Member proposes to make any other transfer or gift of the Member’s interest, the Company and the other Members shall have options, as provided in this Section 7.3, to purchase such part of the interest which is the subject of the offer.

 

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(a) Notice . The Member desiring to sell, exchange or transfer the membership (“Seller”) shall give prompt written notice to the Company and the other Members of the offer, and shall attach to Seller’s notice a copy of the written offer, or shall provide notice of the intent to exchange or transfer. Seller shall include in Seller’s notice a statement setting forth the offering price, the identity of the offeror, and all other terms and conditions of the offer or transfer. If the interest is to be exchanged for property other than cash, Seller shall include in Seller’s notice a reasonable dollar value of that property, valued as of the date of the written offer.

(b) Company’s Right . For thirty (30) days after receipt of Seller’s notice, the Company shall have the right to purchase the interest which is the subject of the written offer, either at the same price and upon the same terms and conditions as set forth in the written offer.

(c) Members’ Right . If the Company does not exercise the right to purchase the interest Seller proposes to sell, that same option to purchase, as described in paragraph (b) above, shall be given to the other Members for an additional thirty (30) day period, beginning on the date of expiration of the Company’s option.

In the absence of a unanimous agreement among the Members purchasing the interest (“Purchasing Members”), the interest which is the subject of the written offer shall be divided according to the proportion that each Purchasing Member’s capital account bears to the total of the capital accounts of all Purchasing Members, as of the date Seller sends notice of the written offer; provided, however, that the Purchasing Members may not, in the aggregate, purchase less than the entire interest which is the subject of the written offer received by Seller.

Purchasing Members shall become substituted Members with respect to interests purchased under this paragraph (c), as soon as the purchase has been accomplished according to the terms hereof.

(d) Failure to Exercise . If neither the Company nor the other Members exercise their option to purchase, Seller may sell or exchange Seller’s interest according to the terms and conditions of the written offer Seller received, or the gift or transfer may then be accomplished, provided that such transfer be consummated within thirty (30) days following the expiration of the other Members’ option period. Thereafter, or in the event Seller receives and desires to accept a new written offer, or make any other such transfer, Seller must again give the notice required by paragraph (a) above, and the Company and the other Members shall again have option periods, one following the other, as provided in this Section 7.3.

The purchaser or transferee of Seller’s interest under this paragraph (d) shall not be entitled to become a substituted Member and shall have only a right to receive the income and distributions to which Seller would otherwise have been entitled, unless a majority in profits interest of Members shall approve such action, and the transferee shall execute this Agreement.

(e) Bona Fide Offer . A “bona fide offer”, as that phrase is used herein, means an offer to purchase an interest in Company made by a third party to a Member, or by a Member to another Member, under circumstances in which the Selling Member and the offeror are

 

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negotiating at arms length and under circumstances where they could reasonably achieve a fair market price for the interest. The Selling Member shall have the right to designate in the Notice whether the offer is bona fide or not. If the Selling Member fails to designate the offer as being “bona fide”, then the offer shall be deemed to be bona fide. If the offer is not bona fide, then it is deemed to be an Involuntary Transfer under Section 7.4 of this Agreement. If the offer is not bona fide, then the Selling Member may only complete the transfer to the third party offeror under terms and conditions which are essentially identical to Section 7.4 of this Agreement.

7.4 Involuntary Transfer . In the event a Member’s interest is transferred by operation of law, including, without limitation, execution of judgment, or on the divorce, bankruptcy, or dissolution of the Member, the transferee shall not be entitled to become a substituted Member, and shall only have a right to receive the income and distributions to which the transferor-Member would otherwise have been entitled. Such involuntary transfer shall be considered an offer for sale or transfer as set forth at Section 7.3 herein, and the Company and Members shall have the right to purchase the interest transferred in accordance with the price and terms allowed under Sections 7.6 and 7.7 herein. The Company and the Members shall have the option to purchase the interest as provided under Section 7.3 above, with the first option period beginning the date the Member filing bankruptcy or whose interest is executed upon provides notice thereof similar to the notice required under Section 7.3 above. The Member shall give Company and the other Members notice of the occurrence of bankruptcy or execution upon a judgment or such other involuntary transfer event as soon as it occurs. Failure to provide such notice shall not affect the rights of the Company or the remaining Members who may at any time exercise their rights hereunder, with or without notice. The Company and remaining Members may exercise their rights under this Section even after the date of the involuntary transfer, and any transferee of such interest shall be bound by these provisions.

7.5 Transfers on Death . In the event of the death of any Member, the Company and the remaining Members shall have an absolute right to purchase all, but not less than all, of the deceased Member’s interest, as follows:

(a) Company Right . The Company shall have, for a period of ninety (90) days after appointment of an executor, administrator or personal representative for the deceased Member, an option to purchase the deceased Member’s entire interest in the Company. The Purchase Price and payment terms shall be determined in accordance with Sections 7.6 and 7.7 below.

(b) Members’ Right . If the Company does not exercise the right to purchase the deceased Member’s entire interest by giving notice to the deceased Member’s executor, administrator, or personal representative, in writing, within said 90-day period, the option to purchase shall be given to the remaining Members for an additional thirty (30) day period, beginning on the day that the Company’s right to purchase expires. In the absence of a unanimous agreement among the remaining Members who desire to participate in the exercise of this option (“Purchasing Members”), the interest owned by the deceased Member shall be divided according to the proportion that each Purchasing Member’s capital account bears to the total capital accounts of all of the Purchasing Members, as of the date of the deceased Member’s death; provided, however, that the Purchasing Members may not, in the aggregate, purchase less than the entire interest of the deceased Member. The Purchase Price and payment terms shall be determined in accordance with Sections 7.6 and 7.7 below.

 

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Purchasing Members shall become substituted Members with respect to interests purchased under this paragraph (b).

(c) Failure to Purchase . In the event the option to purchase is not exercised by the Company or the remaining Members as provided above, the assignees of the executor, administrator, or personal representative of the deceased Member shall not be entitled to become substituted Members and shall have only the right to receive the income and distributions to which the deceased Member would otherwise have been entitled.

7.6 Purchase Price . The Purchase Price for a Member’s interest sold by a Member to the Company or to another Member under Sections 7.3 or 7.4, or sold by a deceased Member’s estate under Section 7.5, shall be the fair market value (“FMV”) of the interest, determined as follows:

(a) The Valuation Date for determining FMV shall be the date of the written offer received by Seller in the case of a sale under Section 7.3, the date of exercise of the option to purchase by the Company or the other Members pursuant to Section 7.4, or the date of death of the deceased Member, in the case of a sale by the deceased Member’s estate under Section 7.5.

(b) The Company shall pay for and obtain an appraisal of any real property interests performed by a reputable real estate appraiser (to be selected by the Manager) as of the Valuation Date, and shall determine the market value of all securities owned by Company.

(c) The FMV of the Company shall then be determined by the following formula: Sum of appraised value for real estate, market value for all marketable securities, and book value of all other assets, plus cash on hand at Valuation Date, minus total Company liabilities at Valuation Date.

(d) The Purchase Price of the interest being purchased shall be the product of the percentage of the whole Company assets which the subject interest represents (based upon relative Capital Account balances) as of the Valuation Date, multiplied by the FMV of the Company determined in paragraphs (b) and (c) above. In the case of a purchase under Section 7.4 above, a discount from the FMV shall be applied of Thirty percent (30%). In the case of a purchase under Section 7.5 above, a discount from the FMV shall be applied of Twenty percent (20%).

7.7 Payment and Terms . Payment by the Company or the Members for a sale by a Member under Sections 7.3 or 7.4, or for a sale by a deceased Member’s estate under Section 7.5 shall be made as follows:

(a) Ten percent (10%) of the Purchase Price shall be paid within six (6) months after the Valuation Date defined in Section 7.6(a).

 

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(b) The balance shall be paid in five (5) equal annual installments beginning on the first annual anniversary of the initial payment.

(c) Interest on the unpaid principal balance shall be charged at the Applicable Federal Rate in effect as of the Valuation Date, as the Applicable Federal Rate is defined in §1274 (or a successor provision) of the Internal Revenue Code, compounded semiannually. If there is no Applicable Federal Rate in effect as of the Valuation Date, the interest rate shall be the prime rate in effect on the Valuation Date at Zion’s First National Bank in Salt Lake City, Utah, or its successors. Interest shall begin to accrue after the first payment date, compounded annually. Interest payments shall be made at the time principal payments are made.

7.8 Proration of Gains, etc. for Tax Purposes . In the event of any transfer or assignment of membership interests other than at and as of the close of the Company’s fiscal year, all items of gain, loss, deduction or credit for the entire fiscal year in which the transfer or assignment takes place shall be allocated between the transferor and the transferee (or assignor and assignee) by proration based on the portion of the fiscal year that has elapsed prior to the transfer or assignment, regardless of whether those items have been realized as of the date the transfer or assignment takes place.

7.9 Transfer of Capital Account . Upon the transfer of all or part of an interest in the Company, as permitted herein, the capital account of the transferor that is attributable to the transferred interest shall carry over to the transferee Member.

7.10 Authority of Manager . Upon the terms set forth in this Article VII, the Manager is authorized (a) to admit substitute Members; (b) to exercise the power of attorney granted in Article IX to amend this Operating Agreement or the Articles of Organization to reflect such substitution; and (c) to file any such amendment with the appropriate depositories.

ARTICLE VIII

DISSOLUTION AND TERMINATION

8.1 Final Accounting . In case of the Company’s dissolution, a proper accounting shall be made from the date of the last previous accounting to the date of dissolution.

8.2 Liquidation . Upon the Company’s dissolution, the Manager or, if none, some person selected by a majority in interest of the Members shall act as liquidator to wind up the Company. The liquidator shall have full power and authority to sell, assign and encumber any or all of the Company’s assets and to wind up and liquidate the Company’s affairs in an orderly and prudent manner. The liquidator shall distribute all proceeds from liquidation to the Members in proportion to their Sharing Ratios, as of the date of distribution, as determined after taking into account all capital account adjustments for the Company’s taxable year during which such liquidation occurs.

If a Member has a deficit balance in his capital account following the liquidation of his interest in the Company, as determined after taking into account all capital account adjustments for the Company’s taxable year during which such liquidation occurs, he shall be unconditionally

 

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obligated to restore the amount of such deficit balance to the Company by the end of such taxable year (or, if later, within 90 days after the date of such liquidation), which amount shall, upon liquidation of the Company, be paid to creditors of the Company or distributed to other Members in accordance with their positive capital account balances, as required above.

8.3 Distribution in Kind . If the liquidator shall determine that a portion of the Company’s assets should be distributed in kind to the Members, the liquidator shall distribute such assets to them in undivided interests as tenants in common in proportion to their Sharing Ratios.

8.4 Articles of Dissolution . Upon the completion of the distribution of Company assets, the Company shall be terminated and the Members shall cause the Company to execute Articles of Dissolution and take such other actions as may be necessary to terminate the Company.

ARTICLE IX

POWERS OF ATTORNEY

9.1 Appointment of Manager . The Member, and any subsequent Member added hereto, by execution hereof, does irrevocably constitute and appoint the Manager, with full power of substitution, as the Member’s true and lawful attorney, in Member’s name, place and stead, to file Articles of Organization with the appropriate depositories and to execute, acknowledge, swear to and file (a) all amendments to this Operating Agreement or to the Articles of Organization required by law or authorized or required by the provisions of this Operating Agreement or the Articles of Organization; (b) all certificates and other instruments necessary to qualify or continue the Company as a limited liability company wherein the Members have limited liability in the states where the Company may be doing business; and, (c) all conveyances and other instruments necessary to effect the Company’s dissolution and termination.

9.2 Irrevocable . The powers of attorney granted herein shall be deemed to be coupled with an interest and shall be irrevocable and survive the death, bankruptcy, dissolution, or incompetency of the Members. In the event of any conflict between this Operating Agreement and any instruments filed by such attorney pursuant to the power of attorney granted in this section, this Operating Agreement shall control.

ARTICLE X

AMENDMENT TO AGREEMENT

Amendments to this Operating Agreement and to the Articles of Organization may be proposed to the Members by the Manager or any Member. The Manager shall submit to the Members any such proposed amendment and the recommendation of the Manager as to its adoption. A proposed amendment shall become effective at such time as it has been approved in writing by a majority in capital interest of Members.

 

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ARTICLE XI

NOTICES

11.1 Method for Notices . All mailed notices hereunder shall be sent by first class mail, postage prepaid, and addressed as set forth in Section 1.10 above (except that any Member may from time to time give notice changing address for such purpose), or may be sent registered or certified mail, and shall be effective on the date of receipt or upon the fifth day after mailing, whichever is earlier. Notices may also be delivered in person and by facsimile. If delivered by facsimile transmission, then they shall be deemed received if the person to whom sent actually received the facsimile transmission at their office or residence (as the case may be) before 5:00 p.m. on a business day when said person is present at such office or home where sent. If received after the applicable time or on a weekend or holiday, the notice is deemed received on the next business day.

11.2 Computation of Time . In computing any period of time under this Operating Agreement, the day of the act, event or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or legal holiday, in which event the period shall run until five o’clock p.m. of the next day which is not a Saturday, Sunday or legal holiday.

ARTICLE XII

GENERAL PROVISIONS

12.1 Entire Agreement . This Operating Agreement (a) contains the entire agreement among the parties; (b) except as provided in Article X, may not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (c) shall be construed in accordance with, and governed by, the laws of the State of Utah; and (d) shall be binding upon and shall inure to the benefit of the parties, and their respective personal representatives, successors and assigns, except as set forth above.

12.2 Construction Principles . Words in any gender shall be deemed to include the other gender. The singular shall be deemed to include the plural and vice versa. The headings and underlined paragraph titles are for guidance only and shall have no significance in the interpretation of this Operating Agreement.

12.3 Severance Clause . The invalidity or unenforceability of any part of this Agreement shall not invalidate or affect the remainder, which shall continue to govern the relative rights and duties of the parties as though the invalid or unenforceable part were not a part hereof.

12.4 Attorney Fees . In the event any Member or the Company shall breach this Agreement, the nonbreaching parties shall be entitled to recover from the breaching party all attorney fees and costs incurred in enforcing this Agreement, with or without suit.

 

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IN WITNESS WHEREOF, the Member and Manager have signed this Operating Agreement on the respective dates set forth below to be effective as of the date first written above.

 

MEMBER:
/s/ Jason T. Kilgore
Jason T. Kilgore

 

MANAGER:
/s/ Jason T. Kilgore
Jason T. Kilgore

 

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Exhibit 3.70

ARTICLES OF ORGANIZATION

OF

KILGORE TRUCKING, LLC

THE UNDERSIGNED, as the sole initial member of the above-named limited liability company, and acting pursuant to the Utah Limited Liability Company Act, hereby adopts the following Articles of Organization in formation of a limited liability company:

ARTICLE I

COMPANY NAME

The name of this limited liability company is Kilgore Trucking, LLC.

ARTICLE II

DURATION OF COMPANY

The company is to exist for a period of ninety-nine (99) years from the date of filing of these Articles of Organization with the Division of Corporations and Commercial Code of the Utah Department of Commerce.

ARTICLE III

COMPANY PURPOSES

The business purpose and object for which this company is organized shall be to conduct any or all lawful business for which limited liability companies may be organized, including, but not limited to, the following:

(a) To acquire, own, hold, lease, mortgage, operate, maintain, sell, dispose of, rent and otherwise deal with personal property, equipment, machines, trucks, automobiles, fork lifts, delivery vehicles, computers, printers and other personal property.

(b) To acquire, own, hold, improve, develop, lease, mortgage, operate, maintain, sell, dispose of, and otherwise deal with real property and any equipment, fixtures, or other personal property that may be used in connection with the operation of real property or business of the company.

(c) Investments of all types.

(d) To acquire, own, hold, use and employ, sell, lease, exchange, transfer and otherwise dispose of, mortgage, lend, pledge and otherwise deal in and with securities of any persons, domestic and foreign firms, associations and corporations, and any government or agency or instrumentality thereof; and while owner of such securities, to exercise any and all rights, powers and privileges in respect thereof.


(e) To acquire by purchase, exchange, lease, hire or otherwise, real property of every kind, character and description whatever, wherever located, and interests of all kinds therein, and (i) to hold, own, develop, improve, manage, operate, let as lessor or sublessor, and mortgage such property; (ii) to sell and exchange such property and interests therein; (iii) to obtain, use, dispose of and deal in and with such property in every other manner, either alone or in conjunction with others, as partners, joint venturers or otherwise; and, (iv) to carry on the business of managing agent, broker, finder, consultant and all other functions in connection therewith.

(f) To transact any and all other businesses for which limited liability companies may be formed under Utah law.

(g) To do each and every thing necessary, suitable, or proper for the accomplishment of any of the purposes or the attainment of any one or more of the objects herein enumerated, or which may at any time appear conducive to or expedient for the protection or benefit of this company, and to do said acts as fully and to the same extent as natural persons might, or could do, in any part of the world as principals, agents, partners, trustees, or otherwise, either along or in conjunction with any other person, limited liability company, partnership (whether limited or general and whether as limited or general partners), association, joint venture, or corporation.

The foregoing paragraphs shall be construed both as objects and powers and shall not be held to limit or restrict in any manner the general powers of the company and the enjoyment and exercise thereof, as conferred by the laws of the State of Utah; and it is intended that the purposes, objects, and powers specified in each of the paragraphs of this ARTICLE III, COMPANY PURPOSES, of these Articles of Organization shall be regarded as independent purposes, objects, and powers.

ARTICLE IV

INITIAL DESIGNATED OFFICE, REGISTERED OFFICE AND AGENT

The address of this corporation’s initial designated office, registered office and the name of its initial registered agent at such address is:

Graden P. Jackson

Strong & Hanni

9 Exchange Place

Sixth Floor, Boston Bldg.

Salt Lake City, Utah 84111

The Division of Corporations and Commercial Code of the Utah Department of Commerce is hereby appointed as the agent of this company for service of process in the event of the resignation of the above agent, or revocation of said agent’s authority, or if said agent cannot be found or served with the exercise of reasonable diligence.

 

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ARTICLE VIII

MANAGER

The company will be managed by a its member, as provided in an Operating Agreement to be executed by the members. The initial member manager shall be Jason Kilgore, who shall serve as manager until its successor is elected and qualified in accordance with the terms and provisions of the Operating Agreement in accordance with the terms of the Operating Agreement to be adopted by the members. If Jason Kilgore dies while being the sole member of Company, the estate of Jason Kilgore shall automatically become the sole member and manager of Company. The business address of said manager is as follows:

1655 W. 1900 N.

Salt Lake City, UT 84116

ARTICLE IX

MEMBERS’ CONTRACTS

No contracts or other transactions between the company and any other entity shall in any way be affected or invalidated by the fact that any of the members of the company are pecuniarily or otherwise interested in, or are members, trustees, partners, directors or officers of such other entity.

Any member individually, or any entity with which any member may be associated, may be a party to or may be pecuniarily or otherwise interested in, any contracts or transactions of the company, provided that the fact that such member or such trust, organization or corporation is so interested shall be disclosed to or shall have been known by the members or a majority thereof.

ARTICLE XI

OPERATING AGREEMENT

The members of the company shall have the right to enter into an Operating Agreement to regulate and manage the affairs of the company in any manner not inconsistent with law or these articles. The power to adopt, alter, amend or repeal the Operating Agreement shall be vested in the members.

ARTICLE XII

DEATH OF SOLE MEMBER

If Jason Kilgore dies while being the sole member of Company, the estate of Jason Kilgore shall automatically become the sole member and manager of Company, such that the death of the sole member shall not cause the automatic dissolution of Company. As provided in the Operating Agreement, the estate shall automatically become a party to the Operating Agreement and the Operating Agreement shall continue to govern the regulation and management of the affairs of the Company so long as the same is not inconsistent with law or these articles. The power to adopt, alter, amend or repeal the Operating Agreement shall continue to be vested in the members.

 

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DATED this 28 th day of January, 2003.

 

REGISTERED AGENT:     MEMBER:
/s/ Graden P. Jackson     /s/ Jason Kilgore
Graden P. Jackson     Jason Kilgore, Managing Member

 

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Exhibit 3.71

OPERATING AGREEMENT

FOR

KILGORE TRUCKING, LLC

THIS OPERATING AGREEMENT (the “Agreement”) is made and entered into effective as of the 1st day of February, 2003 by Jason T. Kilgore, (hereinafter referred to as “Member”), as the sole Member of Company.

ARTICLE I

THE LIMITED LIABILITY COMPANY

1.1 Organization . Member hereby organizes the limited liability company, Kilgore Trucking, LLC, (the “Company”), subject to the provisions of the Utah Limited Liability Company Act as amended from time to time (the “Act”). It is the desire and intent of the Member that this entity be ignored for income tax purposes.

The Company shall be a single member, manager-managed limited liability company. It is anticipated, however, that the addition of another Member or Members may be important to meet the objectives of the Company. Therefore, this Agreement is created with the perspective that an additional Member or Members may be added. All references to the plural “Members” in this Agreement shall not limit in any way the right and authority of Member to act as the sole Member or manager unless and until another member or members are added hereto. If another Member of Members are added, Member shall only be limited by the provisions of this Agreement.

Member desires to organize a limited liability company pursuant to the laws of the State of Utah. Accordingly, in consideration of the mutual covenants contained herein, and Member certifies as follows:

1.2 Filing . In connection with the execution of this Operating Agreement, Member shall cause Articles of Organization that comply with the requirements of the Act to be properly filed with the Utah Division of Corporations and Commercial Code, and shall execute such further documents (including amendments to the Articles of Organization) and take such further action as is appropriate to comply with the requirements of law for the formation or operation of a limited liability company in all states and counties where the Company may conduct its business.

1.3 Name . The name of the Company shall be Kilgore Trucking, LLC.

1.4 Registered Office, Registered Agent . The location of the registered office of the Company shall be 3 Triad Center, Suite 500, Salt Lake City, Utah 84180, and thereafter at such other location as the Member may designate. The Company’s registered agent at such address shall be Graden P. Jackson.


1.5 Events of Dissolution . The Company shall continue for a period of ninety-nine (99) years from the date of the filing of its Articles of Organization with the State of Utah, unless sooner dissolved by:

(a) the vote of a majority in profits interest of the Members;

(b) the Manager may elect to dissolve the Company; or

(c) any event which makes it unlawful for the business of the Company to be carried on by the Members.

1.6 Management of Business . The management of the business of the Company shall be managed by a Manager, pursuant to the provisions of Article IV below. The name and place of business of the initial Manager of the Company is as follows: Jason T. Kilgore, 7057 West 2100 South, Magna, Utah 84044.

The above Manager shall serve until its successor is appointed according to this Agreement. Management is not reserved to the Members.

1.7 Character of Business . The business of the Company shall be any and all lawful business, including, but not limited to:

(a) To acquire by purchase, exchange, lease, hire or otherwise, real property of every kind, character and description whatever, wherever located, and interests of all kinds therein, and (i) to hold, own, develop, improve, manage, operate, let as lessor or sublessor, and mortgage such property; (ii) to sell and exchange such property and interests therein; (iii) to obtain, use, dispose of and deal in and with such property in every other manner, either alone or in conjunction with others, as partners, joint venturers or otherwise; and, (iv) to carry on the business of managing agent, broker, finder, consultant and all other functions in connection therewith.

(b) To acquire, own, hold, use and employ, sell, lease, exchange, transfer and otherwise dispose of, mortgage, lend, pledge and otherwise deal in and with securities of any persons, domestic and foreign firms, associations and corporations, and any government or agency or instrumentality thereof; and while owner of such securities, to exercise any and all rights, powers and privileges in respect thereof.

(c) To transact any and all other businesses for which limited liability companies may be formed under Utah law.

(d) To accomplish any of the foregoing purposes for its own account or as nominee, agent or trustee for others.

1.8 Principal Place of Business . The location of the principal place of business of the Company shall initially be at 7057 West 2100 South, Magna, Utah 84044, or at such other place as the Manager from time to time may select.

 

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1.9 Member . The name and address of the initial Member is as follows:

Jason T. Kilgore, 7057 West 2100 South, Magna, Utah 84044.

ARTICLE II

CAPITAL CONTRIBUTIONS

2.1 Capitalization . The Member will initially contribute the following assets to the Company’s capital:

2.2 Interests in Capital . The respective interests of the Members in the capital contributions to the Company are as follows:

 

Member

   Interest in Capital  

Jason T. Kilgore

     100

2.3 Additional Contributions . Except as provided herein, no Member shall be obligated to make any additional contribution(s) to the capital of the Company once all contributions have been provided as described above. If additional capital is needed, contributions may be requested upon the consent of the Manager. The Manager may allow additional contributions of capital at any time and in disproportionate amounts by any Member or Members.

2.4 Allocation . In accordance with §704(c) of the Internal Revenue Code (“IRC”) and applicable Treasury Regulations, income, gain, loss and deductions with respect to any property contributed to the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal tax purposes and its fair market value or its adjusted value under IRC §704(c) and applicable Treasury Regulations. Allocations pursuant to this Section 2.3 are solely for purposes of federal and state taxes, as appropriate, and shall not affect, or in any way be taken into account, in computing any Member’s capital account or share of profits, losses, or other items or distributions pursuant to any provision of this Agreement.

2.5 Interest . No interest shall be paid on the capital accounts of the Members.

2.6 Capital Accounts . A separate capital account shall be maintained by the Company for each Member in accordance with IRC §704(b) and Treasury Regulations promulgated thereunder.

(a) Increases . There shall be credited to each Member’s capital account:

 

  (i) the amount of money contributed by the Member to the Company;

 

  (ii) the fair market value of property contributed by a Member to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under IRC §752); and

 

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  (iii) allocations to a Member of Company income and gain (or items thereof), including income and gain exempt from tax and income and gain, as computed for book purposes, in accordance with Treas. Reg. §1.704-1(b)(2)(iv)(g).

(b) Decreases . Each Member’s capital account shall be decreased by:

 

  (i) the amount of money distributed to the Member by the Company;

 

  (ii) the fair market value of property distributed to the Member by the Company (net of liabilities secured by such property that such Member is considered to assume or take pursuant to IRC §752);

 

  (iii) allocations to such Member of expenditures of the Company described in IRC §705(a)(2)(B);

 

  (iv) allocations of Company loss and deduction (or items thereof), including loss of deduction, computed for book purposes, as described in Treas. Reg. §1.704-1(b)(2)(iv)(g); and

 

  (v) amounts made available for withdrawal by Company (even if not withdrawn by a Member).

2.7 Loans to Company . If any Member shall, with the Manager’s prior consent, make any loan to the Company or advance money on its behalf, the loan or advance shall not increase the lending Member’s capital account, entitle the lending Member to any greater share of Company distributions, or subject the Member to any greater proportion of Company losses. The amount of the loan or advance shall be a debt owed by the Company to the lender Member, repayable on the terms and conditions, and bearing interest at the rate agreed upon between the lending Member and the Manager.

ARTICLE III

PROFITS, LOSSES AND DISTRIBUTIONS

3.1 Profits and Losses . Once capitalized, the Company’s net profits or net losses shall be determined on an annual basis in accordance with generally accepted accounting principles, consistently applied, and shall be allocated to the Members’ capital accounts in proportion to their Sharing Ratios, but taking into account each Member’s varying interests in the Company during the fiscal year. The Sharing Ratio of each Member is set forth below:

Member’s capital account X 100

Total capital accounts

of all Members

 

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“Capital account” is defined in Section 2.6 above.

3.2 Distributions . Annually, or at more frequent intervals, the Manager may, in Manager’s discretion, distribute available funds to the Members in proportion to their Sharing Ratios distributions. “Available funds” for this purpose means the Company’s gross cash receipts, less the Company’s cash expenditures, and less the amount that, in the Manager’s reasonable judgment, the Company should retain in order to fulfill its business purposes. The business purposes shall include the growth and preservation of capital by reinvestment of all profits. The Manager shall have no obligation to make distributions of income.

3.3 No Shift of Recapture Responsibility . In making the allocation among the Members of gain or profit, the ordinary income portion, if any, of such gain or profit caused by the recapture of cost recovery or any other deductions shall be allocated among those Members who were previously allocated the cost recovery or any other deductions in proportion to the amount of such deductions previously allocated to them. It is intended that the Members, as among themselves, shall bear the burden of recapture caused by cost recovery or other deductions which were previously allocated to them, in proportion to the amount of such deductions which have been allocated to them, notwithstanding that a Member’s share of profits, losses or liabilities may increase or decrease from time to time. Nothing in this Article, however, shall cause the Members to be allocated more or less gain or profit than would otherwise be allocated to them pursuant to this Article.

3.4 Loans to Members . The Manager shall have the right to make loans to Members in such amounts and upon such terms as may be determined by the Manager (so long as the loan bears interest at least at the applicable “Federal Rate” determined under the Federal Internal Revenue Code and Regulations). Such loans may be secured or unsecured, but at all times shall be deemed secured by the Member’s interest in Company.

ARTICLE IV

MANAGEMENT

4.1 Members . The liability of Member and other Members that may be subsequently added hereto shall be limited as provided in the Act. The Members shall take no part whatever in the control, management, direction or operation of the Company’s affairs and shall have no power to bind the Company. The Manager may, from time to time, seek advice from the Members on major policy decisions, but the Manager need not accept such advice, and at all times the Manager shall have the exclusive right to control and manage the Company.

4.2 Powers of Manager . The Manager is authorized on the Company’s behalf to make all decisions as to:

(a) the development, sale, lease or other disposition of the Company’s assets;

(b) the purchase or other acquisition of other assets of all kinds;

(c) the management of all or any part of the Company’s assets and business;

 

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(d) the borrowing of money and the granting of security interests in the Company’s assets (including loans from Members);

(e) the prepayment, refinancing or extension of any mortgage affecting the Company’s assets;

(f) the compromise or release of any of the Company’s claims or debts;

(g) the employment of persons, firms or corporations for the operation and management of the business of the Company;

(h) the admittance of new Members to the Company (with concurrence of a majority in profits interest in the Company); and

(i) the increase in interest in Company of any Member.

In exercise of management powers, the Manager is authorized to execute and deliver all contracts, conveyances, assignments, leases, subleases, franchise agreements, licensing agreements, management contracts and maintenance contracts covering or affecting the assets of the Company; all checks, drafts, and other orders for the payment of the Company’s funds; all promissory notes, mortgages, deeds of trust, security agreements and other similar documents; and all other instruments of any kind or charter relating to the Company’s affairs, whether like or unlike the foregoing.

4.3 Nominee . The title for the Company’s assets shall be held in the Company’s name or in the name of any nominee (including a Manager so acting) that the Manager may designate. The Manager shall have the power to enter into a nominee agreement with any such person, and such agreement may contain provisions indemnifying the nominee, except for his willful misconduct.

4.4 Time Devoted to Business . The Manager shall devote such time to the business of the Company as the Manager, in Manager’s discretion, deems necessary for the efficient operation of the Company’s business. The Manager shall at all times be free to engage for the Manager’s own account in all aspects of any business or investment in which the Company is involved.

4.5 Information Relating to Company . Upon request, the Manager shall supply to any Member information regarding the Company or its activities. Each Member or the Member’s authorized representative shall have access to and may inspect and copy all books, records, and materials in the possession of the Manager regarding the Company or its activities. The exercise of the rights contained in this Section 4.5 shall be at the requesting Member’s expense.

4.6 Exculpation . Any act or omission of the Manager, the effect of which may cause or result in loss or damage to the Company or the Members, if done in good faith to promote the best interests of the Company, shall not subject the Manager to any liability to the Members.

 

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4.7 Records at Principal Place of Business . The Manager shall cause the Company to keep at its principal place of business the following:

(a) a current list in alphabetical order of the full name and last known business street address of each Member;

(b) a copy of the stamped Articles of Organization and all certificates of amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate of amendment has been executed;

(c) copies of the Company’s federal, state and local income tax returns and reports, if any, for the three most recent years;

(d) copies of any financial statements of the Company, if any, for the three most recent years; and

(e) unless otherwise set forth in the Articles of Organization, a written statement setting forth:

 

  (i) the amount of cash and a description and statement of the agreed value of the other property or services contributed by each Member and which each Member has agreed to contribute. The value of each such contribution shall be subject to the absolute control and discretion of Manager;

 

  (ii) the times at which, or the events on the happening of which, any additional contributions agreed to be made by each Member are to be made;

 

  (iii) any right of a Member to receive distributions which include a return of all or any part of the Member’s contributions; and

 

  (iv) any event upon the happening of which the Company is to be dissolved and its affairs wound up.

4.8 Manager and Successors . The current Manager of the Company is and shall be Brett E. Cox. Upon the addition of other Members, the Members shall not have the right to remove or replace said Manager except for cause. The Manager need not be a Member of the Company.

ARTICLE V

COMPENSATION

5.1 Reimbursements of Expenses to Manager . The Manager shall be entitled at all times, on demand, to reimbursement from the Company’s funds for Manager’s Reimbursable Expenses. “Reimbursable Expenses”, as that term is used herein, are expenses incurred by the

 

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Manger in furthering the Company’s business and for which the Manager has approved reimbursement to be made. Reimbursable Expenses shall have priority over all other distributions to the Members, and if not reimbursed within 30 days after demand, such amounts shall become interest-bearing debts of the Company, payable at a rate and upon terms agreed upon between the creditor/Manager and the Company.

5.2 Fee . In addition to reimbursements under Section 5.1 above, the Manager shall be entitled to be paid reasonable compensation for services in managing the Company’s business and affairs. The Manager shall have discretion to set the amount of the Manager’s Fee and to adjust it from time to time. Since available cash flow may be of concern for the Company from time to time, such fee may be assessed and accrued retroactively by Manager without approval of the Members.

5.3 Accrual . In the event there is insufficient cash available to pay Reimbursable Expenses or fees owed to the Manager, such amounts shall be accrued as payables or indebtedness until such time as cash becomes available for payment of such accrued amounts.

ARTICLE VI

ACCOUNTS

6.1 Books . The Manager shall maintain complete and accurate books of account of the Company’s affairs at the Company’s principal place of business. Such books shall be kept on such method of accounting as Manager may select. The Company’s accounting period shall be the calendar year.

6.2 Reports . The Manager shall close the books of account promptly after the close of each calendar year, and shall prepare and send to each Member a statement of such Member’s distributive share of income and expense for federal income tax reporting purposes.

ARTICLE VII

TRANSFERS OF MEMBER’S INTERESTS

7.0 Purpose . As stated above, Jason T. Kilgore is currently the only Member of the Company. However, to achieve the goals of the Company, it is possible that additional Members may be added. In contemplation of these additional Members, the following provisions for transfers of Member’s interests have been included herein. Until other Members are added to the Company, Member shall not be restricted in any way in the transfer of Member’s interest except as may be provided by law.

7.1 Lifetime Restriction . Except as provided otherwise in this Article VII, and except for transfers to other Members, no Member may, during the Member’s lifetime, sell, assign, transfer, or otherwise encumber any part of the Member’s membership interest which the Member now owns or hereafter acquires.

 

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7.2 Related Parties . At any time, a Member may make an inter vivos transfer of all or part of the Member’s membership interest to a trust or trusts for the benefit of any of the following related parties: Member, Member’s spouse, Member’s children and/or grandchildren. Provided, however, that a Member shall have this right to transfer only if all of the following conditions are met:

(a) The assignor shall state assignor’s intention in the instrument of assignment that the assignee shall become a substituted Member;

(b) The assignor and assignee shall execute such other instruments as the Manager deems necessary or desirable to effect admission of the substituted Member;

(c) The assignee shall execute this Agreement;

(d) The assignee shall bear all reasonable expenses incurred in effecting the substitution;

(e) The Member making the transfer shall remain the Trustee of the Trust to which the conveyance is made, or shall retain the right to revoke or amend the Trust in its entirety; and

(f) The death, divorce, bankruptcy, dissolution, or other event described herein of said Member shall still give rise to purchase rights provided in this Article VII to Company and its Members.

The assignee shall not become a substituted Member (i.e., the assignee shall be entitled to receive only the share of profits or other compensation by way of income and the return of contribution to which the assignor would have been entitled and shall have no right to participate in voting or the management of the business and affairs of the Company) until a majority of the nontransferring Members (voting by profits interest) have consented to the transfer or assignment and the Manager has executed an acceptance with the Member. Further, if such a transfer into trust is made, the Trustee shall be bound as if Trustee were the Member, and unless otherwise agreed upon, in the event of the death, divorce, bankruptcy, or dissolution of the transferring Member, the Trustee shall be bound as if the event affecting the transferor Member had occurred to the transferee Member.

7.3 Right of First Refusal . If at any time a Member receives a bona fide written offer from a third party for the purchase of all or a part of that Member’s membership interest, and if the Member desires to accept the offer, or, if a Member proposes to make any other transfer or gift of the Member’s interest, the Company and the other Members shall have options, as provided in this Section 7.3, to purchase such part of the interest which is the subject of the offer.

(a) Notice . The Member desiring to sell, exchange or transfer the membership (“Seller”) shall give prompt written notice to the Company and the other Members of the offer, and shall attach to Seller’s notice a copy of the written offer, or shall provide notice of the intent to exchange or transfer. Seller shall include in Seller’s notice a statement setting forth the offering price, the identity of the offeror, and all other terms and conditions of the offer or transfer. If the interest is to be exchanged for property other than cash, Seller shall include in Seller’s notice a reasonable dollar value of that property, valued as of the date of the written offer.

 

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(b) Company’s Right . For thirty (30) days after receipt of Seller’s notice, the Company shall have the right to purchase the interest which is the subject of the written offer, either at the same price and upon the same terms and conditions as set forth in the written offer.

(c) Members’ Right . If the Company does not exercise the right to purchase the interest Seller proposes to sell, that same option to purchase, as described in paragraph (b) above, shall be given to the other Members for an additional thirty (30) day period, beginning on the date of expiration of the Company’s option.

In the absence of a unanimous agreement among the Members purchasing the interest (“Purchasing Members”), the interest which is the subject of the written offer shall be divided according to the proportion that each Purchasing Member’s capital account bears to the total of the capital accounts of all Purchasing Members, as of the date Seller sends notice of the written offer; provided, however, that the Purchasing Members may not, in the aggregate, purchase less than the entire interest which is the subject of the written offer received by Seller.

Purchasing Members shall become substituted Members with respect to interests purchased under this paragraph (c), as soon as the purchase has been accomplished according to the terms hereof.

(d) Failure to Exercise . If neither the Company nor the other Members exercise their option to purchase, Seller may sell or exchange Seller’s interest according to the terms and conditions of the written offer Seller received, or the gift or transfer may then be accomplished, provided that such transfer be consummated within thirty (30) days following the expiration of the other Members’ option period. Thereafter, or in the event Seller receives and desires to accept a new written offer, or make any other such transfer, Seller must again give the notice required by paragraph (a) above, and the Company and the other Members shall again have option periods, one following the other, as provided in this Section 7.3.

The purchaser or transferee of Seller’s interest under this paragraph (d) shall not be entitled to become a substituted Member and shall have only a right to receive the income and distributions to which Seller would otherwise have been entitled, unless a majority in profits interest of Members shall approve such action, and the transferee shall execute this Agreement.

(e) Bona Fide Offer . A “bona fide offer”, as that phrase is used herein, means an offer to purchase an interest in Company made by a third party to a Member, or by a Member to another Member, under circumstances in which the Selling Member and the offeror are negotiating at arms length and under circumstances where they could reasonably achieve a fair market price for the interest. The Selling Member shall have the right to designate in the Notice whether the offer is bona fide or not. If the Selling Member fails to designate the offer as being “bona fide”, then the offer shall be deemed to be bona fide. If the offer is not bona fide, then it is deemed to be an Involuntary Transfer under Section 7.4 of this Agreement. If the offer is not bona fide, then the Selling Member may only complete the transfer to the third party offeror under terms and conditions which are essentially identical to Section 7.4 of this Agreement.

 

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7.4 Involuntary Transfer . In the event a Member’s interest is transferred by operation of law, including, without limitation, execution of judgment, or on the divorce, bankruptcy, or dissolution of the Member, the transferee shall not be entitled to become a substituted Member, and shall only have a right to receive the income and distributions to which the transferor-Member would otherwise have been entitled. Such involuntary transfer shall be considered an offer for sale or transfer as set forth at Section 7.3 herein, and the Company and Members shall have the right to purchase the interest transferred in accordance with the price and terms allowed under Sections 7.6 and 7.7 herein. The Company and the Members shall have the option to purchase the interest as provided under Section 7.3 above, with the first option period beginning the date the Member filing bankruptcy or whose interest is executed upon provides notice thereof similar to the notice required under Section 7.3 above. The Member shall give Company and the other Members notice of the occurrence of bankruptcy or execution upon a judgment or such other involuntary transfer event as soon as it occurs. Failure to provide such notice shall not affect the rights of the Company or the remaining Members who may at any time exercise their rights hereunder, with or without notice. The Company and remaining Members may exercise their rights under this Section even after the date of the involuntary transfer, and any transferee of such interest shall be bound by these provisions.

7.5 Transfers on Death . In the event of the death of any Member, the Company and the remaining Members shall have an absolute right to purchase all, but not less than all, of the deceased Member’s interest, as follows:

(a) Company Right . The Company shall have, for a period of ninety (90) days after appointment of an executor, administrator or personal representative for the deceased Member, an option to purchase the deceased Member’s entire interest in the Company. The Purchase Price and payment terms shall be determined in accordance with Sections 7.6 and 7.7 below.

(b) Members’ Right . If the Company does not exercise the right to purchase the deceased Member’s entire interest by giving notice to the deceased Member’s executor, administrator, or personal representative, in writing, within said 90-day period, the option to purchase shall be given to the remaining Members for an additional thirty (30) day period, beginning on the day that the Company’s right to purchase expires. In the absence of a unanimous agreement among the remaining Members who desire to participate in the exercise of this option (“Purchasing Members”), the interest owned by the deceased Member shall be divided according to the proportion that each Purchasing Member’s capital account bears to the total capital accounts of all of the Purchasing Members, as of the date of the deceased Member’s death; provided, however, that the Purchasing Members may not, in the aggregate, purchase less than the entire interest of the deceased Member. The Purchase Price and payment terms shall be determined in accordance with Sections 7.6 and 7.7 below.

Purchasing Members shall become substituted Members with respect to interests purchased under this paragraph (b).

 

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(c) Failure to Purchase . In the event the option to purchase is not exercised by the Company or the remaining Members as provided above, the assignees of the executor, administrator, or personal representative of the deceased Member shall not be entitled to become substituted Members and shall have only the right to receive the income and distributions to which the deceased Member would otherwise have been entitled.

7.6 Purchase Price . The Purchase Price for a Member’s interest sold by a Member to the Company or to another Member under Sections 7.3 or 7.4, or sold by a deceased Member’s estate under Section 7.5, shall be the fair market value (“FMV”) of the interest, determined as follows:

(a) The Valuation Date for determining FMV shall be the date of the written offer received by Seller in the case of a sale under Section 7.3, the date of exercise of the option to purchase by the Company or the other Members pursuant to Section 7.4, or the date of death of the deceased Member, in the case of a sale by the deceased Member’s estate under Section 7.5.

(b) The Company shall pay for and obtain an appraisal of any real property interests performed by a reputable real estate appraiser (to be selected by the Manager) as of the Valuation Date, and shall determine the market value of all securities owned by Company.

(c) The FMV of the Company shall then be determined by the following formula: Sum of appraised value for real estate, market value for all marketable securities, and book value of all other assets, plus cash on hand at Valuation Date, minus total Company liabilities at Valuation Date.

(d) The Purchase Price of the interest being purchased shall be the product of the percentage of the whole Company assets which the subject interest represents (based upon relative Capital Account balances) as of the Valuation Date, multiplied by the FMV of the Company determined in paragraphs (b) and (c) above. In the case of a purchase under Section 7.4 above, a discount from the FMV shall be applied of Thirty percent (30%). In the case of a purchase under Section 7.5 above, a discount from the FMV shall be applied of Twenty percent (20%).

7.7 Payment and Terms . Payment by the Company or the Members for a sale by a Member under Sections 7.3 or 7.4, or for a sale by a deceased Member’s estate under Section 7.5 shall be made as follows:

(a) Ten percent (10%) of the Purchase Price shall be paid within six (6) months after the Valuation Date defined in Section 7.6(a).

(b) The balance shall be paid in five (5) equal annual installments beginning on the first annual anniversary of the initial payment.

(c) Interest on the unpaid principal balance shall be charged at the Applicable Federal Rate in effect as of the Valuation Date, as the Applicable Federal Rate is defined in §1274 (or a successor provision) of the Internal Revenue Code, compounded semiannually. If

 

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there is no Applicable Federal Rate in effect as of the Valuation Date, the interest rate shall be the prime rate in effect on the Valuation Date at Zion’s First National Bank in Salt Lake City, Utah, or its successors. Interest shall begin to accrue after the first payment date, compounded annually. Interest payments shall be made at the time principal payments are made.

7.8 Proration of Gains, etc. for Tax Purposes . In the event of any transfer or assignment of membership interests other than at and as of the close of the Company’s fiscal year, all items of gain, loss, deduction or credit for the entire fiscal year in which the transfer or assignment takes place shall be allocated between the transferor and the transferee (or assignor and assignee) by proration based on the portion of the fiscal year that has elapsed prior to the transfer or assignment, regardless of whether those items have been realized as of the date the transfer or assignment takes place.

7.9 Transfer of Capital Account . Upon the transfer of all or part of an interest in the Company, as permitted herein, the capital account of the transferor that is attributable to the transferred interest shall carry over to the transferee Member.

7.10 Authority of Manager . Upon the terms set forth in this Article VII, the Manager is authorized (a) to admit substitute Members; (b) to exercise the power of attorney granted in Article IX to amend this Operating Agreement or the Articles of Organization to reflect such substitution; and (c) to file any such amendment with the appropriate depositories.

ARTICLE VIII

DISSOLUTION AND TERMINATION

8.1 Final Accounting . In case of the Company’s dissolution, a proper accounting shall be made from the date of the last previous accounting to the date of dissolution.

8.2 Liquidation . Upon the Company’s dissolution, the Manager or, if none, some person selected by a majority in interest of the Members shall act as liquidator to wind up the Company. The liquidator shall have full power and authority to sell, assign and encumber any or all of the Company’s assets and to wind up and liquidate the Company’s affairs in an orderly and prudent manner. The liquidator shall distribute all proceeds from liquidation to the Members in proportion to their Sharing Ratios, as of the date of distribution, as determined after taking into account all capital account adjustments for the Company’s taxable year during which such liquidation occurs.

If a Member has a deficit balance in his capital account following the liquidation of his interest in the Company, as determined after taking into account all capital account adjustments for the Company’s taxable year during which such liquidation occurs, he shall be unconditionally obligated to restore the amount of such deficit balance to the Company by the end of such taxable year (or, if later, within 90 days after the date of such liquidation), which amount shall, upon liquidation of the Company, be paid to creditors of the Company or distributed to other Members in accordance with their positive capital account balances, as required above.

 

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8.3 Distribution in Kind . If the liquidator shall determine that a portion of the Company’s assets should be distributed in kind to the Members, the liquidator shall distribute such assets to them in undivided interests as tenants in common in proportion to their Sharing Ratios.

8.4 Articles of Dissolution . Upon the completion of the distribution of Company assets, the Company shall be terminated and the Members shall cause the Company to execute Articles of Dissolution and take such other actions as may be necessary to terminate the Company.

ARTICLE IX

POWERS OF ATTORNEY

9.1 Appointment of Manager . The Member, and any subsequent Member added hereto, by execution hereof, does irrevocably constitute and appoint the Manager, with full power of substitution, as the Member’s true and lawful attorney, in Member’s name, place and stead, to file Articles of Organization with the appropriate depositories and to execute, acknowledge, swear to and file (a) all amendments to this Operating Agreement or to the Articles of Organization required by law or authorized or required by the provisions of this Operating Agreement or the Articles of Organization; (b) all certificates and other instruments necessary to qualify or continue the Company as a limited liability company wherein the Members have limited liability in the states where the Company may be doing business; and, (c) all conveyances and other instruments necessary to effect the Company’s dissolution and termination.

9.2 Irrevocable . The powers of attorney granted herein shall be deemed to be coupled with an interest and shall be irrevocable and survive the death, bankruptcy, dissolution, or incompetency of the Members. In the event of any conflict between this Operating Agreement and any instruments filed by such attorney pursuant to the power of attorney granted in this section, this Operating Agreement shall control.

ARTICLE X

AMENDMENT TO AGREEMENT

Amendments to this Operating Agreement and to the Articles of Organization may be proposed to the Members by the Manager or any Member. The Manager shall submit to the Members any such proposed amendment and the recommendation of the Manager as to its adoption. A proposed amendment shall become effective at such time as it has been approved in writing by a majority in capital interest of Members.

 

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ARTICLE XI

NOTICES

11.1 Method for Notices . All mailed notices hereunder shall be sent by first class mail, postage prepaid, and addressed as set forth in Section 1.10 above (except that any Member may from time to time give notice changing address for such purpose), or may be sent registered or certified mail, and shall be effective on the date of receipt or upon the fifth day after mailing, whichever is earlier. Notices may also be delivered in person and by facsimile. If delivered by facsimile transmission, then they shall be deemed received if the person to whom sent actually received the facsimile transmission at their office or residence (as the case may be) before 5:00 p.m. on a business day when said person is present at such office or home where sent. If received after the applicable time or on a weekend or holiday, the notice is deemed received on the next business day.

11.2 Computation of Time . In computing any period of time under this Operating Agreement, the day of the act, event or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or legal holiday, in which event the period shall run until five o’clock p.m. of the next day which is not a Saturday, Sunday or legal holiday.

ARTICLE XII

GENERAL PROVISIONS

12.1 Entire Agreement . This Operating Agreement (a) contains the entire agreement among the parties; (b) except as provided in Article X, may not be amended nor may any rights hereunder be waived except by an instrument in writing signed by the party sought to be charged with such amendment or waiver; (c) shall be construed in accordance with, and governed by, the laws of the State of Utah; and (d) shall be binding upon and shall inure to the benefit of the parties, and their respective personal representatives, successors and assigns, except as set forth above.

12.2 Construction Principles . Words in any gender shall be deemed to include the other gender. The singular shall be deemed to include the plural and vice versa. The headings and underlined paragraph titles are for guidance only and shall have no significance in the interpretation of this Operating Agreement.

12.3 Severance Clause . The invalidity or unenforceability of any part of this Agreement shall not invalidate or affect the remainder, which shall continue to govern the relative rights and duties of the parties as though the invalid or unenforceable part were not a part hereof.

12.4 Attorney Fees . In the event any Member or the Company shall breach this Agreement, the nonbreaching parties shall be entitled to recover from the breaching party all attorney fees and costs incurred in enforcing this Agreement, with or without suit.

 

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IN WITNESS WHEREOF, the Member and Manager have signed this Operating Agreement on the respective dates set forth below to be effective as of the date first written above.

 

MEMBER:
/s/ Jason T. Kilgore
Jason T. Kilgore

 

MANAGER:
/s/ Jason T. Kilgore
Jason T. Kilgore

 

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Exhibit 3.72

ARTICLES OF ORGANIZATION

OF

PEAK CONSTRUCTION MATERIALS, LLC

The undersigned, acting pursuant to the Utah Revised Limited Liability Company Act (the “Act”), adopts the following Articles of Organization for the purpose of organizing a Utah limited liability company (the “Company”):

 

FIRST : The Company’s name is Peak Construction Materials, LLC.

 

SECOND : The Company will continue until September 1, 2109, unless sooner dissolved by law or as provided in the Company’s operating agreement.

 

THIRD : The Company is organized for any and all legal and lawful purposes pursuant to the Act.

 

FOURTH : The address of the initial registered office of the Company and the name of its initial registered agent at such address are: Corporation Service Company, 2180 South 1300 East, Suite 650, Salt Lake City, UT 84106.

 

FIFTH : The management of the Company shall be vested in its members. The name and street address of the initial member of the Company are: RSR Altaview Holdings, Inc., 9547 South 500 West, Sandy, UT 84070.

IN WITNESS WHEREOF, the undersigned member of Peak Construction Materials, LLC has executed these Articles of Organization as of this 13 day of September, 2010.

 

RSR. ALTAVIEW HOLDINGS, INC., a Utah corporation
By:   /s/ R. Scott Reynolds
      R. Scott Reynolds, President


CERTIFICATE OF AMENDMENT

TO ARTICLES OF ORGANIZATION OF

PEAK CONSTRUCTION MATERIALS, LLC

Pursuant to Section 48-2c-408 of the Utah Revised Limited Liability Company Act, as amended (the “ Act ”), the undersigned hereby causes this Certificate of Amendment (this “ Certificate ”) to be delivered to the Utah Department of Commerce, Division of Corporations and Commercial Code for filing, and states as follows:

FIRST: The name of the company is Peak Construction Materials, LLC (the “ Company ”).

SECOND: The Fifth Article of the Articles of Organization of the Company (the “ Articles ”), is hereby amended and restated in its entirety to read as follows:

FIFTH: The Company shall be managed by its sole member. The name and street address of the sole member of the Company are, Harper- Kilgore, LLC, a Delaware limited liability company, P.O. Box 189 Magna, UT 84044

THIRD: On September 15, 2010, the amendments to the Articles set forth above were adopted by the sole member of the Company, as required by Section 48-2c-803 of the Act, or as otherwise required by the Articles or the Company’s operating agreement.

[Signature page follows.]


IN WITNESS WHEREOF, the undersigned, in accordance with Section 48-2c-204 of the Act, hereby executes this Certificate as of September 15, 2010.

 

HARPER-KILGORE, LLC, a Delaware limited liability company, in its capacity as the sole

member of the Company

By:   /s/ Anya Fonina
Name: Anya Fonina
Title: Vice President

[Signature page to Certificate of Amendment – Peak Construction Materials, LLC]

Exhibit 3.73

AMENDED AND RESTATED OPERATING AGREEMENT

OF

PEAK CONSTRUCTION MATERIALS, LLC

This Amended and Restated Operating Agreement (this “ Agreement ”) of Peak Construction Materials, LLC (the “ Company ”) is entered into by Harper-Kilgore, LLC, as the sole member of the Company (as defined below) (the “ Member ”).

RECITALS

WHEREAS, on September 13, 2010, the Company was converted from a Utah corporation to a Utah limited liability company, and upon such conversion RSR Altaview Holdings, Inc., a Utah corporation (“ RSR ”), was admitted as the sole member of the Company and executed the operating agreement of the Company, dated as of September 13, 2010 (the “ Original Operating Agreement ”);

WHEREAS, upon the closing of the transactions contemplated by the Membership Interest Purchase Agreement, dated as of September 15, 2010, among the Company, Peak Construction Materials, LLC, Peak Management, L.C., Wasatch Concrete Pumping, LLC, R. Scott Reynolds, RSR and the Member, the Member acquired all of the issued and outstanding membership interests of the Company; and

WHEREAS, the Member desires to amend and restated the Original Operating Agreement in its entirety to reflect that it is the sole member of the Company.

AGREEMENT

The Company is a limited liability company subject to the Utah Revised Limited Liability Company Act (§ 48-2c-101, et seq., Utah Code Ann.), as amended from time to time (the “ Act ”) and the Member, agreeing to be bound by this Agreement, hereby declares as follows.

1. Name . The name of the Company is Peak Construction Materials, LLC.

2. Filing of Certificates . So long as the Company is member-managed, the Member shall be the person authorized to sign documents and reports required by the Act. The Member, or other person required by law, shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business. This Agreement does not limit the power of any person to sign, in accordance with the Act, any document or report required by the Act pursuant to a power of attorney duly executed by a person otherwise authorized to sign such document or report.


3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Utah law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 9547 South 500 West, Sandy, Utah 84070.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Utah is Corporation Service Company, 2180 South 1300 East, Suite 650, Salt Lake City, Utah 84106.

7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Harper-Kilgore, LLC

  

P.O. Box 189

Magna, UT 84044

8. Limited Liability . Except as provided in Section 48-2c-602 of Act, the debts, obligations and liabilities of the Company shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company or for the acts or omissions of the Company or of any other member, manager or employee of the Company.

9. Capital Contributions . The Member is the sole member of the Company, having been admitted upon its acquisition of the entire interest of the predecessor member in the Company and having agreed to be bound by the Company’s operating agreement in effect at that time. The Member may, but is not obligated to make any capital contribution to the Company. The capital account of the Member shall be adjusted only at the time and in the manner determined by the Member.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member only at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 48-2c-803 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described

 

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herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Utah. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document or report on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “Officers”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Utah Revised Business Corporation Act, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member.

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Utah and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be in, or not opposed to, the Company’s best interests.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Utah for directors and officers of corporations organized under the laws of the State of Utah. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

 

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17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member, (ii) any time there are no members of the Company, or (iii) the entry of a decree of judicial dissolution under Section 48-2c-1213 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Part 13 of the Act, except, to the extent permitted under the Act, as determined by the Member.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof. To the extent that the Act permits this Agreement to provide for, or otherwise does not prohibit this Agreement from providing for, any term or condition for which provision is made in this Agreement, this Agreement shall control to the extent of any inconsistency between this Agreement and the Act. This Agreement is a declaration of the sole member of the Company and this declaration constitutes the operating agreement of the Company pursuant to Section 48-2c-504 of the Act.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Utah (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

 

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25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

[Signature page follows.]

 

5


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 15 day of September 2010.

 

HARPER-KILGORE, LLC., sole member
By:   /s/ Anya Fonina
 

Name: Anya Fonina

Title: Vice President

[Signature Page to Peak Construction Materials, LLC Operating Agreement]

Exhibit 3.74

ARTICLES OF ORGANIZATION

OF

PEAK MANAGEMENT, L.C.

BY AGREEMENT made effective the 1st day of January, 1998, the undersigned Co-Operating Manager, on behalf of the Members who desire to form a limited liability company under the Utah Limited Liability Company Act, hereby set forth the following Articles of Organization for such limited liability company (hereinafter referred to as the “Company”):

ARTICLE 1: NAME

The name of the Company is Peak Management, L.C.

ARTICLE 2: DURATION

The period of duration of the Company shall begin effective the 1st day of January, 1998, and shall continue thereafter until the 31st day of December, 2097, or until such time as it is dissolved upon the occurrence of any of the events provided for under the Utah Limited Liability Company Act.

ARTICLE 3: PURPOSE

The purposes for which the Company is organized are:

a. to do all things reasonable and proper in the operation, acquisition, management, lease and sale of assets and investments and to deal generally therein; and

b. to engage in any other lawful business activities for which limited liability companies may be organized pursuant to the Utah Limited Liability Company Act.

ARTICLE 4: REGISTERED OFFICE AND AGENT

The name of the original Registered Agent of the Company is Travis L. Bowen, P.C., located at 175 South West Temple, Suite 710, Salt Lake City, Utah, 84147-0637.


ARTICLE 5: FAILURE TO MAINTAIN A REGISTERED AGENT OF OFFICE

Failure to maintain a registered agent or registered office in this State shall be grounds for involuntary dissolution of the Company by the Division. The registered agent of the Company may resign by filing an original and one copy of a signed written notice of resignation with the Division, which will be effective thirty (30) days after the Division receives notice of the resignation.

ARTICLE 6: PRINCIPAL PLACE OF BUSINESS

The principal place of business of the Company shall be 9547 South 500 West, Sandy, Utah, 84070.

ARTICLE 7: MANAGEMENT

The management of the Company shall be vested in Co-Operating Managers. The name and street address of the Co-Operating Managers, who will serve until a successor is elected, are as follows:

 

NAME:

  

ADDRESS:

Craig S. Wardle

   9547 South 500 West
   Sandy, Utah 84070

R. Scott Reynolds

   3226 West 8650 South
   West Jordan, Utah 84088

ARTICLE 8: AMENDMENT TO THE ARTICLES OF ORGANIZATION

The Articles of Organization of the Company shall be amended if there is a change in Co-Operating Managers of the Company (or for any of the other applicable reasons stated in the Utah Limited Liability Company Act), and may otherwise only be amended by majority vote of the Members of the Company.

 

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ARTICLE 9: OPERATING AGREEMENT

All provisions pertaining to control, operations and records of the Company shall be stated in the Operating Agreement of the Company, which shall only be altered, amended, or repealed as provided therein. No Member or Officer shall have authority to act on behalf of or bind the Company without the written approval of a Co-Operating Managers. Only the Co-Operating Managers of the Company, as indicated above, or their successor(s), and those given authority by such written approval may sign contracts or other instruments on behalf of the Company. Any significant changes in the purposes of the Company or any matters of significant consequence to the existence of the Company, including but not limited to the distribution of substantially all or all of the assets of the Company, shall only be made with the majority written approval of the Members of the Company.

ARTICLE 10: INTEREST OF A MEMBER

An interest of a Member in the Company may only be adjusted, transferred or assigned in accordance with the provisions of the Operating Agreement of the Company. If all of the Members of the Company do not consent to a transfer or assignment, the transferee has no right to participate in the management of the business or affairs of the Company or become a Member and is only entitled to receive the transferor’s share of profits or other compensation.

ARTICLE 11: LIABILITY

Neither the Members, Managers, Employees, nor Agents of the Company shall be personally liable for any debt, obligation, or liability of the Company nor of any other Member, Manager, Employee, or Agent of the Company. Neither shall the Company be liable for any debts, obligations, or liabilities of any Member, Manager, Employee, or Agent.

 

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ARTICLE 12: WAIVER OF CONFLICT OF INTEREST

The parties to this Agreement acknowledge that this Agreement has been prepared by the Law Offices of Travis L. Bowen, P.C. (hereinafter referred to as the “Law Firm”) on behalf of the parties hereto. There is an inherent potential for conflicts of interest among the parties to this Agreement because this Agreement establishes the rights and obligations of each of the parties to this Agreement. Due to such potential conflicts of interest, the Law Firm has advised and hereby advises each of the parties that it would be in their best interest to obtain the services of their own independent legal counsel to review this document. Notwithstanding the fact that the Law Firm has prepared this Agreement and has provided legal advice to one or more of the parties in preparation of this Agreement and in related matters, the parties hereby waive, as evidenced by the execution of this Agreement, any potential conflicts of interest that may arise as a result of the above actions by the Law Firm, whether or not one or more of the parties to this Agreement may have consulted with separate legal counsel concerning this Agreement.

WITNESS WHEREOF, the Parties have hereunto executed this Agreement this 23 rd day of December, 1998.

 

CO-OPERATING MANAGER:

/s/ Craig S. Wardle

Craig S. Wardle

 

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The undersigned hereby accepts appointment as Registered Agent for the above named Company.

 

REGISTERED AGENT:

 

TRAVIS L. BOWEN, P.C.

/s/ Travis L. Bowen

Travis L. Bowen, President

 

5

Exhibit 3.75

AMENDED AND RESTATED OPERATING AGREEMENT

OF

PEAK MANAGEMENT, L.C.

This Amended and Restated Operating Agreement (this “ Agreement ”) of Peak Management, L.C. (the “ Company ”) is entered into by Harper-Kilgore, LLC, as the sole member of the Company (as defined below) (the “ Member ”).

RECITALS

WHEREAS, on August 6, 2010, the R. Scott Reynolds Revocable Trust, dated March 22, 1999 (the “Trust”) entered into the operating agreement of the Company (the “ Original Operating Agreement ”) as the sole member of the Company;

WHEREAS, on September 10, 2010, the Trust assigned all of its membership interests in the Company to RSR Acquisition Holdings, Inc., a Utah Corporation (“ RSR ”);

WHEREAS, upon the closing of the transactions contemplated by the Membership Interest Purchase Agreement, dated as of September 15, 2010, among the Company, Peak Construction Materials, LLC, Peak Management, L.C., Wasatch Concrete Pumping, LLC, R. Scott Reynolds, RSR and the Member, the Member acquired all of the issued and outstanding membership interests of the Company; and

WHEREAS, the Member desires to amend and restated the Original Operating Agreement in its entirety to reflect that it is the sole member of the Company.

AGREEMENT

The Company is a limited liability company subject to the Utah Revised Limited Liability Company Act (§ 48-2c-101, et seq., Utah Code Ann.), as amended from time to time (the “ Act ”) and the Member, agreeing to be bound by this Agreement, hereby declares as follows.

1. Name . The name of the Company is Peak Management, L.C.

2. Filing of Certificates . So long as the Company is member-managed, the Member shall be the person authorized to sign documents and reports required by the Act. The Member, or other person required by law, shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business. This Agreement does not limit the power of any person to sign, in accordance with the Act, any document or report required by the Act pursuant to a power of attorney duly executed by a person otherwise authorized to sign such document or report.


3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Utah law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 9547 South 500 West, Sandy, Utah 84070.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Utah is Corporation Service Company, 2180 South 1300 East, Suite 650, Salt Lake City, Utah 84106.

 

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7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Harper-Kilgore, LLC

   P.O. Box 189
   Magna, UT 84044

8. Limited Liability . Except as provided in Section 48-2c-602 of Act, the debts, obligations and liabilities of the Company shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company or for the acts or omissions of the Company or of any other member, manager or employee of the Company.

9. Capital Contributions . The Member is the sole member of the Company, having been admitted upon its acquisition of the entire interest of the predecessor member in the Company and having agreed to be bound by the Company’s operating agreement in effect at that time. The Member may, but is not obligated to make any capital contribution to the Company. The capital account of the Member shall be adjusted only at the time and in the manner determined by the Member.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member only at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 48-2c-803 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Utah. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document or report on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Utah Revised Business Corporation Act, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member.

 

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14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Utah and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be in, or not opposed to, the Company’s best interests.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Utah for directors and officers of corporations organized under the laws of the State of Utah. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

 

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19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member, (ii) any time there are no members of the Company, or (iii) the entry of a decree of judicial dissolution under Section 48-2c-1213 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Part 13 of the Act, except, to the extent permitted under the Act, as determined by the Member.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof. To the extent that the Act permits this Agreement to provide for, or otherwise does not prohibit this Agreement from providing for, any term or condition for which provision is made in this Agreement, this Agreement shall control to the extent of any inconsistency between this Agreement and the Act. This Agreement is a declaration of the sole member of the Company and this declaration constitutes the operating agreement of the Company pursuant to Section 48-2c-504 of the Act.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Utah (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

[Signature page follows.]

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 15 day of September 2010.

 

HARPER-KILGORE, LLC., sole member

By:

  /s/ Anya Fonina
  Name: Anya Fonina
  Title: Vice President

[Signature Page to Peak Management, L.C. Operating Agreement]

Exhibit 3.76

ARTICLES OF INCORPORATION

OF

SALT LAKE VALLEY SAND & GRAVEL, INC.

We, the undersigned natural persons of the age of eighteen years or more, acting as incorporators of the Corporation under the Utah Business Corporation Act (hereinafter referred to as the “Act”), adopt the following Articles of Incorporation for said Corporation:

ARTICLE I

NAME

The name of the Corporation is Salt Lake Valley Sand & Gravel, Inc.

ARTICLE II

PERIOD OF DURATION

The duration of the Corporation is perpetual.

ARTICLE III

PURPOSES AND POWERS

Section 1 : Purpose .

The general purposes of the Corporation shall be as follows:

Clause A : To engage in the business of producing and selling sand, gravel and related products as well as the rendering of services of all kinds.

Clause B : To form, promote, and enter into partnerships, franchises and other associations with other individuals or entities for the purpose of establishing, promoting and carrying on the business of the Corporation.


Clause C : To buy, sell, mortgage, encumber and deal in real estate, and in any and all kinds of personal property, including inventory, fixtures and perishables used in the course of business and the doing of all things necessary to the accomplishment of the purposes of the Corporation; to borrow money and execute evidence of indebtedness and to do any and all things necessary to establish, promote, and carry on the business of the Corporation.

Clause D : To issue promissory notes, bonds, debentures, and other evidences of indebtedness in the furtherance of any of the state purposes of the Corporation.

Clause E : To enter into or execute contracts of any kind and character, sealed or unsealed, with individuals, firms associations, corporations (private, public or municipal), political subdivisions of the United States or with the government of the United States.

Clause F : To buy, acquire, own, pledge, and sell bonds, debentures or other securities of any corporation (private or public), any municipality, any state of the United States or the government of the United States.

Clause G : To engage generally in the business of acting as a holding company, including acquisition, ownership, management, and sale of other corporations and the shares of stock of other corporations; to note such shares; to invest the funds of the Corporation in the assets of other corporations: real estate, franchises, and things of a similar nature; and to lend the funds of the Corporation to other individuals, firms or corporations with or without security.

Clause H : To do each and everything necessary, suitable or proper for the accomplishment of any of the purposes or the attainment of any of the objectives herein enumerated, or which shall at any time appear conducive to or expedient for the protection or benefit of the Corporation.

Section 2 : Powers

The Corporation, subject to any specific written limitations or restrictions imposed by the Act or by these Articles of Incorporation, shall have and exercise the following powers:

 

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Clause A : To have and exercise all the powers specified in the Act.

Clause B : To enter into any lawful arrangement for sharing profits, union of interest, reciprocal association, or cooperative association with any domestic corporation or foreign corporations, associations, partnerships, individuals, or other entities, and to enter into general or limited partnerships.

Clause C : To make any guaranty respecting stocks, dividends, securities, indebtedness, interest, contracts, or other obligations created by any domestic or foreign corporations, associations, partnerships, individuals, or other entities, and to enter into general or limited partnerships.

Clause D : To have and exercise all those powers necessary, suitable and proper for the accomplishment of any of the purposes or the attainment of any of the objectives herein enumerated or which shall, at any time, appear conducive to or expedient for the protection or benefit of the Corporation.

ARTICLE IV

AUTHORIZED SHARES

Section 1 : The aggregate number of shares that the Corporation shall have authority to issue is 50,000 shares of nonassessable common stock with no par value.

Section 2 : Such shares of common stock shall have equal rights as to voting and shall have equal rights in the event of dissolution or liquidation.

 

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ARTICLE V

RIGHT OF THE CORPORATION

TO ACQUIRE ITS OWN SHARES

The Corporation shall have the right to purchase, take, receive, or otherwise acquire its own shares, but purchases of such shares, whether direct or indirect, shall be made only to the extent of the unreserved and unrestricted earned surplus or paid-in surplus available therefor.

ARTICLE VI

PREEMPTIVE SHAREHOLDER RIGHTS

The shareholders shall have preemptive rights to acquire unissued shares of this Corporation in the manner and subject to the limitations prescribed by this Article and not otherwise. Except as provided below, before the Board of Directors shall issue any unissued shares of this Corporation, it shall notify each shareholder of the proposed issuance and of the terms and conditions under which the shares are proposed to be issued. For a period of thirty (30) days after the giving of such notice, any shareholder shall have the right, on the same terms and conditions as is stated in the notice, to acquire such portion of the shares proposed to be issued as the shares held by such shareholders bears to the total shares issued and outstanding at the time such notice is given, such right to be exercised by giving notice of such election to the Corporation at its registered office. If any shareholder does not give notice of his election to acquire such shares within such thirty (30) day period, the shares may be issued free and clear of any and all claims of the shareholder and any other shareholders but only on the terms and conditions no more favorable to the issue than the terms and conditions stated in the notice to the shareholders. The shareholders shall have no preemptive rights to acquire treasury shares, shares issued in payment for property, tangible or intangible, real or personal, or for labor or services

 

4


actually performed, or shares issued by the Corporation on the exercise of an incentive option granted to officers or employees of the Corporation or officers or employees of any subsidiary corporation. The Bylaws shall make such provisions as are reasonable and appropriate to implement this right.

Except as provided above, a shareholder shall have no preemptive rights to acquire any securities of this Corporation.

ARTICLE VII

COMMENCEMENT OF BUSINESS

The Corporation shall not commence business until consideration of the value of at least One Thousand Dollars ($1,000.00) has been received by it as consideration for the issuance of shares.

ARTICLE VIII

PROVISIONS FOR REGULATION OF

INTERNAL AFFAIRS OF THE CORPORATION

Section 1 : Regular Meetings of Shareholders .

An annual meeting of the shareholders of the Corporation shall be held at the registered office of the corporation, or such other place as may be designated by the Board of Directors, said meeting to be at 1:00 A.M. on the third Tuesday of January of each year. Notice of the annual meeting, containing its time and place, shall be mailed to each shareholder of record at his last known address at least two (2) weeks prior to such meetings.

Section 2 : Special Meetings of Shareholders .

Special meetings of the shareholders of the Corporation may be called by the Board of Directors; provided that two (2) weeks notice thereof shall be given stating the purpose of the meeting, such notice to be mailed by first class mail to the last known address of each shareholder.

 

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Section 3 : Quorum of Shareholders .

Unless otherwise provided in the Utah Business Corporation Act or by other applicable law, a majority of the shares of the common stock of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at all meetings of the shareholders of the Corporation.

Section 4 : Meetings of the Board of Directors .

Unless otherwise provided in the Utah Business Corporation Act, meetings of the Board of Directors of the Corporation, whether regular or special, may be held either within or without the State of Utah, as may be determined by the Board of Directors or by at least two (2) of the directors of the Corporation. Notice of such meetings shall be given as prescribed by the Board of Directors.

Section 5 : Quorum of Directors .

A majority of the directors holding office at any given time shall constitute a quorum for the transaction of business.

Section 6 : Bylaws of the Corporation .

The Board of Directors shall have the power to adopt Bylaws for the Corporation and to amend the same from time to time at any regular or special meeting of the Board of Directors. Amendments to the Bylaws shall require a two-third (2/3) majority of the directors present in order to be adopted. The affairs of the corporation shall be governed by these Articles of Incorporation and the Bylaws.

 

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Section 7 : Vacancies in the Board of Directors .

Any vacancy occurring in the Board of Directors may be filled by an affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase of the number of directors shall be filled by the Board of Directors, such appointment to be until the next annual meeting or a special meeting of the shareholders called for the purpose of electing a director to the office so created. Any directorship to be filled by reason of the removal of one (1) or more directors by the shareholders may be filled by election by the shareholders at a meeting at which the director or directors are removed.

Section : Shareholders of Record .

The names and address of each shareholder of record of the common stock of the Corporation shall be conclusively presumed to be in accordance with the stock ledger of the Corporation. Such shareholders shall have all rights usual to holders of the common stock of a corporation and as provided by applicable Utah law and as hereinbefore expressly set forth.

Section 9 : Books and Records .

The Corporation shall keep adequate books, records and minutes of meetings at its registered office.

Section 10 : Working Capital and Business Management .

The Board of Directors shall have the power to fix and vary the amount to be reserved as working capital and to otherwise govern the affairs, financing, and management of the Corporation as the Board, in its discretion, deems necessary and proper.

 

7


Section 11 : Compensation of Directors .

The Board of Directors may make provisions for the reasonable compensation of its members for their services as directors and establish the basis and condition upon which such compensation shall be paid. Any director of the Corporation may also serve the Corporation in any other capacity and receive compensation for such other service.

Section 12 : Amendments to the Articles of Incorporation .

The Articles of Incorporation may be amended by the shareholders at any regular or special meeting of the shareholders; provided that a quorum is present and that a two-third (2/3) majority of the shares voting is required to adopt any such amendment.

Section 13 : Contracts in Which Directors Have an Interest .

No contract or other transaction of which this Corporation is interested shall be invalidated or affected by (a) the fact that one or more of the directors of this Corporation is interested in or is a director or office of another corporation, or (b) the fact that any director, individually or jointly with others, may be a party to or may be interested in the contract or transaction; and each person who may become a director of this Corporation is hereby relived from any liability that might otherwise arise by reason of his contracting with this Corporation for the benefit of himself or any firm or corporation in which he may be interested.

ARTICLE IX

INITIAL REGISTERED OFFICE AND

INITIAL REGISTERED AGENT

Section 1 : Registered Office .

The address of the initial registered office of the Corporation is 11500 South 2950 West, South Jordan, Utah 84065.

 

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Section 2 : Registered Agent .

The name and initial registered agent at the above address is Dave Balls.

 

/s/ Dave Balls

Dave Balls

Registered Agent

ARTICLE X

OFFICERS AND DIRECTORS

Section 1 : Members of the Initial Board of Directors .

The initial Board of Directors of the Corporation shall consist of three members and their respective names and addresses are:

 

NAME

  

ADDRESS

Dave Balls

  

11500 South 2950 West

South Jordan, Utah 84065

Brent Baker

  

10987 South Avilla Drive

Sandy, Utah 84094

Laurie Balls

  

11500 South 2950 West

South Jordan, Utah 84065

which directors shall hold office until the first annual meeting of the shareholders of the Corporation and until their successors shall have been elected and qualified.

Section 2 : Member of Subsequent Board of Directors .

At the annual meeting of the shareholders of the Corporation and at each annual meeting thereafter, the shareholders shall elect directors to hold office until the next succeeding annual meeting of the shareholders. Each director so elected shall hold office for the term for which he is elected and until his successor shall have been elected and qualified.

 

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Section 3 : Number of Directors .

The number of directors of the Corporation shall be fixed by the Board of Directors but shall in no case be less than three (3) nor more the twenty (20).

Section 4 : Officers .

The officers of the Corporation shall be elected by the Board of Directors but may or may not also serve as directors. The officers shall include: President, Vice President and Secretary—Treasurer, as the Board of Directors may nominate and direct. One person may hold the offices of Secretary and Treasurer simultaneously, and such person must be a shareholder of the Corporation. The duties of the officers shall be those usually incumbent upon the holders of such offices. The Board may, from time to time, elect and remove a Chairman of the Board whose duty shall be to conduct meetings of the Board and to serve as its titular head.

Section 4b :

Until their successors are elected and qualified, the officers of the Corporation shall be as follows:

 

NAME

  

OFFICE

Dave Balls

   President

Brent Baker

   Vice-President

Laurie Balls

   Secretary Treasurer

ARTICLE XI

INCORPORATORS

The name and address of each incorporator is:

 

NAME

  

OFFICE

Dave Balls   

11500 South 2950 West

South Jordan, Utah 84065

 

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NAME

  

OFFICE

Brent Baker   

10987 South Avilla Drive

Sandy, Utah 84094

Laurie Balls   

11500 South 2950 West

South Jordan, Utah 84065

EXECUTED this 13 th day of July, 1995.

 

/s/ Dave Balls

Name

/s/ Brent Baker

Name

/s/ Laurie Balls

Name

 

STATE OF UTAH

   )
   : ss.
COUNTY OF SALT LAKE    )

On the 13 th day of July, 1995, personally appeared before me Dave Balls, who being by me first duly sworn, deposes and says that he is an incorporator in the foregoing action and that he has read the Articles of Incorporation and states that they are true to his knowledge and belief, except as to those items stated on information, and as to those matters he believes them to be true.

SWORN to before me this 13 th day of July, 1995.

 

My Commission Expires: 8/1/98      

/s/ Annalyn Anderson

    NOTARY PUBLIC
    Residing in Salt Lake County, Utah

 

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STATE OF UTAH

   )
   : ss.
COUNTY OF SALT LAKE    )

On the 13 th day of July, 1995, personally appeared before me Brent Baker, who being by me first duly sworn, deposes and says that he is an incorporator in the foregoing action and that he has read the Articles of Incorporation and states that they are true to his knowledge and belief, except as to those items stated on information, and as to those matters he believes them to be true.

SWORN to before me this 13 th day of July, 1995.

 

My Commission Expires: 8/1/98      

/s/ Annalyn Anderson

    NOTARY PUBLIC
    Residing in Salt Lake County, Utah

 

STATE OF UTAH

   )
   : ss.
COUNTY OF SALT LAKE    )

On the 28 th day of July, 1995, personally appeared before me Laurie Balls, who being by me first duly sworn, deposes and says that she is an incorporator in the foregoing action and that she has read the Articles of Incorporation and states that they are true to her knowledge and belief, except as to those items stated on information, and as to those matters she believes them to be true.

SWORN to before me this 28 th day of July, 1995.

 

My Commission Expires: 8/1/98      

/s/ Annalyn Anderson

    NOTARY PUBLIC
    Residing in Salt Lake County, Utah

 

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Exhibit 3.77

By-Laws of

SALT LAKE VALLEY SAND & GRAVEL, INC.

Article One – Organization

 

1. The name of this Company shall be SALT LAKE VALLEY SAND & GRAVEL, INC.

 

2. The Company shall have a seal which shall be in the following form attached

 

3. The Company may at its pleasure by a vote of the shareholders change its name.

Article Two – Purposes

The following are the purposes for which the Company has been organized:

To produce and provide sand and gravel products to commercial and residential customers.

To provide financial resources and assets necessary for the operation of related businesses.

For any other legal and lawful purpose as established by the Officers of the Company.

Article Four – Meetings

The annual shareholder meeting of this Company shall be held on the first Tuesday of October each and every year except if such day is a legal holiday then and in that event the Board of Directors shall fix the day but it shall not be more than two weeks from the date fixed by these by-laws. The secretary shall cause to be mailed to every shareholder in good standing at his or her address as it appears in the shareholder roll book of this Company a notice telling the time and place of such annual meeting.

Regular meetings of the Officers of this Company shall be held each Tuesday morning.

The presence of not less than two members shall constitute a quorum and shall be necessary to conduct the business of this Company. A quorum as hereinbefore set forth shall be required at any adjourned meeting.

Special meetings of this Company may be called by the president when he deems it for the best interest of the Company. Notices of such meeting shall be mailed to all shareholders at their addresses as they appear in the shareholder roll book at least but not more than five days before the scheduled date set for such special meeting. Such notice shall state the reasons that such meeting has been called, the business to be transacted at such meeting and by whom called.


At the request of any one member of the Board of Directors the president shall cause a special meeting to be called but such request must be made in writing at least five days before the requested scheduled dated.

No other business but that specified in the notice may be transacted at such special meeting without the unanimous consent of all present at such meeting.

Article Five – Voting

At all meetings, except for the election of officers and directors, all votes shall be viva voce, except that for the election of officers ballots may be provided and there shall not appear any place on such ballot any mark or marking that might tend to indicate the person who cast such ballot.

At any regular or special meeting if a majority so required any question may be voted upon in the manner and style provided for election of officers and directors.

At all votes by ballot the chairman of such meeting may immediately prior to the commencement of balloting appoint a committee who shall act as “Inspectors of Election” and who shall at the conclusion of such balloting certify in writing to the chairperson the results and the certified copy shall be physically affixed in the minute book to the minutes of that meeting.

No inspector of election shall be a candidate for office or shall be personally interested in the question voted upon.

Article Six – Order of Business

 

1. Roll Call
2. Reading of the minutes of the preceding meeting.
3. Reports of Committees
4. Reports of Officers
5. Old and unfinished business
6. New business
7. Adjournments

 

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Article Seven – Board of Directors

The business of this Company shall be managed by a Board of Directors consisting of at least two members together with the officers of this Company.

The directors to be chosen for the ensuing year shall be chosen at the annual meeting of this Company in the same manner and style as the officers of this Company and they shall serve for a term of two years.

The Board of Directors shall have the control and management of the affairs and business of this Company. Such Board of Directors shall only act in the name of the Company when it shall be regularly convened by its chairman after due notice to all the directors of such meeting.

Two of the members of the Board of Directors shall constitute quorum and the meetings of the Board of Directors shall be held at least annually.

Each director shall have one vote and such voting may not be done by proxy.

The Board of Directors may make such rules and regulations covering its meetings as it may in its discretion determine necessary.

Vacancies in the Board of Directors shall be filled by a vote of the majority of the remaining members of the Board of Directors for the balance of the year.

A director may be removed when sufficient cause exists for such removal. The Board of Directors may entertain charges against any director. A director may be represented by counsel upon any removal hearing. The Board of Directors shall adopt such rules as it may in its discretion consider necessary for the best interests of the Company for this hearing.

Article Eight – Officers

The officers of the Company shall be as follows:

President

Vice President, if desired

Secretary

Treasurer

The president shall preside at all shareholder meetings, by virtue of the office be chairperson of the Board of Directors, present at each annual meeting of the Company an annual report of the work of the Company, appoint all committees temporary or permanent, see that all books, reports and certificates as required by law are properly kept or filed, be one of the officers who may sign the checks or drafts of the Company, and have such powers as may be reasonably construed as belonging to the chief executive of any Company.

 

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The vice president shall in the event of the absence or inability of the president to exercise his or her office become acting president of the Company with all rights, privileges and powers as if he or she had been the duly elected president.

The secretary shall keep the minutes and records of the Company in appropriate books, file any certificates required by any statute, federal or state, give and serve all notices to shareholders of the Company, be the official custodian of the records and seal of the Company, be one of the officers required to sign the checks and drafts of the Company, present to the shareholders at any meetings any communication addressed to the secretary of the Company, submit to the Board of Directors any communications which shall be addressed to the secretary, attend to all correspondence of the Company and exercise all duties incident to the office of the secretary.

The Treasurer shall have the care and custody of all monies belonging to the Company, be solely responsible for such monies or securities of the Company and be one of the officers who shall sign the checks or drafts of the Company. No special fund may be set aside that shall make it unnecessary for the Treasurer to sign the checks issued upon it.

The Treasurer shall render at stated periods as the Board of Directors shall determine a written account of the finances of the Company and such report shall be physically affixed to the minutes of the Board of Directors of such meeting and shall exercise all duties incident to the office of the Treasurer.

Officers shall by virtue of their office be members of the Board of Directors.

No officer or director shall for reason of the office be entitled to receive any salary or compensation, but nothing herein shall be construed to prevent an officer or director for receiving any compensation from the Company for duties other than as a director or officer.

Article Nine – Salaries

The Board of Directors shall hire and fix the compensation of any and all employees which they in their discretion may determine to be necessary in the conduct of the business of the Company.

Article Ten – Committees

All committees of this Company shall be appointed by the President and their term of office shall be for a period of one year or less if sooner terminated by the action of the President.

 

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Article Eleven – Amendments

These by-laws may be altered, amended, repealed or added to by an affirmative vote of not less a majority of the shareholders but not less than two shareholders.

 

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Exhibit 3.78

ARTICLES OF INCORPORATION

OF

VALLEY READY MIX, INC.

We, the undersigned natural persons of the age of eighteen years or more, acting as incorporators of the Corporation under the Utah Business Corporation Act (hereinafter referred to as the “Act”), adopt the following Articles of Incorporation for said Corporation:

ARTICLE I

NAME

The name of the Corporation is Valley Ready Mix, Inc.

ARTICLE II

PERIOD OF DURATION

The duration of the Corporation is perpetual.

ARTICLE III

PURPOSES AND POWERS

Section 1: Purpose.

The general purposes of the Corporation shall be as follows:

Clause A: To engage in the business of owning and leasing cement trucks, management of business interests and real property as well as the rendering of services of all kinds including, but not limited to, the production, sale, and delivery of raw materials and all other interests related to the business.


Clause B: To form, promote, and enter into partnerships, franchises and other associations with other individuals or entities for the purpose of establishing, promoting and carrying on the business of the Corporation.

Clause C: To buy, sell, mortgage, encumber and deal in real estate, and in any and all kinds of personal property, including inventory, fixtures and perishables used in the course of business and the doing of all things necessary to the accomplishment of the purposes of the Corporation; to borrow money and execute evidence of indebtedness and to do any and all things necessary to establish, promote, and carry on the business of the Corporation.

Clause D: To issue promissory notes, bonds, debentures, and other evidences of indebtedness in the furtherance of any of the stated purposes of the Corporation.

Clause E: To enter into or execute contracts of any kind and character, sealed or unsealed, with individuals, firms associations, corporations (private, public or municipal), political subdivisions of the United States or with the government of the United States.

Clause F: To buy, acquire, own, pledge, and sell bonds, debentures or other securities of any corporation (private of public), any municipality, any state of the United States or the government of the United States.

 

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Clause G: To engage generally in the business of acting as a holding company, including acquisition, ownership, management, and sale of other corporations and the shares of stock of other corporations; to note such shares; to invest the funds of the Corporation in the assets of other corporations: real estate, franchises, and things of a similar nature; and to lend the funds of the Corporation to other individuals, firms or corporations with or without security.

Clause H: To do each and everything necessary, suitable or proper for the accomplishment of any of the purposes or the attainment of any of the objectives herein enumerated, or which shall at any time appear conducive to or expedient for the protection or benefit of the Corporation.

Section 2: Powers

The Corporation, subject to any specific written limitations or restrictions imposed by the Act or by these Articles of Incorporation, shall have and exercise the following powers:

Clause A: To have and exercise all the powers specified in the Act.

 

3


Clause B: To enter into any lawful arrangement for sharing profits, union of interest, reciprocal association, or cooperative association with any domestic corporation or foreign corporations, associations, partnerships, individuals, or other entities, and to enter into general or limited partnerships.

Clause C: To make any guaranty respecting stocks, dividends, securities, indebtedness, interest, contracts, or other obligations created by any domestic or foreign corporations, associations, partnerships, individuals, or other entities, and to enter into general or limited partnerships.

Clause D: To have and exercise all those powers necessary, suitable and proper for the accomplishment of any of the purposes or the attainment of any of the objectives herein enumerated or which shall, at any time, appear conducive to or expedient for the protection or benefit of the Corporation.

ARTICLE IV

AUTHORIZED SHARES

Section 1: The aggregate number of shares that the Corporation shall have authority to issue is 50,000 share of nonassessable common stock with no par value.

Section 2: Such shares of common stock shall have equal rights as to voting and shall have equal rights in the event of dissolution or liquidation.

 

4


ARTICLE V

RIGHT OF THE CORPORATION

TO ACQUIRE ITS OWN SHARES

The Corporation shall have the right to purchase, take, receive, or otherwise acquire its own shares, but purchases of such shares, whether direct or indirect, shall be made only to the extent of the unreserved and unrestricted earned surplus or paid-in surplus available therefor.

ARTICLE VI

PREEMPTIVE SHAREHOLDER RIGHTS

The shareholders shall have preemptive rights to acquire unissued shares of this Corporation in the manner and subject to the limitations prescribed by this Article and not otherwise. Except as provided below, before the Board of Directors shall issue any unissued shares of this Corporation, it shall notify each shareholder of the proposed issuance and of the terms and conditions under which the shares are proposed to be issued. For a period of thirty (30) days after the giving of such notice, any shareholder shall have the right, on the same terms and conditions as is stated in the notice, to acquire such portion of the shares proposed to be issued as the shares held by such shareholders bears to the total shares issued and outstanding at the time such notice is given, such right to be exercised by giving notice of such election to the Corporation at its registered office. If any shareholder does not give notice of

 

5


his election to acquire such shares within such thirty (30) day period, the shares may be issued free and clear of any and all claims of the shareholder and any other shareholders but only on the terms and conditions no more favorable to the issue than the terms and conditions stated in the notice to the shareholders. The shareholders shall have no preemptive rights to acquire treasury shares, shares issued in payment for property, tangible or intangible, real or personal, or for labor or services actually performed, or shares issued by the Corporation on the exercise of an incentive option granted to officers or employees of the Corporation or officers or employees of any subsidiary corporation. The Bylaws shall make such provisions as are reasonable and appropriate to implement this right.

Except as provided above, a shareholder shall have no preemptive rights to acquire any securities of this Corporation.

ARTICLE VII

COMMENCEMENT OF BUSINESS

The Corporation shall not commence business until consideration of the value of at least One Thousand Dollars ($1,000.00) has been received by it as consideration for the issuance of shares.

 

6


ARTICLE VIII

PROVISIONS FOR REGULATION OF

INTERNAL AFFAIRS OF THE CORPORATION

Section 1: Regular Meetings of Shareholders.

An annual meeting of the shareholders of the Corporation shall be held at the registered office of the corporation, or such other place as may be designated by the Board of Directors, said meeting to be at 10:00 A.M. on the third Tuesday of January of each year. Notice of the annual meeting, containing its time and place, shall be mailed to each shareholder of record at his last known address at least two (2) weeks prior to such meetings.

Section 2: Special Meetings of Shareholders.

Special meeting of the shareholders of the Corporation may be called by the Board of Directors; provided that two (2) weeks notice thereof shall be given stating the purpose of the meeting, such notice to be mailed by first class mail to the last known address of each shareholder.

Section 3: Quorum of Shareholders.

Unless otherwise provided in the Utah Business Corporation Act or by other applicable law, a majority of the shares of the common stock of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at all meetings of the shareholders of the Corporation.

 

7


Section 4: Meetings of the Board of Directors.

Unless otherwise provided in the Utah Business Corporation Act, meetings of the Board of Directors of the Corporation, whether regular or special, may be held either within or without the State of Utah, as may be determined by the Board of Directors or by at least two (2) of the directors of the Corporation. Notice of such meetings shall be given as prescribed by the Board of Directors.

Section 5: Quorum of Directors.

A majority of the directors holding office at any given time shall constitute a quorum for the transaction of business.

Section 6: Bylaws of the Corporation.

The Board of Directors shall have the power to adopt Bylaws for the Corporation and to amend the same from time to time at any regular or special meeting of the Board of Directors. Amendments to the Bylaws shall require a two-third (2/3) majority of the directors present in order to be adopted. The affairs of the corporation shall be governed by these Articles of Incorporation and the Bylaws.

Section 7: Vacancies in the Board of Directors.

Any vacancy occurring in the Board of Directors may be filled by an affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the

 

8


unexpired,; term of this predecessor in office. Any directorship to be filled by reason of an increase of the number of directors shall be filled by the Board of Directors, such appointment to be until the next annual meeting or a special meeting of the shareholders called for the purpose of electing a director to the office so created. Any directorship to be filled by reason of the removal of one (1) or more directors by the shareholders may be filled by election by the shareholders at a meeting at which the director or directors are removed.

Section 8: Shareholders of Record.

The names and address of each shareholder of record of the common stock of the Corporation shall be conclusively presumed to be in accordance with the stock ledger of the Corporation. Such shareholders shall have all rights usual to holders of the common stock of a corporation and as provided by applicable Utah law and as hereinbefore expressly set forth.

Section 9: Books and Records.

The Corporation shall keep adequate books, records and minutes of meetings at its registered office.

Section 10: Working Capital and Business Management.

The Board of Directors shall have the power to fix and vary the amount to be reserved as working capital and to otherwise govern the affairs, financing, and management of the Corporation as the Board, in its discretion, deems necessary and proper.

 

9


Section 11: Compensation of Directors.

The Board of Directors may make provisions for the reasonable compensation of its members for their services as directors and establish the basis and condition upon which such compensation shall be paid. Any director of the Corporation may also serve the Corporation in any other capacity and receive compensation for such other service.

Section 12: Amendments to the Articles of Incorporation.

The Articles of Incorporation may be amended by the shareholders at any regular or special meeting of the shareholders; provided that a quorum is present and that a two-third (2/3) majority of the shares voting is required to adopt any such amendment.

Section 13: Contracts in Which Directors Have an Interest.

No contract or other transaction of which this Corporation is interested shall be invalidated or affected by (a) the fact that one or more of the directors of this Corporation is interested in or is a director or officer of another corporation, or (b) the fact that any director, individually or jointly with others, may be a party to or may be interested in the contract or transaction; and each person who may become a director of this Corporation is hereby relived from any liability that might otherwise arise by reason of his contracting with this Corporation for the benefit of himself or any firm or corporation in which he may be interested.

 

10


ARTICLE IX

INITIAL REGISTERED OFFICE AND

INITIAL REGISTERED AGENT

Section 1: Registered Office.

The address of the initial registered office of the Corporation is 11500 South 2950 West, South Jordan, Utah 84065.

Section 2: Registered Agent.

The name of the initial registered agent at the above address is Dave Balls.

 

   
Dave Balls
Registered Agent

ARTICLE X

OFFICERS AND DIRECTORS

Section 1: Members of the Initial Board of Directors.

The initial Board of Directors of the Corporation shall consist of three members and their respective names and addresses are:

 

NAME

  

ADDRESS

Dave Balls

  

11512 South 2950 West

South Jordan, Utah 84065

Brent Baker

  

10987 South Avilla Drive

Sandy, Utah 84094

Laurie Balls

  

11512 South 2950 West

South Jordan, Utah 84065

 

11


which directors shall hold office until the first annual meeting of the shareholders of the Corporation and until their successors shall have been elected and qualified.

Section 2: Members of Subsequent Board of Directors.

At the annual meeting of the shareholders of the Corporation and at each annual meeting thereafter, the shareholders shall elect directors to hold office until the next succeeding annual meeting of the shareholders. Each director so elected shall hold office for the term for which he is elected and until his successor shall have been elected and qualified.

Section 3: Number of Directors.

The number of directors of the Corporation shall be fixed by the Board of Directors but shall in no case be less than three (3) nor more than twenty (20).

Section 4: Officers.

The officers of the Corporation shall be elected by the Board of Directors but may or may not also serve as directors. The officers shall include: President, Vice President and Secretary—Treasurer, as the Board of Directors may nominate and direct. One person may hold the offices of Secretary and Treasurer simultaneously, and such person must be a shareholder of the Corporation. The duties of the officers shall be those usually incumbent upon the holders of such offices. The Board may, from time to time, elect and remove a Chairman of the Board whose duty shall be to conduct meetings of the Board and to serve as its titular head.

 

12


Section 4b :

Until their successors are elected and qualified, the officers of the corporation shall be as follows:

 

NAME

  

OFFICE

Dave Balls

   President

Brent Baker

   Vice-President

Laurie Balls

   Secretary Treasurer

ARTICLE XI

INCORPORATORS

The name and address of each incorporator is:

 

NAME

  

ADDRESS

Dave Balls

  

11512 South 2950 West

South Jordan, Utah 84065

Brent Baker

  

10987 South Avilla Drive

Sandy, Utah 84094

Laurie Balls

  

11512 South 2950 West

South Jordan, Utah 84065

 

13


EXECUTED this 13th day of July    , 1995.

 

/s/ Dave Balls

Name

/s/ Brent Baker

Name

/s/ Laurie Balls

Name

 

STATE OF UTAH

   )
   )

County of Salt Lake

   )

On the this 13th day of July     , 1995, personally appeared before me Dave Balls, who being by me first duly sworn, deposes and says that he is an incorporator in the foregoing action and that he has read the Articles of Incorporation and states that they are true to his knowledge and belief, except as to those items stated on information, and as to those matters he believes them to be true.

SWORN to before me on this 13th day of July     , 1995.

My Commission Expires:

 

/s/ Annalyne Anderson
NOTARY PUBLIC
Residing in Salt Lake County, Utah

 

14


STATE OF UTAH

   )
   )

County of Salt Lake

   )

On the this 13th day of July     , 1995, personally appeared before me Brent Baker, who being by me first duly sworn, deposes and says that he is an incorporator in the foregoing action and that he has read the Articles of Incorporation and states that they are true to his knowledge and belief, except as to those items stated on information, and as to those matters he believes them to be true.

SWORN to before me on this 13th day of July     , 1995.

My Commission Expires:

 

/s/ Annalyne Anderson
NOTARY PUBLIC
Residing in Salt Lake County, Utah

 

STATE OF UTAH

   )
   )

County of Salt Lake

   )

On the this 13th day of July     , 1995, personally appeared before me Laurie Balls, who being by me first duly sworn, deposes and says that he is an incorporator in the foregoing action and that he has read the Articles of Incorporation and states that they are true to his knowledge and belief, except as to those items stated on information, and as to those matters he believes them to be true.

SWORN to before me on this 13th day of July     , 1995.

My Commission Expires:

 

/s/ Annalyne Anderson
NOTARY PUBLIC
Residing in Salt Lake County, Utah

 

15

Exhibit 3.79

By-Laws of

VALLEY READY MIX, INC.

Article One — Organization

 

1. The name of this Company shall be VALLEY READY MIX, INC.

 

2. The Company shall have a seal which shall be in the following form attached

 

3. The Company may at its pleasure by a vote of the shareholders change its name.

Article Two — Purposes

The following are the purposes for which this Company has been organized:

To produce and provide ready mix concrete products to commercial and residential customers.

To provide financial resources and assets necessary for the operation of related businesses.

For any other legal and lawful purpose as established by the Officers of the Company.

Article Three — Membership

Membership in this Company shall be open to all shareholders who have ownership interest in the Company

Article Four — Meetings

The annual shareholder meeting of this Company shall be held on the first Tuesday of October each and every year except if such day is a legal holiday then and in that event the Board of Directors shall fix the day but it shall not be more than two weeks from the date fixed by these by-laws. The secretary shall cause to be mailed to every shareholder in good standing at his or her address as it appears in the shareholder roll book of this Company a notice telling the time and place of such annual meeting.

Regular meetings of the Officers of this Company shall be held each Tuesday morning.

The presence of not less than two members shall constitute a quorum and shall be necessary to conduct the business of this Company. A quorum as herein before set forth shall be required at any adjourned meeting.

Special meetings of this Company may be called by the president when he deems it for the best interest of the Company. Notices of such meeting shall be mailed to all shareholders at their addresses as they appear in the shareholder roll book at least but not more than five days before the scheduled date set for such special meeting. Such notice shall state the reasons that such meeting has been called, the business to be transacted at such meeting and by whom called.


At the request of any one member of the Board of Directors the president shall cause a special meeting to be called but such request must be made in writing at least five days before the requested scheduled date.

No other business but that specified in the notice may be transacted at such special meeting without the unanimous consent of all present at such meeting.

Article Five — Voting

At all meetings, except for the election of officers and directors, all votes shall be viva voce, except that for the election of officers ballots may be provided and there shall not appear any place on such ballot any mark or marking that might tend to indicate the person who cast such ballot.

At any regular or special meeting if a majority so required any question may be voted upon in the manner and style provided for election of officers and directors.

At all votes by ballot the chairman of such meeting may immediately prior to the commencement of balloting appoint a committee who shall act as “Inspectors of Election” and who shall at the conclusion of such balloting certify in writing to the chairperson the results and the certified copy shall be physically affixed in the minute book to the minutes of that meeting.

No inspector of election shall be a candidate for office or shall be personally interested in the question voted upon.

Article Six — Order of Business

 

1. Roll Call
2. Reading of the minutes of the preceding meeting.
3. Reports of Committees
4. Reports of Officers
5. Old and unfinished business
6. New business
7. Adjournments

Article Seven — Board of Directors

The business of this Company shall be managed by a Board of Directors consisting of at least two members together with the officers of this Company.

The directors to be chosen for the ensuing year shall be chosen at the annual meeting of this Company in the same manner and style as the officers of this Company and they shall serve for a term of two years.

The Board of Directors shall have the control and management of the affairs and business of this Company. Such Board of Directors shall only act in the name of the Company when it shall be regularly convened by its chairman after due notice to all the directors of such meeting.

 

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Two of the members of the Board of Directors shall constitute a quorum and the meetings of the Board of Directors shall be held at least annually.

Each director shall have one vote and such voting may not be done by proxy.

The Board of Directors may make such rules and regulations covering its meetings as it may in its discretion determine necessary.

Vacancies in the Board of Directors shall be filled by a vote of the majority of the remaining members of the Board of Directors for the balance of the year.

The president of the Company by virtue of the office shall be chairperson of the Board of Directors. The Board of Directors shall select from one of their number a secretary.

A director may be removed when sufficient cause exists for such removal. The Board of Directors may entertain charges against any director. A director may be represented by counsel upon any removal hearing. The Board of Directors shall adopt such rules as it may in its discretion consider necessary for the best interests of the Company for this hearing.

Article Eight — Officers

The officers of the Company shall be as follows:

President

Vice President, if desired

Secretary Treasurer

The president shall preside at all shareholder meetings, by virtue of the office be chairperson of the Board of Directors, present at each annual meeting of the Company an annual report of the work of the Company, appoint all committees temporary or permanent, see that all books, reports and certificates as required by law are properly kept or filed, be one of the officers who may sign the checks or drafts of the Company, and have such powers as may be reasonably construed as belonging to the chief executive of any Company.

The vice president shall in the event of the absence or inability of the president to exercise his or her office become acting president of the Company with all rights, privileges and powers as if he or she had been the duly elected president.

The secretary shall keep the minutes and records of the Company in appropriate books, file any certificates required by any statute, federal or state, give and serve all notices to shareholders of the Company, be the official custodian of the records and seal of the Company, be one of the officers required to sign the checks and drafts of the Company, present to the shareholders at any meetings any communication addressed to the secretary of the Company, submit to the Board of Directors any communications which shall be addressed to the secretary, attend to all correspondence of the Company and exercise all duties incident to the office of the secretary.

 

3


The Treasurer shall have the care and custody of all monies belonging to the Company, be solely responsible for such monies or securities of the Company and be one of the officers who shall sign the checks or drafts of the Company. No special fund may be set aside that shall make it unnecessary for the Treasurer to sign the checks issued upon it.

The Treasurer shall render at stated periods as the Board of Directors shall determine a written account of the finances of the Company and such report shall be physically affixed to the minutes of the Board of Directors of such meeting and shall exercise all duties incident to the office of the Treasurer.

Officers shall by virtue of their office be members of the Board of Directors.

No officer or director shall for reason of the office be entitled to receive any salary or compensation, but nothing herein shall be construed to prevent an officer or director for receiving any compensation from the Company for duties other than as a director or officer.

Article Nine — Salaries

The Board of Directors shall hire and fix the compensation of any and all employees which they in their discretion may determine to be necessary in the conduct of the business of the Company.

Article Ten — Committees

All committees of this Company shall be appointed by the President and their term of office shall be for a period of one year or less if sooner terminated by the action of the President.

Article Eleven — Amendments

These by-laws may be altered, amended, repealed or added to by an affirmative vote of not less a majority of the shareholders but not less than two shareholders.

 

4

Exhibit 3.80

ARTICLES OF ORGANIZATION

OF

WASATCH CONCRETE PUMPING, LLC

The undersigned, acting pursuant to the Utah Revised Limited Liability Company Act (the “Act”), adopts the following Articles of Organization for the purpose of organizing a Utah limited liability company (the “Company”):

 

FIRST :    The Company’s name is Wasatch Concrete Pumping, LLC.
SECOND :    The Company will continue until September 1, 2109, unless sooner dissolved by law or as provided in the Company’s operating agreement.
THIRD :    The Company is organized for any and all legal and lawful purposes pursuant to the Act.
FOURTH :    The address of the initial registered office of the Company and the name of its initial registered agent at such address are Corporation Service Company, 2180 South 1300 East, Suite 650, Salt Lake City, UT 84106.
FIFTH :    The management of the Company shall be vested in its members. The name and street address of the initial member of the Company are: RSR Altaview Holdings, Inc., 9547 South 500 West, Sandy, UT 84070.

IN WITNESS WHEREOF, the undersigned member of Wasatch Concrete Pumping, LLC has executed these Articles of Organization as of this 13 day of September, 2010.

 

RSR ALTAVIEW HOLDINGS, INC.,

a Utah corporation

By:   /s/ R. Scott Reynolds
 

R. Scott Reynolds, President


CERTIFICATE OF AMENDMENT

TO ARTICLES OF ORGANIZATION OF

WASATCH CONCRETE PUMPING, LLC

Pursuant to Section 48-2c-408 of the Utah Revised Limited Liability Company Act, as amended (the “ Act ”), the undersigned hereby causes this Certificate of Amendment (this “ Certificate ”) to be delivered to the Utah Department of Commerce, Division of Corporations and Commercial Code for filing, and states as follows:

FIRST: The name of the company is Wasatch Concrete Pumping, LLC (the “ Company ”).

SECOND: The Fifth Article of the Articles of Organization of the Company (the “ Articles ”), is hereby amended and restated in its entirety to read as follows:

 

  FIFTH: The Company shall be managed by its sole member. The name and street address of the sole member of the Company are Harper- Kilgore, LLC, a Delaware limited liability company, P.O. Box 189 Magna, UT 84044.

THIRD: On September 15, 2010, the amendments to the Articles set forth above were adopted by the sole member of the Company, as required by Section 48-2c-803 of the Act, or as otherwise required by the Articles or the Company’s operating agreement.

[Signature page follows.]


IN WITNESS WHEREOF, the undersigned, in accordance with Section 48-2c-204 of the Act, hereby executes this Certificate as of September 15, 2010.

 

 

HARPER-KILGORE, LLC, a Delaware limited

liability company, in its capacity as the sole

member of the Company

By:   /s/ Anya Fonina

Name: Anya Fonina

Title: Vice President

 

3

Exhibit 3.81

AMENDED AND RESTATED OPERATING AGREEMENT

OF

WASATCH CONCRETE PUMPING, LLC

This Amended and Restated Operating Agreement (this “ Agreement ”) of Wasatch Concrete Pumping, LLC (the “ Company ”) is entered into by Harper-Kilgore, LLC, as the sole member of the Company (as defined below) (the “ Member ”).

RECITALS

WHEREAS, on September 13, 2010, the Company was converted from a Utah corporation to a Utah limited liability company, and upon such conversion RSR Altaview Holdings, Inc., a Utah corporation (“ RSR ”), was admitted as the sole member of the Company and executed the operating agreement of the Company, dated as of September 13, 2010 (the “ Original Operating Agreement ”); and

WHEREAS, upon the closing of the transactions contemplated by the Membership Interest Purchase Agreement, dated as of September 15, 2010, among the Company, Peak Construction Materials, LLC, Peak Management, L.C., Wasatch Concrete Pumping, LLC, R. Scott Reynolds, RSR and the Member, the Member acquired all of the issued and outstanding membership interests of the Company;

WHEREAS, the Member desires to amend and restated the Original Operating Agreement in its entirety to reflect that it is the sole member of the Company.

AGREEMENT

The Company is a limited liability company subject to the Utah Revised Limited Liability Company Act (§ 48-2c-101, et seq., Utah Code Ann.), as amended from time to time (the “ Act ”) and the Member, agreeing to be bound by this Agreement, hereby declares as follows.

1. Name . The name of the Company is Wasatch Concrete Pumping, LLC.

2. Filing of Certificates . So long as the Company is member-managed, the Member shall be the person authorized to sign documents and reports required by the Act. The Member, or other person required by law, shall also execute, deliver and file, or cause the execution, delivery and filing of any other certificates, notices or documents required or permitted by law for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business. This Agreement does not limit the power of any person to sign, in accordance with the Act, any document or report required by the Act pursuant to a power of attorney duly executed by a person otherwise authorized to sign such document or report.


3. Purposes . The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Powers . In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have and may exercise all the powers now or hereafter conferred by Utah law on limited liability companies formed under the Act. The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Member.

5. Principal Business Office . The principal business office of the Company shall be located at 9547 South 500 West, Sandy, Utah 84070.

6. Registered Office; Registered Agent . The address of the registered office and the name and address of the registered agent of the Company in the State of Utah is Corporation Service Company, 2180 South 1300 East, Suite 650, Salt Lake City, Utah 84106.

7. Member . The name and the mailing address of the Member are as follows:

 

Name

  

Address

Harper-Kilgore, LLC    P.O. Box 189
   Magna, UT 84044

8. Limited Liability . Except as provided in Section 48-2c-602 of Act, the debts, obligations and liabilities of the Company shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company or for the acts or omissions of the Company or of any other member, manager or employee of the Company.

9. Capital Contributions . The Member is the sole member of the Company, having been admitted upon its acquisition of the entire interest of the predecessor member in the Company and having agreed to be bound by the Company’s operating agreement in effect at that time. The Member may, but is not obligated to make any capital contribution to the Company. The capital account of the Member shall be adjusted only at the time and in the manner determined by the Member.

10. Allocation of Profits and Losses . The Company’s profits and losses shall be allocated solely to the Member.

11. Distributions . Subject to the limitations of the Act and any other applicable law, distributions shall be made to the Member only at the times and in the aggregate amounts determined by the Member.

12. Management . In accordance with Section 48-2c-803 of the Act, management of the Company shall be vested in the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described

 

2


herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Utah. Notwithstanding any other provisions of this Agreement, the Member is authorized to execute and deliver any document or report on behalf of the Company without any vote or consent of any other person. The Member has the authority to bind the Company.

13. Officers . The Member may, from time to time as it deems advisable, select natural persons who are employees or agents of the Company and designate them as officers of the Company (the “ Officers ”) and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Utah Revised Business Corporation Act, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section may be revoked at any time by the Member. An Officer may be removed with or without cause by the Member.

14. Other Business . The Member may engage in or possess an interest in other business ventures of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

15. Exculpation and Indemnification .

(a) To the fullest extent permitted by the laws of the State of Utah and except in the case of bad faith, gross negligence or willful misconduct, no Member or Officer shall be liable to the Company or any other Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member or Officer in good faith on behalf of the Company and in a manner reasonably believed to be in, or not opposed to, the Company’s best interests.

(b) Except in the case of bad faith, gross negligence or willful misconduct, each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Member or Officer, shall be indemnified and held harmless by the Company to the same extent as permitted by the laws of the State of Utah for directors and officers of corporations organized under the laws of the State of Utah. Any indemnity under this Section 15 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

16. Assignments . The Member may at any time assign in whole or in part its limited liability company interest in the Company. If the Member transfers all of its interest in the Company pursuant to this Section 16, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

 

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17. Resignation . The Member may at any time resign from the Company. If the Member resigns pursuant to this Section 17, an additional Member shall be admitted to the Company, subject to Section 18 hereof, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

18. Admission of Additional Members . One or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19. Dissolution .

(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of: (i) the written consent of the Member, (ii) any time there are no members of the Company, or (iii) the entry of a decree of judicial dissolution under Section 48-2c-1213 of the Act.

(b) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets or proceeds from the sale of the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Part 13 of the Act, except, to the extent permitted under the Act, as determined by the Member.

20. Separability of Provisions . If any provision of this Agreement or the application thereof is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable to any extent, the remainder of this Agreement and the application of such provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

21. Entire Agreement . This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof. To the extent that the Act permits this Agreement to provide for, or otherwise does not prohibit this Agreement from providing for, any term or condition for which provision is made in this Agreement, this Agreement shall control to the extent of any inconsistency between this Agreement and the Act. This Agreement is a declaration of the sole member of the Company and this declaration constitutes the operating agreement of the Company pursuant to Section 48-2c-504 of the Act.

22. Governing Law . This Agreement shall be governed by, and construed under, the laws of the State of Utah (without regard to conflict of laws principles).

23. Amendments . This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24. Sole Benefit of Member . The provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

 

4


25. Effectiveness . This Agreement shall become effective when the Member shall have executed and delivered the Agreement to the Company.

[Signature page follows.]

 

5


IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 15 day of September 2010.

 

HARPER-K1LGORE, LLC., sole member
By:   /s/ Anya Fonina
  Name: Anya Fonina
  Title: Vice President

[Signature Page to Wasatch Concrete Pumping, LLC Operating Agreement]

Exhibit 3.82

A RTICLES OF O RGANIZATION

OF

W IND R IVER M ATERIALS , LLC

THE UNDERSIGNED, as an organizer of the above-named limited liability company, and acting pursuant to Section 17-29-201 the Wyoming Limited Liability Company Act (the “Act”), hereby submits to the Wyoming Secretary of State the following Articles of Organization in formation of a limited liability company:

ARTICLE I

COMPANY NAME

The name of this limited liability company is Wind River Materials, LLC.

ARTICLE II

REGISTERED OFFICE AND AGENT

The address of this company’s initial registered office and the name of its original registered agent at this address is:

Monica Hunzie

120 East Elk Street

Kemmerer, WY 83101

ARTICLE III

PRINCIPAL OFFICE

The principal office of the Company shall be located at 120 E. Elk Street, Kemmerer, WY 83101. The mailing address of the Company shall be the address of the principal office. The location of the Company’s principal place of business may be changed by the Managers from time to time in accordance with the then applicable provisions of the Act and any other applicable laws.

ARTICLE III

MANAGER

The company will be managed by a manager or managers, as provided in an Operating Agreement to be executed by the members. Management is not reserved to the members. The initial managers are Jason T. Kilgore and Richard J. Barrett, who will serve as managers until the first meeting of members and until his successor is elected and qualified.


ARTICLE IV

OPERATING AGREEMENT

The members of the company have the right to enter into an Operating Agreement to regulate and manage the affairs of the company in any manner not inconsistent with the Act or these articles. The power to adopt, alter, amend or repeal the Operating Agreement is vested in the members.

DATED this 20th day of October, 2010

ORGANIZER:

 

/s/ Graden P. Jackson

Graden P. Jackson

CONSENT TO APPOINTMENT

I, Monica Hunzie, having a registered office located at 120 East Elk Street, Kemmerer, WY 83101, hereby voluntarily consent to serve as the registered agent for Wind River Materials, LLC and certify that I am in compliance with the requirements of Section 17-28-101 through 111 of the Wyoming Limited Liability Company Act.

REGISTERED AGENT:

 

/s/Monica Hunzie

    Date: 10-12-10

Monica Hunzie

   

 

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F IRST A MENDMENT

TO

A RTICLES OF O RGANIZATION

OF

W IND R IVER M ATERIALS , LLC

THE UNDERSIGNED, being an authorized person of the above-named limited liability company (the “Company”), and acting pursuant to Section 17-29-202 and 17-29-203 of the Wyoming Limited Liability Company Act (the “Act”), hereby submits to the Wyoming Secretary of State the following First Amendment to the Articles of Organization of Wind River Materials, LLC:

I. NAME OF THE COMPANY

The name of this limited liability company is Wind River Materials, LLC.

II. DATE OF FILING ARTICLES OF ORGANIZATION

The date on which the Company filed its initial Articles of Organization with the Wyoming Secretary of State was November 4, 2010.

III. TEXT OF AMENDMENT TO ARTICLES OF ORGANIZATION

Article III of the Articles of Organization of the Company is amended to read:

ARTICLE III

MANAGER

The company will be managed by a manager or managers, as provided in an Operating Agreement to be executed by the members. Management is not reserved to the members. The initial managers are M. Shane Evans, Jason T. Kilgore, and Richard J. Barrett, who will serve as managers until the first meeting of members and until their successors are elected and qualified.

DATED this 28 day of January        , 2011.

AUTHORIZED PERSON:

 

/s/ Richard J. Barrett

Richard J. Barrett, Manager, Wind
River Materials, LLC


ARTICLE III

MANAGER

The company will be managed by a manager or managers, as provided in an Operating Agreement to be executed by the members. Management is not reserved to the members. The initial managers are Jason T. Kilgore and Richard J. Barrett, who will serve as managers until the first meeting of members and until their successors are elected and qualified.

ARTICLE IV

OPERATING AGREEMENT

The members of the Company have the right to enter into an Operating Agreement to regulate and manage the affairs of the company in any manner not inconsistent with the Act or these articles. The power to adopt, alter, amend or repeal the Operating Agreement is vested in the members.

DATED this 20 day of October        , 2010.

ORGANIZER

 

/s/ Graden P. Jackson

Graden P. Jackson

CONSENT TO APPOINTMENT

I, Monica Hunzie, having a registered office located at 120 East Elk Street, Kemmeter, WY 80103, hereby voluntarily consent to serve as registered agent for Wind River materials, LLC and certify that I am in compliance with the requirements of Section 17-28-101 through 111 of the Wyoming Limited Liability Company Act.

REGISTERED AGENT:

 

/s/ Monica Hunzie

  Date:  

10-12-10

Monica Hunzie        


S ECOND A MENDMENT

TO

A RTICLES OF O RGANIZATION

OF

W IND R IVER M ATERIALS , LLC

THE UNDERSIGNED, being an authorized person of the above-named limited liability company (the “Company”), and acting pursuant to Section 17-29-202 and 17-29-203 of the Wyoming Limited Liability Company Act (the “Act”), hereby submits to the Wyoming Secretary of State the following Second Amendment to the Articles of Organization of Wind River Materials, LLC:

I. NAME OF THE COMPANY

The name of this limited liability company is Wind River Materials, LLC.

II. DATE OF FILING ARTICLES OF ORGANIZATION

The date on which the Company filed its initial Articles of Organization with the Wyoming Secretary of State was November 4, 2010. A First Amendment to the Articles of Organization was subsequently filed with the Wyoming Secretary of State on February 15, 2011.

III. TEXT OF AMENDMENT TO ARTICLES OF ORGANIZATION

Article III of the Articles of Organization of the Company is amended to read:

ARTICLE III

MANAGER

The company will be managed by a manager or managers, as provided in an Operating Agreement to be executed by the members. Management is not reserved to the members. The initial managers are M. Shane Evans, Jason T. Kilgore, I. Brian Hall, and Richard J. Barrett, who will serve as managers until the first meeting of members and until their successors are elected and qualified.

DATED this 11th day of April        , 2011.

AUTHORIZED PERSON:

Kilgore Companies, LLC, as

Sole Member of Wind River Materials, LLC

By:   /s/ Jason T. Kilgore
Its:   President

Exhibit 3.83

O PERATING A GREEMENT

FOR

W IND R IVER M ATERIALS , LLC

The undersigned, have caused the limited liability company Wind River Materials, LLC (the “Company” ) to be organized as a limited liability company under the laws of the State of Wyoming effective as of the 20th day of October, 2010, and they wish to enter into this Operating Agreement (the “Agreement” ) to set forth the terms and conditions on which the management, business and financial affairs of the Company shall be conducted.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, covenants and conditions herein contained, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby covenants and agrees as follows:

ARTICLE I — Definitions

“Accounting Period” means the period beginning on the day following any Adjustment Date (or, in the case of the first Accounting Period, beginning on the day of formation of the Company) and ending on the next succeeding Adjustment Date.

“Act” means the Wyoming Limited Liability Company Act and its default provisions, 17-29-101, et seq. (as amended from time to time).

“Adjustment Date” means (i) the last day of each Fiscal Year, (ii) the date of any adjustment pursuant to clause (i) or (ii) of the definition of Book Value, and (iii) any other date determined by the Managers as appropriate for a closing of the Company’s books.

“Articles” means the Articles of Organization, as filed with the Secretary.

“Authorized Representative” means any person authorized to act on behalf of the Company pursuant to Section 4.4.

“Available Cash” means all cash funds of the Company on hand from time to time (other than cash funds obtained as Capital Contributions, Capital Event Proceeds and cash funds obtained from loans to the Company) after (i) payment of all operating expenses of the Company as of such time, (ii) reasonable provisions for payment of all obligations of the Company as of such time, and (iii) reasonable provisions for a working capital and other reserves for identified future needs.

“Book Value” means, with respect to any Company asset, the asset’s adjusted basis for U.S. federal income tax purposes, except as follows:

(i) the initial Book Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset;


(ii) the Book Values of all of the Company’s assets shall be adjusted by the Company to equal their respective gross fair market values as of the following times: (a) the admission of a Person (other than a transferee) as a new Member of the Company; (b) the distribution by the Company of money or property to a Member in consideration of the retirement of all or a portion of such Member’s Interest; and (c) any time that either one or more Members, but fewer than all Members, or all Members but not in proportion to their Percentage Interests, make a Capital Contribution to the Company;

(iii) the Book Value of any or all of the Company’s assets shall be adjusted to the gross fair market value thereof if the Managers determine that such adjustment is necessary in order to ensure that the allocations of Net Profits and Net Losses provided for under this Agreement comply with the Treasury Regulations issued under section 704(b) of the Code; and

(iv) if the Book Value of any asset has been adjusted pursuant to clause (i), (ii) or (iii) hereof, such Book Value shall thereafter be adjusted by any Depreciation taken into account with respect to such asset.

“Capital Account” has the meaning set forth in Section 5.3 hereof

“Capital Contributions” means, with respect to any Member, the amount of cash or the gross fair market value of any property contributed by such Member to the Company pursuant to Article V and the other provisions of this Agreement.

“Capital Event Proceeds” means the net amount of cash received by the Company from the sale, exchange, refinancing, condemnation, casualty loss or other disposition by the Company of its assets outside of the ordinary course of business, less (i) the portion thereof disbursed by the Managers for the payment of the Company’s debts and expenses and (ii) such other reserves as the Managers in their business judgment may see fit to establish.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor act thereto.

“Depreciation” shall mean, for any Accounting Period and with respect to any asset, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to such asset for such period for U.S. federal income tax purposes, provided that if the Book Value of an asset differs from its adjusted basis for U.S. federal income tax purposes at the beginning of any such period, Depreciation shall be an amount that bears the same relationship to the Book Value of such asset as the depreciation, amortization, or other cost recovery deduction computed for tax purposes with respect to such asset for the applicable period bears to the adjusted tax basis of such asset at the beginning of such period, or if such asset has a zero adjusted tax basis, Depreciation shall be an amount determined under any reasonable method selected by the Managers.

“Dissolution Event” has the meaning set forth in Section 11.1 hereof

 

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“Fiscal Year” means the Company’s fiscal year which shall end on December 31 in each year and which shall be the same for income tax and financial and accounting purposes, unless determined otherwise by the Managers.

“Indemnified Person” means any person entitled to indemnification pursuant to the terms set forth in Article VIII.

“Interest” of a Member means the Member’s “interest in the Company” (as defined in the Act) and such Member’s rights and obligations with respect to the Company pursuant to this Agreement and applicable law.

“Majority” or “Majority-In-Interest” means more than fifty percent (50%) of all Percentage Interests in the Company.

“Manager” means a Manager of the Company, whose rights, powers and duties are specified in Article IV hereof.

“Member” means each person that is identified as an initial Member in Schedule A hereto or is admitted as a Member as provided in Article IX hereof. A Person shall cease to be a Member at such time as such Person no longer owns an Interest as a Member.

“Net Profits” and “Net Losses” means, with respect to any Accounting Period, the net income or net loss of the Company for such Accounting Period, determined in accordance with section 703(a) of the Code, including any items that are separately stated for purposes of section 702(a) of the Code, as determined in accordance with U.S. federal income tax accounting principles with the following adjustments:

(i) any income of the Company that is exempt from U.S. federal income tax shall be included as income;

(ii) any expenditures of the Company described in section 705(a)(2)(B) of the Code or treated as section 705(a)(2)(B) of the Code expenditures pursuant to section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations shall be treated as current expenses;

(iii) any items of income, gain, loss or deduction specially allocated pursuant to this Agreement shall be excluded from the determination of Net Profits and Net Losses;

(iv) without giving effect to any adjustments made pursuant to sections 734 or 743 of the Code;

(v) treating as an item of gain (loss) the excess (deficit), if any, of the gross fair market value of property distributed in such Accounting Period over (under) such property’s Book Value;

(vi) treating as an item of gain (or loss) the amount of any adjustment to the Book Value of any asset pursuant to clause (ii) or (iii) of the definition of Book Value; and

 

3


(vii) in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such net income or loss, there shall be taken into account Depreciation for such Accounting Period.

“Percentage Interest” means with respect to any Member, (i) for the initial Percentage Interest, the percentage set forth opposite such Member’s name on column 2 of Schedule A hereto, and (ii) upon the occurrence of any event described in clause (ii) of the definition of Book Value herein, the percentage obtained by dividing the Capital Account of such Member by the aggregate Capital Accounts of all of the Members.

“Person” means any natural person or entity, and the heirs, executors, administrators, legal representatives, successors, and assigns of such person where the context so admits.

“Secretary” means the Wyoming Secretary of State and any successor thereto.

“Treasury Regulations” means the U.S. federal income tax regulations promulgated under the Code, as they may be amended from time to time.

“Unreturned Capital” means so much of a Member’s Capital Contributions that have not been returned to such Member by way of distributions under Section 7.1(b).

ARTICLE II — Purpose, Principal Office, Etc.

2.1 Purpose . The Company is formed to engage in any lawful activity for which limited liability companies may be formed under the Act, and to engage in any and all activities necessary or incidental to the foregoing, including, without limitation, acquiring, operating, managing, holding and disposing of real estate (and interests therein), stocks, bonds, notes, debentures, limited liability company interests, limited partner interests and other securities and assets of any kind.

2.2 Principal Office . The principal office of the Company shall be located at 120 E. Elk Street, Kemmerer, WY 83101. The location of the Company’s principal place of business may be changed by the Managers from time to time in accordance with the then applicable provisions of the Act and any other applicable laws.

2.3 Registered Office and Registered Agent . The address of this company’s initial registered office and the name of its original registered agent at this address is: Monica Hunzie, 120 E. Elk Street, Kemmerer, WY 83101. The Managers may from time to time in accordance with the Act change the Company’s registered office or registered agent or both. The Managers shall select and designate a registered office and registered agent for the Company in each other state in which the Company is required to maintain or appoint one.

2.4 Term . The term of the Company shall begin upon the acceptance of the Articles of Organization by the Secretary and shall continue in existence until terminated pursuant to Section 11.1 hereof.

 

4


2.5 Limited Liability . Except as otherwise provided by Act or herein, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and neither the Managers nor the Members shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member of the Company.

2.6 Other Business . The Managers, Members and any Person affiliated with any of the Managers or Members may engage in or possess an interest in other business ventures of every kind and description, independently or with others. Neither the Company nor other Members shall have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

2.7 Transaction of Business . With the consent of the Managers, any Member shall have the authority to lend money to, borrow money from, act as surety, guarantor or endorser for, guarantee or assume one or more obligations of, provide collateral for, and transact other business with the Company. Any Member transacting business with the Company shall have the same rights and obligations with respect to such matter as person who is not a Member or Manager.

2.8 Filings . The Managers and any Authorized Representative (as hereinafter defined) are hereby authorized to execute and file (or direct the execution and filing of) Articles of Organization with the Secretary. The Managers are hereby authorized to execute, file and record all such other certificates and documents, including amendments to the Articles of Organization, and to do such other acts as may be appropriate to comply with all requirements for the formation, continuation and operation of a limited liability company, the ownership of property and the conduct of business under the laws of the State of Wyoming and any other jurisdiction in which the Company may own property or conduct business.

ARTICLE III—Voting Powers, Meetings, Etc. of Members

3.1 In General . The Members shall not be entitled to participate in the day-to-day affairs and management of the Company, but instead, the Members’ right to vote or otherwise participate with respect to matters relating to the Company shall be limited to those matters as to which the express terms of the Act, the Articles of Organization or this Agreement vest in the Members the right to so vote or otherwise participate.

3.2 Actions Requiring Approval of Members.

(a) Notwithstanding any other provision of this Operating Agreement, the approval of the Members shall be required in order for any of the following actions to be taken on behalf of the Company:

(i) Amending the Articles of Organization in any manner that materially alters the preferences, privileges or relative rights of the Members.

(ii) Electing the Managers as provided in Article IV hereof.

(iii) Taking any action that would make it impossible to carry on the ordinary business of the Company.

 

5


(iv) Confessing a judgment against the Company in excess of $10,000.

(v) Filing or consenting to filing a petition for or against the Company under any federal or state bankruptcy, insolvency or reorganization act.

(vi) Loaning Company funds in excess of $10,000 or for a term in excess of one year to any Member.

(b) Unless the express terms of this Operating Agreement specifically provide otherwise, the affirmative vote of a Majority-In-Interest of the Members shall be necessary and sufficient in order to approve or consent to any of the matters set forth in Section 3.2(a) above or any other matters that require the approval or consent of the Members.

3.3 Action by Members . In exercising their rights as provided above, the Members shall act collectively through meetings or written consents as provided in this Article.

3.4 Special Meetings . Special meetings of the Members, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Managers, and shall be called by the Managers at the request of any two Members, or such lesser number of Members as are Members of the Company.

3.5 Place of Meeting . The place of any meeting of the Members shall be the principal office of the Company, unless another place is designated by the Managers.

3.6 Notice of Meetings . Written notice stating the place, day and hour of any meeting of the Members and the purpose or purposes for which the meeting is called shall be delivered not less than 10 nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the Managers, to each Member, unless the Act or the Articles of Organization require different notice.

3.7 Conduct of Meetings . All meetings of the Members shall be presided over by a chairperson of the meeting, who shall be the Managers, or a Member designated by the Managers. The chairperson of any meeting of the Members shall determine the order of business and the procedure at the meeting, including regulation of the manner of voting and the conduct of discussion, and shall appoint a secretary of such meeting to take minutes thereof.

3.8 Participation by Telephone or Similar Communications . Members may participate and hold a meeting by means of conference telephone or similar communications equipment by means of which all Members participating can hear and be heard, and such participation shall constitute attendance and presence in person at such meeting.

3.9 Waiver of Notice . When any notice of a meeting of the Members is required to be given, a waiver thereof in writing signed by a Member entitled to such notice, whether given before, at, or after the time of the meeting as stated in such notice, shall be equivalent to the proper giving of such notice.

 

6


3.10 Action by Written Consent . Any action required or permitted to be taken at a meeting of Members may be taken without a meeting if one or more written consents to such action are signed by the Members who are entitled to vote on the matter set forth in the consents and who constitute the requisite number or percentage of such Members necessary for adoption or approval of such matter on behalf of the Company. By way of example and not limitation, a Majority-In-Interest of the Members may take action as to any matter specified in Section 3.2(a) hereof by signing one or more written consents approving such action, without obtaining signed written consents from any other Members. Such consent or consents shall be filed with the minutes of the meetings of the Members. However, unless the written consents of all Members have been obtained, notice of any Member approval without a meeting shall be given at least five (5) days before the consummation of the transaction, action, or event authorized by the Member action to those entitled to vote who have not consented in writing. The notice must be accompanied by a description of the transaction, action, or event.

ARTICLE IV — Management of the Company

4.1 Management and Control . The Company shall be managed by Managers. Except as otherwise expressly provided in the Act, the Articles of Organization or this Operating Agreement, the Managers are authorized and empowered on behalf of and in the name of the Company to carry out any and all of the purposes of the Company and to perform all acts and enter into and perform all contracts and other undertakings that they may, in their sole discretion, deem necessary, advisable or incidental thereto. No member other than a Manager shall have authority to manage or specifically bind the Company except as specifically provided in this Operating Agreement.

4.2 Election, Etc. of Managers .

(a) Richard J. Barrett and Jason T. Kilgore shall serve as the initial Managers of the Company until their respective successors shall be duly elected and qualified.

(b) If any Person resigns or otherwise vacates the office of Manager, the Members shall elect a replacement Manager to serve the remaining term of such office, unless one or more other Persons then serve as Managers and the Members determine not to fill such vacancy. A Person may be removed as a Manager by the Members with or without cause at any time. A Manager may, but shall not be required to, be elected from among the Members. A Manager may be a natural person or an entity.

4.3 Powers . Except as otherwise expressly provided in the Act, the Articles of Organization or this Operating Agreement, the Managers shall have full, exclusive and complete discretion, power and authority to manage, control, administer and operate the business and affairs of the Company for the purposes herein stated, and to make all decisions affecting such business and affairs, including without limitation, for Company purposes, the power to:

(a) acquire by purchase, lease or otherwise, any real or personal property, tangible or intangible;

(b) construct, operate, maintain, finance and improve and to own, sell, convey, assign, mortgage or lease any property owned or held by the Company;

 

7


(c) enter into agreements and contracts in connection with the Company’s business;

(d) borrow money for and on behalf of the Company and execute any guaranty on behalf of a third party and pledge Company property to secure any such obligation;

(e) execute or modify agreements or contracts with respect to any part or all of the property owned or held by the Company;

(f) repay, in whole or in part, refinance, amend, modify or extend any mortgages or deeds of trust that may affect any property owned or held by the Company and, in connection therewith, to execute for and on behalf of the Company any extensions, renewals or modifications of such mortgages or deeds of trust;

(g) execute any and all other instruments and documents that may be necessary, or in the reasonable opinion of the Managers, desirable to carry out the intent and purpose of this Agreement;

(h) make any and all expenditures that the Managers, in their sole discretion, deem necessary or appropriate in connection with the management of the affairs of the Company and the carrying out of its obligations and responsibilities under this Agreement, including, without limitation, all operating, capital, legal, accounting, investment advisory and other related expenses incurred in connection with the organization, financing and operation of the Company or in connection with its property;

(i) enter into any kind of activity necessary for, in connection with, or incidental to, the accomplishment of the purposes of the Company;

(j) open bank accounts, and invest and reinvest Company monies in short term instruments or money market funds or any securities or other investments, whether or not publicly traded or readily marketable;

(k) loan money on behalf of the Company;

(1) carry out the Company purposes through other limited liability companies, joint ventures, partnerships, corporations, trusts or other entities;

(m) purchase liability and other insurance to protect the Company’s property and business, including policies of life insurance which insure the life of any Member;

(n) pay all Company debts, obligations and expenses;

(o) employ accountants, attorneys, appraisers or other professionals to perform services for or on behalf of the Company and to compensate them from Company funds; and

(p) perform any and all other acts as the Managers may deem necessary or appropriate to the conduct of the Company’s business.

 

8


4.4 Authorized Representatives .

(a) The Managers may (i) authorize by written action any person to enter into and perform any contract on behalf of the Company, and (ii) appoint individuals (including one or more Managers), with such titles as they may select, as officers, employees or agents of the Company to act on behalf of the Company, for such reasonable compensation as the Managers shall determine, and with such power and authority as the Managers may delegate from time to time to any such person, upon delivery to the Secretary of a Statement of Authority in accordance with Section 17-29-302 of the Act.

(b) Any Statement of Authority filed with the Secretary pursuant to Section 4.4(a) must comply with the requirements of Section 17-29-302 of the Act, including that the Statement of Authority:

(i) include the name of the company and the street and mailing addresses of its designated office;

(ii) with respect to any position that exists in or with respect to the Company, that it state the authority, or limitations on the authority, of all persons holding the position to:

(A) execute an instrument transferring real property held in the name of the Company; or

(B) enter into other transactions on behalf of, or otherwise act for or bind, the Company; and

(iii) that it state the authority, or limitations on the authority, of a specific person to:

(A) execute an instrument transferring real property held in the name of the Company; or

(B) enter into other transactions on behalf of, or otherwise act for or bind, the Company.

(c) Any such persons, individuals, officers, employees and agents (each “Authorized Representative” ) may be removed by the Managers at any time and from time to time through the Managers filing a cancellation of the Statement of Authority with the Secretary in accordance with Section 17-29-302(b) of the Act.

4.5 Authority . The Managers and any Authorized Representative shall have the right to act for and bind the Company and may execute documents, instruments and contracts in the name of and on behalf of the Company. Any person or entity dealing with the Company, the Members, the Managers or any Authorized Representative may rely upon a certificate signed by the Managers as to the identity of the Members, the Managers or such Authorized Representative and as to the authority of the Managers or such Authorized Representative to execute and deliver any agreement or other instrument or document on behalf of the Company. No person dealing

 

9


with the Managers need inquire into the validity or propriety of any agreement, instrument or document executed in the name of the Company by the Managers, or as to the authority of the Managers executing the same.

4.6 Decisions by Managers . During any period in which more than two persons are serving as the Managers, and except as otherwise provided herein, all decisions which under this Agreement are to be made by the Managers shall be made by the majority of such Managers, with each Manager having one vote. If only two persons are serving as the Managers, all decisions shall be made by a unanimous vote of such Managers unless otherwise agreed by them. Moreover, if an even number of persons are serving as the Managers and such Managers are unable to take action or make a decision because of a disagreement or dispute, such decision shall be made by a vote of all of the Members of the Company. If only one person is serving as the Manager all decisions to be made by the Managers shall be made by such person serving as the sole Manager.

In exercising their powers and authority under, and otherwise carrying out the provisions of, this Agreement, the Managers shall act solely in the best interests of, and shall have a fiduciary duty (including the duty of loyalty, the duty of good faith and fair dealing, the duty of care, and the duty to disclose material information) with respect to, the Company and the Members.

4.7 Execution of Documents by Managers . When more than one person is serving as a Manager, the signature of one Manager on a contract or other document on behalf of the Company shall be legally binding as to the Company and its Members even though such Manager did not have the authority to do so under the provisions of this Agreement.

4.8 IRC Section 754 Elections . The Managers shall have the power, in their sole discretion, to (a) cause an election under section 754 of the Code to be made with respect to the Company, (b) determine the method (or methods) adopted by the Company for making any income tax allocations required by section 704(c) of the Code or the Treasury Regulations issued thereunder, (c) make such allocations for Federal, state and local income tax purposes as may be necessary to maintain substantial economic effect, or to ensure that such allocations are in accordance with the Interests of the Members in the Company, within the meaning of the Code and the Treasury Regulations, and (d) determine all other tax matters relating to the Company, including accounting procedures, not expressly provided for by the terms of this Agreement.

4.9 Reliance by Authorized Representatives . An Authorized Representative shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any person or entity as to matters the Authorized Representative reasonably believes are within such person’s or entity’s professional or expert competence.

4.10 Incapacity of Individual Manager .

(a) For purposes of this Agreement, an individual who is a Manager shall be treated as being incapacitated if he or she lacks sufficient understanding or capacity to make or communicate responsible decisions concerning the management of the Company assets by

 

10


reason of mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, chronic intoxication or other similar cause. The existence of a Manager’s incapacity shall be conclusively established by (i) a determination of a court having jurisdiction of such matters, (ii) the written opinion of the Manager’s regularly attending physician or (iii) the written opinion of two other physicians licensed to practice medicine in the state in which the Manager resides.

(b) If a Manager is treated as being incapacitated, he or she shall be deemed to have irrevocably resigned as a Manager. If the effect of the incapacity results in there being no remaining Manager, the remaining Members by the vote of a Majority-In-Interest shall designate a new Manager.

4.11 Reimbursement . Each Manager shall be entitled to reasonable compensation for services rendered to the Company in that capacity as well as to be reimbursed for all expenses reasonably incurred by such manager in connection with the business and purposes of the Company.

ARTICLE V—Contributions and Capital Accounts

5.1 Initial Capital Contributions . On or prior to the date hereof, each Member shall make an initial Capital Contribution of all or a portion of such Member’s right, title and interest in and to the property set forth opposite such Member’s name in column 2 of Schedule A hereto, in exchange for the respective Percentage Interests set forth in column 4 thereon. The parties to this Agreement agree that the fair market value of the foregoing contributions is set forth in column 3 of Schedule A hereto.

5.2 Additional Contributions . No Member shall be required to make any Capital Contribution in addition to his or her initial Capital Contribution, and the Members may make additional Capital Contributions to the Company only if such additional Capital Contributions are made pro rata by all the Members or all the Members consent in writing to any non-pro rata contribution. The fair market value of any property other than cash or publicly traded securities to be contributed as an additional Capital Contribution shall be (a) agreed upon by the contributing Member and a Majority-in-Interest of the Members before the contribution, or (b) determined by a disinterested appraiser selected by the Managers.

5.3 Capital Accounts . For each Member, there shall be established a separate Capital Account to which such Member’s initial Capital Contribution shall be credited. As of the end of each Accounting Period, the balance in each Member’s Capital Account shall be adjusted by (a) increasing such balance by such Member’s (i) allocable share of Net Profits for such Accounting Period (allocated in accordance with Section 6.1 hereof) and (ii) Capital Contributions, if any, made during such Accounting Period and (b) decreasing such balance by (i) the amount of cash and the fair market value of property distributed to such Member during such Accounting Period and (ii) such Member’s allocable share of Net Losses for such Accounting Period (allocated in accordance with Section 6.1). The Capital Accounts shall also be adjusted to reflect any special allocations made pursuant to this Agreement and any Member indebtedness transferred to the Company and any Company indebtedness transferred to a Member.

 

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5.4 Negative Capital Accounts . No Member shall be required to make up a negative balance in the Member’s Capital Account.

5.5 No Withdrawal of Capital . Unless as otherwise provided by the Act or expressly herein, no Member shall have the right to withdraw the Member’s capital from the Company or to receive any distribution of or return on such Member’s Capital Contributions.

5.6 Loan . No loan or promissory note made to the Company by any Member (whether or not evidenced by a promissory note) shall constitute a Capital Contribution to the Company for any purpose.

ARTICLE VI—Allocations and Tax Matters

6.1 Allocations to Capital Accounts . Net Profits or Net Losses with respect to any Accounting Period shall be allocated among the Capital Accounts of the Members in proportion to their Percentage Interests in effect during such Accounting Period.

6.2 Tax Allocations and Other Tax Matters . Except as otherwise provided in the following sentence, each item of income, gain, loss and deduction recognized by the Company shall be allocated among the Members, for U.S. federal, state and local income tax purposes, to the extent permitted under the Code and the Treasury Regulations, in the same manner that each such item is allocated to the Members’ Capital Accounts, provided that the Managers may adjust such allocations as long as such adjusted allocations have substantial economic effect or are in accordance with the interests of the Members in the Company, within the meaning of the Code and the Treasury Regulations. Each item of income, gain, loss and deduction with respect to property contributed to the Company shall be allocated in accordance with the principles of section 704(c) and section 737 of the Code and the Treasury Regulations thereunder. Tax credits and tax recapture shall be allocated in accordance with the Members’ interests in the Company as provided in Treasury Regulations section 1.704-1(b)(4)(ii). The Managers shall have the power, in their sole discretion, to (a) cause an election under section 754 of the Code to be made with respect to the Company, (b) determine the method (or methods) adopted by the Company for making any income tax allocations required by section 704(c) of the Code or the Treasury Regulations thereunder, and (c) determine all other tax matters relating to the Company, including accounting procedures, not expressly provided for by the terms of this Agreement.

6.3 Allocation of Income and Loss in Respect of Interests Transferred or Reduced . If a Member shall Transfer an Interest pursuant to Section 9.3 of this Agreement (or a Member shall be admitted to the Company) other than on the first day of the Company’s taxable year, the Company books shall not be closed but instead the Net Profits and Net Losses allocable in respect of such Interest (or all Interests) for such taxable year shall be apportioned between the transferor and the transferee (or between the Persons who were Members immediately before such admission and the persons who are Members immediately after such admission) based on the portion of the taxable year that has elapsed prior to such transfer (or admission), as provided in section 1.706-1(c)(2)(ii) of the Treasury Regulations, unless the Manager shall otherwise elect or as may otherwise be required by section 1.706-1(c)(5) of the Treasury Regulations in the case of a Transfer by gift.

 

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6.4 Taxation Treatment . Initially, the Company shall be treated as a disregarded entity under the Code for income tax purposes.

ARTICLE VII—Distributions

7.1 Distributions of Cash .

(a) Distribution of Available Cash . Available Cash shall be distributed to the Members according to their Percentage Interests in such amounts and at such times as the Managers shall determine consistent with the Managers’ fiduciary duty to the Company and the Members of the Company.

(b) Distribution of Capital Event Proceeds . Capital Event Proceeds shall be distributed to the Members in such amounts and at such times as the Managers shall determine in their discretion but always in the following rank and order:

(i) Among the Members in proportion to, and to the extent of, their Unreturned Capital.

(ii) The remainder, if any, among the Members according to their Percentage Interests.

7.2 Member Tax Liability . The amount of tax which is required to be paid or withheld by the Company with respect to any Member’s allocable share of the income of the Company shall be assessed to such Member, who shall pay the same to the Company or the taxing authority forthwith upon demand of the Managers. The Managers may in their discretion set off any such tax against any amounts otherwise distributable to a Member under this Agreement. Each Member hereby indemnifies the Company and every other Member and agrees to hold them harmless from any liability or loss they might incur by virtue of any such tax with respect to such Member’s allocable share of the income of the Company.

7.3 Restrictions on Distributions . Notwithstanding the distributions contemplated by this Section, if the Company has creditors, no distribution may be made if, after giving effect to such distribution, (i) the Company would be unable to pay its debts as they become due in the usual course of business, (ii) the net assets of the Company would be less than zero, or (iii) it would be in violation of the Act.

7.4 Liquidating Distributions . Distributions of proceeds resulting from a termination and dissolution of the Company shall be distributed by the Managers in the manner set forth in Section 11.4 hereof.

ARTICLE VIII—Exculpation, Indemnification, and Insurance

8.1 Exculpation . So long as a Manager acts in good faith with respect to the conduct of the business and affairs of the Company, no Manager shall be liable or accountable to the Company or to any of the other Managers and Members, in damages or otherwise, for any error of judgment, for any mistake of fact or of law, for any other act or thing that the Manager may do or refrain from doing in connection with the business and affairs of the Company or for any act

 

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or omission performed or omitted by a Manager or Authorized Representative, except for willful misconduct or gross negligence or breach of fiduciary duty, and further except for breaches of contractual obligations or agreements between the Manager and the Company. Whenever in this Agreement a Manager is permitted or required to make decisions in good faith, the Manager shall act under such standard imposed by this Agreement or any relevant provisions of law or in equity or otherwise. A Manager shall not be relieved of any breach of the Manager’s fiduciary obligations to the Company or its Members as set forth in the Act.

8.2 Reliance . A Manager shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any of the Members, officers, employees or committees, or by any other person as to matters the Manager reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company (including, without limitation, information, opinions, reports or statements as to the value and the amount of the assets, liabilities, profits or losses of the Company or any other facts pertinent to the existence and amount of assets from which distributions to Members might properly be paid). In addition, the Manager may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisors selected by him or her, and any opinion of any such person as to matters which the Manager reasonably believes to be within such person’s professional or expert competence shall be a full and complete authorization and shall provide full and complete protection in respect of any action taken or suffered or omitted by the Manager hereunder in good faith and in accordance with such opinion.

8.3 Indemnification . In addition to any other powers provided by law:

(a) The Company has power to indemnify any person (an “Indemnified Person” ) who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact that the Indemnified Person is or was a Manager, Member, Authorized Representative, employee or agent of the Company, or is or was serving at the request of the Company as a Manager, Member, officer, director, Authorized Representative, employee or agent of another Company, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if the Indemnified Person acted in good faith and in a manner the Indemnified Person reasonably believed to be not opposed to the best interests of the Company (measured by the same fiduciary duty standards applicable to Managers in Section 4.6), and, with respect to any criminal action or proceeding, had no reasonable cause to believe the Indemnified Person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon plea of nolo contendre or its equivalent, shall not, of itself, create a presumption that the Indemnified Person did not act in good faith and in a manner which the Indemnified Person reasonably believed to be or not opposed to the best interests of the Company (measured as aforesaid), and, with respect to any criminal action or proceeding, had reasonable cause to believe that the Indemnified Person’s conduct was unlawful.

 

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(b) The Company has the power to indemnify any Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or contemplated action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnified Person was or is a Manager, Member, Authorized Representative, employee or agent of the Company, or is or was serving at the request of the Company as a Member, Manager, Authorized Representative, director, officer, employee or agent of another Company, partnership, joint venture, trust or other enterprise at the request of the Company against expenses (including attorneys’ fees) actually and reasonably incurred by the Indemnified Person in connection with the defense or settlement of such action or suit if the Indemnified Person acted in good faith and in a manner the Indemnified Person reasonably believed to be in or not opposed to the best interests of the Company (measured as aforesaid) and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of the Indemnified Person’s duty to the Company unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

(c) To the extent that a Manager, Member, Authorized Representative, director, employee or agent of a Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 8.3(a) or (b), or in defense of any claim, issue or matter therein, the Indemnified Person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith.

(d) Any indemnification under Section 8.3(a) or (b) (unless ordered by a court) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the Manager, Member, Authorized Representative, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 8.3(a) or (b). Such determination shall be made by the Managers (but excluding any Manager who was a party to such action, suit or proceeding) if any such Managers were not parties to such action, suit or proceeding supported by independent legal counsel in a written opinion. If all of the Managers were parties to such action, suit, or proceeding, then such determination shall be made by a Majority-In-Interest of the Members provided such Members were not parties to such action, suit, or proceeding supported by independent legal counsel in a written opinion.

(e) The indemnification provided by this Section 8.3 shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any law, agreement, or otherwise, both as to action in the Indemnified Person’s official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Manager, Member, Authorized Representative, employee or agent and shall inure to the benefit of the heirs and personal representatives of such person.

8.4 Insurance . The Company may purchase and maintain insurance or other similar protection for its benefit, the benefit of any Indemnified Person, or both, against any Claims, whether or not the Company would have the obligation to indemnify such Indemnitee against such liability.

 

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8.5 Expenses . To the fullest extent permitted by applicable law, expenses (including, without limitation, attorneys’ fees and disbursements) incurred by an Indemnified Person in defending any claim, demand, action (a civil or criminal), suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding, subject to recapture by the Company following a later determination that such Indemnified Person was not entitled to be indemnified hereunder.

ARTICLE IX—Resignation; Admission of Members

Voluntary Transfers of Interests; Involuntary Transfers of Interests

9.1 Resignation .

(a) Resignation by Manager . A Manager may resign at any time by giving written notice to the other Manager of the Company, or if none, to the Members of the Company. The resignation of a Manager shall take effect upon delivery of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Such resignation may be revoked at any time before its effective date by delivery of a notice of revocation to the other Manager, or if none, to the Members. The resignation of a Manager shall not affect such Manager’s rights and liabilities as a Member.

(b) Withdrawal by Member . In accordance with the Act, no Member shall have the right to withdraw from the Company, except upon the dissolution and completion of winding up of the Company, or as a result of a transfer of the Member’s Interest pursuant to Section 9.4 hereof.

9.2 Admission of Members .

(a) Admission of New Members . No person shall be admitted to the Company as a Member without the unanimous consent of the Members. Upon the admission of one or more new Members, the Managers are authorized to adjust the Percentage Interests of the Members to reflect the dilution, if any, required to admit such new Members. Any such dilution shall be in proportion to the Members’ Percentage Interests in the Company, unless otherwise agreed by each such Member whose Percentage Interest may be diluted in excess of that proportion. The Percentage Interest to be granted to a new Member shall take due account of the value of the new Member’s capital contribution and capital commitment in relation to the value of the Company upon admission. Each new Member shall have all of the rights, duties and obligations of the original Members hereunder and in all respects each new Member’s admission shall be subject to all of the terms and provisions of this Agreement.

(b) Admission of Member . If a Member transfers all or any part of his, her or its Interest in accordance with this Agreement, the transferee of such Member shall be admitted to the Company as a Member provided that:

(i) the transferring Member and his, her or its transferee execute and deliver such instruments as the Managers deem necessary or desirable to effect such admission;

 

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(ii) such transferring Member furnishes to the Managers such assurances as the Managers may request, including, without limitation, an opinion of counsel, which opinion and which counsel are satisfactory to the Managers, that the transfer of such Member’s Interest complies with, or does not require the registration under applicable Federal and state securities laws, and that such transfer shall not require the Company to be registered under the Investment Company Act of 1940, as amended; and

(iii) except as provided in Sections 9.4, 9.5, 9.6 and 9.9, the Members consent to the admission of such transferee as a Member.

Newly admitted Members shall have all of the rights, duties and obligations of the original Members hereunder, and in all respects their admission shall be subject to all of the terms and provisions of this Agreement.

(c) Unadmitted Assignee . A person who acquires all or any portion of a Member’s Interest but who is not admitted as a Member pursuant to Section 9.2(b) above shall be a mere assignee (herein an “Unadmitted Assignee” ) under the Act and shall have the right to receive such distributions to which the assignor was entitled to the extent assigned and shall be allocated the share of Net Profits and Net Losses attributable to such Interest transferred to such person and shall otherwise be treated as a Member for Federal and state income tax purposes and for purposes of the distribution of cash or other assets to such person upon dissolution of the Company pursuant to Section 11.1 hereof but shall have no right to participate in the management of the business or affairs of the Company or exercise any rights as a Member under this Agreement, to require any information or account of Company transactions, or to inspect the Company books and records.

9.3 Voluntary Transfers of Member Interest . Except as provided under Sections 9.4, 9.5, and 9.8 hereof each Member hereby covenants and agrees that he, she or it shall only sell, assign, transfer, mortgage, pledge, encumber, hypothecate or otherwise dispose of all or any part of his, her or its Interest to any person after first having obtained the unanimous written consent of the Members.

9.4 Right of First Refusal on Transfer of Member Interests .

(a) Company’s First Option . If a Member desires to sell his, her or its Interest (the “Offeror” ) and has received a bona fide third party offer in writing (the “Offer” ) from an individual or entity, the Offeror shall, within five (5) days of receiving such Offer, give the Company the first option to purchase and redeem the Offeror’s Interest on the same terms and conditions as the Offer (the “First Option” ) by written notice (the “Offer Notice” ) to the Managers. The Company may elect, by written notice to the Offeror and to the other Members (the “First Exercise Notice” ) given within thirty (30) days after receiving the Offer Notice (the “First Response Date” ) , to purchase the Offeror’s Interest. If, on or before the First Response Date, there is a First Exercise Notice, then the Offeror shall be required to sell the Interest to the Company under the same terms and conditions contained in the Offer.

 

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(b) Members’ Second Option . If no First Exercise Notice is received by the First Response Date or the Company has notified the Offeror that the First Option will not be exercised, the Offeror shall give the other Members the second option to purchase and redeem the Offeror’s Interest on the same terms and conditions as the Offer (the “Second Option” ) by written notice (the “Second Offer Notice” ) to the other Members. Each of the other Members shall initially be entitled to purchase that fraction of the Offeror’s Interest subject to the Offer equal to each such Member’s Percentage Interest divided by the Percentage Interests of all Members other than that of the Offeror. The other Members may elect, by written notice to each Member and Manager (the “Second Exercise Notice” ) within thirty (30) days of the Second Offer Notice (the “Second Response Date” ), to purchase the Offeror’s Interest. If, on or before the Second Response Date, there is a Second Exercise Notice, then the Offeror shall be required to sell the Interest to the exercising Member(s) or their designee(s) (the “Purchasing Members” ). Unless otherwise agreed between the Purchasing Members, each Purchasing Member shall be entitled to purchase that fraction of the Offeror’s Interest subject to the Offer equal to the Purchasing Member’s Percentage Interest divided by the Percentage Interests of all Purchasing Members.

(c) Conditions of Purchase by Company . At the closing, which shall take place at the principal place of business of the Company on a date and time mutually agreed upon by the Managers and the Offeror, the Offeror shall deliver to the Company (i) a duly executed and acknowledged instrument of assignment transferring the Interest of the Offeror to the Company and (ii) evidence of the absence of any liens, security interests and encumbrances as the Managers, shall reasonably request; and the Offeror shall pay all transfer or similar taxes due in connection with the conveyance of the Interest. The Company shall (i) pay the purchase price to the Offeror in accordance with the Offer, the cash portion thereof by wire transfer, or certified or bank cashier’s check payable to the order of the Offeror, and (ii) deliver to the Offeror a duly executed agreement indemnifying the Offeror against claims arising from or in connection with the Company except obligations of the Company which the Offeror may have incurred prior to the date of such closing. The Members shall execute all amendments to the Articles and/or this Agreement as may be required to reflect the transfer of the offered Offeror’s interest.

(d) Conditions of Purchase by Members . At the closing, which shall take place at the principal place of business of the Company on a date and time mutually agreed upon by the Purchasing Members and the Offeror, the Offeror shall deliver to each Purchasing Member (i) duly executed and acknowledged instruments of assignment transferring that portion of the Offeror’s Interest being purchased to such Purchasing Member and (ii) evidence of the absence of any liens, security interests and encumbrances as the Purchasing Member, or the Purchasing Member’s designee(s) shall reasonably request; and the Offeror shall pay all transfer or similar taxes due in connection with the conveyance of the Interest. Each Purchasing Member shall (i) pay the purchase price for that portion of the Offeror’s Interest being purchased, in accordance with the Offer, the cash portion thereof by wire transfer, or certified or bank cashier’s check payable to the order of the Offeror, and (ii) deliver to the Offeror a duly executed agreement indemnifying the Offeror against claims arising from or in connection with the Company except obligations of the Company which the Offeror may have incurred prior to the date of such closing. The Members shall execute all amendments to the Articles of Organization and/or this Agreement as may be required to reflect the transfer of the Offeror’s Interest.

 

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(e) Sale to Third Party Purchaser . If no Second Exercise Notice is received by the Second Response Date, the Offeror shall have the right to sell the Offeror’s Interest to a third party purchaser on the same terms and conditions contained in the Offer for a period of sixty (60) days following the expiration of the Second Response Date. If a binding contract to sell such Interest is not entered into between the Offeror and a third party purchaser within such sixty (60)-day period, any sale thereafter shall be subject to the provisions of this Section 9.5. In the event of a completed sale of the Offeror’s Interest to the third party purchaser, such third party purchaser shall have the rights, duties and obligations of a Member pursuant to Section 9.2(b) above subject to compliance with the requirements hereof.

9.5 Right of Redemption . Each Member who has acquired a Member Interest through gift shall have the right and power, during the thirty (30)-day period commencing with such Member’s acquisition of such Interest during such taxable year, to have the Company purchase and redeem a portion of such Member’s Member Percentage Interest having a fair market value equal to the annual Federal gift tax exclusion under section 2503(b) of the Code, available to the transferor (or available to the transferor and the transferor’s spouse if an election is made under Code section 2513(a) to split gifts during such calendar year for Federal gift tax purposes) which value shall be determined without giving effect to this Section 9.5 Right of Redemption. The Member shall exercise the right of redemption under this Section 9.5 by written notice to the Company within said thirty (30)-day period.

9.6 Additional Transfer Restriction . Notwithstanding any other provision contained herein, without the consent of the Members, a Member or an Unadmitted Assignee may not transfer his, her or its Interest in the Company if such transfer, when aggregated with any prior transfers of Interests in the Company results in a sale or exchange within a 12-month period of 50% or more of the Interests of the Company within the meaning of Code section 708(b).

9.7 Involuntary Transfer of Interest . If the Interest of a Member or Unadmitted Assignee is taken or encumbered by levy, foreclosure, charging order, execution, assignment for the benefit of creditors or other similar involuntary proceeding (an “Involuntary Transfer” ) or if a Member or Unadmitted Assignee voluntarily files or is involuntarily subject to a bankruptcy proceeding (the “debtor Member” ), the statutory or other involuntary assignee (the “Involuntary Assignee” ) of such Interest or the debtor Member, as the case may be, shall have only the rights, duties and obligations of an Unadmitted Assignee in accordance with Section 9.2(c) hereof, unless such Involuntary Transferee or debtor Member is admitted to the Company as a Member in accordance with the provisions of Section 9.2(b) of this Agreement. If the Involuntary Transferee has a right to dispose of the Interest in which it has a security interest or a Bankruptcy Court or its representative has a right to do so (the “Seizing Creditor” ) , the Seizing Creditor may complete a public or private sale to itself or third party only after the Seizing Creditor has offered such Interest by private sale to the Company and other Members pursuant to the procedures in Section 9.4. In connection therewith such Seizing Creditor shall obtain a bona fide written offer from a third-party purchaser or make an offer itself. If the Company or other Members elect to purchase the Interest of the Seizing Creditor, debtor Member or Unadmitted Assignee pursuant to this Section 9.7 and the procedures set forth in Section 9.4 hereof, or if they do not elect to do so and the Seizing Creditor completes the purchase, the proceeds from such sale shall be first remitted to any creditors of the debtor Member or Unadmitted Assignee which have a security interest in the Interest superior to the Seizing Creditor to satisfy all of the debtor Member’s or Unadmitted Assignee’s indebtedness to such superior creditors, if any, then to the Seizing Creditor to satisfy all indebtedness of the debtor Member or Unadmitted Assignee to the

 

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Seizing Creditor, with the balance, if any, to be remitted to other creditors of the debtor Member or Unadmitted Assignee which have a security interest in the Interest inferior to the Seizing Creditor to satisfy all indebtedness of the debtor Member or Unadmitted Assignee to such inferior creditors, if any, with the balance, if any, to be remitted to the debtor Member or Unadmitted Assignee or as specified by a Bankruptcy Court.

9.8 Death, Incompetency or Termination of a Member . On the death or incompetency of a Member (who is a natural person), any personal representative, guardian, trustee or other successor in interest of such deceased or incompetent Member shall have the rights, duties and obligations of an Unadmitted Assignee as defined in Section 9.2(c) hereof, unless such person is admitted to the Company as a Substitute Member in accordance with the provisions of this Agreement. Further, if the Member is an Entity and is dissolved or terminated, the Member’s legal representatives or successors in interest shall have the same rights duties and obligations as an Unadmitted Assignee as provided in Section 9.2(c), unless such person is admitted to the Company as a Substitute Member in accordance with the provisions of this Agreement.

ARTICLE X—Books and Records; Bank Accounts; Tax Matters Partner

10.1 Records at Designated Office . The Managers will cause the Company to keep at its designated office the following records:

(a) a current list in alphabetical order of the full name and last known business street address of each Member;

(b) a copy of the stamped Articles of Organization and all certificates of amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate of amendment has been executed;

(c) a copy of the Company’s federal, state and local income tax returns and reports, if any, for the three most recent years;

(d) a copy of any financial statements of the Company, if any, for the three most recent years;

(e) a copy of this Agreement;

(f) a copy of the minutes, if any, of each meeting of Members and of any written consents obtained from Members; and

(g) unless otherwise set forth in the Articles of Organization, a written statement setting forth:

 

  (i) the amount of cash and a description and statement of the agreed value of the other property or services contributed by each Member and which each Member has agreed to contribute;

 

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  (ii) the times at which, or the events on the happening of which, any additional contributions agreed to be made by each Member are to be made;

 

  (iii) any right of a Member to receive distributions which include a return of all or any part of the Member’s contributions;

 

  (iv) any date or event upon the happening of which a Member is entitled to payment in redemption of the Member’s interest in the Company; and

 

  (v) any date or event upon the happening of which the Company is to be dissolved and its affairs wound up.

10.2 Books and Records . The Managers shall keep or cause to be kept complete and accurate books and records of the Company, using the same methods of accounting which are used in preparing the required tax returns of the Company to the extent applicable and otherwise in accordance with generally accepted accounting principles consistently applied. Such books and records shall be maintained and be available, in addition to any documents and information required to be kept under the Act, at its principal office, for examination and copying by any Member, or his or her duly authorized representative, at his or her reasonable request and at his or her expense during ordinary business hours. A current list of the full name and last known address of each Member, a copy of this Agreement, any amendments thereto and the Articles, executed copies of all powers of attorney, if any, pursuant to which this Agreement or the Articles or any amendment has been executed, copies of the Company’s financial statements and required tax returns and reports, if any, for the three most recent years, shall also be maintained at such office.

10.3 Bank Accounts . Bank accounts and/or other accounts of the Company shall be maintained in such banking and/or other financial institution(s) as shall be selected by the Managers, and withdrawals shall be made and other activity conducted on such signature or signatures as shall be designated by the Managers.

10.4 Filing Returns and Other Writings; Tax Matters Partner .

(a) The Managers shall cause the preparation and timely filing of all required Company tax returns and shall, on behalf of the Company, timely file all other writings required by any governmental authority having jurisdiction to require such filing. On or before the date which is 15 days before the due date (including extensions) of any required federal income tax return of the Company for each year, each Member shall be furnished with a copy of his or her Schedule K-1 with respect to the Company’s federal income tax return for the year.

(b) The “Tax Matters Partner,” as defined in Section 6231(a)(7) of the Code, shall be Kilgore Companies, LLC.

(c) Promptly following the written request of the Tax Matters Partner, the Company shall, to the fullest extent permitted by law, reimburse and indemnify the Tax Matters Partner for all reasonable expenses, including reasonable legal and accounting fees, claims, liabilities, losses and damages incurred by the Tax Matters Partner in connection with any administrative or judicial proceeding with respect to the federal income taxation of the Company and/or the Members.

 

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(d) The provisions of this Section 10.4 shall survive the termination of the Company or the termination of any Member’s Interest and shall remain binding on the Members for as long a period of time as is necessary to resolve with the Internal Revenue Service any and all matters regarding the federal income taxation of the Company and/or the Members.

ARTICLE XI—Dissolution and Winding Up

11.1 Dissolution . The Company will be dissolved upon the occurrence of any of the following events (each a “Dissolution Event” ):

(a) an event or circumstance that the operating agreement or articles of organization states causes dissolution;

(b) the consent of all the Members of the Company;

(c) the passage of ninety (90) consecutive days during which the Company has no members;

(d) the Company is not the successor company in the merger or consolidation of two or more companies;

(e) upon application by a Member, the entry of a court order dissolving the company on the grounds that the conduct of the Company makes it unlawful for the business of the Company to be carried on, or that it is not reasonably practicable to carry on the Company’s activities in conformity with the Articles of Organization and this Agreement; or

(f) upon application by a member or dissociated member, the entry of a court order dissolving the company on the grounds that the managers or those members in control of the company have acted, are acting, or will act in a manner that is illegal or fraudulent, or have acted or are acting in a manner that is oppressive and was, is, or will be directly harmful to the applicant.

11.2 Deemed Distribution and Reconstitution . Notwithstanding any other provisions of this Article, if the Company is liquidated within the meaning of Treasury Regulations section 1.704-1(b)(2)(ii)(g), but no Dissolution Event has occurred, the assets of the Company shall not be sold or distributed, the Company’s debts and other liabilities shall not be paid or otherwise provided for and the Company’s affairs shall not be wound up. Instead, solely for federal income tax purposes, the Company shall be deemed to have distributed its assets in-kind to the Members, who shall be deemed to have taken subject to all debts of the Company and other liabilities all in accordance with their respective Capital Accounts Immediately thereafter, the Members shall be deemed to have re-contributed the assets in-kind to the Company, which shall be deemed to have taken subject to all such liabilities.

 

22


11.3 Winding Up .

(a) Upon the occurrence of a Dissolution Event, the Managers shall wind up the Company’s affairs.

(b) The Managers shall sell such assets as the Managers deem proper to pay or provide for the Company’s debts or liabilities and to generate cash for distribution to the Members.

(c) Any cash or other assets, based on their fair market values, remaining, after paying or providing for payment of the debts and liabilities of the Company, in any order of priority required by the Act, shall be distributed to the Members as provided in Section 11.4 hereof, provided that no Member shall be required to accept more than such Member’s pro rata share of any asset.

11.4 Tax Law Requirements; Deficit Capital Accounts . If the Company is “liquidated” within the meaning of Treasury Regulations section 704-1(b)(2)(ii)(g) following a Dissolution Event, distributions shall be made to the Members who have positive Capital Accounts (after giving effect to all contributions, distributions and allocations for all tax years, including the tax year during which such liquidation occurs) in compliance with Treasury Regulations section 1.704-1(b)(2)(ii)(b)(2). If any Member has a deficit balance in his Capital Account after giving effect to all such contributions, distributions and allocations, such Member shall have no obligation to make any contributions to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to another person or entity for any purpose whatsoever.

11.5 State Law Compliance .

(a) The Managers may utilize any provisions of the Act designed to limit liability of the Members after distribution of the Company’s assets.

(b) The Managers shall take all steps which are required by the Act to complete the dissolution of the Company of record.

ARTICLE XII — Miscellaneous

12.1 Binding Effect, Not for Benefit of Creditors . Subject to the restrictions on transfers set forth herein, the terms of this Agreement shall be binding upon and shall inure to the benefit of the Members, their respective successors, successors-in-title, heirs, legal representatives and assigns; and each and every successor-in-interest to any Member, whether such successor acquires his, her or its interest by way of inheritance, gift, purchase, foreclosure or any other method, and each Member shall hold his, her or its interest subject to all of the terms and provisions of this Agreement. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or of any Member (including any Member acting in his or her capacity as a creditor of the Company).

12.2 Amendment . No change, modification or amendment of this Agreement shall be valid or binding unless such change, modification or amendment shall be in writing and duly adopted by all Members. Any amendment made pursuant to this Section 12.2 may be made effective as of the date of this Agreement.

 

23


12.3 Additional Documents and Acts . Each Member agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions, and conditions of this Agreement and the transactions contemplated hereby.

12.4 Severability of Provisions . Each provision of this Agreement shall be considered severable and, if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.

12.5 Waiver of Partition . Each Member agrees that irreparable damage would be done to the Company if any Member brought an action in court to dissolve the Company. Accordingly, except as may be otherwise expressly authorized in this Agreement, each Member agrees that he, she or it shall not, either directly or indirectly, take any action to require partition or appraisement of the Company or of any of the assets or properties of the Company, and notwithstanding any provisions of this Agreement to the contrary, each Member (and his, her or its successors and assigns) accepts the provisions of this Agreement as his, her or its sole entitlement on termination, dissolution or liquidation of the Company and hereby irrevocably waives any and all right to maintain any action for partition or to compel any sale or other liquidation with respect to his, her or its Interest, in or with respect to, any assets or properties of the Company; and each Member agrees that he, she or it will not petition a court for the dissolution, termination or liquidation of the Company.

12.6 Personal Jurisdiction . Subject to the provisions of Section 12.8, the Company, the Managers and the Members hereby irrevocably consent to the jurisdiction of every applicable court in the State of Wyoming for purposes of any litigation among or between the Company, any Manager and/or any Member concerning the Company or this Agreement. In any such proceeding, the Company and each Member shall be deemed to have waived his, her or its right to a trial by jury. The parties hereto hereby individually agree that they shall not assert any claim that they are not subject to the jurisdiction of such court, that the venue is improper, that the forum is inconvenient or any similar objection, claim or arguments. Service of process on any of the parties hereto with regard to any such action may be made by mailing the process to such person by regular or certified mail to the address of such person set forth herein or to any subsequent address to which notices shall be sent.

12.7 Title to Assets . Title to the assets and to any other property, real or personal, owned by or leased to the Company shall be held in the name of the Company unless, in the opinion of counsel to the Company or if the Managers so determine, it is advisable to hold record title in a nominee or in a limited liability company or other entity wholly owned, directly or indirectly, by the Company.

 

24


12.8 Applicable Law . This Agreement and the rights and obligations of the parties hereunder shall be governed by and interpreted and enforced in accordance with the laws of the State of Wyoming, notwithstanding any choice of law rules to the contrary.

12.9 Entire Agreement . This Agreement, including the Articles of Organization, which is hereby incorporated herein, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter.

12.10 Non-Waiver . The failure of any Member to insist upon strict performance of a covenant hereunder or of any obligation hereunder, irrespective of the length of time for which such failure continues, shall not be a waiver of such Member’s right to demand strict compliance in the future. No consent or waiver, expressed or implied, to or of any breach or default in the performance of any obligation hereunder, shall constitute a consent or waiver to or of any other breach or default in the performance of the same or any other obligation hereunder.

12.11 Notices . Any and all notices provided under this Agreement shall be treated as having been received (i) on the fourth business day after being sent by registered or certified mail, return receipt requested, postage prepaid, or (ii) on the first business day after being sent by commercial expedited delivery service providing a receipt for delivery or by telecopy or e-mail by a machine providing automatic, printed confirmation of successful transmission (if the telecopy number or e-mail address, as the case may be, of the person to whom the notice is addressed is set forth as part of such person’s address for purposes of this Agreement) or by United States Postal Service express mail. All such notices in order to be effective shall be addressed, if to a Manager or the Company at the principal office of the Company, if to a Member at the last address of record on the Company’s books, and copies of such notices shall also be sent to the last address for the recipient which is known to the sender, if different from the address so specified.

12.12 Titles, etc . Article and paragraph titles are for descriptive purposes only and shall not control or alter the meaning of the Agreement as set forth in the text. As used herein, the singular shall include the plural and the masculine gender shall include the feminine and neuter, and vice versa, unless the context otherwise requires.

12.14 Counterparts/Signatures . This Agreement may be executed in any number of counterparts, all of which together shall for all purposes constitute one Agreement, binding on all parties notwithstanding that all parties have not signed the same counterpart. Signatures sent via facsimile or other electronic transmission shall have the same force and effect as original signatures.

IN WITNESS WHEREOF, the undersigned has executed this Agreement on the dates shown below, effective as of the date first shown above.

 

25


 

MEMBER:

 

Kilgore Companies, LLC

Date: 12/22/11  

By:

Its:

   

/s/ Richard J. Barrett

Chief Operating Officer

  MANAGERS:
Date: 12/22/11  

/s/ Jason T. Kilgore

Jason T. Kilgore

Date: 12/22/11  

/s/ Richard J. Barrett

Richard J. Barrett

 

26


SCHEDULE A

(Attached to and forming part of Operating Agreement)

INITIAL CAPITAL CONTRIBUTIONS

 

1    2      3      4  

Member’s Name and

Address

   Initial Capital Contribution      Agreed Value of
Initial Capital
Contribution
     Percentage
Interest
 

1. Kilgore Companies,

LLC, 8201 W. 5400

S., Magna, Utah 84044

   $ 10,000 Dollars       $ 10,000 Dollars         100

2. Richard J. Barrett

3565 Saddleback Rd.

Park City, UT 84098

   $ 0.00 Dollars       $ 0.00 Dollars         0

3. Jason T. Kilgore

13614 Carolina Hill Crt.

Draper, UT 84020

   $ 0.00 Dollars       $ 0.00 Dollars         0
     Total       $ 10,000 Dollars         100

 

27

Exhibit 4.1

EXECUTION VERSION

INDENTURE

Dated as of January 30, 2012

Among

SUMMIT MATERIALS, LLC,

SUMMIT MATERIALS FINANCE CORP., as Issuers,

the Guarantors listed herein,

and

WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee

10.5% SENIOR NOTES DUE 2020


CROSS-REFERENCE TABLE*

 

Trust Indenture Act Section

   Indenture Section

310(a)(1)

   7.10

(a)(2)

   7.10

(a)(3)

   N.A.

(a)(4)

   N.A.

(a)(5)

   7.10

(b)

   7.03; 7.10

(c)

   N.A.

311(a)

   7.11

(b)

   7.11

(c)

   N.A.

312(a)

   2.05

(b)

   12.03

(c)

   12.03

313(a)

   7.06

(b)(1)

   N.A.

(b)(2)

   7.06; 7.07

(c)

   7.06; 12.02

(d)

   7.06

314(a)

   4.03; 12.05

(b)

   N.A.

(c)(1)

   12.04

(c)(2)

   12.04

(c)(3)

   N.A.

(d)

   N.A.

(e)

   12.05

(f)

   N.A.

315(a)

   7.01

(b)

   7.05; 12.02

(c)

   7.01

(d)

   7.01

(e)

   6.14

316(a)(last sentence)

   2.09

(a)(1)(A)

   6.05

(a)(1)(B)

   6.04

(a)(2)

   N.A.

(b)

   6.07

(c)

   2.12; 9.04

317(a)(1)

   6.08

(a)(2)

   6.12

(b)

   2.04

318(a)

   12.01

(b)

   N.A.

(c)

   12.01

N.A. means not applicable.

* This Cross-Reference Table is not part of this Indenture.


TABLE OF CONTENTS

 

             Page  
ARTICLE 1   
DEFINITIONS AND INCORPORATION BY REFERENCE   

Section 1.01.

    Definitions      -1-   

Section 1.02.

    Other Definitions      -37-   

Section 1.03.

    Incorporation by Reference of Trust Indenture Act      -38-   

Section 1.04.

    Rules of Construction      -38-   

Section 1.05.

    Acts of Holders      -39-   
ARTICLE 2   
THE NOTES   

Section 2.01.

    Form and Dating; Terms      -40-   

Section 2.02.

    Execution and Authentication      -42-   

Section 2.03.

    Registrar, Transfer Agent and Paying Agent      -42-   

Section 2.04.

    Paying Agent to Hold Money in Trust      -43-   

Section 2.05.

    Holder Lists      -43-   

Section 2.06.

    Transfer and Exchange      -43-   

Section 2.07.

    Replacement Notes      -55-   

Section 2.08.

    Outstanding Notes      -55-   

Section 2.09.

    Treasury Notes      -56-   

Section 2.10.

    Temporary Notes      -56-   

Section 2.11.

    Cancellation      -56-   

Section 2.12.

    Defaulted Interest      -56-   

Section 2.13.

    CUSIP Numbers; ISINs      -57-   
ARTICLE 3   
REDEMPTION   

Section 3.01.

    Notices to Trustee      -57-   

Section 3.02.

    Selection of Notes to Be Redeemed      -57-   

Section 3.03.

    Notice of Redemption      -57-   

Section 3.04.

    Effect of Notice of Redemption      -58-   

Section 3.05.

    Deposit of Redemption Price      -59-   

Section 3.06.

    Notes Redeemed in Part      -59-   

Section 3.07.

    Optional Redemption      -59-   

Section 3.08.

    Mandatory Redemption      -60-   

Section 3.09.

    Offers to Repurchase by Application of Excess Proceeds      -60-   
ARTICLE 4   
COVENANTS   

Section 4.01.

    Payment of Notes      -62-   

Section 4.02.

    Maintenance of Office or Agency      -62-   

Section 4.03.

    Reports and Other Information      -63-   

Section 4.04.

    Compliance Certificate      -65-   

Section 4.05.

    Taxes      -65-   

Section 4.06.

    Stay, Extension and Usury Laws      -65-   

Section 4.07.

    Limitation on Restricted Payments      -66-   

Section 4.08.

    Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries      -74-   

 

-i-


             Page  

Section 4.09.

    Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock      -76-   

Section 4.10.

    Asset Sales      -83-   

Section 4.11.

    Transactions with Affiliates      -85-   

Section 4.12.

    Liens      -88-   

Section 4.13.

    Company Existence      -89-   

Section 4.14.

    Offer to Repurchase Upon Change of Control      -89-   

Section 4.15.

    Limitation on Guarantees of Indebtedness by Restricted Subsidiaries      -91-   

Section 4.16.

    Suspension of Covenants      -91-   

Section 4.17.

    Limitation on Business Activities of the Co-Issuer      -92-   
ARTICLE 5   
SUCCESSORS   

Section 5.01.

    Merger, Consolidation or Sale of All or Substantially All Assets      -93-   

Section 5.02.

    Successor Person Substituted      -95-   
ARTICLE 6   
DEFAULTS AND REMEDIES   

Section 6.01.

    Events of Default      -95-   

Section 6.02.

    Acceleration      -97-   

Section 6.03.

    Other Remedies      -98-   

Section 6.04.

    Waiver of Past Defaults      -98-   

Section 6.05.

    Control by Majority      -98-   

Section 6.06.

    Limitation on Suits      -98-   

Section 6.07.

    Rights of Holders to Receive Payment      -99-   

Section 6.08.

    Collection Suit by Trustee      -99-   

Section 6.09.

    Restoration of Rights and Remedies      -99-   

Section 6.10.

    Rights and Remedies Cumulative      -99-   

Section 6.11.

    Delay or Omission Not Waiver      -99-   

Section 6.12.

    Trustee May File Proofs of Claim      -100-   

Section 6.13.

    Priorities      -100-   

Section 6.14.

    Undertaking for Costs      -100-   
ARTICLE 7   
TRUSTEE   

Section 7.01.

    Duties of Trustee      -101-   

Section 7.02.

    Rights of Trustee      -102-   

Section 7.03.

    Individual Rights of Trustee      -103-   

Section 7.04.

    Trustee’s Disclaimer      -103-   

Section 7.05.

    Notice of Defaults      -103-   

Section 7.06.

    Reports by Trustee to Holders      -103-   

Section 7.07.

    Compensation and Indemnity      -103-   

Section 7.08.

    Replacement of Trustee      -104-   

Section 7.09.

    Successor Trustee by Merger, etc.      -105-   

Section 7.10.

    Eligibility; Disqualification      -105-   

Section 7.11.

    Preferential Collection of Claims Against Issuer      -105-   
ARTICLE 8   
LEGAL DEFEASANCE AND COVENANT DEFEASANCE   

Section 8.01.

    Option to Effect Legal Defeasance or Covenant Defeasance      -105-   

Section 8.02.

    Legal Defeasance and Discharge      -106-   

 

-ii-


             Page  

Section 8.03.

    Covenant Defeasance      -106-   

Section 8.04.

    Conditions to Legal or Covenant Defeasance      -107-   

Section 8.05.

    Deposited Money and U.S. Government Securities to be Held in Trust; Other Miscellaneous Provisions      -108-   

Section 8.06.

    Repayment to Issuers      -108-   

Section 8.07.

    Reinstatement      -109-   
ARTICLE 9   
AMENDMENT, SUPPLEMENT AND WAIVER   

Section 9.01.

    Without Consent of Holders      -109-   

Section 9.02.

    With Consent of Holders      -110-   

Section 9.03.

    Compliance with Trust Indenture Act      -111-   

Section 9.04.

    Revocation and Effect of Consents      -112-   

Section 9.05.

    Notation on or Exchange of Notes      -112-   

Section 9.06.

    Trustee to Sign Amendments, etc.      -112-   
ARTICLE 10   
GUARANTEES   

Section 10.01.

    Guarantee      -112-   

Section 10.02.

    Limitation on Guarantor Liability      -114-   

Section 10.03.

    Execution and Delivery      -114-   

Section 10.04.

    Subrogation      -114-   

Section 10.05.

    Benefits Acknowledged      -115-   

Section 10.06.

    Release of Guarantees      -115-   
ARTICLE 11   
SATISFACTION AND DISCHARGE   

Section 11.01.

    Satisfaction and Discharge      -115-   

Section 11.02.

    Application of Trust Money      -116-   
ARTICLE 12   
MISCELLANEOUS   

Section 12.01.

    Trust Indenture Act Controls      -117-   

Section 12.02.

    Notices      -117-   

Section 12.03.

    Communication by Holders with Other Holders      -118-   

Section 12.04.

    Certificate and Opinion as to Conditions Precedent      -118-   

Section 12.05.

    Statements Required in Certificate or Opinion      -118-   

Section 12.06.

    Rules by Trustee and Agents      -119-   

Section 12.07.

    No Personal Liability of Directors, Officers, Employees and Stockholders      -119-   

Section 12.08.

    Governing Law      -119-   

Section 12.09.

    Waiver of Jury Trial      -119-   

Section 12.10.

    Force Majeure      -119-   

Section 12.11.

    No Adverse Interpretation of Other Agreements      -119-   

Section 12.12.

    Successors      -120-   

Section 12.13.

    Severability      -120-   

Section 12.14.

    Counterpart Originals      -120-   

Section 12.15.

    Table of Contents, Headings, etc.      -120-   

Section 12.16.

    Qualification of Indenture      -120-   

 

-iii-


EXHIBITS

 

Exhibit A    FORM OF NOTE
Exhibit B    FORM OF CERTIFICATE OF TRANSFER
Exhibit C    FORM OF CERTIFICATE OF EXCHANGE
Exhibit D    FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS

 

-iv-


INDENTURE, dated as of January 30, 2012, among Summit Materials, LLC, a Delaware limited liability company (the “ Company ”), Summit Materials Finance Corp., a Delaware corporation wholly-owned by the Company (the “ Co-Issuer ” and, together with the Company, the “ Issuers ”), the Guarantors (as defined herein) and Wilmington Trust, National Association, a national banking association, as Trustee.

W I T N E S S E T H

WHEREAS, the Issuers have duly authorized the creation of an issue of $250,000,000 aggregate principal amount of 10.5% Senior Notes due 2020 (the “ Initial Notes ”);

WHEREAS, the Issuers will be jointly and severally liable for all obligations under the Notes; and

WHEREAS, each of the Issuers and each of the Guarantors has duly authorized the execution and delivery of this Indenture (as defined herein).

NOW, THEREFORE, each of the Issuers, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined herein).

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions .

144A Global Note ” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

Acquired Indebtedness ” means, with respect to any specified Person,

(a) Indebtedness of any other Person existing at the time such other Person is merged or consolidated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging or consolidating with or into or becoming a Restricted Subsidiary of such specified Person, and

(b) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

Additional Interest ” means all additional interest then owing pursuant to the Registration Rights Agreement.

Additional Notes ” means any additional Notes (other than the Initial Notes or any Exchange Notes issued in exchange for such Initial Notes) issued from time to time under this Indenture in accordance with Sections 2.01, 2.02 and 4.09 hereof.

Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “ control ” (including, with correlative meanings, the terms “ controlling ,” “ controlled by ” and “ under common control with ”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.


Agent ” means any Registrar, Transfer Agent or Paying Agent.

Agent’s Message ” means a message transmitted by DTC to, and received by, the Depositary and forming a part of the book-entry confirmation, which states that DTC has received an express acknowledgment from each participant in DTC tendering the Notes and that such participants have received the Letter of Transmittal and agree to be bound by the terms of the Letter of Transmittal and the Issuers may enforce such agreement against such participants.

Applicable Premium ” means, with respect to any Note on any Redemption Date, the greater of:

(a) 1.0% of the principal amount of such Note, and

(b) the excess, if any, of (i) the present value at such Redemption Date of (A) the redemption price of such Note at January 31, 2016 (such redemption price being set forth in the table set forth in Section 3.07(b) hereof), plus (B) all required remaining scheduled interest payments due on such Note through January 31, 2016 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points over (ii) the then outstanding principal amount of such Note.

Applicable Procedures ” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and/or Clearstream that apply to such transfer or exchange.

Asset Sale ” means:

(a) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions (including by way of a Sale and Lease-Back Transaction), of property or assets of the Company or any of its Restricted Subsidiaries (each referred to in this definition as a “ disposition ”); or

(b) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than Preferred Stock of Restricted Subsidiaries issued in compliance with Section 4.09 hereof), whether in a single transaction or a series of related transactions;

in each case, other than:

(i) any disposition of Cash Equivalents or Investment Grade Securities or obsolete or worn out property or equipment in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale or no longer used or useful in the ordinary course of business;

(ii) the disposition of all or substantially all of the assets of the Company in a manner permitted pursuant to the provisions described under Section 5.01 hereof or any disposition that constitutes a Change of Control pursuant to this Indenture;

(iii) the making of any Restricted Payment that is permitted to be made, and is made, under Section 4.07 hereof or any Permitted Investment;

 

— 2 —


(iv) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate fair market value of less than $15.0 million;

(v) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

(vi) to the extent allowable under Section 1031 of the Internal Revenue Code of 1986, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(vii) the lease, assignment, sub-lease, license or sub-license of any real or personal property in the ordinary course of business;

(viii) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(ix) foreclosures, condemnation, expropriation or any similar action with respect to assets or the granting of Liens not prohibited by this Indenture;

(x) sales of accounts receivable, or participations therein, or Securitization Assets (other than royalties or other revenues (except accounts receivable)) or related assets in connection with any Qualified Securitization Facility or the disposition of an account receivable in connection with the collection or compromise thereof in the ordinary course of business;

(xi) any financing transaction with respect to property built or acquired by the Company or any Restricted Subsidiary after the Issue Date, including Sale and Lease-Back Transactions and asset securitizations permitted by this Indenture;

(xii) the sale or discount of inventory, accounts receivable or notes receivable in the ordinary course of business or the conversion of accounts receivable to notes receivable;

(xiii) the licensing or sub-licensing of intellectual property or other general intangibles in the ordinary course of business, other than the licensing of intellectual property on a long-term basis;

(xiv) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business;

(xv) the unwinding of any Hedging Obligations;

(xvi) sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

(xvii) the abandonment of intellectual property rights in the ordinary course of business, which in the reasonable good faith determination of the Company are not material to the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole;

(xviii) the issuance by a Restricted Subsidiary of Preferred Stock or Disqualified Stock that is permitted by the covenant described under Section 4.09 hereof;

(xix) the granting of a Lien that is permitted under Section 4.12 hereof; and

(xx) the issuance of directors’ qualifying shares and shares issued to foreign nationals as required by applicable law.

 

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Bank Products ” means any facilities or services related to cash management, including treasury, depository, overdraft, credit or debit card, purchase card, electronic funds transfer and other cash management arrangements.

Bankruptcy Law ” means Title 11, U.S. Code, as amended, or any similar federal or state law for the relief of debtors.

Business Day ” means each day which is not a Legal Holiday.

Capital Stock ” means:

(a) in the case of a corporation, corporate stock or shares in the capital of such corporation;

(b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

Capitalized Lease Obligation ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) prepared in accordance with GAAP; provided that any obligations of the Company or its Restricted Subsidiaries, or of a special purpose or other entity not consolidated with the Company and its Restricted Subsidiaries, either existing on the Issue Date or created prior to any recharacterization described below (or any refinancing thereof) (i) that were not included on the consolidated balance sheet of the Company as capital lease obligations and (ii) that are subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with the Company and its Restricted Subsidiaries, due to a change in accounting treatment or otherwise, shall for all purposes not be treated as a Capitalized Lease Obligations or Indebtedness.

Capitalized Software Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of a Person and its Restricted Subsidiaries.

Cash Equivalents ” means:

(a) United States dollars;

(b) (i) Canadian dollars, pounds sterling, yen, euros or any national currency of any participating member state of the EMU; or

 

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(ii) in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(c) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 24 months or less from the date of acquisition;

(d) certificates of deposit, time deposits and eurodollar time deposits with maturities of 24 months or less from the date of acquisition, demand deposits, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any domestic or foreign commercial bank having capital and surplus of not less than $250.0 million;

(e) repurchase obligations for underlying securities of the types described in clauses (c), (d), (g) and (h) entered into with any financial institution or recognized securities dealer meeting the qualifications specified in clause (d) above;

(f) commercial paper and variable or fixed rate notes rated at least P-2 by Moody’s or at least A-2 by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;

(g) marketable short-term money market and similar funds having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency);

(h) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition;

(i) readily marketable direct obligations issued by any foreign government or any political subdivision or public instrumentality thereof, in each case having an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition;

(j) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency);

(k) securities with maturities of 12 months or less from the date of acquisition backed by standby letters of credit issued by any financial institution or recognized securities dealer meeting the qualifications specified in clause (d) above; and

(l) investment funds investing substantially all of their assets in securities of the types described in clauses (a) through (k) above.

 

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In the case of Investments by any Foreign Subsidiary that is a Restricted Subsidiary or Investments made in a country outside the United States of America, Cash Equivalents shall also include (i) investments of the type and maturity described in clauses (a) through (h) and clauses (j), (k) and (l) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (ii) other short-term investments utilized by Foreign Subsidiaries that are Restricted Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (a) through (l) and in this paragraph.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (a) and (b) above, provided that such amounts are converted into any currency listed in clauses (a) and (b) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.

Change of Control ” means the occurrence of any of the following:

(a) the sale, lease, transfer, conveyance or other disposition in one or a series of related transactions (other than by merger, consolidation or amalgamation), of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person other than any Permitted Holder; or

(b) the Company becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by (A) any Person (other than any Permitted Holder) or (B) Persons (other than any Permitted Holders) that are together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any such group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50.0% or more of the total voting power of the Voting Stock of the Company directly or indirectly through any of its direct or indirect parent holding companies .

Clearstream ” means Clearstream Banking, Société Anonyme or any successor securities clearing agency.

Co-Issuer ” has the meaning set forth in the recitals hereto until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Co-Issuer” shall mean such successor Person.

Company ” has the meaning set forth in the recitals hereto until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

Consolidated Depletion, Depreciation and Amortization Expense ” means with respect to any Person for any period, the total amount of depletion, depreciation and amortization expense of such Person, including the amortization of intangible assets, deferred financing fees, debt issuance costs, commissions, fees and expenses and Capitalized Software Expenditures of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

 

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Consolidated Interest Expense ” means, with respect to any Person for any period, without duplication, the sum of:

(a) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (i) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (ii) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (iii) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (iv) the interest component of Capitalized Lease Obligations, and (v) net payments, if any made (less net payments, if any, received), pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (q) annual agency fees paid to the administrative agents and collateral agents under any Credit Facilities, (r) costs associated with obtaining Hedging Obligations, (s) any expense resulting from the discounting of any Indebtedness in connection with the application of recapitalization accounting or, if applicable, purchase accounting in connection with the Transactions or any acquisition, (t) penalties and interest relating to taxes, (u) any Additional Interest and any “ additional interest ” or “ liquidated damages ” with respect to other securities for failure to timely comply with registration rights obligations, (v) amortization or expensing of deferred financing costs and any other amounts of non-cash interest, amendment and consent fees, debt issuance costs, commissions, fees and expenses and discounted liabilities, (w) any expensing of bridge, commitment and other financing fees and any other fees related to the Transactions or any acquisitions after the Issue Date, (x) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Securitization Facility, (y) any accretion of accrued interest on discounted liabilities and any prepayment premium or penalty) and (z) interest expense resulting from push-down accounting; plus

(b) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

(c) interest income of such Person and its Restricted Subsidiaries for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

Consolidated Leverage Ratio ” means, as at any date of determination, the ratio of (1) the Consolidated Total Indebtedness of the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (2) the EBITDA of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.

 

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Consolidated Net Income ” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided , that, without duplication,

(a) any after-tax effect of extraordinary, non-recurring or unusual gains or losses (less all fees and expenses relating thereto), charges or expenses (including relating to any multi-year strategic initiatives), Transaction Expenses, duplicative running costs, relocation costs, integration costs, facility consolidation and closing costs, severance costs and expenses, one-time compensation charges, costs relating to pre-opening and opening costs for plants/facilities, losses, costs or cost inefficiencies related to plant/facility disruptions or shutdowns, signing, retention and completion bonuses, costs incurred in connection with any strategic initiatives, transition costs, costs incurred in connection with acquisitions and non-recurring product and intellectual property development, other business optimization expenses (including costs and expenses relating to business optimization programs and new systems design, retention charges, system establishment costs and implementation costs) and operating expenses attributable to the implementation of cost-savings initiatives, and curtailments or modifications to pension and post-retirement employee benefit plans shall be excluded;

(b) the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies during such period shall be excluded;

(c) any net after-tax effect of gains or losses on disposal, abandonment or discontinuance of disposed, abandoned or discontinued operations, as applicable, shall be excluded;

(d) any net after-tax effect of gains or losses (less all fees, expenses and charges relating thereto) attributable to asset dispositions or abandonments or the sale or other disposition of any Capital Stock of any Person other than in the ordinary course of business shall be excluded;

(e) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary or that is accounted for by the equity method of accounting, shall be excluded; provided , that Consolidated Net Income of such Person shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to such Person or a Restricted Subsidiary thereof in respect of such period;

(f) solely for the purpose of determining the amount available for Restricted Payments under clause (C)(1) of Section 4.07(a) hereof, the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders (other than restrictions in the Notes or this Indenture), unless such restriction with respect to the payment of dividends or similar distributions has been legally waived, provided that Consolidated Net Income of such Person will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to such Person or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein;

(g) effects of adjustments (including the effects of such adjustments pushed down to such Person and its Restricted Subsidiaries) in such Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition or joint venture investment or the amortization or write-off or write-down of any amounts thereof, net of taxes, shall be excluded;

 

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(h) any after-tax effect of income (loss) from the early extinguishment or conversion of (i) Indebtedness, (ii) Hedging Obligations or (iii) other derivative instruments shall be excluded;

(i) any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities and investments recorded using the equity method or as a result of a change in law or regulation, in each case, pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded;

(j) any equity-based or non-cash compensation charge or expense including any such charge or expense arising from grants of stock appreciation or similar rights, stock options, restricted stock or other rights or equity incentive programs, and any cash charges associated with the rollover, acceleration, or payout of Equity Interests by management of the Company or any of its direct or indirect parent companies in connection with the Transactions, shall be excluded;

(k) any fees, expenses or charges incurred during such period, or any amortization thereof for such period, in connection with any acquisition, Investment, Asset Sale, disposition, incurrence or repayment of Indebtedness (including such fees, expenses or charges related to the offering and issuance of the Notes and other securities and the syndication and incurrence of any Credit Facilities), issuance of Equity Interests, refinancing transaction or amendment or modification of any debt instrument (including any amendment or other modification of the Notes and other securities and any Credit Facilities) and including, in each case, any such transaction consummated on or prior to the Issue Date and any such transaction undertaken but not completed, and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, in each case whether or not successful or consummated (including, for the avoidance of doubt the effects of expensing all transaction related expenses in accordance with Financial Accounting Standards Board Accounting Standards Codification 805), shall be excluded;

(l) accruals and reserves that are established within 12 months after the Issue Date that are so required to be established as a result of the Transactions (or within 12 months after the closing of any acquisition that are so required to be established as a result of such acquisition) in accordance with GAAP shall be excluded;

(m) any expenses, charges or losses to the extent covered by insurance or indemnity and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer or indemnifying party and only to the extent that such amount is in fact reimbursed within 365 days of the date of the insurable or indemnifiable event (net of any amount so added back in any prior period to the extent not so reimbursed within the applicable 365-day period), shall be excluded;

(n) any net pension or other post-employment benefit costs representing amortization of unrecognized prior service costs, actuarial losses, including amortization of such amounts arising in prior periods, amortization of the unrecognized net obligation (and loss or cost) existing at the date of initial application of Accounting Standards Codification Topic No. 715, Compensation-Retirement Benefits , shall be excluded, and

 

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(o) any noncash compensation expense resulting from the application of Accounting Standards Codification Topic No. 718, Compensation — Stock Compensation , shall be excluded; and

(p) the following items shall be excluded:

(i) any net unrealized gain or loss (after any offset) resulting in such period from Hedging Obligations and the application of Accounting Standards Codification Topic No. 815, Derivatives and Hedging ;

(ii) any net unrealized gain or loss (after any offset) resulting in such period from currency translation gains or losses including those related to currency remeasurements of Indebtedness (including any net loss or gain resulting from Hedging Obligations for currency exchange risk) and any other foreign currency translation gains and losses, to the extent such gain or losses are non-cash items;

(iii) any adjustments resulting for the application of Accounting Standards Codification Topic No. 460, Guarantees, or any comparable regulation;

(iv) effects of adjustments to accruals and reserves during a prior period relating to any change in the methodology of calculating reserves for returns, rebates and other chargebacks; and

(v) changes related to earn-outs and other deferred or contingent consideration obligations (including to the extent accounted for as bonuses or otherwise) and adjustments thereof and purchase price adjustments.

In addition, to the extent not already included in the Consolidated Net Income of such Person and its Restricted Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall include the amount of proceeds received from business interruption insurance and reimbursements of any expenses and charges that are covered by indemnification or other reimbursement provisions in connection with any acquisition, Investment or any sale, conveyance, transfer or other disposition of assets permitted under this Indenture.

Notwithstanding the foregoing, for the purpose of Section 4.07 hereof only (other than clause (C)(4) of Section 4.07(a) hereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Company and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Company and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by the Company or any of its Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under clause (C)(4) of Section 4.07(a) hereof.

Consolidated Secured Debt Ratio ” as of any date of determination means, the ratio of (a) Consolidated Total Indebtedness of the Company and its Restricted Subsidiaries that is secured by Liens on the property of the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (b) EBITDA of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.

 

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Consolidated Total Indebtedness ” means, as at any date of determination, an amount equal to the sum of (a) the aggregate amount of all outstanding Indebtedness of the Company and its Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments, as determined in accordance with GAAP (excluding for the avoidance of doubt all undrawn amounts under revolving credit facilities and letters of credit, all obligations relating to Qualified Securitization Facilities and Tax Receivable Agreements) and (b) the aggregate amount of all outstanding Disqualified Stock of the Company and all Preferred Stock of its Restricted Subsidiaries on a consolidated basis, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and maximum fixed repurchase prices, in each case determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of repurchase or purchase accounting in connection with the Transactions or any acquisition); provided , that Consolidated Total Indebtedness shall not include Indebtedness in respect of (A) any letter of credit, except to the extent of unreimbursed amounts under standby letters of credit and (B) Hedging Obligations existing on the Issue Date or otherwise permitted by Section 4.09(b)(x) hereof; it being understood, for the avoidance of doubt that earn-out payments and non-compete payments (to the extent such payments would not become a liability on the balance sheet of such Person in accordance with GAAP as GAAP existed on December 31, 2008) and obligations to pay the deferred purchase price of property or services do not constitute Consolidated Total Indebtedness. For purposes hereof, the “ maximum fixed repurchase price ” of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the Company. The U.S. Dollar Equivalent principal amount of any Indebtedness denominated in a foreign currency will reflect the currency translation effects, determined in accordance with GAAP, of Hedging Obligations for currency exchange risks with respect to the applicable currency in effect on the date of determination of the U.S. Dollar Equivalent principal amount of such Indebtedness.

Contingent Obligations ” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“ primary obligations ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent,

(a) to purchase any such primary obligation or any property constituting direct or indirect security therefor;

(b) to advance or supply funds

(i) for the purchase or payment of any such primary obligation, or

(ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

 

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Controlled Investment Affiliate ” means, as to any Person, any other Person, other than any Investor, which directly or indirectly is in control of, is controlled by, or is under common control with such Person and is organized by such Person (or any Person controlling such Person) primarily for making direct or indirect equity or debt investments in the Company and/or other companies.

Corporate Trust Office ” means the office of the Trustee at which any time its corporate trust business related to this Indenture shall be administered, which office at the date hereof is 246 Goose Lane, Suite 105, Guilford, CT 06437, Facsimile: (203) 453-1183, Attention: Summit Administrator, or such other address as the Trustee may designate from time to time by notice to the Holders and the Issuers, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Issuers).

Credit Agreement ” means that certain Credit Agreement, to be dated on or about the Issue Date, by and among the Company, Bank of America, N.A. and Citigroup Global Markets Inc., as joint lead arrangers, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., UBS Securities LLC, Barclays Capital, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc., as joint bookrunners, Bank of America, N.A., as administrative agent, collateral agent and swing line lender, Bank of America, N.A., as letter of credit issuer, Citigroup Global Markets Inc., as syndication agent and other parties party thereto.

Credit Facilities ” means, with respect to the Company or any of its Restricted Subsidiaries, one or more debt facilities, including the Senior Secured Credit Facilities, or other financing arrangements (including, without limitation, commercial paper facilities or indentures) providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof, in whole or in part, and any indentures or credit facilities or commercial paper facilities that replace, refund, supplement or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding, supplemental or refinancing facility, arrangement or indenture that increases the amount permitted to be borrowed or issued thereunder or alters the maturity thereof ( provided that such increase in borrowings or issuances is permitted under Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, trustee, lender or group of lenders or other holders.

Custodian ” means the Trustee, as custodian with respect to the Notes, each in global form, or any successor entity thereto.

Debt Fund Affiliate ” means (i) any fund managed by, or under common management with, GSO Capital Partners LP, (ii) any fund managed by GSO Debt Funds Management LLC, Blackstone Debt Advisors L.P., Blackstone Distressed Securities Advisors L.P., Blackstone Mezzanine Advisors L.P. or Blackstone Mezzanine Advisors II L.P. and (iii) any other Affiliate of the Investors that is a bona fide debt fund or an investment vehicle that is engaged in the making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course.

Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

Definitive Note ” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06(c) hereof, substantially in the form of Exhibit A except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

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Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, any Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Non-cash Consideration ” means the fair market value of non-cash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate delivered by the Company, setting forth the basis of such valuation, executed by the principal financial officer of the Company, less the amount of Cash Equivalents received in connection with a subsequent sale, redemption or repurchase of or collection or payment on such Designated Non-cash Consideration.

Designated Preferred Stock ” means Preferred Stock of the Company or any direct or indirect parent company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate delivered by the Company executed by the principal financial officer of the Company or the applicable parent company thereof, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (C) of Section 4.07(a) hereof.

Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely as a result of a change of control or asset sale) pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, in each case prior to the date 91 days after the earlier of the maturity date of the Notes or the date the Notes are no longer outstanding; provided , that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations; provided , further , that any Capital Stock held by any future, current or former employee, director, officer, manager or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any of its Subsidiaries, any of its direct or indirect parent companies or any other entity in which the Company or a Restricted Subsidiary has an Investment and is designated in good faith as an “ affiliate ” by the board of directors of the Company (or the compensation committee thereof), in each case pursuant to any stock subscription or shareholders’ agreement, management equity plan or stock option plan or any other management or employee benefit plan or agreement shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries or in order to satisfy applicable statutory or regulatory obligations; provided, further , that the Class B Membership Interests of Continental Cement Company, L.L.C. shall not constitute Disqualified Stock.

EBITDA ” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period

(a) increased (without duplication) by the following, in each case (other than with respect to clauses (viii) and (xi)) to the extent deducted (and not added back) in determining Consolidated Net Income for such period:

(i) provision for taxes based on income or profits or capital, including, without limitation, federal, state, franchise and similar taxes and foreign withholding taxes (including any future taxes or other levies which replace or are intended to be in lieu of such taxes and any penalties and interest related to such taxes or arising from tax examinations) and the net tax expense associated with any adjustments made pursuant to clauses (a) through (p) of the definition of “ Consolidated Net Income ”; plus

 

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(ii) Fixed Charges of such Person for such period (including (x) net losses or Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, (y) bank fees and other financing fees and (z) costs of surety bonds in connection with financing activities, plus amounts excluded from Consolidated Interest Expense as set forth in clauses (a)(q) through (z) in the definition thereof); plus

(iii) Consolidated Depletion, Depreciation and Amortization Expense of such Person for such period; plus

(iv) the amount of any severance, relocation costs and expenses, integration costs, transition costs, pre-opening, opening, consolidation and/or closing costs for facilities, costs incurred in connection with any non-recurring strategic initiatives, costs incurred in connection with acquisitions and Investments and non-recurring product and intellectual property development, other business optimization expenses (including costs and expenses relating to business optimization programs and new systems design and implementation costs), project start-up costs, restructuring charges, accruals or reserves (including restructuring costs related to acquisitions and to closure/consolidation of facilities, retention charges, systems establishment costs and excess pension charges); plus

(v) any other non-cash charges, including any write-offs or write-downs reducing Consolidated Net Income for such period ( provided , that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, (A) the Company may elect not to add back such non-cash charge in the current period and (B) to the extent the Company elects to add back such non-cash charge, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period); plus

(vi) the amount of any non-controlling interest or minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly-Owned Subsidiary; plus

(vii) the amount of management, monitoring, consulting, advisory fees and other fees (including termination fees) and indemnities and expenses paid or accrued in such period under the Management Fee Agreement or otherwise to the Investors to the extent otherwise permitted under Section 4.11 hereof; plus

(viii) the amount of “ run-rate ” cost savings, operating expense reductions and synergies projected by the Company in good faith to result from actions taken, committed to be taken or expected in good faith to be taken no later than 12 months after the end of such period (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period for which EBITDA is being determined and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions; provided , that such cost savings and synergies are reasonably identifiable and factually supportable (it is understood and agreed that “ run-rate ” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or expected to be taken, net of the amount of actual benefits realized during such period from such actions); plus

(ix) the amount of loss on sale of receivables, Securitization Assets and related assets to any Securitization Subsidiary in connection with a Qualified Securitization Facility; plus

 

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(x) any costs or expense incurred by the Company or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Company or net cash proceeds of an issuance of Equity Interest of the Company (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in clause (C) of Section 4.07(a) hereof; plus

(xi) cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing EBITDA or Consolidated Net Income in any period to the extent non-cash gains relating to such income were deducted in the calculation of EBITDA pursuant to clause (b) below for any previous period and not added back; plus

(xii) any net loss from disposed, abandoned or discontinued operations; plus

(xiii) accretion of asset retirement obligations in accordance with Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations ; plus

(xiv) interest income or investment earnings on retiree medical and intellectual property, royalty or license receivables;

(b) decreased (without duplication) by the following, in each case to the extent included in determining Consolidated Net Income for such period:

(i) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period and any non-cash gains with respect to cash actually received in a prior period so long as such cash did not increase EBITDA in such prior period; plus

(ii) any net income from disposed, abandoned or discontinued operations.

EMU ” means economic and monetary union as contemplated in the Treaty on European Union.

Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

Equity Offering ” means any public or private sale or issuance of common stock or Preferred Stock of the Company or any of its direct or indirect parent companies (excluding Disqualified Stock), other than:

(a) public offerings with respect to the Company’s or any direct or indirect parent company’s common stock registered on Form S-4 or Form S-8;

(b) issuances to any Subsidiary of the Company; and

(c) any such public or private sale or issuance that constitutes an Excluded Contribution.

euro ” means the single currency of participating member states of the EMU.

Euroclear ” means Euroclear Bank S.A./N.V., as operator of the Euroclear system, or any successor securities clearing agency.

 

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Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Exchange Notes ” means the Notes issued in an Exchange Offer pursuant to Section 2.06(f) hereof.

Exchange Offer ” has the meaning set forth in the Registration Rights Agreement.

Exchange Offer Registration Statement ” has the meaning set forth in the Registration Rights Agreement.

Excluded Contribution ” means net cash proceeds, marketable securities or Qualified Proceeds received by the Company from

(a) contributions to its common equity capital; and

(b) the sale (other than to a Subsidiary of the Company or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Company) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Company,

in each case designated as Excluded Contributions pursuant to an Officer’s Certificate delivered by the Company executed by the principal financial officer of the Company on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (C) of Section 4.07(a) hereof.

fair market value ” means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Company in good faith.

Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Company or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “ Fixed Charge Coverage Ratio Calculation Date ”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP) that have been made by the Company or any of its Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the

 

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Company or any of its Restricted Subsidiaries since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to an Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation (including the Transactions), the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company (and may include, for the avoidance of doubt, cost savings, synergies and operating expense reductions resulting from such Investment, acquisition, merger, amalgamation or consolidation (including the Transactions) which is being given pro forma effect that have been or are expected to be realized based on actions taken, committed to be taken or expected in good faith to be taken within 18 months). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period except as set forth in the first paragraph of this definition. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

Fixed Charges ” means, with respect to any Person for any period, the sum of, without duplication:

(a) Consolidated Interest Expense of such Person for such period;

(b) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock during such period; and

(c) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

Foreign Subsidiary ” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof and any Restricted Subsidiary of such Foreign Subsidiary.

GAAP ” means (1) generally accepted accounting principles in the United States of America which are in effect from time to time (other than with respect to Capitalized Lease Obligations), it being understood that, for purposes of this Indenture, all references to codified accounting standards specifically named in this Indenture shall be deemed to include any successor, replacement, amended or updated accounting standard under GAAP or (2) if elected by the Company by written notice to the Trustee in connection with the delivery of financial statements and information, the accounting standards and interpretations (“ IFRS ”) adopted by the International Accounting Standard Board, as in effect on the first date of

 

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the period for which the Company is making such election; provided , that (a) any such election once made shall be irrevocable, (b) all financial statements and reports required to be provided after such election pursuant to this Indenture shall be prepared on the basis of IFRS, (c) from and after such election, all ratios, computations and other determinations based on GAAP contained in this Indenture shall be computed in conformity with IFRS, (d) in connection with the delivery of financial statements (x) for any of its first three financial quarters of any financial year, it shall restate its consolidated interim financial statements for such interim financial period and the comparable period in the prior year to the extent previously prepared in accordance with GAAP as in effect on the Issue Date and (y) for delivery of audited annual financial information, it shall provide consolidated historical financial statements prepared in accordance with IFRS for the prior most recent fiscal year to the extent previously prepared in accordance with GAAP as in effect on the first date of the period in which the Company is making such election. For the avoidance of doubt, solely making an election (without any other action) referred to in this definition will not be treated as an incurrence of Indebtedness.

Global Note Legend ” means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.

Global Notes ” or “ Global Securities ” each mean, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A, issued in accordance with Section 2.01, 2.06(b), 2.06(d) or 2.06(f) hereof.

guarantee ” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

Guarantee ” means the guarantee by any Guarantor of the Issuers’ Obligations under this Indenture and the Notes.

Guarantor ” means each Subsidiary of the Company, if any, that Guarantees the Notes in accordance with the terms of this Indenture.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer or mitigation of interest rate, currency or commodity risks either generally or under specific contingencies.

Holder ” means the Person in whose name a Note is registered on the Registrar’s books.

Immediate Family Members ” means with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, qualified domestic partner, sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including adoptive relationships) and any trust, partnership or other bona fide estate-planning vehicle the only beneficiaries of which are any of the foregoing individuals or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.

 

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Indebtedness ” means, with respect to any Person, without duplication:

(a) any indebtedness (including principal and premium) of such Person, whether or not contingent:

(i) in respect of borrowed money;

(ii) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof);

(iii) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes an obligation in respect of a commercial letter of credit, a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn-out or non-compete obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP as GAAP existed on the Issue Date and is not paid after becoming due and payable; or

(iv) representing the net obligations under any Hedging Obligations,

if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; provided , that Indebtedness of any direct or indirect parent of the Company appearing upon the balance sheet of the Company solely by reason of push-down accounting under GAAP shall be excluded;

(b) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (a) of a third Person (whether or not such items would appear upon the balance sheet of the such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and

(c) to the extent not otherwise included, the obligations of the type referred to in clause (a) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person;

provided , that notwithstanding the foregoing, Indebtedness shall be deemed not to include (a) Contingent Obligations incurred in the ordinary course of business or (b) obligations under or in respect of Qualified Securitization Facilities; provided, further , that Indebtedness shall be calculated without giving effect to the effects of Financial Accounting Standards Board Accounting Standards Codification 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.

Indenture ” means this Indenture, as amended, supplemented or otherwise modified from time to time.

Independent Financial Advisor ” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.

Indirect Participant ” means a Person who holds a beneficial interest in a Global Note through a Participant.

 

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Initial Notes ” has the meaning set forth in the recitals hereto.

Initial Purchasers ” means Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc.

Interest Payment Date ” means January 31 and July 31 of each year to stated maturity.

Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or if the applicable securities are not then rated by Moody’s or S&P an equivalent rating by any other Rating Agency.

Investment Grade Securities ” means:

(a) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents);

(b) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the Company and its Subsidiaries;

(c) investments in any fund that invests exclusively in investments of the type described in clauses (a) and (b) which fund may also hold immaterial amounts of cash pending investment or distribution; and

(d) corresponding instruments in countries other than the United States customarily utilized for high quality investments.

Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, advances to customers, commission, travel and similar advances to employees, directors, officers, managers and consultants, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of the Company in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.07 hereof:

(a) “ Investments ” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to:

(i) the Company’s “ Investment ” in such Subsidiary at the time of such redesignation; less

(ii) the portion (proportionate to the Company’s Equity Interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

(b) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer.

 

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The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, interest payment, return of capital, repayment or other amount received in cash by the Company or a Restricted Subsidiary in respect of such Investment.

Investors ” means any of (i) Blackstone Capital Partners V L.P. and its Affiliates and any investment funds advised or managed by any of the foregoing (other than any portfolio operating companies of Blackstone Capital Partners V L.P.) and (ii) Silverhawk Summit, L.P. and its Affiliates and any investment funds advised or managed by any of the foregoing (other than any portfolio operating companies of Silverhawk Summit, L.P.).

Issue Date ” means January 30, 2012.

Issuers’ Order ” means a written request or order signed on behalf of each Issuer by an Officer of such Issuer, who must be the principal executive officer, the principal financial officer, the treasurer, the secretary or the principal accounting officer of such Issuer, and delivered to the Trustee.

Issuers ” has the meaning set forth in the recitals hereto until a successor Person or Persons shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Issuers” shall mean such Person or Persons.

Legal Holiday ” means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York or at the place of payment. If a payment date is on a Legal Holiday, payment will be made on the next succeeding day that is not a Legal Holiday and no interest shall accrue for the intervening period.

Letter of Transmittal ” means the letter of transmittal to be prepared by the Issuers and sent to all Holders for use by such Holders in connection with an Exchange Offer.

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided , that in no event shall an operating lease be deemed to constitute a Lien.

Management Fee Agreement ” means the transaction and management fee agreement or similar agreements between certain of the management companies associated with one or more of the Investors or their advisors, if applicable, and the Company (and/or its direct or indirect parent companies).

Management Stockholders ” means the members of management (and their Controlled Investment Affiliates and Immediate Family Members) of the Company (or its indirect or direct parent companies) who are holders of Equity Interests of any direct or indirect parent companies of the Companies on the Issue Date.

Moody’s ” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

 

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Net Income ” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

Net Proceeds ” means the aggregate Cash Equivalents proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale, including any Cash Equivalents received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, payments made in order to obtain a necessary consent or required by applicable law, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, other fees and expenses, including title and recordation expenses, taxes paid or payable as a result thereof or any transactions occurring or deemed to occur to effectuate a payment under this Indenture (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Senior Indebtedness or amounts required to be applied to the repayment of Indebtedness secured by a Lien on such assets and required (other than required by clause (i) of Section 4.10(b) hereof) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Company or any of its Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Company or any of its Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

Non-U.S. Person ” means a Person who is not a U.S. Person.

Notes ” means the Initial Notes and more particularly means any Note authenticated and delivered under this Indenture. Unless the context requires otherwise, all references to “ Notes ” for all purposes of this Indenture shall include any Additional Notes that are actually issued. The Notes offered by the Issuers and any Additional Notes subsequently issued under this Indenture will be treated as a single class for all purposes under this Indenture, including waivers, amendments, redemptions and offers to purchase, except for certain waivers and amendments as set forth herein.

Obligations ” means any principal, interest (including any interest accruing on or subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), premium, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness; provided , that any of the foregoing (other than principal and interest) shall no longer constitute “ Obligations ” after payment in full of such principal and interest except to the extent such obligations are fully liquidated and non-contingent on or prior to such payment in full.

Offering Memorandum ” means the confidential offering memorandum, dated January 23, 2012, relating to the sale of the Initial Notes.

Officer ” means the Chairman of the board of directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the applicable Issuer or Guarantor.

 

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Officer’s Certificate ” means a certificate signed on behalf of a Person by an Officer of such Person that meets the requirements set forth in this Indenture. An Officer’s Certificate required to be delivered by the Issuers shall be signed by an Officer of each Issuer.

Opinion of Counsel ” means a written opinion from legal counsel. The counsel may be an employee of or counsel to the Company or the Trustee that meets the requirements set forth herein.

Participant ” means, with respect to the Depositary, a Person who has an account with the Depositary (and, with respect to DTC, shall include Euroclear and Clearstream).

Participating Broker-Dealer ” has the meaning set forth in the Registration Rights Agreement.

Permitted Asset Swap ” means the substantially concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and Cash Equivalents between the Company or any of its Restricted Subsidiaries and another Person; provided , that any Cash Equivalents received must be applied in accordance with Section 4.10 hereof.

Permitted Holders ” means each of the Investors and Management Stockholders and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing are members; provided , that in the case of such group and without giving effect to the existence of such group or any other group, such Investors and Management Stockholders, collectively, have beneficial ownership of more than 50.0% of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

Permitted Investments ” means:

(a) any Investment in the Company or any of its Restricted Subsidiaries;

(b) any Investment in Cash Equivalents or Investment Grade Securities;

(c) any Investment by the Company or any of its Restricted Subsidiaries in a Person (including, to the extent constituting an Investment, in assets of a Person that represent substantially all of its assets or a division, business unit or product line, including research and development and related assets in respect of any product) that is engaged directly or through entities that will be Restricted Subsidiaries in a Similar Business if as a result of such Investment:

(i) such Person becomes a Restricted Subsidiary; or

(ii) such Person, in one transaction or a series of related transactions, is amalgamated, merged or consolidated with or into, or transfers or conveys substantially all of its assets (or such division, business unit or product line) to, or is liquidated into, the Company or a Restricted Subsidiary,

and, in each case, any Investment held by such Person; provided , that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation consolidation or transfer;

 

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(d) any Investment in securities or other assets not constituting Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to the provisions of Section 4.10(a) hereof or any other disposition of assets not constituting an Asset Sale;

(e) any Investment existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date or an Investment consisting of any extension, modification or renewal of any such Investment or binding commitment existing on the Issue Date; provided , that the amount of any such Investment may be increased in such extension, modification or renewal only (i) as required by the terms of such Investment or binding commitment as in existence on the Issue Date (including as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities) or (ii) as otherwise permitted under this Indenture;

(f) any Investment acquired by the Company or any of its Restricted Subsidiaries:

(i) consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business; or

(ii) in exchange for any other Investment, accounts receivable or indorsements for collection or deposit held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable (including any trade creditor or customer); or

(iii) in satisfaction of judgments against other Persons; or

(iv) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(g) Hedging Obligations permitted under clause (x) of Section 4.09(b) hereof;

(h) any Investment in a Similar Business taken together with all other Investments made pursuant to this clause (h) that are at that time outstanding not to exceed the greater of (i) $35.0 million and (ii) 2.50% of Total Assets (in each case, determined on the date such Investment is made, with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(i) Investments the payment for which consists of Equity Interests (other than Disqualified Stock) of the Company, or any of its direct or indirect parent companies; provided , that such Equity Interests will not increase the amount available for Restricted Payments under clause (C) of Section 4.07(a) hereof;

(j) guarantees of Indebtedness permitted under Section 4.09 hereof, performance guarantees and Contingent Obligations incurred in the ordinary course of business and the creation of Liens on the assets of the Company or any Restricted Subsidiary in compliance with Section 4.12 hereof;

(k) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.11(b) hereof (except transactions described in clauses (ii), (v) and (ix) of Section 4.11(b) hereof);

 

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(l) Investments consisting of purchases or other acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(m) Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (m) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (i) $25.0 million and (ii) 1.75% of Total Assets (in each case, determined on the date such Investment is made, with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(n) Investments in or relating to a Securitization Subsidiary that, in the good faith determination of the Company are necessary or advisable to effect any Qualified Securitization Facility or any repurchase obligation in connection therewith;

(o) advances to, or guarantees of Indebtedness of, employees not in excess of $10.0 million outstanding in the aggregate;

(p) loans and advances to employees, directors, officers, managers and consultants (i) for business-related travel expenses, moving expenses and other similar expenses or payroll advances, in each case incurred in the ordinary course of business or consistent with past practices or (ii) to fund such Person’s purchase of Equity Interests of the Company from the Company or any direct or indirect parent company thereof from such parent company;

(q) advances, loans or extensions of trade credit in the ordinary course of business by the Company or any of its Restricted Subsidiaries;

(r) any Investment in any Subsidiary or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business;

(s) Investments consisting of purchases and acquisitions of assets or services in the ordinary course of business;

(t) Investments made in the ordinary course of business in connection with obtaining, maintaining or renewing client contacts;

(u) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business in the ordinary course of business;

(v) repurchases of Notes;

(w) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection of deposit and Article 4 customary trade arrangements with customers consistent with past practices; and

(x) Investments consisting of promissory notes issued by the Company or any Guarantor to future, present or former officers, directors and employees, members of management, or consultants of the Company or any of its Subsidiaries or their respective estates, spouses or former

 

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spouses to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent thereof, to the extent the applicable Restricted Payment is a permitted by Section 4.07 hereof.

Permitted Liens ” means, with respect to any Person:

(a) pledges, deposits or security by such Person under workmen’s compensation laws, unemployment insurance, employers’ health tax, and other social security laws or similar legislation or other insurance-related obligations (including, but not limited to, in respect of deductibles, self-insured retention amounts and premiums and adjustments thereto) or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business;

(b) Liens imposed by law, such as landlords’, carriers’, warehousemen’s, materialmen’s, repairmen’s and mechanics’ Liens, in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate actions or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(c) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or not yet payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate actions diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(d) Liens in favor of issuers of performance, surety, bid, indemnity, warranty, release, appeal or similar bonds or with respect to other regulatory requirements or letters of credit or bankers acceptances issued, and completion guarantees provided for, in each case, issued pursuant to the request of and for the account of such Person in the ordinary course of its business or consistent with past practice prior to the Issue Date;

(e) minor survey exceptions, minor encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, sewers, electric lines, drains, telegraph, telephone and cable television lines and other similar purposes, or zoning, building codes or other restrictions (including minor defects and irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental, to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person and exceptions on title policies insuring liens granted on Mortgaged Properties (as defined in the Senior Secured Credit Facilities);

(f) Liens securing Obligations relating to any Indebtedness permitted to be incurred pursuant to clause (iv), (xii)(B) (in an amount not to exceed $60.0 million at any one time outstanding under such clause), (xiii) or (xxiii) of Section 4.09(b) hereof; provided , that (a) Liens securing

 

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Obligations relating to any Indebtedness, Disqualified Stock or Preferred Stock permitted to be incurred pursuant to clause (xiii) relate only to Obligations relating to Refinancing Indebtedness that (x) is secured by Liens on the same assets as the assets securing the Refinancing Indebtedness or (y) extends, replaces, refunds, refinances, renews or defeases Indebtedness incurred or Disqualified Stock or Preferred Stock issued under clauses (iii), (iv), (xii) or (xiii) of Section 4.09(b) hereof, (b) Liens securing Obligations relating to Indebtedness permitted to be incurred pursuant to clause (xxiii) of Section 4.09(b) extend only to the assets of Restricted Subsidiaries of the Company that are not Guarantors, and (c) Liens securing Obligations relating to any Indebtedness, Disqualified Stock or Preferred Stock to be incurred pursuant to clause (iv) of Section 4.09(b) hereof extend only to the assets so purchased, leased or improved;

(g) Liens existing on the Issue Date (including to secure any Refinancing Indebtedness of any Indebtedness secured by such Liens);

(h) Liens on property or shares of stock or other assets of a Person at the time such Person becomes a Subsidiary; provided , that such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further , that such Liens may not extend to any other property or other assets owned by the Company or any of its Restricted Subsidiaries;

(i) Liens on property or other assets at the time the Company or a Restricted Subsidiary acquired the property or such other assets, including any acquisition by means of a merger, amalgamation or consolidation with or into the Company or any of its Restricted Subsidiaries; provided , that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, amalgamation, merger or consolidation; provided , further , that the Liens may not extend to any other property owned by the Company or any of its Restricted Subsidiaries;

(j) Liens securing Obligations relating to any Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary permitted to be incurred in accordance with Section 4.09 hereof;

(k) Liens securing (x) Hedging Obligations and (y) obligations in respect of Bank Products;

(l) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s accounts payable or similar trade obligations in respect of bankers’ acceptances or trade letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(m) leases, sub-leases, licenses or sub-licenses, granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries and do not secure any Indebtedness;

(n) Liens arising from Uniform Commercial Code (or equivalent statute) financing statement filings regarding operating leases or consignments entered into by the Company and its Restricted Subsidiaries in the ordinary course of business or purported Liens evidenced by the filing of precautionary Uniform Commercial Code financing statements or similar public filings;

(o) Liens in favor of the Company, the Co-Issuer or any Guarantor;

 

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(p) Liens on equipment of the Company or any of its Restricted Subsidiaries granted in the ordinary course of business to the Company’s clients;

(q) Liens on accounts receivable, Securitization Assets and related assets incurred in connection with a Qualified Securitization Facility;

(r) Liens to secure any modification, refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (f), (g), (h) and (i); provided , that (i) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property) and proceeds and products thereof, and (ii) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (f), (g), (h) and (i) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses (including original issue discount, upfront fees or similar fees) and premiums (including tender premiums and accrued and unpaid interest) related to such modification, refinancing, refunding, extension, renewal or replacement;

(s) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers;

(t) Liens securing obligations in an aggregate principal amount outstanding which does not exceed the greater of (i) $50.0 million and (ii) 3.75% of Total Assets (in each case, determined as of the date of such incurrence);

(u) security given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of business;

(v) Liens securing judgments for the payment of money not constituting an Event of Default under clause (v) of Section 6.01(a) hereof so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

(w) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

(x) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking institutions arising as a matter of law or under general terms and conditions encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

(y) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 4.09 hereof; provided , that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

 

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(z) Liens encumbering reasonable customary deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(aa) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Company or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(bb) Liens securing obligations owed by the Company or any Restricted Subsidiary to any lender under the Senior Secured Credit Facilities or any Affiliate of such a lender in respect of any overdraft and related liabilities arising from treasury, depository and cash management services or any automated clearing house transfers of funds;

(cc) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(dd) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Company or any Restricted Subsidiary in the ordinary course of business;

(ee) Liens solely on any cash earnest money deposits made by the Company or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted by this Indenture;

(ff) ground leases in respect of real property on which facilities owned or leased by the Company or any of its Subsidiaries are located;

(gg) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

(hh) Liens on Capital Stock of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;

(ii) Liens on the assets of non-guarantor Restricted Subsidiaries securing Indebtedness of such Subsidiaries that were permitted by the terms of this Indenture to be incurred;

(jj) Liens on cash advances in favor of the seller of any property to be acquired in an Investment permitted under this Indenture to be applied against the purchase price for such Investment;

(kk) any interest or title of a lessor, sub-lessor, licensor or sub-licensor or secured by a lessor’s, sub-lessor’s, licensor’s or sub-licensor’s interest under leases or licenses entered into by the Company or any of the Restricted Subsidiaries in the ordinary course of business; and

(ll) deposits of cash with the owner or lessor of premises leased and operated by the Company or any of its Subsidiaries in the ordinary course of business of the Company and such Subsidiary to secure the performance of the Company’s or such Subsidiary’s obligations under the terms of the lease for such premises.

 

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For purposes of this definition, the term “ Indebtedness ” shall be deemed to include interest on such Indebtedness.

Person ” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

Preferred Stock ” means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.

Private Placement Legend ” means the legend set forth in Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Qualified Proceeds ” means the fair market value of assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business.

Qualified Securitization Facility ” means any Securitization Facility (a) constituting a securitization financing facility that meets the following conditions: (i) the board of directors of the Company shall have determined in good faith that such Securitization Facility (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Company and the applicable Securitization Subsidiary, (ii) all sales and/or contributions of Securitization Assets and related assets to the applicable Securitization Subsidiary are made at fair market value (as determined in good faith by the Company) and (iii) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Company) or (b) constituting a receivables financing facility.

Rating Agencies ” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuers which shall be substituted for Moody’s or S&P or both, as the case may be.

Record Date ” for the interest payable on any applicable Interest Payment Date means the January 15 and July 15 (whether or not a Business Day) immediately preceding such Interest Payment Date.

Registration Rights Agreement ” means a registration rights agreement with respect to the Initial Notes dated as of the Issue Date, among the Issuers, the Guarantors and the representatives of the Initial Purchasers, as such agreement may be amended, modified or supplemented from time to time and, with respect to any Additional Notes, one or more registration rights agreements among the Issuers and the other parties thereto (if any), as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the Issuers to the purchasers of Additional Notes to register such Additional Notes under the Securities Act.

Regulation S ” means Regulation S promulgated under the Securities Act.

 

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Regulation S Global Note ” means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as applicable.

Regulation S Permanent Global Note ” means a permanent Global Note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the applicable Restricted Period.

Regulation S Temporary Global Note ” means a temporary Global Note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and the Regulation S Temporary Global Note Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.

Regulation S Temporary Global Note Legend ” means the legend set forth in Section 2.06(g)(iii) hereof.

Related Business Assets ” means assets (other than Cash Equivalents) used or useful in a Similar Business, provided that any assets received by the Company or a Restricted Subsidiary in exchange for assets transferred by the Company or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

Responsible Officer ” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and, in each case, who shall have direct responsibility for the administration of this Indenture.

Restricted Definitive Note ” means a Definitive Note bearing, or that is required to bear, the Private Placement Legend.

Restricted Global Note ” means a Global Note bearing, or that is required to bear, the Private Placement Legend.

Restricted Investment ” means an Investment other than a Permitted Investment.

Restricted Period ” means, in respect of any Note issued under Regulation S, the 40-day distribution compliance period as defined in Regulation S applicable to such Note.

Restricted Subsidiary ” means, with respect to any Person, at any time, any direct or indirect Subsidiary of such Person (including the Co-Issuer and any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided, however , that upon an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “ Restricted Subsidiary .” Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Company.

Rule 144 ” means Rule 144 promulgated under the Securities Act.

 

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Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 903 ” means Rule 903 promulgated under the Securities Act.

Rule 904 ” means Rule 904 promulgated under the Securities Act.

S&P ” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

Sale and Lease-Back Transaction ” means any arrangement providing for the leasing by the Company or any of its Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to a third Person in contemplation of such leasing.

SEC ” means the U.S. Securities and Exchange Commission.

Secured Indebtedness ” means any Indebtedness of the Company or any of its Restricted Subsidiaries secured by a Lien.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Securitization Assets ” means the accounts receivable, royalty or other revenue streams and other rights to payment and any other assets related thereto subject to a Qualified Securitization Facility and the proceeds thereof.

Securitization Facility ” means any of one or more receivables or securitization financing facilities as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Company or any of its Restricted Subsidiaries (other than a Securitization Subsidiary) pursuant to which the Company or any of its Restricted Subsidiaries sells or grants a security interest in its accounts receivable or Securitization Assets or assets related thereto to either (a) a Person that is not a Restricted Subsidiary or (b) a Securitization Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

Securitization Fees ” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Securitization Subsidiary in connection with, any Qualified Securitization Facility.

Securitization Subsidiary ” means any Subsidiary formed for the purpose of, and that solely engages only in one or more Qualified Securitization Facilities and other activities reasonably related thereto.

Senior Indebtedness ” means:

(a) all Indebtedness of the Company or any Guarantor outstanding under the Senior Secured Credit Facilities and the related guarantees and Notes and related Guarantees (including interest accruing on or after the filing of any petition in bankruptcy or similar proceeding or for reorganization of the Company or any Guarantor (at the rate provided for in the documentation with respect thereto, regardless of whether or not a claim for post-filing interest is allowed in such proceedings)), and any and all other fees, expense reimbursement obligations, indemnification

 

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amounts, penalties, and other amounts (whether existing on the Issue Date or thereafter created or incurred) and all obligations of the Company or any Guarantor to reimburse any bank or other Person in respect of amounts paid under letters of credit, acceptances or other similar instruments;

(b) all (x) Hedging Obligations (and guarantees thereof) and (y) obligations in respect of Bank Products (and guarantees thereof) owing to a lender under the Senior Secured Credit Facilities or any Affiliate of such lender (or any Person that was a lender or an Affiliate of such lender at the time the applicable agreement giving rise to such Hedging Obligation was entered into); provided , that such Hedging Obligations and obligations in respect of Bank Products, as the case may be, are permitted to be incurred under the terms of this Indenture;

(c) any other Indebtedness of the Company or any Guarantor permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the Notes or any related Guarantee; and

(d) all Obligations with respect to the items listed in the preceding clauses (a), (b) and (c); provided , that Senior Indebtedness shall not include:

(i) any obligation of such Person to the Issuers or any of their Subsidiaries;

(ii) any liability for federal, state, local or other taxes owed or owing by such Person;

(iii) any accounts payable or other liability to trade creditors arising in the ordinary course of business;

(iv) any Indebtedness or other Obligation of such Person which is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or

(v) that portion of any Indebtedness which at the time of incurrence is incurred in violation of this Indenture.

Senior Secured Credit Facilities ” means the term loan facility, revolving credit facility and other credit facilities under the Credit Agreement, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings, refinancings or replacements thereof and any one or more indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund, supplement or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof ( provided , that such increase in borrowings is permitted under Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, trustee, lender or group of lenders or holders.

Shelf Registration Statement ” means a Shelf Registration Statement as defined in the Registration Rights Agreement.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.

 

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Similar Business ” means (a) any business conducted by the Company or any of its Restricted Subsidiaries on the Issue Date, and any reasonable extension thereof, or (b) any business or other activities that are reasonably similar, ancillary, incidental, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which the Company and its Restricted Subsidiaries are engaged on the Issue Date.

Subordinated Indebtedness ” means, with respect to the Notes,

(a) any Indebtedness of the Issuers which is by its terms subordinated in right of payment to the Notes, and

(b) any Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.

Subsidiary ” means, with respect to any Person:

(a) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50.0% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; and

(b) any partnership, joint venture, limited liability company or similar entity of which

(i) more than 50.0% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and

(ii) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Total Assets ” means the total assets of the Company and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recent balance sheet of the Company or such other Person as may be expressly stated.

Transaction Expenses ” means any fees or expenses incurred or paid by the Company or any Restricted Subsidiary in connection with the Transactions, including payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses and charges for repurchase or rollover of, or modifications to, stock options.

Transactions ” means the issuance of the Notes and borrowings under the Senior Secured Credit Facilities on the Issue Date to repay certain debt as described in the offering memorandum under “Offering Memorandum Summary — The Transactions” and the payment of related premiums, fees and expenses.

Treasury Rate ” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the

 

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most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to January 31, 2016; provided , that if the period from the Redemption Date to such date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

Trust Indenture Act ” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).

Trustee ” means Wilmington Trust, National Association, as trustee, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

Uniform Commercial Code ” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of New York.

Unrestricted Definitive Note ” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

Unrestricted Global Note ” means a permanent Global Note, substantially in the form of Exhibit A that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Notes that do not bear the Private Placement Legend.

Unrestricted Subsidiary ” means:

(a) any Subsidiary of the Company which at the time of determination is an Unrestricted Subsidiary (as designated by the Company, as provided below); and

(b) any Subsidiary of an Unrestricted Subsidiary.

The Company may designate any Subsidiary of the Company, other than the Co-Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Company or any Subsidiary of the Company (other than solely any Subsidiary of the Subsidiary to be so designated); provided , that:

(i) any Unrestricted Subsidiary must be an entity of which the Equity Interests entitled to cast at least a majority of the votes that may be cast by all Equity Interests having ordinary voting power for the election of directors or Persons performing a similar function are owned, directly or indirectly, by the Company;

(ii) such designation complies with Section 4.07 hereof; and

(iii) each of (A) the Subsidiary to be so designated and (B) its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any Restricted Subsidiary.

 

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The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, no Default shall have occurred and be continuing and either:

(a) the Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test; or

(b) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be equal to or greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.

Any such designation by the Company shall be notified by the Company to the Trustee by promptly filing with the Trustee a copy of the resolution of the board of directors of the Company or any committee thereof giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

U.S. Dollar Equivalent ” means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the “ Exchange Rates ” column under the heading “ Currency Trading ” on the date two business days prior to such determination.

U.S. Government Securities ” means securities that are:

(a) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or

(b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Securities or a specific payment of principal of or interest on any such U.S. Government Securities held by such custodian for the account of the holder of such depository receipt; provided , that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Securities or the specific payment of principal of or interest on the U.S. Government Securities evidenced by such depository receipt.

U.S. Person ” means a U.S. person as defined in Rule 902(k) under the Securities Act.

Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.

 

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Weighted Average Life to Maturity ” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing:

(a) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment; by

(b) the sum of all such payments;

provided , that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness that is being extended, replaced, refunded, refinanced, renewed or defeased (the “ Applicable Indebtedness ”), the effects of any amortization or prepayments made on such Applicable Indebtedness prior to the date of the applicable extension, replacement, refunding, refinancing, renewal or defeasance shall be disregarded.

Wholly-Owned Subsidiary ” of any Person means a Subsidiary of such Person, 100.0% of the outstanding Equity Interests of which (other than directors’ qualifying shares and shares issued to foreign nationals as required by applicable law) shall at the time be owned by such Person and/or by one or more Wholly-Owned Subsidiaries of such Person.

Section 1.02. Other Definitions .

 

Term    Defined
in Section
 

“Acceptable Commitment”

     4.10   

“Affiliate Transaction”

     4.11   

“Applicable Premium Deficit”

     8.04   

“Asset Sale Offer”

     4.10   

“Authentication Order”

     2.02   

“Change of Control Offer”

     4.14   

“Change of Control Payment”

     4.14   

“Change of Control Payment Date”

     4.14   

“Covenant Defeasance”

     8.03   

“Covenant Suspension Event”

     4.16   

“DTC”

     2.03   

“Event of Default”

     6.01   

“Excess Proceeds”

     4.10   

“Fixed Charge Coverage Test”

     4.07   

“incur” and “incurrence”

     4.09   

“Independent Assets or Operations”

     4.03   

“Legal Defeasance”

     8.02   

“Note Register”

     2.03   

“Offer Amount”

     3.09   

“Offer Period”

     3.09   

“Pari Passu Indebtedness”

     4.10   

“Paying Agent”

     2.03   

“Purchase Date”

     3.09   

“Redemption Date”

     3.01   

“Refinancing Indebtedness”

     4.09   

“Refunding Capital Stock”

     4.07   

“Registrar”

     2.03   

“Restricted Payments”

     4.07   

 

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Term    Defined
in Section
 

“Reversion Date”

     4.16   

“Second Commitment”

     4.10   

“Successor Company”

     5.01   

“Successor Person”

     5.01   

“Suspended Covenants”

     4.16   

“Suspension Date”

     4.16   

“Suspension Period”

     4.16   

“Transfer Agent”

     2.03   

“Treasury Capital Stock”

     4.07   

Section 1.03. Incorporation by Reference of Trust Indenture Act . At all times after the effectiveness of a registration statement under the Registration Rights Agreement, this Indenture will be subject to the mandatory provisions of the Trust Indenture Act, which unless otherwise indicated are incorporated by reference in and made a part of this Indenture effective upon the effectiveness of any such registration statement. Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture.

The following Trust Indenture Act terms if used in this Indenture have the following meanings:

“indenture securities” means the Notes and the Guarantees;

“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and “obligor” on the Notes and the Guarantees means the Issuers and the Guarantors, respectively, and any successor obligor upon the Notes and the Guarantees, respectively.

All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them.

Section 1.04. Rules of Construction . Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(c) “or” is not exclusive;

(d) the words “including,” “includes” and similar words shall be deemed to be followed by “without limitation”;

(e) words in the singular include the plural, and in the plural include the singular;

(f) “shall” and “will” shall be interpreted to express a command;

(g) provisions apply to successive events and transactions;

 

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(h) references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(i) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

(j) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision;

(k) words used herein implying any gender shall apply to both genders;

(l) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including”;

(m) the principal amount of any Preferred Stock at any time shall be (i) the maximum liquidation value of such Preferred Stock at such time or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock at such time, whichever is greater; and

(n) all references to any interest or other amount payable on or with respect to the Notes shall be deemed to include any Additional Interest.

Section 1.05. Acts of Holders .

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuers. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01 hereof) conclusive in favor of the Trustee and the Issuers, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuers in reliance thereon, whether or not notation of such action is made upon such Note.

 

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(e) The Issuers may, in the circumstances permitted by the Trust Indenture Act, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuers prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 10 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this Section 1.05(f) shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC, that is a Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and any Person, that is a Holder of a Global Note, including DTC, may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such Depositary’s standing instructions and customary practices.

(h) The Issuers may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such Depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 120 days after such record date.

ARTICLE 2

THE NOTES

Section 2.01. Form and Dating; Terms .

(a) General . The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. The Notes shall be issued in minimum denominations of $2,000 and any integral multiples of $1,000 in excess of $2,000.

(b) Global Notes . Notes issued in global form shall be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto

 

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and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

(c) Temporary Global Notes . Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuers and authenticated by the Trustee as hereinafter provided.

Following (i) the termination of the applicable Restricted Period and (ii) the receipt by the Trustee of (A) a certification or other evidence in a form reasonably acceptable to the Issuers of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(b) hereof) and (B) an Officer’s Certificate from the Issuers, the Trustee shall remove the Regulation S Temporary Global Note Legend from the Regulation S Temporary Global Note, following which temporary beneficial interests in the Regulation S Temporary Global Note shall automatically become beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note.

The aggregate principal amount of a Regulation S Temporary Global Note and a Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

(d) Terms . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuers, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

The Notes shall be subject to repurchase by the Issuers pursuant to an Asset Sale Offer as provided in Section 4.10 hereof or a Change of Control Offer as provided in Section 4.14 hereof. The Notes shall not be redeemable, other than as provided in Article 3 hereof.

Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Issuers without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes except that interest may accrue on the Additional Notes from their date of issuance (or

 

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such other date specified by the Issuers); provided , that the Issuers’ ability to issue Additional Notes shall be subject to the Issuers’ compliance with Section 4.09 hereof. Any Additional Notes may be issued with the benefit of an indenture supplemental to this Indenture.

(e) Euroclear and Clearstream Applicable Procedures . The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream.

Section 2.02. Execution and Authentication . At least one Officer of each Issuer shall execute the Notes on behalf of each Issuer by manual, facsimile or electronic (including “.pdf”) signature.

If an Officer of an Issuer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A attached hereto, by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On the Issue Date, the Trustee shall, upon receipt of an Issuers’ Order (an “ Authentication Order ”), authenticate and deliver the Initial Notes in the aggregate principal amount or amounts specified in such Authentication Order. In addition, at any time, from time to time, the Trustee shall, upon receipt of an Authentication Order, authenticate and deliver any Additional Notes or Exchange Notes for an aggregate principal amount specified in such Authentication Order for such Additional Notes or Exchange Notes issued or increased hereunder.

The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuers.

Section 2.03. Registrar, Transfer Agent and Paying Agent . The Issuers shall maintain (i) an office or agency where Notes may be presented for registration (“ Registrar ”), (ii) an office or agency where Notes may be presented for transfer or for exchange (“ Transfer Agent ”) and (iii) an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The registered Holder of a Note will be treated as the owner of such Note for all purposes and only registered Holders shall have rights under this Indenture and the Notes. The Issuers may appoint one or more co-registrars, one or more co-transfer agents and one or more additional paying agents. The term “Registrar” includes any co-registrar, the term “Transfer Agent” includes any co-transfer agent and the term “Paying Agent” includes any additional paying agents. The Issuers may change any Paying Agent, Transfer Agent or Registrar without prior notice to any Holder. The Issuers shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuers fail to appoint or maintain another entity as Registrar, Transfer Agent or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent, Transfer Agent or Registrar.

The Issuers initially appoint The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

 

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The Issuers initially appoint the Trustee to act as the Paying Agent, Transfer Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

Section 2.04. Paying Agent to Hold Money in Trust . The Issuers shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, interest or Additional Interest, if any, on the Notes, and will notify the Trustee in writing of any default by the Issuers in making any such payment. While any such default continues, the Trustee may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee. The Issuers at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than an Issuer or a Subsidiary or the Trustee) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuers, the Trustee shall serve as Paying Agent for the Notes.

Section 2.05. Holder Lists . The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with Section 312(a) of the Trust Indenture Act. If the Trustee is not the Registrar, the Issuers shall furnish to the Trustee at least two Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders and the Issuers shall otherwise comply with Section 312(a) of the Trust Indenture Act.

Section 2.06. Transfer and Exchange .

(a) Transfer and Exchange of Global Notes . Except as otherwise set forth in this Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor thereto or a nominee of such successor thereto. A beneficial interest in a Global Note may not be exchanged for a Definitive Note unless, and, if applicable, subject to the limitation on issuance of Definitive Notes set forth in Section 2.06(c)(ii), (i) the Depositary (x) notifies the Issuers that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act, and, in either case, a successor Depositary is not appointed by the Issuers within 120 days, (ii) the Issuers, at its option, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes (although Regulation S Temporary Global Notes may not be exchanged for Definitive Notes prior to (A) the expiration of the applicable Restricted Period and (B) the receipt by the Registrar of any certification of beneficial ownership required pursuant to Rule 903(b)(3)(ii)(B)) or (iii) upon the request of a Holder if there shall have occurred and be continuing an Event of Default with respect to the Notes and the Trustee has received a written request from the Depositary to issue Definitive Notes. Upon the occurrence of any of the events described in clause (i), (ii) or (iii) above, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Sections 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the events described in clause (i), (ii) or (iii) above and pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); provided , however , beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

 

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(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided , however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person other than pursuant to Rule 144A. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided , that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (x) the expiration of the applicable Restricted Period therefor and (y) the receipt by the Registrar of any certification of beneficial ownership required pursuant to Rule 903(b)(3)(ii)(B). Upon consummation of an Exchange Offer by the Issuers in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the applicable Letter of Transmittal or in an Agent’s Message delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; or

(B) if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof.

 

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(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) hereof and:

(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Participating Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of an Issuer;

(B) such Notes are sold or exchanged pursuant to an effective registration statement under the Securities Act;

(C) such transfer is effected by a Participating Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Issuers so request or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuers to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.

 

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Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(c) Transfer or Exchange of Beneficial Interests for Definitive Notes .

(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes . If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events described in clause (i), (ii) or (iii) of Section 2.06(a) hereof and receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof; or

(F) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuers shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) (except transfers pursuant to clause (F) above) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

 

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(ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes . Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the expiration of the applicable Restricted Period therefor and (B) the receipt by the Registrar of any certifications of beneficial ownership required pursuant to Rule 903(b)(3)(ii)(B), except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes . A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events described in clause (i), (ii) or (iii) of Section 2.06(a) hereof and if:

(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Participating Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuers;

(B) such transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Participating Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Issuers so request or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuers to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes . If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events described in clause (i), (ii) or (iii) of Section 2.06(a) hereof and satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly

 

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pursuant to Section 2.06(h) hereof, and the Issuers shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement Legend.

(d) Transfer and Exchange of Definitive Notes for Beneficial Interests .

(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes . If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof; or

(F) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, and in the case of clause (C) above, the applicable Regulation S Global Note.

 

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(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Participating Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of an Issuer;

(B) such transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Participating Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

(2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Issuers so request or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuers to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

Upon satisfaction of the applicable conditions of this Section 2.06(d)(ii), the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly

 

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endorsed or accompanied by a written instruction of transfer or exchange in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e):

(i) Restricted Definitive Notes to Restricted Definitive Notes . Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

(A) if the transfer will be made to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or

(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (3) thereof, if applicable.

(ii) Restricted Definitive Notes to Unrestricted Definitive Notes . Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Participating Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of an Issuer;

(B) any such transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) any such transfer is effected by a Participating Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

(2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

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and, in each such case set forth in this subparagraph (D), if the Issuers so requests, an Opinion of Counsel in form reasonably acceptable to the Issuers to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

(f) Exchange Offer . Upon the occurrence of an Exchange Offer in accordance with the Registration Rights Agreement, the Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal or through an Agent’s Message though the DTC Automated Tender Offer program that (x) they are not Participating Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of an Issuer, and accepted for exchange in an Exchange Offer and (ii) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not Participating Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of an Issuer, and accepted for exchange in an Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuers shall execute and the Trustee shall authenticate and mail to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the applicable principal amount. Any Notes that remain outstanding after the consummation of an Exchange Offer, and Exchange Notes issued in connection with such Exchange Offer, shall be treated as a single class of securities under this Indenture.

(g) Legends . The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:

(i) Private Placement Legend .

(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A

 

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UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN [SIX MONTHS — FOR NOTES ISSUED PURSUANT TO RULE 144A][40 DAYS — FOR NOTES ISSUED IN OFFSHORE TRANSACTIONS PURSUANT TO REGULATION S] AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE, AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (IF AVAILABLE, AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

EACH HOLDER OF THIS SECURITY OR ANY INTEREST HEREIN IS DEEMED TO REPRESENT AND WARRANT THAT EITHER (1) NO PORTION OF THE ASSETS USED TO PURCHASE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN WHICH IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), (B) PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, “SIMILAR LAWS”), OR (C) ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY OF THE FOREGOING PLANS, ACCOUNTS OR ARRANGEMENTS DESCRIBED IN CLAUSE (A) OR (B), OR (2) ITS PURCHASE AND HOLDING OF THIS SECURITY OR ANY INTEREST HEREIN WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION OF ANY APPLICABLE SIMILAR LAW.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

 

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(ii) Global Note Legend . Each Global Note shall bear a legend in substantially the following form (with appropriate changes in the last sentence if DTC is not the Depositary):

“THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (A) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (B) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (C) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (D) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) TO THE ISSUERS OR THEIR AGENTS FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

EACH HOLDER OF THIS SECURITY OR ANY INTEREST HEREIN IS DEEMED TO REPRESENT AND WARRANT THAT EITHER (1) NO PORTION OF THE ASSETS USED TO PURCHASE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN WHICH IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), (B) PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, “SIMILAR LAWS”), OR (C) ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY OF THE FOREGOING PLANS, ACCOUNTS OR ARRANGEMENTS DESCRIBED IN CLAUSE (A) OR (B), OR (2) ITS PURCHASE AND HOLDING OF THIS SECURITY OR ANY INTEREST HEREIN WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION OF ANY APPLICABLE SIMILAR LAW.”

 

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(iii) Regulation S Temporary Global Note Legend . The Regulation S Temporary Global Note shall bear a legend in substantially the following form:

“BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.”

(h) Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(i) General Provisions Relating to Transfers and Exchanges .

(i) To permit registrations of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuers may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

(iii) Neither the Registrar nor the Issuers shall be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Notes to be redeemed under Section 3.03 hereof and ending at the close of business on the day of such mailing, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, (C) to register the transfer or exchange of a Note between a Record Date and the next succeeding Interest Payment Date or (D) to register the transfer or exchange of any Notes tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Sale Offer.

(iv) Neither the Registrar nor the Issuers shall be required to register the transfer or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; provided , that new Notes will only be issued in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000.

(v) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuers, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

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(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuers shall deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuers shall be affected by notice to the contrary.

(vii) Upon surrender for registration of transfer of any Note at the office or agency of the Issuers designated pursuant to Section 4.02 hereof, the Issuers shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(viii) At the option of the Holder, subject to Section 2.06(a) hereof, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuers shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.02 hereof.

(ix) All certifications, certificates and Opinions of Counsel required to be submitted pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

Section 2.07. Replacement Notes . If either (x) any mutilated Note is surrendered to the Trustee, the Registrar or the Issuers, or (y) the Issuers and the Trustee receive evidence to their satisfaction of the ownership and destruction, loss or theft of any Note, then the Issuers shall issue and the Trustee, upon receipt of an Authentication Order and satisfaction of any other requirements of the Trustee, shall authenticate a replacement Note. If required by the Trustee or the Issuers, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of both (i) the Trustee to protect the Trustee and (ii) the Issuers to protect the Issuers, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuers and the Trustee may charge the Holder for their expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuers and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08. Outstanding Notes . The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuers or a Guarantor or an Affiliate of an Issuer or a Guarantor holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code).

Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture shall not be deemed to be outstanding for purposes hereof.

If the principal amount of any Note is considered paid under Section 4.01 hereof, such Note shall cease to be outstanding and interest thereon shall cease to accrue.

 

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If the Paying Agent (other than an Issuer or a Guarantor or an Affiliate of an Issuer or a Guarantor) holds, on a Redemption Date or maturity date, money sufficient to pay Notes (or portions thereof) payable on that date, then on and after that date such Notes (or portions thereof) shall be deemed to be no longer outstanding (including for accounting purposes) and shall cease to accrue interest on and after such date.

Section 2.09. Treasury Notes . In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by an Issuer or by any Affiliate of an Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to such pledged Notes and that the pledgee is not an Issuer or a Guarantor or any Affiliate of an Issuer or a Guarantor.

Section 2.10. Temporary Notes . Until certificates representing Notes are ready for delivery, the Issuers may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuers consider appropriate for temporary Notes. Without unreasonable delay, the Issuers shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

Section 2.11. Cancellation . The Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of such cancelled Notes in its customary manner. Certification of the cancellation of all cancelled Notes shall be delivered to the Issuers upon their written request therefor. The Issuers may not issue new Notes to replace Notes that the Issuers have paid or that have been delivered to the Trustee for cancellation.

Section 2.12. Defaulted Interest . If the Issuers default in a payment of interest on the Notes, the Issuers shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuers shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuers shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed any such special record date and payment date; provided , that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuers of any such special record date. At least 15 days before any such special record date, the Issuers (or, upon the written request of the Issuers, the Trustee in the name and at the expense of the Issuers) shall mail or cause to be mailed, first-class postage prepaid, or otherwise deliver in accordance with the Applicable Procedures, to each Holder, with a copy to the Trustee, a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.

 

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Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

Section 2.13. CUSIP Numbers; ISINs . The Issuers in issuing the Notes may use CUSIP numbers and ISINs (in each case, if then generally in use) and, if so, the Trustee shall use CUSIP numbers and ISINs in notices of redemption or exchange as a convenience to Holders; provided , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuers will as promptly as practicable notify the Trustee in writing of any change in the CUSIP numbers and ISINs.

ARTICLE 3

R EDEMPTION

Section 3.01. Notices to Trustee . If the Issuers elect to redeem Notes pursuant to Section 3.07 hereof, the Issuers shall furnish to the Trustee, at least two Business Days (unless a shorter notice shall be agreed to by the Trustee) before notice of redemption is required to be delivered or mailed to Holders pursuant to Section 3.03 hereof, an Officer’s Certificate setting forth (a) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (b) the date of redemption (the “ Redemption Date ”), (c) the principal amount of the Notes to be redeemed and (d) the redemption price.

Section 3.02. Selection of Notes to Be Redeemed . If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed (a) if the Notes are listed on any exchange (and such listing is known to the Trustee), in compliance with the requirements of such exchange or (b) on a pro rata basis to the extent practicable, or, if the pro rata basis is not practicable for any reason, by lot or by such other method as the Trustee shall deem fair and appropriate and otherwise in accordance with the Applicable Procedures. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the Redemption Date by the Trustee from the outstanding Notes not previously called for redemption.

The Trustee shall promptly notify the Issuers in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. No Notes of $2,000 or less can be redeemed in part, except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder shall be redeemed or purchased, even if not in a principal amount of at least $2,000. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

Section 3.03. Notice of Redemption . Subject to Section 3.09 hereof, the Issuers shall deliver electronically, mail or cause to be mailed by first-class mail, postage prepaid, notices of redemption at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at such Holder’s registered address stated in the Note Register or otherwise in accordance with the Applicable Procedures, except that redemption notices may be delivered or mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with Article 8 or Article 11 hereof. Notices of redemption may, at the Issuers’ discretion, be conditional.

 

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The notice shall identify the Notes to be redeemed and shall state:

(a) the Redemption Date;

(b) the redemption price;

(c) if any Definitive Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder upon cancellation of the original Note; provided , that new Notes will only be issued in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000;

(d) the name and address of the Paying Agent;

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Issuers default in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;

(g) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(h) the CUSIP number and ISIN, if any, printed on the Notes being redeemed and that no representation is made as to the correctness or accuracy of any such CUSIP number and ISIN that is listed in such notice or printed on the Notes; and

(i) any condition to such redemption.

At the Issuers’ request, the Trustee shall give the notice of redemption in the names of the Issuers name and at their expense; provided , that the Issuers shall have delivered to the Trustee, at least two Business Days before notice of redemption is required to be delivered, mailed or caused to be mailed or delivered by electronic transmission to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

If the Notes are listed on an exchange, for so long as the Notes are so listed and the rules of such exchange so require, the Issuers will notify the exchange of any such redemption and, if applicable, of the principal amount of any Notes outstanding following any partial redemption of Notes.

Section 3.04. Effect of Notice of Redemption . A notice of redemption, if delivered, mailed or caused to be mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to deliver such notice or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 3.05 hereof, on and after the Redemption Date, interest shall cease to accrue on Notes or portions of Notes called for redemption.

 

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Section 3.05. Deposit of Redemption Price .

(a) Prior to 11:00 a.m. (New York City time) on the Redemption Date, the Issuers shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes to be redeemed on that Redemption Date. The Trustee or the Paying Agent shall promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed.

(b) If the Issuers comply with the provisions of the preceding paragraph (a), on and after the Redemption Date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the Redemption Date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Issuers to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the Redemption Date until such principal is paid, and to the extent lawful on any interest accrued to the Redemption Date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06. Notes Redeemed in Part . Upon surrender of a Definitive Note that is redeemed in part, the Issuers shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuers a new Note equal in principal amount to the unredeemed portion of the Note surrendered representing the same indebtedness to the extent not redeemed; provided , that each new Note will be in a principal amount of $2,000 and any integral multiple of $1,000 in excess of $2,000. It is understood that, notwithstanding anything to the contrary in this Indenture, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

Section 3.07. Optional Redemption .

(a) At any time prior to January 31, 2016, the Issuers may on one or more occasions redeem all or a part of the Notes upon notice in accordance with Section 3.03 hereof, at a redemption price equal to the sum of (i) 100.0% of the principal amount of the Notes redeemed, plus (ii) the Applicable Premium as of the Redemption Date, plus (iii) accrued and unpaid interest and Additional Interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(b) On and after January 31, 2016, the Issuers may redeem the Notes, in whole or in part, upon notice in accordance with Section 3.03 hereof, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on January 31 of each of the years indicated below:

 

Year

   Percentage  

2016

     105.250

2017

     102.625

2018 and thereafter

     100.000

(c) Until January 31, 2015, the Issuers may, at their option, and on one or more occasions, redeem up to 35.0% of the aggregate principal amount of Notes issued by them at a redemption price

 

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equal to 110.500% of the aggregate principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds received by the Company from one or more Equity Offerings or a contribution to the Company’s common equity capital made with the net cash proceeds of a concurrent Equity Offering; provided , that (A) at least 50.0% of the aggregate principal amount of Notes originally issued under this Indenture on the Issue Date and any Additional Notes issued under this Indenture after the Issue Date remains outstanding immediately after the occurrence of each such redemption; and (B) each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

In addition to any redemption pursuant to this Section 3.07, the Issuers, the Investors and their respective Affiliates may at any time and from time to time purchase Notes in the open market or otherwise.

(d) Except pursuant to any of clauses (a) through (c) of this Section 3.07 and as set forth in the Notes, the Notes will not be redeemable at the Issuers’ option prior to January 31, 2015.

(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. Notice of any redemption, whether in connection with an Equity Offering or otherwise, may be given prior to the completion thereof, and any such redemption or notice may, at the Issuers’ discretion, be subject to one or more conditions precedent, including, but not limited to, the completion of the related Equity Offering or other corporate transaction. If such redemption is subject to the satisfaction of one or more conditions precedent, in the Issuers’ discretion the Redemption Date may be delayed or the redemption may be rescinded in the event that any such conditions shall not have been satisfied by the original Redemption Date. If any Notes are listed on an exchange, and the rules of such exchange so require, the Issuers shall notify the exchange of any such notice of redemption. In addition, the Issuers shall notify the exchange of the principal amount of any Notes outstanding following any partial redemption of such Notes.

(f) The Trustee shall have no duty to calculate or verify the calculation of the Applicable Premium.

Section 3.08. Mandatory Redemption. The Issuers shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

Section 3.09. Offers to Repurchase by Application of Excess Proceeds .

(a) In the event that, pursuant to Section 4.10 hereof, the Issuers shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “ Offer Period ”). No later than five Business Days after the termination of the Offer Period (the “ Purchase Date ”), the Issuers shall apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata basis, if applicable, with adjustments as necessary so that no Notes or Pari Passu Indebtedness will be repurchased in part in an unauthorized denomination), or, if less than the Offer Amount has been tendered, all Notes and Pari Passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest and Additional Interest, up to but excluding the Purchase

 

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Date, shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

(d) Upon the commencement of an Asset Sale Offer, the Issuers shall deliver electronically or send, by first-class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and holders of such Pari Passu Indebtedness. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(i) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

(ii) the Offer Amount, the purchase price and the Purchase Date;

(iii) that any Note not tendered or accepted for payment shall continue to accrue interest;

(iv) that, unless the Issuers default in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest on and after the Purchase Date;

(v) that any Holder electing to have less than all of the aggregate principal amount of its Notes purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in an amount not less than $2,000 and in integral multiples of $1,000 in excess thereof;

(vi) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer such Note by book-entry transfer, to the Issuers, the Depositary, if appointed by the Issuers, or a Paying Agent at the address specified in the notice at least two Business Days before the Purchase Date;

(vii) that Holders shall be entitled to withdraw their election if the Issuers, the Depositary or the Paying Agent, as the case may be, receives, not later than the close of business on the second Business Day prior to the expiration date of the Offer Period, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(viii) that, if the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall, through the facilities of the Depositary (in the case of Global Notes) select the Notes and the Issuers shall select such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in an amount not less than $2,000 or integral multiples of $1,000 in excess thereof are purchased); and

(ix) that Holders whose certificated Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased; provided , that new Notes will only be issued in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000.

 

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(e) On or before the Purchase Date, the Issuers shall, to the extent lawful, (1) accept for payment, on a pro rata basis as described in clause (d)(viii) of this Section 3.09, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted, together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

(f) The Issuers, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuers for purchase, and the Issuers shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased. Any Note not so accepted shall be promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers shall publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof.

ARTICLE 4

C OVENANTS

Section 4.01. Payment of Notes . The Issuers shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuers or a Guarantor or an Affiliate of the Issuers or a Guarantor, holds as of 11:00 a.m. (New York City time) on the due date money deposited by the Issuers in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.

The Issuers shall pay all Additional Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement.

The Issuers shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; the Issuers shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02. Maintenance of Office or Agency . The Issuers shall maintain the offices or agencies (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or Transfer Agent) required under Section 2.03 hereof where Notes may be surrendered for registration of transfer or for exchange or presented for payment and where notices and demands to or upon the Issuers in respect of

 

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the Notes and this Indenture may be served. The Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office.

The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuers of its obligation to maintain such offices or agencies as required by Section 2.03 hereof for such purposes. The Issuers shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Issuers hereby designate the Corporate Trust Office as one such office or agency of the Issuers in accordance with Section 2.03 hereof.

Section 4.03. Reports and Other Information .

(a) Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Company shall file with the SEC:

(i) within 90 days after the end of each fiscal year (or 135 days for the fiscal year ending December 31, 2011), annual reports on Form 10-K, or any successor or comparable form, containing the information required to be contained therein, or required in such successor or comparable form;

(ii) within 45 days after the end of each of the first three fiscal quarters of each fiscal year (or 90, 75 and 60 days, respectively, for the first three fiscal quarters ending after the Issue Date), reports on Form 10-Q containing all quarterly information that would be required to be contained in Form 10-Q, or any successor or comparable form;

(iii) within five Business Days of the date on which an event would have been required to be reported on a Form 8-K or any successor or comparable form if the Company had been a reporting company under the Exchange Act, a current report relating to such event on Form 8-K or any successor or comparable form;

in each case, in a manner that complies in all material respects with the requirements specified in such form (except as described above or below and subject, in the case of required financial information, to exceptions consistent with the presentation of financial information in the Offering Memorandum, to the extent filed within the times specified above); provided, however , that the Company shall not be so obligated to file such reports referred to in clauses (i), (ii) and (iii) in this Section 4.03(a) above with the SEC (A) if the SEC does not permit such filing or (B) prior to the consummation of an Exchange Offer or the effectiveness of a Shelf Registration Statement as required by the Registration Rights Agreement, in which event the Company shall make available such information to the Trustee, the Holders and prospective purchasers of Notes, in each case within 15 days after the time the Company would be required to file such information with the SEC (or, for the avoidance of doubt, such longer period of time specified above) if it were subject to Sections 13 or 15(d) of the Exchange Act; provided, further , that until such time as the consummation of an Exchange Offer or the effectiveness of a Shelf Registration Statement as required by the Registration Rights Agreement, the Company shall not be required to (a) in the case of (x)

 

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clauses (i) and (ii) provide any information beyond the financial information that would be required to be contained in an annual or quarterly report on Form 10-K or 10-Q, as applicable, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and (y) clause (iii) make available any information regarding director and management compensation or the occurrence of any of the events set forth in Items 1.04, 2.01, 2.05, 2.06, 3 (other than Item 3.03), 5.01, 5.02(e)—(f), 5.03-5.08, 6, 7, 8 or 9 of Form 8-K, (b) make available any information regarding the occurrence of any of the events set forth in Items 1.01 or 1.02 of Form 8-K if the Company determines in its good faith judgment that the event that would otherwise be required to be disclosed is not material to the Holders of the notes or the business, assets, operations, financial positions or prospects of the Company and its Restricted Subsidiaries taken as a whole, (c) comply with Regulation G under the Exchange Act or Item 10(e) of Regulation S-K with respect to any “non-GAAP” financial information contained therein (other than providing reconciliations of such non-GAAP information to extent included in the Offering Memorandum), (d) comply with Regulation S-X or (e) provide any information that is not otherwise similar to information currently included in the Offering Memorandum. In addition, notwithstanding the foregoing, the Company will not be required to (x) comply with Sections 302, 906 and 404 of the Sarbanes-Oxley Act of 2002 or (y) otherwise furnish any information, certificates or reports required by Items 307 or 308 of Regulation S-K prior to the consummation of an Exchange Offer or the effectiveness of a Shelf Registration Statement. In addition, to the extent not satisfied by the foregoing, the Company will agree that, for so long as any Notes are outstanding, it will furnish to Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(b) In the event that any direct or indirect parent company of the Company of which the Company is a Wholly-Owned Subsidiary becomes a Guarantor, the Company may satisfy its obligations under this Section 4.03 with respect to financial information relating to the Company by furnishing financial information relating to such parent; provided , that, if and so long as such parent company shall have Independent Assets or Operations, the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Company and its Restricted Subsidiaries on a stand-alone basis, on the other hand. “ Independent Assets or Operations ” means, with respect to any such parent company, that such parent company’s total assets, revenues, income from continuing operations before income taxes and cash flows from operating activities (excluding in each case amounts related to its investment in the Company and the Restricted Subsidiaries), determined in accordance with GAAP and as shown on the most recent balance sheet of such parent company, is more than 3.0% of such parent company’s corresponding consolidated amount.

(c) Notwithstanding the foregoing, such requirements of this Section 4.03 shall be deemed satisfied prior to the commencement of an Exchange Offer or the effectiveness of the Shelf Registration Statement for the Initial Notes (1) by the filing with the SEC of the Exchange Offer Registration Statement or the Shelf Registration Statement (or any other similar registration statement), and any amendments thereto, with such financial information that satisfies Regulation S-X of the Securities Act, subject to exceptions consistent with the presentation of financial information in the Offering Memorandum, to the extent filed within the time periods specified above, or (2) by posting on the Company’s website and providing to the Trustee within 15 days of the time periods after the Company would have been required to file annual and interim reports with the SEC (or, for the avoidance of doubt, such longer period of time specified above) if it were a non-accelerated filer, the financial information (including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section) that would be required to be included in such reports, subject to exceptions consistent with the presentation of financial information in the Offering Memorandum, to the extent filed within the times specified above.

 

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(d) Notwithstanding anything herein to the contrary, the Company will not be deemed to have failed to comply with any of its obligations hereunder for purposes of clause (iii) of Section 6.01(a) hereof until 90 days after the receipt of the written notice delivered thereunder.

To the extent any information is not provided within the time periods specified in this Section 4.03 and such information is subsequently provided, the Company will be deemed to have satisfied its obligations with respect thereto at such time and any Default with respect thereto shall be deemed to have been cured.

Section 4.04. Compliance Certificate .

(a) Each Issuer and Guarantor (to the extent that such Guarantor is so required under the Trust Indenture Act) shall deliver to the Trustee, within 90 days after the end of each fiscal year ending after the Issue Date (or 120 days for the fiscal year ending December 31, 2012), a certificate from its principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of such Issuer and, in the case of the Company, its Restricted Subsidiaries, during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether such Issuer has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge, on behalf of such Issuer, such Issuer has kept, observed, performed and fulfilled in all material respects each and every condition and covenant contained in this Indenture during such fiscal year and no Default has occurred and is continuing with respect to any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred and is continuing, describing all such Defaults of which he or she may have knowledge and what action such Issuer is taking or proposes to take with respect thereto).

(b) When any Default has occurred and is continuing under this Indenture, or if the Trustee or the holder of any other evidence of Indebtedness of the Company or any Subsidiary gives any notice or takes any other action with respect to a claimed Default, the Issuers shall promptly (which shall be no more than 10 Business Days after becoming aware of such Default) deliver to the Trustee by registered or certified mail or by facsimile transmission an Officer’s Certificate specifying such event and what action the Issuers propose to take with respect thereto.

Section 4.05. Taxes . The Company shall pay or discharge, and shall cause each of its Restricted Subsidiaries to pay or discharge, prior to delinquency, all material taxes, lawful assessments, and governmental levies except such as are contested in good faith and by appropriate actions or where the failure to effect such payment or discharge is not adverse in any material respect to the Holders.

Section 4.06. Stay, Extension and Usury Laws . The Issuers and each of the Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture and the Notes; and the Issuers and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and (to the extent that they may lawfully do so) covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

 

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Section 4.07. Limitation on Restricted Payments .

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(i) declare or pay any dividend or make any payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (in each case, solely in such Person’s capacity as holder of such Equity Interests), including any dividend, payment or distribution payable in connection with any merger, amalgamation or consolidation, other than:

(A) dividends and distributions by the Company payable solely in Equity Interests (other than Disqualified Stock) of the Company; or

(B) dividends and distributions by a Restricted Subsidiary so long as, in the case of any dividend, payment or distribution payable on or in respect of any class or series of securities (including Equity Interests) issued by a Restricted Subsidiary other than a Wholly-Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend, payment or distribution in accordance with its Equity Interests in such class or series of securities (including Equity Interests);

(ii) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Company or any direct or indirect parent company of the Company, including in connection with any merger, amalgamation or consolidation;

(iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness, other than:

(A) Indebtedness permitted under clauses (vii), (viii) and (ix) of Section 4.09(b) hereof; or

(B) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or

(iv) make any Restricted Investment

(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment:

(A) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(B) immediately after giving effect to such transaction on a pro forma basis, (x) the Company could incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof (the “ Fixed Charge Coverage Test ”); and (y) the Consolidated Leverage Ratio of the Company is less than 5.00 to 1.00.

(C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (including

 

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Restricted Payments permitted by clauses (i), (vi)(C), (ix) and (xiv) of Section 4.07(b) hereof, but excluding all other Restricted Payments permitted by Section 4.07(b) hereof), is less than the sum of (without duplication):

(1) 50.0% of the Consolidated Net Income of the Company for the period (taken as one accounting period and including the predecessor) beginning on the first day of the fiscal quarter during which the Issue Date occurs to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100.0% of such deficit; plus

(2) 100.0% of the aggregate net cash proceeds and the fair market value of marketable securities or other property received by the Company since immediately after the Issue Date (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to clause (xii)(A) of Section 4.09(b) hereof) from the issue or sale of:

(i) (A) Equity Interests of the Company, including Treasury Capital Stock, but excluding cash proceeds and the fair market value of marketable securities or other property received from the sale of:

(x) Equity Interests to any future, present or former employees, directors, officers, managers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any direct or indirect parent company of the Company or any of the Company’s Subsidiaries after the Issue Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (iv) of Section 4.07(b) hereof; and

(y) Designated Preferred Stock; and

(B) to the extent such net cash proceeds are actually contributed to the Company, Equity Interests of the Company’s direct or indirect parent companies (excluding contributions of the proceeds from the sale of Designated Preferred Stock of such companies or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (iv) of Section 4.07(b) hereof); or

(ii) debt securities of the Company that have been converted into or exchanged for such Equity Interests of the Company;

provided , that this clause (C)(2) shall not include the proceeds from (W) Refunding Capital Stock applied in accordance with clause (ii) of Section 4.07(b) hereof, (X) Equity Interests or convertible debt securities of the Company sold to a Restricted Subsidiary, (Y) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (Z) Excluded Contributions; plus

(3) 100.0% of the aggregate amount of cash and the fair market value of marketable securities or other property contributed to the capital of the Company following the Issue Date (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to clause (xii)(A) of Section 4.09(b) hereof) (other than by a Restricted Subsidiary and other than any Excluded Contributions); plus

 

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(4) 100.0% of the aggregate amount received in cash and the fair market value of marketable securities or other property received by means of:

(i) the sale or other disposition (other than to the Company or a Restricted Subsidiary) of, or other returns on Investments from, Restricted Investments made by the Company or its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Company or its Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees, which constitute Restricted Investments made by the Company or its Restricted Subsidiaries, in each case after the Issue Date; or

(ii) the sale (other than to the Company, the Co-Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a dividend or distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to clause (vii) of Section 4.07(b) hereof or to the extent such Investment constituted a Permitted Investment) or a dividend from an Unrestricted Subsidiary after the Issue Date; plus

(5) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary or the merger, amalgamation or consolidation of an Unrestricted Subsidiary into the Company or a Restricted Subsidiary or the transfer of all or substantially all of the assets of an Unrestricted Subsidiary to the Company or a Restricted Subsidiary after the Issue Date, the fair market value of the Investment in such Unrestricted Subsidiary (or the assets transferred) at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, amalgamation, consolidation or transfer of assets, other than to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment; provided , that, in the case of this clause (5), if the fair market value of such Investment shall exceed $40.0 million, such fair market value shall be determined by the board of directors of the Company, whose resolution with respect thereto will be delivered to the Trustee, at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary, other than to the extent the Investment in such Unrestricted Subsidiary was made by the Company, Co-Issuer or a Restricted Subsidiary pursuant to clause (vii) of Section 4.07(b) hereof or to the extent such Investment constituted a Permitted Investment.

(b) The foregoing provisions of Section 4.07(a) hereof shall not prohibit:

(i) the payment of any dividend or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or other distribution or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or other distribution or redemption payment would have complied with the provisions of this Indenture;

(ii) (A) the redemption, repurchase, retirement or other acquisition of any Equity Interests, including any accrued and unpaid dividends thereon (“ Treasury Capital Stock ”) or Subordinated Indebtedness of the Company or any Restricted Subsidiary or any Equity Interests of any direct or indirect parent company of the Company, in exchange for, or out of the proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary) of, Equity Interests of the Company or any direct or indirect parent company of the Company to the extent

 

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contributed to the Company (in each case, other than any Disqualified Stock) (“ Refunding Capital Stock ”), (B) the declaration and payment of dividends on Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to a Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company or any of its Subsidiaries) of Refunding Capital Stock, and (C) if, immediately prior to the retirement of Treasury Capital Stock, the declaration and payment of dividends thereon was permitted under clauses (vi)(A) or (B) of this Section 4.07(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Company) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Treasury Capital Stock immediately prior to such retirement;

(iii) the defeasance, redemption, repurchase, exchange or other acquisition or retirement (1) of Subordinated Indebtedness of the Issuers or a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuers or a Guarantor or Disqualified Stock of the Company, Co-Issuers or a Guarantor or (2) Disqualified Stock of the Issuers or a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of the Issuers or a Guarantor, that, in each case, is incurred or issued, as applicable, in compliance with Section 4.09 hereof so long as:

(A) the principal amount (or accreted value, if applicable) of such new Indebtedness or the liquidation preference of such new Disqualified Stock does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Subordinated Indebtedness or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired for value, plus the amount of any premium (including tender premium) required to be paid under the terms of the instrument governing the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired, defeasance costs and any fees and expenses incurred in connection with the issuance of such new Indebtedness or Disqualified Stock;

(B) such new Indebtedness is subordinated to the Notes or the applicable Guarantee at least to the same extent as such Subordinated Indebtedness so defeased, redeemed, repurchased, exchanged, acquired or retired;

(C) such new Indebtedness or Disqualified Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired (or, if earlier, the date that is 91 days after the maturity date of the Notes); and

(D) such new Indebtedness or Disqualified Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired (or requires no or nominal payments in cash prior to the date that is 91 days after the maturity date of the Notes);

(iv) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Company or any direct

 

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or indirect parent company of the Company held by any future, present or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any of its Subsidiaries or any of its direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, or any stock subscription or shareholder agreement (including, for the avoidance of doubt, any principal and interest payable on any notes issued by the Company or any direct or indirect parent company of the Company in connection with such repurchase, retirement or other acquisition), including any Equity Interest rolled over by management of the Company or any direct or indirect parent company of the Company in connection with the Transactions; provided , that the aggregate amount of Restricted Payments made under this clause (iv) do not exceed in any calendar year $15.0 million (which shall increase to $25.0 million subsequent to the consummation of an underwritten public Equity Offering by the Company or any direct or indirect parent entity of the Company) (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $30.0 million in any calendar year (which shall increase to $50.0 million subsequent to the consummation of an underwritten public Equity Offering by the Company or any direct or indirect parent corporation of the Company)); provided , further , that such amount in any calendar year under this clause may be increased by an amount not to exceed:

(A) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Company and, to the extent contributed to the Company, the cash proceeds from the sale of Equity Interests of any of the Company’s direct or indirect parent companies, in each case to any future, present or former employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any of its Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (C) of Section 4.07(a) hereof; plus

(B) the cash proceeds of key man life insurance policies received by the Company or its Restricted Subsidiaries (or any direct or indirect parent company to the extent contributed to the Company) after the Issue Date; less

(C) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (A) and (B) of this clause (iv);

and provided , further , that cancellation of Indebtedness owing to the Company from any future, present or former employees, directors, officers, members of management or consultants of the Company (or their respective Controlled Investment Affiliates or Immediate Family Members), any of the Company’s direct or indirect parent companies or any of the Company’s Restricted Subsidiaries in connection with a repurchase of Equity Interests of the Company or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this Section 4.07 or any other provision of this Indenture;

(v) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any of its Restricted Subsidiaries or any class or series of Preferred Stock of any Restricted Subsidiary issued in accordance with Section 4.09 hereof to the extent such dividends are included in the definition of “ Fixed Charges ”;

 

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(vi) (A) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by the Company or any of its Restricted Subsidiaries after the Issue Date;

(B) the declaration and payment of dividends to any direct or indirect parent company of the Company, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by such parent company after the Issue Date, provided , that the amount of dividends paid pursuant to this clause (b) shall not exceed the aggregate amount of cash actually contributed to the Company from the sale of such Designated Preferred Stock; or

(C) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (ii) of this Section 4.07(b);

provided , in the case of each of (A), (B) and (C) of this clause (vi), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is Preferred Stock, after giving effect to such issuance or declaration on a pro forma basis, the Company and its Restricted Subsidiaries on a consolidated basis would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(vii) if the Consolidated Leverage Ratio of the Company is less than 5.00 to 1.00 on a pro forma basis after giving effect to such transaction, Investments in Unrestricted Subsidiaries having an aggregate fair market value taken together with all other Investments made pursuant to this clause (vii) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities (until such proceeds are converted to Cash Equivalents), not to exceed the greater of (a) $15.0 million and (b) 1.0% of Total Assets at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(viii) payments made or expected to be made by the Company or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company or any Restricted Subsidiary or any direct or indirect parent company of the Company and any repurchases of Equity Interests deemed to occur upon exercise of stock options, warrants or similar rights if such Equity Interests represent a portion of the exercise price of such options, warrants or similar rights;

(ix) the declaration and payment of dividends on the Company’s common stock (or the payment of dividends to any direct or indirect parent company of the Company to fund a payment of dividends on such company’s common stock), following the first public offering of the Company’s common stock or the common stock of any direct or indirect parent company of the Company after the Issue Date, of up to 6.0% per annum of the net cash proceeds received by or contributed to the Company in or from any such public offering, other than public offerings with respect to the Company’s common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

 

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(x) Restricted Payments in an amount that does not exceed the amount of Excluded Contributions received since the Issue Date;

(xi) if the Consolidated Leverage Ratio of the Company is less than 5.00 to 1.00 on a pro forma basis after giving effect to such transaction, Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (xi) (in the case of Restricted Investments, at the time outstanding (without giving effect to the sale of an Investment to the extent the proceeds of such sale do not consist of, or have not be subsequently sold or transferred for, Cash Equivalents)) not to exceed the greater of (a) $25.0 million and (b) 1.75% of Total Assets at such time;

(xii) distributions or payments of Securitization Fees;

(xiii) any Restricted Payment made in connection with the Transactions and the fees and expenses related thereto or owed to Affiliates, in each case to the extent permitted by Section 4.11 hereof;

(xiv) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those described under Section 4.10 and Section 4.14 hereof; provided , that if the Issuers shall have been required to make a Change of Control Offer or Asset Sale Offer, as applicable, to purchase the Notes on the terms provided in this Indenture applicable to Change of Control Offers or Asset Sale Offers, respectively, all Notes validly tendered by Holders in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed, acquired or retired for value;

(xv) the declaration and payment of dividends or distributions by the Company to, or the making of loans to, any direct or indirect parent company of the Company in amounts required for any direct or indirect parent company of the Company to pay, in each case without duplication,

(A) franchise and similar taxes, and other fees and expenses, required to maintain their corporate or other entity existence;

(B) foreign, federal, state or local income or similar taxes, to the extent such income or similar taxes are attributable to the income of the Company and its Restricted Subsidiaries or, to the extent of any cash amounts actually received from its Unrestricted Subsidiaries for such purpose, to the income of such Unrestricted Subsidiaries; provided , that in each case the amount of such payments in respect of any fiscal year does not exceed the amount that the Company and/or its Restricted Subsidiaries (and, to the extent permitted above, its Unrestricted Subsidiaries), as applicable, would have been required to pay in respect of the relevant foreign, federal, state or local income or similar taxes for such fiscal year had the Company, its Restricted Subsidiaries and/or its Unrestricted Subsidiaries (to the extent described above), as applicable, paid such taxes separately from any such parent company;

(C) customary salary, bonus and other benefits payable to employees, directors, officers and managers of any direct or indirect parent company of the Company to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Company and its Restricted Subsidiaries;

 

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(D) general corporate operating and overhead costs and expenses of any direct or indirect parent company of the Company to the extent such costs and expenses are attributable to the ownership or operation of the Company and its Restricted Subsidiaries;

(E) fees and expenses other than to Affiliates of the Company related to any unsuccessful equity or debt offering of such parent entity;

(F) amounts payable pursuant to the Management Fee Agreement, (including any amendment thereto or replacement thereof so long as any such amendment or replacement is not materially disadvantageous in the good faith judgment of the board of directors of the Company to the Holders when taken as a whole, as compared to the Management Fee Agreement as in effect on the Issue Date (it being understood that any amendment thereto or replacement thereof to increase the fees payable pursuant to the Management Fee Agreement would be deemed to be materially disadvantageous to the Holders)), solely to the extent such amounts are not paid directly by the Company or its Subsidiaries;

(G) cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of the Company or any direct or indirect parent company of the Company;

(H) to finance Investments that would otherwise be permitted to be made pursuant to this Section 4.07 if made by the Company; provided , that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment, (2) such direct or indirect parent company shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to the capital of the Company or one of its Restricted Subsidiaries or (y) the merger or amalgamation of the Person formed or acquired into the Company or one of its Restricted Subsidiaries (to the extent not prohibited by Section 5.01 hereof) in order to consummate such Investment, (3) such direct or indirect parent company and its Affiliates (other than the Company or a Restricted Subsidiary) receives no consideration or other payment in connection with such transaction except to the extent the Company or a Restricted Subsidiary could have given such consideration or made such payment in compliance with this Indenture, (4) any property received by the Company shall not increase amounts available for Restricted Payments pursuant to clause (C) of Section 4.07(a) hereof and (5) such Investment shall be deemed to be made by the Company or such Restricted Subsidiary pursuant to another provision of this Section 4.07(b) (other than pursuant to clause (x) of this Section 4.07(b)) or pursuant to the definition of “Permitted Investments” (other than clause (i) thereof);

(I) amounts that would be permitted to be paid by the Company under clauses (iii), (iv), (vii), (viii), (xii), (xiii), (xvi) and (xx) of Section 4.11(b) hereof; provided , that the amount of any Restricted Payment made under this clause (xv)(I) as permitted to be paid by Section 4.11(b)(xiii) hereof shall not exceed the amount permitted under Section 4.07(b)(iv) hereof; provided, further , that the amount of any dividend or distribution under this clause (xv)(I) to permit such payment shall reduce, without duplication, Consolidated Net Income of the Company to the extent, if any, that such payment would have reduced Consolidated Net Income of the Company if such payment had been made directly by the Company and increase (or, without duplication of any reduction of Consolidated Net Income, decrease) EBITDA to the extent, if any, that Consolidated Net

 

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Income is reduced under this clause (xv)(I) and such payment would have been added back to (or, to the extent excluded from Consolidated Net Income, would have been deducted from) EBITDA if such payment had been made directly by the Company, in each case, in the period such payment is made;

(xvi) the redemption, repurchase, retirement or other acquisition of any Equity Interests of any Restricted Subsidiary by the Company or any Restricted Subsidiary; and

(xvii) the distribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are cash and/or Cash Equivalents);

provided , that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (xi) and (xvi) of this Section 4.07(b), no Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) As of the Issue Date, all of the Company’s Subsidiaries shall be Restricted Subsidiaries. The Company shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the penultimate sentence of the definition of “ Unrestricted Subsidiary .” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the penultimate sentence of the definition of “ Investments .” Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such time, pursuant to Section 4.07 hereof, or pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries shall not be subject to any of the restrictive covenants set forth in this Indenture. For the avoidance of doubt, this Section 4.07 shall not restrict the making of any “ AHYDO catch up payment ” with respect to, and required by the terms of, any Indebtedness of the Company or any of its Restricted Subsidiaries permitted to be incurred under the terms of this Indenture.

Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries .

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries that is not a Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Restricted Subsidiary to:

(i) (A) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries that is a Guarantor on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or

(B) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries that is a Guarantor;

(ii) make loans or advances to the Company or any of its Restricted Subsidiaries that is a Guarantor; or

(iii) sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries that is a Guarantor,

 

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(b) The restrictions in Section 4.08(a) hereof shall not apply to encumbrances or restrictions existing under or by reason of:

(i) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Senior Secured Credit Facilities and the related documentation and Hedging Obligations and the related documentation;

(ii) this Indenture, the Notes and the guarantees thereof;

(iii) purchase money obligations for property acquired in the ordinary course of business and capital lease obligations that impose restrictions of the nature described in clause (iii) of Section 4.08(a) hereof on the property so acquired;

(iv) applicable law or any applicable rule, regulation or order;

(v) any agreement or other instrument of a Person acquired by or merged or consolidated with or into the Company or any of its Restricted Subsidiaries in existence at the time of such acquisition or at the time it merges with or into the Company or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such Person (but, in any such case, not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person so acquired and its Subsidiaries, or the property or assets of the Person so acquired and its Subsidiaries or the property or assets so acquired;

(vi) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Company pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(vii) Secured Indebtedness otherwise permitted to be incurred pursuant to Section 4.09 and Section 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(viii) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business or arising in connection with any Permitted Liens;

(ix) other Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries that are not Guarantors permitted to be incurred subsequent to the Issue Date pursuant to the provisions of Section 4.09 hereof;

(x) customary provisions in joint venture agreements and other similar agreements relating solely to such joint venture;

(xi) customary provisions contained in leases, sub-leases, licenses, sub-licenses or similar agreements, including with respect to intellectual property and other agreements, in each case, entered into in the ordinary course of business;

(xii) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Company or any of its Restricted Subsidiaries is a party entered into in the ordinary course of business; provided , that such agreement prohibits the encumbrance of solely the property or assets of the Company or such Restricted

 

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Subsidiary that are the subject to such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Company or such Restricted Subsidiary or the assets or property of another Restricted Subsidiary;

(xiii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of any Restricted Subsidiary;

(xiv) customary provisions restricting assignment of any agreement entered into in the ordinary course of business;

(xv) restrictions arising in connection with cash or other deposits permitted under Section 4.12 hereof;

(xvi) any agreement or instrument (A) relating to any Indebtedness, Disqualified or preferred stock permitted to be incurred or issued subsequent to the Issue Date pursuant to Section 4.09 hereof if the encumbrances and restrictions are not materially more disadvantageous, taken as a whole, to the Holders than is customary in comparable financings for similarly situated issuers (as determined in good faith by the Company) or is otherwise in effect on the Issue Date and (B) either (x) the Company determines that such encumbrance or restriction will not adversely affect the Company’s ability to make principal and interest payments on the Notes as and when they come due or (y) such encumbrances and restrictions apply only during the continuance of a default in respect of a payment or financial maintenance covenant relating to such Indebtedness;

(xvii) any encumbrances or restrictions of the type referred to in clauses (i), (ii) and (iii) of Section 4.08(a) hereof imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (i) through (xvi) of this Section 4.08(b); provided , that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company, not materially more restrictive with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; and

(xviii) restrictions created in connection with any Qualified Securitization Facility that, in the good faith determination of the Company are necessary or advisable to effect such Qualified Securitization Facility.

Section 4.09. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “ incur ” and collectively, an “ incurrence ”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company shall not issue any shares of Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided , that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on

 

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which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided , that the then outstanding aggregate principal amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing, together with any amounts incurred under clauses (xii) and (xxiii) of Section 4.09(b) hereof, by Restricted Subsidiaries that are not Guarantors (other than the Co-Issuer) shall not exceed $75.0 million.

(b) The provisions of Section 4.09(a) hereof shall not apply to:

(i) Indebtedness incurred pursuant to any Credit Facilities by the Company or any Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided, that immediately after giving effect to any such incurrence or issuance, the then outstanding aggregate principal amount of all Indebtedness incurred or issued under this clause (i) does not exceed $660.0 million;

(ii) the incurrence by the Company and any Guarantor of Indebtedness represented by the Notes (including any guarantee thereof) and the exchange notes and related exchange guarantees to be issued in exchange for the Notes and the guarantees thereof pursuant to the Registration Rights Agreement (but excluding any Additional Notes);

(iii) Indebtedness of the Company and its Subsidiaries in existence on the Issue Date (other than Indebtedness described in clauses (i) and (ii) of this Section 4.09(b));

(iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock incurred or issued by the Company or any Restricted Subsidiary and Preferred Stock incurred or issued by the Company or any Restricted Subsidiary, to finance the purchase, lease or improvement of property (real or personal), equipment or other assets used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount not to exceed the greater of (a) $40.0 million and (b) 3.0% of Total Assets (in each case, determined at the date of incurrence or issuance), so long as such Indebtedness, Disqualified Stock or Preferred Stock is incurred or issued at the date of such purchase, lease or improvement or within 270 days thereafter;

(v) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided , that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 Business Days following such drawing or incurrence;

(vi) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations,

 

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in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided , that such Indebtedness is not reflected on the balance sheet of the Company, or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (vi));

(vii) Indebtedness of the Company to a Restricted Subsidiary; provided , that any such Indebtedness owing to a Restricted Subsidiary that is not the Co-Issuer or a Guarantor is expressly subordinated in right of payment to the Notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (vii);

(viii) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided , that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not the Co-Issuer or a Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (viii);

(ix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries or any pledge of such Capital Stock constituting a Permitted Lien) shall be deemed in each case to be an issuance of such shares of Preferred Stock (to the extent such Preferred Stock is then outstanding) not permitted by this clause (ix);

(x) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred under this Indenture, exchange rate risk or commodity pricing risk;

(xi) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business;

(xii) (A) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100% of the net cash proceeds received by the Company since immediately after the Issue Date from the issue or sale of Equity Interests of the

 

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Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (C)(2) and (C)(3) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (a), (b) or (c) of the definition thereof), and

(B) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (xii)(B), does not exceed the greater of (x) $75.0 million and (y) 5.5% of Total Assets (in each case, determined on the date of such incurrence); it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (xii)(B) shall cease to be deemed incurred or outstanding for purposes of this clause (xii)(B) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09(a) hereof without reliance on this clause (xii)(B); provided , that the amount of Indebtedness, Disqualified Stock and Preferred Stock that may be incurred pursuant to this clause (xii), together with amounts incurred under clause (xxiii) of this Section 4.09(b) and Section 4.09(a), by Restricted Subsidiaries that are not Guarantors (other than the Co-Issuer) shall not exceed $75.0 million at any one time outstanding;

(xiii) the incurrence or issuance by the Company or any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to extend, replace, refund, refinance, renew or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a) hereof and clauses (ii), (iii), (iv) and (xii)(A) of this Section 4.09(b), this clause (xiii) and clause (xiv) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so extend, replace, refund, refinance, renew or defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including tender premiums), defeasance costs, and accrued interest, fees and expenses in connection therewith (the “ Refinancing Indebtedness ”) prior to its respective maturity; provided , that such Refinancing Indebtedness:

(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased (or requires no or nominal payments in cash prior to the date that is 91 days after the maturity date of the Notes);

(B) to the extent such Refinancing Indebtedness extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated in right of payment to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively; and

 

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(C) shall not include:

(1) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not the Co-Issuer or a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company, the Co-Issuer or a Guarantor;

(2) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor; or

(3) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

(4) and, provided , further , that subclause (A) of this clause (xiii) will not apply to any extension, replacement, refunding, refinancing, renewal or defeasance of any Credit Facilities or Secured Indebtedness;

(xiv) (A) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets) or (B) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company or any Restricted Subsidiary or merged into or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided , that in the case of clauses (A) and (B), after giving effect to such acquisition, merger, amalgamation or consolidation either

(1) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or

(2) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger, amalgamation or consolidation;

(xv) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided , that such Indebtedness is extinguished within five Business Days of its incurrence;

(xvi) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;

(xvii) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture,

(B) any guarantee by a Restricted Subsidiary of Indebtedness of the Company; provided that such guarantee is incurred in accordance with Section 4.15 hereof, or

 

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(C) any incurrence by the Co-Issuer of Indebtedness as a co-issuer of Indebtedness of the Company that was permitted to be incurred by another provision of this Section 4.09;

(xviii) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to future, present or former employees, directors, officers, managers and consultants thereof, their respective Controlled Investment Affiliates or Immediate Family Members, in each case to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent company of the Company to the extent described in clause (iv) of Section 4.07(b) hereof;

(xix) to the extent constituting Indebtedness, customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;

(xx) (A) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business of the Company and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Company and its Restricted Subsidiaries and (B) Indebtedness in respect of Bank Products;

(xxi) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s length commercial terms;

(xxii) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (A) the financing of insurance premiums or (B) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business;

(xxiii) the incurrence of Indebtedness of Restricted Subsidiaries of the Company that are not Guarantors (including Foreign Subsidiaries) in an amount outstanding under this clause (xxiii) not to exceed together with any other Indebtedness incurred under this clause (xxiii) the greater of (A) $50.0 million and (B) 3.5% of Total Assets (in each case, determined on the date of such incurrence); it being understood that any Indebtedness deemed incurred pursuant to this clause (xxiii) shall cease to be deemed incurred or outstanding for purposes of this clause (xxiii) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiaries could have incurred such Indebtedness under Section 4.09(a) hereof without reliance on this clause (xxiii); provided , that the amount of Indebtedness, Disqualified Stock and Preferred Stock that may be incurred pursuant to this clause (xxiii), together with amounts incurred under clause (xii) of this Section 4.09(b) and Section 4.01(a), by Restricted Subsidiaries that are not Guarantors (other than the Co-Issuer) shall not exceed $75.0 million at any one time outstanding; and

(xxiv) Indebtedness of the Company or any of its Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business.

(c) For purposes of determining compliance with this Section 4.09:

(i) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness,

 

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Disqualified Stock or Preferred Stock described in clauses (i) through (xxiv) of Section 4.09(b) hereof or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company, in its sole discretion, may classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and shall only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one of the above clauses or under Section 4.09(a) hereof; provided , that all Indebtedness outstanding under the Senior Secured Credit Facilities on the Issue Date shall be treated as incurred on the Issue Date under clause (i) of Section 4.09(b) hereof; and

(ii) the Company shall be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.09(a) and Section 4.09(b) hereof.

Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, of the same class shall not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.09.

Notwithstanding any other provision of this Indenture to the contrary, for all purposes during the term of this Indenture, each lease in existence on the Issue Date shall have the same characterization as a Capitalized Lease Obligation or an operating lease as the characterization of that lease in the most recent financial statements in existence on the Issue Date, notwithstanding any change in characterization of that lease subsequent to the Issue Date by the Company based on changes in GAAP or its interpretation of GAAP.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. Dollar Equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided , that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed (A) the principal amount of such Indebtedness being refinanced plus (B) the aggregate amount of fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with such refinancing.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Notwithstanding anything to the contrary, the Company shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is contractually subordinated or junior in right of payment to any Indebtedness of the Company or such Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or such Guarantor’s Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be.

 

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This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to Secured Indebtedness merely because it is unsecured or (2) Indebtedness as subordinated or junior to any other Indebtedness merely because it has a junior priority with respect to the same collateral or because it is guaranteed by other obligors.

Section 4.10. Asset Sales .

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale, unless:

(i) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of; and

(ii) except in the case of a Permitted Asset Swap, at least 75.0% of the consideration therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided , that the amount of:

(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of the Company or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Notes, that are assumed by the transferee of any such assets and for which the Company and all of its Restricted Subsidiaries have been validly released by all applicable creditors in writing;

(B) any securities, notes or other obligations or assets received by the Company or such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into Cash Equivalents (to the extent of the Cash Equivalents received) within 180 days following the closing of such Asset Sale; and

(C) any Designated Non-cash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (x) $30.0 million and (y) 2.25% of Total Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value,

shall be deemed to be Cash Equivalents for purposes of this provision and for no other purpose.

(b) Within 365 days after the receipt of any Net Proceeds of any Asset Sale, the Company or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale,

(i) to permanently reduce:

(A) Obligations under the Senior Secured Credit Facilities, and to correspondingly reduce commitments with respect thereto;

 

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(B) Obligations under Secured Indebtedness, which is secured by a Lien that is permitted by this Indenture, and to correspondingly reduce commitments with respect thereto;

(C) Obligations under other Senior Indebtedness (and to correspondingly reduce commitments with respect thereto), provided that the Issuers shall equally and ratably reduce Obligations under the Notes as provided under Section 3.07 hereof or through open-market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth in Section 3.09 and Section 4.10(c) hereof) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes to be repurchased, to the date of repurchase; or

(D) Indebtedness of a Restricted Subsidiary that is not a Guarantor, other than Indebtedness owed to the Issuers or another Restricted Subsidiary; or

(ii) to make (A) an Investment in any one or more businesses, provided , that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Company or any of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (B) capital expenditures or (C) acquisitions of other assets, in each of (A), (B) and (C), used or useful in a Similar Business; or

(iii) to make an Investment in (A) any one or more businesses, provided , that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Company or any of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (B) properties or (C) acquisitions of other assets that, in each of (A), (B) and (C), replace the businesses, properties and/or assets that are the subject of such Asset Sale;

provided , that, in the case of clauses (ii) and (iii) above, a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as the Company, or such Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “ Acceptable Commitment ”) and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, the Company or such Restricted Subsidiary enters into another Acceptable Commitment (a “ Second Commitment ”) within 180 days of such cancellation or termination; provided further that if any Second Commitment is later cancelled or terminated for any reason before such Net Proceeds are applied, then such Net Proceeds shall constitute Excess Proceeds.

(c) Any Net Proceeds from the Asset Sale that are not invested or applied as provided and within the time period set forth in Section 4.10(b) hereof will be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $25.0 million, the Issuers shall make an offer to all Holders and, if required by the terms of any Indebtedness that is pari passu with the Notes (“ Pari Passu Indebtedness ”), to the holders of such Pari Passu Indebtedness (an “ Asset Sale Offer ”), to purchase the maximum aggregate principal amount of the Notes and such Pari Passu Indebtedness that is in an amount equal to at least $2,000, or an integral multiple of $1,000 thereafter, that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100.0% of the principal amount thereof (or accreted value thereof, if less), plus accrued and unpaid interest and Additional Interest, if any, to

 

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the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Issuers will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $25.0 million by delivering the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. The Issuers may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 365 days (or such longer period provided above) or with respect to Excess Proceeds of $25.0 million or less.

To the extent that the aggregate amount of Notes and such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes. If the aggregate principal amount of Notes or the Pari Passu Indebtedness surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the Company shall select such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered with adjustments as necessary so that no Notes or Pari Passu Indebtedness will be repurchased in part in an unauthorized denomination. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds that resulted in the Asset Sale Offer shall be reset to zero (regardless of whether there are any remaining Excess Proceeds upon such completion).

(d) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility, including under the Senior Secured Credit Facilities, or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.

(e) The notice, if delivered or mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is delivered or mailed in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect. The Issuers shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase by the Issuers of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

The provisions of this Section 4.10 may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.

Section 4.11. Transactions with Affiliates .

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate payments or consideration in excess of $10.0 million, unless:

(i) such Affiliate Transaction is on terms that are not materially less favorable to the Company or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis; and

(ii) the Company delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $20.0 million, a resolution adopted by the majority of the board of directors of the Company approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (i) of this Section 4.11(a).

 

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(b) The provisions of Section 4.11(a) hereof shall not apply to the following:

(i) transactions between or among the Company or any of its Restricted Subsidiaries;

(ii) Restricted Payments permitted by Section 4.07 hereof and the definition of “ Permitted Investments ”;

(iii) the payment of management, consulting, monitoring, transaction, advisory and other fees, indemnities and expenses pursuant to the Management Fee Agreement (plus any unpaid management, consulting, monitoring, transaction, advisory and other fees, indemnities and expenses accrued in any prior year) and the termination fees pursuant to the Management Fee Agreement, or any amendment thereto or replacement thereof so long as any such amendment or replacement is not materially disadvantageous in the good faith judgment of the board of directors of the Company to the Holders when taken as a whole, as compared to the Management Fee Agreement as in effect on the Issue Date (it being understood that any amendment thereto or replacement thereof to increase the fees payable pursuant to the Management Fee Agreement would be deemed to be materially disadvantageous to the Holders);

(iv) the payment of reasonable and customary fees and compensation paid to, and indemnities and reimbursements and employment and severance arrangements provided on behalf of or for the benefit of, current or former employees, directors, officers, managers or consultants of the Company, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(v) transactions in which the Company or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially less favorable to the Company or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis;

(vi) any agreement as in effect as of the Issue Date, or any amendment thereto (so long as any such amendment is not disadvantageous in any material respect to the Holders when taken as a whole as compared to the applicable agreement as in effect on the Issue Date);

(vii) the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it (or any parent company of the Company which holds, directly or indirectly, 100% of the issued and outstanding Equity Interests of the Company) is a party as of the Issue Date and any similar agreements which it (or any parent company of the Company which holds, directly or indirectly, 100% of the issued

 

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and outstanding Equity Interests of the Company) may enter into thereafter; provided , that the existence of, or the performance by the Company or any of its Restricted Subsidiaries (or such parent company) of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (vii) to the extent that the terms of any such amendment or new agreement are not otherwise disadvantageous in any material respect in the good faith judgment of the board of directors of the Company to the Holders when taken as a whole;

(viii) the Transactions and the payment of all fees and expenses related to the Transactions, including Transaction Expenses;

(ix) transactions with customers, clients, suppliers, contractors, joint venture partners or purchasers or sellers of goods or services that are Affiliates, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture which are fair to the Company and its Restricted Subsidiaries, in the reasonable determination of the board of directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(x) the issuance of Equity Interests (other than Disqualified Stock) of the Company to any direct or indirect parent company of the Company or to any Permitted Holder or to any employee, director, officer, manager or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(xi) sales of accounts receivable, or participations therein, or Securitization Assets or related assets in connection with any Qualified Securitization Facility;

(xii) payments by the Company or any of its Restricted Subsidiaries to any of the Investors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures which payments are approved by a majority of the board of directors of the Company in good faith;

(xiii) payments and Indebtedness and Disqualified Stock (and cancellation of any thereof) of the Company and its Restricted Subsidiaries and Preferred Stock (and cancellation of any thereof) of any Restricted Subsidiary to any future, current or former employee, director, officer, manager or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Company, any of its Subsidiaries or any of its direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement that are, in each case, approved by the Company in good faith; and any employment agreements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers, managers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) that are, in each case, approved by the Company in good faith;

(xiv) (i) investments by Permitted Holders in securities of the Company or any of its Restricted Subsidiaries (and payment of reasonable out-of-pocket expenses incurred by such Permitted Holders in connection therewith) so long as (A) the investment is being offered by the Company or such Restricted Subsidiary generally to other investors on the same or more favorable

 

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terms and (B) the investment constitutes less than 5.0% of the proposed or outstanding issue amount of such class of securities ( provided , that any investments in debt securities by any Debt Fund Affiliates shall not be subject to the limitation in this clause (B)), and (ii) payments to Permitted Holders in respect of securities of the Company or any of its Restricted Subsidiaries contemplated in the foregoing subclause (i) or that were acquired from Persons other than the Company and its Restricted Subsidiaries, in each case, in accordance with the terms of such securities;

(xv) payments to or from, and transactions with, any joint venture in the ordinary course of business (including, without limitation, any cash management activities related thereto);

(xvi) payments by the Company (and any direct or indirect parent company thereof) and its Subsidiaries pursuant to tax sharing agreements among the Company (and any such parent company) and its Subsidiaries, to the extent such payments are permitted under Section 4.07(b)(xv)(B) hereof;

(xvii) any lease entered into between the Company or any Restricted Subsidiary, as lessee, and any Affiliate of the Company, as lessor, which is approved by a majority of the disinterested members of the board of directors of the Company in good faith;

(xviii) intellectual property licenses in the ordinary course of business;

(xix) any payments by the Company and the Company’s Subsidiaries made pursuant to any Tax Receivable Agreement; and

(xx) the payment of reasonable out-of-pocket costs and expenses relating to registration rights and indemnities provided to stockholders of the Company or any direct or indirect parent thereof pursuant to the stockholders agreement or the registration rights agreement entered into on the Issue Date in connection therewith.

Section 4.12. Liens . The Company will not, and will not permit the Co-Issuer or any Guarantor to, directly or indirectly, create, incur, assume or suffer to exist any Lien (except Permitted Liens) that secures Obligations under any Indebtedness or any related Guarantee of Indebtedness, on any asset or property of the Company, the Co-Issuer or any Guarantor, or any income or profits therefrom, or assign or convey any right to receive income therefrom, unless:

(a) in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and

(b) in all other cases, the Notes or the Guarantees are equally and ratably secured,

except that the foregoing shall not apply to or restrict (A) Liens securing obligations in respect of the Notes, Exchange Notes and the related Guarantees, (B) Liens securing obligations in respect of (x) Indebtedness and other Obligations permitted to be incurred under Credit Facilities, including any letter of credit facility relating thereto, that was permitted by the terms of this Indenture to be incurred pursuant to clause (i) of Section 4.09(b) hereof and (y) obligations of the Issuers or any Subsidiary in respect of any Bank Products provided by any lender party to any Senior Secured Credit Facilities or any Affiliate of such lender (or any Person that was a lender or an Affiliate of a lender at the time the applicable agreements pursuant to which such Bank Products are provided were entered into) and (C) Liens securing obligations in respect of Indebtedness permitted to be incurred under Section 4.09 hereof; provided , that, with respect to Liens securing Indebtedness permitted under this subclause (C), at the time of incurrence and after giving pro forma effect thereto and the application of the net proceeds thereof, the Consolidated Secured Debt Ratio would be no greater than 3.50 to 1.00.

 

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Any Lien created for the benefit of the Holders of the Notes pursuant to this Section 4.12 shall be deemed automatically and unconditionally released and discharged upon the release and discharge of each of the Liens described in clauses (a) and (b) above.

Section 4.13. Company Existence . Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its company existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary; provided , that the Company shall not be required to preserve the corporate, partnership or other existence of any of its Restricted Subsidiaries (other than the Co-Issuer), if the Company in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole.

Section 4.14. Offer to Repurchase Upon Change of Control . If a Change of Control occurs after the Issue Date, unless the Issuers have previously or concurrently delivered a redemption notice with respect to all the outstanding Notes pursuant to Section 3.07 hereof, the Issuers shall make an offer to purchase all of the Notes pursuant to the offer described below (the “ Change of Control Offer ”) at a price in cash (the “ Change of Control Payment ”) equal to 101.0% of the aggregate principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date. Within 30 days following any Change of Control, except to the extent that the Issuers have exercised the right to redeem the Notes pursuant to Section 3.07, the Issuers shall deliver notice of such Change of Control Offer electronically or by first-class mail, with a copy to the Trustee, to each Holder to the address of such Holder appearing in the Note Register or otherwise in accordance with the Applicable Procedures with the following information:

(a) that a Change of Control Offer is being made pursuant to this Section 4.14 and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Issuers;

(b) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is delivered (the “ Change of Control Payment Date ”);

(c) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(d) that unless the Issuers default in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on the Change of Control Payment Date;

(e) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer shall be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

 

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(f) that Holders shall be entitled to withdraw their tendered Notes and their election to require the Issuers to purchase such Notes; provided , that the Paying Agent receives, not later than the close of business on the second Business Day prior to the expiration date of the Change of Control Offer, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes, or a specified portion thereof, and its election to have such Notes purchased;

(g) that if the Issuers are redeeming less than all of the Notes, the Holders of the remaining Notes shall be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal to at least $2,000 or any integral multiple of $1,000 in excess of $2,000;

(h) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and

(i) the other instructions, as determined by the Issuers, consistent with this Section 4.14 that a Holder must follow in order to have the Notes repurchased.

The notice, if delivered or mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is delivered or mailed in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect. The Issuers shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase by the Issuers of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuers will comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in this Indenture by virtue thereof.

(j) On the Change of Control Payment Date, the Issuers will, to the extent permitted by law:

(i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

(ii) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(iii) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuers.

(k) The Issuers shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Issuers and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

 

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(l) Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(m) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06 hereof, and references therein to “redeem,” “redemption,” “Redemption Date” and similar words shall be deemed to refer to “purchase,” “repurchase” and “Change of Control Payment Date” and similar words, as applicable.

The provisions of this Section 4.14 may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.

Section 4.15. Limitation on Guarantees of Indebtedness by Restricted Subsidiaries . The Company shall not permit any of its Wholly-Owned Subsidiaries that are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities of the Company , the Co-Issuer or any Guarantor), other than a Guarantor, the Co-Issuer or a Foreign Subsidiary or a Securitization Subsidiary, to guarantee the payment of any Indebtedness of the Company, the Co-Issuer or any Guarantor unless:

(a) such Restricted Subsidiary within 30 days after the guarantee of such Indebtedness executes and delivers a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Company, the Co-Issuer or any Guarantor:

(i) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or such Guarantor’s Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes; and

(ii) such Restricted Subsidiary waives and shall not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other applicable rights against the Company or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee;

provided , that this Section 4.15 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. The Company may elect, in its sole discretion, to cause any Subsidiary that is not otherwise required to be a Guarantor to become a Guarantor, in which case such Subsidiary shall not be required to comply with the 30 day period described in clause (a) of this Section 4.15.

Section 4.16. Suspension of Covenants .

(a) During any period of time that (i) the Notes have Investment Grade Ratings from both Rating Agencies and (ii) no Default has occurred and is continuing under this Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “ Covenant Suspension Event ” and the date thereof being referred to as the “ Suspension Date ”) then, Section 4.07, Section 4.08, Section 4.09, Section 4.10, Section 4.11, Section 4.15 and clause (iv) of Section 5.01(a) hereof shall not be applicable to the Notes (collectively, the “ Suspended Covenants ”).

 

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(b) During any period that the foregoing covenants have been suspended, the Company may not designate any of its Subsidiaries as Unrestricted Subsidiaries pursuant to the second sentence of the definition of “ Unrestricted Subsidiary .”

(c) In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date ”) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then the Company and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events. The period of time between the Suspension Date and the Reversion Date is referred to in this Indenture as the “ Suspension Period .” Additionally, upon the occurrence of a Covenant Suspension Event, the amount of Excess Proceeds from Net Proceeds shall be reset to zero.

(d) Notwithstanding the foregoing, in the event of any such reinstatement of the Suspended Covenants, no action taken or omitted to be taken by the Company or any of its Restricted Subsidiaries prior to such reinstatement will give rise to a Default or Event of Default under this Indenture with respect to the Notes; provided , that (i) with respect to Restricted Payments made after such reinstatement, the amount available to be made as Restricted Payments will be calculated as though Section 4.07 hereof had been in effect prior to, but not during, the Suspension Period; (ii) all Indebtedness incurred, or Disqualified Stock issued, during the Suspension Period will be classified to have been incurred or issued pursuant to clause (iii) of Section 4.09(b) hereof; (iii) any Affiliate Transaction entered into after such reinstatement pursuant to an agreement entered into during any Suspension Period shall be deemed to be permitted pursuant to clause (vi) of Section 4.11(b) hereof; (iv) any encumbrance or restriction on the ability of any Restricted Subsidiary that is not a Guarantor to take any action described in clauses (i) through (iii) of Section 4.08(a) hereof that becomes effective during any Suspension Period shall be deemed to be permitted pursuant to clause (i) of Section 4.08(b) hereof; and (v) no Subsidiary of the Company shall be required to comply with Section 4.15 hereof after such reinstatement with respect to any guarantee entered into by such Subsidiary during any Suspension Period.

(e) The Trustee shall have no obligation to determine if a Suspension Period has commenced or terminated or to provide Holders with notice of the commencement or termination of a Suspension Period.

Section 4.17. Limitation on Business Activities of the Co-Issuer .

The Co-Issuer may not hold any assets, become liable for any obligations or engage in any business activities; provided that it may be a co-obligor with respect to the Notes or any other Indebtedness issued by the Company and may engage in any activities directly related thereto or necessary in connection therewith. The Co-Issuer shall be a Wholly-Owned Subsidiary of the Company (or its permitted successors) at all times.

 

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ARTICLE 5

S UCCESSORS

Section 5.01. Merger, Consolidation or Sale of All or Substantially All Assets.

(a) The Company may not consolidate or merge with or into or wind up into (whether or not the Company is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(i) the Company is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made, is a Person organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Person, as the case may be, being herein called the “ Successor Company ”); provided , that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

(ii) the Successor Company, if other than the Company, expressly assumes all the obligations of the Company under the Notes pursuant to supplemental indentures or other documents or instruments;

(iii) immediately after such transaction, no Default exists;

(iv) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable four-quarter period,

(A) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test, or

(B) the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would be equal to or greater than the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries immediately prior to such transaction;

(v) each Guarantor, unless it is the other party to the transactions described above, in which case Section 5.01(c)(i)(B) hereof shall apply, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under this Indenture, the Notes and the Registration Rights Agreement; and

(vi) the Co-Issuer, unless it is the party to the transactions described above, in which case clause (e)(iii) of this Section 5.01 hereof shall apply, shall have by supplemental indenture confirmed that it continues to be a co-obligor of the Notes; and

(vii) the Company (or, if applicable, the Successor Company) shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures, if any, comply with this Indenture.

(b) The Successor Company shall succeed to, and be substituted for, the Company under this Indenture, the Guarantees and the Notes, as applicable. Notwithstanding clauses (iii) and (iv) of Section 5.01(a) hereof,

 

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(i) any Restricted Subsidiary may consolidate or amalgamate with or merge with or into or transfer all or part of its properties and assets to the Company, and

(ii) the Company may merge with an Affiliate of the Company solely for the purpose of reorganizing the Company in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

(c) Subject to Section 10.06 hereof, no Guarantor shall, and the Company shall not permit any Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(i) (A) such Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of such Guarantor, as applicable, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such surviving Guarantor or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantor’s related Guarantee pursuant to supplemental indentures or other documents or instruments;

(C) immediately after such transaction, no Default exists; and

(D) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures, if any, comply with this Indenture;

(ii) the transaction is made in compliance with Section 4.10(a) hereof; or

(iii) in the case of assets comprised of Equity Interests of Subsidiaries that are not Guarantors, such Equity Interests are sold, assigned, transferred, leased, conveyed or otherwise disposed of to one or more Restricted Subsidiaries.

(d) Subject to Section 10.06 hereof, the Successor Person shall succeed to, and be substituted for, such Guarantor under this Indenture and such Guarantor’s Guarantee. Notwithstanding the foregoing, any Guarantor may (1) merge or consolidate with or into, wind up into or transfer all or part of its properties and assets to another Guarantor or the Company, (2) merge with an Affiliate of the Company solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof, (3) convert into a corporation, partnership, limited partnership, limited liability company or trust organized or existing under the laws of the jurisdiction of organization of such Guarantor or (4) liquidate or dissolve or change its legal form if the Company determines in good faith that such action is in the best interests of the Company.

(e) The Co-Issuer shall not, directly or indirectly, consolidate or merge with or into or wind up into (whether or not the Co-Issuer is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the Co-Issuer’s properties or assets, in one or more related transactions, to any Person unless:

(i) (A) concurrently therewith, a corporate Wholly-Owned Restricted Subsidiary of the Company organized and validly existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (which may be the continuing Person as a result of such transaction) expressly assumes all the obligations of the Co-Issuer under the Notes, pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee, and the Registration Rights Agreement if the exchange offer contemplated therein has not been consummated or if the Issuers continue to have an obligation to file or maintain the effectiveness of a shelf registration statement as provided under such agreement; or

 

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(B) after giving effect thereto, at least one obligor on the notes shall be a corporation organized and validly existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof;

(ii) immediately after such transaction, no Default exists; and

(iii) the Co-Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture, if any, comply with this Indenture.

Section 5.02. Successor Person Substituted . Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of an Issuer or a Guarantor in accordance with Section 5.01 hereof, the successor Person formed by such consolidation or into or with which such Issuer or such Guarantor, as applicable, is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to such Issuer or such Guarantor, as applicable, shall refer instead to the successor Person, as applicable, and not to such Issuer or such Guarantor, as applicable), and may exercise every right and power of such Issuer or such Guarantor, as applicable, under this Indenture with the same effect as if such successor Person, as applicable, had been named as an Issuer or a Guarantor, as applicable, herein; provided that the predecessor Issuer shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of an Issuer’s assets that meets the requirements of Section 5.01 hereof.

ARTICLE 6

D EFAULTS AND R EMEDIES

Section 6.01. Events of Default .

(a) An “ Event of Default ,” wherever used herein, means any one of the following events:

(i) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes;

(ii) default for 30 days or more in the payment when due of interest or Additional Interest, if any, on or with respect to the Notes;

(iii) subject to Section 4.03(d) hereof, failure by the Company, Co-Issuer or any Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of not less than 25.0% in principal amount of the then outstanding Notes to comply with any of its obligations, covenants or agreements (other than a default referred to in clause (i) or (ii) above) contained in this Indenture or the Notes;

 

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(iv) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company, the Co-Issuer or any Restricted Subsidiary or the payment of which is guaranteed by the Company, the Co-Issuer or any Restricted Subsidiary, other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both:

(A) such default either results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or relates to an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated maturity; and

(B) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, aggregate $30.0 million or more outstanding;

(v) failure by the Company, the Co-Issuer or any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end provided as required under Section 4.03 hereof) would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $30.0 million (net of amounts covered by insurance policies issued by reputable insurance companies), which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;

(vi) the Company or any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end provided as required under Section 4.03 hereof) would constitute a Significant Subsidiary), pursuant to or within the meaning of any Bankruptcy Law:

(A) commences proceedings to be adjudicated bankrupt or insolvent;

(B) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;

(C) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(D) makes a general assignment for the benefit of its creditors; or

(E) generally is not paying its debts as they become due;

 

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(vii) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(A) is for relief against the Company or any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end provided as required under Section 4.03 hereof) would constitute a Significant Subsidiary), in a proceeding in which the Company or any such Subsidiary or such group of Restricted Subsidiaries is to be adjudicated bankrupt or insolvent;

(B) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end provided as required under Section 4.03 hereof) would constitute a Significant Subsidiary), or for all or substantially all of the property of the Company or any such Subsidiary or such group of Restricted Subsidiaries; or

(C) orders the liquidation of the Company or any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end provided as required under Section 4.03 hereof) would constitute a Significant Subsidiary);

and the order or decree remains unstayed and in effect for 60 consecutive days; or

(viii) the Guarantee of any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end provided as required under Section 4.03 hereof) would constitute a Significant Subsidiary) shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of any Guarantor that is a Significant Subsidiary (or the responsible officers of any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Company for a fiscal quarter end provided as required under Section 4.03 hereof) would constitute a Significant Subsidiary), as the case may be, denies in writing that it has any further liability under its Guarantee or gives written notice to such effect, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture.

(b) In the event of any Event of Default specified in clause (iv) of Section 6.01(a) hereof, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose:

(i) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged;

(ii) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

(iii) the default that is the basis for such Event of Default has been cured.

Section 6.02. Acceleration . If any Event of Default (other than an Event of Default of the type specified in clause (vi) or (vii) of Section 6.01(a) hereof) occurs and is continuing under this Indenture, the Trustee or the Holders of at least 25.0% in principal amount of the then total outstanding Notes may, by notice to the Issuers and the Trustee, in either case specifying in such notice the respective

 

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Event of Default and that such notice is a “notice of acceleration”, declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately.

Upon the effectiveness of such declaration, such principal of and premium, if any, and interest will be due and payable immediately.

Notwithstanding the foregoing, in the case of an Event of Default arising under clause (vi) or (vii) of Section 6.01(a) hereof, all outstanding Notes will become due and payable without further action or notice. The Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that withholding notice is in their interest.

Section 6.03. Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04. Waiver of Past Defaults . Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee (with a copy to the Issuers, provided, that any waiver or rescission under this Section 6.04 shall be valid and binding notwithstanding the failure to provide a copy of such notice to the Issuers) may on behalf of all the Holders waive any existing Default and its consequences under this Indenture (except a continuing Default in the payment of interest on, premium, if any, or the principal of any Notes held by a non-consenting Holder) (including in connection with an Asset Sale Offer or a Change of Control Offer) and rescind any acceleration with respect to the Notes and its consequences under this Indenture (except if such rescission would conflict with any judgment of a court of competent jurisdiction). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

Section 6.05. Control by Majority . Subject to Section 7.01(e) hereof, Holders of a majority in aggregate principal amount of the then total outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee and the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.

Section 6.06. Limitation on Suits . Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(a) such Holder has previously given the Trustee written notice that an Event of Default is continuing;

 

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(b) Holders of at least 25.0% in principal amount of the total outstanding Notes have requested in writing the Trustee to pursue the remedy;

(c) the Holders have offered the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;

(d) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(e) Holders of a majority in aggregate principal amount of the then total outstanding Notes have not given the Trustee a direction in writing inconsistent with such written request within such 60-day period.

Section 6.07. Rights of Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and Additional Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08. Collection Suit by Trustee . If an Event of Default specified in Section 6.01(a)(i) or (ii) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuers for the whole amount of principal of, premium, if any, Additional Interest, if any, and interest remaining unpaid on, the Notes and interest on overdue principal, if applicable, and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09. Restoration of Rights and Remedies . If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuers, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.

Section 6.10. Rights and Remedies Cumulative . Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.11. Delay or Omission Not Waiver . No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

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Section 6.12. Trustee May File Proofs of Claim . The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Issuers (or any other obligor upon the Notes including the Guarantors), their creditors or their property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.13. Priorities . If the Trustee or any Agent collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order:

(a) to the Trustee, such Agent, their agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee or such Agent and the costs and expenses of collection;

(b) to Holders for amounts due and unpaid on the Notes for principal, premium, if any, Additional Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

(c) to the Issuers or to such party as a court of competent jurisdiction shall direct including a Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.13.

Section 6.14. Undertaking for Costs . In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10.0% in principal amount of the then outstanding Notes.

 

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ARTICLE 7

T RUSTEE

Section 7.01. Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of willful misconduct or bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not investigate or confirm the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.02, 6.04 or 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders unless the Holders have offered to the Trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense.

(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

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Section 7.02. Rights of Trustee.

(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuers and its Restricted Subsidiaries, personally or by agent or attorney at the sole cost of the Issuers and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuers shall be sufficient if signed by an Officer of each Issuer.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if an indemnity satisfactory to it against such risk or liability is not assured to it.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee at the Corporate Trust Office, and such notice references the Notes and this Indenture.

(h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) In the event the Issuers are required to pay Additional Interest, the Issuers will provide written notice to the Trustee of the Issuers’ obligation to pay Additional Interest no later than 15 days prior to the next Interest Payment Date, which notice shall set forth the amount of the Additional Interest to be paid by the Issuers. The Trustee shall not at any time be under any duty or responsibility to any Holders to determine whether the Additional Interest is payable and the amount thereof.

 

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(k) Delivery of reports, information and documents (including without limitation reports contemplated under Section 4.03 hereof) to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuers compliance with any of the Issuers’ covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

(l) The permissive rights of the Trustee to take certain actions under this Indenture shall not be construed as a duty unless so specified herein.

Section 7.03. Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or any of their Affiliates with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if the Indenture has been qualified under the Trust Indenture Act) or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04. Trustee’s Disclaimer . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the Notes or any money paid to the Issuers or upon the Issuers’ direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05. Notice of Defaults . If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall deliver to Holders a notice of the Default within 90 days after it occurs, unless such Default shall have been cured or waived, or if discovered after 90 days, promptly thereafter. The Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that withholding notice is in their interest.

Section 7.06. Reports by Trustee to Holders . Within 60 days after each January 15, beginning on January 15, 2013 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders a brief report dated as of such reporting date that complies with Trust Indenture Act Section 313(a) (but if no event described in Trust Indenture Act Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with Trust Indenture Act Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by Trust Indenture Act Section 313(c).

A copy of each report at the time of its mailing to the Holders shall be mailed to the Issuers and filed with the SEC and each stock exchange on which the Notes are listed in accordance with Trust Indenture Act Section 313(d). The Issuers shall promptly notify the Trustee when the Notes are listed on any stock exchange or delisted therefrom.

Section 7.07. Compensation and Indemnity . The Issuers shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

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The Issuers and the Guarantors, jointly and severally, shall indemnify the Trustee and its officers, directors, employees, agents and any predecessor trustee and its officers, directors, employees and agents for, and hold the Trustee harmless against, any and all loss, damage, claims, liability or expense (including reasonable attorneys’ fees) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder (including the reasonable costs and expenses of enforcing this Indenture against the Issuers or any of the Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuers or any Guarantor, or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder) (but excluding taxes imposed on such Persons in connection with compensation for such administration or performance). The Trustee shall notify the Issuers promptly of any claim of which a Responsible Officer has received written notice for which it may seek indemnity. Failure by the Trustee to so notify the Issuers shall not relieve the Issuers of their obligations hereunder. The Issuers shall defend the claim and the Trustee may have separate counsel and the Issuers shall pay the reasonable fees and expenses of such counsel. Neither the Issuers nor any Guarantor need reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith. Neither the Issuers nor any Guarantor need pay for any settlement made without its consent.

The obligations of the Issuers under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

To secure the payment obligations of the Issuers and the Guarantors in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except money or property held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(vi) or Section 6.01(a)(vii) hereof occurs, the expenses and the compensation for the services (including the reasonable fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

The Trustee shall comply with the provisions of Trust Indenture Act Section 313(b)(2) to the extent applicable.

Section 7.08. Replacement of Trustee . A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuers. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuers in writing. The Issuers may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10 hereof or Trust Indenture Act Section 310;

(b) the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(c) a custodian or public officer takes charge of the Trustee or its property; or

(d) the Trustee becomes incapable of acting.

 

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If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuers’ expense), the Issuers or the Holders of at least 10% in principal amount of the then outstanding Notes, may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuers’ obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

Section 7.09. Successor Trustee by Merger, etc . If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

Section 7.10. Eligibility; Disqualification . There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has, together with its parent, a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of Trust Indenture Act Sections 310(a)(1), (2) and (5). The Trustee is subject to Trust Indenture Act Section 310(b).

Section 7.11. Preferential Collection of Claims Against Issuer s . The Trustee is subject to Trust Indenture Act Section 311(a), excluding any creditor relationship listed in Trust Indenture Act Section 311(b). A Trustee who has resigned or been removed shall be subject to Trust Indenture Act Section 311(a) to the extent indicated therein.

ARTICLE 8

L EGAL D EFEASANCE AND C OVENANT D EFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance . The Issuers may, at their option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes and all obligations of the Guarantors with respect to the Guarantees upon compliance with the conditions set forth below in this Article 8.

 

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Section 8.02. Legal Defeasance and Discharge . Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuers and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes and Guarantees and all Events of Default cured on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuers and the Guarantors shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below (it being understood that such Notes shall not be deemed outstanding for accounting purposes), and to have satisfied all their other obligations under such Notes and this Indenture including that of the Guarantors (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same) and to have cured all then existing Events of Default, except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

(b) the Issuers’ obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuers’ obligations in connection therewith; and

(d) this Section 8.02.

Subject to compliance with this Article 8, the Issuers may exercise their option under this Section 8.02 notwithstanding the prior exercise of their option under Section 8.03 hereof.

Section 8.03. Covenant Defeasance . Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuers and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 and 4.17 hereof and clauses (iv) and (v) of Section 5.01(a) and Sections 5.01(c), 5.01(d) and 5.01(e) hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (“ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and the Guarantees, the Issuers and the Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and the Guarantees shall be unaffected thereby. In addition, upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Section 6.01(a)(iii) (solely

 

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with respect to the covenants that are released upon a Covenant Defeasance), 6.01(a)(iv), 6.01(a)(v), 6.01(a)(vi) (solely with respect to Restricted Subsidiaries subject thereto), 6.01(a)(vii) (solely with respect to Restricted Subsidiaries subject thereto) and 6.01(a)(viii) hereof shall not constitute Events of Default.

Section 8.04. Conditions to Legal or Covenant Defeasance . The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(a) the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the Redemption Date, as the case may be, of such principal, premium, if any, or interest on such Notes and the Company must specify whether such Notes are being defeased to maturity or to a particular Redemption Date; provided , that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit as of the date of redemption (any such amount, the “ Applicable Premium Deficit ”) only required to be deposited with the Trustee on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered by the Issuers to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption;

(b) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions,

(i) the Issuers have received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(ii) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(c) in the case of Covenant Defeasance, the Issuers shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(d) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

 

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(e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, the Senior Secured Credit Facilities or any other material agreement or instrument (other than this Indenture) to which the Issuers or any Guarantor is a party or by which the Issuers or any Guarantor is bound (other than that resulting from any borrowing of funds to be applied to make the deposit required to effect such Legal Defeasance or Covenant Defeasance and any similar and simultaneous deposit relating to other Indebtedness, and, in each case, the granting of Liens in connection therewith);

(f) the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

(g) the Issuers shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuers with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuers or any Guarantor or others; and

(h) the Issuers shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Section 8.05. Deposited Money and U.S. Government Securities to be Held in Trust; Other Miscellaneous Provisions . Subject to Section 8.06 hereof, all money and U.S. Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuers or a Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuers shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or U.S. Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuers from time to time upon the request of the Issuers any money or U.S. Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06. Repayment to Issuers . Subject to any applicable abandoned property law, any money deposited with the Trustee or any Paying Agent, or then held by the Issuers, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Issuers on its request or (if then held by the Issuers) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuers for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuers as trustee thereof, shall thereupon cease.

 

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Section 8.07. Reinstatement . If the Trustee or Paying Agent is unable to apply any United States dollars or U.S. Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuers’ and the Guarantors’ obligations under this Indenture and the Notes and the Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Issuers make any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

A MENDMENT , S UPPLEMENT AND W AIVER

Section 9.01. Without Consent of Holders . Notwithstanding Section 9.02 hereof, the Issuers, any Guarantor (with respect to a Guarantee or this Indenture) and the Trustee may amend or supplement this Indenture and any Guarantee or Notes without the consent of any Holder:

(a) to cure any ambiguity, omission, mistake, defect or inconsistency;

(b) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(c) to comply with Section 5.01 hereof;

(d) to provide for the assumption of the Issuers’ or any Guarantor’s obligations to the Holders;

(e) to make any change that would provide any additional rights or benefits to the Holders or that does not materially adversely affect the legal rights under this Indenture of any such Holder;

(f) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuers or any Guarantor;

(g) to provide for the issuance of Additional Notes in accordance with the terms of this Indenture;

(h) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act;

(i) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee hereunder pursuant to the requirements hereof;

(j) to provide for the issuance of exchange notes or private exchange notes, which are identical to exchange notes except that they are not freely transferable;

(k) to add a Guarantor under this Indenture or to release a Guarantor in accordance with the terms of this Indenture;

 

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(l) to conform the text of this Indenture, the Guarantees or the Notes to any provision of the “Description of the Notes” section of the Offering Memorandum to the extent that such provision in such “Description of the Notes” section was intended to be a verbatim recitation of a provision of this Indenture, the Guarantee or the Notes; or

(m) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation, to facilitate the issuance and administration of the Notes; provided , that (a) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Notes; or

(n) to make any other modifications to the Notes or this Indenture of a formal, minor or technical nature or necessary to correct a manifest error, so long as such modification does not adversely affect the rights of any Holders of the Notes in any material respect.

Upon the request of the Issuers accompanied by a resolution of their boards of directors (or comparable body) authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof (to the extent requested by the Trustee and subject to the last sentence of Section 9.06), the Trustee shall join with the Issuers and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall have the right, but not be obligated to, enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Notwithstanding the foregoing, neither an Opinion of Counsel nor an Officer’s Certificate, nor a board resolution, shall be required in connection with the addition of a Guarantor under this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto.

Section 9.02. With Consent of Holders . Except as provided in Section 9.01 and this Section 9.02, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes and the Guarantees with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding, including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes and, subject to Section 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Guarantees or the Notes issued thereunder may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a purchase of or tender offer or exchange offer for the Notes). Section 2.08 hereof and Section 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuers accompanied by a resolution of their boards of directors (or comparable body) authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders as aforesaid, the Trustee shall join with the Issuers and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

 

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It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuers shall deliver to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuers to deliver such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not, with respect to any Notes held by a non-consenting Holder:

(a) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

(b) reduce the principal of or change the fixed final maturity of any such Note or alter or waive the provisions with respect to the redemption of such Note (other than provisions relating to (i) notice periods (to the extent consistent with applicable requirements of clearing and settlement systems) for redemption and conditions to redemption and (ii) Section 3.09, Section 4.10 and Section 4.14 hereof);

(c) reduce the rate of or change the time for payment of interest on any Note;

(d) waive a Default in the payment of principal of or premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Guarantee which cannot be amended or modified without the consent of all affected Holders;

(e) make any Note payable in money other than that stated therein;

(f) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of or premium, if any, or interest or Additional Interest on the Notes;

(g) make any change in these amendment and waiver provisions;

(h) impair the right of any Holder to receive payment of principal of, or premium, if any, or interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

(i) make any change to or modify the ranking of the Notes that would adversely affect the Holders; or

(j) except as expressly permitted by this Indenture, modify the Guarantees of any Significant Subsidiary, or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company), would constitute a Significant Subsidiary in any manner materially adverse to the Holders.

Section 9.03. Compliance with Trust Indenture Act . Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies in all material respects with the Trust Indenture Act as then in effect.

 

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Section 9.04. Revocation and Effect of Consents . Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.

Section 9.05. Notation on or Exchange of Notes . The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuers in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06. Trustee to Sign Amendments, etc . The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuers may not sign an amendment, supplement or waiver until the boards of directors of the Issuers approves it. In executing any amendment, supplement or waiver, the Trustee shall be provided with, upon request, and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officer’s Certificate and an Opinion of Counsel each stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuers and any Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03 hereof). Notwithstanding the foregoing, neither an Opinion of Counsel nor an Officer’s Certificate, nor a board resolution, shall be required for the Trustee to execute any supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, adding a new Guarantor under this Indenture.

ARTICLE 10

G UARANTEES

Section 10.01. Guarantee . Subject to this Article 10, each of the Guarantors hereby, jointly and severally, irrevocably and unconditionally, guarantees, on an unsecured senior basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the Obligations of the Issuers hereunder or thereunder, that: (a) the principal of and interest and premium, if any, on the Notes shall be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations

 

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of the Issuers to the Holders or the Trustee hereunder or under the Notes shall be promptly paid in full, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same promptly. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuers, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuers hereunder or under the Notes). Each Guarantor hereby waives, to the fullest extent permitted by law, diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuers, any right to require a proceeding first against the Issuers, protest, notice and all demands whatsoever and covenants that this Guarantee shall not be discharged except by full payment of the obligations contained in the Notes and this Indenture or by release in accordance with the provisions of this Indenture.

Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuers, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuers or the Guarantors, then any amount paid either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek contribution from any nonpaying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantees.

Until terminated in accordance with Section 10.06, each Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuers for liquidation, reorganization, should an Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of an Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes or Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

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In case any provision of any Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

The Guarantee issued by any Guarantor shall be a general unsecured senior obligation of such Guarantor and shall be pari passu in right of payment with all existing and future Senior Indebtedness of such Guarantor, if any.

Each payment to be made by a Guarantor in respect of its Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 10.02. Limitation on Guarantor Liability . Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law or being void or voidable under any law relating to insolvency of debtors.

Section 10.03. Execution and Delivery . To evidence its Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that this Indenture (or a supplemental indenture in the form of Exhibit D ) shall be executed on behalf of such Guarantor by one of its authorized officers.

Each Guarantor hereby agrees that its Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

If an officer whose signature is on this Indenture (or a supplemental indenture in the form of Exhibit D ) no longer holds that office at the time the Trustee authenticates a Note, the Guarantee of such Guarantor shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors.

If required by Section 4.15 hereof, the Issuers shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.15 hereof and this Article 10, to the extent applicable.

Section 10.04. Subrogation . Each Guarantor shall be subrogated to all rights of Holders against the Issuers in respect of any amounts paid by any Guarantor pursuant to the provisions of Section 10.01 hereof; provided that, if an Event of Default has occurred and is continuing, no Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuers under this Indenture or the Notes shall have been paid in full.

 

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Section 10.05. Benefits Acknowledged . Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Guarantee are knowingly made in contemplation of such benefits.

Section 10.06. Release of Guarantees . Each Guarantee by a Guarantor shall be automatically and unconditionally released and discharged, and shall thereupon terminate and be of no further force and effect, and no further action by such Guarantor, the Issuers or the Trustee is required for the release of such Guarantor’s Guarantee, upon:

(a) (i) any sale, exchange, disposition or transfer (by merger, amalgamation, consolidation or otherwise) of (x) the Capital Stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary or (y) all or substantially all the assets of such Guarantor, in each case if such sale, exchange, disposition or transfer is made in compliance with the applicable provisions of this Indenture;

(ii) the release or discharge of the guarantee by such Guarantor of Indebtedness under the Senior Secured Credit Facilities, or the release or discharge of such other guarantee that resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, such Guarantee shall also be reinstated to the extent that such Guarantor would then be required to provide a Guarantee pursuant to Section 4.15 hereof);

(iii) the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in compliance with the applicable provisions of this Indenture; or

(iv) the exercise by the Issuers of their Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the discharge of the Issuers’ obligations under this Indenture in accordance with the terms of this Indenture; and

(b) such Guarantor delivering to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to such transaction have been complied with.

ARTICLE 11

S ATISFACTION AND D ISCHARGE

Section 11.01. Satisfaction and Discharge . This Indenture shall be discharged and shall cease to be of further effect as to all Notes, when either:

(a) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or

(b) (i) all Notes not theretofore cancelled or delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense,

 

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of the Issuers, and the Issuers or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, U.S. dollar-denominated U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore cancelled or delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption; provided that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any Applicable Premium Deficit only required to be deposited with the Trustee on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered by the Issuers to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption;

(ii) no Default (other than that resulting from borrowing funds to be applied to make such deposit or any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) with respect to this Indenture or the Notes shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under the Senior Secured Credit Facilities or any other material agreement or instrument (other than this Indenture) to which the Issuers or any Guarantor is a party or by which the Issuers or any Guarantor is bound (other than resulting from any borrowing of funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith);

(iii) the Issuers have paid or caused to be paid all sums payable by it under this Indenture; and

(iv) the Issuers have delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the Redemption Date, as the case may be.

In addition, the Issuers must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied. Such Opinion of Counsel may rely on such Officer’s Certificate as to matters of fact, including clauses (b)(i), (ii), (iii) and (iv) above.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (i) of clause (b) of this Section 11.01, the provisions of Section 11.02 and Section 8.06 hereof shall survive such satisfaction and discharge.

Section 11.02. Application of Trust Money . Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuers or a Guarantor acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

 

— 116 —


If the Trustee or Paying Agent is unable to apply any money or U.S. Government Securities in accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers’ and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof; provided , that if the Issuers have made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the Holders to receive such payment from the money or U.S. Government Securities held by the Trustee or Paying Agent.

ARTICLE 12

M ISCELLANEOUS

Section 12.01. Trust Indenture Act Controls . If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Trust Indenture Act Section 318(c), the imposed duties shall control.

Section 12.02. Notices . Any notice or communication by the Issuers, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), facsimile, electronic mail or other electronic transmission or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Issuers and/or any Guarantor:

Summit Materials, LLC

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, DC 20007

Facsimile: (202) 339-9517

Attention: Chief Financial Officer

With a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Facsimile: (212) 455-2502

Attention: Edward P. Tolley III, Esq.

If to the Trustee:

Wilmington Trust, National Association

246 Goose Lane, Suite 105

Guilford, CT 06437

Facsimile: (203) 453-1183

Attention: Summit Administrator

The Issuers, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited

 

— 117 —


in the mail, postage prepaid, if mailed by first-class mail; when receipt is acknowledged, if faxed or sent electronically; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided , that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof and, subject to compliance with the Trust Indenture Act, on the final date on which publication is made, if given by publication.

Any notice or communication to a Holder shall be electronically delivered, mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the Note Register kept by the Registrar. Any notice or communication shall also be so delivered or mailed to any Person described in Trust Indenture Act Section 313(c), to the extent required by the Trust Indenture Act. Failure to deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed or otherwise delivered in the manner provided above within the time prescribed, such notice or communication shall be deemed duly given, whether or not the addressee receives it.

If the Issuers deliver or mail a notice or communication to Holders, it shall deliver or mail a copy to the Trustee and each Agent at the same time.

Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event or any other communication (including any notice of redemption or repurchase) to a holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with accepted practices at the Depositary.

Section 12.03. Communication by Holders with Other Holders . Holders may communicate pursuant to Trust Indenture Act Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuers, the Trustee, the Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c).

Section 12.04. Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Issuers or any of the Guarantors to the Trustee to take any action under this Indenture, the Issuers or such Guarantor, as the case may be, shall furnish to the Trustee:

(a) An Officer’s Certificate in form reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(b) An Opinion of Counsel in form reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 12.05. Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof or Trust Indenture Act Section 314(a)(4)) shall comply with the provisions of Trust Indenture Act Section 314(e) and shall include:

(a) a statement that the Person making such certificate or opinion has read such covenant or condition;

 

— 118 —


(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with; provided , however , that with respect to matters of fact an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.

Section 12.06. Rules by Trustee and Agents . The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuers or any Guarantor or any of their direct or indirect parent companies (other than the Company and the Guarantors) shall have any liability, for any obligations of the Issuers or the Guarantors under the Notes, the Guarantees or this Indenture or any supplemental indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 12.08. Governing Law . THIS INDENTURE, THE NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 12.09. Waiver of Jury Trial . EACH OF THE ISSUERS, THE GUARANTORS, AND THE TRUSTEE (1) AGREE TO SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES AND (2)HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 12.10. Force Majeure . In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

Section 12.11. No Adverse Interpretation of Other Agreements . This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Restricted Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

— 119 —


Section 12.12. Successors . All agreements of the Issuers in this Indenture and the Notes shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 10.06 hereof.

Section 12.13. Severability . In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 12.14. Counterpart Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. This Indenture may be executed in multiple counterparts which, when taken together, shall constitute one instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

Section 12.15. Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 12.16. Qualification of Indenture . The Issuers and the Guarantors shall qualify this Indenture under the Trust Indenture Act in accordance with the terms and conditions of the Registration Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Issuers, the Guarantors and the Trustee) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Notes and printing this Indenture and the Notes. The Trustee shall be provided with such Officer’s Certificates, Opinions of Counsel or other documentation as it may reasonably request and as is necessary in connection with any such qualification of this Indenture under the Trust Indenture Act.

[ Signatures on following page ]

 

— 120 —


IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first above written.

 

Issuers:
SUMMIT MATERIALS, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Executive Vice President
SUMMIT MATERIALS FINANCE CORP.
By:  

/s/ DAPHNE TONG

  Name:   Daphne Tong
  Title:   President

 

[Signature page to Indenture]


Guarantors:
ELAM CONSTRUCTION, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
AUSTIN MATERIALS, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
CONTINENTAL CEMENT COMPANY, L.L.C.
By:  

/s/ R. MICHAEL JOHNSON

  Name:   R. Michael Johnson
  Title:   President / CEO
CORNEJO QUALITY STONE LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
KBDJ MATERIALS, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
KILGORE COMPANIES, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
RK HALL, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature page to Indenture]


SUMMIT MATERIALS COMPANIES I, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS CORPORATIONS I, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS HOLDINGS I, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS HOLDINGS II, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
CORNEJO & SONS, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
HAMM ASPHALT, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature page to Indenture]


HAMM, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
N.R. HAMM CONTRACTOR, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
N.R. HAMM QUARRY, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
BOURBON LIMESTONE COMPANY
By:  

/s/ ANTHONY KEENAN

  Name:   Anthony Keenan
  Title:   Assistant Secretary
GLASS AGGREGATES, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
HINKLE CONTRACTING COMPANY, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature page to Indenture]


KENTUCKY HAULING, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
SOUTH CENTRAL KENTUCKY LIMESTONE, LLC
By:   Glass Aggregates, LLC, its sole member
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
CON-AGG OF MO, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
FISCHER QUARRIES, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
QUARRY PROPERTIES, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Manager
ELAM PAVING, INC.
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President

 

[Signature page to Indenture]


ASPHALT PAVING COMPANY OF AUSTIN, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Manager
B&H CONTRACTING, L.P.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
INDUSTRIAL ASPHALT, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Manager
J.D. RAMMING PAVING CO., LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
KBDJ, L.P.
By:   KBDJ Materials, LLC, its general partner
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
RAMMING TRANSPORTATION CO., LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President

 

[Signature page to Indenture]


R.K. HALL CONSTRUCTION, LTD.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
RKH CAPITAL, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
RTI EQUIPMENT CO., LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
RTI HOT MIX, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
SCS MATERIALS, L.P.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
ALTAVIEW CONCRETE, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President

 

[Signature page to Indenture]


B&B RESOURCES, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
KILGORE EQUIPMENT, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
KILGORE TRUCKING, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
PEAK CONSTUCTION MATERIALS, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
PEAK MANAGEMENT, L.C.
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
SALT LAKE VALLEY SAND & GRAVEL, INC.
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President

 

[Signature page to Indenture]


VALLEY READY MIX, INC.
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
WASATCH CONCRETE PUMPING, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
WIND RIVER MATERIALS, LLC
By:  

/s/ JASON KILGORE

  Name:   Jason Kilgore
  Title:   Manager

 

[Signature page to Indenture]


WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
By:  

/s/ JOSEPH O’DONNELL

  Name:   Joseph O’Donnell
  Title:   Vice President
  Date:   January 30, 2012

 

[Signature page to Indenture]


EXHIBIT A

[FORM OF FACE OF NOTE]

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Regulation S Temporary Global Note Legend, if applicable pursuant to the provisions of the Indenture]

 

A-1


CUSIP   [             ] [             ]
ISIN   [             ] [             ]

[RULE 144A][REGULATION S] [GLOBAL] NOTE

SUMMIT MATERIALS, LLC

SUMMIT MATERIALS FINANCE CORP.

10.5% Senior Notes due 2020

 

No.         $[            ]

Summit Materials, LLC, a Delaware limited liability company, and Summit Materials Finance Corp., a Delaware corporation, promise to pay to [Cede & Co.]* or its registered assigns, the principal sum of                      United States Dollars, [as revised by the Schedule of Exchanges of Interests in the Global Note attached hereto]*, on January 31, 2020.

Interest Payment Dates: January 31 and July 31, commencing on July 31, 2012

Record Dates: January 15 and July 15

Additional provisions of this Note are set forth on the other side of this Note.

 

* Include only if the Note is issued in global form.

 

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IN WITNESS HEREOF, the Issuers have caused this instrument to be duly executed.

Dated:

 

SUMMIT MATERIALS, LLC.
By:  

 

  Name:
  Title:
SUMMIT MATERIALS FINANCE CORP.
By:  

 

  Name:
  Title:

 

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This is one of the Notes referred to in the within-mentioned Indenture:
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
By:  

 

  Name:
  Title:
  Date:

 

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[FORM OF REVERSE SIDE OF NOTE]

SUMMIT MATERIALS, LLC

SUMMIT FINANCE CORP.

10.5% Senior Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. Interest . Summit Materials, LLC, a Delaware limited liability company, and Summit Materials Finance Corp., a Delaware corporation, promise to pay interest on the principal amount of this Note at a rate per annum of 10.5% from January 30, 2012 until maturity and to pay the Additional Interest, if any, payable pursuant to the Registration Rights Agreement referred to below. The Issuers will pay interest on this Note semi-annually in arrears on January 31 and July 31 of each year, beginning July 31, 2012, or, if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). The Issuers will make each interest payment to the Holder of record of this Note on the immediately preceding January 15 and July 15 (each, a “ Record Date ”). Interest on this Note will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including January 30, 2012. The Issuers will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate borne by this Note; the Issuers shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the rate borne by this Note. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. Method of Payment . The Issuers will pay interest on this Note to the Person who is the registered Holder of this Note at the close of business on the Record Date (whether or not a Business Day) next preceding the Interest Payment Date, even if this Note is cancelled after such Record Date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Payments of principal of, premium, if any, and interest on the Notes may be made by check mailed to the Holders at their respective addresses set forth in the Note Register of Holders, provided , that payment by wire transfer of immediately available funds will be required with respect to principal of, premium, if any, and interests on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Trustee or Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. Paying Agent, Transfer Agent and Registrar . Initially, Wilmington Trust, National Association, the Trustee under the Indenture, will act as Paying Agent, Transfer Agent and Registrar. The Issuers may change any Paying Agent, Transfer Agent or Registrar without prior notice to the Holders. The Company or any of its Subsidiaries may act in any such capacity.

4. Indenture . The Issuers issued the Notes under an Indenture, dated as of January 30, 2012 (as amended, supplemented or otherwise modified from time to time, the “ Indenture ”), among the Issuers, the Guarantors party thereto and the Trustee. This Note is one of a duly authorized issue of notes of the Issuers designated as their 10.5% Senior Notes due 2020. The Issuers shall be entitled to issue Additional Notes pursuant to Sections 2.01 and 4.09 of the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

 

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5. Guarantee . To guarantee the due and punctual payment of the principal, premium, if any, and interest (including post-petition interest in any proceeding under any Bankruptcy Law) on the Notes and all other amounts payable by the Issuers under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, the Guarantors have unconditionally guaranteed (and future guarantors, together with the Guarantors, shall unconditionally Guarantee), jointly and severally, such obligations on an unsecured senior basis pursuant to the terms of the Indenture.

6. Optional Redemption .

(a) Except as described below under clauses 6(b), 6(c) and 6(d) hereof and in clauses (a) through (c) of Section 3.07 of the Indenture, the Notes will not be redeemable at the Issuers’ option prior to January 31, 2015.

(b) At any time prior to January 31, 2016, the Issuers may on one or more occasions redeem all or a part of the Notes upon notice in accordance with Section 3.03 of the Indenture, at a redemption price equal to the sum of (i) 100.0% of the principal amount of the Notes redeemed, plus (ii) the Applicable Premium as of the date of redemption (the “ Redemption Date ”), plus (iii) accrued and unpaid interest and Additional Interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) On and after January 31, 2016, the Issuers may redeem the Notes, in whole or in part, upon notice in accordance with Section 3.03 of the Indenture, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on January 31 of each of the years indicated below:

 

Year

   Percentage  

2016

     105.250

2017

     102.625

2018 and thereafter

     100.000

(d) Until January 31, 2015, the Issuers may, at their option, and on one or more occasions, redeem up to 35.0% of the aggregate principal amount of Notes issued under the Indenture at a redemption price equal to 110.500% of the aggregate principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds received by the Company from one or more Equity Offerings or a contribution to the Company’s common equity capital made with the net cash proceeds of a concurrent Equity Offering; provided , that (A) at least 50.0% of the aggregate principal amount of Notes originally issued under the Indenture on the Issue Date and any Additional Notes issued under the Indenture after the Issue Date remains outstanding immediately after the occurrence of each such redemption; and (B) each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

In addition to any redemption pursuant to this paragraph 6, the Issuers, the Investors and their respective Affiliates may at any time and from time to time purchase Notes in the open market or otherwise.

 

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(e) Any redemption pursuant to this paragraph 6 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture. Notice of any redemption, whether in connection with an Equity Offering or otherwise, may be given prior to the completion thereof, and any such redemption or notice may, at the Issuers’ discretion, be subject to one or more conditions precedent, including, but not limited to, the completion of the related Equity Offering or other corporate transaction. If such redemption is subject to the satisfaction of one or more conditions precedent, in the Issuers’ discretion the Redemption Date may be delayed or the redemption may be rescinded in the event that any such conditions shall not have been satisfied by the original Redemption Date. If any Notes are listed on an exchange, and the rules of such exchange so require, the Issuers shall notify the exchange of any such notice of redemption. In addition, the Issuers shall notify the exchange of the principal amount of any Notes outstanding following any partial redemption of such Notes.

7. Mandatory Redemption . The Issuers shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

8. Notice of Redemption . Subject to Sections 3.03 and 3.09 of the Indenture, notice of redemption shall be delivered electronically or mailed by first-class mail, postage prepaid, at least 30 but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at such Holder’s registered address or otherwise in accordance with the Applicable Procedures, except that redemption notices may be delivered electronically or mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with Article 8 or Article 11 of the Indenture. No Notes of less than $2,000 and integral multiples of $1,000 in excess thereof can be redeemed or purchased in part, except that if all the Notes of a Holder are to be redeemed or purchased, the entire amount of Notes held by such Holder even if not in a principal amount of at least $2,000 or an integral multiple thereof, shall be redeemed or purchased. On and after the Redemption Date, interest ceases to accrue on this Note or portions thereof called for redemption.

9. Offers to Repurchase . Upon the occurrence of a Change of Control, the Issuers shall make a Change of Control Offer in accordance with Section 4.14 of the Indenture. In connection with certain Asset Sales, the Issuers shall make an Asset Sale Offer as and when provided in accordance with Sections 3.09 and 4.10 of the Indenture.

10. Denominations, Transfer, Exchange . The Notes are in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess of $2,000. The transfer of Notes shall be registered and Notes may only be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuers may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuers need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part; provided , that new Notes will only be issued in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000. Also, the Issuers need not exchange or register the transfer of any Notes for a period of 15 days before the mailing of a notice of redemption of Notes to be redeemed.

11. Persons Deemed Owners . The registered Holder of a Note shall be treated as its owner for all purposes. Only registered Holders shall have rights hereunder.

12. Amendment, Supplement and Waiver . The Indenture, the Guarantees and the Notes may be amended or supplemented as provided in the Indenture.

13. Defaults and Remedies . The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default (other than an Event of Default of the type specified in

 

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clause (vi) or (vii) of Section 6.01(a) of the Indenture) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25.0% in principal amount of the then total outstanding Notes may, by notice to the Issuers and the Trustee, in either case specifying in such notice the respective Event of Default and that such notice is a “notice of acceleration”, declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising under clause (vi) or (vii) of Section 6.01(a) of the Indenture, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee (with a copy to the Issuers, provided , that any waiver or rescission under Section 6.04 of the Indenture shall be valid and binding notwithstanding the failure to provide a copy of such notice to the Issuers) may on behalf of all the Holders waive any existing Default and its consequences under the Indenture (except a continuing Default in payment of the principal of, premium, if any, or interest on, any of the Notes held by a non-consenting Holder) (including in connection with an Asset Sale Offer or a Change of Control Offer) and rescind any acceleration with respect to the Notes and its consequences under the Indenture (except if such rescission would conflict with any judgment of a court of competent jurisdiction). The Issuers are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuers are required, within 10 Business Days after becoming aware of any Default, to deliver to the Trustee a statement specifying such Default and what action the Issuers propose to take with respect thereto.

14. Authentication . This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

15. Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes . In addition to the rights provided to Holders under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement, including the right to receive Additional Interest (as defined in the Registration Rights Agreement).

16. Governing Law . THIS NOTE, THE INDENTURE AND THE GUARANTEES WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

17. CUSIP Numbers and ISINs . Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers and ISINs to be printed on the Notes and the Trustee may use CUSIP numbers and ISINs in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Issuers will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to the Issuers at the following address:

Summit Materials, LLC

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, DC 20007

Facsimile: (202) 339-9517

Attention: Chief Financial Officer

 

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ASSIGNMENT FORM

To assign this Note, fill in the form below:

 

(I) or (we) assign and transfer this Note to:  

 

 
  (Insert assignee’s legal name)  

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint  

 

to transfer this Note on the books of the Issuers. The agent may substitute another to act for him.

 

Date:  

 

 

Your Signature:  

 

  (Sign exactly as your name appears on the face of this Note)

 

Signature Guarantee*:  

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

 

¨   Section 4.10                              ¨   Section 4.14

If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$            

 

Date:  

 

 

Your Signature:  

 

  (Sign exactly as your name appears on the face of this Note)
Tax Identification No.:

 

Signature Guarantee*:  

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $            . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

   Amount of
decrease in
Principal Amount
of this Global Note
   Amount of increase
in Principal Amount
of this Global Note
   Principal Amount of
this Global Note
following such
decrease or increase
   Signature of
authorized
signatory of
Trustee or
Custodian
           
           
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

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EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

Summit Materials, LLC

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, DC 20007

Facsimile: (202) 339-9517

Attention: Chief Financial Officer

With a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Facsimile: (212) 455-2502

Attention: Edward P. Tolley III, Esq.

If to the Trustee:

Wilmington Trust, National Association

246 Goose Lane, Suite 105

Guilford, CT 06437

Facsimile: (203) 453-1183

Attention: Summit Administrator

 

  Re: 10.5% Senior Notes due 2020

Reference is hereby made to the Indenture, dated as of January 30, 2012 (as amended, supplemented or otherwise modified from time to time, the “ Indenture ”), among Summit Materials, LLC, a Delaware limited liability company (the “ Company ”), Summit Materials Finance Corp., a Delaware corporation (the “ Co-Issuer ”, and together with the Company, the “ Issuers ”), the Guarantors party thereto and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     (the “ Transferor ”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $             in such Note[s] or interests (the “ Transfer ”), to (the “ Transferee ”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ¨ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT 144A GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “ Securities Act ”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account,

 

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or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.

2. ¨ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT REGULATION S GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the applicable Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Indenture and the Securities Act.

3. ¨ CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or

(b) ¨ such Transfer is being effected to the Company or a subsidiary thereof; or

(c) ¨ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act.

4. ¨ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

(a) ¨ CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

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(b) ¨ CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(c) ¨ CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

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This certificate and the statements contained herein are made for your benefit and the benefit of the Issuers.

 

[Insert Name of Transferor]
By:  

 

  Name:
  Title:

 

Dated:  

 

 

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ANNEX A TO CERTIFICATE OF TRANSFER

 

1.   The Transferor owns and proposes to transfer the following:
  [CHECK ONE OF (a) OR (b)]
 

(a)       ¨ a beneficial interest in the:

 

(i)     ¨ 144A Global Note ([CUSIP:             ]), or

 

(ii)    ¨ Regulation S Global Note ([CUSIP:             ]), or

 

(b)       ¨ a Restricted Definitive Note.

2.   After the Transfer the Transferee will hold:
  [CHECK ONE]
 

(a)       ¨ a beneficial interest in the:

 

(i)     ¨ 144A Global Note ([CUSIP:             ]), or

 

(ii)    ¨ Regulation S Global Note ([CUSIP:             ]) or

 

(iii)   ¨ Unrestricted Global Note ([    ] [            ]); or

 

(b)       ¨ a Restricted Definitive Note; or

 

(c)       ¨ an Unrestricted Definitive Note, in accordance with the terms of the Indenture.

 

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EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

Summit Materials, LLC

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, DC 20007

Facsimile: (202) 339-9517

Attention: Chief Financial Officer

With a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Facsimile: (212) 455-2502

Attention: Edward P. Tolley III, Esq.

If to the Trustee:

Wilmington Trust, National Association

246 Goose Lane, Suite 105

Guilford, CT 06437

Facsimile: (203) 453-1183

Attention: Summit Administrator

 

  Re: 10.5% Senior Notes due 2020

Reference is hereby made to the Indenture, dated as of January 30, 2012 (as amended, supplemented or otherwise modified from time to time, the “ Indenture ”), among Summit Materials, LLC, a Delaware limited liability company (the “ Company ”), Summit Materials Finance Corp., a Delaware corporation (the “ Co-Issuer ”, and together with the Company, the “ Issuers ”), the Guarantors party thereto and the Trustee.

                     (the “ Owner ”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $             in such Note[s] or interests (the “ Exchange ”). In connection with the Exchange, the Owner hereby certifies that:

1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE

(a) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions

 

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applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “ Securities Act ”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(b) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(c) ¨ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(d) ¨ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES

(a) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

 

C-2


(b) ¨ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] ¨ 144A Global Note ¨ Regulation S Global Note in each case, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

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This certificate and the statements contained herein are made for your benefit and the benefit of the Issuers and are dated

 

[Insert Name of Transferor]
By:  

 

  Name:
  Title:

 

Dated:  

 

 

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EXHIBIT D

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of                     , among                      (the “ Guaranteeing Subsidiary ”), a subsidiary of Summit Materials, LLC, a Delaware limited liability company (the “ Company ”), and Wilmington Trust, National Association, a national banking association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, the Company, Summit Materials Finance Corp., a Delaware corporation (the “ Co-Issuer ”, and together with the Company, the “ Issuers ”), and certain Guarantors have heretofore executed and delivered to the Trustee an Indenture (the “ Indenture ”), dated as of January 30, 2012, providing for the issuance of an unlimited aggregate principal amount of 10.5% Senior Notes due 2020 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers’ Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary acknowledges that it has received and reviewed a copy of the Indenture and all other documents it deems necessary to review in order to enter into this Supplemental Indenture, and acknowledges and agrees to (i) join and become a party to the Indenture as indicated by its signature below; (ii) be bound by the Indenture, as of the date hereof, as if made by, and with respect to, each signatory hereto; and (iii) perform all obligations and duties required of a Guarantor pursuant to the Indenture. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Indenture, including, but not limited to, Article 10 thereof.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuers or any Guaranteeing Subsidiary (other than the Issuers and the Guarantors) shall have any liability for any obligations of the Issuers or the Guarantors (including the Guaranteeing Subsidiary) under the Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

D-1


(5) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(6) Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. This Supplemental Indenture may be executed in multiple counterparts which, when taken together, shall constitute one instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

(7) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

(8) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(9) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

(10) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

D-2


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

[GUARANTEEING SUBSIDIARY]
By:  

 

  Name:
  Title:
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
By:  

 

  Name:
  Title:

 

D-3

Exhibit 4.2

EXECUTION VERSION

First Supplemental Indenture (this “ Supplemental Indenture ”), dated as of March 13, 2012, among Norris Quarries, LLC, a Delaware limited liability company (the “ Guaranteeing Subsidiary ”), an indirect subsidiary of Summit Materials, LLC, a Delaware limited liability company (the “ Company ”), and Wilmington Trust, National Association, a national banking association, as trustee (the “ Trustee ”).

W I T N E S SETH

WHEREAS, the Company, Summit Materials Finance Corp., a Delaware corporation (the “ Co-Issuer ”, and together with the Company, the “ Issuers ”), and certain Guarantors have heretofore executed and delivered to the Trustee an Indenture (the “ Indenture ”), dated as of January 30, 2012, providing for the issuance of an unlimited aggregate principal amount of 10.5% Senior Notes due 2020 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers’ Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture, without the consent of the holders of the Notes.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

(1) Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee. The Guaranteeing Subsidiary acknowledges that it has received and reviewed a copy of the Indenture and all other documents it deems necessary to review in order to enter into this Supplemental Indenture, and acknowledges and agrees to (i) join and become a party to the Indenture as indicated by its signature below; (ii) be bound by the Indenture, as of the date hereof, as if made by, and with respect to, each signatory hereto; and (iii) perform all obligations and duties required of a Guarantor pursuant to the Indenture. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Indenture, including, but not limited to, Article 10 thereof.

(3) Execution and Delivery. The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) No Recourse Against Others. No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuers or any Guaranteeing Subsidiary (other than the Issuers and the Guarantors) shall have any liability for any obligations of the Issuers or the Guarantors (including the Guaranteeing Subsidiary) under the Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(5) Governing Law. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(6) Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. This Supplemental Indenture may be executed in multiple counterparts which, when taken together, shall constitute one instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

1


(7) Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

(8) The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(9) Benefits Acknowledged. The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

(10) Successors. All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

[ Signatures on following page ]

 

2


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

NORRIS QUARRIES, LLC
By:  

/s/ MICHAEL BRADY

Name:   Michael Brady
Title:   Vice President

[Signature Page to First Supplemental Indenture]


WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Trustee

By:  

/s/ JOSEPH P. O’DONNELL

Name:   Joseph P. O’Donnell
Title:   Vice President

[Signature Page to First Supplemental Indenture]

Exhibit 4.4

EXECUTION VERSION

 

 

SUMMIT MATERIALS, LLC

SUMMIT MATERIALS FINANCE CORP.

$250,000,000 10.5% Senior Notes due 2020

REGISTRATION RIGHTS AGREEMENT

dated January 30, 2012

 

 


TABLE OF CONTENTS

 

         Page  
1.  

DEFINITIONS

     1   
2.  

EXCHANGE OFFER

     5   
3.  

SHELF REGISTRATION

     8   
4.  

ADDITIONAL INTEREST

     10   
5.  

REGISTRATION PROCEDURES

     11   
6.  

REGISTRATION EXPENSES

     19   
7.  

INDEMNIFICATION AND CONTRIBUTION

     20   
8.  

RULES 144 AND 144A

     24   
9.  

UNDERWRITTEN REGISTRATIONS

     24   
10.  

MISCELLANEOUS

     24   

 

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REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “ Agreement ”) is dated as of January 30, 2012, and is entered into by and among SUMMIT MATERIALS, LLC, a Delaware limited liability company (the “ Company ”), SUMMIT MATERIALS FINANCE CORP., a Delaware corporation (“ Finance Corp. ” and, together with the Company, the “ Issuers ”), each of the guarantors listed on the signature pages hereto (each, a “ Guarantor ”, and collectively, the “ Guarantors ”) and Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as representatives (the “ Representatives ”) of the several initial purchasers named on Annex A to the Purchase Agreement referenced below (collectively, the “ Initial Purchasers ”).

This Agreement is entered into in connection with the Purchase Agreement, dated as of January 23, 2012 (the “ Purchase Agreement ”), by and among the Issuers, the Guarantors and the Representatives on behalf of the Initial Purchasers, which provides for, among other things, the sale by the Issuers to the Initial Purchasers of $250,000,000 in aggregate principal amount of the Issuers’ 10.5% senior notes due 2020 (the “ Notes ”). The Notes are issued under an indenture, dated as of the date hereof (such indenture, as amended or supplemented from time to time, the “ Indenture ”), by and among the Issuers, the Guarantors and Wilmington Trust, National Association, as trustee. Pursuant to the Purchase Agreement and the Indenture, the Guarantors are required to guarantee, on an unsecured senior basis with respect to the Notes (the “ Guarantees ”), the obligations of the Issuers and the Guarantors under the Notes and the Indenture. References to the “ Securities ” shall mean, collectively, the Notes and the Guarantees. In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Issuers have agreed to provide the registration rights set forth in this Agreement for the benefit of the Initial Purchasers and, except as otherwise set forth herein, any subsequent holder or holders of the Securities on the terms, and subject to the conditions, set forth herein. The execution and delivery of this Agreement is a condition to the Initial Purchasers’ obligations under the Purchase Agreement.

The parties hereby agree as follows:

 

  1. Definitions

As used in this Agreement, the following terms shall have the following meanings:

Additional Interest : See Section 4(a) hereof.

Advice : See the last paragraph of Section 5 hereof.

Agreement : See the introductory paragraphs hereto.

Applicable Period : See Section 2(b) hereof.

Board : See Section 3(a) hereof.


Business Day : Shall have the meaning ascribed to such term in Rule 14d-1(g)(3) under the Exchange Act.

Company : See the introductory paragraphs hereto.

Effectiveness Date : With respect to any Shelf Registration Statement, the 90th day after the Filing Date with respect thereto; provided , however , that if the Effectiveness Date would otherwise fall on a day that is not a Business Day, then the Effectiveness Date shall be the next succeeding Business Day.

Effectiveness Period : See Section 3(a) hereof.

Exchange Act : The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Exchange Notes : See Section 2(a) hereof.

Exchange Notes Guarantees : See Section 2(a) hereof.

Exchange Offer : See Section 2(a) hereof.

Exchange Offer Registration Statement : See Section 2(a) hereof.

Exchange Securities : See Section 2(a) hereof.

Filing Date : The 90th day after the delivery of a Shelf Notice as required pursuant to Section 2(c) hereof; provided , however , that if the Filing Date would otherwise fall on a day that is not a Business Day, then the Filing Date shall be the next succeeding Business Day.

Finance Corp. : See the introductory paragraphs hereto.

FINRA : See Section 5(r) hereof.

Guarantees : See the introductory paragraphs hereto.

Guarantors : See the introductory paragraphs hereto.

Holder : Any holder of a Registrable Security or Registrable Securities, including, where applicable, each Participating Broker-Dealer.

Indenture : See the introductory paragraphs hereto.

Information : See Section 5(n) hereof.

Initial Purchasers : See the introductory paragraphs hereto.

Initial Shelf Registration : See Section 3(a) hereof.

Inspectors : See Section 5(n) hereof.

 

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Issue Date : January 30, 2012, the date of original issuance of the Notes.

Issuers : See the introductory paragraphs hereto.

Notes : See the introductory paragraphs hereto.

Participant : See Section 7(a) hereof.

Participating Broker-Dealer : See Section 2(b) hereof.

Person : An individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm or other legal entity.

Private Exchange : See Section 2(b) hereof.

Private Exchange Notes : See Section 2(b) hereof.

Prospectus : The prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A or 430C under the Securities Act), as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

Purchase Agreement : See the introductory paragraphs hereof.

Records : See Section 5(n) hereof.

Registrable Securities : Each Security upon its original issuance and at all times subsequent thereto, each Exchange Security as to which Section 2(c)(iv) hereof is applicable upon original issuance and at all times subsequent thereto and each Private Exchange Note (and the related Guarantees) upon original issuance thereof and at all times subsequent thereto, until, in each case, the earliest to occur of (i) a Registration Statement (other than, with respect to any Exchange Securities as to which Section 2(c)(iv) hereof is applicable, the Exchange Offer Registration Statement) covering such Security, Exchange Security or Private Exchange Note (and the related Guarantees) has been declared effective by the SEC and such Security, Exchange Security or such Private Exchange Note (and the related Guarantees), as the case may be, has been disposed of in accordance with such effective Registration Statement, (ii) such Security has been exchanged pursuant to the Exchange Offer for an Exchange Security or Exchange Securities that may be resold without restriction under state and federal securities laws, (iii) such Security, Exchange Security or Private Exchange Note (and the related Guarantees), as the case may be, ceases to be outstanding for purposes of the Indenture, (iv) the later of (x) the date which is two years after the date the Securities were originally issued and (y) the date upon which such Security, Exchange Security or Private Exchange Note (and the related Guarantees), as the case may be, has been resold in compliance with Rule 144, provided that such Security, Exchange Security or Private Exchange Note (and the related Guarantees) does not bear any restrictive legend relating

 

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to the Securities Act and does not bear a restricted CUSIP number or (v) the Exchange Offer is consummated and such Security (x) is not a Security as to which a valid request for a Private Exchange has been timely delivered to the Issuers and (y) was not validly tendered in and not withdrawn from the Exchange Offer at the time of the consummation thereof.

Registration Default : See Section 4(a) hereof.

Registration Statement : Any registration statement of the Issuers that covers any of the Securities, the Exchange Securities or the Private Exchange Notes (and the related Guarantees) filed with the SEC under the Securities Act, including, in each case, the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

Rule 144 : Rule 144 under the Securities Act.

Rule 144A : Rule 144A under the Securities Act.

Rule 405 : Rule 405 under the Securities Act.

Rule 415 : Rule 415 under the Securities Act.

Rule 424 : Rule 424 under the Securities Act.

SEC : The U.S. Securities and Exchange Commission.

Securities : See the introductory paragraphs hereto.

Securities Act : The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Shelf Notice : See Section 2(c) hereof.

Shelf Registration : See Section 3(b) hereof.

Shelf Registration Statement : Any Registration Statement relating to a Shelf Registration.

Shelf Suspension Period : See Section 3(a) hereof.

Subsequent Shelf Registration : See Section 3(b) hereof.

TIA : The Trust Indenture Act of 1939, as amended.

Trustee : The trustee under the Indenture and the trustee under any indenture (if different) governing the Exchange Securities and Private Exchange Notes (and the related Guarantees).

 

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Underwritten registration or underwritten offering : A registration in which securities of the Issuers are sold to an underwriter for reoffering to the public.

Except as otherwise specifically provided, all references in this Agreement to acts, laws, statutes, rules, regulations, releases, forms, no-action letters and other regulatory requirements (collectively, “ Regulatory Requirements ”) shall be deemed to refer also to any amendments thereto and all subsequent Regulatory Requirements adopted as a replacement thereto having substantially the same effect therewith.

 

  2. Exchange Offer

(a) Unless the Exchange Offer would violate applicable law or any applicable interpretation of the staff of the SEC, each of the Issuers and the Guarantors shall use their respective commercially reasonable efforts to file with the SEC one or more Registration Statements (each, an “ Exchange Offer Registration Statement ”) on an appropriate registration form with respect to a registered offer (the “ Exchange Offer ”) to exchange any and all of the Registrable Securities for a like aggregate principal amount of debt securities of the applicable series of the Issuers (such debt securities, the “ Exchange Notes ”), guaranteed, to the extent applicable, on an unsecured senior basis by the Guarantors, (the “ Exchange Notes Guarantees ” and, together with the Exchange Notes, the “ Exchange Securities ”), that are substantially identical in all material respects to the Notes except that the Exchange Notes (i) shall contain no restrictive legend thereon, (ii) interest thereon shall accrue from (A) the later of (x) the last date on which interest was paid on such Notes or (y) if such Notes are surrendered for exchange on a date in a period that includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no such interest has been paid, from the Issue Date and (iii) shall be entitled to the benefits of the Indenture or a trust indenture which is identical in all material respects to the Indenture (other than such changes to the Indenture or any such identical trust indenture as are necessary to comply with the TIA) and which, in either case, has been qualified under the TIA. The Exchange Offer shall comply with all applicable tender offer rules and regulations under the Exchange Act and other applicable laws. The Issuers and the Guarantors shall use their respective commercially reasonable efforts to (x) prepare and file with the SEC the Exchange Offer Registration Statement with respect to the Exchange Offer and cause the Exchange Offer Registration Statement to be declared effective under the Securities Act; (y) keep the Exchange Offer open for at least 20 Business Days (or longer if required by applicable law) after the date that notice of the Exchange Offer is sent to Holders; and (z) consummate the Exchange Offer on or prior to the 540th day following the Issue Date (or if such 540th day is not a Business Day, the next succeeding Business Day).

Each Holder (including, without limitation, each Participating Broker-Dealer) that participates in the Exchange Offer, as a condition to participation in the Exchange Offer, will be required to represent to the Issuers in writing (which may be contained in the applicable letter of transmittal) substantially to the effect that: (i) any Exchange Securities acquired in exchange for Registrable Securities tendered are being acquired in the ordinary course of business of the Person receiving such Exchange Securities, whether or not such recipient is such Holder itself; (ii) at the time of the commencement or consummation of the Exchange Offer neither such Holder nor, to the actual knowledge of such Holder, any other Person receiving Exchange Securities from

 

-5-


such Holder has an arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of the provisions of the Securities Act; (iii) neither the Holder nor, to the knowledge of such Holder, any other Person receiving Exchange Securities from such Holder is an “affiliate” (as defined in Rule 405) of either Issuer or any Guarantor or, if it is an affiliate of either Issuer or any Guarantor, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable and will provide information to be included in the Shelf Registration Statement in accordance with Section 5 hereof in order to have their Securities included in the Shelf Registration Statement and benefit from provisions regarding Additional Interest in Section 4 hereof; (iv) if such Holder is not a broker-dealer, neither such Holder nor, to the knowledge of such Holder, any other Person receiving Exchange Securities from such Holder is engaging in or intends to engage in a distribution of the Exchange Securities; and (v) if such Holder is a Participating Broker-Dealer, such Holder has acquired the Registrable Securities for its own account in exchange for Securities that were acquired as a result of market-making activities or other trading activities and that it will comply with the applicable provisions of the Securities Act (including, but not limited to, the prospectus delivery requirements thereunder).

Upon consummation of the Exchange Offer in accordance with this Section 2, the provisions of this Agreement shall continue to apply, mutatis mutandis , solely with respect to Registrable Securities that are Private Exchange Notes (and the related Guarantees), Exchange Securities as to which Section 2(c)(iv) hereof is applicable and Exchange Securities held by Participating Broker-Dealers, and the Issuers and the Guarantors shall have no further obligation to register Registrable Securities (other than Private Exchange Notes (and the related Guarantees) and Exchange Securities as to which clause 2(c)(iv) hereof applies) pursuant to Section 3 hereof.

(b) The Issuers shall include within the Prospectus contained in the Exchange Offer Registration Statement a section entitled “Plan of Distribution,” which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential “underwriter” status of any broker-dealer that is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a “ Participating Broker-Dealer ”), whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies represent the prevailing views of the staff of the SEC. Such “Plan of Distribution” section shall also expressly permit, to the extent permitted by applicable policies and regulations of the SEC, the use of the Prospectus by all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Exchange Securities in compliance with the Securities Act.

Each of the Issuers and the Guarantors shall use its commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the Prospectus contained therein in order to permit such Prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such period of time as is necessary to comply with applicable law in connection with any resale of the Exchange Securities; provided , however , that such period shall not be required to exceed 90 days after the date on which the Exchange Offer Registration Statement is declared effective, such period as extended, if at all, pursuant to the last paragraph of Section 5 hereof (the “ Applicable Period ”).

 

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If, immediately prior to consummation of the Exchange Offer, the Initial Purchasers hold any Notes acquired by them that have the status of an unsold allotment in the initial distribution, the Issuers, upon the written request of the Initial Purchasers or any such Holders, as the case may be, shall simultaneously with the delivery of the Exchange Notes issue and deliver to the Initial Purchasers, in exchange (the “ Private Exchange ”) for such Notes held by any such Initial Purchaser, a like principal amount of notes (the “ Private Exchange Notes ”) of the Issuers, guaranteed by the Guarantors, that are identical in all material respects to the Exchange Notes except for the placement of a restrictive legend on such Private Exchange Notes. The Private Exchange Notes shall be issued pursuant to the same indenture as the Exchange Notes and bear the same CUSIP number as the Exchange Notes if permitted by the CUSIP Service Bureau.

In connection with the Exchange Offer, the Issuers and the Guarantors shall:

(1) mail, or cause to be mailed, to each Holder of record entitled to participate in the Exchange Offer a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

(2) use their respective commercially reasonable efforts to keep the Exchange Offer open for not less than 20 Business Days from the date that notice of the Exchange Offer is sent to Holders (or longer if required by applicable law);

(3) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York or in Wilmington, Delaware;

(4) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the last Business Day on which the Exchange Offer remains open; and

(5) otherwise comply in all material respects with all laws, rules and regulations applicable to the Exchange Offer.

As soon as practicable after the close of the Exchange Offer and any Private Exchange, the Issuers and the Guarantors shall:

(1) accept for exchange all Registrable Securities validly tendered and not validly withdrawn pursuant to the Exchange Offer and any Private Exchange;

(2) deliver to the Trustee for cancellation all Registrable Securities so accepted for exchange; and

(3) cause the Trustee to authenticate and deliver promptly to each Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange; provided that, in the case of any Notes held in global form by a depositary, authentication and delivery to such depositary of one or more replacement Notes in global form in an equivalent principal amount thereto for the account of such Holders in accordance with the Indenture shall satisfy such authentication and delivery requirement.

 

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The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than that (i) the Exchange Offer or Private Exchange, as the case may be, does not violate applicable law or any applicable interpretation of the staff of the SEC; (ii) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency which might materially impair the ability of the Issuers to proceed with the Exchange Offer or the Private Exchange, and no material adverse development shall have occurred in any existing action or proceeding with respect to the Issuers; (iii) all governmental approvals shall have been obtained, which approvals the Issuers deem necessary for the consummation of the Exchange Offer or Private Exchange and (iv) the Holders shall have satisfied customary conditions relating to the delivery of Securities and the execution and delivery of customary documentation relating to the Exchange Offer.

The Exchange Securities and the Private Exchange Notes (and related guarantees) shall be issued under (i) the Indenture or (ii) an indenture substantially identical in all material respects to the Indenture and which, in either case, has been qualified under the TIA or is exempt from such qualification and shall provide that the Exchange Securities shall not be subject to the transfer restrictions set forth in the Indenture. The Indenture or such other indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the Notes will have the right to vote or consent as a separate class on any matter.

(c) If, (i) because of any change in law or in currently prevailing interpretations of the staff of the SEC, the Issuers or the Guarantors are not permitted to effect the Exchange Offer within 540 days of the Issue Date, (ii) the Exchange Offer is not consummated within 540 days of the Issue Date, (iii) any holder of Private Exchange Notes so requests in writing to the Issuers at any time within 30 days after the consummation of the Exchange Offer, (iv) in the case of any Holder that participates in the Exchange Offer, such Holder does not receive Exchange Securities on the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the status of such Holder as an affiliate of either Issuer or any Guarantor within the meaning of the Securities Act) or (v) any Initial Purchaser so requests with respect to the Securities or the Private Exchange Securities that have the status of unsold allotments in an initial distribution and so notifies the Issuers within 30 days after such Initial Purchaser or such Holder, as the case may be, first becomes aware of such restrictions (but in any event (x) no earlier than the date upon which the Exchange Offer Registration Statement is declared effective and (y) no later than 30 days after the consummation of the Exchange Offer), in the case of each of clauses (i) through and including (v) of this sentence, then the Issuers and the Guarantors shall promptly deliver to the Trustee (to deliver to the Holders) written notice thereof (the “ Shelf Notice ”) and shall file a Shelf Registration pursuant to Section 3 hereof.

 

  3. Shelf Registration

If at any time a Shelf Notice is delivered as contemplated by Section 2(c) hereof, then:

(a) Shelf Registration . The Issuers and the Guarantors shall promptly file with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant

 

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to Rule 415 covering all of the Registrable Securities (the “ Initial Shelf Registration ”). The Issuers and the Guarantors shall use their respective commercially reasonable efforts to file with the SEC the Initial Registration Statement on or prior to the Filing Date. The Initial Shelf Registration shall be on Form S-1 or another appropriate form permitting registration of such Registrable Securities for resale by Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings).

The Issuers and the Guarantors shall use their respective commercially reasonable efforts to cause the Shelf Registration to be declared effective under the Securities Act on or prior to the Effectiveness Date and to keep the Initial Shelf Registration continuously effective under the Securities Act until the earliest of (i) 360 days after the date that the Shelf Registration Statement is declared effective, (ii) such shorter period ending when all Registrable Securities covered by the Initial Shelf Registration have been sold in the manner set forth and as contemplated in the Initial Shelf Registration or, if applicable, a Subsequent Shelf Registration or (iii) the date upon which all Registrable Securities have been otherwise sold (the “ Effectiveness Period ”); provided , however , that the Effectiveness Period in respect of the Initial Shelf Registration shall be extended to the extent required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under the Securities Act and as otherwise provided herein. Notwithstanding anything to the contrary in this Agreement, at any time, the Issuers may delay the filing of any Initial Shelf Registration Statement or delay or suspend the effectiveness thereof, for a reasonable period of time, but not in excess of 60 consecutive days or more than three (3) times during any calendar year (each, a “ Shelf Suspension Period ”), if the Board of Directors of each Issuer or a similar governing body of any parent company of the either Issuer (each, a “ Board ”) determines reasonably and in good faith that the filing of any such Initial Shelf Registration Statement or the continuing effectiveness thereof would require the disclosure of non-public material information that, in the reasonable judgment of such Board, would be detrimental to either Issuer if so disclosed or would otherwise materially adversely affect a financing, acquisition, disposition, merger or other material transaction or such action is required by applicable law.

(b) Withdrawal of Stop Orders; Subsequent Shelf Registrations . If the Initial Shelf Registration or any Subsequent Shelf Registration ceases to be effective for any reason at any time during the Effectiveness Period (other than in the case of Shelf Suspension Period(s) permitted by this Agreement and other than because of the sale of all of the Securities registered thereunder), the Issuers and the Guarantors shall use their respective commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall file an additional Shelf Registration Statement pursuant to Rule 415 covering all of the Registrable Securities covered by and not sold under the Initial Shelf Registration or an earlier Subsequent Shelf Registration (each, a “ Subsequent Shelf Registration ”). If a Subsequent Shelf Registration is filed, the Issuers and the Guarantors shall use their respective commercially reasonable efforts to cause the Subsequent Shelf Registration to be declared effective under the Securities Act as soon as practicable after such filing and to keep such subsequent Shelf Registration continuously effective for a period equal to the number of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration or any Subsequent Shelf Registration was previously continuously effective. As used herein, the term “ Shelf Registration ” means the Initial Shelf Registration and any Subsequent Shelf Registration.

 

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(c) Supplements and Amendments . The Issuers and the Guarantors shall promptly supplement and amend the Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested by the Holders of a majority in aggregate principal amount of the Registrable Securities (or their counsel) covered by such Registration Statement with respect to the information included therein with respect to one or more of such Holders, or, if reasonably requested by any underwriter of such Registrable Securities, with respect to the information included therein with respect to such underwriter.

 

  4. Additional Interest

(a) The Issuers, the Guarantors and the Initial Purchasers agree that the Holders will suffer damages if the Issuers and the Guarantors fail to fulfill their obligations under Section 2 or Section 3 hereof, as further specified in this Section 4 (each, a “ Registration Default ”), and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers and the Guarantors agree to pay, jointly and severally, as liquidated damages, additional interest to the Holders of the Notes affected thereby (“ Additional Interest ”) if (A) the Issuers and the Guarantors have neither (i) exchanged Exchange Securities for all Securities validly tendered in accordance with the terms of the Exchange Offer nor (ii) if applicable, had a Shelf Registration Statement declared effective, in either case on or prior to the 540th day after the Issue Date, (B) notwithstanding clause (A), the Issuers and the Guarantors are required to file a Shelf Registration Statement and such Shelf Registration Statement is not declared effective on or prior to the Effectiveness Date or (C), if applicable, a Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time during the Effectiveness Period (other than because of the sale of all of the Securities registered thereunder), then Additional Interest shall accrue on the principal amount of the Notes then outstanding affected thereby (but, following the consummation of the Exchange Offer, only on the principal amount of such Notes that could not be exchanged or were not exchanged as specified in Section 2(c) hereof) at a rate of 0.25% per annum (which rate will be increased by an additional 0.25% per annum for each subsequent 90-day period that such Additional Interest continues to accrue, provided that the rate at which such Additional Interest accrues may in no event exceed 1.00% per annum) (such Additional Interest to be calculated by the Issuers) commencing on the (x) 540th day after the Issue Date, in the case of (A) above, (y) the Effectiveness Date in the case of (B) above, or (z) the day on which such Shelf Registration ceases to be effective in the case of (C) above; provided , however , that upon the exchange of the Exchange Securities for all Securities validly tendered (in the case of clause (A)(i) of this Section 4), upon the effectiveness of the applicable Shelf Registration Statement (in the case of (A)(ii) and (B) of this Section 4(a)), or upon the effectiveness of the applicable Shelf Registration Statement which had ceased to remain effective (in the case of (C) of this Section 4), Additional Interest on the Notes in respect of which such events relate as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. Notwithstanding any other provisions of this Section 4, the Issuers and the Guarantors shall not be obligated to pay Additional Interest provided in Section 4(a)(A)(ii) or 4(a)(C) hereof during a Shelf Suspension Period permitted by Section 3(a) hereof. The obligation of the Issuers and the Guarantors to pay Additional Interest as set forth in this Section 4 shall be the sole and exclusive monetary remedy of the Holders and Participating Broker-Dealers for any Registration Default. Notwithstanding anything to the contrary herein, (i) the amount of Additional Interest payable shall not increase because more than one Registration Default has

 

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occurred and is continuing and (ii) a Holder or Participating Broker-Dealer that is not entitled to the benefits of the Shelf Registration shall not be entitled to Additional Interest with respect to any Registration Default that pertains to the Shelf Registration.

(b) The Issuers shall notify the Trustee within five Business Days after the occurrence of a Registration Default in respect of which Additional Interest is required to be paid. Any amounts of Additional Interest due pursuant to clause (a) of this Section 4 will be payable in cash semiannually on each January 31 and July 31 (to the holders of record on the January 15 and July 15 immediately preceding such dates), in each case commencing with the first such date occurring after any such Additional Interest commences to accrue. The amount of Additional Interest will be determined by the Issuers by multiplying the applicable Additional Interest rate by the principal amount of the Registrable Securities affected by the Registration Default, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30 day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360.

 

  5. Registration Procedures

In connection with the filing of any Registration Statement pursuant to Section 2 or 3 hereof, the Issuers and the Guarantors shall use their respective commercially reasonable efforts to effect such registrations to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Issuers and the Guarantors hereunder the Issuers and the Guarantors shall:

(a) Use their respective commercially reasonable efforts to prepare and file with the SEC, a Registration Statement or Registration Statements as prescribed by Section 2 or 3 hereof, and use their respective commercially reasonable efforts to cause each such Registration Statement to become effective and remain effective as provided herein; provided , however , that if (1) such filing is pursuant to Section 3 hereof or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period relating thereto from whom the Issuers have received prior written notice that it will be a Participating Broker-Dealer in the Exchange Offer, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Issuers and the Guarantors shall furnish to and afford counsel for the Holders of the Registrable Securities covered by such Registration Statement (with respect to a Registration Statement filed pursuant to Section 3 hereof), which shall be a single firm and which shall be Cahill Gordon & Reindel LLP or such other firm selected by the Holders holding a majority in principal amount of the Registrable Securities covered by such Registration Statement or counsel for such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, and counsel to the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case at least three Business Days prior to such filing). The Issuers and the Guarantors shall not file any Registration Statement or Prospectus or any amendments or supplements thereto if the Holders of a majority in aggregate principal

 

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amount of the Registrable Securities covered by such Registration Statement, or any such Participating Broker-Dealer, as the case may be, their counsel, or the managing underwriters, if any, shall reasonably object.

(b) Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration Statement or Exchange Offer Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period, the Applicable Period or until consummation of the Exchange Offer, as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424; and comply with the provisions of the Securities Act and the Exchange Act applicable to them with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus in all material respects. The Issuers and the Guarantors shall be deemed not to have used their respective commercially reasonable efforts to keep a Registration Statement effective if they voluntarily take any action that is reasonably expected to result in selling Holders of the Registrable Securities covered thereby or Participating Broker-Dealers seeking to sell Exchange Securities not being able to sell such Registrable Securities or such Exchange Securities during that period unless such action is required by applicable law or permitted by this Agreement.

(c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period relating thereto from whom the Issuers have received written notice that it will be a Participating Broker-Dealer in the Exchange Offer, notify the selling Holders of Registrable Securities (with respect to a Registration Statement filed pursuant to Section 3 hereof), or each such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, their counsel and the managing underwriters, if any, promptly (but in any event within three Business Days), and confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, at the sole expense of the Issuers, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Securities or resales of Exchange Securities by Participating Broker-Dealers the representations and warranties of the Issuers and the Guarantors contained in any agreement (including any underwriting agreement) contemplated by Section 5(m) hereof cease to be true and correct in all material respects, (iv) of the receipt by the Issuers and the Guarantors of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Securities or the Exchange Securities to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of

 

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any proceeding for such purpose, (v) of the happening of any event, the existence of any condition or any information becoming known that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in or amendments or supplements to such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (vi) of the Issuers’ determination that a post-effective amendment to a Registration Statement would be appropriate.

(d) Use their respective commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Securities or the Exchange Securities to be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, to use their commercially reasonable efforts to obtain the withdrawal of any such order as soon as possible.

(e) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period and if requested during the Effectiveness Period by the managing underwriter or underwriters (if any), the Holders of a majority in aggregate principal amount of the Registrable Securities being sold in connection with an underwritten offering or any Participating Broker-Dealer, as the case may be, (i) as promptly as practicable incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters (if any), such Holders or any Participating Broker-Dealer, as the case may be, or counsel for either of them reasonably request to be included therein and (ii) make all required filings of such prospectus supplement or such post-effective amendment as soon as practicable after the Issuers and the Guarantors have received notification of the matters to be incorporated in such prospectus supplement or post-effective amendment.

(f) If (l) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, furnish to each selling Holder of Registrable Securities (with respect to a Registration Statement filed pursuant to Section 3 hereof) and to each such Participating Broker-Dealer who so requests (with respect to any such Registration Statement) and to their respective counsel and each managing underwriter, if any, upon request and at the sole expense of the Issuers, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits.

 

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(g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, deliver to each selling Holder of Registrable Securities (with respect to a Registration Statement filed pursuant to Section 3 hereof), or each such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, their respective counsel, and the underwriters, if any, at the sole expense of the Issuers, as many copies of the Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, the Issuers and the Guarantors hereby consent to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Securities or each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers, if any, in connection with the offering and sale of the Registrable Securities covered by, or the sale by Participating Broker-Dealers of the Exchange Securities pursuant to, such Prospectus and any amendment or supplement thereto.

(h) Prior to any public offering of Registrable Securities or any delivery of a Prospectus contained in the Exchange Offer Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, use their respective commercially reasonable efforts to register or qualify, and to cooperate with the selling Holders of Registrable Securities or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably request in writing; provided , however , that where Exchange Securities held by Participating Broker-Dealers or Registrable Securities are offered other than through an underwritten offering, the Issuers and the Guarantors agree to use their respective commercially reasonable efforts to cause their counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h), keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Exchange Securities held by Participating Broker-Dealers or the Registrable Securities covered by the applicable Registration Statement; provided , however , that the Issuers and the Guarantors shall not be required to (A) qualify generally to do business in any jurisdiction where they are not then so qualified, (B) take any action that would subject them to general service of process in any such jurisdiction where they are not then so subject or (C) subject themselves to taxation in excess of a nominal dollar amount in any such jurisdiction where they are not then so subject.

(i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the selling Holders of Registrable Securities and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Securities to be in such denominations (subject to applicable requirements contained in the Indenture) and registered in such names as the managing underwriter or underwriters, if any, or Holders may reasonably request.

 

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(j) [Reserved].

(k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, upon the occurrence of any event contemplated by Section 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole expense of the Issuers, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference so that (but only to such an extent that), as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder (with respect to a Registration Statement filed pursuant to Section 3 hereof) or to the purchasers of the Exchange Securities to whom such Prospectus will be delivered by a Participating Broker-Dealer (with respect to any such Registration Statement), any such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(l) Prior to the effective date of the first Registration Statement relating to the Registrable Securities, (i) provide the Trustee with certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number for the Registrable Securities.

(m) In connection with any underwritten offering of Registrable Securities pursuant to a Shelf Registration, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Securities (including, without limitation, a customary condition to the obligations of the underwriters that the underwriters shall have received “cold comfort” letters and updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters from the independent certified public accountants of the Issuers (and, if necessary, any other independent certified public accountants of the Issuers, or of any business acquired by the Issuers, for which financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings of debt securities similar to the Securities), and take all such other actions as are reasonably requested by the managing underwriter or underwriters in order to expedite or facilitate the registration or the disposition of such Registrable Securities and, in such connection, (i) make such representations and warranties to, and covenants with, the underwriters with respect to the business of the Issuers and the Guarantors (including any acquired business, properties or entity, if applicable), and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Securities, and confirm the same in writing if and when reasonably requested; (ii) use their respective commercially reasonable efforts to obtain the written opinions of counsel to the Issuers and the Guarantors, and

 

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written updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the underwriters covering the matters customarily covered in opinions reasonably requested in underwritten offerings (it being agreed that Simpson Thacher & Bartlett LLP is deemed to be counsel that is reasonably acceptable); and (iii) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures requested by the underwriters or no less favorable to the sellers than those set forth in Section 7 hereof (or such other provisions and procedures reasonably acceptable to Holders of a majority in aggregate principal amount of Registrable Securities covered by such Registration Statement and the managing underwriter or underwriters or agents, if any). The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder.

(n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, make available for inspection by any Initial Purchaser, any selling Holder of such Registrable Securities being sold (with respect to a Registration Statement filed pursuant to Section 3 hereof), or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Securities, if any, and any attorney (which shall be a single firm and which shall be Cahill Gordon & Reindel LLP or such other firm selected by the Holders holding a majority in principal amount of the Registrable Securities covered by such Registration Statement), accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, or underwriter (any such Initial Purchasers, Holders, Participating Broker-Dealers, underwriters, attorneys, accountants or agents, collectively, the “ Inspectors ”), upon written request, at the offices where normally kept, during reasonable business hours, all pertinent financial and other records, pertinent corporate documents and instruments of each of the Issuers and Guarantors and subsidiaries of each of the Issuers and the Guarantors (collectively, the “ Records ”), as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Issuers and the Guarantors and any of their respective subsidiaries to supply, during reasonable business hours, all information (“ Information ”) reasonably requested by any such Inspector in connection with such due diligence responsibilities. Each Inspector shall agree in writing that it will keep the Records and Information confidential, to use the Records and Information only to the extent necessary for due diligence purposes under applicable securities laws, to abstain from using the Records and Information as the basis for any market transactions in Securities of the Issuers (or for any purpose other than the satisfaction of its due diligence responsibilities in connection with such Shelf Registration or Exchange Offer Registration Statement, as applicable) and that it will not disclose any of the Records or Information that the Issuers and the Guarantors determine, in good faith, to be confidential and notifies the Inspectors in writing are confidential unless (i) the disclosure of such Records or Information is necessary to avoid or correct a misstatement or omission in such Registration Statement or Prospectus, (ii) the release of such Records or Information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure of such Records or Information is necessary or advisable, in the reasonable opinion of counsel for any Inspector, in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based upon, relating to, or involving this Agreement or the

 

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Purchase Agreement, or any transactions contemplated hereby or thereby or arising hereunder or thereunder, or (iv) the information in such Records or Information has been made generally available to the public other than by an Inspector or an “affiliate” (as defined in Rule 405) thereof; provided , that the foregoing gathering of Records and Information by the Inspectors shall, to the greatest extent possible, be coordinated on behalf of Holders and any other parties entitled thereto (including any Participating Broker-Dealers) by one counsel designated by them; and provided , further , that prior written notice shall be provided as soon as practicable to the Issuers of the potential disclosure of any information by such Inspector pursuant to clauses (i) or (ii) of this sentence to permit the Issuers to obtain a protective order (or waive the provisions of this paragraph (n)) and that such Inspector shall take such actions as are reasonably necessary to protect the confidentiality of such information (if practicable) to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of the Holder (including any Participating Broker-Dealer) or any Inspector.

(o) Provide an indenture trustee for the Registrable Securities or the Exchange Securities, as the case may be, and cause the Indenture or the trust indenture provided for in Section 2(a) hereof, as the case may be, to be qualified under the TIA not later than the effective date of the first Registration Statement relating to the Registrable Securities; and in connection therewith, cooperate with the trustee under any such indenture and the Holders of the Registrable Securities, to effect such changes (if any) to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its commercially reasonable efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner.

(p) Comply in all material respects with all applicable rules and regulations of the SEC, and make generally available to their securityholders with regard to any applicable Registration Statement a consolidated earning statement (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) for the 12-month period beginning with the first month of each Issuer’s first fiscal quarter commencing after the effective date of the first Registration Statement required by this Agreement.

(q) If the Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Securities by Holders to the Issuers (or to such other Person as directed by the Issuers), in exchange for the Exchange Securities or the Private Exchange Notes (and the related Guarantees), as the case may be, if then in certificated form, the Issuers shall mark, or cause to be marked, on such Registrable Securities that such Registrable Securities are being cancelled in exchange for the Exchange Securities or the Private Exchange Notes (and the related Guarantees), as the case may be; in no event shall such Registrable Securities be marked as paid or otherwise satisfied.

(r) Cooperate with each seller of Registrable Securities covered by any Registration Statement and each underwriter, if any (including any “qualified independent underwriter” that is required to be retained in accordance with the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“ FINRA ”)), participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA.

 

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(s) Use their respective commercially reasonable efforts to take all other steps reasonably necessary to effect the registration of the Exchange Securities and/or Registrable Securities covered by a Registration Statement contemplated hereby.

The Issuers may require each seller of Registrable Securities as to which any registration is being effected to furnish to the Issuers in writing such information regarding such seller and the distribution of such Registrable Securities as the Issuers may, from time to time, reasonably request. The Issuers may exclude from such registration the Registrable Securities of any seller so long as such seller fails to furnish such information in writing within a reasonable time after receiving such request. Each seller as to which any Shelf Registration is being effected agrees to furnish promptly in writing to the Issuers all information required to be disclosed in order to make the information previously furnished to the Issuers by such seller not materially misleading.

If any such Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Issuers or the Guarantors, then such Holder shall have the right to require (to the extent not objected to by the SEC) (i) the insertion therein of language, in form and substance reasonably satisfactory to such Holder, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Issuers, or (ii) in the event that such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required.

Each Holder of Registrable Securities and each Participating Broker-Dealer agrees by its acquisition of such Registrable Securities or Exchange Securities to be sold by such Participating Broker-Dealer, as the case may be, that, upon actual receipt of any notice from the Issuers of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus or Exchange Securities to be sold by such Holder or Participating Broker-Dealer, as the case may be, until such Holder’s or Participating Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until it is advised in writing (the “ Advice ”) by the Issuers that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto. In the event that the Issuers shall give any such notice, each of the Applicable Period and the Effectiveness Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement or Exchange Securities to be sold by such Participating Broker-Dealer, as the case may be, shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or (y) the Advice.

 

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  6. Registration Expenses

(a) All fees and expenses incident to the performance of or compliance with this Agreement by the Issuers and the Guarantors of their obligations under Sections 2, 3, 5 and 8 hereof shall be borne by the Issuers and the Guarantors, jointly and severally, whether or not the Exchange Offer Registration Statement or any Shelf Registration Statement is filed or becomes effective or the Exchange Offer is consummated, including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with FINRA in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Securities or Exchange Securities and determination of the eligibility of the Registrable Securities or Exchange Securities for investment under the laws of such jurisdictions in the United States (x) where the Holders of Registrable Securities are located, in the case of the Exchange Securities, or (y) as provided in Section 5(h) hereof, in the case of Registrable Securities or Exchange Securities to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, printing Prospectuses if the printing of Prospectuses is requested by the managing underwriter or underwriters, if any, by the Holders of a majority in aggregate principal amount of the Registrable Securities included in any Registration Statement or in respect of Registrable Securities or Exchange Securities to be sold by any Participating Broker-Dealer during the Applicable Period, as the case may be, (iii) fees and expenses of the Trustee and any exchange agent retained by the Issuers and the Guarantors and their counsel, (iv) fees and disbursements of counsel for the Issuers and the Guarantors and, in the case of a Shelf Registration, reasonable fees and disbursements of one firm of counsel, plus one local counsel (if necessary) for all of the sellers of Registrable Securities selected by the Holder of a majority in aggregate principal amount of Registrable Securities covered by such Shelf Registration (which counsel shall be reasonably satisfactory to the Issuers) exclusive of any counsel retained pursuant to Section 7 hereof), (v) fees and disbursements of all independent certified public accountants referred to in Section 5(m) hereof (including, without limitation, the expenses of any “cold comfort” letters required by or incident to such performance), (vi) rating agency fees, if any, and any fees associated with making the Registrable Securities or Exchange Securities eligible for trading through The Depository Trust Company, (vii) Securities Act liability insurance, if the Issuers and the Guarantors desire such insurance, (viii) fees and expenses of all other Persons retained by the Issuers and the Guarantors, (ix) internal expenses of the Issuers and the Guarantors (including, without limitation, all salaries and expenses of officers and employees of the Issuers and the Guarantors performing legal or accounting duties), (x) the expense of any annual audit, (xi) any fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange, and the obtaining of a rating of the securities, in each case, if applicable and (xii) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agreements, indentures and any other documents necessary in order to comply with this Agreement. Notwithstanding the foregoing or anything to the contrary, each Holder shall pay all underwriting discounts and commissions of any underwriters with respect to any Registrable Securities sold by or on behalf of such Holder in an underwritten offering.

(b) In connection with any Shelf Registration Statement required by this Agreement, the Issuers and the Guarantors, jointly and severally, will reimburse the Initial Purchasers and the Holders of Registrable Securities being resold pursuant to the “Plan of Distribution” contained in such Shelf Registration Statement for the reasonable fees and disbursements of not more than one counsel, who shall be Cahill Gordon & Reindel LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Registrable Securities for whose benefit such Shelf Registration Statement is being prepared.

 

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  7. Indemnification and Contribution .

(a) The Issuers and the Guarantors, jointly and severally, agree to indemnify and hold harmless each Holder of Registrable Securities and each Participating Broker-Dealer selling Exchange Securities during the Applicable Period, and each Person, if any, who controls such Person or its affiliates within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, the agents, employees, officers and directors of each Holder and each such Participating Broker-Dealer and the agents, partners, members, employees, officers, managers and directors of any such controlling Person and its affiliates (each, a “ Participant ”) against any losses, claims, damages or liabilities, joint or several, to which any Participant may become subject under the Securities Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon:

(i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if either of the Issuers or any of the Guarantors shall have furnished any amendments or supplements thereto); or

(ii) the omission or alleged omission to state, in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if either of the Issuers or any of the Guarantors shall have furnished any amendments or supplements thereto), a material fact required to be stated therein or necessary to make the statements therein (in the case of any such Prospectus, in the light of the circumstances under which such statement was made) not misleading;

and agree (subject to the limitations set forth in the proviso to this sentence) to reimburse, as incurred, the Participant for any reasonable legal or other expenses incurred by the Participant in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided , however , neither the Issuers nor the Guarantors will be liable in any case under this Section 7(a) to the extent that any such loss, claim, damage, or liability (A) arises out of or is based upon any untrue statement or omission or alleged untrue statement or alleged omission made in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Issuers or any of the Guarantors shall have furnished any amendments or supplements thereto) or any amendment or supplement thereto in reliance upon and in conformity with written information relating to any Participant furnished to the Issuers or the Guarantors by such Participant specifically for use therein or (B) arising from an offer or sale of Securities or Exchange Securities occurring during a Shelf Suspension Period by a Holder or Participating Broker-Dealer to whom the Issuers theretofore provided notice thereof pursuant to Section 5(c) hereof. The indemnity provided for in this Section 7 will be in addition to any liability that the Issuers or any of the Guarantors may otherwise have to the indemnified parties. The Issuers and the Guarantors shall not be liable under this Section 7 to any indemnified party regarding any settlement or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the

 

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indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent is consented to by the Issuers and the Guarantors, which consent shall not be unreasonably withheld.

(b) Each Participant, severally and not jointly, agrees to indemnify and hold harmless the Issuers, the Guarantors, their respective directors (or equivalent), their respective officers who sign any Registration Statement and each person, if any, who controls either Issuer or any Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which the Issuers, the Guarantors or any such director, officer or controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement or Prospectus or any amendment or supplement thereto, (ii) the omission or the alleged omission to state therein a material fact necessary to make the statements therein not misleading (in the case of any such Prospectus, in the light of the circumstances under which such statements were made), in each case to the extent, but only to the extent, that such untrue statement or omission or alleged untrue statement or alleged omission was made in reliance upon and in conformity with written information concerning such Participant furnished to the Issuers or the Guarantors by or on behalf of such Participant specifically for use therein or (iii) an offer or sale of Securities or Exchange Securities occurring during a Shelf Suspension Period by a Holder or Participating Broker-Dealer to whom the Issuers theretofore provided notice thereof pursuant to Section 5(c) hereof; and subject to the limitation set forth immediately preceding this clause, will reimburse, as incurred, any reasonable legal or other expenses incurred by the Issuers, the Guarantors or any such director, officer or controlling person in connection with investigating or defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action in respect thereof. The indemnity provided for in this Section 7 will be in addition to any liability that the Participants may otherwise have to the indemnified parties. A Participant shall not be liable under this Section 7 to any indemnified party regarding any settlement or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent is consented to by such Participant, which consent shall not be unreasonably withheld.

(c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party of the commencement thereof in writing; but the omission to so notify the indemnifying party (i) will not relieve it from any liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraphs (a) and (b) above. The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and

 

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expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below); provided , however , that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest (based on the advice of counsel to the indemnified party); (ii) such action includes both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded (based on the advice of counsel to the indemnified party) that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. It is understood and agreed that the indemnifying party shall not, in connection with any proceeding or separate but related or substantially similar proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm (in addition to one local counsel in each applicable jurisdiction) representing the indemnified parties under paragraph (a) or paragraph (b) of this Section 7, as the case may be, who are parties to such action or actions. Any such separate firm for any Participants shall be designated in writing by Participants who sold a majority in interest of the Registrable Securities and Exchange Securities sold by all such Participants in the case of paragraph (a) of this Section 7 or the Issuers in the case of paragraph (b) of this Section 7. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include any statement as to, or any admission of, fault, culpability or failure to act by or on behalf of any indemnified party. All fees and expenses reimbursed pursuant to this paragraph (c) shall be reimbursed as they are incurred and following a written request therefor.

(d) After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the third sentence of paragraph (c) of this Section 7 or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld), unless such indemnified party waived in writing its rights under this Section 7, in which case the indemnified party may effect such a settlement without such consent.

 

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(e) In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 7 is unavailable to, or insufficient to hold harmless, an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) (other than for the reasons specified in Section 7(a) or 7(b) hereof, including by virtue of the failure of an indemnified party to notify the indemnifying party of its right to indemnification pursuant to paragraph (a) or (b) of this Section 7, where such failure materially prejudices the indemnifying party (through the forfeiture of substantial rights or defenses)), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the offering of the Securities or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof). The relative benefits received by the Issuers and the Guarantors on the one hand and the Participants on the other shall be deemed to be in the same proportion that the total net proceeds from the offering (before deducting expenses) of the Securities received by the Issuers bear to the total discounts and commissions received by the Participants in connection with the initial sale of the Securities by the Issuers (or if such Participant did not receive a discount from the Issuers with respect to the initial sale of the Securities by the Issuers, the net proceeds received by such Participant from the sale of Securities, Exchange Securities or Private Exchange Notes pursuant to such Registration Statement). The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers and the Guarantors on the one hand, or the Participants on the other hand, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement or omission, and any other equitable considerations appropriate in the circumstances. The parties agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this paragraph (e). Notwithstanding any other provision of this paragraph (e), no Participant shall be obligated to make contributions hereunder that in the aggregate exceed the total discounts, commissions and other compensation or net proceeds, as applicable, on the sale of Securities received by such Participant in connection with the sale of the Securities, less the aggregate amount of any damages that such Participant has otherwise been required to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material fact, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (e), each person, if any, who controls a Participant within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Participants, and each director, member or manager, as applicable, of each of the Issuers and the Guarantors, each officer of each of the Issuers and

 

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the Guarantors and each person, if any, who controls each of the Issuers and the Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Issuers and the Guarantors.

 

  8. Rules 144 and 144A

The Issuers and the Guarantors covenant and agree that they will use their respective commercially reasonable efforts to file the reports required to be filed by them under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, if at any time the Issuers and the Guarantors are not required to file such reports and do not otherwise file such reports pursuant to the terms of the Indenture, the Issuers and the Guarantors will, upon the request of any Holder or beneficial owner of Registrable Securities, make available such information necessary to permit sales pursuant to Rule 144A. The Issuers and the Guarantors further covenant and agree, for so long as any Registrable Securities remain outstanding that they will take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act and Rule 144A unless the Issuers and the Guarantors are then subject to Section 13 or 15(d) of the Exchange Act or otherwise file such reports pursuant to the terms of the Indenture and reports filed thereunder satisfy the information requirements of Rule 144A then in effect.

 

  9. Underwritten Registrations .

The Issuers and the Guarantors shall not be required to assist in an underwritten offering unless requested by the Holders of a majority in aggregate principal amount of the Registrable Securities. If any of the Registrable Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Securities included in such offering and shall be reasonably acceptable to the Issuers and the Guarantors.

No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

  10. Miscellaneous

(a) No Inconsistent Agreements . None of the Issuers or the Guarantors have as of the date hereof entered, and none of the Issuers or the Guarantors shall after the date of this Agreement enter, into any agreement with respect to any of the Issuers’ or Guarantors’ securities that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder

 

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do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuers’ or Guarantors’ other issued and outstanding securities, if any, under any such agreements. None of the Issuers or the Guarantors will enter into any agreement with respect to any of the Issuers’ or Guarantors’ securities which will grant to any Person piggy-back registration rights with respect to any Registration Statement.

(b) Amendments and Waivers . The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of (I) the Issuers and the Guarantors, and (II) (A) the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Securities and (B) in circumstances that would adversely affect the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a majority in aggregate principal amount of the Exchange Notes held by all Participating Broker-Dealers; provided , however , that Section 7 hereof and this Section 10(b) may not be amended, modified or supplemented without the prior written consent of each Holder and each Participating Broker-Dealer (including any person who was a Holder or Participating Broker-Dealer of Registrable Securities or Exchange Securities, as the case may be, disposed of pursuant to any Registration Statement) affected by any such amendment, modification or supplement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Securities whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Securities may be given by Holders of at least a majority in aggregate principal amount of the Registrable Securities being sold pursuant to such Registration Statement; and provided , further , that no consent is necessary from any Holder or Participating Broker-Dealer in the event that this Agreement is amended, modified or supplemented for the purpose of curing any ambiguity, defect or inconsistency that does not adversely affect the rights of any Holder or Participating Broker-Dealer (as applicable).

(c) Notices . All notices and other communications (including, without limitation, any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or facsimile:

(i) If to a Holder of the Registrable Securities or any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the registrar under the Indenture, with a copy in like manner to the Initial Purchasers as follows:

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Facsimile: (212) 816-7912

Attention: General Counsel

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

 

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New York, New York 10036

Facsimile: (917) 267-7085

Attention: Legal Department

with a copy to:

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

Facsimile: (212) 378-2500

Attention: William J. Miller, Esq.

(ii) If to the Initial Purchasers, at the address specified in Section 10(d)(i) hereof;

(iii) If to the Issuers, at the address as follows:

c/o The Blackstone Group

345 Park Avenue

New York, NY 10154

Facsimile: (212) 583-5749

Attention: Vikrant Sawhney

Summit Materials, LLC

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, DC 20007

Facsimile: (202) 339-9517

Attention: Chief Financial Officer

with a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Facsimile: (212) 455-2502

Attention: Edward P. Tolley III, Esq.

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; one Business Day after being timely delivered to a next-day air courier; and upon receipt of confirmation, if sent by facsimile.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address and in the manner specified in such Indenture.

 

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(d) Successors and Assigns . This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Registrable Securities; provided, however , that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Registrable Securities from such Holder and provided , further , that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture.

(e) Counterparts . This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(f) Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(g) Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(h) Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their respective commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(i) Notes Held by Either Issuer or Any of the Guarantors or Any of Their Respective Affiliates . Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by either Issuer or any of the Guarantors or any of their respective controlled affiliates (as such term is defined in Rule 405) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

(j) Third-Party Beneficiaries . Holders of Registrable Securities and Participating Broker-Dealers are intended third-party beneficiaries of this Agreement, and this Agreement may be enforced by such Persons to the extent necessary to protect the rights of the Holders hereunder.

 

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(k) Entire Agreement . This Agreement, together with the Purchase Agreement and the Indenture, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein and any and all prior oral or written agreements, representations, or warranties, contracts, understandings, correspondence, conversations and memoranda between the Holders and Initial Purchasers on the one hand and the Issuers and the Guarantors on the other, or between or among any agents, representatives, parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof and thereof are merged herein and replaced hereby.

[ Remainder of Page Intentionally Blank ]

 

-28-


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

Issuers:
SUMMIT MATERIALS, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Executive Vice President
SUMMIT MATERIALS FINANCE CORP.
By:  

/s/ DAPHNE TONG

  Name:   Daphne Tong
  Title:   President

[Signature Page to Registration Rights Agreement]


Guarantors:
ELAM CONSTRUCTION, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature Page to Registration Rights Agreement]


AUSTIN MATERIALS, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
CONTINENTAL CEMENT COMPANY, L.L.C.
By:  

R. MICHAEL JOHNSON

  Name:   R. Michael Johnson
  Title:   President / CEO
CORNEJO QUALITY STONE LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
KBDJ MATERIALS, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
KILGORE COMPANIES, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
RK HALL, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature Page to Registration Rights Agreement]


SUMMIT MATERIALS COMPANIES I, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS CORPORATIONS I, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS HOLDINGS I, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS HOLDINGS II, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
CORNEJO & SONS, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature Page to Registration Rights Agreement]


HAMM ASPHALT, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
HAMM, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
N.R. HAMM CONTRACTOR, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
N.R. HAMM QUARRY, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
BOURBON LIMESTONE COMPANY
By:  

/s/ ANTHONY KEENAN

  Name:   Anthony Keenan
  Title:   Assistant Secretary
GLASS AGGREGATES, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature Page to Registration Rights Agreement]


HINKLE CONTRACTING COMPANY, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
KENTUCKY HAULING, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
SOUTH CENTRAL KENTUCKY LIMESTONE, LLC
By:   Glass Aggregates, LLC, its sole member
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
CON-AGG OF MO, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
FISCHER QUARRIES, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature Page to Registration Rights Agreement]


QUARRY PROPERTIES, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Manager
ELAM PAVING, INC.
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
ASPHALT PAVING COMPANY OF AUSTIN, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Manager
B&H CONTRACTING, L.P.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
INDUSTRIAL ASPHALT, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Manager

 

[Signature Page to Registration Rights Agreement]


J.D. RAMMING PAVING CO., LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
KBDJ, L.P.
By:   KBDJ Materials, LLC, its general partner
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
RAMMING TRANSPORTATION CO., LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
R.K. HALL CONSTRUCTION, LTD.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
RKH CAPITAL, L.L.C.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature Page to Registration Rights Agreement]


RTI EQUIPMENT CO., LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
RTI HOT MIX, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
SCS MATERIALS, L.P.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
ALTAVIEW CONCRETE, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
B&B RESOURCES, INC.
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President

 

[Signature Page to Registration Rights Agreement]


KILGORE EQUIPMENT, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
KILGORE TRUCKING, LLC
By:  

/s/ MICHAEL BRADY

  Name:   Michael Brady
  Title:   Vice President
PEAK CONSTUCTION MATERIALS, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
PEAK MANAGEMENT, L.C.
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
SALT LAKE VALLEY SAND & GRAVEL, INC.
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
VALLEY READY MIX, INC.
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President

 

[Signature Page to Registration Rights Agreement]


WASATCH CONCRETE PUMPING, LLC
By:  

/s/ ANYA FONINA

  Name:   Anya Fonina
  Title:   Vice President
WIND RIVER MATERIALS, LLC
By:  

/s/ JASON KILGORE

  Name:   Jason Kilgore
  Title:   Manager

 

[Signature Page to Registration Rights Agreement]


The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CITIGROUP GLOBAL MARKETS INC.
Acting on behalf of itself
and as a Representative of
the several Initial Purchasers
By:   Citigroup Global Markets Inc.
By:  

[Illegible Signature]

  Authorized Signatory
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Acting on behalf of itself
and as a Representative of
the several Initial Purchasers
By:   Merrill Lynch, Pierce, Fenner & Smith Incorporated
By:  

/s/ SARANG GADKARI

  Authorized Signatory
  Name:   Sarang Gadkari
  Title:   Managing Director

 

[Signature Page to Registration Rights Agreement]

Exhibit 5.1

March 27, 2013

Summit Materials, LLC

Summit Materials Finance Corp.

2900 K Street N.W., Suite 100

Harbourside North Tower Building

Washington, D.C. 20007

Ladies and Gentlemen:

We have acted as counsel to Summit Materials, LLC, a Delaware limited liability company (the “Company”), and Summit Materials Finance Corp., a Delaware corporation (the “Co-Issuer” and, together with the Company, the “Issuers”), and to the subsidiaries of the Company listed on Schedule I (the “Guarantors”), in connection with the Registration Statement on Form S-4 (the “Registration Statement”) filed by the Issuers and the Guarantors with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, relating to the issuance by the Issuers of up to $250,000,000 aggregate principal amount of 10.5% Senior Notes due 2020 (the “Exchange Securities”) and the issuance by the Guarantors of guarantees (the “Exchange Guarantees”) with respect to the Exchange Securities. The Exchange Securities and the Exchange Guarantees will be issued under an indenture, dated as of January 30, 2012 (as amended by the first supplemental indenture, dated as of March 13, 2012, the “Indenture”), among the Issuers, the Guarantors and Wilmington Trust, National Association, as trustee (the “Trustee”). The Exchange Securities and the Exchange Guarantees will be offered by the Issuers in exchange for their outstanding 10.5% Senior Notes due 2020 that were issued on January 30, 2012.


We have examined the Registration Statement and the Indenture (including the form of Exchange Security and Exchange Guarantee set forth therein), which has been filed with the Commission as an exhibit to the Registration Statement. We also have examined the originals, or duplicates or certified or conformed copies, of such records, agreements, documents and other instruments and have made such other investigations as we have deemed relevant and necessary in connection with the opinions hereinafter set forth. As to questions of fact material to this opinion, we have relied upon certificates or comparable documents of public officials and of officers and representatives of the Issuers and the Guarantors.

In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies and the authenticity of the originals of such latter documents. We also have assumed that the Indenture is the valid and legally binding obligation of the Trustee.

Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that:

1. When the Exchange Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture pursuant to the exchange offer described in the Registration Statement, the Exchange Securities will constitute valid and legally binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms.

 

-2-


2. When (a) the Exchange Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture pursuant to the exchange offer described in the Registration Statement and (b) the Exchange Guarantees have been duly issued, the Exchange Guarantees will constitute valid and legally binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms.

Our opinions set forth above are subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing.

Insofar as the opinions expressed herein relate to or are dependent upon matters governed by (i) the respective laws of the States of Colorado, New Mexico, Utah and Wyoming, we have relied upon the opinion of Holland & Hart LLP, (ii) the respective laws of the States of Kansas and Missouri, we have relied upon the opinion of Kutak Rock LLP, (iii) the law of the State of Kentucky, we have relied upon the opinion of Stites & Harbison PLLC and (iv) the law of the State of Texas, we have relied upon the opinion of Bell Nunnally & Martin LLP, each dated the date hereof and our opinions are subject to the qualifications, assumptions, limitations and exceptions set forth therein.

We do not express any opinion herein concerning any law other than the law of the State of New York, the Delaware General Corporation Law and the Delaware Limited Liability Company Act and, to the extent set forth herein, the respective laws of the States of Colorado, Kansas, Kentucky, Missouri, New Mexico, Texas, Utah and Wyoming.

 

-3-


We hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement and to the use of our name under the caption “Legal Matters” in the Prospectus included in the Registration Statement.

 

Very truly yours,
/s/ SIMPSON THACHER & BARTLETT LLP
SIMPSON THACHER & BARTLETT LLP

 

-4-


SCHEDULE I

 

Subsidiary

  

State of Incorporation

or Organization

Austin Materials, LLC    Delaware
Continental Cement Company, L.L.C.    Delaware
Kilgore Companies, LLC    Delaware
Norris Quarries, LLC    Delaware
RK Hall, LLC    Delaware
Summit Materials Companies I, LLC    Delaware
Summit Materials Corporations I, Inc.    Delaware
Summit Materials Holdings I, LLC    Delaware
Summit Materials Holdings II, LLC    Delaware
Elam Construction, Inc.    Colorado
Cornejo & Sons, L.L.C.    Kansas
Hamm Asphalt, LLC    Kansas
Hamm, Inc.    Kansas
N.R. Hamm Contractor, LLC    Kansas
N.R. Hamm Quarry, LLC    Kansas
Bourbon Limestone Company    Kentucky
Glass Aggregates, LLC    Kentucky
Hinkle Contracting Company, LLC    Kentucky
Kentucky Hauling, Inc.    Kentucky
South Central Kentucky Limestone, LLC    Kentucky
Con-Agg of MO, L.L.C.    Missouri
Fischer Quarries, L.L.C.    Missouri
Quarry Properties, L.L.C.    Missouri
Elam Paving, Inc.    New Mexico
B&H Contracting, L.P.    Texas
Industrial Asphalt, LLC    Texas
R.K. Hall Construction, Ltd.    Texas
RKH Capital, L.L.C.    Texas
SCS Materials, L.P.    Texas
Altaview Concrete, LLC    Utah
B&B Resources, Inc.    Utah
Kilgore Equipment, LLC    Utah
Kilgore Trucking, LLC    Utah
Peak Construction Materials, LLC    Utah
Peak Management, L.C.    Utah
Salt Lake Valley Sand & Gravel, Inc.    Utah
Valley Ready Mix, Inc.    Utah
Wasatch Concrete Pumping, LLC    Utah
Wind River Materials, LLC    Wyoming

Exhibit 5.2

March 27, 2013

Summit Materials, LLC

Summit Materials Finance Corp.

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, D.C. 20007

Ladies and Gentlemen:

We have acted as counsel to Elam Construction, Inc., a Colorado corporation, Elam Paving, Inc., a New Mexico corporation, Altaview Concrete, LLC, a Utah limited liability company, B & B Resources, Inc., a Utah corporation, Kilgore Equipment, LLC, a Utah limited liability company, Kilgore Trucking, LLC, a Utah limited liability company, Peak Construction Materials, LLC, a Utah limited liability company, Salt Lake Valley Sand & Gravel, Inc., a Utah corporation, Valley Ready Mix, Inc., a Utah corporation, Wasatch Concrete Pumping, LLC, a Utah limited liability company, and Wind River Materials, LLC, a Wyoming limited liability company (collectively, the “Guarantors”), in connection with the Registration Statement on Form S-4 (the “Registration Statement”) filed by Summit Materials, LLC, a Delaware limited liability company (the “Company”), Summit Materials Finance Corp., a Delaware corporation (together with the Company, the “Issuers”) and the guarantors party thereto with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), relating to the issuance by the Issuers of up to $250,000,000 aggregate principal amount of 10.5% Senior Notes due 2020 (the “Exchange Securities”) and the issuance by the Guarantors of guarantees (the “Exchange Guarantees”) with respect to the Exchange Securities. The Exchange Securities and the Exchange Guarantees will be issued under an indenture, dated as of January 30, 2012 (as amended by the first supplemental indenture, dated as of March 13, 2012, the “Indenture”), among the Issuers, the Guarantors, the other guarantors named therein, and Wilmington Trust, National Association, as trustee (the “Trustee”). The Exchange Securities and the Exchange Guarantees will be offered by the Issuers in exchange for their outstanding 10.5% Senior Notes due 2020 that were issued on January 30, 2012.

We have examined the Registration Statement and the Indenture (including the form of Exchange Security and Exchange Guarantee set forth therein), which has been filed with the Commission as an exhibit to the Registration Statement. We have also examined the articles of incorporation or articles of organization and bylaws or operating agreements, as applicable, and certain corporate records of the Guarantors, and such other agreements, instruments and documents, and such matters of law and fact as we have deemed necessary or appropriate to enable us to render the opinions expressed below. In establishing certain facts material to our opinions, we have relied, in each case without independent verification thereof, upon certificates and assurances of public officials, the assumptions set forth elsewhere herein and certificates of officers of the Guarantors reasonably believed by us to be appropriate sources of information, as to the accuracy of factual matters.

Based upon the foregoing and subject to the assumptions, exceptions and qualifications stated herein, we are of the opinion that:

1. The Indenture has been duly authorized, executed and delivered by each Guarantor.


2. Each Guarantor has duly authorized its Exchange Guarantee.

3. The execution, delivery and performance by each Guarantor of the Indenture and its Exchange Guarantee does not violate any provision of statutory law or regulation of the State of Colorado, New Mexico, Utah or Wyoming, as applicable to each respective Guarantor.

The opinions expressed herein are subject to the following qualifications, assumptions and limitations:

(a) In connection with rendering the opinions set forth here in, we have assumed, without independent investigation, the genuineness of all signatures, the legal capacity of all individuals who have executed any of the documents reviewed by us, the authenticity of all documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as copies thereof, and the authenticity of the originals of such latter documents.

(b) The Exchange Securities and Exchange Guarantees will be issued as described in the Registration Statement.

(c) This opinion is limited to the laws of the States of Colorado, New Mexico, Utah, and Wyoming as applicable to each respective Guarantor.

We consent to the use of our name in the Registration Statement and in the prospectus in the Registration Statement as it appears in the caption “Legal Matters” and to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we come within the category of persons whose consent is required by the Act or by the rules and regulations under the Act. We consent to the reliance on this opinion by Simpson Thacher & Bartlett LLP for purposes of their opinion to you dated the date hereof and filed as Exhibit 5.1 to the Registration Statement.

 

Very truly yours,
/s/ Holland & Hart LLP
H OLLAND  & H ART LLP

Exhibit 5.3

March 27, 2013

Summit Materials, LLC

Summit Materials Finance Corp.

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, D.C. 20007

 

  Re: Registration Statement on Form S-4

Ladies and Gentlemen:

We have acted as special Missouri counsel to Con-Agg of MO, L.L.C., a Missouri limited liability company, Fischer Quarries, L.L.C., a Missouri limited liability company, and Quarry Properties, L.L.C., a Missouri limited liability company (each individually, a “ Missouri Guarantor ” and collectively, the “ Missouri Guarantors ”) in connection with the Registration Statement on Form S-4 (the “ Registration Statement ) filed by Summit Materials, LLC, a Delaware limited liability company (the “ Issuer ”), Summit Materials Finance Corp., a Delaware corporation (together with the Issuer, the “ Issuers ”), the Missouri Guarantors and certain other guarantors named therein (collectively with the Missouri Guarantors, the “ Guarantors ”) with the Securities and Exchange Commission (the “ Commission ”), under the Securities Act of 1933, as amended (the “ Act ), and the rules and regulations under the Act. The Registration Statement relates to the registration under the Act of up to $250,000,000 aggregate principal amount of the Issuers’ 10.5% Senior Notes due 2020 to be issued in connection with the pending transaction (the “ Exchange Notes ”) and the guarantees of the Exchange Notes by the Guarantors (the “ Exchange Guarantees ”). Capitalized terms used and not otherwise defined in this opinion have the respective meanings given them in the Registration Statement.

The Exchange Notes and the Exchange Guarantees are to be offered in exchange for the Issuers’ outstanding $250,000,000 aggregate principal amount of 10.5% Senior Notes due 2020 issued on or about January 30, 2012 (the “ Initial Notes ”) and the guarantees of the Initial Notes by the Guarantors. The Exchange Notes and the Exchange Guarantees will be issued by the Issuers and the Guarantors in accordance with the terms of the Indenture dated as of January 30, 2012 (as amended by the First Supplemental Indenture dated as of March 13, 2012, the “ Indenture ”), by and among the Issuers, the Guarantors and Wilmington Trust, National Association, as trustee.

In connection with this opinion, we have examined the originals or copies, certified to our satisfaction, of the Registration Statement and the Indenture, which has been filed with the Commission as an exhibit to the Registration Statement (collectively, the “ Documents ”), and of the Missouri Guarantors’ enabling resolutions, each dated January 17, 2012 (the “ Enabling Resolutions ”). We also have examined such other records, agreements, documents and other instruments and have made such other investigations as we have deemed relevant and necessary in connection with the opinions hereinafter set forth. As to questions of fact material to this opinion, we have relied upon certificates or comparable documents of public officials and of officers and representatives of the Issuers and the Missouri Guarantors.


March 27, 2013

Page 2

 

We have not made or undertaken to make any investigation as to factual matters or as to the accuracy or completeness of any representation, warranty, data or any other information, whether written or oral, that may have been made by or on behalf of the parties to the Documents or otherwise.

In rendering this opinion, we have assumed, without investigation, verification or inquiry, (a) the genuineness of all signatures, (b) the authenticity of all documents submitted to us as originals, (c) the legal capacity of natural persons executing such documents, (d) the authenticity and conformity to original documents of documents submitted to us as certified photostatic, facsimile or electronically transmitted copies, (e) the completeness and accuracy of all corporate records provided to us, and (f) that the Enabling Resolutions of each of the Missouri Guarantors are in full force and effect and have not been amended, rescinded or superseded.

Based upon the foregoing, and subject to the assumptions, limitations and qualifications set forth herein, we are of the following opinion:

 

  1. The Indenture has been duly authorized, executed and delivered by each of the Missouri Guarantors.

 

  2. Each of the Missouri Guarantors has duly authorized its Exchange Guarantee.

 

  3. The execution and delivery of the Indenture, including the Exchange Guarantees, by the Missouri Guarantors and the performance by the Missouri Guarantors of their respective obligations thereunder do not violate any Missouri law, rule or regulation or administrative or court decree applicable to such Missouri Guarantor.

The opinions set forth herein are limited to matters governed by the laws of the State of Missouri, and we express no opinion with regard to any matter which may be governed by the law of any other jurisdiction, including the laws of the United States. Our opinions herein contained are subject to the following qualifications and limitations:

 

  A. We express no opinion as to the validity or enforceability of any provision in the Documents. We express no opinion as to any choice of law or choice of judicial forum provisions contained in any of the Documents.

 

  B. We express no opinion with respect to any state or federal securities laws, rules or regulations or any “blue sky” laws, rules or regulations, including, without limitation, the Act, the Securities Act of 1934, as amended, and the Investment Company Act of 1940, as amended, in connection with any Document or the offering, sale or issuance of the Exchange Notes. We express no opinion with regard to the tax effect or tax implication of any provision of the Documents or the interest on the Exchange Notes.

 

  C.

We have assumed, with your permission, that there has been no (i) resolution, consent, approval, or other action taken by any Missouri Guarantor that would expressly or by implication repeal, amend, modify, rescind or terminate such entities’ prior agreement to be bound by all terms and conditions of the terms of the Indenture originally in effect as of


March 27, 2013

Page 3

 

  January 30, 2012; and (ii) rule, regulation or administrative or court decree entered or imposed against any Missouri Guarantor subsequent to January 30, 2012, that would be violated by the execution and delivery of the Indenture by any Missouri Guarantor or by any of the performance of any of their respective obligations thereunder.

This opinion covers only the specific issues regarding the transaction that are expressly described in this letter and no additional opinions should be implied or inferred with respect to any other aspects of the transaction. This opinion letter is provided as a legal opinion only and not as a guarantee or warranty of the matters discussed herein.

Our opinions are intended to apply only to those facts and circumstances that exist as of the date hereof, and we assume no obligation or responsibility to update or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, any changes in laws that may hereafter occur, or to inform the addressee or any other party of any change in circumstances occurring after the date of this opinion that would alter the opinions rendered herein.

This opinion shall not be construed as or deemed to be a guaranty or insuring agreement that a court considering such matters would not rule in a manner contrary to the opinions set forth herein.

We consent to the use of our name in the Registration Statement and in the prospectus in the Registration Statement as it appears in the caption “Legal Matters” and to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we come within the category of persons who are considered “experts” within the meaning of Section 11 of the Act or whose consent is required by the Act or by the rules and regulations under the Act. We consent to the reliance on this opinion by Simpson Thacher & Bartlett LLP for purposes of their opinion to you dated the date hereof and filed as Exhibit 5.1 to the Registration Statement.

 

Very truly yours,
/s/ Kutak Rock LLP

Exhibit 5.4

March 27, 2013

Summit Materials, LLC

Summit Materials Finance Corp.

2900 K Street NW, Suite 100

Harbourside North Tower Building

Washington, D.C. 20007

 

  Re: Registration Statement on Form S-4

Ladies and Gentlemen:

We have acted as special Kansas counsel to Hamm, Inc., a Kansas corporation, Hamm Asphalt, LLC, a Kansas limited liability company, N. R. Hamm Contractor, LLC, a Kansas limited liability company, N. R. Hamm Quarry, LLC, a Kansas limited liability company, and Cornejo & Sons, L.L.C., a Kansas limited liability company (each individually, a “ Kansas Guarantor ” and collectively, the “ Kansas Guarantors ”) in connection with the Registration Statement on Form S-4 (the “ Registration Statement ) filed by Summit Materials, LLC, a Delaware limited liability company (the “ Issuer ”), Summit Materials Finance Corp., a Delaware corporation (together with the Issuer, the “ Issuers ”), the Kansas Guarantors and certain other guarantors named therein (collectively with the Kansas Guarantors, the “ Guarantors ”) with the Securities and Exchange Commission (the “ Commission ”), under the Securities Act of 1933, as amended (the “ Act ), and the rules and regulations under the Act. The Registration Statement relates to the registration under the Act of up to $250,000,000 aggregate principal amount of the Issuers’ 10.5% Senior Notes due 2020 to be issued in connection with the pending transaction (the “ Exchange Notes ”) and the guarantees of the Exchange Notes by the Guarantors (the “ Exchange Guarantees ”). Capitalized terms used and not otherwise defined in this opinion have the respective meanings given them in the Registration Statement.

The Exchange Notes and the Exchange Guarantees are to be offered in exchange for the Issuers’ outstanding $250,000,000 aggregate principal amount of 10.5% Senior Notes due 2020 issued on or about January 30, 2012 (the “ Initial Notes ”) and the guarantees of the Initial Notes by the Guarantors. The Exchange Notes and the Exchange Guarantees will be issued by the Issuers and the Guarantors in accordance with the terms of the Indenture dated as of January 30, 2012 (as amended by the First Supplemental Indenture dated as of March 13, 2012, the “ Indenture ”), by and among the Issuers, the Guarantors and Wilmington Trust, National Association, as trustee.

In connection with this opinion, we have examined the originals or copies, certified to our satisfaction, of the Registration Statement and the Indenture, which has been filed with the Commission as an exhibit to the Registration Statement (collectively, the “ Documents ”), and of the Kansas Guarantors’ enabling resolutions, each dated January 17, 2012 (the “ Enabling Resolutions ”). We also have examined such other records, agreements, documents and other instruments and have made such other investigations as we have deemed relevant and necessary in connection with the opinions hereinafter set forth. As to questions of fact material to this opinion, we have relied upon certificates or comparable documents of public officials and of officers and representatives of the Issuers and the Kansas Guarantors.


March 27, 2013

Page 2

 

We have not made or undertaken to make any investigation as to factual matters or as to the accuracy or completeness of any representation, warranty, data or any other information, whether written or oral, that may have been made by or on behalf of the parties to the Documents or otherwise.

In rendering this opinion, we have assumed, without investigation, verification or inquiry, (a) the genuineness of all signatures, (b) the authenticity of all documents submitted to us as originals, (c) the legal capacity of natural persons executing such documents, (d) the authenticity and conformity to original documents of documents submitted to us as certified photostatic, facsimile or electronically transmitted copies, (e) the completeness and accuracy of all corporate records provided to us, and (f) that the Enabling Resolutions of each of the Kansas Guarantors are in full force and effect and have not been amended, rescinded or superseded.

Based upon the foregoing, and subject to the assumptions, limitations and qualifications set forth herein, we are of the following opinion:

 

  1. The Indenture has been duly authorized, executed and delivered by each of the Kansas Guarantors.

 

  2. Each of the Kansas Guarantors has duly authorized its Exchange Guarantee.

 

  3. The execution and delivery of the Indenture, including the Exchange Guarantees, by the Kansas Guarantors and the performance by the Kansas Guarantors of their respective obligations thereunder do not violate any Kansas law, rule or regulation or administrative or court decree applicable to such Kansas Guarantor.

The opinions set forth herein are limited to matters governed by the laws of the State of Kansas, and we express no opinion with regard to any matter which may be governed by the law of any other jurisdiction, including the laws of the United States. Our opinions herein contained are subject to the following qualifications and limitations:

 

  A. We express no opinion as to the validity or enforceability of any provision in the Documents. We express no opinion as to any choice of law or choice of judicial forum provisions contained in any of the Documents.

 

  B. We express no opinion with respect to any state or federal securities laws, rules or regulations or any “blue sky” laws, rules or regulations, including, without limitation, the Act, the Securities Act of 1934, as amended, and the Investment Company Act of 1940, as amended, in connection with any Document or the offering, sale or issuance of the Exchange Notes. We express no opinion with regard to the tax effect or tax implication of any provision of the Documents or the interest on the Exchange Notes.

 

  C.

We have assumed, with your permission, that there has been no (i) resolution, consent approval, or other action taken by any Kansas Guarantor that would expressly or by implication repeal, amend, modify, rescind or terminate such entities’ prior agreement to be bound by all terms and conditions of the terms of the Indenture originally in effect as of January 30, 2012; and (ii) rule,


March 27, 2013

Page 3

 

  regulation or administrative or court decree entered or imposed against any Kansas Guarantor subsequent to January 30, 2012, that would be violated by the execution and delivery of the Indenture by any Kansas Guarantor or by any of the performance of any of their respective obligations thereunder.

This opinion covers only the specific issues regarding the transaction that are expressly described in this letter and no additional opinions should be implied or inferred with respect to any other aspects of the transaction. This opinion letter is provided as a legal opinion only and not as a guarantee or warranty of the matters discussed herein.

Our opinions are intended to apply only to those facts and circumstances that exist as of the date hereof, and we assume no obligation or responsibility to update or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, any changes in laws that may hereafter occur, or to inform the addressee or any other party of any change in circumstances occurring after the date of this opinion that would alter the opinions rendered herein.

This opinion shall not be construed as or deemed to be a guaranty or insuring agreement that a court considering such matters would not rule in a manner contrary to the opinions set forth herein.

We consent to the use of our name in the Registration Statement and in the prospectus in the Registration Statement as it appears in the caption “Legal Matters” and to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we come within the category of persons who are considered “experts” within the meaning of Section 11 of the Act or whose consent is required by the Act or by the rules and regulations under the Act. We consent to the reliance on this opinion by Simpson Thacher & Bartlett LLP for purposes of their opinion to you dated the date hereof and filed as Exhibit 5.1 to the Registration Statement.

 

Very truly yours,
/s/ Kutak Rock LLP

Exhibit 5.5

March 27, 2013

Summit Materials, LLC

Summit Materials Finance Corp.

2900 K Street N.W., Suite 100

Harbourside North Tower Building

Washington, D.C. 20007

Ladies and Gentlemen:

We have acted as Kentucky counsel to (i) Hinkle Contracting Company, LLC, a Kentucky limited liability company, (ii) Glass Aggregates, LLC, a Kentucky limited liability company, f/k/a Glass Paving and Stone, LLC, (iii) Kentucky Hauling, Inc., a Kentucky corporation, (iv) South Central Kentucky Limestone, LLC, a Kentucky limited liability company, and (v) Bourbon Limestone Company, a Kentucky corporation (collectively referred to as the “ Kentucky Guarantors ”) in connection with the Registration Statement on Form S-4 (the “ Registration Statement ”) filed by Summit Materials, LLC and Summit Materials Finance Corp. (the “ Issuers ”), the Kentucky Guarantors and certain other subsidiaries of Summit Materials, LLC named therein (the “ Guarantors ”) with the Securities and Exchange Commission (the “ Commission ”) under the Securities Act of 1933, as amended (the “ Act ”), relating to the issuance by the Issuers of up to $250,000,000 aggregate principal amount 10.5% Senior Notes due 2020 (the “ Exchange Securities ”) and the issuance by the Guarantors of guarantees (the “ Exchange Guarantees ”) with respect to the Exchange Securities issued under an indenture, dated as of January 30, 2012 (as amended by the first supplemental indenture, dated as of March 13, 2012, the “ Indenture ”), among the Issuers, the Guarantors and Wilmington Trust, National Association, as trustee.

In our capacity as Kentucky counsel to the Kentucky Guarantors, we have reviewed and relied upon copies of the Registration Statement and the Indenture (collectively, the “ Transaction Documents ”). We have also reviewed and relied without investigation on an Opinion Certificate, dated March 27, 2013, executed by Michael Brady, the vice president of Summit Materials Companies I, LLC, the sole member of Hinkle Contracting Company, LLC, on behalf of the Kentucky Guarantors, with respect to the matters described therein (the “ Support Certificate ”) and originals or copies, certified or otherwise identified to our satisfaction, of such agreements, instruments, resolutions, certificates and documents (including without limitation, those delivered pursuant to the Transaction Documents) and company and other records as we have deemed necessary or appropriate as a basis for the opinions expressed below (collectively, the “ Support Documents ”).

We have made no independent investigation as to factual matters, except as expressly stated herein. With respect to factual matters, and without independent investigation, we have


Summit Materials, LLC

Summit Materials Finance Corp.

March 27, 2013

Page 2

 

relied upon and assumed the accuracy and completeness of (i) the Support Certificate and the Support Documents, and (ii) certificates and other documents obtained from public officials. We use the term “to our knowledge” and similar terms to indicate that we have not made any inquiry or investigation into factual matters, and that our opinions are therefore limited in scope and based solely on the actual knowledge of the attorneys in our firm who have been actively involved in the review of the Transaction Documents and the preparation of this opinion.

We have assumed the legal capacity of all individuals, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as certified, photo static, or conformed copies, and the authenticity of the originals of such documents. We also have assumed the due authorization, execution and delivery of all documents to be delivered by all parties other than the Kentucky Guarantors, and the validity, binding effect and enforceability of all documents with respect to all parties. We have assumed the final and executed versions of each of the Transaction Documents are identical to the drafts submitted to us and upon which our opinions are based.

We have assumed that all blanks in the Transaction Documents have been or will be properly filled in and all necessary exhibits and schedules to the Transaction Documents have been or will be attached thereto and are accurate and complete.

We have assumed that there are no other agreements, understandings or negotiations among the parties that would modify the terms of the Transaction Documents.

Based on the foregoing, and subject to the assumptions, qualifications and limitations set forth herein, we are of the opinion that:

1. Each of the Kentucky Guarantors has taken all necessary company or corporate action, as applicable, to authorize the execution and delivery of the Indenture, including the Exchange Guarantees contained therein.

2. Each of the Kentucky Guarantors has duly executed and delivered the Indenture, including the Exchange Guarantees contained therein.

3. The execution and delivery by each of the Kentucky Guarantors of the Indenture, including the Exchange Guarantees contained therein, and the performance of the obligations of each of the Kentucky Guarantors under the terms thereof, do not violate applicable provisions of Kentucky statutory law or regulation, or violate any administrative or court decree that to our knowledge is binding upon each of the Kentucky Guarantors.


Summit Materials, LLC

Summit Materials Finance Corp.

March 27, 2013

Page 3

 

Our opinions are based solely upon the laws of the Commonwealth of Kentucky. We express no opinion concerning the laws of any other jurisdiction, including, without limitation, the federal laws of the United States of America, or whether such laws may apply, under a conflict of laws analysis or otherwise.

Our opinions are subject to the effects of applicable bankruptcy, insolvency, reorganization, receivership, liquidation, conservatorship, reorganization, moratorium and other federal or state laws or constitutions in effect from time to time affecting the rights and remedies of creditors generally, including, without limitation, fraudulent conveyance laws, preferential conveyance laws, and judicially developed doctrines relevant to any of the foregoing laws.

We express no opinion as to the validity or enforceability of any of the Transaction Documents or other agreements or instruments.

We express no opinion as to matters of usury, interest, late charges, loan charges or loan fees, or as to any provisions of the Transaction Documents relating to any of the foregoing.

We express no opinion as to prepayment penalties, prepayment fees, yield-maintenance payments, exit fees, early termination fees, prepayment premiums, defeasance or the like.

Because we did not observe the act of the signing and delivery of the Indenture, including the Exchange Guarantees contained therein, our numerical opinion 2 above is based solely on the Support Certificate.

We express no opinion as to matters relating to securities or blue sky laws of any jurisdiction or any rules or regulations thereunder.

We have not made any investigation concerning the financial resources of the Issuers or the Guarantors and we express no opinion as to the accuracy or completeness of any such information that may have been relied upon in the issuance of the Exchange Securities pursuant to the Transaction Documents, or as to the solvency of the Issuers or the Guarantors either before or after the transactions described in the Transaction Documents.

We wish to advise you that Buckner Hinkle, Jr. is a member of Stites & Harbison, PLLC and also an officer, director and/or direct or indirect owner of one or more of the Kentucky Guarantors. Mr. Hinkle, however, has not been involved in the review of the Transaction Documents or the preparation of this opinion.


Summit Materials, LLC

Summit Materials Finance Corp.

March 27, 2013

Page 4

 

Our opinion is rendered solely in connection with the transactions contemplated under the Registration Statement and may not be relied upon for any other purpose or in any other manner by any person other than the addressees hereof and other persons entitled to rely upon it pursuant to federal securities laws, except that we hereby consent to reliance upon this opinion by Simpson Thacher & Bartlett LLP for purposes of its opinion to you dated the date hereof and filed as Exhibit 5 to the Registration Statement. We hereby consent to the filing of this opinion with the Commission and the incorporation by reference of this opinion as an exhibit to the Registration Statement and to the references to this firm under the caption “Legal Matters” in the Registration Statement. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under the Act of by the rules and regulations of the Commission promulgated thereunder.

 

Very truly yours,
/s/ Stites & Harbison, PLLC
STITES & HARBISON, PLLC

DEL/WSR

Exhibit 5.6

T EL : 214-740-1400

F AX : 214-740-1499

March 27, 2013

Summit Materials, LLC

Summit Materials Finance Corp.

2900 K Street N.W., Suite 100

Harbourside North Tower Building

Washington, D.C. 20007

 

  Re: Registration Statement, dated as of March 27, 2013, filed by
Summit Materials, LLC, a Delaware limited liability company (the
Company ”), Summit Materials Finance Corp., a Delaware
corporation (“ Co-Issuer ” and together with the Company, the
Issuers ”) and the guarantors party thereto.

Ladies and Gentlemen:

We have acted as special counsel in the State of Texas (the “ State ”) to the guarantors named on Annex A attached hereto (each, a “ Guarantor ” and collectively, the Guarantors ”) in connection with the Registration Statement on Form S-4 (the “ Registration Statement ”) filed by the Issuers and the Guarantors with the Securities and Exchange Commission (the “ Commission ”) under the Securities Act of 1933, as amended (the “ Act ”) relating to the issuance by the Issuers of up to $250,000,000 aggregate principal amount of 10.5% Senior Notes due 2020 (the “ Exchange Securities ”) and the issuance by the Guarantors of guarantees (the “ Exchange Guarantees ”) with respect to the Exchange Securities. The Exchange Securities and Exchange Guarantees will be issued under an indenture dated as of January 30, 2012 (as amended by the first supplemental indenture dated as of March 13, 2012, the “ Indenture ”), among the Issuers, the Guarantors and Wilmington Trust, National Association, as trustee. The Exchange Securities and the Exchange Guarantees will be offered by the Issuers in exchange for their outstanding 10.5% Senior Notes due 2020 that were issued on January 30, 2012.

In connection with rendering the opinions expressed below, we have examined the following documents and instruments:

 

  (i) the Registration Statement; and

 

  (ii) the Indenture, which has been filed with the Commission as an exhibit to the Registration Statement.

We have also examined the certificate of formation or certificate of limited partnership, as applicable, of the Guarantors and such other agreements, instruments and documents, and such matters of law and fact as we have deemed necessary or appropriate to enable us to render the opinions below. In establishing certain facts material to our opinions, we have relied, in each case without independent verification thereof, upon certificates and assurances of public


S UMMIT M ATERIALS , LLC

M ARCH 27, 2013

Page 2

officials, the assumptions set forth elsewhere herein and certificates of officers and representatives of the Guarantors reasonably believed by us to be appropriate sources of information, as to the accuracy of factual matters. Based upon the foregoing and subject to the assumptions, exceptions and qualifications stated herein, we are of the opinion that:

 

  1. The Indenture, including the Exchange Guarantees contained therein, has been duly authorized, executed and delivered by each of the Guarantors.

 

  2. Neither the execution and delivery of the Indenture, including the respective Exchange Guarantees contained therein, by each of the Guarantors, nor the performance of the obligations of each of the Guarantors under the terms thereof, violates the laws of the State.

Other than as specifically stated herein, our opinions above do not cover or otherwise address any federal laws and regulations including, without limitation, securities laws and regulations (including, without limitation, the Act, Rule 10b-5 thereof, and the Securities Exchange Act of 1934, as amended, and any rules or regulations promulgated thereunder), or state “Blue Sky” laws and regulations.

We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement filed by the Issuers and the Guarantors with the Commission relating to the Exchange Offer in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act and to the reference to our firm contained under the heading “Legal Matters” in the prospectus included therein. In giving this consent, we do not hereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission. We understand and agree that Simpson Thacher & Bartlett LLP may rely upon this opinion as if it were an addressee hereof for the purpose of providing the opinion to be delivered by such firm in connection with the Registration Statement.

We are opining only as to the matters expressly set forth herein, and no opinion should be inferred as to the other matters including, without limitation, any opinions as to the enforceability of the Indenture or the Exchange Guarantees. This opinion is provided to you as a legal opinion only and not as a guaranty or warranty of the matters discussed herein.

 

Very truly yours,
/s/ Bell Nunnally & Martin LLP
BELL NUNNALLY & MARTIN LLP


A NNEX A

GUARANTORS

 

Asphalt Paving Company of Austin, LLC
B&H Contracting, L.P.
Industrial Asphalt, LLC
J.D. Ramming Paving Co., LLC
KBDJ, L.P.
Ramming Transportation Co., LLC
R.K. Hall Construction, Ltd.
RKH Capital, L.L.C.
RTI Equipment Co., LLC
RTI Hot Mix, LLC
SCS Materials, L.P.

Exhibit 10.1

EXECUTION VERSION

 

 

 

CREDIT AGREEMENT

Dated as of January 30, 2012

among

SUMMIT MATERIALS, LLC,

as the Borrower,

THE GUARANTORS PARTY HERETO FROM TIME TO TIME,

BANK OF AMERICA, N.A.,

as Administrative and Collateral Agent,

BANK OF AMERICA, N.A.,

as L/C Issuer and Swing Line Lender,

THE OTHER LENDERS PARTY HERETO FROM TIME TO TIME,

CITIGROUP GLOBAL MARKETS INC.,

as Syndication Agent,

and

BARCLAYS BANK PLC

and

REGIONS BANK,

as Co-Documentation Agents

 

 

BANK OF AMERICA, N.A.,

and

CITIGROUP GLOBAL MARKETS INC.,

as Joint Lead Arrangers,

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

CITIGROUP GLOBAL MARKETS INC.,

UBS SECURITIES LLC,

BARCLAYS CAPITAL,

CREDIT SUISSE SECURITIES (USA) LLC

and

DEUTSCHE BANK SECURITIES INC.,

as Joint Bookrunners

 

 

 


TABLE OF CONTENTS

 

         Page  
  ARTICLE I   
  Definitions and Accounting Terms   

Section 1.01.

 

Defined Terms.

     1   

Section 1.02.

 

Other Interpretive Provisions.

     42   

Section 1.03.

 

Accounting Terms.

     42   

Section 1.04.

 

Rounding.

     42   

Section 1.05.

 

References to Agreements, Laws, Etc.

     43   

Section 1.06.

 

Times of Day.

     43   

Section 1.07.

 

Timing of Payment of Performance.

     43   

Section 1.08.

 

Pro Forma Calculations.

     43   

Section 1.09.

 

Letter of Credit Amounts.

     44   

Section 1.10.

 

Cumulative Credit Transactions.

     44   
  ARTICLE II   
  The Commitments and Credit Extensions   

Section 2.01.

 

The Loans.

     45   

Section 2.02.

 

Borrowings, Conversions and Continuations of Loans.

     45   

Section 2.03.

 

Letters of Credit.

     46   

Section 2.04.

 

Swing Line Loans.

     53   

Section 2.05.

 

Prepayments.

     56   

Section 2.06.

 

Termination or Reduction of Commitments.

     59   

Section 2.07.

 

Repayment of Loans.

     59   

Section 2.08.

 

Interest.

     60   

Section 2.09.

 

Fees.

     60   

Section 2.10.

 

Computation of Interest and Fees.

     61   

Section 2.11.

 

Evidence of Indebtedness.

     61   

Section 2.12.

 

Payments Generally.

     61   

Section 2.13.

 

Sharing of Payments.

     63   

Section 2.14.

 

Incremental Credit Extensions.

     63   

Section 2.15.

 

Defaulting Lender.

     65   

Section 2.16.

 

Refinancing Amendments.

     66   

Section 2.17.

 

Extension of Term Loans; Extension of Revolving Credit Loans.

     67   
  ARTICLE III   
  Taxes, Increased Costs Protection and Illegality   

Section 3.01.

 

Taxes.

     70   

Section 3.02.

 

Illegality.

     72   

Section 3.03.

 

Inability to Determine Rates.

     72   

Section 3.04.

 

Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency Rate Loans.

     73   

Section 3.05.

 

Funding Losses.

     74   

Section 3.06.

 

Matters Applicable to All Requests for Compensation.

     74   

Section 3.07.

 

Replacement of Lenders Under Certain Circumstances.

     75   

Section 3.08.

 

Survival.

     76   

 

-i-


         Page  
  ARTICLE IV   
  Conditions Precedent to Credit Extensions   

Section 4.01.

 

All Credit Events After the Closing Date.

     76   

Section 4.02.

 

First Credit Event.

     77   
  ARTICLE V   
  Representations and Warranties   

Section 5.01.

 

Existence, Qualification and Power; Compliance with Laws.

     78   

Section 5.02.

 

Authorization; No Contravention.

     79   

Section 5.03.

 

Governmental Authorization; Other Consents.

     79   

Section 5.04.

 

Binding Effect.

     79   

Section 5.05.

 

Financial Statements; No Material Adverse Effect.

     79   

Section 5.06.

 

Litigation.

     80   

Section 5.07.

 

No Default.

     80   

Section 5.08.

 

Ownership of Property; Liens.

     80   

Section 5.09.

 

Environmental Matters.

     80   

Section 5.10.

 

Taxes.

     81   

Section 5.11.

 

ERISA Compliance.

     81   

Section 5.12.

 

Subsidiaries; Equity Interests.

     81   

Section 5.13.

 

Margin Regulations; Investment Company Act.

     82   

Section 5.14.

 

Disclosure.

     82   

Section 5.15.

 

Labor Matters.

     82   

Section 5.16.

 

Intellectual Property; Licenses, Etc.

     82   

Section 5.17.

 

Solvency.

     83   

Section 5.18.

 

Security Documents.

     83   

Section 5.19.

 

Senior Debt.

     83   
  ARTICLE VI   
  Affirmative Covenants   

Section 6.01.

 

Financial Statements.

     84   

Section 6.02.

 

Certificates; Other Information.

     86   

Section 6.03.

 

Notices.

     87   

Section 6.04.

 

Payment of Obligations.

     87   

Section 6.05.

 

Preservation of Existence, Etc.

     87   

Section 6.06.

 

Maintenance of Properties.

     87   

Section 6.07.

 

Maintenance of Insurance.

     87   

Section 6.08.

 

Compliance with Laws.

     88   

Section 6.09.

 

Books and Records.

     88   

Section 6.10.

 

Inspection Rights.

     88   

Section 6.11.

 

Additional Collateral; Additional Guarantors.

     89   

Section 6.12.

 

Compliance with Environmental Laws.

     90   

Section 6.13.

 

Further Assurances and Post-Closing Conditions.

     91   

Section 6.14.

 

Maintenance of Ratings.

     91   
  ARTICLE VII   
  Negative Covenants   

Section 7.01.

 

Liens.

     91   

Section 7.02.

 

Investments.

     95   

Section 7.03.

 

Indebtedness.

     97   

Section 7.04.

 

Fundamental Changes.

     99   

Section 7.05.

 

Dispositions.

     100   

Section 7.06.

 

Restricted Payments.

     102   

Section 7.07.

 

Change in Nature of Business.

     104   

Section 7.08.

 

Transactions with Affiliates.

     104   

 

-ii-


         Page  

Section 7.09.

 

Burdensome Agreements.

     105   

Section 7.10.

 

Use of Proceeds.

     106   

Section 7.11.

 

Financial Covenants.

     106   

Section 7.12.

 

Accounting Changes.

     106   

Section 7.13.

 

Prepayments, Etc. of Indebtedness.

     106   

Section 7.14.

 

Permitted Activities.

     107   
  ARTICLE VIII   
  Events of Default and Remedies   

Section 8.01.

 

Events of Default.

     107   

Section 8.02.

 

Remedies upon Event of Default.

     109   

Section 8.03.

 

Exclusion of Immaterial Subsidiaries.

     110   

Section 8.04.

 

Application of Funds.

     110   

Section 8.05.

 

Borrower’s Right to Cure.

     111   
  ARTICLE IX   
  Administrative Agent and Other Agents   

Section 9.01.

 

Appointment and Authorization of Agents.

     111   

Section 9.02.

 

Delegation of Duties.

     112   

Section 9.03.

 

Liability of Agents.

     112   

Section 9.04.

 

Reliance by Agents.

     112   

Section 9.05.

 

Notice of Default.

     113   

Section 9.06.

 

Credit Decision; Disclosure of Information by Agents.

     113   

Section 9.07.

 

Indemnification of Agents.

     114   

Section 9.08.

 

Agents in Their Individual Capacities.

     114   

Section 9.09.

 

Successor Agents.

     114   

Section 9.10.

 

Administrative Agent May File Proofs of Claim.

     115   

Section 9.11.

 

Collateral and Guaranty Matters.

     116   

Section 9.12.

 

Other Agents; Arrangers and Managers.

     117   

Section 9.13.

 

Appointment of Supplemental Agents.

     117   

Section 9.14.

 

Withholding Tax Indemnity.

     118   
  ARTICLE X   
  Miscellaneous   

Section 10.01.

 

Amendments, Etc.

     118   

Section 10.02.

 

Notices and Other Communications; Facsimile Copies.

     121   

Section 10.03.

 

No Waiver; Cumulative Remedies.

     122   

Section 10.04.

 

Attorney Costs and Expenses.

     122   

Section 10.05.

 

Indemnification by the Borrower.

     122   

Section 10.06.

 

Payments Set Aside.

     123   

Section 10.07.

 

Successors and Assigns.

     124   

Section 10.08.

 

Confidentiality.

     129   

Section 10.09.

 

Setoff.

     130   

Section 10.10.

 

Interest Rate Limitation.

     130   

Section 10.11.

 

Counterparts.

     130   

Section 10.12.

 

Integration; Termination.

     131   

Section 10.13.

 

Survival of Representations and Warranties.

     131   

Section 10.14.

 

Severability.

     131   

Section 10.15.

 

GOVERNING LAW.

     131   

Section 10.16.

 

WAIVER OF RIGHT TO TRIAL BY JURY.

     131   

Section 10.17.

 

Binding Effect.

     132   

Section 10.18.

 

USA Patriot Act.

     132   

Section 10.19.

 

No Advisory or Fiduciary Responsibility.

     132   

 

-iii-


         Page  
  ARTICLE XI   
  Guarantee   

Section 11.01.

 

The Guarantee.

     133   

Section 11.02.

 

Obligations Unconditional.

     133   

Section 11.03.

 

Reinstatement.

     134   

Section 11.04.

 

Subrogation; Subordination.

     134   

Section 11.05.

 

Remedies.

     134   

Section 11.06.

 

Instrument for the Payment of Money.

     135   

Section 11.07.

 

Continuing Guarantee.

     135   

Section 11.08.

 

General Limitation on Guarantee Obligations.

     135   

Section 11.09.

 

Release of Guarantors.

     135   

Section 11.10.

 

Right of Contribution.

     135   

SCHEDULES

 

1.01A    Commitments
1.01B    Existing Letters of Credit
4.02(c)    Local Counsel Opinions
5.05    Certain Liabilities
5.08    Ownership of Property
5.09(a)    Environmental Matters
5.12    Subsidiaries and Other Equity Investments
7.01(b)    Existing Liens
7.02(f)    Existing Investments
7.03(b)    Existing Indebtedness
7.05(k)    Dispositions
7.08    Transactions with Affiliates
7.09    Certain Contractual Obligations
10.02    Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS

Form of

 

A    Committed Loan Notice
B    Swing Line Loan Notice
C-1    Term Note
C-2    Revolving Credit Note
C-3    Swing Line Note
D    Compliance Certificate
E    Assignment and Assumption
F    Security Agreement
G    Intercompany Note
H    Holdings Pledge Agreement
I    United States Tax Compliance Certificates
J    Mortgage
K    First Lien Intercreditor Agreement
L    Affiliated Lender Assignment and Assumption
M    Affiliated Lender Notice

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (this “ Agreement ”) is entered into as of January 30, 2012, among SUMMIT MATERIALS, LLC, a Delaware limited liability company (the “ Borrower ”), the Guarantors party hereto from time to time, BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent, each lender from time to time party hereto (collectively, the “ Lenders ” and individually, a “ Lender ”), BANK OF AMERICA, N.A., as L/C Issuer and Swing Line Lender, Citigroup Global Markets Inc., as Syndication Agent, and BARCLAYS BANK PLC and REGIONS BANK, as Co-Documentation Agents.

PRELIMINARY STATEMENTS

The Borrower, Holdings, certain of the Lenders and Citibank, N.A., as administrative agent for such lenders, are parties to the Existing Credit Agreement pursuant to which certain term loan, revolving credit and letter of credit facilities have been made available to the Borrower.

The proceeds of the term loan borrowings hereunder together with the proceeds of the Senior Notes (as defined below) will be used (i) to repay in full the term loans of Summit Materials Companies I, LLC under the Existing Credit Agreement, (ii) to repay and terminate the revolving credit loans and commitments under the Existing Credit Agreement, as the case may be, and (iii) to repay the existing Indebtedness of Continental Cement Company, L.L.C., in each such case, simultaneously herewith.

In furtherance of the foregoing, the Borrower has requested that the Lenders extend credit to the Borrower in the form of (i) Term Loans in an initial aggregate amount of $400,000,000 and (ii) Revolving Credit Commitments in an initial aggregate amount of $150,000,000. The Revolving Credit Facility may include one or more Swing Line Loans and one or more Letters of Credit from time to time.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

Definitions and Accounting Terms

Section 1.01. Defined Terms .

As used in this Agreement (including in the preliminary statements hereto), the following terms shall have the meanings set forth below:

Additional Lender ” has the meaning set forth in Section 2.14(a).

Additional Refinancing Lender ” means, at any time, any bank, financial institution or other institutional lender or investor (other than any such bank, financial institution or other institutional lender or investor that is a Lender at such time) that agrees to provide any portion of Refinancing Term Loans pursuant to a Refinancing Amendment in accordance with Section 2.16, provided that each Additional Refinancing Lender shall be subject to the approval of (i) the Administrative Agent, such approval not to be unreasonably withheld or delayed, to the extent such consent would be required for an assignment to such Person pursuant to Section 10.07.

Administrative Agent ” means Bank of America, in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders.

Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.


Affiliate ” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

Affiliated Lender ” means, at any time, any Lender that is the Sponsor (including portfolio companies of the Sponsor) (other than Holdings, the Borrower or any of its Subsidiaries and other than any Debt Fund Affiliate) or a Non-Debt Fund Affiliate of the Sponsor at such time.

Affiliated Lender Cap ” has the meaning set forth in Section 10.07(k)(iv).

Agent-Related Persons ” means the Agents, together with their respective Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

Agents ” means, collectively, the Administrative Agent, the Collateral Agent, the Syndication Agent, the Co-Documentation Agents and the Supplemental Agents (if any).

Aggregate Commitments ” means the Commitments of all the Lenders.

Agreement ” means this Credit Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

Applicable ECF Percentage ” means, for any fiscal year, (a) 50% if the Consolidated First Lien Net Leverage Ratio as of the last day of the applicable Excess Cash Flow Period is greater than 2.50:1.00, (b) 25% if the Consolidated First Lien Net Leverage Ratio as of the last day of the applicable Excess Cash Flow Period is greater than 1.75:1.00 and less than or equal to 2.50 to 1.00 and (c) 0% if the Consolidated First Lien Net Leverage Ratio as of the last day of the applicable Excess Cash Flow Period is less than or equal to 1.75:1.00.

Applicable Rate ” means a percentage per annum equal to:

(a) with respect to Term Loans, (i) for Eurocurrency Rate Loans, 4.75% and (ii) for Base Rate Loans, 3.75%.

(b) with respect to Revolving Credit Loans, commitment fees on the unused Revolving Credit Commitments and Letter of Credit fees, (i) until delivery of financial statements for the first full fiscal quarter ending after the Closing Date pursuant to Section 6.01, (A) for Eurocurrency Rate Loans and Letter of Credit fees, 4.50%, (B) for Base Rate Loans, 3.50% and (C) for commitment fees, 0.50% and (ii) thereafter, the following percentages per annum, based upon the Consolidated First Lien Net Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a):

 

Applicable Rate  
Pricing
Level
  Consolidated
First Lien
Net
Leverage
Ratio
  Eurocurrency
Rate and
Letter of
Credit Fees
    Base
Rate
    Commitment
Fee Rate
 
1   >2.50:1     4.50     3.50     0.50
2   £ 2.50:1     4.25     3.25     0.50

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated First Lien Net Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(a); provided that at the option of the Administrative Agent or the Required Lenders, “Pricing Level 1” (immediately above) shall apply (x) as of the first Business Day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and shall continue to so apply to and including the date on which such Compliance Certificate

 

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is so delivered (and thereafter the pricing level otherwise determined in accordance with this definition shall apply) and (y) as of the first Business Day after an Event of Default under Section 8.01(a) shall have occurred and be continuing, and shall continue to so apply to but excluding the date on which such Event of Default is cured or waived (and thereafter the pricing level otherwise determined in accordance with this definition shall apply).

In the event that any financial statements under Section 6.01 or a Compliance Certificate is shown to be inaccurate at any time that this Agreement is in effect and any Loans or Commitments are outstanding hereunder when such inaccuracy is discovered or within 91 days after the date on which all Loans have been repaid and all Commitments have been terminated, and such inaccuracy, if corrected, would have led to a higher Applicable Rate for any period (an “ Applicable Period ”) than the Applicable Rate applied for such Applicable Period, then (i) the Borrower shall promptly (and in no event later than five (5) Business Days thereafter) deliver to the Administrative Agent a correct Compliance Certificate for such Applicable Period, (ii) the Applicable Rate shall be determined by reference to the corrected Compliance Certificate (but in no event shall the Lenders owe any amounts to the Borrower), and (iii) the Borrower shall pay to the Administrative Agent promptly upon demand (and in no event later than five (5) Business Days after demand) any additional interest owing as a result of such increased Applicable Rate for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with the terms hereof. Notwithstanding anything to the contrary in this Agreement, any additional interest hereunder shall not be due and payable until demand is made for such payment pursuant to clause (iii) above and accordingly, any nonpayment of such interest as result of any such inaccuracy shall not constitute a Default (whether retroactively or otherwise), and no such amounts shall be deemed overdue (and no amounts shall accrue interest at the Default Rate), at any time prior to the date that is five (5) Business Days following such demand.

Appropriate Lender ” means, at any time, (a) with respect to Loans of any Class, the Lenders of such Class, (b) with respect to Letters of Credit, (i) the relevant L/C Issuer and (ii) the Revolving Credit Lenders and (c) with respect to the Swing Line Facility, (i) the relevant Swing Line Lender and (ii) if any Swing Line Loans are outstanding pursuant to Section 2.04(a), the Revolving Credit Lenders.

Approved Bank ” has the meaning set forth in clause (c) of the definition of “Cash Equivalents.”

Approved Fund ” means any Fund that is administered, advised or managed by a Lender or an Affiliate of the entity that administers, advises or manages any Fund that is a Lender.

Arrangers ” means Bank of America, N.A. and Citigroup Global Markets Inc.

Assignees ” has the meaning set forth in Section 10.07(b).

Assignment and Assumption ” means an Assignment and Assumption substantially in the form of Exhibit E hereto or such other form as may be approved by the Administrative Agent.

Attorney Costs ” means and includes all reasonable and documented fees, expenses and disbursements of any law firm or other external legal counsel.

Attributable Indebtedness ” means, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.

Audited Financial Statements ” means the audited consolidated balance sheets and the related audited consolidated statements of operations and of cash flows for the Borrower and its Subsidiaries for the fiscal year ended December 31, 2010.

Auto-Extension Letter of Credit ” has the meaning set forth in Section 2.03(b)(iii).

Bank of America ” means Bank of America, N.A., a national banking association, acting in its individual capacity, and its successors and assigns.

 

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Base Rate ” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus  1 / 2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate” and (c) the Eurocurrency Rate plus 1.00%; provided that in no event shall the Base Rate be less than 2.25% per annum with respect to the Term Loans. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

Base Rate Loan ” means a Loan that bears interest based on the Base Rate.

Borrower ” has the meaning set forth in the preamble hereto.

Borrower Materials ” has the meaning set forth in Section 6.01.

Borrowing ” means a Revolving Credit Borrowing, a Swing Line Borrowing, or a Term Borrowing, as the context may require.

Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of the state of New York or, or are in fact closed in, the state where the Administrative Agent’s Office is located and if such day relates to any Eurocurrency Rate Loan, means any such day on which dealings in deposits are conducted by and between banks in the London interbank eurodollar market.

Capital Expenditures ” means, for any period, the aggregate, without duplication, of (a) all expenditures (whether paid in cash or accrued as liabilities) by the Borrower and its Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as additions during such period to property, plant or equipment and other deferred charges included in Capital Expenditures reflected in the consolidated balance sheet of the Borrower and its Subsidiaries, (b) the value of all assets under Capitalized Leases incurred by the Borrower and its Subsidiaries during such period (other than as a result of purchase accounting) and (c) Capitalized Software Expenditures; provided that the term “Capital Expenditures” shall not include (i) expenditures made in connection with the replacement, substitution, restoration or repair of assets to the extent financed with (x) insurance proceeds paid on account of the loss of or damage to the assets being replaced, restored or repaired or (y) awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced, (ii) the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment solely to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time, (iii) the purchase of plant, property or equipment or software to the extent financed with the proceeds of Dispositions outside the ordinary course of business that are not required to be applied to prepay Term Loans pursuant to Section 2.05(b), (iv) expenditures that are accounted for as capital expenditures by the Borrower or any Subsidiary and that actually are paid for by a Person other than the Borrower or any Subsidiary and for which neither the Borrower nor any Subsidiary has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period), (v) expenditures that constitute any part of expenses of any Capitalized Lease, (vi) expenditures that constitute Permitted Acquisitions, (vii) any capitalized interest expense reflected as additions to property, plant or equipment in the consolidated balance sheet of the Borrower and the Subsidiaries or (viii) any non-cash compensation or other non-cash costs reflected as additions to property, plant or equipment in the consolidated balance sheet of the Borrower and its Subsidiaries.

Capitalized Leases ” means all leases that have been or are required to be, in accordance with GAAP, recorded as capitalized leases; provided that for all purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability on a balance sheet (excluding the notes thereto) in accordance with GAAP; provided that for purposes of calculations made pursuant to the terms of this Agreement, GAAP will be deemed to treat leases in a manner consistent with its current treatment under generally accepted accounting principles as of the Closing Date, notwithstanding any modifications or interpretive changes thereto that may occur thereafter.

 

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Capitalized Software Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by the Borrower and its Subsidiaries during such period in respect of purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of the Borrower and its Subsidiaries.

Cash Collateral ” has the meaning set forth in Section 2.03(g).

Cash Collateral Account ” means a blocked account at Bank of America (or another commercial bank selected in compliance with Section 9.09) in the name of the Administrative Agent and under the sole dominion and control of the Administrative Agent, and otherwise established in a manner satisfactory to the Administrative Agent.

Cash Collateralize ” has the meaning set forth in Section 2.03(g).

Cash Equivalents ” means any of the following types of Investments, to the extent owned by the Borrower or any Subsidiary:

(a) Dollars;

(b) readily marketable obligations issued or directly and fully guaranteed or insured by the government or any agency or instrumentality of the United States having average maturities of not more than 24 months from the date of acquisition thereof; provided that the full faith and credit of the United States is pledged in support thereof;

(c) time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) is a Lender or (ii) (A) is organized under the Laws of the United States, any state thereof, the District of Columbia or any member nation of the Organization for Economic Cooperation and Development or is the principal banking Subsidiary of a bank holding company organized under the Laws of the United States, any state thereof, the District of Columbia or any member nation of the Organization for Economic Cooperation and Development, and is a member of the Federal Reserve System, and (B) has combined capital and surplus of at least $250,000,000 (any such bank in the foregoing clause (i) or (ii) being an “ Approved Bank ”), in each case with maturities not exceeding 24 months from the date of acquisition thereof;

(d) commercial paper and variable or fixed rate notes issued by an Approved Bank (or by the parent company thereof) or any variable or fixed rate note issued by, or guaranteed by, a corporation (other than structured investment vehicles and other than corporations used in structured financing transactions) rated A-2 (or the equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or better by Moody’s, in each case with average maturities of not more than 24 months from the date of acquisition thereof;

(e) marketable short-term money market and similar funds having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Borrower);

(f) repurchase agreements entered into by any Person with a bank or trust company (including any of the Lenders) or recognized securities dealer, in each case, having capital and surplus in excess of $250,000,000 for direct obligations issued by or fully guaranteed or insured by the government or any agency or instrumentality of the United States, in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations;

(g) securities with average maturities of 24 months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government having an investment grade rating from either S&P or Moody’s (or the equivalent thereof);

 

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(h) Investments (other than in structured investment vehicles and structured financing transactions) with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s;

(i) euros or any other foreign currency comparable in credit quality and tenor to those referred to above and instruments equivalent to those referred to in clauses (a) through (h) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above, in each case, customarily used by corporations for cash management purposes in any jurisdiction outside the United States in the ordinary course of business of the Borrower and its Subsidiaries;

(j) Investments, classified in accordance with GAAP as current assets of the Borrower or any Subsidiary, in money market investment programs which are registered under the Investment Company Act of 1940 or which are administered by financial institutions having capital of at least $250,000,000, and, in either case, the portfolios of which are limited such that substantially all of such Investments are of the character, quality and maturity described in clauses (a) through (h) of this definition; and

(k) investment funds investing at least 95% of their assets in securities of the types (including as to credit quality and maturity) described in clauses (a) through (j) above.

Cash Management Obligations ” means obligations owed by the Borrower or any Subsidiary to any Lender or any Affiliate of a Lender (or Person that was a Lender or an Affiliate of a Lender at the time such arrangement was entered into) (a “ Cash Management Bank ”) in respect of any overdraft and related liabilities arising from treasury, depository, credit card, debit card and cash management services or any automated clearing house transfers of funds.

Casualty Event ” means any event that gives rise to the receipt by the Borrower or any Subsidiary of any insurance proceeds or condemnation awards in respect of any equipment, fixed assets or real property (including any improvements thereon) to replace or repair such equipment, fixed assets or real property.

Change of Control ” shall be deemed to occur if:

(a) at any time prior to a Qualified IPO, any combination of Permitted Holders shall fail to own beneficially (within the meaning of Rule 13d-5 of the Exchange Act as in effect on the Closing Date), directly or indirectly, in the aggregate Equity Interests representing at least a majority of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Holdings;

(b) at any time after a Qualified IPO, (i) any person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date), other than any combination of the Investors or any “group” including any Permitted Holders ( provided that, in the case of any such “group,” the Permitted Holders hold a majority of all voting interest in Holdings’ Equity Interests held by all members of such “group”), shall have acquired beneficial ownership of 35% or more on a fully diluted basis of the voting interest in Holdings’ Equity Interests and the Permitted Holders shall own, directly or indirectly, less than such person or “group” on a fully diluted basis of the voting interest in Holdings’ Equity Interests or (ii) during each period of twelve consecutive months, the board of directors of Holdings shall not consist of a majority of the Continuing Directors;

(c) a “change of control” (or similar event) shall occur under the Senior Notes or any Junior Financing, in each case, with an aggregate principal amount in excess of the Threshold Amount or any Permitted Refinancing Indebtedness in respect of any of the foregoing with an aggregate principal amount in excess of the Threshold Amount; or

(d) Holdings shall cease to own 100% of the Equity Interests of the Borrower.

 

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Class ” (a) when used with respect to any Lender, refers to whether such Lender has a Loan or Commitment with respect to a particular Class of Loans or Commitments, (b) when used with respect to Commitments, refers to whether such Commitments are Revolving Credit Commitments, Extended Revolving Credit Commitments of a given Extension Series, Revolving Commitment Increases, Other Revolving Credit Commitments, Term Commitments, Other Term Loan Commitments or Refinancing Term Commitments of a given Refinancing Series and (c) when used with respect to Loans or a Borrowing, refers to whether such Loans, or the Loans comprising such Borrowing, are Revolving Credit Loans, Revolving Credit Loans under Extended Revolving Credit Commitments of a given Extension Series, Revolving Credit Loans under Other Revolving Credit Commitments, Incremental Term Loans, Other Term Loans, Refinancing Term Loans of a given Refinancing Series or Extended Term Loans of a given Extension Series. Revolving Credit Commitments, Other Term Loan Commitments, Other Revolving Credit Commitments, Extended Revolving Credit Commitments, Term Commitments (and in each case, the Loans made pursuant to such Commitments) that have different terms and conditions shall be construed to be in different Classes. Commitments (and, in each case, the Loans made pursuant to such Commitments) that have the same terms and conditions shall be construed to be in the same Class.

Closing Date ” means the first date on which all the conditions precedent in Section 4.02 are satisfied or waived in accordance with Section 4.02.

Closing Fee ” has the meaning set forth in Section 2.09(c).

Co-Documentation Agents ” means Barclays Bank PLC and Regions Bank, as co-documentation agents under this Agreement.

Code ” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

Collateral ” means the “Collateral” as defined in the Security Agreement and all the “Collateral” or “Pledged Assets” as defined in any other Collateral Document and any other assets pledged or in which a Lien is granted pursuant to any Collateral Document, including, without limitation, the Mortgaged Property.

Collateral Agent ” means Bank of America, in its capacity as collateral agent or pledgee in its own name under any of the Loan Documents, or any successor collateral agent.

Collateral and Guarantee Requirement ” means, at any time, the requirement that:

(a) the Administrative Agent shall have received each Collateral Document to the extent required to be delivered on the Closing Date pursuant to Section 4.02(e), subject to the limitations and exceptions of this Agreement, duly executed by each Loan Party party thereto;

(b) the Obligations shall have been secured by a first-priority security interest in (i) all the Equity Interests of the Borrower and (ii) all Equity Interests of each Subsidiary of the Borrower that is not an Excluded Subsidiary directly owned by any Loan Party, in each case, subject to exceptions and limitations otherwise set forth in this Agreement and the Collateral Documents (to the extent appropriate in the applicable jurisdiction); provided that notwithstanding anything to the contrary herein, the security interest in the Equity Interests of Continental Cement Company, L.L.C. shall be limited to the units owned by Summit Materials Holdings II, LLC;

(c) the Obligations shall have been secured by a perfected security interest in, and Mortgages on, substantially all tangible and intangible assets of the Borrower and each Subsidiary Guarantor (including Equity Interests and intercompany debt, accounts, inventory, equipment, investment property, contract rights, intellectual property in the United States, other general intangibles, Material Real Property and proceeds of the foregoing), in each case, subject to exceptions and limitations otherwise set forth in this Agreement and the Collateral Documents (to the extent appropriate in the applicable jurisdiction);

(d) subject to limitations and exceptions of this Agreement (for the avoidance of doubt, including the limitations and exceptions set forth in the proviso of Section 4.02(e)) and the Collateral Documents,

 

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to the extent a security interest in and Mortgages on any Material Real Property is required pursuant to clause (c) above or Section 6.11 or 6.13 (each, a “ Mortgaged Property ”), the Administrative Agent shall have received (i) counterparts of a Mortgage with respect to such Mortgaged Property duly executed and delivered by the record owner of such property in form suitable for filing or recording in all filing or recording offices that the Administrative Agent may reasonably deem necessary or desirable in order to create a valid and subsisting perfected first-priority Lien (subject only to Liens described in clause (ii) below) on the property and/or rights described therein in favor of the Collateral Agent for the benefit of the Secured Parties, and evidence that all filing and recording taxes and fees have been paid or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent (it being understood that if a mortgage tax will be owed on the entire amount of the indebtedness evidenced hereby, then the amount secured by the Mortgage shall be limited to 100% of the fair market value of the property at the time the Mortgage is entered into if such limitation results in such mortgage tax being calculated based upon such fair market value), (ii) fully paid policies of title insurance (or marked-up title insurance commitments having the effect of policies of title insurance) on the Mortgaged Property naming the Collateral Agent as the insured for its benefit and that of the Secured Parties and their respective successors and assigns (the “ Mortgage Policies ”) issued by a nationally recognized title insurance company reasonably acceptable to the Administrative Agent in form and substance and in an amount reasonably acceptable to the Administrative Agent (not to exceed 100% of the fair market value of the real properties covered thereby), insuring the Mortgages to be valid subsisting first-priority Liens on the property described therein, free and clear of all Liens other than Liens permitted pursuant to Section 7.01 and other Liens reasonably acceptable to the Administrative Agent, each of which shall (A) to the extent reasonably necessary, include such reinsurance arrangements (with provisions for direct access, if reasonably necessary) as shall be reasonably acceptable to the Collateral Agent, (B) contain a “tie-in” or “cluster” endorsement, if available under applicable law ( i.e. , policies which insure against losses regardless of location or allocated value of the insured property up to a stated maximum coverage amount), (C) have been supplemented by such endorsements (or where such endorsements are not available after the applicable Loan Party has used commercially reasonable efforts to obtain the same, opinions of special counsel, architects or other professionals reasonably acceptable to the Collateral Agent) as shall be reasonably requested by the Collateral Agent (including endorsements on matters relating to usury, first loss, last dollar, zoning, contiguity, revolving credit, doing business, non-imputation, public road access, variable rate, environmental lien, subdivision, mortgage recording tax, separate tax lot and so-called comprehensive coverage over covenants and restrictions; provided , however , that the applicable Loan Party shall not be obligated to obtain a “creditor’s rights” endorsement); provided , further , that the Borrower shall use commercially reasonable efforts (provided such commercially reasonable efforts shall not require Borrower to incur any material additional costs or liabilities) to cause the title company to (A) remove any survey exceptions from the Mortgage Policies and (B) deliver such endorsements to the Mortgage Policies as would typically require the delivery of a survey (including, without limitation, access to public road, access via easement, location, contiguity, address, and encroachment endorsements) notwithstanding that no surveys have been delivered with respect to such Mortgaged Properties, (iii) legal opinions, addressed to the Administrative Agent, the Collateral Agent and the other Secured Parties, reasonably acceptable to the Administrative Agent and the Collateral Agent as to such matters as the Administrative Agent and the Collateral Agent may reasonably request, and (iv) a completed “Life of Loan” Federal Emergency Management Agency Standard Flood Hazard Determination with respect to each Mortgaged Property on which any “building” (as defined in the Flood Insurance Laws) is located, duly executed and acknowledged by the appropriate Loan Parties together with evidence of flood insurance as and to the extent required under Section 6.07(c) hereof; and

(e) after the Closing Date, each Subsidiary of the Borrower that is not an Excluded Subsidiary shall become a Guarantor and signatory to this Agreement pursuant to a joinder agreement in accordance with Section 6.11 and a party to the applicable Collateral Documents in accordance with Section 6.11.

Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary:

(A) the foregoing definition shall not require, unless otherwise stated in this clause (A), the creation or perfection of pledges of, security interests in, Mortgages on, or the obtaining of title insurance

 

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or taking other actions with respect to, (i) (x) any fee owned real property other than Material Real Properties or (y) any leasehold rights or interests in real property (including landlord waivers, estoppels and collateral access letters), (ii) motor vehicles and other assets subject to certificates of title, letters of credit with a face value of less than $5,000,000 and commercial tort claims where the amount of damages claimed by the applicable Loan Party is less than $5,000,000 except to the extent that perfection may be achieved by the filing of financing statements, (iii) any particular asset, if the pledge thereof or the security interest therein is prohibited by Law other than to the extent such prohibition is expressly deemed ineffective under the Uniform Commercial Code or other applicable Law notwithstanding such prohibition, (iv) Margin Stock and, solely to the extent prohibited by the Organization Documents or any shareholders agreement with shareholders that are Excluded Subsidiaries of the Borrower, Equity Interests in any Person other than Subsidiaries of the Borrower that are not Excluded Subsidiaries, (v) any rights of any Loan Party with respect to any lease, license or other agreement to the extent a grant of security interest therein is prohibited by such lease, license or other agreement, would result in an invalidation thereof or would create a right of termination in favor of any other party thereto (other than a Loan Party) after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code or other applicable Laws or principle of equity notwithstanding such prohibition, (vi) the creation or perfection of pledges of, or security interests in, any property or assets that would result in material adverse tax consequences to Holdings, the Borrower or any of its Subsidiaries, as reasonably determined by the Borrower with the consent of the Administrative Agent (not to be unreasonably withheld or delayed) (it being understood that the Lenders shall not require the Borrower or any of its Subsidiaries to enter into any security agreements or pledge agreements governed under foreign law), (vii) intellectual property to the extent a security interest is not perfected by filing of a UCC financing statement or in respect of registered intellectual property, a filing in the USPTO (if required) or the U.S. Copyright Office (it being understood that such assets are intended to constitute Collateral, though perfection beyond UCC, USPTO and U.S. Copyright Office filings is not required) and (viii) any particular assets if, in the reasonable determination of the Administrative Agent evidenced in writing, determined in consultation with the Borrower, the burden or cost of creating or perfecting such pledges or security interests in such assets is excessive in relation to the benefits to be obtained therefrom by the Lenders under the Loan Documents;

(B) (i) the foregoing definition shall not require control agreements and perfection by “control” with respect to any Collateral (including deposit accounts, securities accounts, etc.) other than certificated Equity Interests of (x) the Borrower, (y) to the extent constituting Collateral, its Subsidiaries that are Domestic Subsidiaries and (z) other Subsidiaries to the extent permitted by the terms of such Subsidiaries’ organizational or joint venture documents; (ii) no actions in any non-U.S. jurisdiction or required by the laws of any non-U.S. jurisdiction shall be required in order to create any security interests in assets located or titled outside of the U.S. or to perfect such security interests (it being understood that there shall be no security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction); and (iii) except to the extent that perfection and priority may be achieved by the filing of a financing statement under the Uniform Commercial Code with respect to the Borrower or a Guarantor, or, with respect to real property and the recordation of Mortgages in respect thereof, as contemplated by clauses (c) and (d) above, the Loan Documents shall not contain any requirements as to perfection or priority with respect to any assets or property a security interest in which can be perfected by control described in this clause (B);

(C) the Administrative Agent in its discretion may grant extensions of time for the creation or perfection of security interests in, and Mortgages on, or obtaining of title insurance or taking other actions with respect to, particular assets (including extensions beyond the Closing Date) or any other compliance with the requirements of this definition where it reasonably determines in writing, in consultation with the Borrower, that the creation or perfection of security interests and Mortgages on, or obtaining of title insurance or taking other actions, or any other compliance with the requirements of this definition cannot be accomplished without undue delay, burden or expense by the time or times at which it would otherwise be required by this Agreement or the Collateral Documents; provided that the Collateral Agent shall have received on or prior to the Closing Date, (i) UCC financing statements in appropriate form for filing under the UCC in the jurisdiction of incorporation or organization of each Loan Party, and (ii) any certificates or instruments representing or evidencing Equity Interests of the Borrower and any Subsidiary Guarantors accompanied by instruments of transfer and stock powers undated and endorsed in blank; and

(D) Liens required to be granted from time to time pursuant to the Collateral and Guarantee Requirement shall be subject to exceptions and limitations set forth in this Agreement and the Collateral Documents.

 

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Collateral Documents ” means, collectively, the Security Agreement, the Holdings Pledge Agreement, each of the Mortgages, collateral assignments, security agreements, pledge agreements, intellectual property security agreements or other similar agreements delivered to the Administrative Agent or the Collateral Agent pursuant to Section 4.02, Section 6.11 or Section 6.13, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

Commitment ” means a Revolving Credit Commitment, Extended Revolving Credit Commitment of a given Extension Series, Other Revolving Credit Commitment, Term Commitment, Other Term Loan Commitment, Refinancing Term Commitment of a given Refinancing Series or Extended Term Loan of a given Extension Series, as the context may require.

Committed Loan Notice ” means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurocurrency Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A hereto.

Company ” means the Borrower, together with its successors and assigns.

Compensation Period ” has the meaning set forth in Section 2.12(c)(ii).

Compliance Certificate ” means a certificate substantially in the form of Exhibit D hereto.

Consolidated EBITDA ” means, for any period, the Consolidated Net Income for such period, plus :

(a) without duplication and, except with respect to clauses (viii) and (xi) below, to the extent deducted (and not added back) in arriving at such Consolidated Net Income, the sum of the following amounts for such period with respect to the Borrower and its Subsidiaries:

(i) total interest expense determined in accordance with GAAP (including, to the extent deducted and not added back in computing Consolidated Net Income, (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers’ acceptances, (c) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in mark-to-market valuation of Swap Contracts or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Leases, (e) net payments, if any, pursuant to interest rate Swap Contracts with respect to Indebtedness, (f) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and (g) any expensing of bridge, commitment and other financing fees) and, to the extent not reflected in such total interest expense, any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of interest income and gains on such hedging obligations, and costs of surety bonds in connection with financing activities (whether amortized or immediately expensed),

(ii) provision for taxes based on income, profits or capital gains of the Borrower and its Subsidiaries, including, without limitation, federal, state and local income, franchise and similar taxes and foreign withholding taxes paid or accrued during such period including penalties and interest related to such taxes or arising from any tax examinations,

(iii) depletion, depreciation and amortization (including amortization of intangible assets, including Capitalized Software Expenditures),

 

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(iv) (A) severance, relocation costs and expenses, Original Transaction Expenses, integration costs, transition costs, pre-opening, opening, consolidation and closing costs for facilities, costs incurred in connection with any non-recurring strategic initiatives, costs incurred in connection with acquisitions and non-recurring product and intellectual property development after the Original Closing Date, other business optimization expenses (including costs and expenses relating to business optimization programs and new systems design and implementation costs), project start-up costs and other restructuring charges, accruals or reserves (including restructuring costs related to acquisitions after the Original Closing Date and to closure/consolidation of facilities, retention charges, systems establishment costs and excess pension charges) in an aggregate amount of all items added pursuant to this clause (iv)(A) for any Test Period (other than Original Transaction Expenses incurred, accrued or paid no later than the end of the first full fiscal quarter ending after the Original Closing Date) not to exceed, with respect to transactions (other than the Original Transactions), when added to the amount of add backs made pursuant to clause (viii) below and pursuant to Section 1.08(c), 25% of Consolidated EBITDA (prior to giving effect to this clause (iv)(A) or clause (viii) below or Section 1.08(c) for such Test Period), (B) without duplication of amounts under subclause (A) of this clause (iv) or clause (viii) below, the amount of any losses, costs or costs inefficiencies related to plant disruptions or shutdowns to the extent such losses, costs and/or costs inefficiencies do not exceed $5,000,000 in any period of four consecutive fiscal quarters and (C) without duplication of amounts under clause (iii) above, the portion of any earn-out, non-compete payments relating to such period or other contingent purchase price obligations and adjustments thereof and purchase price adjustments to the extent such payment is permitted to be paid pursuant to this Agreement and is deducted from net income under GAAP;

(v) the amount of net income (loss) attributable to minority interests or non-controlling interests of third parties in any non-wholly owned Subsidiary,

(vi) the amount of management, monitoring, consulting and advisory fees and related expenses and indemnities paid or accrued to the Investors or their Affiliates (or management companies) under the Investor Management Agreement (for avoidance of doubt, no termination fee paid under the Investor Management Agreement may be included in this clause (vi)),

(vii) any costs or expenses incurred pursuant to any individual equity grant or award, management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Borrower or net cash proceeds of an issuance of Equity Interests of the Borrower (other than Disqualified Equity Interests),

(viii) the amount of cost savings, operating expense reductions and synergies projected by the Borrower in good faith to be realized as a result of specified actions taken or with respect to which substantial steps have been taken (in the good faith determination of the Borrower) during such period, including in connection with any Specified Transaction (calculated on a Pro Forma Basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions; provided that (A) a duly completed certificate signed by a Responsible Officer of the Borrower shall be delivered to the Administrative Agent together with the Compliance Certificate required to be delivered pursuant to Section 6.02(a), certifying that (x) such cost savings, operating expense reductions and synergies are reasonably expected and factually supportable in the good faith judgment of the Borrower, (y) such actions are to be taken within 18 months after the consummation of the acquisition, Disposition, restructuring or the implementation of an initiative, which is expected to result in such cost savings, expense reductions or synergies, (B) no cost savings, operating expense reductions and synergies shall be added pursuant to this clause (viii) to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for such period, (C) the aggregate amount of cost savings and operating expense reductions added pursuant

 

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to this clause (viii) for any Test Period, when added to the aggregate amount of add backs made pursuant to clause (iv)(A) above and pursuant to Section 1.08(c) does not exceed 25% of Consolidated EBITDA (prior to giving effect to this clause (viii), clause (iv)(A) above or Section 1.08(c) for such Test Period and (D) projected amounts (and not yet realized) may no longer be added in calculating Consolidated EBITDA pursuant to this clause (viii) to the extent occurring more than four full fiscal quarters after the specified action taken in order to realize such projected cost savings, operating expense reductions and synergies,

(ix) any net loss from disposed, abandoned or discontinued operations,

(x) accretion of asset retirement obligations in accordance with Accounting Standards Codification, section 410, accounting for asset retirement obligations,

(xi) cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing Consolidated EBITDA or Consolidated Net Income in any period to the extent non-cash gains relating to such income were deducted in the calculation of Consolidated EBITDA pursuant to paragraph (b) below for any previous period and not added back,

(xii) non-cash expenses, charges and losses (including reserves, impairment charges or asset write-offs, losses from investments recorded using the equity method, stock-based awards compensation expense), in each case other than (A) any non-cash charge representing amortization of a prepaid cash item that was paid and not expensed in a prior period and (B) any non-cash charge relating to write-offs, write-downs or reserves with respect to accounts receivable or inventory; provided that if any non-cash charges referred to in this clause (xii) represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA in such future period to such extent paid,

(xiii) the amount of loss on the sale of receivables and related assets as part of a receivables financing,

less (b) without duplication and to the extent included in arriving at such Consolidated Net Income, (i) non-cash gains (excluding any non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item that reduced Consolidated EBITDA in any prior period), (ii) any net gain from disposed, abandoned or discontinued operations and (iii) the amount of any minority interest income consisting of Subsidiary losses attributable to minority interests or non-controlling interests of third parties in any non-wholly owned Subsidiary; provided that, for the avoidance of doubt, any gain representing the reversal of any non-cash charge referred to in clause (a)(xii)(B) above for a prior period shall be added (together with, without duplication, any amounts received in respect thereof to the extent not increasing Consolidated Net Income) to Consolidated EBITDA in any subsequent period to such extent so reversed (or received);

provided that:

(A) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA (x) currency translation gains and losses related to currency remeasurements of Indebtedness (including the net loss or gain (i) resulting from Swap Contracts for currency exchange risk and (ii) resulting from intercompany indebtedness) and (y) gains or losses on Swap Contracts,

(B) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA for any period any adjustments resulting from the application of Accounting Standards Codification, section 815 and International Accounting Standard No. 39 and their respective related pronouncements and interpretations,

(C) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA for any period any income (loss) for such period attributable to the early extinguishment of (i) Indebtedness, (ii) obligations under any Swap Contracts or (iii) other derivative instruments, and

(D) there shall be excluded in determining Consolidated EBITDA for any period any after-tax effect of non-recurring items (including gains or losses and all fees and expenses relating thereto) relating to curtailments or modifications to pension and post-retirement employee benefit plans for such period.

 

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Notwithstanding anything to the contrary contained herein but subject to pro forma adjustments for events occurring following the Closing Date (and pursuant to the next succeeding sentence), for purposes of determining Consolidated EBITDA under this Agreement for any period that includes (x) any of the fiscal quarters ended December 31, 2010, March 31, 2011, June 30, 2011 and September 30, 2011, Consolidated EBITDA for such fiscal quarters shall be $37,046,000, $(10,802,000), $40,531,000 and $66,381,000, respectively, or (y) any other period occurring prior to the Closing Date, Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect to the Original Transactions. For the period of four fiscal quarters ended on September 30, 2011, the amount of adjustments pursuant to clause (viii) above and Section 1.08, net of the amount of actual benefits realized in such period from such actions, was $11,198,000.

Consolidated First Lien Net Debt ” means, as of any date of determination, any Indebtedness described in clause (a) of the definition of “Consolidated Total Net Debt” outstanding on such date that is secured by a Lien on any asset or property of the Borrower or any Subsidiary but excluding any such Indebtedness in which the applicable Liens are expressly subordinated or junior to the Liens securing the Obligations minus the aggregate amount of cash and Cash Equivalents (other than Restricted Cash), in each case, that is held by the Borrower and its Subsidiaries as of such date, free and clear of all Liens (other than nonconsensual Liens permitted by Section 7.01 and Liens permitted by Section 7.01(a), Section 7.01(p), Section 7.01(q), clauses (i) and (ii) of Section 7.01(r), 7.01(ee) and 7.01(ff)); provided that Consolidated First Lien Net Debt shall not include Indebtedness in respect of letters of credit (including Letters of Credit), except to the extent of unreimbursed amounts thereunder; provided that any unreimbursed amount under commercial letters of credit shall not be counted as Consolidated First Lien Net Debt until 3 Business Days after such amount is drawn; it being understood, for the avoidance of doubt, that obligations under Swap Contracts entered into for non-speculative purposes, deferred consideration, earn-out payments and non-compete payments do not constitute Consolidated First Lien Net Debt.

Consolidated First Lien Net Leverage Ratio ” means, with respect to any Test Period, the ratio of (a) Consolidated First Lien Net Debt as of the last day of such Test Period to (b) Consolidated EBITDA for such Test Period.

Consolidated Interest Expense ” means, for any period, the sum, without duplication, of (i) the cash interest expense (including that attributable to Capitalized Leases), net of cash interest income, of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net cash costs under Swap Contracts, and (ii) any cash payments made during such period in respect of obligations referred to in clause (b) below relating to Funded Debt that were amortized or accrued in a previous period, but excluding, however, (a) amortization of deferred financing costs and any other amounts of non-cash interest, (b) the accretion or accrual of discounted liabilities and any prepayment premium or penalty during such period, (c) non-cash interest expense attributable to the movement of the mark-to-market valuation of obligations under Swap Contracts or other derivative instruments pursuant to Accounting Standards Codification, section 815, (d) any cash costs associated with breakage in respect of hedging agreements for interest rates, (e) all non-recurring cash interest expense consisting of liquidated damages for failure to timely comply with registration rights obligations and financing fees, all as calculated on a consolidated basis in accordance with GAAP, (f) fees and expenses associated with the consummation of the Original Transactions, (g) annual agency fees paid to the Administrative Agent and/or Collateral Agent, and (h) costs associated with obtaining Swap Contracts. Notwithstanding anything to the contrary contained herein, for purposes of determining Consolidated Interest Expense (i) for any period ending prior to the first anniversary of the Closing Date, Consolidated Interest Expense shall be an amount equal to actual Consolidated Interest Expense from the Closing Date through the date of determination multiplied by a fraction the numerator of which is 365 and the denominator of which is the number of days from the Closing Date through the date of determination and (ii) shall exclude the purchase accounting effects described in the last sentence of the definition of “Consolidated Net Income.”

 

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Consolidated Net Income ” means, for any period, the net income (loss) of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, provided , however , that, without duplication,

(a) any after-tax effect of extraordinary, non-recurring or unusual items (including gains or losses and all fees and expenses relating thereto) for such period shall be excluded,

(b) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income shall be excluded,

(c) any fees and expenses incurred during such period (including, without limitation, any premiums, make whole or penalty payments), or any amortization thereof for such period, in connection with any acquisition, investment, asset disposition, issuance or repayment of debt, issuance of equity securities, refinancing transaction or amendment or other modification of any debt instrument (in each case, including any such transaction consummated on or prior to the Closing Date and any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, in each case whether or not successful (including, for the avoidance of doubt the effects of expensing all transaction related expenses in accordance with Financial Accounting Standards No. 141(R) and gains or losses associated with FASB Interpretation No. 45) shall be excluded,

(d) accruals and reserves that are established or adjusted within twelve months after the Closing Date that are so required to be established or adjusted as a result of the Original Transactions in accordance with GAAP or changes as a result of adoption or modification of accounting policies in accordance with GAAP shall be excluded,

(e) any net after-tax gains or losses on disposal of abandoned, disposed or discontinued operations shall be excluded,

(f) any net after-tax effect of gains or losses (less all fees, expenses and charges) attributable to asset dispositions or abandonments or the sale or other disposition of any Equity Interests of any Person in each case other than in the ordinary course of business, as determined in good faith by the Borrower, shall be excluded,

(g) the amount of proportionate Consolidated EBITDA above the net income (loss) for such period of any Person that is not a Subsidiary of the Borrower and that is accounted for by the equity method of accounting, shall be included,

(h) any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities or as a result of a change in law or regulation, in each case, pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded,

(i) any non-cash compensation charge or expense, including any such charge or expense arising from the grants of stock appreciation or similar rights, stock options, restricted stock or other rights or equity incentive programs shall be excluded, and any cash charges associated with the rollover, acceleration or payout of Equity Interests by management of the Borrower or any of its direct or indirect parents in connection with the Original Transactions, shall be excluded,

(j) any expenses, charges or losses that are covered by indemnification or other reimbursement provisions in connection with any Investment, Permitted Acquisition or any sale, conveyance, transfer or other disposition of assets permitted under this Agreement, to the extent actually reimbursed, or, so long as the Borrower has made a determination that a reasonable basis exists for indemnification or reimbursement and only to the extent that such amount is in fact indemnified or reimbursed within 365 days of such determination (with a deduction in the applicable future period for any amount so added back to the extent not so indemnified or reimbursed within such 365 days), shall be excluded,

 

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(k) to the extent covered by insurance and actually reimbursed, or, so long as the Borrower has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is in fact reimbursed within 365 days of the date of such determination (with a deduction in the applicable future period for any amount so added back to the extent not so reimbursed within such 365 days), expenses, charges or losses with respect to liability or casualty events or business interruption shall be excluded,

(l) any net pension or other post-employment benefit costs representing amortization of unrecognized prior service costs, actuarial losses, including amortization of such amounts arising in prior periods, amortization of the unrecognized net obligation (and loss or cost) existing at the date of initial application of Accounting Standards Codification, section 715, and any other items of a similar nature, shall be excluded, and

(m) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Borrower or is merged into or consolidated with Borrower or any of its Subsidiaries or that Person’s assets are acquired by Borrower or any of its Subsidiaries shall be excluded (except to the extent required for any calculation of Consolidated EBITDA on a Pro Forma Basis in accordance with Section 1.08).

For the avoidance of doubt revenue will be accounted for on a GAAP basis and the recognition of any deferred revenue will be included in Consolidated Net Income in the same period as recognized for GAAP.

There shall be excluded from Consolidated Net Income for any period the purchase accounting effects of adjustments (including the effects of such adjustments pushed down to the Borrower and its Subsidiaries) in component amounts required or permitted by GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue, mineral reserves, landfill airspace and debt line items thereof) and related authoritative pronouncements (including the effects of such adjustments pushed down to the Borrower and its Subsidiaries), as a result of the Original Transactions, any acquisition consummated prior to the Closing Date, any Permitted Acquisitions, or the amortization or write-off of any amounts thereof.

Consolidated Secured Net Debt ” means, as of any date of determination, any Indebtedness described in clause (a) of the definition of “Consolidated Total Net Debt” outstanding on such date that is secured by a Lien on any asset or property of the Borrower or any Subsidiary minus the aggregate amount of cash and Cash Equivalents (other than Restricted Cash), in each case, that is held by the Borrower and its Subsidiaries as of such date, free and clear of all Liens (other than nonconsensual Liens permitted by Section 7.01 and Liens permitted by Section 7.01(a), Section 7.01(p), Section 7.01(q), clauses (i) and (ii) of Section 7.01(r), 7.01 (ee) and 7.01(ff)); provided that Consolidated Secured Net Debt shall not include Indebtedness in respect of letters of credit (including Letters of Credit), except to the extent of unreimbursed amounts thereunder; provided that any unreimbursed amount under commercial letters of credit shall not be counted as Consolidated Secured Net Debt until 3 Business Days after such amount is drawn; it being understood, for the avoidance of doubt, that obligations under Swap Contracts entered into for non-speculative purposes, deferred consideration, earn-out payments and non-compete payments do not constitute Consolidated Secured Net Debt.

Consolidated Total Assets ” of any Person means, at any date, the total assets of such Person and its Subsidiaries as of the last day of the most recently ended Test Period for which financial statements were required to have been delivered pursuant to Section 6.01(a) determined on a consolidated basis in accordance with GAAP.

Consolidated Total Net Debt ” means, as of any date of determination, (a) the aggregate principal amount of Indebtedness of the Borrower and its Subsidiaries outstanding on such date, in an amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP (but (x) excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Original Transactions or any Permitted Acquisition and (y) any Indebtedness that is issued at a discount to its initial principal amount shall be calculated based on the entire principal amount thereof), consisting of Indebtedness for borrowed money, Attributable Indebtedness, and debt obligations evidenced by promissory notes or similar instruments, minus (b) the aggregate amount of cash and Cash Equivalents (other than Restricted Cash), in each case, that is held by the Borrower and its Subsidiaries as of such date free and clear of all Liens, other than nonconsensual

 

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Liens permitted by Section 7.01 and Liens permitted by Section 7.01(a), Section 7.01(p), Section 7.01(q), clauses (i) and (ii) of Section 7.01(r), 7.01 (ee) and 7.01(ff)); provided that Consolidated Total Net Debt shall not include Indebtedness in respect of letters of credit (including Letters of Credit), except to the extent of unreimbursed amounts thereunder; provided that any unreimbursed amount under commercial letters of credit shall not be counted as Consolidated Total Net Debt until 3 Business Days after such amount is drawn; it being understood, for the avoidance of doubt, that obligations under Swap Contracts entered into for non-speculative purposes, deferred consideration, earn-out payments and non-compete payments (to the extent such earn-out payments would not become a liability on the balance sheet of such Person in accordance with GAAP as GAAP existed on December 31, 2008) do not constitute Consolidated Total Net Debt.

Consolidated Working Capital ” means, with respect to the Borrower and its Subsidiaries on a consolidated basis at any date of determination, Current Assets at such date of determination minus Current Liabilities at such date of determination; provided that increases or decreases in Consolidated Working Capital shall be calculated without regard to any changes in Current Assets or Current Liabilities as a result of (a) any reclassification in accordance with GAAP of assets or liabilities, as applicable, between current and noncurrent or (b) the effects of purchase accounting.

Continental Cement Indebtedness ” means each of (i) that certain Second Amended and Restated Credit Agreement, dated as of May 27, 2010, among Continental Cement Company, L.L.C., as borrower, Wells Fargo Bank, National Association, as agent and a syndicate of lenders, as amended or supplemented and in effect on the date hereof, (ii) that certain Second Amended and Restated Second Lien Credit Agreement, dated as of May 27, 2010, among Continental Cement Company, L.L.C., as borrower, Sankaty Advisors, LLC, as agent and a syndicate of lenders, as amended or supplemented and in effect on the date hereof and (iii) that certain Promissory Note, dated as of May 27, 2010, made by Continental Cement Company, L.L.C. in favor of Farmer Holding Company, Inc., as amended or supplemented and in effect on the date hereof.

Continuing Directors ” means the directors of the Borrower on the Closing Date and each other director, if, in each case, such other director’s nomination for election to the board of directors of the Borrower is recommended by a majority of the then Continuing Directors or such other director receives the vote of the Permitted Holders in his or her election by the stockholders of the Borrower.

Contract Consideration ” has the meaning set forth in the definition of “Excess Cash Flow.”

Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

Control ” has the meaning set forth in the definition of “Affiliate.”

Credit Extension ” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

Cumulative Credit ” means, at any date, an amount, not less than zero in the aggregate, determined on a cumulative basis equal to, without duplication:

(a) the Cumulative Retained Excess Cash Flow Amount at such time, plus

(b) the cumulative amount of cash and Cash Equivalent proceeds from (i) the sale of Equity Interests of the Borrower or of any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower and (ii) the common Equity Interests of the Borrower (or of Holdings or of any direct or indirect parent of Holdings) (other than Disqualified Equity Interests of the Borrower) issued upon conversion of Indebtedness (other than Indebtedness that is contractually subordinated to the Obligations) of the Borrower or any Subsidiary of the Borrower owed to a Person other than a Loan Party or a Subsidiary of a Loan Party, in the case of each of subclause (i) and subclause (ii), not previously applied for a purpose (including a Specified Equity Contribution) other than use in the Cumulative Credit, plus

 

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(c) 100% of the aggregate amount of contributions to the common capital of the Borrower (other than from a Subsidiary) received in cash and Cash Equivalents after the Closing Date other than from a Specified Equity Contribution, plus

(d) an amount equal to any returns in cash and Cash Equivalents (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the Borrower or any Subsidiary in respect of any Investments made pursuant to Section 7.02(n), minus

(e) any amount of the Cumulative Credit used to make Investments pursuant to Section 7.02(i) after the Closing Date and prior to such time, minus

(f) any amount of the Cumulative Credit used to make Investments pursuant to Section 7.02(n) after the Closing Date and prior to such time, minus

(g) any amount of the Cumulative Credit used to make Restricted Payments pursuant to Section 7.06(j)(y) after the Closing Date and prior to such time, minus

(h) any amount of the Cumulative Credit used to make payments or distributions in respect of Junior Financings pursuant to Section 7.13 after the Closing Date and prior to such time.

Cumulative Retained Excess Cash Flow Amount ” means, at any date, an amount, not less than zero in the aggregate, determined on a cumulative basis equal to the aggregate cumulative sum of the Retained Percentage of Excess Cash Flow, less the amount of Excess Cash Flow of Foreign Subsidiaries to the extent and for so long as such Excess Cash Flow is excluded from Excess Cash Flow prepayments pursuant to Section 2.05(b)(viii), for each Excess Cash Flow Period ending after the Closing Date and prior to such date.

Current Assets ” means, with respect to the Borrower and its Subsidiaries on a consolidated basis at any date of determination, all assets (other than cash and Cash Equivalents) that would, in accordance with GAAP, be classified on a consolidated balance sheet of the Borrower and its Subsidiaries as current assets at such date of determination, other than amounts related to current or deferred Taxes based on income or profits (but excluding assets held for sale, loans (permitted) to third parties, Pension Plan assets, deferred bank fees and derivative financial instruments).

Current Liabilities ” means, with respect to the Borrower and its Subsidiaries on a consolidated basis at any date of determination, all liabilities that would, in accordance with GAAP, be classified on a consolidated balance sheet of the Borrower and its Subsidiaries as current liabilities at such date of determination, other than (a) the current portion of any Indebtedness, (b) the current portion of interest, (c) accruals for current or deferred Taxes based on income or profits, (d) accruals of any costs or expenses related to restructuring reserves, (e) deferred revenue and (f) any Revolving Credit Exposure or Revolving Credit Loans.

Debt Fund Affiliate ” means (i) any fund managed by, or under common management with, GSO Capital Partners LP, (ii) any fund managed by GSO Debt Funds Management LLC, Blackstone Debt Advisors L.P., Blackstone Distressed Securities Advisors L.P., Blackstone Mezzanine Advisors L.P. or Blackstone Mezzanine Advisors II L.P. and (iii) any other Affiliate of Holdings that is a bona fide diversified debt fund or an investment vehicle that is engaged in the making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course and with respect to which Blackstone Capital Partners V L.P. does not, directly or indirectly, direct or cause the direction of the investment policies of such entity.

Debtor Relief Laws ” means the Bankruptcy Code of the United States and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

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Declined Proceeds ” has the meaning set forth in Section 2.05(b)(vi).

Default ” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

Default Rate ” means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2.0% per annum; provided that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2.0% per annum, in each case, to the fullest extent permitted by applicable Laws.

Defaulting Lender ” means, at any time, a Lender as to which the Administrative Agent has notified the Borrower that (i) such Lender has failed for three or more Business Days to comply with its obligations under this Agreement to make a Loan unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied , make a payment to the L/C Issuer in respect of an LC Advance and/or make a payment to the Swing Line Lender in respect of a Swing Line Loan (each a “ funding obligation ”), (ii) such Lender has notified the Administrative Agent, or has stated publicly, that it will not comply with any such funding obligation hereunder (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (iii) such Lender has, for three or more Business Days, failed, in good faith, to confirm in writing to the Administrative Agent, in response to a written request of the Administrative Agent, that it will comply with its funding obligations hereunder ( provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (iii) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (iv) a Lender Insolvency Event has occurred and is continuing with respect to such Lender ( provided that neither the reallocation of funding obligations provided for in Section 2.15(a) as a result of a Lender’s being a Defaulting Lender nor the performance by Non-Defaulting Lenders of such reallocated funding obligations will by themselves cause the relevant Defaulting Lender to become a Non-Defaulting Lender). Any determination that a Lender is a Defaulting Lender under clauses (i) through (iv) above will be made by the Administrative Agent in its reasonable discretion acting in good faith. The Administrative Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition.

Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any sale or issuance of Equity Interests in a Subsidiary) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

Disqualified Equity Interests ” means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the Latest Maturity Date at the time of issuance of such Equity Interests; provided that if such Equity Interests are issued pursuant to a plan for the benefit of employees of Holdings (or any direct or indirect parent thereof), the Borrower or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because it may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

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Dollar ” and “ $ ” mean lawful money of the United States.

Domestic Subsidiary ” means any Subsidiary that is organized under the Laws of the United States, any state thereof or the District of Columbia.

Effective Yield ” means, as to any Loans of any Class, the effective yield on such Loans, taking into account the applicable interest rate margins, any interest rate floors or similar devices and all upfront or similar fees or original issue discount (based on an assumed four year life to maturity) payable generally to Lenders making such Loans, but excluding any arrangement, structuring or other fees payable in connection therewith that are not generally shared ratably with all relevant Lenders and consent fees paid generally to consenting Lenders.

Eligible Assignee ” has the meaning set forth in Section 10.07(a).

Environment ” means indoor air, ambient air, surface water, groundwater, drinking water, land surface, subsurface strata, and natural resources such as wetlands, flora and fauna.

Environmental Laws ” means the common law and any applicable Laws, in any case, relating to pollution or the protection of the Environment, or the protection of human health (to the extent relating to exposure to Hazardous Materials) and safety as it relates to the environment, including any applicable provisions of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq ., the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq ., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq ., the Clean Water Act, 33 U.S.C. § 1251 et seq ., the Clean Air Act, 42 U.S.C. § 7401 et seq ., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq ., the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq ., Mine Safety and Health Act, 30 U.S.C. § 801 et seq , and the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq ., and all analogous state or local statutes, and the regulations promulgated pursuant thereto.

Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of investigation and remediation, fines, penalties or indemnities), of the Loan Parties or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage or treatment of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any order, decree or contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Environmental Permit ” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

Equity Interests ” means, with respect to any Person, all of the shares, interests, rights, participations or other equivalents (however designated) of capital stock of (or other ownership or profit interests or units in) such Person and all of the warrants, options or other rights for the purchase, acquisition or exchange from such Person of any of the foregoing (including through convertible securities).

ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

ERISA Affiliate ” means any trade or business (whether or not incorporated) that is under common control with a Loan Party or any Subsidiary within the meaning of Section 414 of the Code or Section 4001 of ERISA.

ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by a Loan Party, any Subsidiary or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by a Loan Party, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of

 

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ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) with respect to a Pension Plan, the failure to satisfy the minimum funding standard of Section 412 of the Code, whether or not waived; (g) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could result in liability to a Loan Party or any Subsidiary; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon a Loan Party, any Subsidiary or any ERISA Affiliate.

Eurocurrency Rate ” means:

(a) for any Interest Period with respect to any Eurocurrency Rate Loan, the rate per annum equal to (i) the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or such other commercially available source providing quotations of BBA LIBOR as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two London Banking Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period or (ii) if such rate is not available at such time for any reason, then the “Eurocurrency Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurocurrency Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two London Banking Days prior to the commencement of such Interest Period; and

(b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time determined two London Banking Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two London Banking Days prior to such date and time of determination;

provided that in all cases (a) or (b) the Eurocurrency Rate shall not be less than 1.25% per annum with respect to the Term Loans.

Eurocurrency Rate Loan ” means a Loan that bears interest at a rate based on the Eurocurrency Rate.

Event of Default ” has the meaning set forth in Section 8.01.

Excess Cash Flow ” means, for any period, an amount equal to (a) the sum, without duplication, of (i) Consolidated Net Income for such period, (ii) an amount equal to the amount of all non-cash charges (including depreciation and amortization) to the extent deducted in arriving at such Consolidated Net Income, (iii) decreases in Consolidated Working Capital and long-term accounts receivable of the Borrower and its Subsidiaries for such period (other than any such decreases arising from acquisitions or dispositions by the Borrower and its Subsidiaries completed during such period) and (iv) an amount equal to the aggregate net non-cash loss on Dispositions by the Borrower and its Subsidiaries during such period (other than sales in the ordinary course of business) to the extent deducted in arriving at such Consolidated Net Income minus (b) the sum, without duplication, of (i) an amount equal to the amount of all non-cash credits included in arriving at such Consolidated Net Income and cash charges included in clauses (a) through (m) of the definition of “Consolidated Net Income,” (ii) without duplication of amounts deducted pursuant to clause (xi) below in prior fiscal years, the amount of Capital Expenditures or acquisitions of intellectual property to the extent not expensed and Capitalized Software Expenditures accrued or made in cash or accrued during such period, to the extent that such Capital Expenditures or acquisitions were financed with internally generated cash or borrowings under the Revolving Credit Facility and were not made by utilizing the Cumulative Retained Excess Cash Flow Amount, (iii) the aggregate amount of all principal payments of Indebtedness of the Borrower or its Subsidiaries (including (A) the principal component of payments in respect of Capitalized Leases, (B) the amount of any scheduled repayment of Term Loans pursuant to Section 2.07 and (C) any mandatory

 

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prepayment of Term Loans pursuant to Section 2.05(b)(ii) to the extent required due to a Disposition that resulted in an increase to Consolidated Net Income and not in excess of the amount of such increase but excluding (X) all other voluntary and mandatory prepayments of Term Loans, (Y) all prepayments of Revolving Credit Loans and Swing Line Loans made during such period and (Z) all payments in respect of any other revolving credit facility made during such period, except in the case of clause (Z) to the extent there is an equivalent permanent reduction in commitments thereunder), to the extent financed with internally generated cash, (iv) an amount equal to the aggregate net non-cash gain on Dispositions by the Borrower and its Subsidiaries during such period (other than Dispositions in the ordinary course of business) to the extent included in arriving at such Consolidated Net Income, (v) increases in Consolidated Working Capital and long-term accounts receivable of the Borrower and its Subsidiaries for such period (other than any such increases arising from acquisitions or dispositions by the Borrower and its Subsidiaries during such period), (vi) cash payments by the Borrower and its Subsidiaries during such period in respect of long-term liabilities of the Borrower and its Subsidiaries other than Indebtedness, (vii) without duplication of amounts deducted pursuant to clause (xi) below in prior fiscal years, the amount of Investments and acquisitions made during such period by the Borrower and its Subsidiaries on a consolidated basis pursuant to Section 7.02 to the extent that such Investments and acquisitions were financed with internally generated cash and were not made by utilizing the Cumulative Retained Excess Cash Flow Amount, (viii) the amount of Restricted Payments paid during such period pursuant to Section 7.06(f), Section 7.06(h) or Section 7.06(j)(x) to the extent such Restricted Payments were financed with internally generated cash or borrowings under the Revolving Credit Facility, (ix) the aggregate amount of expenditures actually made by the Borrower and its Subsidiaries in cash during such period (including expenditures for the payment of financing fees) to the extent that such expenditures are not expensed during such period, (x) the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by the Borrower and its Subsidiaries during such period that are required to be made in connection with any prepayment of Indebtedness, (xi) without duplication of amounts deducted from Excess Cash Flow in prior periods, the aggregate consideration required to be paid in cash by the Borrower and its Subsidiaries pursuant to binding contracts (the “ Contract Consideration ”) entered into prior to or during such period relating to Permitted Acquisitions, Capital Software Expenditures or Capital Expenditures or acquisitions of intellectual property to the extent not expected to be consummated or made, plus any restructuring cash expenses, pension payments or tax contingency payments that have been added to Excess Cash Flow pursuant to clause (a)(ii) above required to be made, in each case during the period of four consecutive fiscal quarters of the Borrower following the end of such period, provided that to the extent the aggregate amount of internally generated cash not utilizing the Cumulative Retained Excess Cash Flow Amount actually utilized to finance such Permitted Acquisitions, Capital Expenditures, Capitalized Software Expenditures or acquisitions of intellectual property during such period of four consecutive fiscal quarters is less than the Contract Consideration, the amount of such shortfall shall be added to the calculation of Excess Cash Flow at the end of such period of four consecutive fiscal quarters, (xii) the amount of cash taxes paid in such period to the extent they exceed the amount of tax expense deducted in determining Consolidated Net Income for such period, (xiii) cash expenditures in respect of Swap Contracts during such fiscal year to the extent not deducted in arriving at such Consolidated Net Income, (xiv) any payment of cash to be amortized or expensed over a future period and recorded as a long-term asset and (xv) without duplication of amounts deducted from Excess Cash Flow in prior periods, earn-out payments and non-compete payments actually made and that are permitted to be made under this Agreement. Notwithstanding anything in the definition of any term used in the definition of Excess Cash Flow to the contrary, all components of Excess Cash Flow shall be computed for the Borrower and its Subsidiaries on a consolidated basis.

Excess Cash Flow Period ” means each fiscal year of the Borrower commencing with the fiscal year ending December 31, 2012, but in all cases for purposes of calculating the Cumulative Retained Excess Cash Flow Amount shall only include such fiscal years for which financial statements and a Compliance Certificate have been delivered in accordance with Sections 6.01(a) and 6.02(a) and for which any prepayments required by Section 2.05(b)(i) (if any) have been made (it being understood that the Retained Percentage of Excess Cash Flow for any Excess Cash Flow Period shall be included in the Cumulative Retained Excess Cash Flow Amount regardless of whether a prepayment is required by Section 2.05(b)(i)).

Exchange Act ” means the Securities Exchange Act of 1934, as amended.

Excluded Subsidiary ” means (a) any Subsidiary that is not directly or indirectly a wholly owned Subsidiary of the Borrower, (b) any Subsidiary that does not have total assets or annual revenues in excess of 3.5% of Consolidated Total Assets of the Borrower and its Subsidiaries individually or in the aggregate with all other Subsidiaries excluded via this clause (b), (c) any Subsidiary acquired following the Closing Date that is prohibited by applicable

 

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Law or Contractual Obligations that are in existence at the time of acquisition and not entered into in contemplation thereof from guaranteeing the Obligations or if guaranteeing the Obligation would require material or non-ministerial governmental (including regulatory) consent, approval, license or authorization (unless such consent, approval, license or authorization has been obtained), (d) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent, in consultation with the Borrower, the burden or cost or other consequences (including any material adverse tax consequences) of providing a Guarantee shall be excessive in view of the benefits to be obtained by the Lenders therefrom, (e) any Foreign Subsidiary, (f) any not-for-profit Subsidiaries, (g) joint ventures, (h) any special purpose securitization vehicle or a captive insurance subsidiary, (i) any direct or indirect Domestic Subsidiary (x) that is treated as a disregarded entity for federal income tax purposes and (y) substantially all of the assets of which include the Equity Interests of one or more Foreign Subsidiaries and (j) any Domestic Subsidiary that is a Subsidiary of a Foreign Subsidiary; provided that no Subsidiary that guarantees any Junior Financing shall be deemed to be an Excluded Subsidiary at any time any such guarantee is in effect.

Excluded Taxes ” means, with respect to any Agent, any Lender (including any L/C Issuer), or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder or under any other Loan Document, (a) any Taxes imposed on (or measured by) its net income or net profits (or any franchise or similar Taxes in lieu thereof) by the jurisdiction under the laws of which such recipient is organized, in which its principal office is located or in which it is otherwise doing business (other than a business deemed to arise solely by virtue of any of the transactions contemplated by this Agreement) or, in the case of any Lender, in which its Lending Office is located, (b) any Taxes in the nature of branch profits tax within the meaning of section 884(a) of the Code imposed by any jurisdiction described in (a), (c) other than in the case of an assignee pursuant to a request by the Borrower under Section 3.07, any United States federal withholding tax that is imposed on any interest payable to such Person pursuant to any Law in effect at the time such Person becomes a party to this Agreement (or designates a new Lending Office), except to the extent that such Person (or its assignor, if any) was entitled, at the time of designation of a new applicable Lending Office (or assignment), to receive additional amounts or indemnification payments with respect to such United States federal withholding Tax pursuant to Section 3.01(a), (d) a United States federal withholding tax (including backup withholding tax) that is attributable to such Person’s failure to comply with Section 3.01(d) or (e), or (e) any United States federal withholding tax imposed pursuant to FATCA.

Existing Credit Agreement ” means that certain Credit Agreement dated as of January 31, 2010, as amended and restated as of December 17, 2010, among Summit Materials Companies I, LLC, as borrower, Summit Materials Holdings I, LLC, Citibank, N.A., as agent, certain other co-syndication agents and co-documentation agents, and a syndicate of lenders, as amended or supplemented and in effect on the date hereof.

Existing Letters of Credit ” means those letters of credit in existence on the Closing Date and listed on Schedule 1.01B hereto.

Existing Revolver Tranche ” has the meaning provided in Section 2.17(b).

Existing Term Loan Tranche ” has the meaning provided in Section 2.17(a).

Expiring Credit Commitment ” has the meaning provided in Section 2.04(g).

Extended Revolving Credit Commitments ” has the meaning provided in Section 2.17(b).

Extended Term Loans ” has the meaning provided in Section 2.17(a).

Extending Revolving Credit Lender ” has the meaning provided in Section 2.17(c).

Extending Term Lender ” has the meaning provided in Section 2.17(c).

Extension ” means the establishment of an Extension Series by amending a Loan pursuant to Section 2.17 and the applicable Extension Amendment.

Extension Amendment ” has the meaning provided in Section 2.17(d).

 

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Extension Election ” has the meaning provided in Section 2.17(c).

Extension Request ” means any Term Loan Extension Request or a Revolver Extension Request, as the case may be.

Extension Series ” means any Term Loan Extension Series or a Revolver Extension Series, as the case may be.

Facility ” means the Term Loans, the Revolving Credit Facility, a given Extension Series of Extended Revolving Credit Commitments, a given Refinancing Series of Refinancing Term Loans, a given Extension Series of Extended Term Loans, a given Class of Incremental Term Loans, a given Class of Revolving Commitment Increases, or any Other Term Loan (or Commitment) as the context may require.

FATCA ” means current Sections 1471 through 1474 of the Code (and any amended or successor version thereof that is substantively comparable and not materially more onerous to comply with) and any current or future Treasury Regulations or other official administrative guidance promulgated thereunder.

Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

Fee Letters ” mean (i) the Amended and Restated Engagement Letter, dated as of January 13, 2012, among the Borrower, and the Joint Bookrunners, (ii) that certain Fee Letter dated as of January 30, 2012 between the Borrower and the Administrative Agent and (iii) that certain Administrative Agent Fee Letter dated as of January 30, 2012 between the Borrower and the Administrative Agent.

FIRREA ” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.

First Lien Intercreditor Agreement ” means an intercreditor agreement substantially in the form of Exhibit K hereto between the Collateral Agent and one or more collateral agents or representatives for the holders of Permitted Notes issued pursuant to Section 7.03(r) or Permitted Ratio Debt issued or incurred pursuant to Section 7.03(s), in each case, that are intended to be secured on a pari passu basis with the Obligations.

Foreign Disposition ” has the meaning set forth in Section 2.05(b)(viii).

Foreign Subsidiary ” means any direct or indirect Subsidiary of the Borrower which is not a Domestic Subsidiary.

Flood Insurance Laws ” means, collectively, (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto and (iv) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto.

Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.

Funded Debt ” means all Indebtedness of the Borrower and its Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.

 

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funding obligation ” has the meaning set forth in the definition of “Defaulting Lender.”

GAAP ” means generally accepted accounting principles in the United States of America, as in effect from time to time; provided , however , that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Original Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

Governmental Authority ” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

Granting Lender ” has the meaning set forth in Section 10.07(h).

Guarantee ” means, as to any Person, without duplication, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or other monetary obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

Guaranteed Obligations ” has the meaning set forth in Section 11.01.

Guarantors ” means Holdings and the Subsidiaries of the Borrower (other than any Excluded Subsidiary) and any other Domestic Subsidiary that is required hereby to issue a Guarantee of the Obligations or otherwise, at the option of the Borrower, issues a Guarantee of the Obligations after the Closing Date.

Guaranty ” means, collectively, the guaranty of the Obligations by the Guarantors pursuant to this Agreement.

Hazardous Materials ” means all materials, pollutants, contaminants, chemicals, compounds, constituents, substances or wastes, in any form, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas or mold, that are regulated pursuant to, or which could give rise to liability under, applicable Environmental Law.

 

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Hedge Bank ” has the meaning set forth in the definition of “Secured Hedge Agreement.”

Holdings ” means Summit Materials Intermediate Holdings, LLC or any Domestic Subsidiary of Summit Materials Intermediate Holdings, LLC that directly owns 100% of the issued and outstanding Equity Interests in the Borrower, and issues a Guarantee of the Obligations and agrees to assume the obligations of “Holdings” pursuant to this Agreement and the other Loan Documents pursuant to one or more instruments in form and substance reasonably satisfactory to the Administrative Agent.

Holdings Pledge Agreement ” means that certain Holdings Pledge Agreement substantially in the form of Exhibit H hereto.

Honor Date ” has the meaning set forth in Section 2.03(c)(i).

Immaterial Subsidiary ” has the meaning set forth in Section 8.03.

Incremental Amendment ” has the meaning set forth in Section 2.14(a).

Incremental Facility ” means any Incremental Term Loan or Revolving Commitment Increase, as applicable.

Incremental Term Loans ” has the meaning set forth in Section 2.14(a).

Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) of all outstanding letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than (i) trade accounts payable in the ordinary course of business, (ii) any earn-out or non-compete obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements and mortgage, industrial revenue bond, industrial development bond and similar financings), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f) all Attributable Indebtedness;

(g) all obligations of such Person in respect of Disqualified Equity Interests;

if and to the extent that the foregoing would constitute indebtedness or a liability in accordance with GAAP; and

(h) to the extent not otherwise included above, all Guarantees of such Person in respect of any of the foregoing.

 

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For all purposes hereof, the Indebtedness of any Person shall (A) include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner, except to the extent such Person’s liability for such Indebtedness is otherwise limited and only to the extent such Indebtedness would be included in the calculation of Consolidated Total Net Debt, and (B) in the case of the Borrower and its Subsidiaries, exclude all intercompany Indebtedness among the Borrower and its Subsidiaries having a term not exceeding 364 days (inclusive of any rollover or extensions of terms) and made in the ordinary course of business. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of Indebtedness of any Person for purposes of clause (e) shall be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.

Indemnified Liabilities ” has the meaning set forth in Section 10.05.

Indemnified Taxes ” means any Taxes other than Excluded Taxes.

Indemnitees ” has the meaning set forth in Section 10.05.

Information ” has the meaning set forth in Section 10.08.

Intellectual Property Security Agreement ” has the meaning set forth in the Security Agreement.

Intercompany Note ” means a promissory note substantially in the form of Exhibit G hereto.

Intercreditor Agreements ” means the First Lien Intercreditor Agreement and the Second Lien Intercreditor Agreement, collectively, in each case to the extent then in effect.

Interest Coverage Ratio ” means, with respect to the Borrower and its Subsidiaries on a consolidated basis, as of the end of any fiscal quarter of the Borrower for the Test Period ending on such date, the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense.

Interest Payment Date ” means, (a) as to any Eurocurrency Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made (with Swing Line Loans being deemed made under the Revolving Credit Facility for purposes of this definition).

Interest Period ” means, as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan and ending on the date one, two, three or six months thereafter or, to the extent agreed by each Lender of such Eurocurrency Rate Loan, nine or twelve months or less than one month thereafter, as selected by the Borrower in its Committed Loan Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date of the Facility under which such Loan was made.

 

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Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person (excluding, in the case of the Borrower and its Subsidiaries, intercompany loans, advances or Indebtedness among the Borrower and its Subsidiaries having a term not exceeding 364 days (inclusive of any rollover or extensions of terms) and made in the ordinary course of business consistent with past practice) or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

Investor Management Agreement ” means the Transaction and Management Fee Agreement among Holdings and Affiliates of (or management entities associated with) one or more of the Investors as in effect on the Original Closing Date and as the same may be amended, supplemented or otherwise modified in a manner not materially adverse to the Lenders; provided that any management, monitoring, consulting and advisory fees payable in advance by the Borrower and its Subsidiaries shall not exceed an amount equal to (x) with respect to the period from the Original Closing Date to December 31, 2010, 2% of Consolidated EBITDA for such period and (y) with respect to any fiscal year thereafter, 2% of Consolidated EBITDA for such fiscal year; provided , further , that in each case, such amounts shall be subject to any adjustments made pursuant to Section 3(c) of the Investor Management Agreement.

Investors ” means (i) Blackstone Capital Partners V L.P. and its Affiliates and any investment funds advised or managed by any of the foregoing (other than any portfolio operating companies of Blackstone Capital Partners V L.P.) and (ii) Silverhawk Summit, L.P. and its Affiliates and any investment funds advised or managed by any of the foregoing (other than any portfolio operating companies of Silverhawk Summit, L.P.).

IP Rights ” has the meaning set forth in Section 5.16.

ISP ” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

Issuer Documents ” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such Letter of Credit.

Joint Bookrunners ” means Merrill Lynch, Pierce, Fenner & Smith Incorporated., Citigroup Global Markets Inc., UBS Securities LLC, Barclays Capital, the investment banking division of Barclays Bank PLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc.

Junior Financing ” has the meaning set forth in Section 7.13(a).

Junior Financing Documentation ” means any documentation governing any Junior Financing.

Latest Maturity Date ” means, at any date of determination, the latest Maturity Date applicable to any Loan or Commitment hereunder at such time, including the latest maturity date of any Refinancing Term Loan, any Refinancing Term Commitment, any Extended Term Loan, any Extended Revolving Credit Commitment, any Incremental Term Loans, any Revolving Commitment Increases or any Other Term Loan, Other Term Loan Commitment, Other Revolving Credit Loan or Other Revolving Credit Commitments, in each case as extended in accordance with this Agreement from time to time.

 

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Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.

L/C Advance ” means, with respect to each Revolving Credit Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share.

L/C Borrowing ” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.

L/C Credit Extension ” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

L/C Issuer ” means (a) solely with respect to the Existing Letter of Credit, Citibank, N.A., and (b) Bank of America, N.A. and any other Lender that becomes an L/C Issuer in accordance with Section 2.03(l) or 10.07(j), in each case, in its capacity as an issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.09. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

Lender ” has the meaning set forth in the introductory paragraph to this Agreement and, as the context requires, includes an L/C Issuer and a Swing Line Lender, and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a “Lender.”

Lender Insolvency Event ” means that (i) a Lender or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) such Lender or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender or its Parent Company, or such Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment; provided that a Lender Insolvency Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any Equity Interest in any Lender or any person that directly or indirectly controls such Lender by a Governmental Authority or an instrumentality thereof.

Lending Office ” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

Letter of Credit ” means any letter of credit issued hereunder. A Letter of Credit may be a commercial letter of credit or a standby letter of credit.

Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

Letter of Credit Expiration Date ” means the day that is five (5) Business Days prior to the scheduled Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day); provided that the Letter of Credit Expiration Date shall be extended past the date that is five Business Days prior to the Maturity Date then in effect for the Revolving Credit Facility for so long as such Letters of Credit are Cash Collateralized by the Borrower.

 

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Letter of Credit Sublimit ” means an amount equal to the lesser of (a) $50,000,000 and (b) the aggregate amount of the Revolving Credit Commitments. The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.

Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to Real Property, and any Capitalized Lease having substantially the same economic effect as any of the foregoing).

Loan ” means an extension of credit by a Lender to the Borrower under Article II in the form of a Term Loan, a Revolving Credit Loan or a Swing Line Loan (including any Incremental Term Loan and any extensions of credit under any Revolving Commitment Increase).

Loan Documents ” means, collectively, (i) this Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) each Letter of Credit Application and (v) any amendment, supplement or other modification to any of the foregoing from time to time (including any Incremental Amendment, Refinancing Amendment or Extension Amendment).

Loan Parties ” means, collectively, the Borrower and each Guarantor.

London Banking Day ” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

Management Stockholders ” means the members of management of Holdings, the Borrower or any of its Subsidiaries who are investors in Holdings or any direct or indirect parent thereof.

Margin Stock ” has the meaning set forth in Regulation U.

Master Agreement ” has the meaning set forth in the definition of “Swap Contract.”

Material Adverse Effect ” means a (a) material adverse effect on the business, operations, assets, liabilities (actual or contingent) or financial condition of the Borrower and its Subsidiaries, taken as a whole; (b) material adverse effect on the ability of the Loan Parties (taken as a whole) to fully and timely perform any of their payment obligations under any Loan Document to which the Borrower or any of the Loan Parties is a party; or (c) material adverse effect on the rights and remedies available to the Secured Parties or the Collateral Agent under any Loan Document.

Material Real Property ” means any fee owned real property owned by any Loan Party (other than fee owned real property owned by Hamm, Inc. and its subsidiaries on the Closing Date or any other owned real property subject to a Lien permitted by clause (u) or (w) of Section 7.01 to the extent and for so long as the documentation governing such Lien prohibits the granting of a Mortgage thereon to secure the Obligations) with a fair market value in excess of $5,000,000, at the time of acquisition, as reasonably estimated by the Borrower in good faith).

Maturity Date ” means (i) with respect to the Term Loans, January 30, 2019, (ii) with respect to the Revolving Credit Facility and the Swing Line Facility, January 30, 2017, (iii) with respect to any tranche of Extended Term Loans, Extended Revolving Credit Commitments, the final maturity date as specified in the applicable Extension Request accepted by the respective Lender or Lenders, (iv) with respect to any Other Term Loans or Other Revolving Credit Loans, the final maturity date as specified in the applicable Refinancing Amendment and (v) with respect to any Incremental Term Loans or Revolving Commitment Increases, the final maturity date as specified in the applicable Incremental Amendment; provided that if any such day is not a Business Day, the Maturity Date shall be the Business Day immediately succeeding such day.

 

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Maximum Rate ” has the meaning set forth in Section 10.10.

Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.

Mortgage Policies ” has the meaning set forth in the definition of “Collateral and Guarantee Requirement.”

Mortgaged Properties ” has the meaning set forth in the definition of “Collateral and Guarantee Requirement.”

Mortgages ” means, collectively, the deeds of trust, trust deeds, deeds to secure debt, hypothecs and mortgages made by the Loan Parties in favor or for the benefit of the Collateral Agent on behalf of the Secured Parties creating and evidencing a Lien on a Mortgaged Property, substantially in the form attached as Exhibit J hereto with such local law and other changes thereto as shall be reasonably satisfactory to the Collateral Agent, and any other mortgages executed and delivered pursuant to Sections 6.11 and 6.13, in each case, as the same is amended from time to time and be further amended, restated, supplemented or otherwise modified.

Multiemployer Plan ” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Loan Party, any Subsidiary or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

Net Proceeds ” means:

(a) 100% of the cash proceeds actually received by the Borrower or any of its Subsidiaries (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise and including casualty insurance settlements and condemnation awards, but in each case only as and when received) from any Disposition or Casualty Event, net of (i) attorneys’ fees, accountants’ fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary fees actually incurred in connection therewith, (ii) any amount required to repay (x) Indebtedness (other than pursuant to the Loan Documents) that is secured by a Lien on the assets disposed of and which ranks prior to the Lien securing the Obligations or (y) Indebtedness or other obligations of any Subsidiary that is disposed of in such transaction, (iii) in the case of any Disposition or Casualty Event by a non-wholly owned Subsidiary, the pro rata portion of the Net Proceeds thereof (calculated without regard to this clause (iii)) attributable to minority interests and not available for distribution to or for the account of the Borrower or a wholly owned Subsidiary as a result thereof, (iv) taxes paid or reasonably estimated to be payable as a result thereof, and (v) the amount of any reasonable reserve established in accordance with GAAP against any adjustment to the sale price or any liabilities (other than any taxes deducted pursuant to clause (i) above) (x) related to any of the applicable assets and (y) retained by the Borrower or any of its Subsidiaries including, without limitation, Pension Plan and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations (however, the amount of any subsequent reduction of such reserve (other than in connection with a payment in respect of any such liability) shall be deemed to be Net Proceeds of such Disposition or Casualty Event occurring on the date of such reduction); provided that, if no Default exists, the Borrower or the applicable Subsidiary may reinvest any portion of such proceeds in assets useful for its business within 12 months of such receipt, such portion of such proceeds shall not constitute Net Proceeds except to the extent not, within 12 months of such receipt, so used or contractually committed pursuant to a legally binding agreement to be so used (it being understood that if any portion of such proceeds are not so used within such 12-month period but within such 12-month period are contractually committed pursuant to a legally binding agreement to be used, then upon the termination of such contract or if such Net Proceeds are not so used within the later of such 12 month period and 18 months of initial receipt, such remaining portion shall constitute Net Proceeds as of the date of such termination or expiry without giving effect to this proviso; it being understood that such proceeds shall constitute Net Proceeds notwithstanding any investment notice if there is a Specified Default at the time of a proposed reinvestment unless such proposed reinvestment is made pursuant to a binding commitment entered into at a time when no Specified Default was continuing); provided , further , that no proceeds realized in a single

 

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transaction or series of related transactions shall constitute Net Proceeds unless (x) such proceeds shall exceed $10,000,000 or (y) the aggregate net proceeds exceed $20,000,000 in any fiscal year (and thereafter only net cash proceeds in excess of such amount shall constitute Net Proceeds under this clause (a)), and

(b) 100% of the cash proceeds from the incurrence, issuance or sale by the Borrower or any of its Subsidiaries of any Indebtedness, net of all taxes paid or reasonably estimated to be payable as a result thereof and fees (including investment banking fees and discounts), commissions, costs and other expenses, in each case incurred in connection with such issuance or sale.

For purposes of calculating the amount of Net Proceeds, fees, commissions and other costs and expenses payable to the Borrower or any Subsidiary shall be disregarded.

Non-Consenting Lender ” has the meaning set forth in Section 3.07(d).

Non-Debt Fund Affiliate ” means any Affiliate of the Sponsor other than (a) Holdings or any Subsidiary of Holdings, (b) any Debt Fund Affiliate and (c) any natural person.

Non-Defaulting Lender ” means, at any time, a Lender that is not a Defaulting Lender.

non-Expiring Credit Commitment ” has the meaning provided in Section 2.04(g).

Non-extension Notice Date ” has the meaning set forth in Section 2.03(b)(iii).

Not Otherwise Applied ” means, with reference to any amount of Net Proceeds of any transaction or event, that such amount (a) was not required to be applied to prepay the Loans pursuant to Section 2.05(b), and (b) was not previously applied in determining the permissibility of a transaction under the Loan Documents where such permissibility was (or may have been) contingent on receipt of such amount or utilization of such amount for a specified purpose. The Borrower shall promptly notify the Administrative Agent of any application of such amount as contemplated by (b) above.

Note ” means a Term Note, a Revolving Credit Note or a Swing Line Note, as the context may require.

Obligations ” means all (x) advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party and its Subsidiaries arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or Subsidiary of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding and (y) obligations of the Borrower or any Subsidiary arising under Cash Management Obligations or any Secured Hedge Agreement. Without limiting the generality of the foregoing, the Obligations of the Loan Parties under the Loan Documents (and of their Subsidiaries to the extent they have obligations under the Loan Documents) include (a) the obligation (including guarantee obligations) to pay principal, interest, Letter of Credit fees, reimbursement obligations, charges, expenses, fees, Attorney Costs, indemnities and other amounts payable by any Loan Party under any Loan Document and (b) the obligation of any Loan Party to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Loan Party.

Organization Documents ” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

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Original Acquisition ” has the meaning set forth in the definition of “Original Acquisition Agreement.”

Original Acquisition Agreement ” means that certain membership interest purchase agreement dated November 24, 2009 (together with schedules and exhibits thereto) by and among the Borrower and the sellers party thereto, pursuant to which the Borrower agreed to acquire (the “Original Acquisition”) all of the outstanding equity interests of Hinkle Contracting Company LLC, a Kentucky limited liability company.

Original Closing Date ” means January 31, 2010.

Original Equity Contribution ” means the cash equity contribution by the Investors and certain other investors and associated entities in the amount of $88,278,528.04, together with up to $2,500,000 of rollover equity, made on the Original Closing Date to fund a portion of the Original Acquisition.

Original Funding Date ” means February 1, 2010.

Original Transaction Expenses ” means any fees or expenses incurred or paid by the Investors, Holdings, the Borrower or any of its (or their) Subsidiaries in connection with the Original Transactions (including expenses in connection with hedging transactions), this Agreement and the other Loan Documents and the transactions contemplated hereby and thereby.

Original Transactions ” means, collectively, (a) the Original Acquisition and other related transactions contemplated by the Original Acquisition Agreement, (b) the Original Equity Contribution, (c) the funding of the Loans on the Original Funding Date and the execution and delivery of Loan Documents entered into on the Original Closing Date, (d) the repayment of certain Indebtedness existing on the Original Funding Date and (e) the payment of Original Transaction Expenses.

Other Revolving Credit Commitments ” shall mean one or more Classes of revolving credit commitments hereunder that result from a Refinancing Amendment.

Other Revolving Credit Loans ” shall mean one or more Classes of Revolving Credit Loans that result from a Refinancing Amendment.

Other Taxes ” has the meaning specified in Section 3.01(b).

Other Term Loan Commitments ” shall mean one or more Classes of term loan commitments hereunder that result from a Refinancing Amendment.

Other Term Loans ” shall mean one or more Classes of Term Loans that result from a Refinancing Amendment.

Outstanding Amount ” means (a) with respect to Term Loans, Revolving Credit Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans, Revolving Credit Loans (including any refinancing of outstanding unpaid drawings under Letters of Credit or L/C Credit Extensions as a Revolving Credit Borrowing) and Swing Line Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes thereto as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit (including any refinancing of outstanding unpaid drawings under Letters of Credit or L/C Credit Extensions as a Revolving Credit Borrowing) or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

Parent Company ” means, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.

 

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Participant ” has the meaning set forth in Section 10.07(e).

PBGC ” means the Pension Benefit Guaranty Corporation.

Pension Plan ” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Loan Party or any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five (5) plan years.

Perfection Certificate ” means a certificate in the form of Exhibit II to the Security Agreement or any other form reasonably approved by the Collateral Agent, as the same shall be supplemented from time to time.

Permitted Acquisition ” has the meaning set forth in Section 7.02(i).

Permitted Asset Swap ” means the concurrent purchase and sale, trade-in or exchange of equipment or other property of a nature or type that is used or useful in a Permitted Business or a combination of such equipment or property and cash or Cash Equivalents between the Borrower or any of its Restricted Subsidiaries and another Person; provided , that (x) any cash or Cash Equivalents received must be applied in accordance with Section 2.05(b) and (y) the fair market value of the equipment or property received is at least as great as the fair market value of the equipment or other property being traded-in or exchanged.

Permitted Business ” means any business that is related, ancillary or complementary to the businesses of the Borrower and its Subsidiaries on the Closing Date.

Permitted Holders ” means each of the Investors and the Management Stockholders; provided that if the Management Stockholders own beneficially or of record more than fifteen percent (15%) of the outstanding voting Equity Interests of Holdings in the aggregate, they shall be treated as Permitted Holders of only fifteen percent (15%) of the outstanding voting Equity Interests of Holdings at such time.

Permitted Notes ” means (i) unsecured senior or senior subordinated debt securities of the Borrower, (ii) debt securities of the Borrower that are secured by a Lien on the Collateral ranking junior to the Liens securing the Obligations pursuant to a Second Lien Intercreditor Agreement or (iii) debt securities of the Borrower that are secured by a Lien ranking pari passu with the Liens securing the Obligations pursuant to a First Lien Intercreditor Agreement; provided that (a) in the case of debt securities issued in reliance on Section 7.03(r)(i), such debt securities are issued for cash consideration, (b) the terms of such debt securities do not provide for any scheduled repayment, mandatory redemption or sinking fund obligations prior to the Maturity Date of the Term Facility (other than customary offers to repurchase upon a change of control, asset sale or event of loss and customary acceleration rights after an event of default), (c) the covenants, events of default, guarantees, collateral and other terms of which (other than interest rate and redemption premiums), taken as a whole, are not more restrictive to the Borrower and the Subsidiaries than those in this Agreement; provided that a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent at least three Business Days (or such shorter period as the Administrative Agent may reasonably agree) prior to the incurrence of such debt securities, together with a reasonably detailed description of the material terms and conditions of such debt securities or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement, (d) at the time that any such Permitted Notes are issued (and after giving effect thereto) no Event of Default shall exist, (e) the Borrower shall be in compliance with the covenants set forth in Section 7.11 determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which financial statements were required to have been delivered pursuant to Section 6.01(a) or (b), as applicable (or if no Test Period cited in Section 7.11 has passed, the covenants in Section 7.11 for the first Test Period cited in such Section shall be satisfied as of the last four quarters ended), in each case, as if such Permitted Notes had been outstanding on the last day of such four quarter period, and (f) no Subsidiary of the Borrower (other than a Guarantor) shall be an obligor and no Permitted Notes shall be secured by any collateral other than the Collateral.

 

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Permitted Ratio Debt ” means Indebtedness of the Borrower or any of its Subsidiaries, provided that (a) immediately after giving Pro Forma Effect thereto and to the use of the proceeds thereof (and for purposes of any calculations under this definition, the cash proceeds of such incurrence shall not be permitted to reduce the Consolidated Total Net Debt, Consolidated First Lien Net Debt or Consolidated Secured Net Debt), (i) no Event of Default shall be continuing or result therefrom, (ii) the Borrower and its Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11, (iii) the Total Leverage Ratio is no greater than 4.50 to 1.00 (excluding, for purposes of calculating such ratio under this clause (iii), Revolving Credit Loans borrowed for seasonal working capital requirements in an amount not to exceed $50,000,000), (iv) if such Indebtedness is secured (1) the Secured Leverage Ratio is no greater than 3.00 to 1.00 (excluding, for purposes of calculating such ratio under this clause (iv), Revolving Credit Loans borrowed for seasonal working capital requirements in an amount not to exceed $50,000,000), (2) if such Indebtedness is incurred or guaranteed on a secured basis by a Loan Party, such Indebtedness shall be in the form of debt securities or Indebtedness that is not a credit facility that could have been incurred as an Incremental Term Loan or Revolving Commitment Increase, (3) it shall have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) and (4) such Indebtedness is subject to an Intercreditor Agreement, (v) such Indebtedness does not mature or have scheduled amortization payments prior to the date that is ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred or the maturity date of such Indebtedness can be extended subject to any customary conditions to a date that is ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred and (vi) any such Indebtedness incurred by a Subsidiary that is not a Loan Party, together with any other Indebtedness incurred by a Subsidiary that is not a Loan Party pursuant to Section 7.03, does not exceed in the aggregate at any time outstanding the greater of $35,000,000 and 2.50% of Consolidated Total Assets, in each case determined at the time of incurrence.

Permitted Refinancing ” means, with respect to any Person, any modification, refinancing, refunding, renewal, replacement or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed, replaced or extended except by an amount equal to unpaid accrued interest and premium thereon plus other amounts paid, and fees and expenses reasonably incurred, in connection with such modification, refinancing, refunding, renewal, replacement or extension and by an amount equal to any existing commitments unutilized thereunder, (b) other than with respect to a Permitted Refinancing in respect of Indebtedness permitted pursuant to Section 7.03(e), such modification, refinancing, refunding, renewal, replacement or extension has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended, (c) other than with respect to a Permitted Refinancing in respect of Indebtedness permitted pursuant to Section 7.03(e) or (f), at the time thereof, no Event of Default shall have occurred and be continuing and (d) if such Indebtedness being modified, refinanced, refunded, renewed, replaced or extended is Indebtedness permitted pursuant to Section 7.03(b), 7.03(r), 7.03(s), 7.03(t) or 7.13(a) or is otherwise a Junior Financing, (i) to the extent such Indebtedness being modified, refinanced, refunded, renewed, replaced or extended is subordinated in right of payment to the Obligations, such modification, refinancing, refunding, renewal, replacement or extension is subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended, (ii) the terms and conditions (including, if applicable, as to collateral but excluding as to subordination, interest rate and redemption premium) of any such modified, refinanced, refunded, renewed, replaced or extended Indebtedness, taken as a whole, are not materially less favorable to the Loan Parties or the Lenders than the terms and conditions of the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended, taken as a whole; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees) and (iii) such modification, refinancing, refunding, renewal, replacement or extension is incurred by the Person who is the obligor of the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended.

 

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Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

Plan ” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established, maintained or contributed to by any Loan Party or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

Platform ” has the meaning set forth in Section 6.01.

Principal L/C Issuer ” means Bank of America, any other L/C Issuer that has issued Letters of Credit having an aggregate Outstanding Amount in excess of $4,000,000.

Pro Forma Basis or Pro Forma Effect ” means, with respect to compliance with any test or covenant or calculation of any ratio hereunder, the determination or calculation of such test, covenant or ratio (including in connection with Specified Transactions) in accordance with Section 1.08.

Pro Forma Compliance ” means, with respect to any covenant in Section 7.11, compliance on a Pro Forma Basis with such covenant in accordance with Section 1.08.

Pro Rata Share ” means, with respect to each Lender at any time a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitments of such Lender under the applicable Facility or Facilities at such time and the denominator of which is the amount of the Aggregate Commitments under the applicable Facility or Facilities at such time; provided that if such Commitments have been terminated, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof.

Projections ” has the meaning set forth in Section 6.01(c).

Public Lender ” has the meaning set forth in Section 6.01.

Qualified Equity Interests ” means any Equity Interests that are not Disqualified Equity Interests.

Qualified IPO ” means the issuance by Holdings or any direct or indirect parent of Holdings of its common Equity Interests in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) (i) pursuant to an effective registration statement filed with the U.S. Securities and Exchange Commission in accordance with the Securities Act (whether alone or in connection with a secondary public offering) or (ii) after which the common Equity Interests of Holdings or any direct or indirect parent of Holdings are listed on an internationally recognized securities exchange or dealer quotation system.

Real Property ” means, collectively, all right, title and interest (including any leasehold, mineral or other estate) in and to any and all parcels of or interests in real property owned or leased by any Person, whether by lease, license or other means, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all general intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.

Refinancing Amendment ” means an amendment to this Agreement executed by each of (a) the Borrower, (b) the Administrative Agent, (c) each Additional Refinancing Lender and (d) each Lender that agrees to provide any portion of Refinancing Term Loans, Other Term Loans, Other Term Loan Commitments, Other Revolving Credit Commitments or Other Revolving Credit Loans incurred pursuant thereto, in accordance with Section 2.16.

Refinancing Series ” means all Refinancing Term Loans or Refinancing Term Commitments that are established pursuant to the same Refinancing Amendment (or any subsequent Refinancing Amendment to the extent such Refinancing Amendment expressly provides that the Refinancing Term Loans or Refinancing Term Commitments provided for therein are intended to be a part of any previously established Refinancing Series) and that provide for the same Effective Yield and amortization schedule.

 

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Refinancing Term Commitments ” means one or more term loan commitments hereunder that fund Refinancing Term Loans of the applicable Refinancing Series hereunder pursuant to a Refinancing Amendment.

Refinancing Term Loans ” means one or more term loans hereunder that result from a Refinancing Amendment.

Register ” has the meaning set forth in Section 10.07(d).

Registered Equivalent Notes ” means, with respect to any notes originally issued in an offering pursuant to Rule 144A under the Securities Act or other private placement transaction under the Securities Act, substantially identical notes (having the same guarantees) issued in a dollar-for-dollar exchange therefor pursuant to an exchange offer registered with the SEC.

Rejection Notice ” has the meaning set forth in Section 2.05(b)(vi).

Release ” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing or migrating in, into, onto or through the Environment or from or through any occupied facility or structure.

Replacement Term Loans ” has the meaning set forth in Section 10.01.

Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the thirty (30) day notice period has been waived.

Repricing Transaction ” means the prepayment, refinancing, substitution or replacement of all or a portion of the Term Loans with the incurrence by the Borrower or any Subsidiary of any debt financing (including, without limitation, any new or additional term loans under this Agreement (including Replacement Term Loans) whether incurred directly or by way of the conversion of Term Loans into a new tranche of replacement term loans under this Agreement) having an Effective Yield that is less than the Effective Yield of such Term Loans so repaid, refinanced, substituted or replaced, (with the comparative determinations to be made in the reasonable judgment of the Administrative Agent consistent with generally accepted financial practices) including without limitation, as may be effected through any amendment to this Agreement relating to the interest rate for, or weighted average yield of, such Term Loans or the incurrence of any Replacement Term Loans. Any determination by the Administrative Agent under this definition shall be conclusive and binding on all Lenders holding Term Loans absent manifest error.

Request for Credit Extension ” means (a) with respect to a Borrowing, continuation or conversion of Term Loans or Revolving Credit Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

Required Class Lenders ” means, as of any date of determination, Term Lenders having more than 50% of the aggregate principal amount of outstanding Term Loans of all Term Lenders; provided that, to the same extent set forth in Section 10.07(m) with respect to determination of Required Lenders, the Loans of any Affiliated Lender shall in each case be excluded for purposes of making a determination of Required Class Lenders.

Required Facility Lenders ” mean, as of any date of determination, with respect to any Facility, Lenders having more than 50% of the sum of (a) the Total Outstandings under such Facility (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans, as applicable, under such Facility being deemed “held” by such Lender for purposes of this definition) and (b) the aggregate unused Commitments under such Facility; provided that the unused Commitments of, and the portion of the Total Outstandings under such Facility held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of the Required Facility Lenders; provided , further , that, to the same extent set forth in Section 10.07(m) with respect to determination of Required Lenders, the Loans of any Affiliated Lender shall in each case be excluded for purposes of making a determination of Required Facility Lenders.

 

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Required Lenders ” means, as of any date of determination, Lenders having more than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition), (b) aggregate unused Term Commitments and (c) aggregate unused Revolving Credit Commitments; provided that the unused Term Commitment and unused Revolving Credit Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders; provided , further , that, to the same extent set forth in Section 10.07(m) with respect to determination of Required Lenders, the Loans of any Affiliated Lender shall in each case be excluded for purposes of making a determination of Required Lenders.

Responsible Officer ” means the chief executive officer, president, vice president, chief financial officer, treasurer or assistant treasurer or other similar officer of a Loan Party and, as to any document delivered on the Closing Date, any secretary or assistant secretary of such Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

Restricted Cash ” means cash and Cash Equivalents held by Subsidiaries that is contractually restricted from being distributed to the Borrower.

Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to the Borrower’s or a Subsidiary’s stockholders, partners or members (or the equivalent Persons thereof).

Retained Percentage ” means, with respect to any Excess Cash Flow Period, (a) 100% minus (b) the Applicable ECF Percentage with respect to such Excess Cash Flow Period.

Revolver Extension Request ” has the meaning provided in Section 2.17(b).

Revolver Extension Series ” has the meaning provided in Section 2.17(b).

Revolving Commitment Increase ” has the meaning set forth in Section 2.14(a).

Revolving Commitment Increase Lender ” has the meaning set forth in Section 2.14(a).

Revolving Credit Borrowing ” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Revolving Credit Lenders pursuant to Section 2.01(b).

Revolving Credit Commitment ” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans to the Borrower hereunder, (b) purchase participations in L/C Obligations in respect of Letters of Credit and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 1.01A under the caption “Revolving Credit Commitment” or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be (i) reduced from time to time in accordance with Section 2.06 and (ii) reduced or increased from time to time pursuant to (w) assignments by or to such Revolving Credit Lender pursuant to an Assignment and Assumption, (x) an Incremental Amendment, (y) a Refinancing Amendment or (z) an Extension. The aggregate Revolving Credit Commitments of all Revolving Credit Lenders shall be $150,000,000 on the Closing Date, as such amount may be adjusted from time to time in accordance with the terms of this Agreement.

 

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Revolving Credit Exposure ” means, as to each Revolving Credit Lender, the sum of the amount of the outstanding principal amount of such Revolving Credit Lender’s Revolving Credit Loans and its Pro Rata Share of the L/C Obligations and the Swing Line Obligations at such time.

Revolving Credit Facility ” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time.

Revolving Credit Lender ” means, at any time, any Lender that has a Revolving Credit Commitment at such time or, if the Revolving Credit Commitments have terminated, Revolving Credit Exposure.

Revolving Credit Loans ” means any Revolving Credit Loan made pursuant to Section 2.01(b), Revolving Commitment Increases, Other Revolving Credit Loans or Extended Revolving Credit Loans, as the context may require.

Revolving Credit Note ” means a promissory note of the Borrower payable to any Revolving Credit Lender or its registered assigns, in substantially the form of Exhibit C-2 hereto, evidencing the aggregate Indebtedness of the Borrower to such Revolving Credit Lender resulting from the Revolving Credit Loans made by such Revolving Credit Lender to the Borrower.

S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

Same Day Funds ” means immediately available funds.

SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

Second Lien Intercreditor Agreement ” means an intercreditor agreement by and among the Collateral Agent and the collateral agents or other representatives for the holders of Indebtedness secured by Liens that are intended to rank junior to the Liens securing the Obligations and that are otherwise permitted pursuant to Section 7.01 providing that all proceeds of Collateral shall first be applied to repay the Obligations in full prior to being applied to any obligations under the Indebtedness secured by such junior Liens and that until the termination of the Aggregate Commitments and the repayment in full (or cash collateralization of Letters of Credit) of all Obligations outstanding under this Agreement, the Collateral Agent shall have the sole right to exercise remedies against the Collateral (subject to customary exceptions for limited protective actions that may be taken by the holders of such junior Lien Indebtedness) and otherwise in form and substance reasonably satisfactory to the Collateral Agent.

Secured Hedge Agreement ” means any Swap Contract permitted under Article VII that is entered into by and between the Borrower or any Subsidiary and any Person that is a Lender or an Affiliate of a Lender (or was a Lender or an Affiliate of a Lender at the time such Swap Contract was entered into (a “ Hedge Bank ”)).

Secured Leverage Ratio ” means, with respect to any Test Period, the ratio of (a) Consolidated Secured Net Debt as of the last day of such Test Period to (b) Consolidated EBITDA for such Test Period.

Secured Parties ” means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, the Hedge Banks, the Cash Management Banks, the Supplemental Agents and each co-agent or sub-agent appointed by the Administrative Agent or Collateral Agent from time to time pursuant to Section 9.02.

Securities Act ” means the Securities Act of 1933, as amended.

Security Agreement ” means that certain Security Agreement substantially in the form of Exhibit F hereto.

Security Agreement Supplement ” has the meaning set forth in the Security Agreement.

 

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Senior Notes ” means $250,000,000 in aggregate principal amount of the Borrower’s senior unsecured notes due 2020 and any Registered Equivalent Notes having substantially identical terms and issued pursuant to the Senior Notes Indenture in exchange for the initial unregistered senior unsecured notes.

Senior Notes Indenture ” means the Indenture for the Senior Notes, dated January 30, 2012, between the Borrower and Wilmington Trust, National Association, as trustee, as the same may be amended, modified, supplemented, replace or refinanced to the extent not prohibited by this Agreement.

Solvent ” and “ Solvency ” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

SPC ” has the meaning set forth in Section 10.07(h).

Specified Default ” means a Default under Section 8.01(a), (f) or (g).

Specified Equity Contribution ” means any cash contribution to the common equity of Holdings and/or any purchase or investment in an Equity Interest of Holdings other than Disqualified Equity Interests (or other equity on terms and conditions reasonably satisfactory to the Arrangers).

Specified Transaction ” means any incurrence or repayment of Indebtedness (other than for working capital purposes) or Incremental Term Loan or Revolving Commitment Increase or Investment that results in a Person becoming a Subsidiary, any Permitted Acquisition or any Disposition that results in a Subsidiary ceasing to be a Subsidiary of the Borrower, any Investment constituting an acquisition of assets constituting a business unit, line of business or division of another Person or any Disposition of a business unit, line of business or division of the Borrower or a Subsidiary, in each case whether by merger, consolidation, amalgamation or otherwise.

Sponsor ” means Blackstone Capital Partners V L.P. and any of its Affiliates and funds or partnerships managed or advised by it or its Affiliates.

Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which (i) a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, (ii) more than half of the issued share capital is at the time beneficially owned or (iii) the management of which is otherwise controlled, directly or indirectly, through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

Subsidiary Guarantor ” means any Guarantor other than Holdings.

Successor Company ” has the meaning set forth in Section 7.04(d).

Supplemental Agent ” has the meaning set forth in Section 9.13(a) and “ Supplemental Agents ” shall have the corresponding meaning.

Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price

 

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or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.

Swap Termination Value ” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

Swing Line Borrowing ” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

Swing Line Facility ” means the swing line loan facility made available by the Swing Line Lenders pursuant to Section 2.04.

Swing Line Lender ” means Bank of America, in its capacity as provider of Swing Line Loans or any successor swing line lender hereunder.

Swing Line Loan ” has the meaning set forth in Section 2.04(a).

Swing Line Loan Notice ” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B hereto.

Swing Line Note ” means a promissory note of the Borrower payable to any Swing Line Lender or its registered assigns, in substantially the form of Exhibit C-3 hereto, evidencing the aggregate Indebtedness of the Borrower to such Swing Line Lender resulting from the Swing Line Loans.

Swing Line Obligations ” means, as at any date of determination, the aggregate principal amount of all Swing Line Loans outstanding.

Swing Line Sublimit ” means an amount equal to the lesser of (a) $5,000,000 and (b) the aggregate amount of the Revolving Credit Commitments. The Swing Line Sublimit is part of, and not in addition to, the Revolving Credit Commitments.

Syndication Agent ” means Citigroup Global Markets Inc., as syndication agent under this Agreement.

Taxes ” means any and all present or future taxes, duties, levies, imposts, assessments, deductions, withholdings or other charges imposed by any Governmental Authority, whether computed on a separate, consolidated, unitary, combined or other basis, and any and all liabilities (including interest, fines, penalties or additions to tax) with respect to the foregoing.

Term Borrowing ” means a borrowing consisting of simultaneous Term Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01(a).

Term Commitment ” means, as to each Term Lender, its obligation to make a Term Loan to the Borrower hereunder, expressed as an amount representing the maximum principal amount of the Term Loan to be made by

 

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such Term Lender under this Agreement, as such commitment may be (a) reduced from time to time pursuant to Section 2.06 and (b) reduced or increased from time to time pursuant to (i) assignments by or to such Term Lender pursuant to an Assignment and Assumption, (ii) an Incremental Amendment, (iii) a Refinancing Amendment or (iv) an Extension. The initial amount of each Term Lender’s Commitment is set forth on Schedule 1.01A hereto under the caption “Term Commitment” or, otherwise, in the Assignment and Assumption, Incremental Amendment or Refinancing Amendment pursuant to which such Lender shall have assumed its Commitment, as the case may be. The initial aggregate amount of the Term Commitments on the Closing Date is $400,000,000.

Term Lender ” means, at any time, any Lender that has a Term Commitment or a Term Loan at such time.

Term Loan ” means any Term Loan made pursuant to Section 2.01(a), Incremental Term Loan, Other Term Loan or Extended Term Loan, as the context may require.

Term Loan Extension Request ” has the meaning provided in Section 2.17(a).

Term Loan Extension Series ” has the meaning provided in Section 2.17(a).

Term Note ” means a promissory note of the Borrower payable to any Term Lender or its registered assigns, in substantially the form of Exhibit C-1 hereto, evidencing the aggregate Indebtedness of the Borrower to such Term Lender resulting from the Term Loans made by such Term Lender.

Test Period ” means, for any date of determination under this Agreement, the latest four consecutive fiscal quarters of the Borrower for which financial statements have been delivered to the Administrative Agent on or prior to the Closing Date and/or for which financial statements are required to be delivered pursuant to Section 6.01, as applicable.

Threshold Amount ” means $20,000,000.

Total Leverage Ratio ” means, with respect to any Test Period, the ratio of (a) Consolidated Total Net Debt as of the last day of such Test Period to (b) Consolidated EBITDA for such Test Period.

Total Outstandings ” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

Transferred Guarantor ” has the meaning set forth in Section 11.09.

Type ” means, with respect to a Loan, its character as a Base Rate Loan or a Eurocurrency Rate Loan.

Unaudited Financial Statements ” means the financial statements provided pursuant to Section 6.01(b) of the Existing Credit Agreement prior to the Closing Date.

Uniform Commercial Code ” or “ UCC ” means the Uniform Commercial Code as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.

United States ” and “ U.S. ” mean the United States of America.

United States Tax Compliance Certificate ” has the meaning set forth in Section 3.01(d)(ii)(C) and is in substantially the form of Exhibit I hereto.

unreallocated portion ” has the meaning set forth in Section 2.15(a)(ii).

Unreimbursed Amount ” has the meaning set forth in Section 2.03(c)(i).

 

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USA Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (ii) the then outstanding principal amount of such Indebtedness.

wholly owned ” means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) director’s qualifying shares and (y) shares issued to foreign nationals to the extent required by applicable Law) are owned by such Person and/or by one or more wholly owned Subsidiaries of such Person.

Section 1.02. Other Interpretive Provisions .

With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

(c) Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

(d) The term “including” is by way of example and not limitation.

(e) The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

(f) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including.”

(g) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

Section 1.03. Accounting Terms .

All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, except as otherwise specifically prescribed herein.

Section 1.04. Rounding .

Any financial ratios required to be maintained by the Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).

 

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Section 1.05. References to Agreements, Laws, Etc .

Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are permitted by the Loan Documents; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

Section 1.06. Times of Day .

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

Section 1.07. Timing of Payment of Performance .

When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment (other than as described in the definition of Interest Period) or performance shall extend to the immediately succeeding Business Day.

Section 1.08. Pro Forma Calculations .

(a) Notwithstanding anything to the contrary herein, the Total Leverage Ratio, Consolidated First Lien Net Leverage Ratio, the Secured Leverage Ratio, and the Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.08; provided that notwithstanding anything to the contrary in clause (b), (c) or (d) of this Section 1.08, when calculating the Consolidated First Lien Net Leverage Ratio and the Interest Coverage Ratio, as applicable, for purposes of (i) the Applicable ECF Percentage of Excess Cash Flow and (ii) determining actual compliance (and not Pro Forma Compliance or compliance on a Pro Forma Basis) with any covenant pursuant to Section 7.11, the events described in this Section 1.08 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect.

(b) For purposes of calculating the Total Leverage Ratio, Consolidated First Lien Net Leverage Ratio, the Secured Leverage Ratio and the Interest Coverage Ratio, Specified Transactions (and the incurrence or repayment of any Indebtedness in connection therewith to be subject to clause (d) of this Section 1.08) that have been made (i) during the applicable Test Period and (ii) if applicable as described in clause (a) above, subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period. If since the beginning of any applicable Test Period any Person that subsequently became a Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any of its Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.08, then the Total Leverage Ratio, Consolidated First Lien Net Leverage Ratio, the Secured Leverage Ratio and the Interest Coverage Ratio shall be calculated to give pro forma effect thereto in accordance with this Section 1.08.

(c) Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower and include, for the avoidance of doubt, the amount of cost savings, operating expense reductions and synergies projected by the Borrower in good faith to be realized as a result of specified actions taken or with respect to which the Borrower in good faith expects that substantial steps will have been taken within the time frame set forth in clause (B) below (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized

 

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on the first day of such period as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period) relating to such Specified Transaction, net of the amount of actual benefits realized during such period from such actions and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (B) such actions are taken, committed to be taken or expected to be taken no later than eighteen (18) months after the date of such Specified Transaction, and (C) no amounts shall be added pursuant to this clause (c) to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA, whether through a pro forma adjustment or otherwise, with respect to such period; provided that any increase in Consolidated EBITDA as a result of cost savings, operating expense reductions and synergies shall be subject to the limitations set forth in the definition of “Consolidated EBITDA.”

(d) In the event that the Borrower or any Subsidiary incurs (including by assumption or guarantees) or repays (including by redemption, repayment, retirement or extinguishment) any Indebtedness included in the calculations of the Total Leverage Ratio, the Secured Leverage Ratio, Consolidated First Lien Net Leverage Ratio and the Interest Coverage Ratio, as the case may be (in each case, other than Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes), (i) during the applicable Test Period and (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then the Total Leverage Ratio, the Secured Leverage Ratio, Consolidated First Lien Net Leverage Ratio and the Interest Coverage Ratio shall be calculated giving pro forma effect to such incurrence or repayment of Indebtedness, to the extent required, as if the same had occurred on (A) the last day of the applicable Test Period in the case of the Total Leverage Ratio, the Secured Leverage Ratio or the Consolidated First Lien Net Leverage Ratio and (B) the first day of the applicable Test Period in the case of the Interest Coverage Ratio. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Interest Coverage Ratio is made had been the applicable rate for the entire period (taking into account any hedging obligations applicable to such Indebtedness); provided , in the case of repayment of any Indebtedness, to the extent actual interest related thereto was included during all or any portion of the applicable Test Period, the actual interest may be used for the applicable portion of such Test Period. Interest on Capitalized Leases shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrower to be the rate of interest implicit in such Capitalized Leases in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a London interbank offered rate, or other rate, shall be determined to have been based upon the rate actually chose, or if none, then based upon such optional rate chosen as the Borrower or such Subsidiary may designate.

Section 1.09. Letter of Credit Amounts .

Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided , however , that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

Section 1.10. Cumulative Credit Transactions .

If more than one action occurs on any given date, the permissibility of the taking of which is determined hereunder by reference to the amount of the Cumulative Credit immediately prior to the taking of such action, the permissibility of the taking of each such action shall be determined independently and in no event may any two or more such actions be treated as occurring simultaneously.

 

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ARTICLE II

The Commitments and Credit Extensions

Section 2.01. The Loans .

(a) The Term Borrowings . Subject to the terms and conditions set forth herein, each Term Lender severally agrees to make to the Borrower on the Closing Date loans denominated in Dollars in an aggregate amount not to exceed the amount of such Term Lender’s Term Commitment. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed. Term Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.

(b) The Revolving Credit Borrowings . Subject to the terms and conditions set forth herein, each Revolving Credit Lender severally agrees to make Revolving Credit Loans denominated in Dollars pursuant to Section 2.02 to the Borrower from its applicable Lending Office from time to time, on any Business Day during the period from the Closing Date until the Maturity Date of the Revolving Credit Facility, in an aggregate principal amount not to exceed at any time outstanding the amount of such Lender’s Revolving Credit Commitment; provided that after giving effect to any Revolving Credit Borrowing, the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment. Within the limits of each Lender’s Revolving Credit Commitments and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01(b), prepay under Section 2.05, and reborrow under this Section 2.01(b). Revolving Credit Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.

Section 2.02. Borrowings, Conversions and Continuations of Loans .

(a) Each Term Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit Loans from one Type to the other, and each continuation of Eurocurrency Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than (i) 11:00 a.m. (New York City time) three (3) Business Days prior to the requested date of any Borrowing or continuation of Eurocurrency Rate Loans or any conversion of Base Rate Loans to Eurocurrency Rate Loans, and (ii) 10:00 a.m. (New York City time) on the Business Day prior to any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Except as provided in Section 2.14(a), each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be in a minimum principal amount of $2,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided in Section 2.03(c), 2.04(c), 2.14(a) or the last sentence of this paragraph, each Borrowing of or conversion to Base Rate Loans shall be in a minimum principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Term Borrowing, a Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Term Loans or Revolving Credit Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Loan in a Committed Loan Notice or fails to give a timely notice requesting a conversion or continuation, then the applicable Term Loans or Revolving Credit Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one (1) month.

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Pro Rata Share of the applicable Class of Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details

 

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of any automatic conversion to Base Rate Loans or continuation described in Section 2.02(a). In the case of each Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office not later than 11:00 a.m. (New York City time) on the Business Day specified in the applicable Committed Loan Notice. The Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided that if, on the date the Committed Loan Notice with respect to such Borrowing is given by the Borrower, there are Swing Line Loans or L/C Borrowings outstanding, then the proceeds of such Borrowing shall be applied, first, to the payment in full of any such L/C Borrowing, second, to the payment in full of any such Swing Line Loans, and third, to the Borrower as provided above.

(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurocurrency Rate Loan unless the Borrower pays the amount due, if any, under Section 3.05 in connection therewith. During the existence of an Event of Default, the Administrative Agent or the Required Lenders may require that no Loans may be converted to or continued as Eurocurrency Rate Loans.

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurocurrency Rate Loans upon determination of such interest rate. The determination of the Eurocurrency Rate by the Administrative Agent shall be conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

(e) After giving effect to all Term Borrowings, all Revolving Credit Borrowings, all conversions of Term Loans or Revolving Credit Loans from one Type to the other, and all continuations of Term Loans or Revolving Credit Loans as the same Type, there shall not be more than fifteen (15) Interest Periods in effect; provided that after the establishment of any new Class of Loans pursuant to a Refinancing Amendment or Extension Amendment, the number of Interest Periods otherwise permitted by this Section 2.02(e) shall increase by three (3) Interest Periods for each applicable Class so established.

(f) The failure of any Lender to make the Loan to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Loan on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on the date of any Borrowing.

Section 2.03. Letters of Credit .

(a) The Letter of Credit Commitment . (i) Subject to the terms and conditions set forth herein, (A)each L/C Issuer agrees, in reliance upon the agreements of the other Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars for the account of the Borrower ( provided that any Letter of Credit may be for the benefit of any Subsidiary of the Borrower) and to amend or renew Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drafts under the Letters of Credit and (B) the Revolving Credit Lenders severally agree to participate in Letters of Credit issued pursuant to this Section 2.03; provided that no L/C Issuer shall be obligated to make any L/C Credit Extension with respect to any Letter of Credit, and no Lender shall be obligated to participate in any Letter of Credit if as of the date of such L/C Credit Extension, (x) the Revolving Credit Exposure of any Revolving Credit Lender would exceed such Lender’s Revolving Credit Commitment or (y) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to be issued hereunder in the name of the Borrower for the benefit of the Subsidiary of the Borrower in whose name such Existing Letter of Credit is outstanding immediately prior to the Closing Date and shall constitute Letters of Credit subject to the terms hereof.

 

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(ii) An L/C Issuer shall be under no obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or direct that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date (for which such L/C Issuer is not otherwise compensated hereunder);

(B) the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last renewal, unless the Lenders holding a majority of the Revolving Credit Commitments have approved such expiry date;

(C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date;

(D) the issuance of such Letter of Credit would violate any Laws binding upon such L/C Issuer;

(E) such Letter of Credit is denominated in a currency other than Dollars;

(F) any Revolving Credit Lender is at such time a Defaulting Lender, unless such L/C Issuer has received (as set forth in clause (a)(iv) below) Cash Collateral or similar security satisfactory to such L/C Issuer (in its sole discretion) from either the Borrower or such Defaulting Lender or such Defaulting Lender’s Pro Rata Share of the L/C Obligations has been reallocated pursuant to clause (a)(iv) below in respect of such Defaulting Lender’s obligation to fund under Section 2.03(c);

(G) such Letter of Credit is in an initial amount less than $100,000;

(H) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally; or

(I) with respect to any commercial Letter of Credit, the Borrower shall not have established an account with the L/C Issuer for the payment of fees and any drawings thereunder, as set forth in Section 2.03(h) below.

(iii) An L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(iv) In the case where any Revolving Credit Lender is at any time a Defaulting Lender, the Borrower and such Defaulting Lender each agree, within one Business Day following notice by the Administrative Agent, to cause to be deposited with the Administrative Agent for the benefit of the L/C Issuer, Cash Collateral in the full amount of such Defaulting Lender’s Pro Rata Share of the outstanding L/C Obligations; provided that, at the Borrower’s option, the Borrower may, by notice to the Administrative Agent, elect to reallocate all or any part of the Defaulting Lender’s Pro Rata Share of the L/C Obligations among all Revolving Credit Lenders that are not Defaulting Lenders but only to the extent (x) the total Revolving Credit Exposure of all Revolving Credit Lenders that are not Defaulting Lenders plus such Defaulting Lender’s Pro Rata Share of the L/C Obligations and any Swing Line Loans, in each case, except to the extent Cash Collateralized, does not exceed the aggregate Revolving Credit Commitments (excluding the Revolving Credit Commitment of any Defaulting Lender except to the extent of any outstanding Revolving Credit Loans of such Defaulting Lender) and (y) the conditions set forth in Section 4.02 are satisfied at such time (in which case the Revolving Credit Commitments of all Defaulting Lenders shall be deemed

 

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to be zero (except to the extent Cash Collateral has been posted in respect of any portion of such Defaulting Lender’s L/C Obligations or participations in Swing Line Loans) for purposes of any determination of the Revolving Credit Lenders’ respective Pro Rata Shares of L/C Obligations (including for purposes of all fee calculations hereunder). The Borrower and/or such Defaulting Lender hereby grant to the Administrative Agent, for the benefit of such L/C Issuer, a security interest in any Cash Collateral and all proceeds of the foregoing with respect to such Defaulting Lender’s participations in Letters of Credit deposited hereunder. Such Cash Collateral shall be maintained in blocked deposit accounts at Bank of America and may be invested in Cash Equivalents reasonably acceptable to the Administrative Agent. If at any time the Administrative Agent determines that any funds held as Cash Collateral under this clause (a)(iv) are subject to any right or claim of any Person other than the Administrative Agent for the benefit of such L/C Issuer or that the total amount of such funds is less than such Defaulting Lender’s Pro Rata Share of all L/C Obligations that has not been reallocated as provided above, the Borrower and/or such Defaulting Lender will, promptly upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (I) such Defaulting Lender’s Pro Rata Share of all L/C Obligations that have not been so reallocated over (II) the total amount of funds, if any, then held as Cash Collateral in respect thereof under this clause (a)(iv) that the Administrative Agent determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Laws, to reimburse such L/C Issuer. If the Lender that triggers the Cash Collateral requirement under this clause (a)(iv) ceases to be a Defaulting Lender (as determined by such L/C Issuer in good faith), or if there are no L/C Obligations outstanding, any funds held as Cash Collateral pursuant to the foregoing provisions shall thereafter be returned to the Borrower or the Defaulting Lender, whichever provided the funds for the Cash Collateral, and the Pro Rata Share of the L/C Obligations of each Revolving Credit Lender shall thereafter take into account such Revolving Credit Lender’s Revolving Credit Commitment.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit . (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to an L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the relevant L/C Issuer and the Administrative Agent not later than 11:00 a.m. (New York City time) at least two (2) Business Days prior to the proposed issuance date or date of amendment, as the case may be; or, in each case, such later date and time as the relevant L/C Issuer may agree in a particular instance in its sole discretion. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the relevant L/C Issuer: (a) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (b) the amount thereof; (c) the expiry date thereof; (d) the name and address of the beneficiary thereof; (e) the documents to be presented by such beneficiary in case of any drawing thereunder; (f) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (g) such other matters as the relevant L/C Issuer may reasonably request. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the relevant L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the relevant L/C Issuer may reasonably request.

(ii) Promptly after receipt of any Letter of Credit Application, the relevant L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof. Upon receipt by the relevant L/C Issuer of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be. Immediately upon the issuance of each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the relevant L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Letter of Credit.

(iii) If the Borrower so requests in any applicable Letter of Credit Application relating to a standby Letter of Credit, the relevant L/C Issuer shall agree to issue a standby Letter of Credit that has automatic extension provisions (each, an “ Auto-Extension Letter of Credit ”); provided that any such Auto-Extension Letter of Credit

 

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must permit the relevant L/C Issuer to prevent any such extension at least once in each twelve month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “ Non-extension Notice Date ”) in each such twelve month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the relevant L/C Issuer, the Borrower shall not be required to make a specific request to the relevant L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the relevant L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided that the relevant L/C Issuer shall (A) not be required to permit any such extension if the relevant L/C Issuer has determined that it would have no obligation at such time to issue such Letter of Credit in its extended form under the terms hereof (by reason of the provisions of Section 2.03(a)(ii) or otherwise), and (B) not permit any such extension if it has received notice (which may be by telephone or in writing) on or before the day that is five (5) Business Days before the Non-extension Notice Date from the Administrative Agent, any Revolving Credit Lender or the Borrower that one or more of the applicable conditions specified in Section 4.01 are not then satisfied.

(iv) Promptly after issuance of any Letter of Credit or any amendment to a Letter of Credit, the relevant L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations . (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the relevant L/C Issuer shall notify promptly the Borrower and the Administrative Agent thereof. Not later than 12:00 Noon (New York City time) on the Business Day immediately following any payment by an L/C Issuer under a Letter of Credit with notice to the Borrower (each such date, an “ Honor Date ”), the Borrower shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing in Dollars. The L/C Issuer shall notify the Borrower of the amount of the drawing promptly following the determination or revaluation thereof. If the Borrower fails to so reimburse such L/C Issuer by such time, the Administrative Agent shall promptly notify each Appropriate Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and the amount of such Appropriate Lender’s Pro Rata Share thereof. In such event, the Borrower shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans but subject to the amount of the unutilized portion of the Revolving Credit Commitments of the Appropriate Lenders and the conditions set forth in Section 4.01 (other than the delivery of a Committed Loan Notice). Any notice given by an L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice. Any Unreimbursed Amount that is not reimbursed on or prior the Honor Date shall bear interest at the rate applicable to Revolving Credit Loans that are Base Rate Loans for the first Business Day after the Honor Date and thereafter in accordance with Section 2.03(c)(iii).

(ii) Each Appropriate Lender (including any Lender acting as an L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the relevant L/C Issuer in Dollars at the Administrative Agent’s Office for payments in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. (New York City time) on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Appropriate Lender that so makes funds available shall be deemed to have made a Revolving Credit Loan that is a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the relevant L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 4.01 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the relevant L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate for Revolving Credit Loans. In such event, each Appropriate Lender’s payment to the Administrative Agent for the account of the relevant L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

 

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(iv) Until each Appropriate Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the relevant L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account of the relevant L/C Issuer.

(v) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse an L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the relevant L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided that each Revolving Credit Lender’s obligation to make Revolving Credit Loans (but not L/C Advances) pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.01 (other than delivery by the Borrower of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the relevant L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the relevant L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. A certificate of the relevant L/C Issuer submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.

(d) Repayment of Participations . (i) If, at any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), the Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the amount received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of an L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by such L/C Issuer in its discretion), each Appropriate Lender shall pay to the Administrative Agent for the account of such L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e) Obligations Absolute . The obligation of the Borrower to reimburse the relevant L/C Issuer for each drawing under each Letter of Credit issued by it and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

(ii) the existence of any claim, counterclaim, setoff, defense or other right that any Loan Party may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the relevant L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

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(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) any payment by the relevant L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the relevant L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;

(v) any exchange, release or non-perfection of any Collateral, or any release or amendment or waiver of or consent to departure from the Guaranty or any other guarantee, for all or any of the Obligations of any Loan Party in respect of such Letter of Credit; or

(vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Loan Party;

provided that the foregoing shall not excuse any L/C Issuer from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are waived by the Borrower to the extent permitted by applicable Law) suffered by the Borrower that are caused by such L/C Issuer’s gross negligence or willful misconduct as determined in a final and non-appealable judgment by a court of competent jurisdiction when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.

(f) Role of L/C Issuers . Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the relevant L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuers, any Agent-Related Person nor any of the respective correspondents, participants or assignees of any L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Lenders holding a majority of the Revolving Credit Commitments, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct as determined in a final and non-appealable judgment by a court of competent jurisdiction; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuers, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of any L/C Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (vi) of Section 2.03(e); provided that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against an L/C Issuer, and such L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by such L/C Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful or grossly negligent failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit, in each case as determined in a final and non-appealable judgment by a court of competent jurisdiction. In furtherance and not in limitation of the foregoing, each L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and no L/C Issuer shall be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

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(g) Cash Collateral . (i) If, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, (ii) if any Event of Default occurs and is continuing and the Administrative Agent or the Lenders holding a majority of the Revolving Credit Commitments, as applicable, require the Borrower to Cash Collateralize the L/C Obligations pursuant to Section 8.02 or (iii) an Event of Default set forth under Section 8.01(f) occurs and is continuing, the Borrower shall Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount determined as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be), and shall do so not later than 2:00 p.m., New York City time, on (x) in the case of the immediately preceding clauses (i) through (iii), (1) the Business Day that the Borrower receives notice thereof, if such notice is received on such day prior to 12:00 Noon, New York City time, or (2) if clause (1) above does not apply, the Business Day immediately following the day that the Borrower receives such notice and (y) in the case of the immediately preceding clause (iii), the Business Day on which an Event of Default set forth under Section 8.01(f) occurs or, if such day is not a Business Day, the Business Day immediately succeeding such day. For purposes hereof, “ Cash Collateralize ” means, in respect of an obligation, to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the relevant L/C Issuer and the Lenders, (as a first priority perfected security interest) cash collateral for the L/C Obligations, cash or deposit account balances (“ Cash Collateral ”) pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the relevant L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked accounts at the Administrative Agent and may be invested in readily available Cash Equivalents. If at any time the Administrative Agent determines that any funds held as Cash Collateral are expressly subject to any right or claim of any Person other than the Administrative Agent (on behalf of the Secured Parties) or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in the deposit accounts at the Administrative Agent as aforesaid, an amount equal to the excess of (a) such aggregate Outstanding Amount over (b) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent reasonably determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Law, to reimburse the relevant L/C Issuer. To the extent the amount of any Cash Collateral exceeds the then Outstanding Amount of such L/C Obligations and so long as no Event of Default has occurred and is continuing, the excess shall be refunded to the Borrower. To the extent any Event of Default giving rise to the requirement to Cash Collateralize any Letter of Credit pursuant to this Section 2.03(g) is cured or otherwise waived by the Required Lenders, then so long as no other Event of Default has occurred and is continuing, all Cash Collateral pledged to Cash Collateralize such Letter of Credit shall be refunded to the Borrower.

(h) Letter of Credit Fees . The Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Pro Rata Share a Letter of Credit fee for each Letter of Credit issued pursuant to this Agreement equal to the Applicable Rate times the daily maximum amount then available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit if such maximum amount increases periodically pursuant to the terms of such Letter of Credit); provided that (x) if any portion of a Defaulting Lender’s Pro Rata Share of any Letter of Credit is Cash Collateralized by the Borrower or reallocated to the other Revolving Credit Lenders pursuant to Section 2.03(a)(iv), then the Borrower shall not be required to pay a Letter of Credit fee with respect to such portion of such Defaulting Lender’s Pro Rata Share so long as it is Cash Collateralized by the Borrower or reallocated to the other Revolving Credit Lenders and (y) if any portion of a Defaulting Lender’s Pro Rata Share is not Cash Collateralized or reallocated pursuant to Section 2.03(a)(iv), then the Letter of Credit fee with respect to such Defaulting Lender’s Pro Rata Share shall be payable to the applicable L/C Issuer until such Pro Rata Share is Cash Collateralized or such Lender ceases to be a Defaulting Lender. Such Letter of Credit fees shall be computed on a quarterly basis in arrears. Such Letter of Credit fees shall be due and payable in Dollars on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. With respect to any commercial Letter of Credit, the Borrower shall have set up an account with the relevant L/C Issuer prior to the issuance of any such commercial Letter of Credit from which such L/C Issuer shall be permitted to debit any amounts required to be paid as fees or as a result of any drawing thereunder.

 

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(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers . The Borrower shall pay directly to each L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued by it to the Borrower equal to the greater of (x) 0.125% per annum (or such other amount as may be mutually agreed by the Borrower and the applicable L/C Issuer) of the daily maximum amount then available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit if such maximum amount increases periodically pursuant to the terms of such Letter of Credit) and (y) to the extent the L/C Issuer is the Administrative Agent or an Affiliate thereof, $1,500 per annum. Such fronting fees shall be computed on a quarterly basis in arrears. Such fronting fees shall be due and payable in Dollars on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. In addition, the Borrower shall pay directly to each L/C Issuer for its own account with respect to each Letter of Credit issued to the Borrower the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable within ten (10) Business Days of demand and are nonrefundable.

(j) Applicability of ISP and UCP . Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each commercial Letter of Credit.

(k) Conflict with Letter of Credit Application . Notwithstanding anything else to the contrary in this Agreement, in the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

(l) Addition of an L/C Issuer . A Revolving Credit Lender may become an additional L/C Issuer hereunder pursuant to a written agreement among the Borrower, the Administrative Agent and such Revolving Credit Lender (which, among other things, shall identify the appropriate contact for notices to obtain any necessary consents to assignments under Section 10.07). The Administrative Agent shall notify the Revolving Credit Lenders of any such additional L/C Issuer.

(m) Letter of Credit Reporting . On a monthly basis, each L/C Issuer shall deliver to the Administrative Agent a complete list of all outstanding Letter of Credit issued by such L/C Issuer.

(n) Existing Letters of Credit . The parties hereto agree that the Existing Letters of Credit shall be deemed Letters of Credit for all purposes under this Agreement, without any further action by the Borrower.

(o) Provisions Related to Extended Revolving Credit Commitments . In connection with the establishment of any Extended Revolving Credit Commitments or Other Revolving Credit Commitments and subject to the availability of unused Commitments with respect to such Class and the satisfaction of the conditions set forth in Section 4.02, the Borrower may with the written consent of the applicable L/C Issuer designate any outstanding Letter of Credit to be a Letter of Credit issued pursuant to such Class of Extended Revolving Credit Commitments or Other Revolving Credit Commitments. Upon such designation such Letter of Credit shall no longer be deemed to be issued and outstanding under such prior Class and shall instead be deemed to be issued and outstanding under such Class of Extended Revolving Commitments or Other Revolving Credit Commitments.

Section 2.04. Swing Line Loans .

(a) The Swing Line . Subject to the terms and conditions set forth herein, Bank of America, in its capacity as Swing Line Lender, may in its sole discretion, agree to make loans in Dollars to the Borrower (each such loan, a “ Swing Line Loan ”), from time to time on any Business Day during the period beginning on the Closing Date and until the Maturity Date of the Revolving Credit Facility in an aggregate amount not to exceed at any time

 

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outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of Revolving Credit Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Swing Line Lender’s Revolving Credit Commitment; provided that, after giving effect to any Swing Line Loan, (i) the Revolving Credit Exposure shall not exceed the aggregate Revolving Credit Commitment and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender (other than the relevant Swing Line Lender), plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment then in effect; provided , further , that the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Swing Line Loan.

Notwithstanding the foregoing, before making any Swing Line Loans (if at such time any Revolving Credit Lender is a Defaulting Lender), the applicable Swing Line Lender may condition the provision of any Swing Line Loans on its receipt of Cash Collateral or similar security satisfactory to such Swing Line Lender (in its sole discretion) from either the Borrower or such Defaulting Lender in respect of such Defaulting Lender’s risk participation in such Swing Line Loans as set forth below. The Borrower and/or such Defaulting Lender hereby grants to the Administrative Agent, for the benefit of the Swing Line Lender, a security interest in all such Cash Collateral and all proceeds of the foregoing. Such Cash Collateral shall be maintained in blocked deposit accounts at Bank of America and may be invested in Cash Equivalents reasonably acceptable to the Administrative Agent. If at any time the Administrative Agent determines that any funds held as Cash Collateral under this paragraph are subject to any right or claim of any Person other than the Administrative Agent for the benefit of the Swing Line Lender or that the total amount of such funds is less than the aggregate risk participation of such Defaulting Lender in the applicable Swing Line Loan, the Borrower and/or such Defaulting Lender will, promptly upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate risk participation over (y) the total amount of funds, if any, then held as Cash Collateral under this paragraph that the Administrative Agent determines to be free and clear of any such right and claim. If the Revolving Credit Lender that triggers the Cash Collateral requirement under this paragraph ceases to be a Defaulting Lender (as determined by the Swing Line Lender in good faith), or if the Swing Line Loans have been permanently reduced to zero, the funds held as Cash Collateral shall thereafter be returned to the Borrower or the Defaulting Lender, whichever provided the funds for the Cash Collateral.

(b) Borrowing Procedures . Each Swing Line Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 12:00 Noon (New York City time) on the requested borrowing date and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000 and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the relevant Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any Swing Line Loan Notice (by telephone or in writing), the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, such Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless (x) the relevant Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Credit Lender) prior to 2:00 p.m. (New York City time) on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Section 4.01 is not then satisfied or (y) such Swing Line Lender has determined in its sole discretion not to make such Swing Line Loan, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 5:00 p.m. (New York City time) on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower.

 

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(c) Refinancing of Swing Line Loans . (i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably authorizes such Swing Line Lender to so request on its behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount equal to such Lender’s Pro Rata Share of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the aggregate Revolving Credit Commitments and the conditions set forth in Section 4.01. The relevant Swing Line Lender shall furnish the Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Credit Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Committed Loan Notice available to the Administrative Agent in Same Day Funds for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. (New York City time) on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Loans submitted by the relevant Swing Line Lender as set forth herein shall be deemed to be a request by such Swing Line Lender that each of the Revolving Credit Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Credit Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by the Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.04(c) (but not to purchase and fund risk participations in Swing Line Loans) is subject to the conditions set forth in Section 4.01. No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein.

(d) Repayment of Participations . (i) At any time after any Revolving Credit Lender has purchased and funded a risk participation in a Swing Line Loan, if the relevant Swing Line Lender receives any payment on account of such Swing Line Loan, such Swing Line Lender will distribute to such Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s risk participation was funded) in the same funds as those received by such Swing Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Credit Lender shall pay to the Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Federal Funds Rate. The Administrative Agent will make such demand upon the request of a Swing Line Lender. The obligations of the Revolving Credit Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

 

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(e) Interest for Account of Swing Line Lender . The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Revolving Credit Lender funds its Base Rate Loan, Eurocurrency Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Lender’s Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender . The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

(g) Provisions Related to Extended Revolving Credit Commitments . If the maturity date shall have occurred in respect of any tranche of Revolving Credit Commitments (the “ Expiring Credit Commitment ”) at a time when another tranche or tranches of Revolving Credit Commitments is or are in effect with a longer maturity date (each a “ non-Expiring Credit Commitment ” and collectively, the “ non-Expiring Credit Commitments ”), then with respect to each outstanding Swing Line Loan, if consented to by the applicable Swing Line Lender, on the earliest occurring maturity date such Swing Line Loan shall be deemed reallocated to the tranche or tranches of the non-Expiring Credit Commitments on a pro rata basis; provided that (x) to the extent that the amount of such reallocation would cause the aggregate credit exposure to exceed the aggregate amount of such non-Expiring Credit Commitments, immediately prior to such reallocation the amount of Swing Line Loans to be reallocated equal to such excess shall be repaid or Cash Collateralized and (y) notwithstanding the foregoing, if a Default or Event of Default has occurred and is continuing, the Borrower shall still be obligated to pay Swing Line Loans allocated to the Revolving Credit Lenders holding the Expiring Credit Commitments at the maturity date of the Expiring Credit Commitment or if the Loans have been accelerated prior to the maturity date of the Expiring Credit Commitment. Commencing with the maturity date of any tranche of Revolving Credit Commitments, the sublimit for Swing Line Loans shall be agreed solely with the Swing Line Lender.

Section 2.05. Prepayments .

(a) Optional . (i) The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Term Loans and Revolving Credit Loans in whole or in part without premium or penalty; provided that (1) such notice must be received by the Administrative Agent not later than 11:00 a.m. (New York City time) (A) three (3) Business Days prior to any date of prepayment of Eurocurrency Rate Loans and (B) on the date of prepayment of Base Rate Loans; (2) any prepayment of Eurocurrency Rate Loans shall be in a minimum principal amount of $2,000,000 or a whole multiple of $500,000 in excess thereof; and (3) any prepayment of Base Rate Loans shall be in a minimum principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Class(es) and Type(s) of Loans and the order of Borrowing(s) to be prepaid. The Administrative Agent will promptly notify each Appropriate Lender of its receipt of each such notice, and of the amount of such Lender’s Pro Rata Share. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05. In the case of each prepayment of the Loans pursuant to this Section 2.05(a), the Borrower may in its sole discretion select the Borrowing or Borrowings (and the order of maturity of principal payments) to be repaid, and such payment shall be paid to the Appropriate Lenders in accordance with their respective Pro Rata Shares).

(ii) The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (1) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 11:00 a.m. (New York City time) on the date of the prepayment, and (2) any such prepayment shall be in a minimum principal amount of $100,000 or a whole multiple of $100,000 in excess thereof or, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

 

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Notwithstanding anything to the contrary contained in this Agreement, the Borrower may rescind any notice of prepayment under Section 2.05(a)(i) or 2.05(a)(ii) if such prepayment would have resulted from a refinancing of all of the Facilities, which refinancing shall not be consummated or shall otherwise be delayed. Each prepayment of Term Loans pursuant to this Section 2.05(a) shall be applied in an order of priority to repayments thereof required pursuant to Section 2.07(a) as directed by the Borrower and, absent such direction, shall be applied in direct order of maturity to repayments thereof required pursuant to Section 2.07(a).

(b) Mandatory . (i) Within six (6) Business Days after financial statements have been delivered pursuant to Section 6.01(a) (commencing with the fiscal year ended December 31, 2012) and the related Compliance Certificate has been delivered pursuant to Section 6.02(a), the Borrower shall cause to be prepaid an aggregate amount of Term Loans in an amount equal to (A) the Applicable ECF Percentage of Excess Cash Flow, if any, for the Excess Cash Flow Period covered by such financial statements minus (B) the sum of (1) all voluntary prepayments of Term Loans during such fiscal year pursuant to Section 2.05(a) and (2) all voluntary prepayments of Revolving Credit Loans and Swing Line Loans during such fiscal year to the extent the Revolving Credit Commitments are permanently reduced by the amount of such payments, in the case of each of the immediately preceding clauses (1) and (2), to the extent such prepayments are not funded with the proceeds of Indebtedness.

(ii) If (1) the Borrower or any Subsidiary of the Borrower Disposes of any property or assets (other than any Disposition of any property or assets permitted by Section 7.05(a)(i), (b), (c), (d), (e), (f), (g), (h), (l), (m), (n), (o) or (p)), or (2) any Casualty Event occurs, which results in the realization or receipt by the Borrower or any Subsidiary of Net Proceeds, the Borrower shall cause to be offered to be prepaid on or prior to the date which is ten (10) Business Days after the date of the realization or receipt by the Borrower or any Subsidiary of such Net Proceeds an aggregate principal amount of Term Loans in an amount equal to 100% of all Net Proceeds received; provided that if any Permitted Notes have been issued in compliance with Sections 7.01 and 7.03 with Liens ranking pari passu with the Liens securing the Obligations pursuant to the First Lien Intercreditor Agreement, then the Borrower may, to the extent required pursuant to the terms of the documentation governing such Permitted Notes, prepay Term Loans and purchase such Permitted Notes (at a purchase price no greater than par plus accrued and unpaid interest) on a pro rata basis in accordance with the respective principal amounts thereof.

(iii) If the Borrower or any Subsidiary incurs or issues any Indebtedness after the Closing Date (x) pursuant to Section 7.03(r)(i) or (y) that is not otherwise permitted to be incurred pursuant to Section 7.03, the Borrower shall cause to be prepaid an aggregate principal amount of Term Loans in an amount equal to 100% of all Net Proceeds received therefrom on or prior to the date which is six (6) Business Days after the receipt by the Borrower or such Subsidiary of such Net Proceeds.

(iv) If for any reason the aggregate Revolving Credit Exposures at any time exceeds the aggregate Revolving Credit Commitments then in effect, the Borrower shall promptly prepay or cause to be promptly prepaid Revolving Credit Loans and Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b)(iv) unless after the prepayment in full of the Revolving Credit Loans and Swing Line Loans such aggregate Outstanding Amount exceeds the aggregate Revolving Credit Commitments then in effect.

(v) Except with respect to Loans incurred in connection with any Refinancing Amendment (which shall be applied as provided in Section 2.16), (A) each prepayment of Term Loans pursuant to this Section 2.05(b) shall be applied ratably to each Class of Term Loans then outstanding ( provided that any Class of Incremental Term Loans or Other Term Loans may specify that one or more other Classes of Term Loans may be prepaid prior to such Class of Incremental Term Loans or Other Term Loans); (B) with respect to each Class of Term Loans, each prepayment pursuant to clauses (i) through (iii) of this Section 2.05(b) shall be applied to the scheduled installments of principal thereof following the date of prepayment pursuant to Section 2.07(a) in direct order of maturity and (C) each such prepayment shall be paid to the Lenders in accordance with their respective Pro Rata Shares of such prepayment subject to clause (vi) of this Section 2.05(b).

(vi) The Borrower shall notify the Administrative Agent in writing of any mandatory prepayment of Term Loans required to be made pursuant to clause (i) or (ii) of this Section 2.05(b) at least four (4) Business Days prior to the date of such prepayment. Each such notice shall specify the date of such prepayment and provide a reasonably

 

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detailed calculation of the amount of such prepayment. The Administrative Agent will promptly notify each Appropriate Lender of the contents of the Borrower’s prepayment notice and of such Appropriate Lender’s Pro Rata Share of the prepayment. Each Term Lender may reject all or a portion of its Pro Rata Share of any mandatory prepayment (such declined amounts, the “ Declined Proceeds ”) of Term Loans required to be made pursuant to clauses (i) and (ii) of this Section 2.05(b) by providing written notice (each, a “ Rejection Notice ”) to the Administrative Agent and the Borrower no later than 5:00 p.m. one (1) Business Day after the date of such Lender’s receipt of notice from the Administrative Agent regarding such prepayment. Each Rejection Notice from a given Lender shall specify the principal amount of the mandatory repayment of Term Loans to be rejected by such Lender. If a Term Lender fails to deliver a Rejection Notice to the Administrative Agent within the time frame specified above or such Rejection Notice fails to specify the principal amount of the Term Loans to be rejected, any such failure will be deemed an acceptance of the total amount of such mandatory prepayment of Term Loans. Any Declined Proceeds shall be retained by the Borrower.

(vii) Funding Losses, Etc . All prepayments under this Section 2.05 shall be made together with, in the case of any such prepayment of a Eurocurrency Rate Loan on a date other than the last day of an Interest Period therefor, any amounts owing in respect of such Eurocurrency Rate Loan pursuant to Section 3.05. Notwithstanding any of the other provisions of Section 2.05(b), so long as no Event of Default shall have occurred and be continuing, if any prepayment of Eurocurrency Rate Loans is required to be made under this Section 2.05(b), prior to the last day of the Interest Period therefor, the Borrower may, in its sole discretion, deposit the amount of any such prepayment otherwise required to be made thereunder into a Cash Collateral Account until the last day of such Interest Period, at which time the Administrative Agent shall be authorized (without any further action by or notice to or from the Borrower or any other Loan Party) to apply such amount to the prepayment of such Loans in accordance with this Section 2.05(b). Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent shall also be authorized (without any further action by or notice to or from the Borrower or any other Loan Party) to apply such amount to the prepayment of the outstanding Loans in accordance with this Section 2.05(b).

(viii) Foreign Dispositions . Notwithstanding any other provisions of this Section 2.05, (i) to the extent that any of or all the Net Proceeds of any Disposition by a Foreign Subsidiary (“ Foreign Disposition ”) or Excess Cash Flow attributable to Foreign Subsidiaries are prohibited or delayed by applicable local law from being repatriated to the United States, the portion of such Net Proceeds or Excess Cash Flow so affected will not be required to be applied to repay Term Loans at the times provided in this Section 2.05 but may be retained by the applicable Foreign Subsidiary so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Borrower hereby agreeing to cause the applicable Foreign Subsidiary to promptly take all actions required by the applicable local law to permit such repatriation), and once such repatriation of any of such affected Net Proceeds or Excess Cash Flow is permitted under the applicable local law, such repatriation will be immediately effected and such repatriated Net Proceeds or Excess Cash Flow will be promptly (and in any event not later than two Business Days after such repatriation) applied (net of additional taxes payable or reserved against as a result thereof) to the repayment of the Term Loans pursuant to this Section 2.05 and (ii) to the extent that the Borrower has determined in good faith that repatriation of any of or all the Net Proceeds of any Foreign Disposition or Foreign Subsidiary Excess Cash Flow would have material adverse tax cost consequences with respect to such Net Proceeds or Excess Cash Flow, such Net Proceeds or Excess Cash Flow so affected may be retained by the applicable Foreign Subsidiary; provided that, in the case of this clause (ii), on or before the date on which any such Net Proceeds so retained would otherwise have been required to be applied to reinvestments or prepayments pursuant to Section 2.05(b) or any such Excess Cash Flow would have been required to be applied to prepayments pursuant to Section 2.05(b), the Borrower applies an amount equal to such Net Proceeds or Excess Cash Flow to such reinvestments or prepayments, as applicable, as if such Net Proceeds or Excess Cash Flow had been received by the Borrower rather than such Foreign Subsidiary, less the amount of additional taxes that would have been payable or reserved against if such Net Proceeds or Excess Cash Flow had been repatriated (or, if less, the Net Proceeds or Excess Cash Flow that would be calculated if received by such Foreign Subsidiary).

(ix) Prepayment Premium . At the time of the effectiveness of any Repricing Transaction that is consummated prior to the first anniversary of the Closing Date, the Borrower agrees to pay to the Administrative Agent, for the ratable account of each Term Lender with outstanding Term Loans which are repaid, prepaid or amended pursuant to such Repricing Transaction (including each Term Lender that withholds its consent (to the extent such consent is required) to such Repricing Transaction and is replaced pursuant to Section 3.07), a fee in an amount equal to 1.0% of (x) in the case of a Repricing Transaction of the type described in clause (a) of the definition

 

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thereof, the aggregate principal amount of all Term Loans prepaid (or replaced) in connection with such Repricing Transaction and (y) in the case of a Repricing Transaction described in clause (b) of the definition thereof, the aggregate principal amount of all Term Loans outstanding on such date that are subject to an effective reduction of the Applicable Rate pursuant to such Repricing Transaction. Such fees shall be due and payable upon the date of the effectiveness of such Repricing Transaction.

Section 2.06. Termination or Reduction of Commitments .

(a) Optional . The Borrower may, upon written notice to the Administrative Agent, terminate the unused Commitments of any Class, or from time to time permanently reduce the unused Commitments of any Class, in each case without premium or penalty; provided that (i) any such notice shall be received by the Administrative Agent three (3) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in a minimum aggregate amount of $100,000, as applicable, or any whole multiple of $100,000 in excess thereof and (iii) if, after giving effect to any reduction of the Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Revolving Credit Facility, such sublimit shall be automatically reduced by the amount of such excess. The amount of any such Commitment reduction shall not otherwise be applied to the Letter of Credit Sublimit or the Swing Line Sublimit unless otherwise specified by the Borrower. Notwithstanding the foregoing, the Borrower may rescind or postpone any notice of termination of the Commitments if such termination would have resulted from a refinancing of all of the Facilities, which refinancing shall not be consummated or otherwise shall be delayed.

(b) Mandatory . The Term Commitment of each Term Lender shall be automatically and permanently reduced to $0 upon the funding of Term Loans to be made by it on the Closing Date or if the Closing Date does not occur on or prior to 5:00 p.m. (New York, New York time) on January 30, 2012. The Revolving Credit Commitment of each Revolving Credit Lender shall automatically and permanently terminate on the Maturity Date of the Revolving Credit Facility.

(c) Application of Commitment Reductions; Payment of Fees . The Administrative Agent will promptly notify the Lenders of any termination or reduction of unused portions of the Letter of Credit Sublimit or the Swing Line Sublimit or the unused Commitments of any Class under this Section 2.06. Upon any reduction of unused Commitments of any Class, the Commitment of each Lender of such Class shall be reduced by such Lender’s Pro Rata Share of the amount by which such Commitments are reduced (other than the termination of the Commitment of any Lender as provided in Section 3.07). All commitment fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.

Section 2.07. Repayment of Loans .

(a) Term Loans . The Borrower shall repay to the Administrative Agent for the ratable account of the Term Lenders (i) on the last Business Day of each March, June, September and December, commencing with the first full quarter after the Closing Date, an aggregate amount equal to 0.25% of the aggregate principal amount of all Term Loans outstanding on the Closing Date (which payments shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05) and (ii) on the Maturity Date for the Term Loans, the aggregate principal amount of all Term Loans outstanding on such date.

(b) Revolving Credit Loans . The Borrower shall repay to the Administrative Agent for the ratable account of the Appropriate Lenders on the Maturity Date for the Revolving Credit Facility the aggregate principal amount of all of the Borrower’s Revolving Credit Loans under such Facility outstanding on such date.

(c) Swing Line Loans . The Borrower shall repay the aggregate principal amount of its Swing Line Loans on the earlier to occur of (i) the date five (5) Business Days after such Loan is made and (ii) the Maturity Date for the Revolving Credit Facility.

 

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Section 2.08. Interest .

(a) Subject to the provisions of Section 2.08(b), (i) each Eurocurrency Rate Loan (which shall not include any Swing Line Loan) shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate, for such Interest Period plus the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for Revolving Credit Loans.

(b) During the continuance of a Default under Section 8.01(a), the Borrower shall pay interest on past due amounts owing by it hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws; provided that no interest at the Default Rate shall accrue or be payable to a Defaulting Lender so long as such Lender shall be a Defaulting Lender. Accrued and unpaid interest on such amounts (including interest on past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

Section 2.09. Fees .

In addition to certain fees described in Sections 2.03(h) and (i):

(a) Commitment Fee . The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Credit Lender under each Facility in accordance with its Pro Rata Share, a commitment fee equal to the Applicable Rate with respect to commitment fees times the actual daily amount by which the aggregate Revolving Credit Commitment exceeds the sum of (A) the Outstanding Amount of Revolving Credit Loans (which shall exclude, for the avoidance of doubt, any Swing Line Loans) and (B) the Outstanding Amount of L/C Obligations; provided that (x) any commitment fee accrued with respect to any of the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Borrower so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable by the Borrower prior to such time and (y) no commitment fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender. The commitment fee on the Revolving Credit Facility shall accrue at all times from the Closing Date until the Maturity Date for the Revolving Credit Facility with respect to such Commitments, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date during the first full fiscal quarter to occur after the Closing Date, and on the Maturity Date for the Revolving Credit Facility. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

(b) Other Fees . The Borrower shall pay to the Agents such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever (except as expressly agreed between the Borrower and the applicable Agent).

(c) Closing Fees . The Borrower agrees to pay on the Closing Date to the Administrative Agent, for the account of each Lender party to this Agreement on the Closing Date, as fee compensation for the funding of such Lender’s Term Loan and/or providing a Revolving Credit Commitment, as applicable, a closing fee (the “ Closing Fee ”) in an amount equal to 1% of the stated principal amount of such Lender’s Term Loan made on the Closing Date and, with respect to the Revolving Credit Commitments, the amount

 

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that is set forth in the Fee Letters described in clause (ii) in the definition of “Fee Letters.” Such Closing Fee will be in all respects fully earned, due and payable on the Closing Date and non-refundable and non-creditable thereafter and, in the case of the Term Loans, such Closing Fee shall be netted against Term Loans made by such Lender.

Section 2.10. Computation of Interest and Fees .

All computations of interest for Base Rate Loans shall be made on the basis of a year of three hundred sixty-five (365) days, or three hundred sixty-six (366) days, as applicable, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a three hundred and sixty (360) day year and actual days elapsed. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one (1) day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

Section 2.11. Evidence of Indebtedness .

(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and evidenced by one or more entries in the Register maintained by the Administrative Agent, acting solely for purposes of Treasury Regulation Section 5f.103-1(c), as non-fiduciary agent for the Borrower, in each case in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be prima facie evidence absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note payable to such Lender, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in Section 2.11(a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records and, in the case of the Administrative Agent, entries in the Register, evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

(c) Entries made in good faith by the Administrative Agent in the Register pursuant to Sections 2.11(a) and (b), and by each Lender in its account or accounts pursuant to Sections 2.11(a) and (b), shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from the Borrower to, in the case of the Register, each Lender and, in the case of such account or accounts, such Lender, under this Agreement and the other Loan Documents, absent manifest error; provided that the failure of the Administrative Agent or such Lender to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrower under this Agreement and the other Loan Documents.

Section 2.12. Payments Generally .

(a) All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in Same Day Funds not later than 11:00 a.m. (New York City time) on the date specified herein. The Administrative Agent will promptly distribute to each

 

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Lender its Pro Rata Share (or other applicable share as provided in Section 2.05(b)(vi) or as otherwise provided herein) of such payment in like funds as received by wire transfer to such Lender’s applicable Lending Office. All payments received by the Administrative Agent after 11:00 a.m. (New York City time), shall in each case be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.

(b) If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be; provided that, if such extension would cause payment of interest on or principal of Eurocurrency Rate Loans to be made in the next succeeding calendar month, such payment shall be made on the immediately preceding Business Day.

(c) Unless the Borrower or any Lender has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that the Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Administrative Agent in Same Day Funds, then:

(i) if the Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in Same Day Funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in Same Day Funds at the applicable Federal Funds Rate from time to time in effect; and

(ii) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in Same Day Funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the “ Compensation Period ”) at a rate per annum equal to the greater of (x) the applicable Federal Funds Rate from time to time in effect and (y) a rate determined by the Administrative Agent in accordance with banking rules governing interbank compensation. When such Lender makes payment to the Administrative Agent (together with all accrued interest thereon), then such payment amount (excluding the amount of any interest which may have accrued and been paid in respect of such late payment) shall constitute such Lender’s Loan included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent may make a demand therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or the Borrower may have against any Lender as a result of any default by such Lender hereunder.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this Section 2.12(c) shall be conclusive, absent manifest error.

(d) If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(e) The obligations of the Lenders hereunder to make Loans and to fund participations in Letters of Credit and Swing Line Loans are several and not joint. The failure of any Lender to make any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation.

 

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(f) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(g) Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Administrative Agent and the Lenders under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and the Lenders in the order of priority set forth in Section 8.04. If the Administrative Agent receives funds for application to the Obligations of the Loan Parties under or in respect of the Loan Documents under circumstances for which the Loan Documents do not specify the manner in which such funds are to be applied, the Administrative Agent may (to the fullest extent permitted by mandatory provisions of applicable Law), but shall not be obligated to, elect to distribute such funds to each of the Lenders in accordance with such Lender’s Pro Rata Share of the sum of (a) the Outstanding Amount of all Loans outstanding at such time and (b) the Outstanding Amount of all L/C Obligations outstanding at such time, in repayment or prepayment of such of the outstanding Loans or other Obligations then owing to such Lender.

(h) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.02(b), 2.03(c), 2.04(c), 2.12(c) or 2.13, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

Section 2.13. Sharing of Payments .

If, other than as expressly provided in Section 2.05(b)(vi), Section 7.03(r)(ii) or as otherwise provided elsewhere herein, any Lender shall obtain on account of the Loans made by it, or the participations in L/C Obligations and Swing Line Loans held by it, any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Loans made by them and/or such subparticipations in the participations in L/C Obligations or Swing Line Loans held by them, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such participations, as the case may be, pro rata with each of them; provided that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon. The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by applicable Law, exercise all its rights of payment (including the right of setoff, but subject to Section 10.09) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section 2.13 and will in each case notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section 2.13 shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.

Section 2.14. Incremental Credit Extensions .

(a) The Borrower may at any time or from time to time after the Closing Date, by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request (a) one or more additional tranches or additions to an existing tranche of term loans (the “ Incremental Term Loans ”) and/or (b) one or more increases in the amount of the Revolving Credit Commitments on the same terms as the Revolving Credit Facility (except for interest rate margins and commitment fees as set forth below) (a “ Revolving

 

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Commitment Increase ”), in an aggregate principal amount not to exceed (x) $135,000,000 and (y) such additional amount so long as on a Pro Forma Basis after giving effect to the incurrence of such Incremental Term Loan or any borrowing under such Revolving Commitment Increase (and for purposes of any calculations under this Section 2.14 (A) the cash proceeds of such Incremental Term Loans shall be excluded for purposes of calculating Consolidated First Lien Net Debt and (B) all Revolving Commitment Increase shall be deemed to be fully drawn), the Borrower’s Consolidated First Lien Net Leverage Ratio would be no greater than 3.00 to 1.00 (excluding, for purposes of calculating such ratio under this clause (y), Revolving Credit Loans borrowed for seasonal working capital requirements in an amount not to exceed $50,000,000); provided that (i) both at the time of any such request and upon the effectiveness of any Incremental Amendment referred to below, no Event of Default shall exist and at the time that any such Incremental Term Loan is made (and after giving effect thereto) no Event of Default shall exist and (ii) the Borrower shall be in compliance with the covenants set forth in Section 7.11 determined on a Pro Forma Basis as of the date of the most recently ended Test Period (or, if no Test Period cited in Section 7.11 has passed, the covenants in Section 7.11 for the first Test Period cited in such Section shall be satisfied as of the last four quarters ended), in each case, as if such Incremental Term Loans or any borrowings under any such Revolving Commitment Increases, as applicable, had been outstanding on the last day of such fiscal quarter of the Borrower for testing compliance therewith. Each tranche of (i) Incremental Term Loans shall be in an aggregate principal amount that is not less than $10,000,000 and shall be in an increment of $1,000,000 in excess thereof ( provided that such amount may be less than $1,000,000 if such amount represents all remaining availability under the limit set forth in the next sentence and (ii) Revolving Commitment Increases shall be in an aggregate principal amount that is not less than $5,000,000 and shall be in an increment of $1,000,000 in excess thereof ( provided that such amount may be less than $1,000,000 if such amount represents all remaining availability under the limit set forth in the next sentence). The Incremental Term Loans (a) shall rank pari passu in right of payment and of security with the Revolving Credit Loans and the Term Loans, (b) shall not mature earlier than the Maturity Date with respect to the Term Loans and (c) shall have a Weighted Average Life to Maturity not shorter than the remaining Weighted Average Life to Maturity of then-existing Term Loans, and the Applicable Rate for any Incremental Facility and, subject to clause (c) above, amortization for the Incremental Term Loans shall be determined by the Borrower and the applicable new Lenders; provided , however , that the Effective Yield for any Incremental Facility, shall not be greater than the Effective Yield with respect to Term Loans or Revolving Credit Loans, as the case may be plus 50 basis points (unless the interest rate margins applicable to the Term Loans or Revolving Credit Loans, respectively, are increased to the extent necessary to achieve the foregoing); provided that except as provided above, the terms and conditions applicable to Incremental Term Loans may be materially different from those of the Term Loans to the extent such differences are reasonably satisfactory to the Administrative Agent. Each notice from the Borrower pursuant to this Section 2.14 shall set forth the requested amount and proposed terms of the relevant Incremental Term Loans or Revolving Commitment Increases. Incremental Term Loans may be made, and Revolving Commitment Increases may be provided, by any existing Lender (but each existing Lender will not have an obligation to make a portion of any Incremental Term Loan or any portion of any Revolving Commitment Increase) or by any other bank or other financial institution (any such other bank or other financial institution being called an “ Additional Lender ”), provided that the Administrative Agent, L/C Issuer and/or Swing Line Lender, as applicable, shall have consented (not to be unreasonably withheld, conditioned or delayed) to such Lender’s or Additional Lender’s making such Incremental Term Loans or providing such Revolving Commitment Increases to the extent any such consent would be required under Section 10.07(b) for an assignment of Loans or Revolving Credit Commitments, as applicable, to such Lender or Additional Lender. Commitments in respect of Incremental Term Loans and Revolving Commitment Increases shall become Commitments (or in the case of a Revolving Commitment Increase to be provided by an existing Revolving Credit Lender, an increase in such Lender’s applicable Revolving Credit Commitment) under this Agreement pursuant to an amendment (an “ Incremental Amendment ”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Lender agreeing to provide such Commitment, if any, each Additional Lender, if any, and the Administrative Agent. The Incremental Amendment may, without the consent of Borrower, or any other Loan Party, Agents or Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.14. No Lender shall be obligated to provide any Incremental Term Loans or Revolving Commitment Increases, unless it so agrees. Upon each increase in the Revolving Credit Commitments pursuant to this Section 2.14, (a) if the increase relates to the Revolving Credit Facility, each Revolving Credit Lender immediately prior to such increase will automatically and without further act be deemed to have assigned to each Lender providing a portion of the Revolving Commitment Increase (each, a “ Revolving Commitment Increase Lender ”), and each such Revolving Commitment Increase Lender will automatically and without further act be deemed to have assumed (in the case of an increase to the Revolving Credit Facility only), a

 

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portion of such Revolving Credit Lender’s participations hereunder in outstanding Letters of Credit and Swing Line Loans such that, after giving effect to each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding (i) participations hereunder in Letters of Credit and (ii) participations hereunder in Swing Line Loans held by each Revolving Credit Lender (including each such Revolving Commitment Increase Lender) will equal the percentage of the aggregate Revolving Credit Commitments of all Revolving Credit Lenders represented by such Revolving Credit Lender’s Revolving Credit Commitment and (b) if, on the date of such increase, there are any Revolving Credit Loans under the applicable Facility outstanding, such Revolving Credit Loans shall on or prior to the effectiveness of such Revolving Commitment Increase be prepaid from the proceeds of additional Revolving Credit Loans made hereunder (reflecting such increase in Revolving Credit Commitments), which prepayment shall be accompanied by accrued interest on the Revolving Credit Loans being prepaid and any costs incurred by any Lender in accordance with Section 3.05. The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence.

(b) This Section 2.14 shall supersede any provisions in Section 2.13 or 10.01 to the contrary.

Section 2.15. Defaulting Lender .

(a) Reallocation of Defaulting Lender Commitment . If a Lender becomes, and during the period it remains, a Defaulting Lender, the following provisions shall apply with respect to any outstanding L/C Obligations and any outstanding Swing Line Loans:

(i) the Pro Rata Share of such Defaulting Lender with respect to any L/C Obligations and any outstanding Swing Line Loans will, subject to the limitation in the first proviso below, automatically be reallocated (effective on the date such Lender becomes a Defaulting Lender) among the Revolving Credit Lenders that are Non-Defaulting Lenders pro rata in accordance with their respective Revolving Credit Commitments; provided that (A) the sum of each Non-Defaulting Lender’s Pro Rata Share of the Revolving Credit Exposure may not in any event exceed the Revolving Credit Commitment of such Non-Defaulting Lender as in effect at the time of such reallocation and (B) neither such reallocation nor any payment by a Non-Defaulting Lender pursuant thereto will constitute a waiver or release of any claim any Borrower, the Administrative Agent, any L/C Issuer, any Swing Line Lender or any other Lender may have against such Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender;

(ii) to the extent that any portion (the “ unreallocated portion ”) of the Pro Rata Share of such Defaulting Lender with respect to any L/C Obligations and any outstanding Swing Line Loans cannot be so reallocated, the Borrower will promptly, and in no event later than 1 Business Day after any demand by the Administrative Agent (at the direction of the L/C Issuer and/or the Swing Line Lender, as the case may be), (A)(x) cash collateralize the obligations of the Borrower to the L/C Issuer in respect of such L/C Obligations, in an amount at least equal to the aggregate amount of the unreallocated portion of such L/C Obligations on terms acceptable to the Administrative Agent and the L/C Issuer and (y) in the case of such outstanding Swing Line Loans, prepay (subject to clause (iii) below) and/or cash collateralize (on terms reasonably acceptable to the Administrative Agent and such Swing Line Lender) in full the unreallocated portion thereof, or (B) make other arrangements reasonably satisfactory to the Administrative Agent, and to the L/C Issuer and the Swing Line Lender, as the case may be, in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender; and

(iii) any amount paid by the Borrower for the account of a Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity payments or other amounts) will not be paid or distributed to such Defaulting Lender, but will instead be retained by the Administrative Agent in a segregated, non-interest bearing account until (subject to Section 2.14) the termination of the Commitments and payment in full of all Obligations of the Borrower hereunder and will be applied by the Administrative Agent, to the fullest extent permitted by law, to the making of payments from time to time in the following order of priority: first to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent under this Agreement, second to the payment of any amounts owing by such Defaulting Lender to the L/C Issuer or the Swing Line Lender (pro rata as to the respective amounts owing to each of them) under this Agreement, third to the payment of post-default interest and then current interest due

 

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and payable to the Lenders hereunder other than Defaulting Lenders, ratably among them in accordance with the amounts of such interest then due and payable to them, fourth to the payment of fees then due and payable to the Non-Defaulting Lenders hereunder, ratably among them in accordance with the amounts of such fees then due and payable to them, fifth to pay principal and Reimbursement Obligations then due and payable to the Non-Defaulting Lenders hereunder ratably in accordance with the amounts thereof then due and payable to them, sixth to the ratable payment of other amounts then due and payable to the Non-Defaulting Lenders, and seventh after the termination of the Commitments and payment in full of all Obligations of the Borrower hereunder, to pay amounts owing under this Agreement to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct.

(b) Termination of Defaulting Lender Commitments . The Borrower may terminate the unused amount of the Commitment of a Defaulting Lender upon not less than 3 Business Days’ prior notice to the Administrative Agent (which will promptly notify the Lenders thereof), and in such event the provisions of Sections 2.10 and 2.12 will apply to all amounts thereafter paid by the Borrower for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts); provided that such termination will not be deemed to be a waiver or release of any claim the Borrower, the Administrative Agent, the L/C Issuer, the Swing Line Lender or any Lender may have against such Defaulting Lender.

(c) Cure . If the Borrower, Administrative Agent, the L/C Issuer and the Swing Line Lender agree in writing that a Lender that is a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the closing date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any amounts then held in the segregated account referred to in Section 2.15(a)), (i) such Lender will, to the extent applicable, purchase such portion of outstanding Loans of the other Lenders and/or make such other adjustments as the Administrative Agent may determine to be necessary to cause such Lender’s Pro Rata Share to be on a pro rata basis in accordance with their respective Commitment, whereupon such Lender will cease to be a Defaulting Lender and will be a Non-Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender and (ii) the cash collateral requirements set forth in this Section 2.15 will terminate and the L/C Issuer and Swing Line Lender will cause any cash collateral posted with respect to their respective L/C Obligations or Swing Line Loans, as the case may be, to be returned to the Borrower subject to any terms relating to such cash collateral; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender having been a Defaulting Lender.

(d) Notices . The Administrative Agent will promptly send to each Lender and L/C Issuer a copy of any notice to the Borrower provided for in this Section 2.15.

Section 2.16. Refinancing Amendments .

(a) On one or more occasions after the Closing Date, the Borrower may obtain, from any Lender or any Additional Refinancing Lender, Indebtedness to refinance or replace all or any portion of the Term Loans and the Revolving Credit Loans (or unused Revolving Credit Commitments) then outstanding under this Agreement (which for all purposes of this clause (a) will be deemed to include any then outstanding Other Term Loans, Incremental Term Loans, Other Revolving Credit Commitments or Other Revolving Credit Loans), in the form of Other Term Loans, Other Term Loan Commitments, Other Revolving Credit Commitments, or Other Revolving Credit Loans pursuant to a Refinancing Amendment; provided that notwithstanding anything to the contrary in this Section 2.16 or otherwise, (i) the Other Term Loans and Other Revolving Credit Loans shall rank pari passu in right of payment and of security with the Term Loans and Revolving Credit Loans, respectively, (ii) the Other Term Loans shall not mature earlier than the Maturity Date with respect to the Term Loans being refinanced and shall have a Weighted Average Life to Maturity not shorter than the remaining Weighted Average Life to Maturity of the Term Loans being refinanced and (iii) the other terms and conditions of such Other Term Loans, Other Revolving Credit Commitments and Other Revolving Loans (excluding pricing, fees, rate floors and optional prepayment or redemption terms) shall, taken as a whole, be not materially more favorable to the lenders providing such Other Term Loans, Other Revolving Credit Commitments and Other Revolving Loans, as applicable, than, those applicable to the Term Loans or Revolving Credit Commitments being refinanced (except for covenants or other provisions applicable only to periods after the Latest Maturity Date).

 

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(b) The effectiveness of any Refinancing Amendment shall be subject to the satisfaction on the date thereof of each of the conditions set forth in Section 4.01 and, to the extent reasonably requested by the Administrative Agent, receipt by the Administrative Agent of (i) customary legal opinions, board resolutions and officers’ certificates consistent with those delivered on the Closing Date other than changes to such legal opinion resulting from a change in law, change in fact or change to counsel’s form of opinion reasonably satisfactory to the Administrative Agent and (ii) reaffirmation agreements and/or such amendments to the Collateral Documents (which may be on a post-closing basis if agreed to by the Administrative Agent in its sole discretion) as may be reasonably requested by the Administrative Agent in order to ensure that such Indebtedness is provided with the benefit of the applicable Loan Documents.

(c) Each issuance of Indebtedness under Section 2.16(a) shall be in an aggregate principal amount that is (x) not less than $10,000,000 and (y) an integral multiple of $1,000,000 in excess thereof.

(d) Each of the parties hereto hereby agrees that this Agreement and the other Loan Documents may be amended pursuant to a Refinancing Amendment, without the consent of any other Lenders, to the extent (but only to the extent) necessary to (i) reflect the existence and terms of the Indebtedness incurred pursuant thereto and (ii)make such other changes to this Agreement and the other Loan Documents consistent with the provisions and intent of the third paragraph of Section 10.01 (without the consent of the Required Lenders called for therein) and (iii) effect such other amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.16, and the Required Lenders hereby expressly authorize the Administrative Agent to enter into any such Refinancing Amendment.

Section 2.17. Extension of Term Loans; Extension of Revolving Credit Loans .

(a) Extension of Term Loans . The Borrower may at any time and from time to time request that all or a portion of the Term Loans of a given Class (each, an “ Existing Term Loan Tranche ”) be amended to extend the scheduled maturity date(s) with respect to all or a portion of any principal amount of such Term Loans (any such Term Loans which have been so amended, “ Extended Term Loans ”) and to provide for other terms consistent with this Section 2.17. In order to establish any Extended Term Loans, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders under the applicable Existing Term Loan Tranche) (each, a “ Term Loan Extension Request ”) setting forth the proposed terms of the Extended Term Loans to be established, which shall (x) be identical as offered to each Lender under such Existing Term Loan Tranche (including as to the proposed interest rates and fees payable) and offered pro rata to each Lender under such Existing Term Loan Tranche and (y) be identical to the Term Loans under the Existing Term Loan Tranche from which such Extended Term Loans are to be amended, except that: (i) all or any of the scheduled amortization payments of principal of the Extended Term Loans may be delayed to later dates than the scheduled amortization payments of principal of the Term Loans of such Existing Term Loan Tranche, to the extent provided in the applicable Extension Amendment; provided , however , that at no time shall there be Classes of Term Loans hereunder (including Incremental Term Loans, Other Term Loans and Extended Term Loans) with more than five (5) different Maturity Dates; (ii) the Effective Yield with respect to the Extended Term Loans (whether in the form of interest rate margin, upfront fees, original issue discount or otherwise) may be different than the Effective Yield for the Term Loans of such Existing Term Loan Tranche, in each case, to the extent provided in the applicable Extension Amendment; (iii) the Extension Amendment may provide for other covenants and terms that apply solely to any period after the Latest Maturity Date that is in effect on the effective date of the Extension Amendment (immediately prior to the establishment of such Extended Term Loans); (iv) Extended Term Loans may have call protection as may be agreed by the Borrower and the Lenders thereof; provided that no Extended Term Loans may be optionally prepaid prior to the date on which all Term Loans with an earlier final stated maturity (including Term Loans under the Existing Term Loan Tranche from which they were amended) are repaid in full, unless such optional prepayment is accompanied by a pro rata optional prepayment of such other Term Loans and (v) any Extended Term Loans may participate on a pro rata basis or less than a pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments or prepayments hereunder, in each case as specified in the respective Term Loan Extension Request; provided , however , that (A) no Default shall have occurred and be continuing at the time a Term Loan Extension

 

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Request is delivered to Lenders, (B) any such Extended Term Loans (and the Liens securing the same) shall be permitted by the terms of the Intercreditor Agreements (to the extent any Intercreditor Agreement is then in effect), and (C) all documentation in respect of such Extension Amendment shall be consistent with the foregoing. Any Extended Term Loans amended pursuant to any Term Loan Extension Request shall be designated a series (each, a “ Term Loan Extension Series ”) of Extended Term Loans for all purposes of this Agreement; provided that any Extended Term Loans amended from an Existing Term Loan Tranche may, to the extent provided in the applicable Extension Amendment, be designated as an increase in any previously established Term Loan Extension Series with respect to such Existing Term Loan Tranche. Each Term Loan Extension Series of Extended Term Loans incurred under this Section 2.17 shall be in an aggregate principal amount that is not less than $25,000,000.

(b) Extension of Revolving Credit Commitments . The Borrower may, on behalf of the Borrowers, at any time and from time to time request that all or a portion of the Revolving Credit Commitments of a given Class (each, an “ Existing Revolver Tranche ”) be amended to extend the Maturity Date with respect to all or a portion of any principal amount of such Revolving Credit Commitments (any such Revolving Credit Commitments which have been so amended, “ Extended Revolving Credit Commitments ”) and to provide for other terms consistent with this Section 2.17. In order to establish any Extended Revolving Credit Commitments, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders under the applicable Existing Revolver Tranche) (each, a “ Revolver Extension Request ”) setting forth the proposed terms of the Extended Revolving Credit Commitments to be established, which shall (x) be identical as offered to each Lender under such Existing Revolver Tranche (including as to the proposed interest rates and fees payable) and offered pro rata to each Lender under such Existing Revolver Tranche and (y) be identical to the Revolving Credit Commitments under the Existing Revolver Tranche from which such Extended Revolving Credit Commitments are to be amended, except that: (i) the Maturity Date of the Extended Revolving Credit Commitments may be delayed to a later date than the Maturity Date of the Revolving Credit Commitments of such Existing Revolver Tranche, to the extent provided in the applicable Extension Amendment; provided , however , that at no time shall there be Classes of Revolving Credit Commitments hereunder (including Extended Revolving Credit Commitments) which have more than five (5) different Maturity Dates; (ii) the Effective Yield with respect to extensions of credit under the Extended Revolving Credit Commitments (whether in the form of interest rate margin, upfront fees, original issue discount or otherwise) may be different than the Effective Yield for extensions of credit under the Revolving Credit Commitments of such Existing Revolver Tranche, in each case, to the extent provided in the applicable Extension Amendment and (iii) the Extension Amendment may provide for other covenants and terms that apply solely to any period after the Latest Maturity Date that is in effect on the effective date of the Extension Amendment (immediately prior to the establishment of such Extended Revolving Credit Commitments); provided , further , that (A) no Default shall have occurred and be continuing at the time a Revolver Extension Request is delivered to Lenders, (B) in no event shall the final maturity date of any Extended Revolving Credit Commitments of a given Revolver Extension Series at the time of establishment thereof be earlier than the then Latest Maturity Date of any other Revolving Credit Commitments hereunder, (C) any such Extended Revolving Credit Commitments (and the Liens securing the same) shall be permitted by the terms of the Intercreditor Agreements (to the extent any Intercreditor Agreement is then in effect) and (D) all documentation in respect of such Extension Amendment shall be consistent with the foregoing. Any Extended Revolving Credit Commitments amended pursuant to any Revolver Extension Request shall be designated a series (each, a “ Revolver Extension Series ”) of Extended Revolving Credit Commitments for all purposes of this Agreement; provided that any Extended Revolving Credit Commitments amended from an Existing Revolver Tranche may, to the extent provided in the applicable Extension Amendment, be designated as an increase in any previously established Revolver Extension Series with respect to such Existing Revolver Tranche. Each Revolver Extension Series of Extended Revolving Credit Commitments incurred under this Section 2.17 shall be in an aggregate principal amount that is not less than $5,000,000.

(c) Extension Request . The Borrower shall provide the applicable Extension Request at least five (5) Business Days prior to the date on which Lenders under the Existing Term Loan Tranche or Existing Revolver Tranche, as applicable, are requested to respond, and shall agree to such procedures, if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section 2.17. No Lender shall have any obligation to agree to have any of its Term Loans of any Existing Term Loan Tranche amended into Extended Term Loans or any of its Revolving Credit Commitments amended into Extended Revolving Credit Commitments, as applicable, pursuant to any Extension Request. Any Lender holding a Loan under an Existing Term Loan Tranche (each, an “ Extending Term Lender ”) wishing to have all or a portion of its Term Loans under the Existing Term Loan Tranche subject to such Extension Request amended into Extended

 

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Term Loans and any Revolving Credit Lender (each, an “ Extending Revolving Credit Lender ”) wishing to have all or a portion of its Revolving Credit Commitments under the Existing Revolver Tranche subject to such Extension Request amended into Extended Revolving Credit Commitments, as applicable, shall notify the Administrative Agent (each, an “ Extension Election ”) on or prior to the date specified in such Extension Request of the amount of its Term Loans under the Existing Term Loan Tranche or Revolving Credit Commitments under the Existing Revolver Tranche, as applicable, which it has elected to request be amended into Extended Term Loans or Extended Revolving Credit Commitments, as applicable (subject to any minimum denomination requirements imposed by the Administrative Agent). In the event that the aggregate principal amount of Term Loans under the Existing Term Loan Tranche or Revolving Credit Commitments under the Existing Revolver Tranche, as applicable, in respect of which applicable Term Lenders or Revolving Credit Lenders, as the case may be, shall have accepted the relevant Extension Request exceeds the amount of Extended Term Loans or Extended Revolving Credit Commitments, as applicable, requested to be extended pursuant to the Extension Request, Term Loans or Revolving Credit Commitments, as applicable, subject to Extension Elections shall be amended to Extended Term Loans or Revolving Credit Commitments, as applicable, on a pro rata basis (subject to rounding by the Administrative Agent, which shall be conclusive) based on the aggregate principal amount of Term Loans or Revolving Credit Commitments, as applicable, included in each such Extension Election.

(d) Extension Amendment . Extended Term Loans and Extended Revolving Credit Commitments shall be established pursuant to an amendment (each, a “ Extension Amendment ”) to this Agreement among the Borrower, the Administrative Agent and each Extending Term Lender or Extending Revolving Credit Lender, as applicable, providing an Extended Term Loan or Extended Revolving Credit Commitment, as applicable, thereunder, which shall be consistent with the provisions set forth in Section 2.17(a) or (b) above, respectively (but which shall not require the consent of any other Lender). The effectiveness of any Extension Amendment shall be subject to the satisfaction on the date thereof of each of the conditions set forth in Section 4.01 and, to the extent reasonably requested by the Administrative Agent, receipt by the Administrative Agent of (i) legal opinions, board resolutions and officers’ certificates consistent with those delivered on the Closing Date other than changes to such legal opinion resulting from a change in law, change in fact or change to counsel’s form of opinion reasonably satisfactory to the Administrative Agent and (ii) reaffirmation agreements and/or such amendments to the Collateral Documents as may be reasonably requested by the Administrative Agent in order to ensure that the Extended Term Loans or Extended Revolving Credit Commitments, as applicable, are provided with the benefit of the applicable Loan Documents (which may, if agreed to by the Administrative Agent, be done on a post-closing basis). The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Extension Amendment. Each of the parties hereto hereby agrees that this Agreement and the other Loan Documents may be amended pursuant to an Extension Amendment, without the consent of any other Lenders, to the extent (but only to the extent) necessary to (i) reflect the existence and terms of the Extended Term Loans or Extended Revolving Credit Commitments, as applicable, incurred pursuant thereto, (ii) modify the scheduled repayments set forth in Section 2.07 with respect to any Existing Term Loan Tranche subject to an Extension Election to reflect a reduction in the principal amount of the Term Loans thereunder in an amount equal to the aggregate principal amount of the Extended Term Loans amended pursuant to the applicable Extension (with such amount to be applied ratably to reduce scheduled repayments of such Term Loans required pursuant to Section 2.07), (iii) modify the prepayments set forth in Section 2.05 to reflect the existence of the Extended Term Loans and the application of prepayments with respect thereto, (iv) make such other changes to this Agreement and the other Loan Documents consistent with the provisions and intent of the second paragraph of Section 10.01 (without the consent of the Required Lenders called for therein) and (v) effect such other amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.17, and the Required Lenders hereby expressly authorize the Administrative Agent to enter into any such Extension Amendment.

(e) No conversion of Loans pursuant to any Extension in accordance with this Section 2.17 shall constitute a voluntary or mandatory payment or prepayment for purposes of this Agreement.

 

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ARTICLE III

Taxes, Increased Costs Protection and Illegality

Section 3.01. Taxes .

(a) Unless required by applicable Laws (as determined in good faith by the applicable withholding agent), any and all payments made by or on account of any Loan Party under any Loan Document shall be made free and clear of and without deduction for Taxes. If the Loan Party or other applicable withholding agent shall be required by any Laws to withhold or deduct any Indemnified Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to any Agent or any Lender, (i) the sum payable by such Loan Party shall be increased as necessary so that after all required deductions (including deductions applicable to additional sums payable under this Section 3.01) have been made, each of such Agent and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the applicable withholding agent shall make such deductions, (iii) the applicable withholding agent shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within thirty (30) days after the date of such payment (or, if receipts or evidence are not available within thirty (30) days, as soon as possible thereafter), if the relevant Loan Party is the applicable withholding agent, shall furnish to such Agent or Lender (as the case may be) the original or a copy of a receipt evidencing payment thereof or other evidence acceptable to such Agent or Lender.

(b) In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary Taxes and any other excise, property, intangible or mortgage recording Taxes, or charges or levies of the same character, imposed by any Governmental Authority, which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document, other than any such Taxes that are imposed as a result of a Lender’s voluntary assignment in such Lender’s interest in the Loan hereunder, but only to the extent such assignment-related Taxes are imposed as a result of such Lender’s current or former connection with the jurisdiction imposing such Taxes (other than any connections arising from such Lender having executed, delivered, enforced, become a party to, performed its obligations or received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, any Loan Document) (the “ Other Taxes ”).

(c) Each of the Loan Parties agrees to indemnify each Agent and each Lender for (i) the full amount of Indemnified Taxes and Other Taxes payable by such Agent or such Lender (whether or not such Taxes are correctly or legally imposed) and (ii) any expenses arising therefrom or with respect thereto, provided such Agent or Lender, as the case may be, provides the relevant Loan Party with a written statement thereof setting forth in reasonable detail the basis and calculation of such amounts. If the Borrower reasonably believes that such Indemnified Taxes or Other Taxes were not correctly or legally asserted, the Administrative Agent and each Lender and L/C Issuer will use reasonable efforts to cooperate with Borrower for the Borrower to file for and obtain a refund of such Indemnified Taxes or Other Taxes so long as such efforts would not, in the sole determination of the Administrative Agent, such Lender, or such L/C Issuer, result in any additional costs, expenses or risks or be otherwise disadvantageous to it.

(d) Each Lender shall, at such times as are reasonably requested by the Borrower or the Administrative Agent, provide the Borrower and the Administrative Agent with any documentation prescribed by Law certifying as to any entitlement of such Lender to an exemption from, or reduction in, withholding tax with respect to any payments to be made to such Lender under the Loan Documents. Each such Lender shall, whenever a lapse in time or change in circumstances renders such documentation obsolete, expired or inaccurate in any material respect, deliver promptly to the Borrower and the Administrative Agent updated or other appropriate documentation (including any new documentation reasonably requested by the applicable withholding agent) or promptly notify the Borrower and the Administrative Agent in writing of its inability to do so. Unless the applicable withholding agent has received forms or other documents satisfactory to it indicating that payments under any Loan Document to or for a Lender are not subject to withholding tax or are subject to such Tax at a rate reduced by an applicable tax treaty, the Borrower, the Administrative Agent or other applicable withholding agent shall withhold amounts required to be withheld by applicable Law from such payments at the applicable statutory rate. Without limiting the foregoing:

(i) Each Lender that is a United States person (as defined in Section 7701(a)(30) of the Code) shall deliver to the Borrower and the Administrative Agent on or before the date on which it becomes a party to this Agreement two properly completed and duly signed original copies of Internal Revenue Service Form W-9 (or any successor forms) certifying that such Lender is exempt from federal backup withholding.

 

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(ii) Each Lender that is not a United States person (as defined in Section 7701(a)(30) of the Code) shall deliver to the Borrower and the Administrative Agent on or before the date on which it becomes a party to this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent) whichever of the following is applicable:

(A) two properly completed and duly signed original copies of Internal Revenue Service Form W-8BEN (or any successor forms) claiming eligibility for the benefits of an income tax treaty to which the United States is a party, and such other documentation as required under the Code,

(B) two properly completed and duly signed original copies of Internal Revenue Service Form W-8ECI (or any successor forms),

(C) in the case of a Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (A) a certificate substantially in the form of Exhibit I hereto (any such certificate a “ United States Tax Compliance Certificate ”) to the effect that such Lender is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, (3) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (4) no payments in connection with any Loan Document are effectively connected with a United States trade or business conducted by such Lender and (B) two properly completed and duly signed original copies of Internal Revenue Service Form W-8BEN (or any successor forms),

(D) to the extent a Lender is not the beneficial owner (for example, where the Lender is a partnership, or is a Participant holding a participation granted by a participating Lender), two properly completed and duly signed original copies of Internal Revenue Service Form W-8IMY (or any successor forms) of the Lender, accompanied by a Form W-8ECI, W-8BEN, United States Tax Compliance Certificate, Form W-9, Form W-8IMY or any other required information from each beneficial owner, as applicable ( provided that, if the Lender is a partnership (and not a participating Lender) and one or more beneficial owners are claiming the portfolio interest exemption, the United States Tax Compliance Certificate may be provided by such Lender on behalf of such beneficial owner), or

(E) two properly completed and duly signed original copies of any other form prescribed by applicable U.S. federal income tax laws (including the Treasury Regulations) as a basis for claiming a complete exemption from, or a deduction in, United States federal withholding tax on any payments to such Lender under the Loan Documents.

Notwithstanding any other provision of this clause (d), a Lender shall not be required to deliver any form that such Lender is not legally eligible to deliver.

Each Lender shall deliver to the Borrower and the Administrative Agent two further original copies of any previously delivered form or certification (or any applicable successor form) on or before the date that any such form or certification expires or becomes obsolete or inaccurate and promptly after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrower or the Administrative Agent, or promptly notify the Borrower and the Administrative Agent in writing that it is unable to do so. Each Lender shall promptly notify the Administrative Agent in writing at any time it determines that it is no longer in a position to provide any previously delivered form or certification to the Borrower or the Administrative Agent.

 

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(e) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA, such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Laws and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Laws and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA, to determine whether such Lender has or has not complied with such Lender’s obligations under FATCA and, if necessary, to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(f) Any Lender claiming any additional amounts payable pursuant to this Section 3.01 shall use its reasonable efforts to change the jurisdiction of its Lending Office (or take any other measures reasonably requested by the Borrower) if such a change or other measures would reduce any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the sole determination of such Lender, result in any unreimbursed cost or expense or be otherwise materially disadvantageous to such Lender.

(g) If any Lender or Agent determines, in its sole discretion, that it has received a refund in respect of any Indemnified Taxes or Other Taxes as to which indemnification or additional amounts have been paid to it by any Loan Party pursuant to this Section 3.01, it shall promptly remit such refund to the Loan Party, net of all out-of-pocket expenses of the Lender or Agent, as the case may be and without interest (other than any interest paid by the relevant taxing authority with respect to such refund net of any Taxes payable by any Agent or Lender on such interest); provided that the Loan Party, upon the request of the Lender or Agent, as the case may be, agrees promptly to return such refund (plus any penalties, interest or other charges imposed by the relevant taxing authority) to such party in the event such party is required to repay such refund to the relevant taxing authority. This section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to Taxes that it deems confidential) to the Borrower or any other person.

(h) For the avoidance of doubt, a “Lender” shall include, for all purposes of this Section 3.01, any L/C Issuer and any Swing Line Lender.

Section 3.02. Illegality .

If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurocurrency Rate Loans, or to determine or charge interest rates based upon the Eurocurrency Rate, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurocurrency Rate Loans or to convert Base Rate Loans to Eurocurrency Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all applicable Eurocurrency Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurocurrency Rate Loans to such day, or promptly, if such Lender may not lawfully continue to maintain such Eurocurrency Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted and all amounts due, if any, in connection with such prepayment or conversion under Section 3.05. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

Section 3.03. Inability to Determine Rates .

If the Administrative Agent or the Required Lenders determine that for any reason adequate and reasonable means do not exist for determining the applicable Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan, or that the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, or that Dollar deposits are not being offered to banks in the London interbank eurodollar, or other applicable,

 

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market for the applicable amount and the Interest Period of such Eurocurrency Rate Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurocurrency Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of such Eurocurrency Rate Loans or, failing that, will be deemed to have converted such request, if applicable, into a request for a Borrowing of Base Rate Loans in the amount specified therein.

Section 3.04. Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency Rate Loans .

(a) If any Lender reasonably determines that as a result of the introduction of or any change in or in the interpretation of any Law, in each case after the Closing Date, or such Lender’s compliance therewith, there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any Eurocurrency Rate Loans (or in the case of Taxes, any Loan) or (as the case may be) issuing or participating in Letters of Credit, or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this Section 3.04(a) any such increased costs or reduction in amount resulting from (i) Indemnified Taxes or Other Taxes for which additional amounts would be payable under Section 3.01(a) or which are indemnifiable under Section 3.01(c), or any Excluded Taxes or (ii) reserve requirements contemplated by Section 3.04(c)) and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining the Eurocurrency Rate Loan (or of maintaining its obligations to make any Loan), or to reduce the amount of any sum received or receivable by such Lender, then from time to time within fifteen (15) days after demand by such Lender setting forth in reasonable detail such increased costs (with a copy of such demand to the Administrative Agent given in accordance with Section 3.06), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction.

(b) If any Lender determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, in each case after the Closing Date, or compliance by such Lender (or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender’s obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender’s desired return on capital), then from time to time upon demand of such Lender setting forth in reasonable detail the charge and the calculation of such reduced rate of return (with a copy of such demand to the Administrative Agent given in accordance with Section 3.06), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction within fifteen (15) days after receipt of such demand.

(c) The Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Rate funds or deposits, additional interest on the unpaid principal amount of each applicable Eurocurrency Rate Loan of the Borrower equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive in the absence of manifest error), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of any Eurocurrency Rate Loans of the Borrower, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least fifteen (15) days’ prior notice (with a copy to the Administrative Agent) of such additional interest or cost from such Lender. If a Lender fails to give notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest or cost shall be due and payable fifteen (15) days from receipt of such notice.

(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section 3.04 shall not constitute a waiver of such Lender’s right to demand such compensation.

 

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(e) If any Lender requests compensation under this Section 3.04, then such Lender will, if requested by the Borrower and at the Borrower’s expense, use commercially reasonable efforts to designate another Lending Office for any Loan or Letter of Credit affected by such event; provided that such efforts are made on terms that, in the reasonable judgment of such Lender, cause such Lender and its Lending Office(s) to suffer no material economic, legal or regulatory disadvantage, and provided , further , that nothing in this Section 3.04(e) shall affect or postpone any of the Obligations of the Borrower or the rights of such Lender pursuant to Section 3.04(a), (b), (c) or (d).

Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case, be deemed to have been introduced or adopted after the date hereof, regardless of the date enacted or adopted.

Section 3.05. Funding Losses .

Upon written demand of any Lender (with a copy to the Administrative Agent) from time to time, which demand shall set forth in reasonable detail the basis for requesting such amount, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense actually incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Eurocurrency Rate Loan of the Borrower on a day other than the last day of the Interest Period for such Loan; or

(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Eurocurrency Rate Loan of the Borrower on the date or in the amount notified by the Borrower;

including any loss or expense (excluding loss of anticipated profits) arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.

Section 3.06. Matters Applicable to All Requests for Compensation .

(a) Any Agent or any Lender claiming compensation under this Article III shall deliver a certificate to the Borrower setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error. In determining such amount, such Agent or such Lender may use any reasonable averaging and attribution methods.

(b) With respect to any Lender’s claim for compensation under Section 3.01, 3.02, 3.03 or 3.04, the Borrower shall not be required to compensate such Lender for any amount incurred more than one hundred and eighty (180) days prior to the date that such Lender notifies the Borrower of the event that gives rise to such claim; provided that, if the circumstance giving rise to such claim is retroactive, then such 180-day period referred to above shall be extended to include the period of retroactive effect thereof. If any Lender requests compensation by the Borrower under Section 3.04, the Borrower may, by notice to such Lender (with a copy to the Administrative Agent), suspend the obligation of such Lender to make or continue from one Interest Period to another applicable Eurocurrency Rate Loan, or, if applicable, to convert Base Rate Loans into Eurocurrency Rate Loans, until the event or condition giving rise to such request ceases to be in effect (in which case the provisions of Section 3.06(c) shall be applicable); provided that such suspension shall not affect the right of such Lender to receive the compensation so requested.

(c) If the obligation of any Lender to make or continue any Eurocurrency Rate Loan, or to convert Base Rate Loans into Eurocurrency Rate Loans shall be suspended pursuant to Section 3.06(b) hereof, such Lender’s applicable Eurocurrency Rate Loans shall be automatically converted into Base Rate Loans (or, if such conversion is not possible, repaid) on the last day(s) of the then current Interest Period(s) for such Eurocurrency Rate

 

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Loans (or, in the case of an immediate conversion required by Section 3.02, on such earlier date as required by Law) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 3.02, 3.03 or 3.04 hereof that gave rise to such conversion no longer exist:

(i) to the extent that such Lender’s Eurocurrency Rate Loans have been so converted, all payments and prepayments of principal that would otherwise be applied to such Lender’s applicable Eurocurrency Rate Loans shall be applied instead to its Base Rate Loans; and

(ii) all Loans that would otherwise be made or continued from one Interest Period to another by such Lender as Eurocurrency Rate Loans shall be made or continued instead as Base Rate Loans (if possible), and all Base Rate Loans of such Lender that would otherwise be converted into Eurocurrency Rate Loans shall remain as Base Rate Loans.

(d) If any Lender gives notice to the Borrower (with a copy to the Administrative Agent) that the circumstances specified in Section 3.02, 3.03 or 3.04 hereof that gave rise to the conversion of any of such Lender’s Eurocurrency Rate Loans pursuant to this Section 3.06 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurocurrency Rate Loans made by other Lenders under the applicable Facility are outstanding, if applicable, such Lender’s Base Rate Loans shall be automatically converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Eurocurrency Rate Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding Eurocurrency Rate Loans under such Facility and by such Lender are held pro rata (as to principal amounts, interest rate basis, and Interest Periods) in accordance with their respective Commitments for the applicable Facility.

Section 3.07. Replacement of Lenders Under Certain Circumstances .

(a) If at any time (i) the Borrower becomes obligated to pay additional amounts or indemnity payments described in Section 3.01 or 3.04 as a result of any condition described in such Sections or any Lender ceases to make any Eurocurrency Rate Loans as a result of any condition described in Section 3.02 or Section 3.04, (ii) any Lender becomes a Defaulting Lender or (iii) any Lender becomes a Non-Consenting Lender, then the Borrower may, on ten (10) Business Days’ prior written notice to the Administrative Agent and such Lender, (x) replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 10.07(b) (with the assignment fee to be paid by the Borrower in such instance) all of its rights and obligations under this Agreement (in respect of any applicable Facility only in the case of clause (i) or, with respect to a Class vote, clause (iii)) to one or more Eligible Assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender or other such Person; and provided , further , that (A) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments and (B) in the case of any such assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable Eligible Assignees shall have agreed to, and shall be sufficient (together with all other consenting Lenders) to cause the adoption of, the applicable departure, waiver or amendment of the Loan Documents; or (y) terminate the Commitment of such Lender or L/C Issuer, as the case may be, and (1) in the case of a Lender (other than an L/C Issuer), repay all Obligations of the Borrower owing to such Lender relating to the Loans and participations held by such Lender as of such termination date and (2) in the case of an L/C Issuer, repay all Obligations of the Borrower owing to such L/C Issuer relating to the Loans and participations held by the L/C Issuer as of such termination date and cancel or backstop on terms satisfactory to such L/C Issuer any Letters of Credit issued by it; provided that in the case of any such termination of a Non-Consenting Lender such termination shall be sufficient (together with all other consenting Lenders) to cause the adoption of the applicable departure, waiver or amendment of the Loan Documents and such termination shall be in respect of any applicable facility only in the case of clause (i) or, with respect to a Class vote, clause (iii).

(b) Any Lender being replaced pursuant to Section 3.07(a) above shall (i) execute and deliver an Assignment and Assumption with respect to such Lender’s applicable Commitment and outstanding Loans and participations in L/C Obligations and Swing Line Loans in respect thereof, and (ii) deliver any Notes evidencing such Loans to the Borrower or Administrative Agent. Pursuant to such Assignment and Assumption, (A) the assignee Lender shall acquire all or a portion, as the case may be, of the assigning Lender’s Commitment and outstanding Loans and participations in L/C Obligations and Swing Line Loans, (B) all obligations of the Borrower owing to the

 

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assigning Lender relating to the Loans, Commitments and participations so assigned shall be paid in full by the assignee Lender to such assigning Lender concurrently with such Assignment and Assumption and (C) upon such payment and, if so requested by the assignee Lender, delivery to the assignee Lender of the appropriate Note or Notes executed by the Borrower, the assignee Lender shall become a Lender hereunder and the assigning Lender shall cease to constitute a Lender hereunder with respect to such assigned Loans, Commitments and participations, except with respect to indemnification provisions under this Agreement, which shall survive as to such assigning Lender. In connection with any such replacement, if any such Non-Consenting Lender or Defaulting Lender does not execute and deliver to the Administrative Agent a duly executed Assignment and Assumption reflecting such replacement within five (5) Business Days of the date on which the assignee Lender executes and delivers such Assignment and Assumption to such Non-Consenting Lender or Defaulting Lender, then such Non-Consenting Lender or Defaulting Lender shall be deemed to have executed and delivered such Assignment and Assumption without any action on the part of the Non-Consenting Lender or Defaulting Lender.

(c) Notwithstanding anything to the contrary contained above, any Lender that acts as an L/C Issuer may not be replaced hereunder at any time that it has any Letter of Credit outstanding hereunder unless arrangements reasonably satisfactory to such L/C Issuer (including the furnishing of a back-up standby letter of credit in form and substance, and issued by an issuer reasonably satisfactory to such L/C Issuer or the depositing of Cash Collateral into a Cash Collateral account in amounts and pursuant to arrangements reasonably satisfactory to such L/C Issuer) have been made with respect to each such outstanding Letter of Credit and the Lender that acts as the Administrative Agent may not be replaced hereunder except in accordance with the terms of Section 9.09.

(d) In the event that (i) the Borrower or the Administrative Agent has requested that the Lenders consent to a departure or waiver of any provisions of the Loan Documents or agree to any amendment thereto, (ii) the consent, waiver or amendment in question requires the agreement of all affected Lenders in accordance with the terms of Section 10.01 or all the Lenders with respect to a certain Class of the Loans and (iii) the Required Lenders (or, in the case of a consent, waiver or amendment involving all affected Lenders of a certain Class, the Required Class Lenders) have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a “ Non-Consenting Lender .”

Section 3.08. Survival .

All of the Borrower’s obligations under this Article III shall survive any assignment of rights by, or the replacement of, a Lender (including any L/C Issuer) and termination of the Aggregate Commitments and repayment, satisfaction and discharge of all other Obligations hereunder.

ARTICLE IV

Conditions Precedent to Credit Extensions

Section 4.01. All Credit Events After the Closing Date .

The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurocurrency Rate Loans) is subject to the following conditions precedent:

(i) The representations and warranties of each Loan Party set forth in Article V and in each other Loan Document shall be true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be correct in all respects as so qualified) on and as of the date of such Credit Extension with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date.

(ii) No Default shall exist or would result from such proposed Credit Extension or from the application of the proceeds therefrom.

(iii) The Administrative Agent and, if applicable, the relevant L/C Issuer or the relevant Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

 

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Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurocurrency Rate Loans) submitted by the Borrower after the Closing Date shall be deemed to be a representation and warranty that the conditions specified in Sections 4.01(i) and (ii) have been satisfied on and as of the date of the applicable Credit Extension.

Section 4.02. First Credit Event .

Each Lender shall make the Credit Extension to be made by it on the Closing Date subject only to the following conditions precedent, unless otherwise waived by the Arrangers in their sole discretion:

(a) This Agreement shall have been duly executed and delivered by the Borrower and each Guarantor.

(b) The Administrative Agent and, if applicable, the relevant L/C Issuer or the relevant Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

(c) The Administrative Agent shall have received, on behalf of itself, the Collateral Agent, the Lenders and each L/C Issuer, an opinion of (i) Simpson Thacher & Bartlett LLP, special counsel for the Loan Parties, and (ii) from each local counsel for the Loan Parties listed on Schedule 4.02(c), in each case, dated the Closing Date and addressed to each L/C Issuer, the Administrative Agent, the Collateral Agent and the Lenders, in each case in form and substance customary for senior secured credit facilities in transactions of this kind.

(d) The Administrative Agent shall have received (i) a copy of the certificate or articles of incorporation or organization, including all amendments thereto, of each Loan Party, certified, if applicable, as of a recent date by the Secretary of State of the state of its organization, and a certificate as to the good standing (where relevant) of each Loan Party as of a recent date, from such Secretary of State or similar Governmental Authority and (ii) a certificate of a Responsible Officer of Borrower, Holdings and each other Loan Party dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws or operating (or limited liability company) agreement of such Loan Party as in effect on the Closing Date, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the member (or equivalent governing body) of the Borrower or such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Person is a party and, in the case of the Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation or organization of such Loan Party have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer executing any Loan Document on behalf of such Loan Party and countersigned by another officer as to the incumbency and specimen signature of the Responsible Officer, Secretary or Assistant Secretary executing the certificate pursuant to clause (ii) above.

(e) (i) The Administrative Agent shall have received the (x) results of searches of the Uniform Commercial Code filings (or equivalent filings) and (y) judgment and tax lien searches, made with respect to the Loan Parties in the states or other jurisdictions of formation of such Person and with respect to such other locations and names listed on the Perfection Certificate, together with (in the case of clause (y)) copies of the financing statements (or similar documents) disclosed by such search and (ii) the Security Agreement and the Holdings Pledge Agreement shall have been duly executed and delivered by each Loan Party that is to be a party thereto, together with (x) certificates, if any, representing the Equity Interests of the Borrower and the Domestic Subsidiaries accompanied by undated stock powers executed in blank and (y) documents and instruments to be recorded or filed that the Administrative Agent may deem reasonably necessary to satisfy the Collateral and Guarantee Requirement.

 

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(f) The Administrative Agent shall have received a certificate, dated the Closing Date and signed by the Chief Financial Officer of the Borrower, certifying that the Borrower and its Subsidiaries, on a consolidated basis after giving effect to the transactions on the Closing Date, are Solvent as of the Closing Date.

(g) On the Closing Date, the representations and warranties made by the Loan Parties in Article V shall be true and correct in all material respects.

(h) The Lenders shall have received all documentation and other information required by regulatory authorities with respect to the Borrower reasonably requested by the Lenders under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the USA Patriot Act; provided that the Lenders shall use commercially reasonable efforts to ensure that such requests are delivered at least 5 Business Days prior to the Closing Date and are not unduly burdensome on any person unless required by applicable Law.

(i) The Arrangers shall have received the Audited Financial Statements and the Unaudited Financial Statements.

(j) All fees required to be paid on the Closing Date pursuant to the Fee Letters and reasonable out-of-pocket expenses, to the extent invoiced at least three Business Days prior to the Closing Date, shall have been paid.

(k) The Senior Notes shall have been issued or shall be issued simultaneously with the initial funding of Loans on the Closing Date

(l) Immediately following the execution of this Agreement, neither Holdings nor any of its subsidiaries will have any Indebtedness other than the Obligations and Indebtedness permitted under Section 7.03(b), Capitalized Leases permitted under Section 7.03(e)(i) and Indebtedness permitted under Section 7.03(t).

(m) The Administrative Agent shall have received evidence that each of the Existing Credit Facility and the Continental Cement Indebtedness have been, or concurrently with the Closing Date is being, terminated and all Liens securing obligations under the Existing Credit Facility and the Continental Cement Indebtedness have been, or concurrently with the Closing Date are being released.

ARTICLE V

Representations and Warranties

The Borrower and each of the Subsidiary Guarantors party hereto represent and warrant to the Agents and the Lenders at the time of each Credit Extension that:

Section 5.01. Existence, Qualification and Power; Compliance with Laws .

Each Loan Party and each Subsidiary (a) is a Person duly organized or formed, validly existing and in good standing (where relevant) under the Laws of the jurisdiction of its incorporation or organization to the extent such concept exists in such jurisdiction, (b) has all requisite power and authority to (i) own or lease its assets and carry on its business as currently conducted and (ii) in the case of the Loan Parties, execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and in good standing (where relevant) under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, (d) is in compliance with all Laws, orders, writs and injunctions and (e) has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted; except in the case of clause (a) (other than with respect to the Borrower), (b)(i) (other than with respect to the Borrower), (c), (d) or (e), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

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Section 5.02. Authorization; No Contravention .

The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is a party are within such Loan Party’s corporate or other powers, (a) have been duly authorized by all necessary corporate or other organizational action, and (b) do not (i) contravene the terms of any of such Person’s Organization Documents, (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under (other than as permitted by Section 7.01), or require any payment to be made under (x) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (y) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (iii) violate any material Law; except with respect to any conflict, breach or contravention or payment (but not creation of Liens) referred to in clause (b)(ii)(x), to the extent that such violation, conflict, breach, contravention or payment could not reasonably be expected to have a Material Adverse Effect.

Section 5.03. Governmental Authorization; Other Consents .

No material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the priority thereof) or (d) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for (i) filings and registrations that are necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties, (ii) the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect (except to the extent not required to obtained, taken, given or made or in full force and effect pursuant to the Collateral and Guarantee Requirement) and (iii) those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make could not reasonably be expected to have a Material Adverse Effect.

Section 5.04. Binding Effect .

This Agreement and each other Loan Document has been duly executed and delivered by each Loan Party that is a party thereto. This Agreement and each other Loan Document constitute legal, valid and binding obligations of such Loan Party, enforceable against each Loan Party that is a party thereto in accordance with its terms, except as such enforceability may be limited by (i) Debtor Relief Laws and by general principles of equity, (ii) the need for filings and registrations necessary to create or perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties and (iii) the effect of foreign Laws, rules and regulations as they relate to pledges, if any, of Equity Interests in Foreign Subsidiaries.

Section 5.05. Financial Statements; No Material Adverse Effect .

(a) (i) The Audited Financial Statements fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as of the dates thereof and its consolidated results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein.

(ii) The Unaudited Financial Statements fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as of the dates thereof and its results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein and subject to normal year-end audit adjustments.

(b) The forecasts of income statements of the Borrower and its Subsidiaries which have been furnished to the Administrative Agent prior to the Closing Date have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such forecasts, it being understood that actual results may vary from such forecasts and that such variations may be material.

 

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(c) Since December 31, 2010, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

(d) As of the Closing Date, neither Holdings nor any of its Subsidiaries has any Indebtedness or other obligations or liabilities, direct or contingent (other than (i) the liabilities reflected on Schedule 5.05, (ii) obligations arising under the Loan Documents and (iii) liabilities incurred in the ordinary course of business) that, either individually or in the aggregate, have had or could reasonably be expected to have a Material Adverse Effect.

Section 5.06. Litigation .

There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Section 5.07. No Default .

Neither the Borrower nor any of its Subsidiaries is in default under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.08. Ownership of Property; Liens .

(a) The Borrower and each of its Subsidiaries has good record title to, or valid leasehold interests in, or easements or other limited property interests in, all Real Property necessary in the ordinary conduct of its business, free and clear of all Liens except as set forth on Schedule 5.08 hereto and except for minor defects in title that in the aggregate do not materially interfere with its ability to conduct its business or to utilize such assets for their intended purposes and Liens permitted by Section 7.01 and except where the failure to have such title could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(b) As of the Closing Date, Schedule 5.08 contains a true and complete list of each Material Real Property owned by the Borrower and the Subsidiaries as of the Closing Date.

(c) No Casualty Event . As of the Closing Date, except as otherwise disclosed to the Administrative Agent, (i) no Loan Party has received any notice of, nor has any knowledge of, the occurrence (and still pending as of the Closing Date) or pendency or contemplation of any Casualty Event affecting all or any portion of a Mortgaged Property, and (ii) no Mortgage encumbers improved Mortgaged Property that is located in an area that has been identified by the Federal Emergency Management Act as an area having special flood hazards within the meaning of the National Flood Insurance Act of 1968 unless flood insurance available under such Act or otherwise sufficient to comply with Flood Insurance Laws has been obtained in accordance with Section 6.07.

Section 5.09. Environmental Matters .

Except as specifically disclosed in Schedule 5.09(a) or except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:

(a) each Loan Party and its operation, business, properties and facilities are and have been in material compliance with all Environmental Laws, which includes obtaining and maintaining all applicable Environmental Permits;

(b) the Loan Parties have not received any written notice that alleges any of them is in violation of or actually or potentially liable under any Environmental Laws, and none of the Loan Parties nor

 

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any of their properties or facilities is the subject of any claims, investigations, liens, demands, requests for information or judicial, administrative or arbitral proceedings pending or, to the knowledge of the Borrower, threatened under any Environmental Law or to revoke or modify any Environmental Permit held by any of the Loan Parties;

(c) there are no facts, circumstances, occurrences or conditions, including the Release or threat of Release of Hazardous Materials arising out of or relating to the operations of the Loan Parties or any property or facility owned, leased or operated by any of the Loan Parties or, to the knowledge of the Borrower, any property or facility formerly owned, operated or leased by the Loan Parties or any of their predecessors in interest, that could reasonably be expected to result in violation by any Loan Party or in any of the Loan Parties incurring liability, under, Environmental Laws; and

(d) none of the Loan Parties are conducting or paying for, in whole or in part, any investigation, response or other corrective action under any Environmental Law at any location.

Section 5.10. Taxes .

Except as would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each of the Loan Parties and their Subsidiaries have filed all tax returns required to be filed, and have paid all Taxes levied or imposed upon them or their properties, that are due and payable (including in their capacity as a withholding agent) and taking into account applicable extensions, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed Tax audit, deficiency or assessment known to any Loan Parties against the Loan Parties that would, individually or in the aggregate, have a Material Adverse Effect.

Section 5.11. ERISA Compliance .

(a) Except as could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Plan is in compliance with the applicable provisions of ERISA, the Code and other Federal or state Laws.

(b) (i) No ERISA Event has occurred during the five year period prior to the date on which this representation is made or deemed made; (ii) neither any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iii) neither any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither any Loan Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA, except, with respect to each of the foregoing clauses of this Section 5.11(b), as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

(c) The Pension Plans of the Loan Parties and the Subsidiaries are funded to the extent required by Law, in each case, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

Section 5.12. Subsidiaries; Equity Interests .

As of the Closing Date, no Loan Party has any material Subsidiaries other than those specifically disclosed in Schedule 5.12, and all of the outstanding Equity Interests owned by the Loan Parties (or a Subsidiary of any Loan Party) in such material Subsidiaries have been validly issued and are fully paid and all Equity Interests owned by a Loan Party (or a Subsidiary of any Loan Party) in such material Subsidiaries are owned free and clear of all Liens except (i) those created under the Collateral Documents and (ii) any Lien that is permitted under Section 7.01. As of the Closing Date, Schedule 5.12 (a) sets forth the name and jurisdiction of each Domestic Subsidiary that is a Loan Party and (b) sets forth the ownership interest of the Borrower and any other Subsidiary thereof in each Subsidiary, including the percentage of such ownership.

 

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Section 5.13. Margin Regulations; Investment Company Act .

(a) The Borrower is not engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Borrowings or drawings under any Letter of Credit will be used for any purpose that violates Regulation U.

(b) None of the Borrower, any Person Controlling the Borrower, or any of its Subsidiaries is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

Section 5.14. Disclosure .

To the best of the Borrower’s knowledge, no report, financial statement, certificate or other written information furnished by or on behalf of any Loan Party (other than projected financial information and information of a general economic or industry nature) to any Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein (when taken as a whole), in the light of the circumstances under which they were made, not materially misleading. With respect to projected financial information, the Borrower represents that such information was prepared in good faith based upon assumptions believed to be reasonable at the time of preparation; it being understood that such projections may vary from actual results and that such variances may be material.

Section 5.15. Labor Matters .

Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (a) there are no strikes or other labor disputes against the Borrower or any of its Subsidiaries pending or, to the knowledge of the Borrower, threatened; (b) hours worked by and payment made to employees of the Borrower or any of its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Laws dealing with such matters; and (c) all payments due from the Borrower or any of its Subsidiaries on account of employee health and welfare insurance have been paid or accrued as a liability on the books of the relevant party.

Section 5.16. Intellectual Property; Licenses, Etc .

Except as, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, the Borrower and its Subsidiaries own, license or possess the right to use all of the trademarks, service marks, trade names, domain names, copyrights, patents, patent rights, licenses, technology, software, know-how, rights in databases, design rights and other intellectual property rights (collectively, “ IP Rights ”) that are reasonably necessary for the operation of their respective businesses as currently conducted, and, to the knowledge of the Borrower and its Subsidiaries, such IP Rights do not conflict with the rights of any Person, except to the extent such failure to own, license or possess or such conflicts, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. No advertisement, product, process, method or substance used by any Loan Party or any of its Subsidiaries in the operation of their respective businesses as currently conducted infringes upon any IP Rights held by any Person except for such infringements which individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. No claim or litigation regarding any of the IP Rights is filed and presently pending or, to the knowledge of the Borrower, presently threatened against any Loan Party or any of its Subsidiaries, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Except pursuant to written licenses and other user agreements entered into by each Loan Party in the ordinary course of business, as of the Closing Date, all registrations listed in Schedule 8(a) or 8(b) to the Perfection Certificate are valid and in full force and effect, except, in each individual case, to the extent that such a registration is not valid and in full force and effect could not reasonably be expected to have a Material Adverse Effect.

 

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Section 5.17. Solvency .

On the Closing Date after giving effect to the use of proceeds hereunder, the Borrower and its Subsidiaries, on a consolidated basis, are Solvent.

Section 5.18. Security Documents .

(a) Valid Liens . Each Collateral Document delivered pursuant to Sections 4.02, 6.11 and 6.13 will, upon execution and delivery thereof, be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties, legal, valid and enforceable Liens on, and security interests in, the Collateral described therein to the extent intended to be created thereby and (i) when financing statements and other filings in appropriate form are filed in the offices specified on Schedule 4 to the Perfection Certificate and (ii) upon the taking of possession or control by the Collateral Agent of such Collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to the Collateral Agent to the extent possession or control by the Collateral Agent is required by the Security Agreement), the Liens created by the Collateral Documents shall constitute fully perfected Liens on, and security interests in (to the extent intended to be created thereby), all right, title and interest of the grantors in such Collateral to the extent perfection can be obtained by filing financing statements, in each case subject to no Liens other than Liens permitted hereunder.

(b) PTO Filing; Copyright Office Filing . When the Security Agreement or a short form thereof is properly filed in the United States Patent and Trademark Office and the United States Copyright Office, to the extent such filings may perfect such interests, the Liens created by such Security Agreement shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the grantors thereunder in Patents and Trademarks (each as defined in the Security Agreement) registered or applied for with the United States Patent and Trademark Office or Copyrights (as defined in such Security Agreement) registered or applied for with the United States Copyright Office, as the case may be, in each case free and clear of Liens other than Liens permitted under Section 7.01 hereof (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to establish a Lien on registered Patents, Trademarks and Copyrights (each as defined in the Security Agreement) registered or applied for by the grantors thereof after the Closing Date).

(c) Mortgages . Upon recording thereof in the appropriate recording office, each Mortgage is effective to create, in favor of the Collateral Agent, for its benefit and the benefit of the Secured Parties, legal, valid and enforceable perfected first-priority Liens on, and security interest in, all of the Loan Parties’ right, title and interest in and to the Mortgaged Properties thereunder and the proceeds thereof, subject only to Liens permitted hereunder, and when the Mortgages are filed in the offices specified on Schedule 4 to the Perfection Certificate dated the Closing Date (or, in the case of any Mortgage executed and delivered after the date thereof in accordance with the provisions of Sections 6.11 and 6.13, when such Mortgage is filed in the offices specified in the local counsel opinion delivered with respect thereto in accordance with the provisions of Sections 6.11 and 6.13), the Mortgages shall constitute fully perfected first-priority Liens on, and security interests in, all right, title and interest of the Loan Parties in the Mortgaged Properties and the proceeds thereof, in each case prior and superior in right to any other Person, other than Liens permitted by hereunder.

Notwithstanding anything herein (including this Section 5.18) or in any other Loan Document to the contrary, neither the Borrower nor any other Loan Party makes any representation or warranty as to (A) the effects of perfection or non-perfection, the priority or the enforceability of any pledge of or security interest in any Equity Interests of any Foreign Subsidiary, or as to the rights and remedies of the Agents or any Lender with respect thereto, under foreign Law, (B) the pledge or creation of any security interest, or the effects of perfection or non-perfection, the priority or the enforceability of any pledge of or security interest to the extent such pledge, security interest, perfection or priority is not required pursuant to the Collateral and Guarantee Requirement or the Collateral Documents or (C) on the Closing Date and until required pursuant to Section 6.13, the pledge or creation of any security interest, or the effects of perfection or non-perfection the priority or enforceability of any pledge or security interest.

Section 5.19. Senior Debt . The Obligations constitute senior indebtedness of the Borrower and each other Loan Party.

 

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ARTICLE VI

Affirmative Covenants

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation (other than Cash Management Obligations or obligations under Secured Hedge Agreements) hereunder which is accrued and payable shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding (unless the Outstanding Amount of the L/C Obligations related thereto has been Cash Collateralized or a backstop letter of credit reasonably satisfactory to the applicable L/C Issuer is in place), then from and after the Closing Date, the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each of its Subsidiaries to:

Section 6.01. Financial Statements .

(a) Deliver to the Administrative Agent for prompt further distribution to each Lender as soon as available, but in any event within one hundred thirty-five (135) days after the end of the fiscal year ending December 31, 2011 and within ninety (90) days after the end of each subsequent fiscal year, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent registered public accounting firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

(b) Deliver to the Administrative Agent for prompt further distribution to each Lender, as soon as available, but in any event within ninety (90) days, seventy-five (75) days and sixty (60) days after the end of each of the first three (3) fiscal quarters, respectively, following the Closing Date and within forty-five (45) days after the end of each the first three (3) fiscal quarters of each fiscal year of the Borrower thereafter, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter and the related (i) consolidated statements of income or operations for such fiscal quarter and for the portion of the fiscal year then ended and (ii) consolidated statements of cash flows for such fiscal quarter and the portion of the fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition, results of operations, stockholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes; and

(c) Deliver to the Administrative Agent for prompt further distribution to each Lender, as soon as available, and in any event no later than sixty (60) days after the end of each fiscal year of the Borrower, a detailed consolidated budget for the following fiscal year on a quarterly basis (including a projected consolidated balance sheet of the Borrower and its Subsidiaries as of the end of the following fiscal year, the related consolidated statements of projected cash flow and projected income and a summary of the material underlying assumptions applicable thereto) (collectively, the “ Projections ”), which Projections shall in each case be accompanied by a certificate of a Responsible Officer stating that such Projections have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such Projections, it being understood that actual results may vary from such Projections and that such variations may be material.

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this Section 6.01 may be satisfied with respect to financial information of the Borrower and its Subsidiaries by furnishing (A) the applicable financial statements of the Borrower (or any direct or indirect parent of the Borrower) or (B) the Borrower’s (or any direct or indirect parent thereof), as applicable, Form l0-K or 10-Q, as applicable, filed with the SEC; provided that, with respect to clauses (A) and (B), (i) to the extent such information relates to a parent of the Borrower, such information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to the Borrower (or such parent), on the one hand, and the information relating to the Borrower and its Subsidiaries on a standalone basis, on the other hand, and (ii) to the extent such information is in lieu

 

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of information required to be provided under Section 6.01(a), such materials are accompanied by a report and opinion of an independent registered public accounting firm of nationally recognized standing, with respect to the Borrower and its Subsidiaries, in each case, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualifications or exception as to the scope of such audit.

Documents required to be delivered pursuant to Section 6.01 and Sections 6.02(c) and (d) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower (or any direct or indirect parent of the Borrower) posts such documents, or provides a link thereto on the website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Borrower’s behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) upon written request by the Administrative Agent, the Borrower shall deliver paper copies of such documents to the Administrative Agent for further distribution to each Lender until a written request to cease delivering paper copies is given by the Administrative Agent and (ii) the Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions ( i.e. , soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(a) to the Administrative Agent; provided , however , that if such Compliance Certificate is first delivered by electronic means, the date of such delivery by electronic means shall constitute the date of delivery for purposes of compliance with Section 6.02(a). Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “ Borrower Materials ”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “ Platform ”) and (b) certain of the Lenders (each, a “ Public Lender ”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC,” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arrangers, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States Federal and state securities laws; provided that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.08; (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information”; and (z) the Administrative Agent and each Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.” Notwithstanding the foregoing, the Borrower shall not be under any obligation to mark any Borrower Materials “PUBLIC.”

THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL,

 

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INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

Section 6.02. Certificates; Other Information .

Deliver to the Administrative Agent for prompt further distribution to each Lender:

(a) no later than five (5) days after the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower;

(b) no later than five (5) days after the delivery of the financial statements referred to in Section 6.01(a), but only if available after the use of commercially reasonable efforts, a certificate (or other appropriate reporting means in accordance with applicable auditing standards) of an independent registered public accounting firm of nationally recognized standing, with respect to the Borrower and its Subsidiaries, stating that in making the examination necessary therefor no knowledge was obtained of any Event of Default under Section 7.11 or, if any such Event of Default shall exist, stating the nature and status of such event;

(c) promptly after the same are publicly available, copies of all annual, regular, periodic and special reports and registration statements which the Borrower or any Subsidiary files with the SEC or with any Governmental Authority that may be substituted therefor (other than amendments to any registration statement (to the extent such registration statement, in the form it became effective, is delivered), exhibits to any registration statement and, if applicable, any registration statement on Form S-8) and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(d) promptly after the furnishing thereof, copies of any material requests or material notices received by any Loan Party (other than in the ordinary course of business) or material statements or material reports furnished to any holder of debt securities (other than in connection with any board observer rights) of any Loan Party or of any of its Subsidiaries pursuant to the terms of the Senior Notes Indenture and any Permitted Refinancing thereof or any Junior Financing Documentation, in each case in a principal amount in excess of the Threshold Amount and not otherwise required to be furnished to the Lenders pursuant to any clause of this Section 6.02;

(e) together with the delivery of each Compliance Certificate pursuant to Section 6.02(a), (i)in the case of annual Compliance Certificates only, a report setting forth the information required by sections describing the legal name and the jurisdiction of formation of each Loan Party and the location of the Chief Executive Office of each Loan Party of the Perfection Certificate or confirming that there has been no change in such information since the Closing Date or the date of the last such report, (ii) a description of each event, condition or circumstance during the last fiscal quarter covered by such Compliance Certificate requiring a mandatory prepayment under Section 2.05(b) and (iii) a list of each Subsidiary of the Borrower (to the extent that there have been any changes in the identity of such Subsidiaries since the Closing Date or the most recent list provided); and

(f) promptly, such additional customary information regarding the business, legal, financial or corporate affairs of the Loan Parties or any of their respective Subsidiaries, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender through the Administrative Agent may from time to time reasonably request.

 

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Section 6.03. Notices .

Promptly after a Responsible Officer of the Borrower or any Subsidiary Guarantor has obtained knowledge thereof, notify the Administrative Agent:

(a) of the occurrence of any Default;

(b) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect; and

(c) of the filing or commencement of, or any threat or notice of intention of any person to file or commence, any action, suit, litigation or proceeding, whether at law or in equity by or before any Governmental Authority with respect to any Loan Document.

Each notice pursuant to this Section shall be accompanied by a written statement of a Responsible Officer of the Borrower (x) that such notice is being delivered pursuant to Section 6.03(a), (b) or (c) (as applicable) and (y) setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto.

Section 6.04. Payment of Obligations .

(a) Pay, discharge or otherwise satisfy as the same shall become due and payable in the normal conduct of its business, all its Taxes (whether or not shown on a Tax return), except, in each case, to the extent any such Tax is being contested in good faith and by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP or the failure to pay or discharge the same would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(b) Timely and correctly file all Tax returns required to be filed, except for failures to file that could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

Section 6.05. Preservation of Existence, Etc .

(a) Preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of its organization and (b) take all reasonable action to maintain all rights, privileges (including its good standing where applicable in the relevant jurisdiction), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except, in the case of (a) or (b), (i) (other than with respect to the Borrower) to the extent that failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or (ii) pursuant to a transaction permitted by Section 7.04 or 7.05.

Section 6.06. Maintenance of Properties .

Except if the failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (a) maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and fire, casualty or condemnation excepted, and (b) make all necessary renewals, replacements, modifications, improvements, upgrades, extensions and additions thereof or thereto in accordance with prudent industry practice and in the normal conduct of its business.

Section 6.07. Maintenance of Insurance .

(a) Generally . Maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance reasonable and customary for similarly situated Persons engaged in the same or similar businesses as the Borrower and its Subsidiaries) as are customarily carried under similar circumstances by such other Persons.

 

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(b) Requirements of Insurance . On the Closing Date (or the date any such insurance is obtained, in the case of insurance obtained after the Closing Date), the Borrower shall use commercially reasonable efforts to ensure that (i) all such insurance with respect to any Collateral shall provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least 10 days (or, to the extent reasonably available, 30 days) after receipt by the Collateral Agent of written notice thereof (the Borrower shall deliver a copy of the policy (and to the extent any such policy is renewed, a renewal policy) or other evidence thereof to the Administrative Agent and the Collateral Agent, or insurance certificate with respect thereto) and (ii) all such insurance with respect to any Collateral shall name the Collateral Agent as mortgagee (in the case of property insurance) or additional insured on behalf of the Secured Parties (in the case of liability insurance) and loss payee (in the case of property insurance), as applicable.

(c) Flood Insurance . With respect to each Mortgaged Property, (i) if at any time any “building” (as defined in the Flood Insurance Laws) is located in an area designated as a “Special Flood Hazard Area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), obtain flood insurance with a financially sound and reputable insurer in such total amount as the Administrative Agent or the Required Lenders may from time to time reasonably require, (ii) otherwise comply with the Flood Insurance Laws and (ii) deliver to Administrative Agent evidence of such insurance.

Section 6.08. Compliance with Laws .

Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except if the failure to comply therewith could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 6.09. Books and Records .

Maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP consistently applied and which reflect all material financial transactions and matters involving the assets and business of the Borrower or a Subsidiary, as the case may be (it being understood and agreed that Foreign Subsidiaries may maintain individual books and records in conformity with generally accepted accounting principles that are applicable in their respective countries of organization and that such maintenance shall not constitute a breach of the representations, warranties or covenants hereunder).

Section 6.10. Inspection Rights .

Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom (other than records of the Board of Directors of such Loan Party or such Subsidiary), and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants (subject to such accountants’ customary policies and procedures), all at the reasonable expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this Section 6.10 and the Administrative Agent shall not exercise such rights more often than two (2) times during any calendar year and only one (1) such time shall be at the Borrower’s expense; provided , further , that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and upon reasonable advance notice. The Administrative Agent and the Lenders shall give the Borrower the opportunity to participate in any discussions with the Borrower’s independent public accountants. Notwithstanding anything to the contrary in this Section 6.10, neither the Borrower nor any Subsidiary shall be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (i) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by Law or (iii) is subject to attorney client or similar privilege or constitutes attorney work-product.

 

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Section 6.11. Additional Collateral; Additional Guarantors .

At the Borrower’s expense, take all action necessary or reasonably requested by the Administrative Agent or the Collateral Agent to ensure that the Collateral and Guarantee Requirement continues to be satisfied, including:

(a) Upon (x) the formation or acquisition of any new direct or indirect wholly owned Domestic Subsidiary (in each case, other than an Excluded Subsidiary) by the Borrower or (y) any Excluded Subsidiary ceasing to constitute an Excluded Subsidiary:

(i) within sixty (60) days after such formation, acquisition, cessation or designation, or such longer period as the Administrative Agent may agree in writing in its discretion:

(A) cause each such Domestic Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement to duly execute and deliver to the Administrative Agent or the Collateral Agent (as appropriate) joinders to this Agreement as Guarantors, Security Agreement Supplements, Intellectual Property Security Agreements, a counterpart of the Intercompany Note and other security agreements and documents (including, with respect to such Mortgages, the documents listed in Section 6.13(b)), as reasonably requested by and in form and substance reasonably satisfactory to the Administrative Agent (consistent, subject to local law requirements, with the Mortgages, Security Agreement, Intellectual Property Security Agreements and other security agreements in effect on the Closing Date), in each case granting first-priority Liens required by the Collateral and Guarantee Requirement;

(B) cause each such Domestic Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement (and the parent of each such Domestic Subsidiary that is a Guarantor) to deliver any and all certificates representing Equity Interests (to the extent certificated) and intercompany notes (to the extent certificated) that are required to be pledged pursuant to the Collateral and Guarantee Requirement, accompanied by undated stock powers or other appropriate instruments of transfer executed in blank;

(C) take and cause such Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement and each direct or indirect parent of such Subsidiary to take whatever action (including the recording of Mortgages, the filing of UCC financing statements and delivery of stock and membership interest certificates) as may be necessary in the reasonable opinion of the Collateral Agent to vest in the Collateral Agent (or in any representative of the Collateral Agent designated by it) valid and perfected Liens to the extent required by the Collateral and Guarantee Requirement or the Collateral Documents, and to otherwise comply with the requirements of the Collateral and Guarantee Requirement or the Collateral Documents;

(ii) if reasonably requested by the Administrative Agent or the Collateral Agent, within sixty (60) days after such request (or such longer period as the Administrative Agent may agree in writing in its sole discretion), deliver to the Administrative Agent a signed copy of an opinion, addressed to the Administrative Agent and the Lenders, of counsel for the Loan Parties reasonably acceptable to the Administrative Agent as to such matters set forth in this Section 6.11(a) as the Administrative Agent may reasonably request;

(iii) as promptly as practicable after the request therefor by the Administrative Agent or Collateral Agent, deliver to the Collateral Agent with respect to each Material Real Property, any existing title reports, abstracts or environmental assessment reports, to the extent available and in the possession or control of the Borrower; provided , however , that there shall be no obligation to deliver to the Administrative Agent any existing environmental assessment report whose disclosure to the Administrative Agent would require the consent of a Person other than the Borrower or one of its Subsidiaries, where, despite the commercially reasonable efforts of the Borrower to obtain such consent, such consent cannot be obtained; and

 

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(iv) if reasonably requested by the Administrative Agent or the Collateral Agent, within sixty (60) days after such request (or such longer period as the Administrative Agent may agree in writing in its sole discretion), deliver to the Collateral Agent any other items necessary from time to time to satisfy the Collateral and Guarantee Requirement with respect to perfection and existence of security interests with respect to property of any Guarantor acquired after the Closing Date and subject to the Collateral and Guarantee Requirement or the Collateral Documents, but not specifically covered by the preceding clause (i), (ii) or (iii) or clause (b) below.

(b) Not later than ninety (90) days after the acquisition by any Loan Party of Material Real Property as determined by the Borrower (acting reasonably and in good faith) (or such longer period as the Administrative Agent may agree in writing in its sole discretion) that is required to be provided as Collateral pursuant to the Collateral and Guarantee Requirement, which property would not be automatically subject to another Lien in favor of the Collateral Agent for the benefit of the Secured Parties pursuant to pre-existing Collateral Documents, (A) cause such property to be subject to a first-priority Lien and Mortgage in favor of the Collateral Agent for the benefit of the Secured Parties, (B) take, or cause the relevant Loan Party to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect or record such Lien, in each case to the extent required by, and subject to the limitations and exceptions of, the Collateral and Guarantee Requirement and (C) otherwise comply with the requirements of the Collateral and Guarantee Requirement with respect to such Material Real Property.

(c) Always ensuring that the Obligations are secured by a first-priority security interest in all the Equity Interests of the Borrower.

Section 6.12. Compliance with Environmental Laws .

(a) Except, in each case, to the extent that the failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, comply, and take all reasonable actions to cause all lessees and other Persons operating or occupying its properties and facilities to comply with all applicable Environmental Laws and Environmental Permits; obtain and renew all applicable Environmental Permits; and, in each case to the extent the Loan Parties are required by Environmental Laws, conduct any investigation, remedial or other corrective action necessary to address Hazardous Materials at any property or facility in accordance with applicable Environmental Laws.

(b) If a Default caused by reason of a breach of Section 5.09 or Section 6.12(a) shall have occurred or be continuing for more than 20 days after notice thereof by the Administrative Agent to the Borrower without Borrower or its Subsidiaries commencing activities reasonably likely to cure such Default in accordance with Environmental Laws, at the written request of the Administrative Agent and the Required Lenders through the Administrative Agent, provide to the Administrative Agent within 45 days after such request, at the sole expense of the Borrower and its Subsidiaries, a commercially reasonable environmental assessment report regarding the matters which are the subject of such Default, including, where appropriate and subject to any third party consent requirements, soil and/or groundwater sampling, prepared by an environmental consulting firm and, in the form and substance, reasonably acceptable to the Administrative Agent or Required Lenders making the request and evaluating any alleged violation of Environmental Law, and when appropriate indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or action necessary to address such Hazardous Materials.

(c) On the Closing Date, provide a certificate of a Responsible Officer certifying that the Borrower has implemented commercially reasonable measures designed to insure that (i) the Borrower, its Subsidiaries and their respective operations at the facilities and properties owned, leased or otherwise operated by any of them attain and remain in material compliance with all Environmental Laws, and (ii) each of the Borrower and its Subsidiaries undertakes reasonable efforts to identify and evaluate issues of compliance with and liability under Environmental Laws prior to acquiring any ownership or leasehold interest in any real property that could reasonably be expected to give rise to any material liability under any Environmental Law on the part of the Borrower or any Subsidiary.

 

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Section 6.13. Further Assurances and Post-Closing Conditions .

(a) Within ninety (90) days after the Closing Date (subject to extension by the Administrative Agent in its reasonable discretion), deliver each Collateral Document required to satisfy the Collateral and Guarantee Requirement or required pursuant to the terms of any Collateral Document, duly executed by each Loan Party required to be party thereto, together with all documents and instruments required to perfect the security interest or Lien of the Collateral Agent in the Collateral (if any) free of any other pledges, security interests or mortgages, except Liens permitted under the Collateral and Guarantee Requirement, to the extent required pursuant to the Collateral and Guarantee Requirement or the Collateral Documents.

(b) Within ninety (90) days after the Closing Date (subject to extension by the Administrative Agent in its reasonable discretion), deliver to the Administrative Agent, with respect to each Mortgaged Property on which any “building” (as defined in the Flood Insurance Laws) is located, a completed “Life of Loan” Federal Emergency Management Agency Standard Flood Hazard Determination and, if the area in which any such building is located on any Mortgaged Property is designated a “special flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), a notice with respect to special flood hazard area status, duly executed by the Borrower and the applicable Loan Party and a certificate evidencing the flood insurance policies required by Section 6.07(c) hereof, endorsed or otherwise amended to include a “standard” lender’s mortgagee endorsement naming the Collateral Agent, on behalf of the Secured Parties, as loss payee/mortgagee, in form and substance satisfactory to the Administrative Agent.

(c) Promptly upon reasonable request by the Administrative Agent (i) correct any material defect or error that may be discovered in the execution, acknowledgment, filing or recordation of any Collateral Document or other document or instrument relating to any Collateral, and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent may reasonably request from time to time in order to carry out more effectively the purposes of the Collateral Documents, to the extent required pursuant to the Collateral and Guarantee Requirement or the Collateral Documents. If the Administrative Agent or the Collateral Agent reasonably determines that it is required by applicable Law to have appraisals prepared in respect of the Real Property of any Loan Party subject to a mortgage constituting Collateral, the Borrower shall provide to the Administrative Agent appraisals that satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of FIRREA.

Section 6.14. Maintenance of Ratings .

The Borrower shall use commercially reasonable efforts to maintain a public corporate rating from S&P and a public corporate family rating from Moody’s, in each case in respect of the Borrower, and a public rating of the Facilities by each of S&P and Moody’s.

ARTICLE VII

Negative Covenants

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder (other than Cash Management Obligations or obligations under Secured Hedge Agreements) which is accrued and payable shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding (unless the Outstanding Amount of the L/C Obligations related thereto has been Cash Collateralized or a backstop letter of credit reasonably satisfactory to the applicable L/C Issuer is in place), then from and after the Closing Date:

Section 7.01. Liens .

Neither the Borrower nor its Subsidiaries shall, directly or indirectly, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

(a) Liens pursuant to any Loan Document;

 

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(b) Liens existing on the Closing Date; provided that any Lien securing Indebtedness shall only be permitted to the extent such Lien is listed on Schedule 7.01(b), and any modifications, replacements, renewals, refinancings or extensions thereof; provided that (i) the Lien does not extend to any additional property other than (A) after-acquired property that is affixed or incorporated into the property covered by such Lien or financed by Indebtedness permitted under Section 7.03, and (B) proceeds and products thereof, and (ii) the replacement, renewal, extension or refinancing of the obligations secured or benefited by such Liens, to the extent constituting Indebtedness, is permitted by Section 7.03;

(c) Liens for Taxes that are not overdue for a period of more than thirty (30) days or that are being contested in good faith and by appropriate actions, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP to the extent required by GAAP;

(d) statutory or common law Liens of landlords, sublandlords, carriers, warehousemen, mechanics, materialmen, repairmen, construction contractors or other like Liens arising in the ordinary course of business that secure amounts not overdue for a period of more than thirty (30) days or if more than thirty (30) days overdue, that are unfiled and no other action has been taken to enforce such Lien or that are being contested in good faith and by appropriate actions, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP to the extent required by GAAP;

(e) (i) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation and (ii) pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Borrower or any of its Subsidiaries;

(f) deposits to secure the performance of bids, trade contracts, governmental contracts and leases (other than Indebtedness for borrowed money), statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature (including (i) those to secure health, safety and environmental obligations and (ii) letters of credit and bank guarantees required or requested by any Governmental Authority) incurred in the ordinary course of business;

(g) easements, rights-of-way, restrictions (including zoning restrictions), encroachments, protrusions and other similar encumbrances and minor title defects affecting Real Property that do not in the aggregate materially interfere with the ordinary conduct of the business of the Borrower and its Subsidiaries, taken as a whole, and any exceptions on the Mortgage Policies issued in connection with the Mortgaged Properties;

(h) Liens securing judgments or orders for the payment of money not constituting an Event of Default under Section 8.01(h);

(i) leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which (i) do not interfere in any material respect with the business of the Borrower and its Subsidiaries, taken as a whole, (ii) do not secure any Indebtedness or (iii) are permitted by Section 7.05;

(j) Liens (i) in favor of customs and revenue authorities arising as a matter of Law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business or (ii) on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods in the ordinary course of business;

(k) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business and (iii) in favor of a banking or other financial institution arising as a matter of Law or under customary general terms and conditions encumbering

 

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deposits or other funds maintained with a financial institution (including the right of setoff) and that are within the general parameters customary in the banking industry or arising pursuant to such banking institutions general terms and conditions;

(l) Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted pursuant to Section 7.02(i) or (n) or, to the extent related to any of the foregoing, Section 7.02(r) to be applied against the purchase price for such Investment, and (ii) consisting of an agreement to Dispose of any property in a Disposition permitted under Section 7.05, in each case, solely to the extent such Investment or Disposition, as the case may be, would have been permitted on the date of the creation of such Lien;

(m) Liens (i) in favor of the Borrower or a Subsidiary on assets of a Subsidiary that is not a Guarantor or (ii) in favor of the Borrower or any Subsidiary Guarantor;

(n) any interest or title of a lessor, sublessor, licensor or sublicensor under leases, subleases, licenses or sublicenses entered into by the Borrower or any of its Subsidiaries in the ordinary course of business;

(o) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Borrower or any of its Subsidiaries in the ordinary course of business permitted by this Agreement;

(p) Liens deemed to exist in connection with Investments in repurchase agreements under Section 7.02;

(q) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(r) Liens that are contractual rights of setoff or rights of pledge (i) relating to the establishment of depository relations with banks or other financial institutions not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Borrower or any of its Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrower or any of its Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Borrower or any of its Subsidiaries in the ordinary course of business;

(s) Liens solely on any cash earnest money deposits made by the Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;

(t) ground leases in respect of Real Property on which facilities owned or leased by the Borrower or any of its Subsidiaries are located;

(u) Liens to secure Indebtedness permitted under Section 7.03(e); provided that (i) such Liens are created within 270 days of the acquisition, construction, repair, lease or improvement of the property subject to such Liens, (ii) such Liens do not at any time encumber property (except for replacements, additions and accessions to such property) other than the property financed by such Indebtedness and the proceeds and products thereof and customary security deposits and (iii) with respect to Capitalized Leases, such Liens do not at any time extend to or cover any assets (except for replacements, additions and accessions to such assets) other than the assets subject to such Capitalized Leases and the proceeds and products thereof and customary security deposits; provided that individual financings of equipment provided by one lender may be cross collateralized to other financings of equipment provided by such lender;

(v) Liens on property of any Subsidiary that is not a Loan Party securing Indebtedness of Holdings, the Borrower or the applicable Subsidiary permitted under Section 7.03;

 

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(w) Liens existing on property at the time of its acquisition or existing on the property of any Person at the time such Person becomes a Subsidiary, in each case after the Closing Date (including Capitalized Leases); provided that (i) such Lien was not created in contemplation of such acquisition or such Person becoming a Subsidiary, (ii) such Lien does not extend to or cover any other assets or property (other than the proceeds or products thereof and other than after-acquired property subjected to a Lien securing Indebtedness and other obligations incurred prior to such time and which Indebtedness and other obligations are permitted hereunder that require, pursuant to their terms at such time, a pledge of after-acquired property, it being understood that such requirement shall not be permitted to apply to any property to which such requirement would not have applied but for such acquisition), and (iii) (a) the obligations secured thereby would not cause the Secured Leverage Ratio to be greater than 3.00:1.00 (excluding, for purposes of calculating such ratio under this clause (w), Revolving Credit Loans borrowed for seasonal working capital requirements in an amount not to exceed $50,000,000), determined on a Pro Forma Basis and (b) the Indebtedness secured thereby is permitted under Section 7.03(g);

(x) (i) zoning, building, entitlement and other land use regulations by Governmental Authorities with which the normal operation of the business complies, and (ii) any zoning or similar law or right reserved to or vested in any Governmental Authority to control or regulate the use of any real property that does not materially interfere with the ordinary conduct of the business of the Borrower and its Subsidiaries, taken as a whole;

(y) Liens arising from precautionary Uniform Commercial Code financing statement or similar filings;

(z) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

(aa) the modification, replacement, renewal or extension of any Lien permitted by clauses (b), (u) and (w) of this Section 7.01; provided that (i) the Lien does not extend to any additional property, other than (A) after-acquired property that is affixed or incorporated into the property covered by such Lien and (B) proceeds and products thereof, and (ii) the renewal, extension or refinancing of the obligations secured or benefited by such Liens is permitted by Section 7.03 (to the extent constituting Indebtedness);

(bb) Liens (which may be Liens on the Collateral so long as any such Liens securing Indebtedness for money borrowed are junior to the Liens securing the Obligations and any such obligations secured by junior Lien on the Collateral shall be expressly subject to a Second Lien Intercreditor Agreement) securing obligations in an aggregate principal amount outstanding at any time not to exceed the greater of (x) $50,000,000 and (y) 4.00% of the Consolidated Total Assets of the Borrower and its Subsidiaries;

(cc) Liens in favor of the Borrower or a Subsidiary securing Indebtedness (other than Indebtedness of a Loan Party to a Subsidiary that is not a Loan Party) permitted under Section 7.03(d);

(dd) Liens on specific items of inventory or other goods and the proceeds thereof securing such Person’s obligations in respect of documentary letters of credit or bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods;

(ee) Liens securing Permitted Notes issued pursuant to Section 7.03(r) and any Permitted Refinancings thereof so long as such Liens are subject to the First Lien Intercreditor Agreement or a Second Lien Intercreditor Agreement; and

(ff) Liens on the Collateral securing Indebtedness permitted under Section 7.03(s) to the extent such Liens are subject to (i) a First Lien Intercreditor Agreement if such Indebtedness is secured by the Collateral on a pari passu basis (but without regard to the control of remedies) with the Obligations or (ii) a Second Lien Intercreditor Agreement if such Indebtedness is secured by the Collateral on a second priority (or other junior priority) basis to the liens securing the Obligations.

 

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Section 7.02. Investments .

Neither the Borrower nor the Subsidiaries shall directly or indirectly, make or hold any Investments, except:

(a) Investments by the Borrower or any of its Subsidiaries in assets that were Cash Equivalents when such Investment was made;

(b) loans or advances to officers, directors and employees of any Loan Party (or any direct or indirect parent thereof) or any of its Subsidiaries (i) for reasonable and customary business-related travel, entertainment, relocation and analogous ordinary business purposes, (ii) in connection with such Person’s purchase of Equity Interests of Holdings or any direct or indirect parent thereof ( provided that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity) and (iii) for any other purposes not described in the foregoing clauses (i) and (ii); provided that the aggregate principal amount outstanding at any time under clause (iii) above shall not exceed $10,000,000;

(c) Investments (i) by the Borrower or any Subsidiary in any Loan Party and (ii) by any Subsidiary that is not a Loan Party in any other Subsidiary that is not a Loan Party;

(d) Investments (i) consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and (ii) received in satisfaction or partial satisfaction thereof from financially troubled account debtors and other credits to suppliers in the ordinary course of business;

(e) Investments consisting of (x) transactions permitted under Sections 7.01, 7.03 (other than 7.03(c) and (d)), 7.04 (other than 7.04(d) and (e)) and 7.05 (other than 7.05(e)), (y) Restricted Payments permitted by Section 7.06 and (z) repayments or other acquisitions of Indebtedness of the Company or a Subsidiary Guarantor not prohibited by Section 7.13;

(f) Investments (i) existing or contemplated on the Closing Date and set forth on Schedule 7.02(f) and any modification, replacement, renewal, reinvestment or extension thereof and (ii) existing on the Closing Date by the Borrower or any Subsidiary in the Borrower or any other Subsidiary and any modification, renewal or extension thereof; provided that the amount of any original Investment under this clause (f) is not increased except by the terms of such Investment as of the Closing Date or as otherwise permitted by Section 7.02;

(g) Investments in Swap Contracts permitted under Section 7.03(f);

(h) promissory notes, securities and other non-cash consideration received in connection with Dispositions permitted by Section 7.05;

(i) any acquisition of all or substantially all the assets of, or all the Equity Interests (other than directors’ qualifying shares or any options for Equity Interests that cannot, as a matter of law, be cancelled, redeemed or otherwise extinguished without the express agreement of the holder thereof at or prior to acquisition) in, a Person or division or line of business of a Person (or any subsequent investment made in a Person, division or line of business previously acquired in a Permitted Acquisition), in a single transaction or series of related transactions, if immediately after giving effect thereto: (i) no Event of Default shall have occurred and be continuing or would result therefrom (other than in respect of any Permitted Acquisition made pursuant to a legally binding commitment entered into at a time when no Default exists or would result therefrom); (ii) the Borrower would be in Pro Forma Compliance with the covenants set forth in Section 7.11 after giving effect to such acquisition or investment and any related transaction; (iii) except as set forth in clause (iv) below, the acquired company and its domestic Subsidiaries (subject to the limitations set forth in Section 6.11) will become Guarantors; and (iv) the aggregate amount of Investments made pursuant to this Section 7.02(i) in Persons that do not become Guarantors shall not exceed at any time outstanding the sum of (1) the greater of $35,000,000 and 2.50% of Consolidated Total Assets and (2) the portion,

 

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if any, of the Cumulative Credit on the date of such election that the Borrower elects to apply to this subsection (i), such election to be specified in a written notice of a Responsible Officer of the Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied (any such acquisition, a “ Permitted Acquisition ”);

(j) [RESERVED];

(k) Investments in the ordinary course of business consisting of UCC Article 3 endorsements for collection or deposit and UCC Article 4 customary trade arrangements with customers consistent with past practices;

(l) Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary course of business or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment;

(m) loans and advances to the Borrower and any other direct or indirect parent of the Borrower, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof) Restricted Payments permitted to be made to such parent in accordance with Section 7.06(f), (g) or (j);

(n) Investments in an aggregate amount outstanding pursuant to this clause (n) (valued at the time of the making thereof, and without giving effect to any write downs or write offs thereof) at any time not to exceed the greater of (x) $75,000,000 and (y) 5.50% of the Consolidated Total Assets of the Borrower and its Subsidiaries (net of any return in respect of such initial Investment, including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) plus (z) the portion, if any, of the Cumulative Credit on the date of such election that the Borrower elects to apply to this subsection (z), such election to be specified in a written notice of a Responsible Officer of the Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied;

(o) advances of payroll payments to employees in the ordinary course of business;

(p) (i) Investments made in the ordinary course of business and consistent with past practice in connection with obtaining, maintaining or renewing client contracts and loans or advances made to distributors in the ordinary course of business and consistent with past practice and (ii) Investments to the extent that payment for such Investments is made solely with Equity Interests of the Borrower (or any direct or indirect parent of the Borrower);

(q) Investments of a Subsidiary acquired after the Closing Date or of a corporation merged or amalgamated or consolidated into the Borrower or merged, amalgamated or consolidated with a Subsidiary, in each case in accordance with Section 7.04 after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger, amalgamation or consolidation, do not constitute a material portion of the aggregate assets acquired by the Borrower and its Subsidiaries in such transaction and were in existence on the date of such acquisition, merger or consolidation;

(r) Investments made by any Subsidiary that is not a Loan Party to the extent such Investments are financed with the proceeds received by such Subsidiary from an Investment in such Subsidiary contemplated pursuant to Section 7.02(n) or permitted by the proviso under Section 7.02(i); and

(s) Guarantees by the Borrower or any of its Subsidiaries of leases (other than Capitalized Leases) or of other obligations that do not constitute Indebtedness, in each case entered into in the ordinary course of business.

 

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Section 7.03. Indebtedness .

Neither the Borrower nor any of the Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness of any Loan Party under the Loan Documents;

(b) Indebtedness (i) outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the Closing Date and any refinancing thereof, of which any amount owed by a Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that all such Indebtedness of any Loan Party owed to any Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;

(c) Guarantees by the Borrower and any Subsidiary in respect of Indebtedness of the Borrower or any Subsidiary of the Borrower otherwise permitted hereunder; provided that (A) no Guarantee of any Junior Financing or any Permitted Refinancing thereof shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;

(d) Indebtedness of the Borrower or any Subsidiary owing to any Loan Party or any other Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness shall be evidenced by an Intercompany Note;

(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of (x) $30,000,000 and (y) 2.25% of Consolidated Total Assets of the Borrower and its Subsidiaries (together with any Permitted Refinancing thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and (iii) any Permitted Refinancing of any of the foregoing;

(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof;

(g) Indebtedness of the Borrower or any Subsidiary assumed in connection with any Permitted Acquisition, provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided that (x) such Indebtedness and all Indebtedness resulting from a Permitted Refinancing thereof is unsecured (except for Liens permitted by Section 7.01(w) securing Indebtedness (together with Permitted Refinancings thereof)) and (y) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom (other than a Permitted Acquisition made pursuant to a legally binding commitment entered into at a time when no Default exists or would result therefrom), and (2) the Borrower and its Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11;

(h) Indebtedness representing deferred compensation to employees of the Borrower or any of its Subsidiaries incurred in the ordinary course of business;

 

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(i) Indebtedness to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of the Borrower or any direct or indirect parent of the Borrower permitted by Section 7.06;

(j) Indebtedness incurred by the Borrower or any of its Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including customary earnouts) or other similar adjustments;

(k) Indebtedness consisting of obligations of the Borrower or any of its Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Original Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;

(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts in the ordinary course of business and any Guarantees thereof;

(m) Indebtedness of the Borrower or any of its Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of (x) $75,000,000 and (y) 5.50% of the Consolidated Total Assets of the Borrower and its Subsidiaries; provided that no more than the greater of $35,000,000 and 2.50% of Consolidated Total Assets of such Indebtedness shall be incurred under this clause (m) by Subsidiaries of the Borrower that are not Loan Parties;

(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

(o) Indebtedness incurred by the Borrower or any of its Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the due date thereof;

(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;

(q) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;

(r) (i) Permitted Notes, the Net Proceeds of which are applied to the permanent repayment of Term Loans pursuant to Section 2.05(b)(iii), (ii) Permitted Notes that are offered and sold on a pro rata basis to all Lenders that are “Qualified Institutional Buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended) holding Term Loans and in a principal amount not to exceed the amount of Term Loans exchanged for such Permitted Notes pursuant to procedures reasonably acceptable to the Administrative Agent (including procedures designed to comply with securities laws); provided that any Term Loans exchanged for such Permitted Notes shall be deemed to have been repaid immediately upon the effectiveness of such exchange, and (iii) in the case of Permitted Notes incurred under any of the foregoing clauses (i) and (ii), Permitted Refinancings thereof;

(s) Permitted Ratio Debt and any Permitted Refinancings thereof;

 

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(t) Indebtedness in respect of the Senior Notes (including, in each case, any guarantees thereof) and, in each case, any Permitted Refinancing thereof; and

(u) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (t) above.

For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (u) above, the Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will at all times be deemed to be outstanding in reliance only on the exception in clause (a) of Section 7.03.

Section 7.04. Fundamental Changes .

Neither the Borrower nor any of the Subsidiaries shall merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person (other than as part of the Original Transactions), except that:

(a) any Subsidiary may merge, amalgamate or consolidate with (i) the Borrower (including a merger, the purpose of which is to reorganize the Borrower into a new jurisdiction in the United States); provided that the Borrower shall be the continuing or surviving Person or (ii) one or more other Subsidiaries; provided that when any Person that is a Loan Party is merging with a Subsidiary, a Loan Party shall be the continuing or surviving Person;

(b) (i) any Subsidiary that is not a Loan Party may merge, amalgamate or consolidate with or into any other Subsidiary that is not a Loan Party and (ii) any Subsidiary may liquidate or dissolve or the Borrower or any Subsidiary may change its legal form if the Borrower determines in good faith that such action is in the best interest of the Borrower and its Subsidiaries and if not materially disadvantageous to the Lenders (it being understood that in the case of any change in legal form, a Subsidiary that is a Guarantor will remain a Guarantor unless such Guarantor is otherwise permitted to cease being a Guarantor hereunder);

(c) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another Subsidiary; provided that if the transferor in such a transaction is a Guarantor, then (i) the transferee must be a Guarantor or the Borrower or (ii) to the extent constituting an Investment, such Investment must be a permitted Investment in or Indebtedness of a Subsidiary which is not a Loan Party in accordance with Sections 7.02 (other than Section 7.02(e)) and 7.03, respectively;

(d) so long as no Default exists or would result therefrom, the Borrower may merge or consolidate with any other Person; provided that (i) the Borrower shall be the continuing or surviving corporation or (ii) if the Person formed by or surviving any such merger or consolidation is not the Borrower (any such Person, the “ Successor Company ”), (A) the Successor Company shall be an entity organized or existing under the Laws of the United States, any state thereof, the District of Columbia or any territory thereof, (B) the Successor Company shall expressly assume all the obligations of the Borrower under this Agreement and the other Loan Documents to which the Borrower is a party pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (C) each Guarantor, unless it is the other party to such merger or consolidation, shall have confirmed that its Guarantee shall apply to the Successor Company’s obligations under the Loan Documents, (D) each Guarantor, unless it is the other party to such merger or consolidation, shall have by a supplement to the Security Agreement and other applicable Collateral Documents confirmed that its obligations thereunder shall apply to the Successor Company’s obligations under the Loan Documents, (E) if requested by the Administrative Agent, each mortgagor of a Mortgaged Property, unless it is the other party to such merger or consolidation, shall have by an amendment to or restatement of the applicable Mortgage (or other instrument reasonably satisfactory to the Administrative

 

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Agent) confirmed that its obligations thereunder shall apply to the Successor Company’s obligations under the Loan Documents, and (F) the Borrower shall have delivered to the Administrative Agent an officer’s certificate and an opinion of counsel, each stating that such merger or consolidation and such supplement to this Agreement or any Collateral Document comply with this Agreement; provided , further , that if the foregoing are satisfied, the Successor Company will succeed to, and be substituted for, the Borrower under this Agreement;

(e) so long as no Default exists or would result therefrom (in the case of a merger involving a Loan Party), any Subsidiary may merge or consolidate with any other Person in order to effect an Investment permitted pursuant to Section 7.02; provided that the continuing or surviving Person shall be a Subsidiary or the Borrower, which together with each of its Subsidiaries, shall have complied with the requirements of Section 6.11 to the extent required pursuant to the Collateral and Guarantee Requirement; and

(f) so long as no Default exists or would result therefrom, a merger, dissolution, liquidation, consolidation or Disposition, the purpose of which is to effect a Disposition permitted pursuant to Section 7.05.

Section 7.05. Dispositions .

Neither the Borrower nor any of the Subsidiaries shall, directly or indirectly, make any Disposition or enter into any agreement to make any Disposition (other than as part of or in connection with the Original Transactions), except:

(a) (i) Dispositions of obsolete, surplus or worn out property, whether now owned or hereafter acquired, in the ordinary course of business and Dispositions in the ordinary course of business of property no longer used or useful in the conduct of the business of the Borrower or any of its Subsidiaries and (ii) Dispositions outside the ordinary course of business of property no longer used or useful in the conduct of the business of the Borrower and its Subsidiaries (and for consideration complying with the requirements applicable to Dispositions pursuant to clause (j) below) in an aggregate amount not to exceed $15,000,000;

(b) Dispositions of inventory, goods held for sale in the ordinary course of business and immaterial assets (including allowing any registrations or any applications for registration of any intellectual property to lapse or go abandoned) in the ordinary course of business;

(c) Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property;

(d) Dispositions of property to the Borrower or any Subsidiary; provided that if the transferor of such property is a Loan Party, (i) the transferee thereof must be a Loan Party or (ii) if such transaction constitutes an Investment, such transaction is permitted under Section 7.02;

(e) to the extent constituting Dispositions, the granting of Liens permitted by Section 7.01, the making of Investments permitted by Section 7.02, mergers, consolidations and liquidations permitted by Section 7.04 (other than Section 7.04(f)) and Restricted Payments permitted by Section 7.06;

(f) [RESERVED];

(g) Dispositions of Cash Equivalents;

(h) leases, subleases, licenses or sublicenses (including the provision of software or the licensing of other intellectual property rights), in each case in the ordinary course of business and which do not materially interfere with the business of the Borrower and its Subsidiaries, taken as a whole;

 

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(i) transfers of property subject to Casualty Events;

(j) Dispositions of property; provided that (i) at the time of such Disposition (other than any such Disposition made pursuant to a legally binding commitment entered into at a time when no Default exists), no Default shall exist or would result from such Disposition, (ii) with respect to any Disposition pursuant to this clause (j) for a purchase price in excess of $5,000,000, the Borrower or any of its Subsidiaries shall receive not less than 75% of such consideration in the form of cash or Cash Equivalents (in each case, free and clear of all Liens at the time received, other than nonconsensual Liens permitted by Section 7.01 and Liens permitted by Sections 7.01(a), (f), (k), (p), (q), (r)(i), (r)(ii), (s), (bb), (ee) and (ff)); provided , however , that for the purposes of this clause (j)(ii), the following shall be deemed to be cash: (A) any liabilities (as shown on the Borrower’s most recent balance sheet provided hereunder or in the footnotes thereto) of the Borrower or such Subsidiary associated with the assets or Subsidiary sold in such Disposition that are assumed by the transferee with respect to the applicable Disposition and for which the Borrower and all of its Subsidiaries shall have been validly released by all applicable creditors in writing, (B) any securities received by the Borrower or the applicable Subsidiary from such transferee that are converted by the Borrower or such Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within 180 days following the closing of the applicable Disposition, and (C) aggregate non-cash consideration received by the Borrower or the applicable Subsidiary having an aggregate fair market value (determined as of the closing of the applicable Disposition for which such non-cash consideration is received) not to exceed $5,000,000 at any time (net of any non-cash consideration converted into cash and Cash Equivalents) and (iii) to the extent the aggregate amount of Net Proceeds received by the Borrower or its Subsidiaries from Dispositions made pursuant to this Section 7.05(j) in the aggregate exceeds $75,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the next succeeding fiscal year only after the amount available in such subsequent fiscal year has been fully used), plus any amount available pursuant to this clause (iii) in the next succeeding fiscal year only (which amount will be permanently reduced if used in the current fiscal year) subject to a maximum of $150,000,000 in any fiscal year, all Net Proceeds in excess of such amount in such fiscal year shall be applied to prepay Term Loans in accordance with Section 2.05(b) and may not be reinvested in the business of the Borrower or such Subsidiary;

(k) Dispositions listed on Schedule 7.05(k);

(l) Dispositions or discounts without recourse of accounts receivable in connection with the compromise or collection thereof in the ordinary course of business;

(m) Dispositions of property pursuant to sale-leaseback transactions; provided that the fair market value of all property so Disposed of after the Closing Date shall not exceed $50,000,000;

(n) any swap of assets in exchange for services or other assets in the ordinary course of business of comparable or greater value or usefulness to the business of the Borrower and its Subsidiaries as a whole, as determined in good faith by the management of the Borrower;

(o) Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

(p) the unwinding of any Swap Contracts pursuant to its terms; and

(q) Permitted Asset Swaps;

provided that any Disposition of any property pursuant to Section 7.05(j) or (m) shall be for no less than the fair market value of such property at the time of such Disposition as determined by the Borrower in good faith. To the extent any Collateral is Disposed of as expressly permitted by this Section 7.05 to any Person other than a Loan Party, such Collateral shall be sold free and clear of the Liens created by the Loan Documents, and the Administrative Agent or the Collateral Agent, as applicable, shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

 

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Section 7.06. Restricted Payments .

Neither the Borrower shall, nor shall the Borrower permit any of its Subsidiaries to, directly or indirectly, declare or make, directly or indirectly, any Restricted Payment, except:

(a) each Subsidiary may make Restricted Payments to the Borrower, and other Subsidiaries of the Borrower (and, in the case of a Restricted Payment by a non-wholly owned Subsidiary, to the Borrower and any other Subsidiary and to each other owner of Equity Interests of such Subsidiary based on their relative ownership interests of the relevant class of Equity Interests);

(b) the Borrower and each Subsidiary may declare and make dividend payments or other Restricted Payments payable solely in Equity Interests (other than Disqualified Equity Interests not otherwise permitted by Section 7.03) of such Person;

(c) Restricted Payments made (i) in respect of working capital adjustments or purchase price adjustments pursuant to the Original Acquisition Agreement and any earn-out payments so long as the Total Leverage Ratio, on a Pro Forma Basis, would be no greater than 4.00 to 1.00, (II) in order to satisfy indemnity and other similar obligations under the Original Acquisition Agreement and (III) non-compete payments so long as the Borrower is in Pro Forma Compliance with the covenants set forth in Section 7.11;

(d) to the extent constituting Restricted Payments, the Borrower and its Subsidiaries may enter into and consummate transactions expressly permitted by any provision of Section 7.02 (other than 7.02(e)), 7.04 or Section 7.08 (other than Section 7.08(f));

(e) repurchases of or redemptions by the Borrower or any Subsidiary of the Borrower of either (i) Equity Interests in Continental Cement Company, L.L.C., pursuant to the exercise of any option to “put” such Equity Interests or right of redemption of any holder of such Equity Interests or (ii) Equity Interests in the Borrower (or any direct or indirect parent thereof) or any Subsidiary of the Borrower which are deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(f) the Borrower and each Subsidiary may pay (or make Restricted Payments to allow the Borrower or any other direct or indirect parent thereof to pay) for the repurchase, retirement or other acquisition or retirement for value of Equity Interests of such Subsidiary (or of the Borrower or any other such direct or indirect parent thereof) by any future, present or former employee, officer, director, manager or consultant of such Subsidiary (or the Borrower or any other direct or indirect parent of such Subsidiary) or any of its Subsidiaries upon the death, disability, retirement or termination of employment of any such Person or pursuant to any employee, manager or director equity plan, employee, manager or director stock option plan or any other employee, manager or director benefit plan or any agreement (including any stock subscription or shareholder agreement) with any employee, director, officer or consultant of such Subsidiary (or the Borrower or any other direct or indirect parent thereof) or any of its Subsidiaries; provided that the aggregate amount of Restricted Payments made pursuant to this clause (f) shall not exceed $15,000,000 in any calendar year (which shall increase to $25,000,000 subsequent to the consummation of a Qualified IPO of Holdings or any direct or indirect parent thereof, as the case may be) (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $30,000,000 in any calendar year (which shall increase to $50,000,000 subsequent to the consummation of a Qualified IPO of Holdings or any direct or indirect parent thereof, as the case may be)); provided , further , that such amount in any calendar year may be increased by an amount not to exceed:

(i) to the extent contributed to the Borrower, the Net Proceeds from the sale of Equity Interests of any of the Borrower’s direct or indirect parent companies, in each case to members of management, managers, directors or consultants of Holdings, the Borrower, any of its Subsidiaries or any of its direct or indirect parent companies that occurs after the Closing Date; plus

 

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(ii) the cash proceeds of key man life insurance policies received by the Borrower or its Subsidiaries; less

(iii) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (i) and (ii) of this Section 7.06(f);

(g) the Borrower may make Restricted Payments to any direct or indirect parent of the Borrower:

(i) to pay its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses provided by third parties), which are reasonable and customary and incurred in the ordinary course of business and attributable to the ownership or operations of the Borrower and its Subsidiaries so long as allocable to such entity in accordance with GAAP, Original Transaction Expenses and any reasonable and customary indemnification claims made by directors or officers of such parent attributable to the ownership or operations of the Borrower and its Subsidiaries;

(ii) the proceeds of which shall be used by such parent to pay franchise taxes and other fees, taxes and expenses required to maintain its (or any of its direct or indirect parents’) corporate existence;

(iii) with respect to any taxable year (or portion thereof) with respect to which the Borrower is treated as a disregarded entity or partnership for U.S. federal, state and/or local income tax purposes, to fund the income tax liabilities of the Borrower’s direct owner(s) (or, if a direct owner is a pass-through entity, of an indirect owner) for such taxable year (or portion thereof) resulting from the Borrower being a disregarded entity or partnership for U.S. federal, state and/or local income tax purposes in an aggregate amount assumed to equal the product of (i) the portion of the Borrower’s net taxable income for such taxable year (or portion thereof) reduced by any cumulative net taxable loss with respect to all prior taxable years (or portions thereof) beginning after the date hereof (determined as if all such periods were one period) to the extent such cumulative net taxable loss is of a character (ordinary or capital) that would permit such loss to be deducted against the income of the taxable year in question (or portion thereof) and (ii) the highest combined marginal federal and applicable state and/or local income tax rate (taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes and the character of the taxable income in question ( i.e. , long term capital gain, qualified dividend income, etc.)) applicable to any such direct or indirect owner of the Borrower for the taxable year in question (or portion thereof);

(iv) to finance any Investment that would be permitted to be made pursuant to Section 7.02 if such parent were subject to such section; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) such parent shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or its Subsidiaries or (2) the merger (to the extent permitted in Section 7.04) of the Person formed or acquired into the Borrower or its Subsidiaries in order to consummate such Permitted Acquisition or Investment, in each case, in accordance with the requirements of Section 6.11;

(v) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Borrower and its Subsidiaries;

 

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(vi) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay fees and expenses (other than to Affiliates) related to any unsuccessful equity or debt offering by Holdings (or any direct or indirect parent thereof) that is directly attributable to the operations of the Borrower and its Subsidiaries; and

(vii) the proceeds of which shall be used to pay customary costs, fees and expenses (other than to Affiliates) related to any unsuccessful equity or debt offering permitted by this Agreement; and

(h) payments made or expected to be made by the Borrower or any of its Subsidiaries in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant (or any spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options;

(i) after a Qualified IPO, (i) any Restricted Payment by the Borrower or any other direct or indirect parent of the Borrower to pay listing fees and other costs and expenses attributable to being a publicly traded company which are reasonable and customary and (ii) Restricted Payments of up to 6% per annum of the net proceeds received by (or contributed to) the Borrower and its Subsidiaries from such Qualified IPO; and

(j) so long as no Default has occurred and is continuing or would result therefrom, the Borrower may make Restricted Payments in an aggregate amount not to exceed when combined with the amount applied to make prepayments of Junior Financing (or any Permitted Refinancing in respect thereof) pursuant to Section 7.13(a)(v) (x) $50,000,000, plus (y) if the Total Leverage Ratio, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which financial statements were required to have been delivered pursuant to Section 6.01(a) or (b), as applicable (or, if no Test Period has passed, as of the last four quarters ended), as if such Restricted Payment had been made on the last day of such four quarter period, is less than or equal to 4.00 to 1.00, the portion, if any, of the Cumulative Credit on such date that the Borrower elects to apply to this paragraph, such election to be specified in a written notice of a Responsible Officer of the Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied.

Section 7.07. Change in Nature of Business .

The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, directly or indirectly, engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the Closing Date or any business reasonably related, complementary, synergistic or ancillary thereto (including related, complementary, synergistic or ancillary technologies) or reasonable extensions thereof.

Section 7.08. Transactions with Affiliates .

Neither the Borrower shall, nor shall the Borrower permit any of its Subsidiaries to, directly or indirectly, enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than (a) transactions among the Borrower and its Subsidiaries or any entity that becomes a Subsidiary as a result of such transaction, (b) on terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s-length transaction with a Person other than an Affiliate, (c) the Original Transactions and the payment of fees and expenses (including Original Transaction Expenses) as part of or in connection with the Original Transactions, (d) the issuance of Equity Interests to any officer, director, employee or consultant of the Borrower or any of its Subsidiaries in connection with the Original Transactions, (e) if no Event of Default is occurring or would result therefrom, the payment of management, monitoring, consulting, transaction and advisory fees (but for avoidance of doubt, excluding termination fees) in an aggregate amount not to exceed the amount payable pursuant to the terms of the Investor Management Agreement and related indemnities and reasonable expenses, (f) Restricted Payments permitted under Section 7.06, (g) loans and other transactions among the Borrower and its Subsidiaries and joint ventures (to the extent any such

 

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joint venture is only an Affiliate as a result of Investments by the Borrower and its Subsidiaries in such joint venture) to the extent otherwise permitted under this Article VII, (h) employment and severance arrangements between the Borrower and its Subsidiaries and their respective officers and employees in the ordinary course of business and transactions pursuant to stock option plans and employee benefit plans and arrangements in the ordinary course of business, (i) the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, directors, managers, officers, employees and consultants of the Borrower and its Subsidiaries (or any direct or indirect parent of the Borrower) in the ordinary course of business to the extent attributable to the ownership or operation of the Borrower and its Subsidiaries, (j) transactions pursuant to agreements in existence on the Closing Date and set forth on Schedule 7.08 or any amendment thereto to the extent such an amendment is not adverse to the Lenders in any material respect, (k) customary payments by the Borrower and any of its Subsidiaries to the Investors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities (including in connection with acquisitions or divestitures), which payments are approved by the majority of the members of the board of directors or managers or a majority of the disinterested members of the board of directors or managers of the Borrower, in good faith, (l) payments by the Borrower or any of its Subsidiaries pursuant to any tax sharing agreements with any direct or indirect parent of the Borrower to the extent attributable to the ownership or operation of the Borrower and the Subsidiaries, but only to the extent permitted by Section 7.06(g)(iii), (m) the issuance or transfer of Equity Interests (other than Disqualified Equity Interests) of Holdings to any Permitted Holder or to any former, current or future director, manager, officer, employee or consultant (or any Affiliate of any of the foregoing) of the Borrower, any of its Subsidiaries or any direct or indirect parent thereof, (n) transactions with customers, clients, joint venture partners, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Agreement that are fair to the Borrower and its Subsidiaries, in the reasonable determination of the board of directors or the senior management of the Borrower, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party, (o) any payments required to be made pursuant to the Original Acquisition Agreement and (p) any termination fees payable pursuant to the Investor Management Agreement not to exceed the amount set forth in the Investor Management Agreement as in effect on the Original Closing Date.

Section 7.09. Burdensome Agreements .

The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Loan Document) that limits the ability of (a) any Subsidiary of the Borrower that is not a Guarantor to make Restricted Payments to the Borrower or any Guarantor or (b) any Loan Party to create, incur, assume or suffer to exist Liens on property of such Person for the benefit of the Lenders with respect to the Facilities and the Obligations or under the Loan Documents; provided that the foregoing clauses (a) and (b) shall not apply to Contractual Obligations which (i) (x) exist on the Closing Date and (to the extent not otherwise permitted by this Section 7.09) are listed on Schedule 7.09 hereto and (y) to the extent Contractual Obligations permitted by clause (x) are set forth in an agreement evidencing Indebtedness, are set forth in any agreement evidencing any permitted modification, replacement, renewal, extension or refinancing of such Indebtedness so long as such modification, replacement, renewal, extension or refinancing does not expand the scope of such Contractual Obligation, (ii) are binding on a Subsidiary at the time such Subsidiary first becomes a Subsidiary of the Borrower, so long as such Contractual Obligations were not entered into solely in contemplation of such Person becoming a Subsidiary of the Borrower, (iii) represent Indebtedness of a Subsidiary of the Borrower which is not a Loan Party which is permitted by Section 7.03, (iv) arise in connection with any Disposition permitted by Section 7.04 or 7.05 and relate solely to the assets or Person subject to such Disposition, (v) are customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 7.02 and applicable solely to such joint venture entered into in the ordinary course of business, (vi) are negative pledges and restrictions on Liens in favor of any holder of Indebtedness permitted under Section 7.03 but solely to the extent any negative pledge relates to the property financed by such Indebtedness, (vii) are customary restrictions on leases, subleases, licenses or asset sale agreements otherwise permitted hereby so long as such restrictions relate to the assets subject thereto, (viii) comprise restrictions imposed by any agreement relating to secured Indebtedness permitted pursuant to Section 7.03(e), (g) or (m) and to the extent that such restrictions apply only to the property or assets securing such Indebtedness or to the Subsidiaries incurring or guaranteeing such Indebtedness, (ix) are customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Borrower or any Subsidiary, (x) are customary provisions restricting assignment of any agreement entered into in the ordinary course of business, (xi) are restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business, (xii) arise in connection with cash or other deposits permitted under

 

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Sections 7.01 and 7.02 and limited to such cash or deposit or (xiii) comprise restrictions imposed by any agreement governing Indebtedness entered into on or after the Closing Date and permitted under Section 7.03 (including, without limitation, the Senior Notes or any Junior Financing, and, in each case, any Permitted Refinancing in respect thereof) that are, taken as a whole, in the good faith judgment of the Borrower, no more restrictive with respect to the Borrower or any of its Subsidiaries than customary market terms for Indebtedness of such type (and, in any event, are no more restrictive than the restrictions contained in this Agreement), so long as the Borrower shall have determined in good faith that such restrictions will not affect its obligation or ability to make any payments required hereunder.

Section 7.10. Use of Proceeds .

The proceeds of the Term Loans shall be used together with the proceeds of the Senior Notes to repay the term loans under the Existing Credit Agreement and to repay the Continental Cement Indebtedness. The proceeds of the Revolving Credit Loans and Swing Line Loans, shall be used to repay the revolving credit loans under the Existing Credit Agreement and terminate all revolving commitments under the Existing Credit Agreement and for working capital, general corporate purposes, and any other purpose not prohibited by this Agreement including Permitted Acquisitions, and other Investments. The Letters of Credit shall be used solely to support obligations of the Borrower and its Subsidiaries incurred for working capital, general corporate purposes and any other purpose not prohibited by this Agreement.

Section 7.11. Financial Covenants .

(a) Consolidated First Lien Net Leverage Ratio . The Borrower shall not permit the Consolidated First Lien Net Leverage Ratio as of the last day of any Test Period ending during any period set forth in the table below (commencing with the first fiscal quarter completed after the Closing Date) to be greater than the ratio set forth below opposite such period:

 

Test Period Ending

   Consolidated First Lien
Net Ratio
 

April 1, 2012 - December 31, 2012

     4.75 to 1.0   

January 1, 2013 - September 30, 2013

     4.25 to 1.0   

October 1, 2013 - December 31, 2014

     4.00 to 1.0   

January 1, 2015 and thereafter

     3.85 to 1.0   

(b) Interest Coverage Ratio . The Borrower shall not permit the Interest Coverage Ratio for any Test Period set forth below to be less than the ratio set forth below opposite such period:

 

Test Period Ending

   Interest Coverage Ratio  

April 1, 2012 - December 31, 2012

     1.75 to 1.0   

January 1, 2013 - December 31, 2013

     1.85 to 1.0   

Any Test Period ending after January 1, 2014

     2.00 to 1.0   

Section 7.12. Accounting Changes .

The Borrower shall not make any change in its fiscal year; provided , however , that the Borrower may, upon written notice to the Administrative Agent, change its fiscal year to any other fiscal year reasonably acceptable to the Administrative Agent, in which case, the Borrower and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are necessary to reflect such change in fiscal year.

Section 7.13. Prepayments, Etc. of Indebtedness .

(a) The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, directly or indirectly, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner

 

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(it being understood that payments of regularly scheduled principal, interest and mandatory prepayments shall be permitted) any subordinated Indebtedness incurred under Section 7.03 or any other Indebtedness that is required to be subordinated to the Obligations pursuant to the terms of the Loan Documents (collectively, “ Junior Financing ”) or make any payment in violation of any subordination terms of any Junior Financing Documentation, except (i) the refinancing thereof with the Net Proceeds of any Indebtedness constituting a Permitted Refinancing; provided that if such Indebtedness was originally incurred under Section 7.03, such Permitted Refinancing is permitted pursuant to Section 7.03, (ii) the conversion or exchange of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parents, (iii) the prepayment of Indebtedness of the Borrower or any Subsidiary to the Borrower or any Subsidiary to the extent not prohibited by the subordination provisions contained in the Intercompany Note, (iv) prepayments or purchases of Junior Financing with Declined Proceeds as required pursuant to the Junior Financing Documentation and (v) so long as no Default has occurred and is continuing or would result therefrom, prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings (or any Permitted Refinancings in respect thereof) prior to their scheduled maturity in an aggregate amount not to exceed when combined with the amount of Restricted Payments pursuant to Section 7.06(j), $50,000,000 plus, if the Total Leverage Ratio, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which financial statements were required to have been delivered pursuant to Section 6.01(a) or (b), as applicable (or, if no Test Period has passed, as of the last four quarters ended), as if such prepayment, redemption, purchase, defeasance or other payment in respect of Junior Financings had been made on the last day of such four quarter period, is less than or equal to 4.00 to 1.00, the portion, if any, of the Cumulative Credit on such date that the Borrower elects to apply to this paragraph, such election to be specified in a written notice of a Responsible Officer of the Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied.

(b) The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, amend, modify or change in any manner materially adverse to the interests of the Lenders any term or condition of any Junior Financing Documentation in respect of any Junior Financing having an aggregate outstanding principal amount in excess of the Threshold Amount without the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed).

Section 7.14. Permitted Activities .

Holdings shall not engage in any material operating or business activities; provided that the following shall be permitted in any event: (i) its ownership of the Equity Interests of Borrower and activities incidental thereto, including payment of dividends and other amounts in respect of its Equity Interests, (ii) the maintenance of its legal existence (including the ability to incur fees, costs and expenses relating to such maintenance), (iii) the performance of its obligations with respect to the Loan Documents and any other Indebtedness, (iv) any public offering of its common stock or any other issuance or sale of its Equity Interests, (v) financing activities, including the issuance of securities, incurrence of debt, payment of dividends, making contributions to the capital of the Borrower and guaranteeing the obligations of the Borrower, (vi) participating in tax, accounting and other administrative matters, (vii) holding any cash or property (but not operating any property), (viii) providing indemnification to officers, managers and directors and (ix) any activities incidental to the foregoing. Holdings shall not incur any Liens on Equity Interests of the Borrower other than those for the benefit of the Obligations and Holdings shall not own any Equity Interests other than those of the Borrower.

ARTICLE VIII

Events of Default and Remedies

Section 8.01. Events of Default .

Any of the following from and after the Closing Date shall constitute an event of default (an “ Event of Default ”):

(a) Non-Payment . Any Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan, or (ii) within five (5) Business Days after the same becomes due, any interest on any Loan or any other amount payable hereunder or with respect to any other Loan Document; or

 

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(b) Specific Covenants . The Borrower fails to perform or observe any term, covenant or agreement contained in any of Sections 6.03(a) or 6.05(a) (solely with respect to the Borrower) or Article VII; provided that the covenants in Section 7.11 are subject to cure pursuant to Section 8.05; or

(c) Other Defaults . Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty (30) days after notice thereof by the Administrative Agent or the Required Lenders to the Borrower; or

(d) Representations and Warranties . Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document required to be delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

(e) Cross-Default . Any Loan Party or any Subsidiary (A) fails to make any payment beyond the applicable grace period with respect thereto, if any, (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder) having an outstanding aggregate principal amount of not less than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness, or any other event occurs (other than, with respect to Indebtedness consisting of Swap Contracts, termination events or equivalent events pursuant to the terms of such Swap Contracts), the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity; provided that this clause (e)(B) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; provided , further , that such failure is unremedied and is not waived by the holders of such Indebtedness prior to any termination of the Revolving Credit Commitments or acceleration of the Loans pursuant to Section 8.02; or

(f) Insolvency Proceedings, Etc . Any Loan Party or any Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or

(g) Inability to Pay Debts; Attachment . (i) Any Loan Party or any Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of the Borrower and its Subsidiaries, taken as a whole, and is not released, vacated or fully bonded within sixty (60) days after its issue or levy; or

(h) Judgments . There is entered against any Loan Party or any Subsidiary a final judgment or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgment or order and has not denied coverage) and such judgment or order shall not have been satisfied, vacated, discharged or stayed or bonded pending an appeal for a period of sixty (60) consecutive days; or

(i) Invalidity of Loan Documents . Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder

 

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(including as a result of a transaction permitted under Section 7.04 or 7.05) or as a result of acts or omissions by the Administrative Agent or Collateral Agent or any Lender or the satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party contests in writing the validity or enforceability of any provision of any Loan Document; or any Loan Party denies in writing that it has any or further liability or obligation under any Loan Document (other than as a result of repayment in full of the Obligations and termination of the Aggregate Commitments), or purports in writing to revoke or rescind any Loan Document; or

(j) Change of Control . There occurs any Change of Control; or

(k) Collateral Documents . Any Collateral Document after delivery thereof pursuant to Section 4.02, 6.11 or 6.13 shall for any reason (other than pursuant to the terms thereof including as a result of a transaction not prohibited under this Agreement) cease to create a valid and perfected Lien, with the priority required by the Collateral Documents on and security interest in any material portion of the Collateral purported to be covered thereby, subject to Liens permitted under Section 7.01, (i) except to the extent that any such perfection or priority is not required pursuant to the Collateral and Guarantee Requirement or results from the failure of the Administrative Agent or the Collateral Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Collateral Documents or to file Uniform Commercial Code continuation statements and (ii) except as to Collateral consisting of Real Property to the extent that such losses are covered by a lender’s title insurance policy and such insurer has not denied coverage; or

(l) ERISA . (i) An ERISA Event occurs which has resulted or could reasonably be expected to result in liability of a Loan Party or a Subsidiary in an aggregate amount which could reasonably be expected to result in a Material Adverse Effect, or (ii) a Loan Party, any Subsidiary or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount which could reasonably be expected to result in a Material Adverse Effect.

Section 8.02. Remedies upon Event of Default .

If any Event of Default occurs and is continuing, the Administrative Agent may and, at the request of the Required Lenders, shall take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;

(c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and

(d) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable Law;

provided that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

 

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Section 8.03. Exclusion of Immaterial Subsidiaries .

Solely for the purpose of determining whether a Default or Event of Default has occurred under clause (f) or (g) of Section 8.01, any reference in any such clause to any Subsidiary or Loan Party shall be deemed not to include any Subsidiary (an “ Immaterial Subsidiary ”) affected by any event or circumstances referred to in any such clause that did not, as of the last day of the most recent completed fiscal quarter of the Borrower, have assets with a fair market value in excess of 5% of the Consolidated Total Assets of the Borrower and its Subsidiaries (it being agreed that all Subsidiaries affected by any event or circumstance referred to in any such clause shall be considered together, as a single consolidated Subsidiary, for purposes of determining whether the condition specified above is satisfied).

Section 8.04. Application of Funds .

After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order (to the fullest extent permitted by mandatory provisions of applicable Law):

First , to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (other than principal and interest, but including Attorney Costs payable under Section 10.04 and amounts payable under Article III) payable to the Administrative Agent or the Collateral Agent in its capacity as such;

Second , to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including Attorney Costs payable under Section 10.04 and amounts payable under Article III), ratably among them in proportion to the amounts described in this clause Second payable to them;

Third , to payment of that portion of the Obligations constituting accrued and unpaid interest and fees on the Loans, Commitments, Letters of Credit and L/C Borrowings, and any fees, premiums and scheduled periodic payments due under Cash Management Obligations or Secured Hedge Agreements, ratably among the Secured Parties in proportion to the respective amounts described in this clause Third payable to them;

Fourth , to payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings (including to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit), and any breakage, termination or other payments under Cash Management Obligations or Secured Hedge Agreements, ratably among the Secured Parties in proportion to the respective amounts described in this clause Fourth held by them;

Fifth , to the payment of all other Obligations of the Borrower that are due and payable to the Administrative Agent and the other Secured Parties on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the other Secured Parties on such date; and

Last , the balance, if any, after all of the Obligations have been paid in full, to the Borrower or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above and, if no Obligations remain outstanding, to the Borrower as applicable.

 

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Section 8.05. Borrower’s Right to Cure .

(a) Notwithstanding anything to the contrary contained in Section 8.01 or 8.02, in the event of any Event of Default or potential Event of Default under the covenants set forth in Sections 7.11 and at any time until the expiration of the tenth (10th) day after the date on which financial statements are required to be delivered with respect to the applicable fiscal quarter hereunder, the Investors may make a Specified Equity Contribution to Holdings, and Holdings may apply the amount of the net cash proceeds thereof to increase Consolidated EBITDA with respect to such applicable quarter; provided that such net cash proceeds (i) are actually received by the Borrower as cash common equity (including through capital contribution of such net cash proceeds to the Borrower) no later than ten (10) days after the date on which financial statements are required to be delivered with respect to such fiscal quarter hereunder and (ii) are Not Otherwise Applied. The parties hereby acknowledge that this Section 8.05(a) may not be relied on for purposes of calculating any financial ratios other than as applicable to Section 7.11 and shall not result in any adjustment to any amounts other than the amount of the Consolidated EBITDA referred to in the immediately preceding sentence.

(b) (i) In each period of four consecutive fiscal quarters, there shall be at least two fiscal quarters in which no Specified Equity Contribution is made, (ii) no more than four Specified Equity Contributions will be made in the aggregate during the term of this Agreement, (iii) the amount of any Specified Equity Contribution shall be no more than the amount required to cause the Borrower to be in Pro Forma Compliance with Section 7.11 for any applicable period and (iv) there shall be no pro forma reduction in Indebtedness with the proceeds of any Specified Equity Contribution for determining compliance with Sections 7.11 for the fiscal quarter immediately prior to the fiscal quarter in which such Specified Equity Contribution was made.

ARTICLE IX

Administrative Agent and Other Agents

Section 9.01. Appointment and Authorization of Agents .

(a) Each Lender hereby irrevocably appoints, designates and authorizes each of the Administrative Agent and the Collateral Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Without limiting the foregoing, each Lender and each L/C Issuer hereby authorizes each of the Administrative Agent and the Collateral Agent to execute and deliver, and to perform its obligations under, each of the Loan Documents to which such Administrative Agent or Collateral Agent is a party, to exercise all rights, powers and remedies that such Administrative Agent or Collateral Agent may have under any such Loan Documents and, in the case of the Collateral Documents, to act as agent for the Lenders, L/C Issuers and the other Secured Parties under such Collateral Documents. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, neither the Administrative Agent nor the Collateral Agent shall have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent or the Collateral Agent have or be deemed to have any fiduciary relationship with any Lender or Participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent or the Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the other Loan Documents with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

(b) Each L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each such L/C Issuer shall have all of the benefits and immunities (i) provided to the Agents in this Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term “Agent” as used in this Article IX and in the definition of “Agent-Related Person” included such L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to such L/C Issuer.

 

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(c) Each of the Secured Parties hereby irrevocably appoints and authorizes the Collateral Agent to act as the agent of (and to hold any security interest created by the Collateral Documents for and on behalf of or in trust for) such Secured Party for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Collateral Agent (and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.02 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Collateral Agent), shall be entitled to the benefits of all provisions of this Article IX (including, Section 9.07, as though such co-agents, sub-agents and attorneys-in-fact were the Collateral Agent under the Loan Documents) as if set forth in full herein with respect thereto.

(d) In performing its functions and duties hereunder and under the other Loan Documents, each of the Administrative Agent and the Collateral Agent is acting solely on behalf of the Lenders and the L/C Issuers and its duties are entirely administrative in nature. Each of the Administrative Agent and the Collateral Agent does not assume and shall not be deemed to have assumed any obligation other than as expressly set forth herein and in the other Loan Documents or any other relationship as the agent, fiduciary or trustee of or for any Lender, L/C Issuer or holder of any other Obligation. The Administrative Agent may perform any of its duties under any Loan Document by or through its agents or employees. In the event the Administrative Agent calculates the aggregate amount outstanding under Letters of Credit upon the request of any Lender or L/C Issuer, the Administrative Agent may make such calculation based on the face amount of all outstanding Letters of Credit.

Section 9.02. Delegation of Duties .

Each of the Administrative Agent and the Collateral Agent may execute any of its duties under this Agreement or any other Loan Document (including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents or of exercising any rights and remedies thereunder) by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or sub-agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct (as determined in the final non-appealable judgment of a court of competent jurisdiction).

Section 9.03. Liability of Agents .

No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct, as determined by the final non-appealable judgment of a court of competent jurisdiction, in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or Participant for any recital, statement, representation or warranty made by any Loan Party or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent or the Collateral Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or the perfection or priority of any Lien or security interest created or purported to be created under the Collateral Documents, or for any failure of any Loan Party or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any Affiliate thereof.

Section 9.04. Reliance by Agents .

(a) Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Loan Party), independent accountants and other experts

 

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selected by such Agent. Each Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Without limiting the foregoing, each Agent (a) may treat the payee of any Note as its holder until such Note has been assigned in accordance with Section 10.07, (b) may rely on the Register to the extent set forth in Section 10.07, (c) may consult with legal counsel (including counsel to the Borrower or any other Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (d) makes no warranty or representation to any Lender or L/C Issuer and shall not be responsible to any Lender or L/C Issuer for any statements, warranties or representations made by or on behalf of Holdings or any of its Subsidiaries in or in connection with this Agreement or any other Loan Document, (e) shall not have any duty to ascertain or to inquire either as to the performance or observance of any term, covenant or condition of this Agreement or any other Loan Document, as to the financial condition of any Loan Party or as to the existence or possible existence of any Default or Event of Default, (f) shall not be responsible to any Lender or L/C Issuer for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto or thereto and (g) shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which writing may be a facsimile or electronic mail) or any telephone message believed by it to be genuine and signed or sent by the proper party or parties. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

(b) For purposes of determining compliance with the conditions specified in Section 4.01 with respect to Credit Extensions on the Closing Date or Section 4.02, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

Section 9.05. Notice of Default .

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default and stating that such notice is a “notice of default.” The Administrative Agent will notify the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to any Event of Default as may be directed by the Required Lenders in accordance with Article VIII; provided that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable or in the best interest of the Lenders.

Section 9.06. Credit Decision; Disclosure of Information by Agents .

Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by any Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Lender represents to each Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties and their Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder. Each Lender also represents that it will, independently

 

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and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by any Agent herein, such Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their Affiliates which may come into the possession of any Agent-Related Person.

Section 9.07. Indemnification of Agents .

Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting from such Agent-Related Person’s own gross negligence or willful misconduct, as determined by the final non-appealable judgment of a court of competent jurisdiction; provided that no action taken in accordance with the directions of the Required Lenders (or such other number or percentage of the Lenders as shall be required by the Loan Documents) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section 9.07; provided , further , that any obligation to indemnify an L/C Issuer pursuant to this Section 9.07 shall be limited to Revolving Credit Lenders only. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Liabilities, this Section 9.07 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person. Without limitation of the foregoing, each Lender shall reimburse each of the Administrative Agent and the Collateral Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent or the Collateral Agent, as the case may be, in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent or the Collateral Agent, as the case may be, is not reimbursed for such expenses by or on behalf of the Loan Parties. The undertaking in this Section 9.07 shall survive termination of the Aggregate Commitments, the payment of all other Obligations and the resignation of the Administrative Agent or the Collateral Agent, as the case may be.

Section 9.08. Agents in Their Individual Capacities .

Bank of America and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Borrower and its respective Affiliates as though Bank of America were not the Administrative Agent, the Collateral Agent or an L/C Issuer hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding the Borrower or its Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or such Affiliate) and acknowledge that neither the Administrative Agent nor the Collateral Agent shall be under any obligation to provide such information to them. With respect to its Loans, Bank of America and its Affiliates shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent, the Collateral Agent or an L/C Issuer, and the terms “Lender” and “Lenders” include Bank of America in its individual capacity. Any successor to Bank of America as the Administrative Agent or the Collateral Agent shall also have the rights attributed to Bank of America under this paragraph.

Section 9.09. Successor Agents .

Each of the Administrative Agent and the Collateral Agent may resign as the Administrative Agent or the Collateral Agent, as applicable, upon ten (10) days’ notice to the Lenders and the Borrower and if either the Administrative Agent or the Collateral Agent is a Defaulting Lender pursuant to clause (iv) of the definition thereof, the Borrower may remove such Defaulting Lender from such role upon ten (10) days’ notice to the Lenders. If the Administrative

 

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Agent or the Collateral Agent resigns under this Agreement or is removed by the Borrower, the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be consented to by the Borrower at all times other than during the existence of an Event of Default under Section 8.01(f) or (g) (which consent of the Borrower shall not be unreasonably withheld or delayed). If no successor agent is appointed prior to the effective date of the resignation or removal of the Administrative Agent or the Collateral Agent, as applicable, the Administrative Agent or the Collateral Agent, as applicable in the case of a resignation, and the Borrower, in the case of a removal, may appoint, after consulting with the Lenders and the Borrower (in the case of a resignation), a successor agent from among the Lenders. Upon the acceptance of its appointment as successor agent hereunder, the Person acting as such successor agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent or retiring Collateral Agent and the term “Administrative Agent” or “Collateral Agent” shall mean such successor administrative agent or collateral agent and/or Supplemental Agent, as the case may be, and the retiring Administrative Agent’s or Collateral Agent’s appointment, powers and duties as the Administrative Agent or Collateral Agent shall be terminated. After the retiring Administrative Agent’s or the Collateral Agent’s resignation or removal hereunder as the Administrative Agent or Collateral Agent, the provisions of this Article IX and Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent or Collateral Agent under this Agreement. If no successor agent has accepted appointment as the Administrative Agent or the Collateral Agent by the date which is ten (10) days following the retiring Administrative Agent’s or Collateral Agent’s notice of resignation or ten (10) days following the Borrower’s notice of removal, the retiring Administrative Agent’s or the retiring Collateral Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent or Collateral Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above (except that in the case of any collateral security held by a resigning Collateral Agent under any of the Loan Documents, the retiring Collateral Agent shall continue to hold such collateral security until such time as a successor Collateral Agent is appointed). Upon the acceptance of any appointment as the Administrative Agent or Collateral Agent hereunder by a successor and upon the execution and filing or recording of such financing statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to (a) continue the perfection of the Liens granted or purported to be granted by the Collateral Documents or (b) otherwise ensure that Section 6.11 is satisfied, the Administrative Agent or Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges, and duties of the retiring Administrative Agent or Collateral Agent, and the retiring Administrative Agent or Collateral Agent shall be discharged from its duties and obligations under the Loan Documents. After the retiring Administrative Agent’s or Collateral Agent’s resignation hereunder as the Administrative Agent or the Collateral Agent, the provisions of this Article IX shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent or the Collateral Agent.

Section 9.10. Administrative Agent May File Proofs of Claim .

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower or the Collateral Agent) shall be (to the fullest extent permitted by mandatory provisions of applicable Law) entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Collateral Agent and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Collateral Agent and the Administrative Agent and their respective agents and counsel and all other amounts due to the Lenders, the Collateral Agent and the Administrative Agent under Sections 2.03(h) and (i), 2.09 and 10.04) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

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and any custodian, curator, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent or the Collateral Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent or the Collateral Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agents and their respective agents and counsel, and any other amounts due the Administrative Agent or the Collateral Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

Section 9.11. Collateral and Guaranty Matters .

The Lenders irrevocably agree:

(a) that any Lien on any property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document shall be automatically released (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than (x) Cash Management Obligations or obligations under Secured Hedge Agreements not yet due and payable and (y) contingent obligations not yet accrued and payable) and the expiration or termination or Cash Collateralization of all Letters of Credit, (ii) at the time the property subject to such Lien is Disposed or to be substantially simultaneously Disposed as part of or in connection with any Disposition permitted hereunder or under any other Loan Document to any Person other than a Person required to grant a Lien to the Administrative Agent or the Collateral Agent under the Loan Documents (or, if such transferee is a Person required to grant a Lien to the Administrative Agent or the Collateral Agent on such asset, at the option of the applicable Loan Party, such Lien on such asset may still be released in connection with the transfer so long as (x) the transferee grants a new Lien to the Administrative Agent or Collateral Agent on such asset substantially concurrently with the transfer of such asset, (y) the transfer is between parties organized under the laws of different jurisdictions and the transferee is a Foreign Subsidiary and (z) the priority of the new Lien is the same as that of the original Lien), (iii) subject to Section 10.01, if the release of such Lien is approved, authorized or ratified in writing by the Required Lenders or (iv) if the property subject to such Lien is owned by a Guarantor, upon release of such Guarantor from its obligations under its Guaranty pursuant to clause (c) below;

(b) the Collateral Agent is authorized to release any Lien on any property granted to or held by the Collateral Agent under any Loan Document on any assets that are excluded from the Collateral;

(c) that any Guarantor shall be automatically released from its obligations under the Guaranty if such Person ceases to be a Subsidiary or becomes an Excluded Subsidiary (other than pursuant to clause (b) of the definition thereof unless the Borrower delivers a written request to the Administrative Agent for such release and no Default has occurred and is continuing at such time) as a result of a transaction or designation permitted hereunder; provided that no such release shall occur if such Guarantor continues to be a guarantor in respect of any Junior Financing; and

(d) (x) the Collateral Agent may, without any further consent of any Lender, enter into or amend (i) a First Lien Intercreditor Agreement with the collateral agent or other representative of the holders of Permitted Notes issued pursuant to Section 7.03(r) or Permitted Ratio Debt issued or incurred pursuant to Section 7.03(s), in each case, that are intended to be secured on a pari passu basis with the Obligations and/or (ii) a Second Lien Intercreditor Agreement with the collateral agent or other representatives of the holders of Permitted Ratio Debt or other Indebtedness that is permitted to be secured by a Lien on the Collateral ranking junior to the Lien securing the Obligations that is permitted by Section 7.03, (y) the Collateral Agent may rely exclusively on a certificate of a Responsible Officer of the Borrower as to whether any such other Liens are permitted and (z) any First Lien Intercreditor Agreement or Second Lien Intercreditor Agreement entered into by the Collateral Agent shall be binding on the Secured Parties.

 

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Upon request by the Administrative Agent or the Collateral Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s or the Collateral Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.11. In each case as specified in this Section 9.11, the Administrative Agent or the Collateral Agent will (and each Lender irrevocably authorizes the Administrative Agent and the Collateral Agent to), at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as the Borrower may reasonably request to evidence the release or subordination of such item of Collateral from the assignment and security interest granted under the Collateral Documents, or to evidence the release of such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.11.

Section 9.12. Other Agents; Arrangers and Managers .

None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a “syndication agent,” “documentation agent,” “joint bookrunner” or “arranger” shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

Section 9.13. Appointment of Supplemental Agents .

(a) It is the purpose of this Agreement and the other Loan Documents that there shall be no violation of any Law of any jurisdiction denying or restricting the right of banking corporations or associations to transact business as agent or trustee in such jurisdiction. It is recognized that in case of litigation under this Agreement or any of the other Loan Documents, and in particular in case of the enforcement of any of the Loan Documents, or in case the Administrative Agent or the Collateral Agent deems that by reason of any present or future Law of any jurisdiction it may not exercise any of the rights, powers or remedies granted herein or in any of the other Loan Documents or take any other action which may be desirable or necessary in connection therewith, the Administrative Agent and the Collateral Agent are hereby authorized to appoint an additional individual or institution selected by the Administrative Agent or the Collateral Agent in its sole discretion as a separate trustee, co-trustee, administrative agent, collateral agent, administrative sub-agent or administrative co-agent (any such additional individual or institution being referred to herein individually as a “ Supplemental Agent ” and collectively as “ Supplemental Agents ”).

(b) In the event that the Collateral Agent appoints a Supplemental Agent with respect to any Collateral, (i) each and every right, power, privilege or duty expressed or intended by this Agreement or any of the other Loan Documents to be exercised by or vested in or conveyed to the Collateral Agent with respect to such Collateral shall be exercisable by and vest in such Supplemental Agent to the extent, and only to the extent, necessary to enable such Supplemental Agent to exercise such rights, powers and privileges with respect to such Collateral and to perform such duties with respect to such Collateral, and every covenant and obligation contained in the Loan Documents and necessary to the exercise or performance thereof by such Supplemental Agent shall run to and be enforceable by either the Collateral Agent or such Supplemental Agent, and (ii) the provisions of this Article IX and of Sections 10.04 and 10.05 that refer to the Administrative Agent shall inure to the benefit of such Supplemental Agent and all references therein to the Collateral Agent shall be deemed to be references to the Collateral Agent and/or such Supplemental Agent, as the context may require.

(c) Should any instrument in writing from any Loan Party be required by any Supplemental Agent so appointed by the Administrative Agent or the Collateral Agent for more fully and certainly vesting in and confirming to it or its such rights, powers, privileges and duties, such Loan Party shall execute, acknowledge and deliver any and all such instruments promptly upon request by the Administrative Agent or the Collateral Agent. In case any Supplemental Agent, or a successor thereto, shall die, become incapable of acting, resign or be removed, all the rights, powers, privileges and duties of such Supplemental Agent, to the extent permitted by Law, shall vest in and be exercised by the Administrative Agent until the appointment of a new Supplemental Agent.

 

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Section 9.14. Withholding Tax Indemnity .

To the extent required by any applicable Law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding tax. If the Internal Revenue Service or any other authority of the United States or any other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender for any reason (including, without limitation, because the appropriate form was not delivered or not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of, withholding tax ineffective), such Lender shall indemnify and hold harmless the Administrative Agent (to the extent that the Administrative Agent has not already been reimbursed by the Borrower pursuant to Section 3.01 and Section 3.04 and without limiting or expanding the obligation of the Borrower to do so) for all amounts paid, directly or indirectly, by the Administrative Agent as Taxes or otherwise, together with all expenses incurred, including legal expenses and any other out-of-pocket expenses, whether or not such tax was correctly or legally imposed or asserted by the relevant governmental authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. The agreements in this Section 9.14 shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Agreement and the repayment, satisfaction or discharge of all other Obligations. Each Lender authorizes the Administrative Agent to set off and apply any and all amounts owing to such Lender under any Loan Document against any amount due to the Administrative Agent under this Section 9.14. For the avoidance of doubt, a “Lender” shall, for all purposes of this Section 9.14, include any L/C Issuer and any Swing Line Lender.

ARTICLE X

Miscellaneous

Section 10.01. Amendments, Etc .

Except as otherwise set forth in this Agreement, no amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by any Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders (other than with respect to any amendment or waiver contemplated in clauses (i) or (j) below, which shall only require the consent of the Required Facility Lenders under the applicable Facility, as applicable) (or by the Administrative Agent with the consent of the Required Lenders) and the Borrower and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that, no such amendment, waiver or consent shall:

(a) extend or increase the Commitment of any Lender without the written consent of each Lender holding such Commitment (it being understood that a waiver of any condition precedent or of any Default, mandatory prepayment or mandatory reduction of the Commitments shall not constitute an extension or increase of any Commitment of any Lender);

(b) postpone any date scheduled for, or reduce or forgive the amount of, any payment of principal or interest under Section 2.07 or 2.08 (other than pursuant to Section 2.08(b)) without the written consent of each Lender holding the applicable Obligation (it being understood that the waiver of (or amendment to the terms of) any mandatory prepayment of the Term Loans shall not constitute a postponement of any date scheduled for the payment of principal or interest and it further being understood that any change to the definition of “Consolidated First Lien Net Leverage Ratio,” “Interest Coverage Ratio,” “Total Leverage Ratio” or “Secured Leverage Ratio” or, in each case, in the component definitions thereof shall not constitute a reduction or forgiveness in any rate of interest;

(c) reduce or forgive the principal of, or the rate of interest specified herein on, any Loan, or L/C Borrowing, or (subject to clause (iii) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document (or change the timing of payments of such fees or other amounts) without the written consent of each Lender holding such Loan, L/C Borrowing or to whom such fee or other amount is owed, it further being understood that any change to the definition of “Consolidated First Lien Net Leverage Ratio,” “Interest Coverage Ratio,” “Total Leverage Ratio” or “Secured Leverage Ratio” or, in each case, in the component definitions thereof shall not constitute a reduction

 

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or forgiveness in any rate of interest; provided that, only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate;

(d) change any provision of this Section 10.01, the definition of “Required Lenders,” “Required Facility Lenders,” “Required Class Lenders,” Section 8.04 or the definition of “Pro Rata Share” or Section 2.12(a), 2.12(g) or 2.13 without the written consent of each Lender directly affected thereby;

(e) other than in connection with a transaction permitted under Section 7.04 or 7.05, release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender;

(f) other than in connection with a transaction permitted under Section 7.04 or 7.05, release all or substantially all of the aggregate value of the Guarantees, without the written consent of each Lender;

(g) without the written consent of each Lender adversely affected thereby, amend the portion of the definition of “Interest Period” that reads as follows: “one, two, three or six months thereafter or, to the extent agreed by each Lender of such Eurocurrency Rate Loan, nine or twelve months or less than one month thereafter”; or

(h) waive or modify any mandatory prepayment of the Term Loans required under Section 2.05 without the written consent of the Required Class Lenders;

(i) (1) waive any condition set forth in Section 4.01 as to any Credit Extension under one or more Revolving Credit Facilities or (2) amend, waive or otherwise modify any term or provision which directly affects Lenders under one or more Revolving Credit Facilities and does not directly affect Lenders under any other Facility, in each case, without the written consent of the Required Facility Lenders under such applicable Revolving Credit Facility or Facilities (and in the case of multiple Facilities which are affected, such Required Facility Lenders shall consent together as one Facility); provided , however , that the waivers described in this clause (i) shall not require the consent of any Lenders other than the Required Facility Lenders under such Facility or Facilities; or

(j) amend, waive or otherwise modify any term or provision (including the availability and conditions to funding under Section 2.14 with respect to Incremental Term Loans and Revolving Commitment Increases and the rate of interest applicable thereto) which directly affects Lenders of one or more Incremental Term Loans or Revolving Commitment Increases and does not directly affect Lenders under any other Facility, in each case, without the written consent of the Required Facility Lenders under such applicable Incremental Term Loans or Revolving Commitment Increases (and in the case of multiple Facilities which are affected, such Required Facility Lenders shall consent together as one Facility); provided , however , that the waivers described in this clause (j) shall not require the consent of any Lenders other than the Required Facility Lenders under such applicable Incremental Term Loans or Revolving Commitment Increases;

and provided , further , that (i) no amendment, waiver or consent shall, unless in writing and signed by each L/C Issuer in addition to the Lenders required above, affect the rights or duties of an L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by a Swing Line Lender in addition to the Lenders required above, affect the rights or duties of such Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent or the Collateral Agent, as applicable, in addition to the Lenders required above, affect the rights or duties of, or any fees or other amounts payable to, the Administrative Agent or the Collateral Agent, as applicable, under this Agreement or any other Loan Document; and (iv) Section 10.07(h) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification.

 

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Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans and the Revolving Credit Loans and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders. Notwithstanding the foregoing, this Agreement may be amended to adjust the borrowing mechanics related to Swing Line Loans with only the written consent of the Administrative Agent, the applicable Swing Line Lender(s) and the Borrower so long as the obligations of the Revolving Credit Lenders and, if applicable, the other Swing Line Lender are not affected thereby.

In addition, notwithstanding the foregoing, this Agreement may be amended with the written consent of the Administrative Agent, the Borrower and the Lenders providing the Replacement Term Loans (as defined below) to permit the refinancing of all outstanding Term Loans (“ Refinanced Term Loans ”) with a replacement term loan tranche denominated in Dollars (“ Replacement Term Loans ”) hereunder; provided that (a) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount of such Refinanced Term Loans, (b) the Applicable Rate for such Replacement Term Loans shall not be higher than the Applicable Rate for such Refinanced Term Loans, (c) the Weighted Average Life to Maturity of Replacement Term Loans shall not be shorter than the Weighted Average Life to Maturity of such Refinanced Term Loans, at the time of such refinancing (except to the extent of nominal amortization for periods where amortization has been eliminated as a result of prepayment of the applicable Term Loans) and (d) all other terms applicable to such Replacement Term Loans shall be substantially identical to, or less favorable to the Lenders providing such Replacement Term Loans than, those applicable to such Refinanced Term Loans except to the extent necessary to provide for covenants and other terms applicable to any period after the Latest Maturity Date in effect immediately prior to such refinancing.

Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, to the fullest extent permitted by applicable law, such Lender will not be entitled to vote in respect of amendments, waivers and consents hereunder and the Commitment and the outstanding Loans or other extensions of credit of such Lender hereunder will not be taken into account in determining whether the Required Class Lenders, the Required Lenders or all of the Lenders, as required, have approved any such amendment, waiver or consent (and the definitions of “Required Class Lenders” and “Required Lenders” will automatically be deemed modified accordingly for the duration of such period); provided that any such amendment or waiver that would increase or extend the term of the Commitment of such Defaulting Lender, extend the date fixed for the payment of principal or interest owing to such Defaulting Lender hereunder, reduce the principal amount of any obligation owing to such Defaulting Lender, reduce the amount of or the rate or amount of interest on any amount owing to such Defaulting Lender or of any fee payable to such Defaulting Lender hereunder, or alter the terms of this proviso, will require the consent of such Defaulting Lender.

Notwithstanding anything to the contrary contained in this Section 10.01, the Borrower and the Administrative Agent may without the input or consent of the Lenders, effect amendments to this Agreement and the other Loan Documents as may be necessary or appropriate in the opinion of the Administrative Agent to effect the provisions of Section 2.14.

Notwithstanding anything to the contrary contained in this Section 10.01, guarantees, collateral security documents and related documents executed by Subsidiaries in connection with this Agreement may be in a form reasonably determined by the Administrative Agent and may be, together with this Agreement, amended, supplemented and waived with the consent of the Administrative Agent at the request of the Borrower without the need to obtain the consent of any other Lender if such amendment, supplement or waiver is delivered in order (i) to comply with local Law or advice of local counsel, (ii) to cure ambiguities, omissions, mistakes or defects or (iii) to cause such guarantee, collateral security document or other document to be consistent with this Agreement and the other Loan Documents.

Notwithstanding anything to the contrary contained in this Section 10.01, no Lender consent is required to effect any amendment or supplement to any First Lien Intercreditor Agreement, any Second Lien Intercreditor Agreement or other intercreditor agreement or arrangement permitted under this Agreement that is for the purpose of adding the holders of Permitted Notes or Permitted Ratio Debt and, in each case, any Permitted Refinancings thereof,

 

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as expressly contemplated by the terms of such First Lien Intercreditor Agreement, such Second Lien Intercreditor Agreement or such other intercreditor agreement or arrangement permitted under this Agreement, as applicable (it being understood that any such amendment or supplement may make such other changes to the applicable intercreditor agreement as, in the good faith determination of the Administrative Agent, are required to effectuate the foregoing and provided that such other changes are not adverse, in any material respect, to the interests of the Lenders); provided , further , that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder or under any other Loan Document without the prior written consent of the Administrative Agent.

Section 10.02. Notices and Other Communications; Facsimile Copies .

(a) General . Unless otherwise expressly provided herein, all notices and other communications provided for hereunder or under any other Loan Document shall be in writing (including by facsimile transmission). All such written notices shall be mailed, faxed or delivered to the applicable address, facsimile number or electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower or the Administrative Agent, the Collateral Agent, an L/C Issuer or a Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 10.02 or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and

(ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the Borrower and the Administrative Agent, the Collateral Agent, an L/C Issuer or a Swing Line Lender.

All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four (4) Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of Section 10.02(d)), when delivered; provided that notices and other communications to the Administrative Agent, the Collateral Agent, an L/C Issuer and a Swing Line Lender pursuant to Article II shall not be effective until actually received by such Person. In no event shall a voice mail message be effective as a notice, communication or confirmation hereunder.

(b) Effectiveness of Facsimile Documents and Signatures . Loan Documents may be transmitted and/or signed by facsimile or other electronic communication. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually signed originals and shall be binding on all Loan Parties, the Agents and the Lenders.

(c) Reliance by Agents and Lenders . The Administrative Agent, the Collateral Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower in the absence of gross negligence or willful misconduct as determined in a final and non-appealable judgment by a court of competent jurisdiction. All telephonic notices to the Administrative Agent or Collateral Agent may be recorded by the Administrative Agent or the Collateral Agent, and each of the parties hereto hereby consents to such recording.

(d) Electronic Communications . Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has

 

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notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

Section 10.03. No Waiver; Cumulative Remedies .

No failure by any Lender or the Administrative Agent or the Collateral Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Law.

Section 10.04. Attorney Costs and Expenses .

The Borrower agrees (a) to pay or reimburse the Administrative Agent, the Collateral Agent, the Syndication Agent, the Joint Bookrunners and the Arrangers for all reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation, syndication and execution of this Agreement and the other Loan Documents, and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby (including all Attorney Costs, which shall be limited to Cahill Gordon & Reindel LLP (and one local counsel in each applicable jurisdiction and, in the event of a conflict of interest, one additional counsel of each type to the affected parties)) and (b) from and after the Closing Date, to pay or reimburse the Administrative Agent, the Collateral Agent, the Syndication Agent, the Joint Bookrunners, the Arrangers and each Lender for all reasonable and documented out-of-pocket costs and expenses incurred in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any legal proceeding, including any proceeding under any Debtor Relief Law, and including all respective Attorney Costs, which shall be limited to Attorney Costs of one counsel to the Administrative Agent and Joint Bookrunners (and one local counsel in each applicable jurisdiction and, in the event of any conflict of interest, one additional counsel of each type to the affected parties)). The foregoing costs and expenses shall include all reasonable search, filing, recording and title insurance charges and fees related thereto, and other reasonable out-of-pocket expenses incurred by any Agent. The agreements in this Section 10.04 shall survive the termination of the Aggregate Commitments and repayment of all other Obligations. All amounts due under this Section 10.04 shall be paid within ten (10) Business Days of receipt by the Borrower of an invoice relating thereto setting forth such expenses in reasonable detail; provided that, with respect to the Closing Date, all amounts due under this Section 10.04 shall be paid on the Closing Date solely to the extent invoiced to the Borrower within three (3) Business Days of the Closing Date. If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it hereunder or under any Loan Document, such amount may be paid on behalf of such Loan Party by the Administrative Agent in its sole discretion.

Section 10.05. Indemnification by the Borrower .

Whether or not the transactions contemplated hereby are consummated, from and after the Closing Date, the Borrower shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, and directors, officers, employees, counsel, agents, trustees, investment advisors and attorneys-in-fact of each of the foregoing (collectively, the “ Indemnitees ”) from and against any and all liabilities, obligations, losses, damages,

 

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penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs which shall be limited to Attorney Costs of one counsel to the Administrative Agent and the Joint Bookrunners and one counsel to the other Lenders (and one local counsel in each applicable jurisdiction and, in the event of any actual conflict of interest, one additional counsel of each type to the affected parties)) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom including any refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit, or (c) any actual or alleged presence or Release of Hazardous Materials at, on, under or from any property or facility currently or formerly owned, leased or operated by the Loan Parties or any Subsidiary, or any Environmental Liability related in any way to any Loan Parties or any Subsidiary, or (d) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the “ Indemnified Liabilities ”) in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided that, notwithstanding the foregoing, such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements resulted from (x) the gross negligence, bad faith or willful misconduct of such Indemnitee or of any affiliate, director, officer, employee, counsel, agent or attorney-in-fact of such Indemnitee, as determined by the final non-appealable judgment of a court of competent jurisdiction or (y) a material breach of its obligations under the Loan Documents by such Indemnitee or of any affiliate, director, officer, employee, counsel, agent or attorney-in-fact of such Indemnitee as determined by the final non-appealable judgment of a court of competent jurisdiction. No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnitee or the Borrower or any Subsidiary have any liability for any special, punitive, indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 10.05 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, any Subsidiary of any Loan Party, any Loan Party’s directors, stockholders or creditors or an Indemnitee or any other Person, whether or not any Indemnitee is otherwise a party thereto and whether or not any of the transactions contemplated hereunder or under any of the other Loan Documents are consummated. All amounts due under this Section 10.05 shall be paid within ten (10) Business Days after demand therefor; provided , however , that such Indemnitee shall promptly refund such amount to the extent that there is a final judicial or arbitral determination that such Indemnitee was not entitled to indemnification rights with respect to such payment pursuant to the express terms of this Section 10.05. The agreements in this Section 10.05 shall survive the resignation of the Administrative Agent or the Collateral Agent, the replacement of, or assignment of rights by, any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations. For the avoidance of doubt, any indemnification relating to Taxes, other than Taxes resulting from any non-Tax claim, shall be covered by Sections 3.01 and 3.04 and shall not be covered by this Section 10.05.

Section 10.06. Payments Set Aside .

To the extent that any payment by or on behalf of the Borrower is made to any Agent or any Lender, or any Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by such Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall, to the fullest extent possible under provisions of applicable Law, be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by any Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Federal Funds Rate from time to time in effect.

 

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Section 10.07. Successors and Assigns .

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (except as permitted by Section 7.04) and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Assignee pursuant to an assignment made in accordance with the provisions of Section 10.07(b) (such an assignee, an “ Eligible Assignee ”) and (A) in the case of any Assignee that, immediately prior to or upon giving effect to such assignment, is an Affiliated Lender, Section 10.07(k), (B) in the case of any Assignee that is Holdings or any of its Subsidiaries, Section 10.07(l), or (C) in the case of any Assignee that, immediately prior to or upon giving effect to such assignment, is a Debt Fund Affiliate, Section 10.07(o), (ii) by way of participation in accordance with the provisions of Section 10.07(e), (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.07(g) or (iv) to an SPC in accordance with the provisions of Section 10.07(h) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 10.07(e) and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (“ Assignees ”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this Section 10.07(b), participations in L/C Obligations and in Swing Line Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A) the Borrower, provided that no consent of the Borrower shall be required for (i) an assignment of all or a portion of a Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund, (ii) an assignment related to Revolving Credit Commitments or Revolving Credit Exposure to a Revolving Credit Lender, (iii) if an Event of Default under Section 8.01(a), (f) or (g) has occurred and is continuing, any Assignee and (iv) an assignment of a Term Loan to any institution that committed during the primary syndication of the Loans or its Affiliates; provided that the Borrower shall be deemed to have consented to any assignment of a Term Loan unless it shall have objected thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof;

(B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Term Loan to a Lender with a Commitment in respect of the applicable Facility or an Approved Fund;

(C) each Principal L/C Issuer at the time of such assignment, provided that no consent of the Principal L/C Issuers shall be required for any assignment not related to Revolving Credit Commitments or Revolving Credit Exposure; and

(D) the Swing Line Lenders; provided that no consent of a Swing Line Lender shall be required for any assignment not related to Revolving Credit Commitments or Revolving Credit Exposure or any assignment to an Agent or an Affiliate of an Agent.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered

 

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to the Administrative Agent) shall not be less than an amount of $2,500,000 (in the case of each Revolving Credit Loan) or $1,000,000 (in the case of a Term Loan), and shall be in increments of an amount of $1,000,000 in excess thereof unless each of the Borrower and the Administrative Agent otherwise consents, provided that such amounts shall be aggregated in respect of each Lender and its Affiliates or Approved Funds, if any;

(B) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that the Administrative Agent, in its sole discretion, may elect to waive such processing and recordation fee; and

(C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

This paragraph (b) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis among such Facilities.

(c) Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 10.07(d), from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, and the surrender by the assigning Lender of its Note, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this clause (c) shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.07(e).

(d) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption and each Affiliated Lender Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and related interest amounts) of the Loans, L/C Obligations (specifying the Unreimbursed Amounts), L/C Borrowings and the amounts due under Section 2.03, owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Agents and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Agent, at any reasonable time and from time to time upon reasonable prior notice. This Section 10.07(d) and Section 2.11 shall be construed so that all Loans are at all times maintained in “registered form” within the meaning of Section 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations (or any other relevant or successor provisions of the Code or of such Treasury regulations). Notwithstanding the foregoing, in no event shall the Administrative Agent be obligated to ascertain, monitor or inquire as to whether any Lender is an Affiliated Lender nor shall the Administrative Agent be obligated to monitor the aggregate amount of Term Loans held by Affiliated Lenders. Upon request by the Administrative Agent, the Borrower shall (i) promptly (and in any case, not less than 5 Business Days (or shorter period as agreed to by the Administrative Agent) prior to the proposed effective date of any amendment, consent or waiver pursuant to Section 10.01) provide to the Administrative Agent, a complete list of all Affiliated Lenders holding Term Loans at such time and (ii) not less than 5 Business Days (or shorter period as agreed to by the Administrative Agent) prior to the proposed effective date of any amendment, consent or waiver pursuant to Section 10.01, provide to the Administrative Agent, a complete list of all Debt Fund Affiliates holding Term Loans at such time.

(e) Any Lender may at any time sell participations to any Person (other than a natural person, Holdings or any of its Subsidiaries) (each, a “ Participant ”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations

 

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in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement or the other Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that requires the affirmative vote of such Lender. Subject to Section 10.07(f), the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 (subject to the requirements and limitations of such Sections, including the requirement to provide the forms and certificates pursuant to Section 3.01(d)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.07(c). To the extent permitted by applicable Law, each Participant also shall be entitled to the benefits of Section 10.09 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and related interest amounts) of each participant’s interest in the Loans or other Obligations under this Agreement (the “ Participant Register ”). The entries in the Participant Register shall be conclusive, absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. No Lender shall have any obligation to disclose all or any part of a Participant Register (including the identity of any Participant or any information relating to the Participant’s interest in any Commitments, Loans, Letters of Credit or other Obligation under this Agreement) to any Person except to the extent that such disclosure is necessary to establish in connection with a Tax audit that any such Commitment, Loan, Letter of Credit or other Obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.

(f) A Participant shall not be entitled to receive any greater payment under Section 3.01, 3.04 or 3.05 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent, not to be unreasonably withheld or delayed (for the avoidance of doubt, the Borrower shall have a reasonable basis for withholding consent if there would be materially increased indemnification obligations immediately after the participation.

(g) Any Lender may, without the consent of the Borrower or the Administrative Agent, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(h) Notwithstanding anything to the contrary contained herein, any Lender (a “ Granting Lender ”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower (an “ SPC ”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. Each party hereto hereby agrees that (i) an SPC shall be entitled to the benefit of Sections 3.01, 3.04 and 3.05 (subject to the requirements and the limitations of such Sections, including the requirement to provide the forms and certificates pursuant to Section 3.01(d)), but neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrower under this Agreement, unless the grant to the SPC was made with the prior written consent of the Borrower, not to be unreasonably withheld or delayed (for the avoidance of doubt, the Borrower shall have a reasonable basis for withholding consent if an exercise by SPC immediately after the grant would result in materially increased indemnification obligation to the Borrower at such time), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of

 

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any Loan Document, remain the lender of record hereunder. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Borrower and the Administrative Agent and with the payment of a processing fee of $3,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

(i) Notwithstanding anything to the contrary contained herein, without the consent of the Borrower or the Administrative Agent, (1) any Lender may in accordance with applicable Law create a security interest in all or any portion of the Loans owing to it and the Note, if any, held by it and (2) any Lender that is a Fund may create a security interest in all or any portion of the Loans owing to it and the Note, if any, held by it to the trustee for holders of obligations owed, or securities issued, by such Fund as security for such obligations or securities; provided that unless and until such trustee actually becomes a Lender in compliance with the other provisions of this Section 10.07, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.

(j) Notwithstanding anything to the contrary contained herein, any L/C Issuer or Swing Line Lender may, upon thirty (30) days’ notice to the Borrower and the Lenders, resign as an L/C Issuer or Swing Line Lender, respectively; provided that on or prior to the expiration of such 30-day period with respect to such resignation, the relevant L/C Issuer or Swing Line Lender shall have identified a successor L/C Issuer or Swing Line Lender reasonably acceptable to the Borrower willing to accept its appointment as successor L/C Issuer or Swing Line Lender, as applicable. In the event of any such resignation of an L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders willing to accept such appointment a successor L/C Issuer or Swing Line Lender hereunder; provided that no failure by the Borrower to appoint any such successor shall affect the resignation of the relevant L/C Issuer or the Swing Line Lender, as the case may be, except as expressly provided above. If an L/C Issuer resigns as an L/C Issuer, it shall retain all the rights and obligations of an L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If the Swing Line Lender resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans, Eurocurrency Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

(k) Any Lender may, so long as no Default or Event of Default has occurred and is continuing, at any time, assign all or a portion of its rights and obligations with respect to Term Loans under this Agreement to a Person who is or will become, after such assignment, an Affiliated Lender through (x) Dutch auctions open to all Lenders on a pro rata basis or (y) open market purchase on a non-pro rata basis, in each case subject to the following limitations:

(i) the assigning Lender and the Affiliated Lender purchasing such Lender’s Term Loans shall execute and deliver to the Administrative Agent an assignment agreement substantially in the form of Exhibit L hereto (an “ Affiliated Lender Assignment and Assumption ”);

(ii) Affiliated Lenders will not receive information provided solely to Lenders by the Administrative Agent or any Lender and will not be permitted to attend or participate in conference calls or meetings attended solely by the Lenders and the Administrative Agent, other than the right to receive notices of prepayments and other administrative notices in respect of its Loans or Commitments required to be delivered to Lenders pursuant to Article II;

(iii) each Affiliated Lender that purchases any Term Loans pursuant to clause (x) above shall represent and warrant to the seller, or shall make a statement that such representation cannot be made, that it does not possess material non-public information with respect to Holdings and its Subsidiaries or the securities of any of them that has not been disclosed to the Lenders generally (other than Lenders who elect not to receive such information);

 

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(iv) the aggregate principal amount of Term Loans held at any one time by Affiliated Lenders at the time of any assignment to an Affiliated Lender shall not exceed 20% of the principal amount of all Term Loans at such time outstanding (the “ Affiliated Lender Cap ”); provided that to the extent any assignment to an Affiliated Lender would result in the aggregate principal amount of all Loans held by Affiliated Lenders exceeding the Affiliated Lender Cap, the assignment of such excess amount will be void ab initio ; and

(v) as a condition to each assignment pursuant to this clause (k), the Administrative Agent shall have been provided a notice in the form of Exhibit M (an “ Affiliated Lender Notice ”) to this Agreement in connection with each assignment to an Affiliated Lender or a Person that upon effectiveness of such assignment would constitute an Affiliated Lender pursuant to which such Affiliated Lender shall waive any right to bring any action in connection with such Term Loans against the Administrative Agent, in its capacity as such.

Each Affiliated Lender agrees to notify the Administrative Agent promptly (and in any event within 10 Business Days) if it acquires any Person who is also a Lender, and each Lender agrees to notify the Administrative Agent promptly (and in any event within ten (10) Business Days) if it becomes an Affiliated Lender. Such notice shall contain the type of information required and be delivered to the same addressee as set forth in Exhibit M .

(l) Any Lender may, so long as no Default or Event of Default has occurred and is continuing, at any time, assign all or a portion of its rights and obligations with respect to Term Loans under this Agreement to Holdings, the Borrower or any other Subsidiary of Holdings through (x) Dutch auctions open to all Lenders on a pro rata basis or (y) notwithstanding Sections 2.12 and 2.13 or any other provision in this Agreement, open market purchase on a non-pro rata basis; provided , that, in connection with assignments pursuant to clause (y) above:

(i) if Holdings is the assignee, upon such assignment, transfer or contribution, Holdings shall automatically be deemed to have contributed the principal amount of such Term Loans, plus all accrued and unpaid interest thereon, to the Borrower; or

(ii) if the assignee is the Borrower or any other Subsidiary of Holdings (including through any deemed contribution pursuant to clause (i) above), (a) the principal amount of such Term Loans, along with all accrued and unpaid interest thereon, so contributed, assigned or transferred to the Borrower or such Subsidiary shall be deemed automatically cancelled and extinguished on the date of such contribution, assignment or transfer, (b) the aggregate outstanding principal amount of Term Loans of the remaining Lenders shall reflect such cancellation and extinguishing of the Term Loans then held by the Borrower and (c) the Borrower shall promptly provide notice to the Administrative Agent of such contribution, assignment or transfer of such Term Loans, and the Administrative Agent, upon receipt of such notice, shall reflect the cancellation of the applicable Term Loans in the Register.

(m) Notwithstanding anything in Section 10.01 or the definition of “Required Lenders,” “Required Class Lenders,” or “Required Facility Lenders” to the contrary, for purposes of determining whether the Required Lenders and Required Class Lenders (in respect of a Class of Term Loans) have (i) consented (or not consented) to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Loan Document or any departure by any Loan Party therefrom, or subject to Section 10.07(n), any plan of reorganization pursuant to the U.S. Bankruptcy Code, (ii) otherwise acted on any matter related to any Loan Document, or (iii) directed or required the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document, no Affiliated Lender shall have any right to consent (or not consent), otherwise act or direct or require the Administrative Agent or any Lender to take (or refrain from taking) any such action and:

(A) all Term Loans held by any Affiliated Lenders shall be deemed to be not outstanding for all purposes of calculating whether the Required Lenders and Required Class Lenders (in respect of a Class of Term Loans) have taken any actions; and

(B) all Term Loans held by Affiliated Lenders shall be deemed to be not outstanding for all purposes of calculating whether all Lenders have taken any action unless the action in question affects such Affiliated Lender in a disproportionately adverse manner than its effect on other Lenders.

 

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(n) Notwithstanding anything in this Agreement or the other Loan Documents to the contrary, each Affiliated Lender hereby agrees that and each Affiliated Lender Assignment and Assumption shall provide a confirmation that, if a proceeding under any Debtor Relief Law shall be commenced by or against the Borrower or any other Loan Party at a time when such Lender is an Affiliated Lender, such Affiliated Lender irrevocably authorizes and empowers the Administrative Agent to vote on behalf of such Affiliated Lender with respect to the Term Loans held by such Affiliated Lender in any manner in the Administrative Agent’s sole discretion, unless the Administrative Agent instructs such Affiliated Lender to vote, in which case such Affiliated Lender shall vote with respect to the Term Loans held by it as the Administrative Agent directs; provided that such Affiliated Lender shall be entitled to vote in accordance with its sole discretion (and not in accordance with the direction of the Administrative Agent) in connection with any plan of reorganization to the extent any such plan of reorganization proposes to treat any Obligations held by such Affiliated Lender in a disproportionately adverse manner to such Affiliated Lender than the proposed treatment of similar Obligations held by Term Lenders that are not Affiliated Lenders.

(o) Although Debt Fund Affiliates shall be Eligible Assignees and shall not be subject to the provisions of Section 10.07(m) or (n), any Lender may, at any time, assign all or a portion of its rights and obligations with respect to Term Loans under this Agreement to a Person who is or will become, after such assignment, a Debt Fund Affiliate only through (x) Dutch auctions open to all Lenders on a pro rata basis (for the avoidance of doubt, without requiring any representation as to the possession of material non-public information by such Affiliate and without regard to whether a Default or an Event of Default has occurred and is continuing) or (y) open market purchase on a non-pro rata basis. Notwithstanding anything in Section 10.01 or the definition of “Required Lenders” to the contrary, for purposes of determining whether the Required Lenders have (i) consented (or not consented) to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Loan Document or any departure by any Loan Party therefrom, (ii) otherwise acted on any matter related to any Loan Document or (iii) directed or required the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document, all Term Loans, Revolving Credit Commitments and Revolving Credit Loans held by Debt Fund Affiliates may not account for more than 50% (pro rata among such Debt Fund Affiliates) of the Term Loans, Revolving Credit Commitments and Revolving Credit Loans of consenting Lenders included in determining whether the Required Lenders have consented to any action pursuant to Section 10.01.

Section 10.08. Confidentiality .

Each of the Agents and the Lenders agrees to maintain the confidentiality of the Information, except that Information may be disclosed (a) to its Affiliates and its and its Affiliates’ managers, administrators, directors, officers, employees, trustees, partners, investors, investment advisors and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any Governmental Authority or self-regulatory authority having or asserting jurisdiction over such Person (including any Governmental Authority regulating any Lender or its Affiliates); (c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) subject to an agreement containing provisions substantially the same as those of this Section 10.08 (or as may otherwise be reasonably acceptable to the Borrower), to any pledgee referred to in Section 10.07(g), counterparty to a Swap Contract, Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in any of its rights or obligations under this Agreement; (f) with the written consent of the Borrower; (g) to the extent such Information becomes publicly available other than as a result of a breach of this Section 10.08 or becomes available to the Administrative Agent, any Arranger, any Lender, the L/C Issuer or any of their respective Affiliates on a non-confidential basis from a source other than a Loan Party or any Investor or their respective related parties (so long as such source is not known to the Administrative Agent, such Arranger, such Lender, the L/C Issuer or any of their respective Affiliates to be bound by confidentiality obligations to any Loan Party); (h) to any Governmental Authority or examiner (including the National Association of Insurance Commissioners or any other similar organization and including any self-regulatory body having or claiming oversight over the Administrative Agent’s, any Arranger’s, any Lender’s, the L/C Issuer’s or any of their respective Affiliates’ businesses or operations) regulating any Lender; (i) to any rating agency when required by it (it being understood that, prior to any such disclosure, such rating

 

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agency shall undertake to preserve the confidentiality of any Information relating to Loan Parties and their Subsidiaries received by it from such Lender) or to the CUSIP Service Bureau or any similar organization; or (j) in connection with the exercise of any remedies hereunder, under any other Loan Document or the enforcement of its rights hereunder or thereunder. In addition, the Agents and the Lenders may disclose the existence of this Agreement and publicly available information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Agents and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions. For the purposes of this Section 10.08, “ Information ” means all information received from the Loan Parties relating to any Loan Party, its Affiliates or its Affiliates’ directors, managers, officers, employees, trustees, investment advisors or agents, relating to Holdings, the Borrower or any of their Subsidiaries or its business, other than any such information that is publicly available to any Agent, any L/C Issuer or any Lender prior to disclosure by any Loan Party other than as a result of a breach of this Section 10.08; provided that, in the case of information received from a Loan Party after the Closing Date, such information is clearly identified at the time of delivery as confidential or is delivered pursuant to Section 6.01, 6.02 or 6.03 hereof.

Section 10.09. Setoff .

In addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender and its Affiliates (and the Collateral Agent, in respect of any unpaid fees, costs and expenses payable hereunder) is authorized at any time and from time to time, without prior notice to the Borrower, any such notice being waived by the Borrower (on its own behalf and on behalf of each Loan Party and each of its Subsidiaries) to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other Indebtedness at any time owing by, such Lender and its Affiliates or the Collateral Agent to or for the credit or the account of the respective Loan Parties and their Subsidiaries against any and all Obligations owing to such Lender and its Affiliates or the Collateral Agent hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not such Agent or such Lender or Affiliate shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or Indebtedness. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Administrative Agent, the Collateral Agent and each Lender under this Section 10.09 are in addition to other rights and remedies (including other rights of setoff) that the Administrative Agent, the Collateral Agent and such Lender may have at Law.

Section 10.10. Interest Rate Limitation .

Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “ Maximum Rate ”). If any Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by an Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

Section 10.11. Counterparts .

This Agreement and each other Loan Document may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by facsimile of an executed counterpart of a signature page to this Agreement and each other Loan Document shall be effective as delivery of an original executed counterpart of this Agreement and such other Loan Document. The Agents may also require that any such documents and signatures delivered by facsimile be confirmed by a manually signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any document or signature delivered by facsimile.

 

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Section 10.12. Integration; Termination .

This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Agents or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

Section 10.13. Survival of Representations and Warranties .

All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by each Agent and each Lender, regardless of any investigation made by any Agent or any Lender or on their behalf and notwithstanding that any Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

Section 10.14. Severability .

If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 10.15. GOVERNING LAW .

(a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY, EACH AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH LOAN PARTY, EACH AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS IN THE MANNER PROVIDED FOR NOTICES (OTHER THAN FACSIMILE) IN SECTION 10.02. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

Section 10.16. WAIVER OF RIGHT TO TRIAL BY JURY .

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION

 

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OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.16 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 10.17. Binding Effect .

This Agreement shall become effective when it shall have been executed by the Loan Parties and the Administrative Agent shall have been notified by each Lender, the Swing Line Lenders and L/C Issuer that each such Lender, Swing Line Lender and L/C Issuer has executed it and thereafter shall be binding upon and inure to the benefit of the Loan Parties, each Agent and each Lender and their respective successors and assigns, in each case in accordance with Section 10.07 (if applicable) and except that no Loan Party shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders except as permitted by Section 7.04.

Section 10.18. USA Patriot Act .

Each Lender that is subject to the USA Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name, address and tax identification number of the Borrower and other information regarding the Borrower that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the USA Patriot Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act. This notice is given in accordance with the requirements of the USA Patriot Act and is effective as to the Lenders and the Administrative Agent.

Section 10.19. No Advisory or Fiduciary Responsibility .

In connection with all aspects of each transaction contemplated hereby, each Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that (i) the facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Borrower and its Affiliates, on the one hand, and the Agents, the Arrangers, the Joint Bookrunners and the Lenders, on the other hand, and the Borrower is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof), (ii) in connection with the process leading to such transaction, each of the Agents, the Arrangers, the Joint Bookrunners and the Lenders is and has been acting solely as a principal and except as expressly agreed in writing by the relevant parties, is not the financial advisor, agent or fiduciary, for the Borrower or any of its Affiliates, stockholders, creditors or employees or any other Person, (iii) none of the Agents, the Arrangers, the Joint Bookrunners or the Lenders has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Borrower with respect to any of the transactions contemplated hereby or the process leading thereto except as expressly agreed in writing by the relevant parties, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether any Agent or Lender has advised or is currently advising the Borrower or any of its Affiliates on other matters) and none of the Agents, the Arrangers, the Joint Bookrunners or the Lenders has any obligation to the Borrower or any of its Affiliates with respect to the financing transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents, (iv) the Agents, the Arrangers, the Joint Bookrunners and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from, and may conflict with, those of the Borrower and its Affiliates, and none of the Agents, the Arrangers,

 

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the Joint Bookrunners or the Lenders has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship and (v) the Agents, the Arrangers, the Joint Bookrunners and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Loan Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate.

ARTICLE XI

Guarantee

Section 11.01. The Guarantee .

Each Guarantor hereby jointly and severally with the other Guarantors guarantees, as a primary obligor and not as a surety to each Secured Party and their respective successors and assigns, the prompt payment in full when due (whether at stated maturity, by required prepayment, declaration, demand, by acceleration or otherwise) of the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of (i) the Title 11 of the United States Code after any bankruptcy or insolvency petition under Title 11 of the United States Code and (ii) any other Debtor Relief Laws) on the Loans made by the Lenders to, and the Notes, if any, held by each Lender of, the Borrower (other than such Guarantor), and all other Obligations from time to time owing to the Secured Parties by any Loan Party under any Loan Document or the Borrower or any Subsidiary under any Secured Hedge Agreement or any Cash Management Obligations, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the “ Guaranteed Obligations ”). The Guarantors hereby jointly and severally agree that if the Borrower or other Guarantor(s) shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same in cash, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

Section 11.02. Obligations Unconditional .

The obligations of the Guarantors under Section 11.01 shall constitute a guaranty of payment and to the fullest extent permitted by applicable Law, are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations of the Borrower under this Agreement, the Notes, if any, or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or Guarantor (except for payment in full). Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder which shall remain absolute, irrevocable and unconditional under any and all circumstances as described above:

(i) at any time or from time to time, without notice to the Guarantors, to the extent permitted by Law, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

(ii) any of the acts mentioned in any of the provisions of this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein shall be done or omitted;

(iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be amended in any respect, or any right under the Loan Documents or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guarantee of any of the Guaranteed Obligations or except as permitted pursuant to Section 11.09, any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;

 

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(iv) any Lien or security interest granted to, or in favor of, an L/C Issuer or any Lender or Agent as security for any of the Guaranteed Obligations shall fail to be perfected; or

(v) the release of any other Guarantor pursuant to Section 11.09 or otherwise.

The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and, to the extent permitted by Law, all notices whatsoever, and any requirement that any Secured Party exhaust any right, power or remedy or proceed against the Borrower under this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein, or against any other person under any other guarantee of, or security for, any of the Guaranteed Obligations. The Guarantors waive, to the extent permitted by Law, any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any Secured Party upon this Guarantee or acceptance of this Guarantee, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee, and all dealings between the Borrower and the Secured Parties shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. This Guarantee shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guaranteed Obligations at any time or from time to time held by Secured Parties, and the obligations and liabilities of the Guarantors hereunder shall not be conditioned or contingent upon the pursuit by the Secured Parties or any other person at any time of any right or remedy against the Borrower or against any other person which may be or become liable in respect of all or any part of the Guaranteed Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of the Lenders, and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guaranteed Obligations outstanding.

Section 11.03. Reinstatement .

The obligations of the Guarantors under this Article XI shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower or other Loan Party in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

Section 11.04. Subrogation; Subordination .

Each Guarantor hereby agrees that until the payment and satisfaction in full in cash of all Guaranteed Obligations and the expiration and termination of the Commitments of the Lenders under this Agreement it shall waive any claim and shall not exercise any right or remedy, direct or indirect, arising by reason of any performance by it of its guarantee in Section 11.01, whether by subrogation or otherwise, against the Borrower or any other Guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations. Any Indebtedness of any Loan Party permitted pursuant to Section 7.03(b)(ii) or 7.03(d) shall be subordinated to such Loan Party’s Obligations in the manner set forth in the Intercompany Note evidencing such Indebtedness.

Section 11.05. Remedies .

The Guarantors jointly and severally agree that, as between the Guarantors and the Lenders, the obligations of the Borrower under this Agreement and the Notes, if any, may be declared to be forthwith due and payable as provided in Section 8.02 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 8.02) for purposes of Section 11.01, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by the Guarantors for purposes of Section 11.01.

 

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Section 11.06. Instrument for the Payment of Money .

Each Guarantor hereby acknowledges that the guarantee in this Article XI constitutes an instrument for the payment of money, and consents and agrees that any Lender or Agent, at its sole option, in the event of a dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to bring a motion-action under New York CPLR Section 3213.

Section 11.07. Continuing Guarantee .

The guarantee in this Article XI is a continuing guarantee of payment, and shall apply to all Guaranteed Obligations whenever arising.

Section 11.08. General Limitation on Guarantee Obligations .

In any action or proceeding involving any state corporate limited partnership or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other Law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 11.01 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 11.01, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Loan Party or any other person, be automatically limited and reduced to the highest amount (after giving effect to the right of contribution established in Section 11.10) that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

Section 11.09. Release of Guarantors .

If, in compliance with the terms and provisions of the Loan Documents, Equity Interests of any Subsidiary Guarantor (a “ Transferred Guarantor ”) are sold or otherwise transferred, following which transfer such Subsidiary Guarantor ceases to be a Subsidiary, such Transferred Guarantor shall, upon the consummation of such sale or transfer, be automatically released from its obligations under this Agreement (including under Section 10.05 hereof) and the other Loan Documents and, so long as the Borrower shall have provided the Agents such certifications or documents as any Agent shall reasonably request, the Collateral Agent shall take such actions as are necessary to effect the releases described in this Section 11.09.

When all Commitments hereunder have terminated, and all Loans or other Obligation hereunder which are accrued and payable have been paid or satisfied, and no Letter of Credit remains outstanding (except any Letter of Credit the Outstanding Amount of which the Obligations related thereto has been Cash Collateralized or for which a backstop letter of credit reasonably satisfactory to the applicable L/C Issuer has been put in place), this Agreement and the Guarantees made herein shall terminate with respect to all Obligations, except with respect to Obligations that expressly survive such repayment pursuant to the terms of this Agreement.

Section 11.10. Right of Contribution .

Each Guarantor hereby agrees that to the extent that a Subsidiary Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Subsidiary Guarantor’s right of contribution shall be subject to the terms and conditions of Section 11.04. The provisions of this Section 11.10 shall in no respect limit the obligations and liabilities of any Subsidiary Guarantor to the Administrative Agent, the L/C Issuer, the Swing Line Lender and the Lenders, and each Subsidiary Guarantor shall remain liable to the Administrative Agent, the L/C Issuer, the Swing Line Lender and the Lenders for the full amount guaranteed by such Subsidiary Guarantor hereunder.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

SUMMIT MATERIALS INTERMEDIATE HOLDINGS, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS HOLDINGS I, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS HOLDINGS II, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS COMPANIES I, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President

 

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SUMMIT MATERIALS CORPORATIONS I, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
CONTINENTAL CEMENT COMPANY, L.L.C.
By:  

/s/ R. Michael Johnson

  Name:   R. Michael Johnson
  Title:   Chief Executive Officer
B&B RESOURCES, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
VALLEY READY MIX, INC.
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
SALT LAKE VALLEY SAND & GRAVEL, INC.
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
ELAM CONSTRUCTION, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President

 

S-2


ELAM PAVING, INC.
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
HAMM, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
HAMM ASPHALT, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
N.R. HAMM CONTRACTOR, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
N.R. HAMM QUARRY, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
RK HALL, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President

 

S-3


R.K. HALL CONSTRUCTION, LTD.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SCS MATERIALS, L.P.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
B&H CONTRACTING, L.P.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
RKH CAPITAL, L.L.C.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
CON-AGG OF MO, L.L.C.
By:   Summit Materials Companies I, LLC, its sole member
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President

 

S-4


QUARRY PROPERTIES, L.L.C.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Manager
FISCHER QUARRIES, L.L.C.
By:   Con-Agg of MO, L.L.C., its sole member
  By:   Summit Materials Companies I, LLC, its sole member
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
HINKLE CONTRACTING COMPANY, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
BOURBON LIMESTONE COMPANY
By:  

/s/ Thomas Hinkle

  Name:   Thomas Hinkle
  Title:   Vice President
KENTUCKY HAULING, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President

 

S-5


GLASS AGGREGATES, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SOUTH CENTRAL KENTUCKY LIMESTONE, LLC
By:   Glass Aggregates, LLC, its sole member
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
KILGORE COMPANIES, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
ALTAVIEW CONCRETE, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
PEAK CONSTRUCTION MATERIALS, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
PEAK MANAGEMENT, L.C.
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President

 

S-6


WASATCH CONCRETE PUMPING, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
KILGORE TRUCKING, LLC
By:  

/s/ Jason T. Kilgore

  Name:   Jason T. Kilgore
  Title:   Manager
KILGORE EQUIPMENT, LLC
By:  

/s/ Jason T. Kilgore

  Name:   Jason T. Kilgore
  Title:   Manager
WIND RIVER MATERIALS, LLC
By:  

/s/ Jason T. Kilgore

  Name:   Jason T. Kilgore
  Title:   Manager
CORNEJO & SONS, L.L.C.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
CORNEJO QUALITY STONE LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President

 

S-7


AUSTIN MATERIALS, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
INDUSTRIAL ASPHALT, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Manager
ASPHALT PAVING COMPANY OF AUSTIN, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Manager
KBDJ, L.P.
By:   KBDJ Materials, LLC, its general partner
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
KBDJ MATERIALS, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
RTI HOT MIX, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President

 

S-8


RTI EQUIPMENT CO., LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
J.D. RAMMING PAVING CO., LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
RAMMING TRANSPORATION CO., LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President

 

S-9


BANK OF AMERICA, N.A., as Administrative Agent, Collateral Agent, L/C Issuer, Swing Line Lender and as a Lender
By:  

/s/ Joon Koo

  Name:   Joon Ko
  Title:   Vice President

 

S-10


CITIBANK, N.A., as a Lender
By:  

/s/ David Leland

  Name:   David Leland
  Title:   Vice President

 

S-11


BARCLAYS BANK PLC, as a Lender
By:  

/s/ Kevin Cullen

  Name:   Kevin Cullen
  Title:   Director

 

S-12


UBS LOAN FINANCE LLC, as a Lender
By:  

/s/ Mary E. Evans

  Name:   Mary E. Evans
  Title:   Associate Director
By:  

/s/ Irja R. Otsa

  Name:   Irja R. Otsa
  Title:   Associate Director

 

S-13


CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender
By:  

/s/ Judith E. Smith

  Name:   Judith E. Smith
  Title:   Managing Director
By:  

/s/ Tyler R. Smith

  Name:   Tyler R. Smith
  Title:   Associate

 

S-14


DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender
By:  

/s/ Omayra Laucella

  Name:   Omayra Laucella
  Title:   Vice President
By:  

/s/ Marguerite Sutton

  Name:   Marguerite Sutton
  Title:   Director

 

S-15


Regions Bank, as a Lender
By:  

/s/ Anne D. Silvestri

  Name:   Anne D. Silvestri
  Title:   Senior Vice President

 

S-16


Citigroup Global Markets Inc., as Syndication Agent
By:  

/s/ David Leland

  Name:   David Leland
  Title:   Managing Director

 

S-17


BARCLAYS BANK PLC , as Co-Documentation Agent
By:  

/s/ Kevin Cullen

  Name:   Kevin Cullen
  Title:   Director

 

S-18


REGIONS BANK, as Co-Documentation Agent
By:  

/s/ Anne D. Silvestri

  Name:   Anne D. Silvestri
  Title:   Senior Vice President

 

S-19

Exhibit 10.2

AMENDMENT No. 1 , dated as of February 5, 2013 (this “ Amendment ”), to the Credit Agreement dated as of January 30, 2012, among SUMMIT MATERIALS, LLC, a Delaware limited liability company (the “ Borrower ”), the Guarantors party thereto, the several banks and other financial institutions or entities from time to time parties to the Credit Agreement (the “ Lenders ”), BANK OF AMERICA, N.A., as Administrative Agent (the “ Administrative Agent ”), Collateral Agent, L/C Issuer and Swing Line Lender and the other parties thereto (as amended, restated, modified and supplemented from time to time, the “ Credit Agreement ”); capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

WHEREAS, the Borrower desires to amend the Credit Agreement on the terms set forth herein;

WHEREAS, Section 10.01 of the Credit Agreement provides that the relevant Loan Parties and the Required Lenders may amend the Credit Agreement and the other Loan Documents for certain purposes including to refinance existing term loans under the Credit Agreement;

WHEREAS, (i) each Amendment No. 1 Consenting Lender (as defined in Exhibit A ) has agreed, on the terms and conditions set forth herein, to have its outstanding Original Term Loans (as defined in Exhibit A ), if any, converted into a like principal amount of a Term B Loan (as defined in Exhibit A ) effective as of the Amendment No. 1 Effective Date (as defined below) and (ii) if not all outstanding Term B Loans are converted as described in clause (i), the Additional Term B Lender (as defined in Exhibit A ) has agreed to make an additional Term B Loan in a principal amount equal to the principal amount of Original Term B Loans not converted into Term B Loans on the Amendment No. 1 Effective Date, the proceeds of which shall be applied to repay in full such non-converted Original Term Loans;

NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

Section 1. Amendment . The Credit Agreement is, effective as of the Amendment No. 1 Effective Date (as defined below), hereby amended to delete the stricken text (indicated textually in the same manner as the following example: ) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Credit Agreement attached as Exhibit A hereto.

Section 2. Representations and Warranties, No Default . The Borrower hereby represents and warrants that as of the Amendment No. 1 Effective Date (as defined below), after giving effect to this Amendment, (i) no Default or Event of Default exists and is continuing and (ii) all representations and warranties contained in the Credit Agreement are true and correct in all material respects on and as of the date hereof, as though made on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an


earlier date, in which case they were true and correct in all material respects as of such earlier date ( provided that representations and warranties that are qualified by materiality are true and correct (after giving effect to any qualification thereof) in all respects on and as of the date hereof or as of the specifically referenced earlier date, as the case may be).

Section 3. Effectiveness . This Amendment shall become effective on the date (such date, the “ Amendment No. 1 Effective Date ”) that the following conditions have been satisfied:

(i) Consents . The Administrative Agent shall have received executed signature pages hereto from Lenders constituting the Required Lenders and each Loan Party;

(ii) Additional Term B Joinder Agreement . The Administrative Agent, the Borrower and the Additional Term B Lender (as defined in Exhibit A ) shall have entered into the Additional Term B Joinder Agreement (as defined in Exhibit A );

(iii) Fees . The Administrative Agent shall have received all fees required to be paid, and all expenses required to be paid or reimbursed under Section 10.04(a) of the Credit Agreement for which invoices have been presented a reasonable period of time prior to the Amendment No. 1 Effective Date;

(iv) Legal Opinions . The Administrative Agent shall have received a favorable legal opinion of Simpson Thacher & Bartlett LLP, counsel to the Loan Parties, covering such matters as the Administrative Agent may reasonably request and otherwise reasonably satisfactory to the Administrative Agent;

(v) Officer’s Certificate . The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower dated the Amendment No. 1 Effective Date certifying that (a) all representations and warranties shall be true and correct in all material respects on and as of the Amendment No. 1 Effective Date (although any representations and warranties which expressly relate to a given date or period shall be required to be true and correct in all material respects as of the respective date or for the respective period, as the case may be), before and after giving effect to this Amendment, as though made on and as of such date and (b) no Default, shall have occurred and be continuing; and

(vi) Closing Certificates . The Administrative Agent shall have received (i) a copy of the certificate or articles of incorporation or organization, including all amendments thereto, of each Loan Party, certified, if applicable, as of a recent date by the Secretary of State of the state of its organization, and a certificate as to the good standing (where relevant) of each Loan Party as of a recent date, from such Secretary of State or similar Governmental Authority (or a certification from each Loan Party that there have been no changes to the certificate or articles of incorporation or organization, including all amendments thereto, that were delivered to the Administrative Agent on the

 

-2-


Closing Date) and (ii) a certificate of a Responsible Officer of each Loan Party dated the Amendment No. 1 Effective Date and certifying (A) that attached thereto is a true and complete copy of the by-laws or operating (or limited liability company) agreement of such Loan Party as in effect on the Amendment No. 1 Effective Date (or a certification from each Loan Party that there have been no changes to the by-laws or operating (or limited liability company) agreement, including all amendments thereto, that were delivered to the Administrative Agent on the Closing Date), (B) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or equivalent governing body) of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Person is a party and, in the case of the Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, and (C) as to the incumbency and specimen signature of each officer executing any Loan Document on behalf of such Loan Party and countersigned by another officer as to the incumbency and specimen signature of a Responsible Officer executing the certificate pursuant to clause (ii) above.

(vii) Real Estate Matters . The Administrative Agent shall have received a completed “Life-of-Loan” Federal Emergency Management Agency standard flood hazard determination with respect to each improved Mortgaged Property (together with a notice about special flood hazard area status and flood disaster assistance duly executed by the applicable Loan Party relating thereto) and, with respect to any Mortgaged Property on which any “building” (as defined in the Flood Insurance Laws) is located in a special flood hazard area, evidence of flood insurance as and to the extent required under Section 6.07(c) of the Credit Agreement.

Section 4. Post-Closing Covenant . Within 60 days after the Amendment No. 1 Effective Date (or such later date as the Administrative Agent may agree in its sole discretion), the Loan Parties will take any actions deemed reasonably advisable (including based on the advice of counsel (which may be counsel to a Loan Party)) by the Administrative Agent or Collateral Agent due to this Amendment to preserve or continue the perfection of liens and security interests granted prior to the date hereof securing the Obligations, including without limitation any amendments to real property mortgages, date-down or modification endorsements to the title policies insuring such mortgages (to the extent available in the applicable jurisdictions at commercially reasonable rates) and/or title searches, and opinions of counsel with respect thereto.

Section 5. Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or any other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

Section 6. Applicable Law .

 

-3-


(a) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AMENDMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AMENDMENT, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND BY EXECUTION AND DELIVERY OF THIS AMENDMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS , WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AMENDMENT OR ANY OTHER DOCUMENT RELATED HERETO. EACH PARTY HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

Section 7. Headings . The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

Section 8. Effect of Amendment . Except as expressly set forth herein, (i) this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative Agent or the Collateral Agent, in each case under the Credit Agreement or any other Loan Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of either such agreement or any other Loan Document. Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement or any other Loan Document is hereby ratified and re-affirmed in all respects and shall continue in full force and effect. Each Loan Party reaffirms its obligations under the Loan Documents to which it is party and the validity of the Liens granted by it pursuant to the Security Documents. This Amendment shall constitute a Loan Document for purposes of the Credit Agreement and from and after the Amendment No. 1 Effective Date, all references to the Credit Agreement in any Loan Document and all references in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, shall, unless expressly provided otherwise, refer to the Credit Agreement as amended by this Amendment. Each of the Loan Parties hereby consents to this Amendment and confirms that all obligations of such Loan Party under the Loan Documents to which such Loan Party is a party shall continue to apply to the Credit Agreement as amended hereby.

 

-4-


Section 9. WAIVER OF RIGHT TO TRIAL BY JURY .

THE PARTIES HERETO EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AMENDMENT IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AMENDMENT OR ANY PROVISION HEREOF.

 

-5-


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

 

[FORM OF SIGNATURE PAGE]
By:    
  Name:
  Title:

 

-6-


[FORM OF LENDER SIGNATURE PAGE; LENDER SIGNATURE PAGES ON FILE WITH

THE ADMINISTRATIVE AGENT]

The undersigned Lender hereby consents to this Amendment and to its Original Term Loans, if any, being converted to Term B Loans on the Amendment No. 1 Effective Date as set forth below:

Conversion of all Original Term Loans

 

  ¨ to convert 100% of the outstanding principal amount of the Original Term Loan held by such Lender into a Term B Loan in a like principal amount.

 

   

Existing principal amount of Original Term Loans held by the undersigned Lender immediately prior to the Amendment No. 1 Effective Date: $            . 1

 

                                                                                        ,

(Name of Institution)
By:  

 

  Name:
  Title:
[If a second signature is necessary:
By:  

 

  Name:
  Title:]

 

1  

For informational purposes only.

 

-7-

Exhibit 10.3

TRANCHE A REVOLVING CREDIT COMMITMENT CONVERSION AGREEMENT , dated as of February 11, 2013 (this “ Conversion Agreement ”), under the Credit Agreement dated as of January 30, 2012, among SUMMIT MATERIALS, LLC, a Delaware limited liability company (the “ Borrower ”), the Guarantors party thereto, the several banks and other financial institutions or entities from time to time parties to the Credit Agreement (the “ Lenders ”), BANK OF AMERICA, N.A., as Administrative Agent (the “ Administrative Agent ”), Collateral Agent, L/C Issuer and Swing Line Lender and the other parties thereto (as amended by Amendment No. 1 dated as of February 5, 2013 and as further amended, restated, modified and supplemented from time to time, the “ Credit Agreement ”); capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

WHEREAS, the Credit Agreement provides that pursuant to a Tranche A Revolving Credit Commitment Conversion Agreement, Revolving Credit Lenders may convert their Revolving Credit Commitments outstanding on the Amendment No. 1 Effective Date to Tranche A Revolving Credit Commitments;

WHEREAS, each Revolving Credit Lender party hereto has agreed, on the terms and conditions set forth herein, to have its existing Revolving Credit Commitment converted into a like principal amount of a Tranche A Revolving Credit Commitment) effective as of the Tranche A Revolving Credit Commitment Effective Date (as defined below);

NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

Section 1. Amendment . Effective as of the Tranche A Revolving Credit Commitment Effective Date (as defined below), the Revolving Credit Commitment of each Revolving Credit Lender party hereto shall be converted to a Tranche A Revolving Credit Commitment in the amount set forth on Schedule I hereto opposite such Revolving Credit Lender’s name.

Section 2. Representations and Warranties, No Default . The Borrower hereby represents and warrants that as of the Tranche A Revolving Credit Commitment Effective Date, after giving effect to this Conversion Agreement, (i) no Default or Event of Default exists and is continuing and (ii) all representations and warranties contained in the Credit Agreement are true and correct in all material respects on and as of the date hereof, as though made on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects as of such earlier date ( provided that representations and warranties that are qualified by materiality are true and correct (after giving effect to any qualification thereof) in all respects on and as of the date hereof or as of the specifically referenced earlier date, as the case may be).

 

-1-


Section 3. Effectiveness . This Conversion Agreement shall become effective on the date (such date, the “ Tranche A Revolving Credit Commitment Effective Date ”) that the following conditions have been satisfied:

(i) Consents . The Administrative Agent shall have received executed signature pages hereto from the Borrower, the Administrative Agent and each Revolving Credit Lender listed on Schedule I hereto;

(ii) Fees . The Administrative Agent shall have received (i) an upfront fee payable in Dollars for the account of each Revolving Credit Lender party hereto in an amount equal to 0.15% of the aggregate principal amount of such Revolving Credit Lender’s Tranche A Revolving Credit Commitment established pursuant to this Conversion Agreement and (ii) all fees required to be paid, and all expenses required to be paid or reimbursed under Section 10.04(a) of the Credit Agreement for which invoices have been presented a reasonable period of time prior to the Tranche A Revolving Credit Commitment Effective Date;

Section 4. Counterparts . This Conversion Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Conversion Agreement by facsimile or any other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

Section 5. Applicable Law .

(a) THIS CONVERSION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS CONVERSION AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS CONVERSION AGREEMENT, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND BY EXECUTION AND DELIVERY OF THIS CONVERSION AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS , WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS CONVERSION AGREEMENT OR ANY OTHER DOCUMENT RELATED

 

-2-


HERETO. EACH PARTY HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

Section 6. Headings . The headings of this Conversion Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

Section 7. Effect of Conversion . Except as expressly set forth herein, (i) this Conversion Agreement shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative Agent or the Collateral Agent, in each case under the Credit Agreement or any other Loan Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of either such agreement or any other Loan Document. Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement or any other Loan Document is hereby ratified and re-affirmed in all respects and shall continue in full force and effect. Each Loan Party reaffirms its obligations under the Loan Documents to which it is party and the validity of the Liens granted by it pursuant to the Security Documents. This Conversion Agreement shall constitute a Loan Document for purposes of the Credit Agreement and from and after the Tranche A Revolving Credit Commitment Effective Date, all references to the Credit Agreement in any Loan Document and all references in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, shall, unless expressly provided otherwise, refer to the Credit Agreement as amended by this Conversion Agreement. Each of the Loan Parties hereby consents to this Conversion Agreement and confirms that all obligations of such Loan Party under the Loan Documents to which such Loan Party is a party shall continue to apply to the Credit Agreement as amended hereby.

Section 8. WAIVER OF RIGHT TO TRIAL BY JURY .

THE PARTIES HERETO EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS CONVERSION AGREEMENT IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS CONVERSION AGREEMENT OR ANY PROVISION HEREOF.

.

 

-3-


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

 

[FORM OF SIGNATURE PAGE]
By:  

 

  Name:
  Title:

 

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Schedule I

 

Total Revolving Credit Commitment to be converted to Tranche A Revolving Credit Commitment

   $ 131,000,000   

[ALLOCATIONS ON FILE WITH THE ADMINISTRATIVE AGENT]

 

-5-

Exhibit 10.4

 

 

SECURITY AGREEMENT

dated as of

January 30, 2012

among

THE GRANTORS IDENTIFIED HEREIN

and

BANK OF AMERICA, N.A.,

as Collateral Agent

 

 


TABLE OF CONTENTS

 

         Page  
  ARTICLE I   
  DEFINITIONS   
Section 1.01   Credit Agreement      1   
Section 1.02   Other Defined Terms      1   
  ARTICLE II   
  PLEDGE OF SECURITIES   
Section 2.01   Pledge      5   
Section 2.02   Delivery of the Pledged Securities      6   
Section 2.03   Representations, Warranties and Covenants      6   
Section 2.04   Certification of Limited Liability Company and Limited Partnership Interests      8   
Section 2.05   Registration in Nominee Name; Denominations      8   
Section 2.06   Voting Rights; Dividends and Interest      8   
  ARTICLE III   
  SECURITY INTERESTS IN PERSONAL PROPERTY   
Section 3.01   Security Interest      10   
Section 3.02   Representations and Warranties      12   
Section 3.03   Covenants      13   
  ARTICLE IV   
  REMEDIES   
Section 4.01   Remedies Upon Default      15   
Section 4.02   Application of Proceeds      16   
Section 4.03   Grant of License to Use Intellectual Property      17   
  ARTICLE V   
  SUBORDINATION   
Section 5.01   Subordination      17   


  ARTICLE VI   
  MISCELLANEOUS   
Section 6.01   Notices      18   
Section 6.02   Waivers; Amendment      18   
Section 6.03   Collateral Agent’s Fees and Expenses; Indemnification      18   
Section 6.04   Successors and Assigns      18   
Section 6.05   Survival of Agreement      19   
Section 6.06   Counterparts; Effectiveness; Several Agreement      19   
Section 6.07   Severability      19   
Section 6.08   Right of Set-Off      19   
Section 6.09   Governing Law; Jurisdiction; Venue; Waiver of Jury Trial; Consent to Service of Process      20   
Section 6.10   Headings      20   
Section 6.11   Security Interest Absolute      20   
Section 6.12   Termination or Release      20   
Section 6.13   Additional Grantors      21   
Section 6.14   Collateral Agent Appointed Attorney-in-Fact      21   
Section 6.15   General Authority of the Collateral Agent      22   
Section 6.16   Reasonable Care      22   
Section 6.17   Delegation; Limitation      22   
Section 6.18   Reinstatement      22   
Section 6.19   Miscellaneous      23   

Schedule I Subsidiary Parties

Schedule II Pledged Equity and Pledged Debt

Schedule III Commercial Tort Claims

Exhibits

 

Exhibit I    Form of Security Agreement Supplement
Exhibit II    Form of Perfection Certificate
Exhibit III    Form of Patent Security Agreement
Exhibit IV    Form of Trademark Security Agreement
Exhibit V    Form of Copyright Security Agreement

 

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SECURITY AGREEMENT dated as of January 30, 2012, among the Grantors (as defined below) and Bank of America, N.A., as Collateral Agent for the Secured Parties (in such capacity, the “ Collateral Agent ”).

Reference is made to the Credit Agreement dated as of January 30, 2012 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Summit Materials, LLC, a Delaware limited liability company (the “ Borrower ”), certain other Guarantors from time to time party thereto, Bank of America, N.A., as Administrative Agent and Collateral Agent, each lender from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), Bank of America, N.A., as L/C Issuer and Swing Line Lender, and the other agents named therein. The Lenders have agreed to extend credit to the Borrower subject to the terms and conditions set forth in the Credit Agreement. The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement. Holdings and the Subsidiary Parties are affiliates of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement, and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

Section 1.01 Credit Agreement .

(a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement. All terms defined in the UCC (as defined herein) and not defined in this Agreement have the meanings specified therein; the term “instrument” shall have the meaning specified in Article 9 of the UCC.

(b) The rules of construction specified in Article I of the Credit Agreement also apply to this Agreement.

Section 1.02 Other Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

“Account Debtor ” means any Person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.

Accounts ” has the meaning specified in Article 9 of the UCC.

Agreement ” means this Security Agreement.

Article 9 Collateral ” has the meaning assigned to such term in Section 3.01(a).

Borrower ” has the meaning assigned to such term in the recitals of this Agreement.

Collateral ” means the Article 9 Collateral and the Pledged Collateral.

Collateral Agent ” has the meaning assigned to such term in the recitals of the Agreement.


Commercial Tort Claims ” has the meaning specified in Article 9 of the UCC.

Copyright License ” means any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now owned or hereafter acquired by any Grantor or that such Grantor otherwise has the right to license, or granting any right to any Grantor under any Copyright now owned or hereafter acquired by any third party, and all rights of such Grantor under any such agreement.

Copyrights ” means all of the following now owned or hereafter acquired by any Person: (a) all copyright rights in any work subject to the copyright laws of the United States, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States, including registrations and pending applications for registration in the USCO.

Credit Agreement ” has the meaning assigned to such term in the preliminary statement of this Agreement.

Excluded Assets ” means:

(a) any General Intangible, Investment Property, Intellectual Property or rights of a Grantor with respect to any contract, lease, license or other agreement if (but only to the extent that) the grant of a security interest therein would (x) constitute a violation (including a breach or default) of, a restriction in respect of, or result in the abandonment, invalidation or unenforceability of, such General Intangible, Investment Property, Intellectual Property or rights in favor of a third party or in conflict with any law, regulation, permit, order or decree of any Governmental Authority, unless and until all required consents shall have been obtained (for the avoidance of doubt, the restrictions described herein shall not include negative pledges or similar undertakings in favor of a lender or other financial counterparty) or (y) expressly give any other party (other than another Grantor or its Affiliates) in respect of any such contract, lease, license or other agreement, the right to terminate its obligations thereunder, provided , however , that the limitation set forth in this clause (a) shall not affect, limit, restrict or impair the grant by a Grantor of a security interest pursuant to this Agreement in any such Collateral to the extent that an otherwise applicable prohibition or restriction on such grant is rendered ineffective by any applicable Law, including the UCC; provided , further, that, at such time as the condition causing the conditions in subclauses (x) and (y) of this clause (a) shall be remedied, whether by contract, change of law or otherwise, the contract, lease, instrument, license or other documents shall immediately cease to be an Excluded Asset, and any security interest that would otherwise be granted herein shall attach immediately to such contract, lease, instrument, license or other agreement, or to the extent severable, to any portion thereof that does not result in any of the conditions in subclauses (x) or (y) above;

(b) any assets to the extent and for so long as (i) the pledge of or security interest in such assets is prohibited by law and such prohibition is not overridden by the UCC or other applicable law or (ii) the grant of such security interest would require governmental consent, approval, license or authorization (except that the cash Proceeds of dispositions thereof in accordance with applicable law, including, without limitation, rules and regulations of any governmental authority or agency shall not be an Excluded Asset);

(c) motor vehicles and other assets subject to certificates of title, letters of credit with a face value of less than $5,000,000 and commercial tort claims where the amount of damages claimed by the applicable Grantor is less than $5,000,000, the perfection of a security interest in which cannot be perfected through the filing of financing statements under the UCC in the relevant jurisdiction;

 

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(d) Margin Stock;

(e) Excluded Security;

(f) any Intellectual Property to the extent that the attachment of the security interest of this Agreement thereto, or any assignment thereof, would result in the forfeiture, cancellation, invalidation, unenforceability, or other loss of the Grantors’ rights in such property including, without limitation, any License pursuant to which Grantor is licensee under terms which prohibit the granting of a security interest or under which granting such an interest would give rise to a breach or default by Grantor, and any Trademark applications filed in the USPTO on the basis of such Grantor’s “intent-to-use” such Trademark, unless and until acceptable evidence of use of such Trademark has been filed with and accepted by the USPTO pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), to the extent that granting a lien in such Trademark application prior to such filing would adversely affect the enforceability, validity, or other rights in such Trademark application;

(g) assets (including Equity Interests) owned by any Grantor on the date hereof or hereafter acquired that are subject to (A) a Lien of the type described in Section 7.01 (u), (w) and (aa) (to the extent relating to Liens originally incurred pursuant to Section 7.01(u) or (w)) of the Credit Agreement that is permitted to be incurred pursuant to the provisions of the Credit Agreement or (B) a contract or agreement permitted under clauses (i) or (xii) of the proviso to Section 7.09 of the Credit Agreement, in each case, if and to the extent that the contract or other agreement pursuant to which such Lien is granted or to which such assets are subject (or the documentation relating thereto) prohibits the creation of any other Lien on such asset;

(h) any particular assets if, in the reasonable judgment of the Borrower evidenced in writing and with the consent of the Administrative Agent (not to be unreasonably withheld or delayed), creating a pledge thereof or security interest therein to the Collateral Agent for the benefit of the Secured Parties would result in any material adverse tax consequences to the Borrower or its Subsidiaries; and

(i) any particular assets if, in the reasonable judgment of the Administrative Agent, determined in consultation with the Borrower and evidenced in writing, the burden, cost or consequence (including any material adverse tax consequences) to the Borrower or its Subsidiaries of creating or perfecting such pledges or security interests in such assets in favor of the Collateral Agent for the benefit of the Secured Parties is excessive in relation to the benefits to be obtained therefrom by the Secured Parties.

Excluded Security ” means

(a) more than 65% of the issued and outstanding Equity Interests of any Foreign Subsidiary;

(b) more than 65% of the issued and outstanding Equity Interests of any Domestic Subsidiary that is a disregarded entity under the Code if substantially all of its assets consist of the Equity Interests of one or more Subsidiaries that are controlled foreign corporations within the meaning of Section 957 of the Code;

(c) any interest in a joint venture or Excluded Subsidiary to the extent the granting of a security interest therein is prohibited by the terms of the Organizational Documents of such joint venture or Excluded Subsidiary;

(d) any Equity Interest of any Subsidiary the pledge of which is prohibited by applicable Law or by agreements permitted under the Credit Agreement containing anti-assignment clauses to the extent not over-ridden by the UCC or the pledge of which would require governmental (including regulatory) consent, approval, license or authorization;

 

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(e) any Equity Interest of any not-for-profit Subsidiaries; and

(f) any Equity Interest of any special purpose securitization vehicle or a captive insurance subsidiary.

General Intangibles ” has the meaning specified in Article 9 of the UCC.

Grantor ” means the Borrower, each Subsidiary Guarantor that is a party hereto, and each Subsidiary Guarantor that is a Domestic Subsidiary that becomes a party to this Agreement after the Closing Date.

Immaterial Subsidiary ” means any Subsidiary that does not have total assets or annual revenues in excess of 5.0% of Consolidated Total Assets of the Borrower and its Subsidiaries individually or in the aggregate with all other Immaterial Subsidiaries.

Intellectual Property ” means all intellectual property now owned or hereafter acquired by any Person, including inventions, designs, Patents, Copyrights, Trademarks, trade secrets, the intellectual property rights in software and databases and related documentation, and all additions and improvements to the foregoing.

Intellectual Property Security Agreements ” means the short-form Patent Security Agreement, short-form Trademark Security Agreement, and short-form Copyright Security Agreement, each substantially in the form attached hereto as Exhibits III, IV and V, respectively.

License ” means any Patent License, Trademark License, Copyright License or other Intellectual Property license or sublicense agreement to which any Grantor is a party, together with any and all (i) renewals, extensions, supplements and continuations thereof, (ii) income, fees, royalties, damages, claims and payments now and hereafter due and/or payable thereunder or with respect thereto including damages and payments for past, present or future infringements or violations thereof, and (iii) rights to sue for past, present and future violations thereof.

Patent License ” means any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a Patent, now owned or hereafter acquired by any Grantor or that any Grantor otherwise has the right to license, is in existence, or granting to any Grantor any right to make, use or sell any invention on which a Patent, now owned or hereafter acquired by any third party, is in existence, and all rights of any Grantor under any such agreement.

Patents ” means all of the following now owned or hereafter acquired by any Person: (a) all letters Patent of the United States in or to which any Grantor now or hereafter has any right, title or interest therein, all registrations thereof, and all applications for letters Patent of the United States, including registrations and pending applications in the USPTO, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.

Perfection Certificate ” means a certificate substantially in the form of Exhibit II, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by a Responsible Officer of the Borrower.

 

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Pledged Collateral ” has the meaning assigned to such term in Section 2.01.

Pledged Debt ” has the meaning assigned to such term in Section 2.01.

Pledged Equity ” has the meaning assigned to such term in Section 2.01.

Pledged Securities ” means the Pledged Equity and Pledged Debt.

Secured Obligations ” means the “Obligations” (as defined in the Credit Agreement).

Security Agreement Supplement ” means an instrument substantially in the form of Exhibit I hereto.

Security Interest ” has the meaning assigned to such term in Section 3.01.

Subsidiary Parties ” means (a) the Subsidiaries identified on Schedule I and (b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary Party after the Closing Date.

Trademark License ” means any written agreement, now or hereafter in effect, granting to any third party any right to use any trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any trademark now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.

Trademarks ” means all of the following now owned or hereafter acquired by any Person: (a) all trademarks, service marks, trade names, corporate names, trade dress, logos, designs, fictitious business names other source or business identifiers, now owned or hereafter acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the USPTO or any similar offices in any State of the United States or any jurisdiction thereof, and all extensions or renewals thereof, and (b) all goodwill associated therewith.

UCC ” means the Uniform Commercial Code as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.

USCO ” means the United States Copyright Office.

USPTO ” means the United States Patent and Trademark Office.

ARTICLE II

Pledge of Securities

Section 2.01 Pledge . As security for the payment or performance, as the case may be, in full of the Secured Obligations, including the Guarantees, each of the Grantors hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest in all of such Grantors’ right, title and interest in, to and under

(i) all Equity Interests held by it that are listed on Schedule II and any other Equity Interests obtained in the future by such Grantor and the certificates representing all such Equity

 

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Interests (the “ Pledged Equity ”) of (x) any Subsidiary that is not an Excluded Subsidiary and (y) Excluded Subsidiaries to the extent permitted by the terms of the Organizational Documents of such Excluded Subsidiaries; provided that the Pledged Equity shall not include (a) Excluded Assets and (b) the Equity Interests of an Immaterial Subsidiary;

(ii) (A) the debt securities owned by it and listed opposite the name of such Grantor on Schedule II , (B) any debt securities obtained in the future by such Grantor and (C) the promissory notes and any other instruments evidencing such debt securities (the “ Pledged Debt ”); provided that the Pledged Debt shall not include any Excluded Assets;

(iii) all other property that may be delivered to and held by the Collateral Agent pursuant to the terms of this Section 2.01;

(iv) subject to Section 2.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (i) and (ii) above;

(v) subject to Section 2.06, all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (i), (ii), (iii) and (iv) above; and

(vi) all Proceeds of any of the foregoing (the items referred to in clauses (i) through (v) above being collectively referred to as the “ Pledged Collateral ”).

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, forever, subject, however, to the terms, covenants and conditions hereinafter set forth.

Section 2.02 Delivery of the Pledged Securities .

(a) Each Grantor agrees promptly (but in any event within 30 days after receipt by such Grantor) to deliver or cause to be delivered to the Collateral Agent, for the benefit of the Secured Parties, any and all (i) Pledged Equity to the extent certificated and (ii) to the extent required to be delivered pursuant to paragraph (b) of this Section 2.02, Pledged Debt.

(b) Each Grantor will cause any Indebtedness for borrowed money having an aggregate principal amount in excess of $2,500,000 owed to such Grantor by any Person that is evidenced by a duly executed promissory note to be pledged and delivered to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the terms hereof.

(c) Upon delivery to the Collateral Agent, any Pledged Securities shall be accompanied by stock or security powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be deemed to supplement Schedule II and made a part hereof; provided that failure to supplement Schedule II shall not affect the validity of such pledge of such Pledged Security. Each schedule so delivered shall supplement any prior schedules so delivered.

Section 2.03 Representations, Warranties and Covenants . Each Grantor represents, warrants and covenants to and with the Collateral Agent, for the benefit of the Secured Parties, that:

(a) As of the date hereof, Schedule II includes all Equity Interests, debt securities and promissory notes required to be pledged by such Grantor hereunder in order to satisfy the Collateral and Guarantee Requirement;

 

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(b) the Pledged Equity issued by the Borrower or a Subsidiary have been duly and validly authorized and issued by the issuers thereof and are fully paid and nonassessable;

(c) except for the security interests granted hereunder, such Grantor (i) is, subject to any transfers made in compliance with the Credit Agreement, the direct owner, beneficially and of record, of the Pledged Equity indicated on Schedule II, (ii) holds the same free and clear of all Liens, other than Liens created by the Collateral Documents or permitted pursuant to Section 7.01 of the Credit Agreement, and (iii) if requested by the Collateral Agent, will defend its title or interest thereto or therein against any and all Liens (other than the Liens permitted pursuant to this Section 2.03(c)), however arising, of all Persons whomsoever;

(d) except for restrictions and limitations (i) imposed or permitted by the Loan Documents or securities laws generally or (ii) described in the Perfection Certificate, the Pledged Collateral is freely transferable and assignable, and none of the Pledged Collateral is subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect in any manner material and adverse to the Secured Parties the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;

(e) the execution and performance by the Grantors of this Agreement are within each Grantor’s corporate, limited liability or limited partnership powers and have been duly authorized by all necessary corporate, limited liability or limited partnership action or other organizational action;

(f) no consent or approval of any Governmental Authority, any securities exchange or any other Person was or is necessary to the validity of the pledge effected hereby, except for (i) filings and registrations necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties and (ii) the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect (except to the extent not required to be obtained, taken, given, or made or to be in full force and effect pursuant to the Collateral and Guarantee Requirement);

(g) by virtue of the execution and delivery by each Grantor of this Agreement, and delivery of the Pledged Securities to and continued possession by the Collateral Agent in the State of New York, the Collateral Agent for the benefit of the Secured Parties has a legal, valid and perfected lien upon and security interest in such Pledged Security as security for the payment and performance of the Secured Obligations to the extent such perfection is governed by the UCC; and

(h) the pledge effected hereby is effective to vest in the Collateral Agent, for the benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral to the extent intended hereby.

Subject to the terms of this Agreement and to the extent permitted by Applicable Law, each Grantor hereby agrees that upon the occurrence and during the continuance of an Event of Default, it will comply with instructions of the Collateral Agent with respect to the Equity Interests in such Grantor that constitute Pledged Equity hereunder that are not certificated without further consent by the applicable owner or holder of such Equity Interests.

 

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Notwithstanding anything to the contrary in this Agreement, to the extent any provision of this Agreement or the Credit Agreement excludes any assets from the scope of the Pledged Collateral, or from any requirement to take any action to perfect any security interest in favor of the Collateral Agent in the Pledged Collateral (including the Equity Interests of Immaterial Subsidiaries), the representations, warranties and covenants made by any relevant Grantor in this Agreement with respect to the creation, perfection or priority (as applicable) of the security interest granted in favor of the Collateral Agent (including, without limitation, this Section 2.03) shall be deemed not to apply to such excluded assets.

Section 2.04 Certification of Limited Liability Company and Limited Partnership Interests . No interest in any limited liability company or limited partnership controlled by any Grantor that constitutes Pledged Equity shall be represented by a certificate unless (i) the limited liability company agreement or partnership agreement expressly provides that such interests shall be a “security” within the meaning of Article 8 of the UCC of the applicable jurisdiction, and (ii) such certificate shall be delivered to the Collateral Agent in accordance with Section 2.02. Any limited liability company and any limited partnership controlled by any Grantor shall either (a) not include in its operative documents any provision that any Equity Interests in such limited liability company or such limited partnership be a “security” as defined under Article 8 of the Uniform Commercial Code or (b) certificate any Equity Interests in any such limited liability company or such limited partnership. To the extent an interest in any limited liability company or limited partnership controlled by any Grantor and pledged under Section 2.01 is certificated or becomes certificated, (i) each such certificate shall be delivered to the Collateral Agent, pursuant to Section 2.02(a) and (ii) such Grantor shall fulfill all other requirements under Section 2.02 applicable in respect thereof. Such Grantor hereby agrees that if any of the Pledged Collateral are at any time not evidenced by certificates of ownership, then each applicable Grantor shall, to the extent permitted by applicable law, if necessary or desirable to perfect a security interest in such Pledged Collateral, upon the reasonable request of the Collateral Agent, cause such pledge to be recorded on the equity holder register or the books of the issuer, execute any customary pledge forms or other documents necessary or appropriate to complete the pledge and give the Collateral Agent the right to transfer such Pledged Collateral under the terms hereof.

Section 2.05 Registration in Nominee Name; Denominations . If an Event of Default shall have occurred and be continuing and the Collateral Agent shall give the Borrower prior notice of its intent to exercise such rights, (a) the Collateral Agent, on behalf of the Secured Parties, shall have the right to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent and each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Equity registered in the name of such Grantor and (b) the Collateral Agent shall have the right to exchange the certificates representing Pledged Equity for certificates of smaller or larger denominations for any purpose consistent with this Agreement, to the extent permitted by the documentation governing such Pledged Securities.

Section 2.06 Voting Rights; Dividends and Interest .

(a) Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent shall have provided prior notice to the Borrower that the rights of the Grantors under this Section 2.06 are being suspended:

(i) Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof, and each Grantor agrees that it shall exercise such rights for purposes consistent with the terms of this Agreement, the Credit Agreement and the other Loan Documents;

 

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(ii) The Collateral Agent shall promptly (after reasonable advance notice) execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above; and

(iii) Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Credit Agreement, the other Loan Documents and applicable Laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent and the Secured Parties and shall be promptly (and in any event within 10 Business Days) delivered to the Collateral Agent in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent). So long as no Default or Event of Default has occurred and is continuing, the Collateral Agent shall promptly deliver to each Grantor any Pledged Securities in its possession if requested to be delivered to the issuer thereof in connection with any exchange or redemption of such Pledged Securities permitted by the Credit Agreement in accordance with this Section 2.06(a)(iii).

(b) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified the Borrower of the suspension of the Grantors’ rights under paragraph (a)(iii) of this Section 2.06, then all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section 2.06 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions. All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 2.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be promptly (and in any event within 10 days) delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 4.02. After all Events of Default have been cured or waived, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.06 and that remain in such account.

(c) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have provided the Borrower with notice of the suspension of the rights of the Grantors under paragraph (a)(i) of this Section 2.06, then, all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 2.06, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 2.06, shall cease, and all

 

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such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights. After all Events of Default have been cured or waived, each Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such Grantor would otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) above, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 2.06 shall be reinstated.

(d) Any notice given by the Collateral Agent to the Borrower under Section 2.05 or Section 2.06 (i) shall be given in writing, (ii) may be given with respect to one or more Grantors at the same or different times and (iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) of this Section 2.06 in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.

ARTICLE III

Security Interests in Personal Property

Section 3.01 Security Interest .

(a) As security for the payment or performance, as the case may be, in full of the Secured Obligations, including the Guarantees, each Grantor hereby collaterally assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest (the “ Security Interest ”) in, all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “ Article 9 Collateral ”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Documents;

(iv) all Equipment;

(v) all General Intangibles;

(vi) all Goods;

(vii) all Instruments;

(viii) all Inventory;

(ix) all Investment Property;

(x) all books and records pertaining to the Article 9 Collateral;

 

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(xi) all Fixtures;

(xii) all Letter of Credit and Letter-of-Credit Rights in excess of $5,000,000;

(xiii) all Intellectual Property;

(xiv) all Commercial Tort Claims listed on Schedule III and on any supplement thereto received by the Collateral Agent pursuant to Section 3.03(g); and

(xv) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all supporting obligations, collateral security and guarantees given by any Person with respect to any of the foregoing;

provided that, notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute a grant of a security interest in any Excluded Asset.

(b) Subject to Section 3.01(e), each Grantor hereby irrevocably authorizes the Collateral Agent for the benefit of the Secured Parties at any time and from time to time to file in any relevant jurisdiction any initial financing statements with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) indicate the Article 9 Collateral as “all assets” or “all personal property” of such Grantor or words of similar effect as being of an equal or lesser scope or with greater detail and (ii) contain the information required by Article 9 of the UCC or the analogous legislation of each applicable jurisdiction for the filing of any financing statement or amendment, including whether such Grantor is an organization, the type of organization and, if required, any organizational identification number issued to such Grantor. Each Grantor agrees to provide such information to the Collateral Agent promptly upon any reasonable request.

(c) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral.

(d) The Collateral Agent is authorized to file with the USPTO or the USCO (or any successor office) such documents executed by any Grantor as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest in United States registered and applied for Intellectual Property of each Grantor in which a security interest has been granted by each Grantor and naming any Grantor or the Grantor as debtors and the Collateral Agent as secured party.

(e) Notwithstanding anything to the contrary in the Loan Documents, none of the Grantors shall be required, nor is the Collateral Agent authorized, (i) to perfect the Security Interests granted by this Security Agreement (including Security Interests in Investment Property and Fixtures) by any means other than by (A) filings pursuant to the Uniform Commercial Code in the office of the secretary of state (or similar central filing office) of the relevant State(s), and filings in the applicable real estate records with respect to any fixtures relating to Mortgaged Property, (B) filings in United States government offices with respect to United States registered and applied for Intellectual Property of Grantor as expressly required elsewhere herein, (C) delivery to the Collateral Agent to be held in its possession of all Collateral consisting of Instruments as expressly required elsewhere herein or (D) other methods expressly provided herein, (ii) to enter into any deposit account control agreement, securities account control agreement or any other control agreement with respect to any deposit account, securities account or any other Collateral that requires perfection by “control”, (iii) to take any action (other than the actions listed in clause (i)(A) and (C) above) with respect to any assets located outside of the United States, (iv) to perfect in any assets subject to a certificate of title statute or (v) to deliver any Equity Interests except as expressly provided in Section 2.02.

 

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Section 3.02 Representations and Warranties . Each Grantor represents and warrants to the Collateral Agent and the Secured Parties that:

(a) Subject to Liens permitted by Section 7.01 of the Credit Agreement, each Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Collateral Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval that has been obtained.

(b) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein is correct and complete in all material respects (except the information therein with respect to the exact legal name of each Grantor shall be correct and complete in all respects) as of the Closing Date. Subject to Section 3.01(e), the UCC financing statements or other appropriate filings, recordings or registrations prepared by the Collateral Agent based upon the information provided to the Collateral Agent in the Perfection Certificate for filing in the applicable filing office (or specified by notice from the Borrower to the Collateral Agent after the Closing Date in the case of filings, recordings or registrations (other than filings required to be made in the USPTO and the USCO in order to perfect the Security Interest in Article 9 Collateral consisting of United States registered and applied for Patents, Trademarks and Copyrights), in each case, as required by Section 6.11 of the Credit Agreement), are all the filings, recordings and registrations that are necessary to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the Uniform Commercial Code, and no further or subsequent filing, re-filing, recording, rerecording, registration or re-registration is necessary in any such jurisdiction, except as provided under applicable Law with respect to the filing of continuation statements.

(c) Each Grantor represents and warrants that short-form Intellectual Property Security Agreements substantially in the form attached hereto as Exhibits III, IV and V and containing a description of all Article 9 Collateral consisting of material United States registered and applied for Patents, United States registered Trademarks (and Trademarks for which United States registration applications are pending, unless it constitutes an Excluded Asset) and United States registered Copyrights, respectively, have been delivered to the Collateral Agent for recording by the USPTO and the USCO pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, (for the benefit of the Secured Parties) in respect of all Article 9 Collateral consisting of registrations and applications for United States Patents, Trademarks and Copyrights. To the extent a security interest may be perfected by filing, recording or registration in USPTO or USCO under the Federal intellectual property laws, then no further or subsequent filing, re-filing, recording, rerecording, registration or re-registration is necessary (other than (i) such filings and actions as are necessary to perfect the Security Interest with respect to any Article 9 Collateral consisting of United States registered and applied for Patents, Trademarks and Copyrights acquired or developed by any Grantor after the date hereof and (ii) the UCC financing and continuation statements contemplated in Section 3.02(b)).

(d) The Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral securing the payment and performance of the Secured Obligations and (ii) subject to the filings described in Section 3.02(b), a perfected security interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous

 

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document in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the Uniform Commercial Code in the relevant jurisdiction. Subject to Section 3.01(e) of this Agreement, the Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral, other than (i) any statutory or similar Lien that has priority as a matter of Law and (ii) any Liens expressly permitted pursuant to Section 7.01 of the Credit Agreement.

(e) The Article 9 Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 7.01 of the Credit Agreement. None of the Grantors has filed or consented to the filing of (i) any financing statement or analogous document under the Uniform Commercial Code or any other applicable Laws covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any Article 9 Collateral owned by any Grantor or any security agreement or similar instrument covering any Article 9 Collateral owned by any Grantor with the USPTO or the USCO, or (iii) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 7.01 of the Credit Agreement and assignments permitted by the Credit Agreement.

(f) As of the date hereof, no Grantor has any Commercial Tort Claim in excess of $5,000,000, other than the Commercial Tort Claims listed on Schedule III.

Section 3.03 Covenants .

(a) The Borrower agrees to notify the Collateral Agent in writing promptly, but in any event within 60 days, after any change in (i) the legal name of any Grantor, (ii) the identity or type of organization or corporate structure of any Grantor or (iii) the jurisdiction of organization of any Grantor.

(b) Subject to Section 3.01(e), each Grantor shall, at its own expense, upon the reasonable request of the Collateral Agent, take any and all commercially reasonable actions necessary to defend title to the Article 9 Collateral against all Persons and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 7.01 of the Credit Agreement; provided that, nothing in this Agreement shall prevent any Grantor from discontinuing the operation or maintenance of any of its assets or properties if such discontinuance is (x) determined by such Grantor to be desirable in the conduct of its business and (y) permitted by the Credit Agreement.

(c) Subject to Section 3.01(e), each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Article 9 Collateral that is in excess of $2,500,000 shall be or become evidenced by any promissory note, other instrument or debt security, such note, instrument or debt security shall be promptly (and in any event within 30 days of its acquisition) pledged and delivered to the Collateral Agent, for the benefit of the Secured Parties, duly endorsed in a manner reasonably satisfactory to the Collateral Agent.

(d) At its option, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not permitted pursuant to Section 7.01 of the Credit Agreement, and may pay for the

 

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maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Credit Agreement or any other Loan Document and within a reasonable period of time after the Collateral Agent has requested that it do so, and each Grantor jointly and severally agrees to reimburse the Collateral Agent within 10 Business Days after demand for any payment made or any reasonable expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided , however , the Grantors shall not be obligated to reimburse the Collateral Agent with respect to any Intellectual Property that any Grantor has failed to maintain or pursue, or otherwise allowed to lapse, terminate or be put into the public domain in accordance with Section 3.03(f)(iv). Nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents.

(e) If at any time any Grantor shall take a security interest in any property of an Account Debtor or any other Person, the value of which is in excess of $2,500,000 to secure payment and performance of an Account, such Grantor shall promptly assign such security interest to the Collateral Agent for the benefit of the Secured Parties. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other Person granting the security interest.

(f) Intellectual Property Covenants .

(i) Other than to the extent not prohibited herein or in the Credit Agreement or with respect to registrations and applications no longer used or useful, except to the extent failure to act would not, as deemed by the applicable Grantor in its reasonable business judgment, reasonably be expected to have a Material Adverse Effect, with respect to registration or pending application of each item of its Intellectual Property for which such Grantor has standing to do so, each Grantor agrees to take, at its expense, all reasonable steps, including, without limitation, in the USPTO, the USCO and any other governmental authority located in the United States, to pursue the registration and maintenance of each Patent, Trademark, or Copyright registration or application, now or hereafter included in the Intellectual Property of such Grantor that are not Excluded Assets.

(ii) Other than to the extent not prohibited herein or in the Credit Agreement, or with respect to registrations and applications no longer used or useful, or except as would not, as deemed by the applicable Grantor in its reasonable business judgment, reasonably be expected to have a Material Adverse Effect, no Grantor shall do or permit any act or knowingly omit to do any act whereby any of its Intellectual Property, excluding Excluded Assets, may prematurely lapse, be terminated, or become invalid or unenforceable or placed in the public domain (or in the case of a trade secret, become publicly known).

(iii) Other than as excluded or as not prohibited herein or in the Credit Agreement, or with respect to Patents, Copyrights or Trademarks which are no longer used or useful in the applicable Grantor’s business operations or except where failure to do so would not, as deemed by the applicable Grantor in its reasonable business judgment, reasonably be expected to have a Material Adverse Effect, each Grantor shall take all reasonable steps to preserve and enforce each item of its Intellectual Property, including, without limitation, maintaining the quality of any and all products or services used or provided in connection with any of the Trademarks, consistent with the quality of the products and services as of the date hereof, and taking reasonable steps necessary to ensure that all licensed users of any of the material Trademarks abide by the applicable license’s terms with respect to standards of quality.

 

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(iv) Notwithstanding any other provision of this Agreement, nothing in this Agreement or any other Loan Document prevents or shall be deemed to prevent any Grantor from disposing of, discontinuing the use or maintenance of, failing to pursue, or otherwise allowing to lapse, expire, terminate or be put into the public domain, any of its Intellectual Property to the extent permitted by the Credit Agreement if such Grantor determines in its reasonable business judgment that such discontinuance is desirable in the conduct of its business.

(v) Within 30 days after each March 31 and September 30, the Borrower shall provide a list of any additional registrations of Intellectual Property of all Grantors with the USPTO and USCO not previously disclosed to the Collateral Agent including such information as is necessary for such Grantor to make appropriate filings in the USPTO and USCO.

(g) Commercial Tort Claims . If the Grantors shall at any time hold or acquire a Commercial Tort Claim in an amount reasonably estimated by such Grantor to exceed $5,000,000 for which this clause has not been satisfied and for which a complaint in a court of competent jurisdiction has been filed, such Grantor shall within 45 days after the end of the fiscal quarter in which such complaint was filed notify the Collateral Agent thereof in a writing signed by such Grantor including a summary description of such claim and grant to the Collateral Agent, for the benefit of the Secured Parties, in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement.

ARTICLE IV

Remedies

Section 4.01 Remedies Upon Default . Upon the occurrence and during the continuance of an Event of Default, it is agreed that the Collateral Agent shall have the right to exercise any and all rights afforded to a secured party with respect to the Secured Obligations, including the Guarantees, under the Uniform Commercial Code or other applicable Law and also may (i) require each Grantor to, and each Grantor agrees that it will at its expense and upon request of the Collateral Agent promptly, assemble all or part of the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place and time to be designated by the Collateral Agent that is reasonably convenient to both parties; (ii) occupy any premises owned or, to the extent lawful and permitted, leased by any of the Grantors where the Collateral or any part thereof is assembled or located for a reasonable period in order to effectuate its rights and remedies hereunder or under Law, without obligation to such Grantor in respect of such occupation; provided that the Collateral Agent shall provide the applicable Grantor with notice thereof prior to such occupancy; (iii) exercise any and all rights and remedies of any of the Grantors under or in connection with the Collateral, or otherwise in respect of the Collateral; provided that the Collateral Agent shall provide the applicable Grantor with notice thereof prior to such exercise; and (iv) subject to the mandatory requirements of applicable Law and the notice requirements described below, sell or otherwise dispose of all or any part of the Collateral securing the Secured Obligations at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at any such sale of securities (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any sale of Collateral shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by Law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any Law now existing or hereafter enacted.

 

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The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the UCC or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by Law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by Law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by Law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Secured Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at Law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 4.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the UCC or its equivalent in other jurisdictions.

Section 4.02 Application of Proceeds . The Collateral Agent shall apply the proceeds of any collection or sale of Collateral, including any Collateral consisting of cash in accordance with Section 8.04 of the Credit Agreement.

The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.

 

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The Collateral Agent shall have no liability to any of the Secured Parties for actions taken in reliance on information supplied to it as to the amounts of unpaid principal and interest and other amounts outstanding with respect to the Secured Obligations, provided that nothing in this sentence shall prevent any Grantor from contesting any amounts claimed by any Secured Party in any information so supplied. All distributions made by the Collateral Agent pursuant to this Section 4.02 shall be (subject to any decree of any court of competent jurisdiction) final (absent manifest error), and the Collateral Agent shall have no duty to inquire as to the application by the Administrative Agent of any amounts distributed to it.

Section 4.03 Grant of License to Use Intellectual Property . For the exclusive purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies at any time after and during the continuance of an Event of Default, each Grantor hereby grants to the Collateral Agent a non-exclusive, royalty-free, limited license (until the termination or cure of the Event of Default) to use, license or, solely to the extent necessary to exercise those rights and remedies, sublicense any of the Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same are located, and including in such license necessary access to media in which such licensed items are recorded or stored and to computer software and programs used for the compilation or printout thereof; provided , however , that all of the foregoing rights of the Collateral Agent to use such licenses, sublicenses and other rights, and (to the extent permitted by the terms of such licenses and sublicenses) all licenses and sublicenses granted thereunder, shall expire immediately upon the termination or cure of all Events of Default and shall be exercised by the Collateral Agent solely during the continuance of an Event of Default and upon 10 Business Days’ prior written notice to the applicable Grantor; provided, further , that nothing in this Section 4.03 shall require Grantors to grant any license that is prohibited by any rule of law, statute or regulation, or is prohibited by, or constitutes a breach or default under or results in the termination of or gives rise to any right of cancellation under any contract, license, agreement, instrument or other document evidencing, giving rise to or theretofore granted, to the extent permitted by the Credit Agreement, with respect to such property or otherwise prejudices the value thereof to the relevant Grantor; provided , further , that such licenses granted hereunder with respect to Trademarks material to the business of such Grantor shall be subject to restrictions, including, without limitation restrictions as to goods or services associated with such Trademarks and the maintenance of quality standards with respect to the goods and services on which such Trademarks are used, sufficient to preserve the validity and value of such Trademarks. For the avoidance of doubt, the use of such license by the Collateral Agent may be exercised, at the option of the Collateral Agent, only during the continuation of an Event of Default and upon 10 Business Days’ prior written notice to the applicable Grantor. Upon the occurrence and during the continuance of an Event of Default and upon 10 Business Days’ prior written notice to the applicable Grantor , the Collateral Agent may also exercise the rights afforded under Section 4.01 of this Agreement with respect to Intellectual Property contained in the Article 9 Collateral.

ARTICLE V

Subordination

Section 5.01 Subordination .

(a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Grantors of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the payment in full in cash of the Secured Obligations. No failure on the part of the Borrower or any Grantor to make the payments required under applicable law or otherwise shall in any respect limit the obligations and liabilities of any Grantor with respect to its obligations hereunder, and each Grantor shall remain liable for the full amount of the obligations of such Grantor hereunder.

(b) Each Grantor hereby agrees that upon the occurrence and during the continuance of an Event of Default and after notice from the Collateral Agent, all Indebtedness owed to it by any other Grantor shall be fully subordinated to the payment in full in cash of the Secured Obligations.

 

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ARTICLE VI

Miscellaneous

Section 6.01 Notices . All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit Agreement. All communications and notices hereunder to the Borrower or any other Grantor shall be given to it in care of the Borrower as provided in Section 10.02 of the Credit Agreement.

Section 6.02 Waivers; Amendment .

(a) No failure or delay by any Secured Party in exercising any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges of the Secured Parties herein provided, and provided under each other Loan Document, are cumulative and are not exclusive of any rights, remedies, powers and privileges provided by Law. No waiver of any provision of this Agreement or consent to any departure by any Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 6.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan, the issuance of a Letter of Credit or the provision of services under Cash Management Obligations or Secured Hedge Agreements shall not be construed as a waiver of any Default, regardless of whether any Secured Party may have had notice or knowledge of such Default at the time.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 10.01 of the Credit Agreement.

Section 6.03 Collateral Agent’s Fees and Expenses; Indemnification .

(a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its reasonable out-of-pocket expenses incurred hereunder and indemnity for its actions in connection herewith, in each case, as provided in Sections 10.04 and 10.05 of the Credit Agreement.

(b) Any such amounts payable as provided hereunder shall be additional Secured Obligations secured hereby and by the other Collateral Documents. The provisions of this Section 6.03 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Secured Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section 6.03 shall be payable within 10 days of written demand therefor.

Section 6.04 Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

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Section 6.05 Survival of Agreement . All covenants, agreements, representations and warranties made by the Grantors hereunder and in the other Loan Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the execution and delivery of the Loan Documents, the making of any Loans and issuance of any Letters of Credit and the provision of services under Cash Management Obligations or Secured Hedge Agreements, regardless of any investigation made by any Secured Party or on its behalf and notwithstanding that any Secured Party may have had notice or knowledge of any Default at the time any credit is extended under the Credit Agreement, and shall continue in full force and effect as long as this Agreement has not been terminated or released pursuant to Section 6.12 below.

Section 6.06 Counterparts; Effectiveness; Several Agreement . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by facsimile or other electronic communication of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement. This Agreement shall become effective as to any Grantor when a counterpart hereof executed on behalf of such Grantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Grantor and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Grantor, the Collateral Agent and the other Secured Parties and their respective permitted successors and assigns, except that no Grantor shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as expressly contemplated by this Agreement or the Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.

Section 6.07 Severability . If any provision of this Agreement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 6.08 Right of Set-Off . In addition to any rights and remedies of the Secured Parties provided by Law, upon the occurrence and during the continuance of any Event of Default, each Secured Party and its Affiliates is authorized at any time and from time to time, without prior notice to any Grantor, any such notice being waived by each Grantor to the fullest extent permitted by applicable Law, to set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other Indebtedness at any time owing by, such Secured Party and its Affiliates to or for the credit or the account of the respective Grantors against any and all Obligations owing to such Secured Party and its Affiliates hereunder, now or hereafter existing, irrespective of whether or not such Secured Party or Affiliate shall have made demand under this Agreement and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or Indebtedness. Each Secured Party agrees promptly to notify the applicable Grantor and the Collateral Agent after any such set-off and application made by such Secured Party; provided , that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Secured Party under this Section 6.08 are in addition to other rights and remedies (including other rights of set-off) that such Secured Party may have at Law.

 

-19-


Section 6.09 Governing Law; Jurisdiction; Venue; Waiver of Jury Trial; Consent to Service of Process .

(a) The terms of Sections 10.15 and 10.16 of the Credit Agreement with respect to governing law, submission of jurisdiction, venue and waiver of jury trial are incorporated herein by reference, mutatis mutandis , and the parties hereto agree to such terms.

(b) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 6.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Law.

Section 6.10 Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

Section 6.11 Security Interest Absolute . To the extent permitted by Law, all rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Secured Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Secured Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or this Agreement.

Section 6.12 Termination or Release .

(a) This Agreement, the Security Interest and all other security interests granted hereby shall terminate with respect to all Secured Obligations and any Liens arising therefrom shall be automatically released upon termination of the Aggregate Commitments and payment in full of all Obligations (other than (i) Cash Management Obligations or obligations under Secured Hedge Agreements not yet due and payable and (ii) contingent obligations not yet accrued and payable) and the expiration or termination of all Letters of Credit (other than Letters of Credit in which the Outstanding Amount of the L/C Obligations related thereto have been Cash Collateralized or, if satisfactory to the relevant L/C Issuer in its reasonable discretion, for which a backstop letter of credit is in place).

(b) A Subsidiary Party shall automatically be released from its obligations under the Guaranty and the Security Interest in the Collateral of such Subsidiary Party shall be automatically released if such Person ceases to be a Subsidiary of the Borrower or becomes an Excluded Subsidiary (other than pursuant to clause (b) of the definition thereof unless the Borrower delivers a written request to the Administrative Agent for such release and no Default has occurred and is continuing at such time) as a result of a transaction or designation permitted under the Credit Agreement; provided that no such release shall occur if such Subsidiary Party continues to be a guarantor in respect of any Junior Financing.

(c) Upon any sale or transfer by any Grantor of any Collateral that is permitted under the Credit Agreement (other than a sale or transfer to another Loan Party), or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 10.01 of the Credit Agreement, the Security Interest in such Collateral shall be automatically released.

 

-20-


(d) In connection with any termination or release pursuant to paragraph (a), (b) or (c) of this Section 6.12, the Collateral Agent shall execute and deliver to any Grantor, at such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination or release and shall perform such other actions reasonably requested by such Grantor to effect such release, including delivery of certificates, securities and instruments. Any execution and delivery of documents pursuant to this Section 6.12 shall be without recourse to or warranty by the Collateral Agent.

(e) Notwithstanding anything to the contrary set forth in this Agreement, each Hedge Bank and each Cash Management Bank by the acceptance of the benefits under this Agreement hereby acknowledges and agrees that (i) the Security Interests granted under this Agreement of the Obligations of any Grantor and its Subsidiaries under any Secured Hedge Agreement and any Cash Management Obligations shall be automatically released upon termination of the Commitments and payment in full of all other Obligations and the expiration or termination of all Letters of Credit (other than Letters of Credit in which the Outstanding Amount of the L/C Obligations related thereto have been Cash Collateralized or, if satisfactory to the relevant L/C Issuer in its reasonable discretion, for which a backstop letter of credit is in place), in each case, unless the Obligations under the Secured Hedge Agreement or the Cash Management Obligations are due and payable at such time (it being understood and agreed that this Agreement and Security Interests granted herein shall survive solely as to such due and payable Obligations and until such time as such due and payable Obligations have been paid in full) and (ii) any release of Collateral or of a Grantor, as the case may be, effective in the manner permitted by this Agreement shall not require the consent of any Hedge Bank or any Cash Management Bank that is not a Lender.

Section 6.13 Additional Grantors . Pursuant to Section 6.11 of the Credit Agreement, certain additional Subsidiaries of the Borrower may be required to enter in this Agreement as Grantors. Upon execution and delivery by the Collateral Agent and a Subsidiary of a Security Agreement Supplement, such Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any such instrument shall not require the consent of any other Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.

Section 6.14 Collateral Agent Appointed Attorney-in-Fact . Each Grantor hereby appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof at any time after and during the continuance of an Event of Default, which appointment is irrevocable and coupled with an interest (provided that the Collateral Agent shall provide the applicable Grantor with notice thereof prior to exercising such rights). Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default and notice by the Collateral Agent to the applicable Grantor of the Collateral Agent’s intent to exercise such rights, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral or Mortgaged Property; (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral or Mortgaged Property; (d) to send verifications of Accounts Receivable to any Account Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at Law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or Mortgaged Property or to enforce any rights in respect of any Collateral or Mortgaged Property; (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral or Mortgaged Property; (g) to notify, or to require any Grantor to notify, Account Debtors to make payment

 

-21-


directly to the Collateral Agent; (h) to make, settle and adjust claims in respect of Article 9 Collateral or Mortgaged Property under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance; (i) to make all determinations and decisions with respect thereto; (j) to obtain or maintain the policies of insurance required by Section 6.07 of the Credit Agreement or paying any premium in whole or in part relating thereto; and (k) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral or Mortgaged Property, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral or Mortgaged Property for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or Mortgaged Property or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence, bad faith, or willful misconduct or that of any of their Affiliates, directors, officers, employees, counsel, agents or attorneys-in-fact, in each case, as determined by a final non-appealable judgment of a court of competent jurisdiction. All sums disbursed by the Collateral Agent in connection with this paragraph, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, within 10 days of demand, by the Grantors to the Collateral Agent and shall be additional Secured Obligations secured hereby.

Section 6.15 General Authority of the Collateral Agent . By acceptance of the benefits of this Agreement and any other Collateral Documents, each Secured Party (whether or not a signatory hereto) shall be deemed irrevocably (a) to consent to the appointment of the Collateral Agent as its agent hereunder and under such other Collateral Documents, (b) to confirm that the Collateral Agent shall have the authority to act as the exclusive agent of such Secured Party for the enforcement of any provisions of this Agreement and such other Collateral Documents against any Grantor, the exercise of remedies hereunder or thereunder and the giving or withholding of any consent or approval hereunder or thereunder relating to any Collateral or any Grantor’s obligations with respect thereto, (c) to agree that it shall not take any action to enforce any provisions of this Agreement or any other Collateral Document against any Grantor, to exercise any remedy hereunder or thereunder or to give any consents or approvals hereunder or thereunder except as expressly provided in this Agreement or any other Collateral Document and (d) to agree to be bound by the terms of this Agreement and any other Collateral Documents.

Section 6.16 Reasonable Care . The Collateral Agent is required to use reasonable care in the custody and preservation of any of the Collateral in its possession; provided , that the Collateral Agent shall be deemed to have used reasonable care in the custody and preservation of any of the Collateral or Mortgaged Property, if such Collateral or Mortgaged Property is accorded treatment substantially similar to that which the Collateral Agent accords its own property.

Section 6.17 Delegation; Limitation . The Collateral Agent may execute any of the powers granted under this Agreement or the Mortgages and perform any duty hereunder either directly or by or through agents or attorneys-in-fact, and shall not be responsible for the gross negligence or willful misconduct of any agents or attorneys-in-fact selected by it with reasonable care and without gross negligence or willful misconduct.

Section 6.18 Reinstatement . The obligations of the Grantors under this Security Agreement shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower or other Loan Party in respect of the Secured Obligations is rescinded or must be otherwise restored by any holder of any of the Secured Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

 

-22-


Section 6.19 Miscellaneous . The Collateral Agent shall not be deemed to have actual, constructive, direct or indirect notice or knowledge of the occurrence of any Event of Default unless and until the Collateral Agent shall have received a notice of Event of Default or a notice from the Grantor or the Secured Parties to the Collateral Agent in its capacity as Collateral Agent indicating that an Event of Default has occurred.

[ Signature Pages Follow ]

 

-23-


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above.

 

SUMMIT MATERIALS, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS HOLDINGS I, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS HOLDINGS II, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS COMPANIES I, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
SUMMIT MATERIALS CORPORATIONS I, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President

 

-24-


CONTINENTAL CEMENT COMPANY, L.L.C.
By:  

/s/ R. Michael Johnson

  Name:   R. Michael Johnson
  Title:   Chief Executive Officer
B&B RESOURCES, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
VALLEY READY MIX, INC.
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
SALT LAKE VALLEY SAND & GRAVEL, INC.
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
ELAM CONSTRUCTION, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
ELAM PAVING, INC.
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President

 

-25-


HAMM, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
HAMM ASPHALT, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
N.R. HAMM CONTRACTOR, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
N.R. HAMM QUARRY, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
RK HALL, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
R.K. HALL CONSTRUCTION, LTD.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President

 

-26-


SCS MATERIALS, L.P.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
B&H CONTRACTING, L.P.
By:   RKH Capital, L.L.C., its general partner
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
RKH CAPITAL, L.L.C.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
CON-AGG OF MO, L.L.C.
By:   Summit Materials Companies I, LLC, its sole
  member
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
QUARRY PROPERTIES, L.L.C.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Manager

 

-27-


FISCHER QUARRIES, L.L.C.
By:   Con-Agg of MO, L.L.C., its sole member
  By:  

Summit Materials Companies I, LLC,

its sole member

By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
HINKLE CONTRACTING COMPANY, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
BOURBON LIMESTONE COMPANY
By:  

/s/ Thomas Hinkle

  Name:   Thomas Hinkle
  Title:   Vice President
KENTUCKY HAULING, INC.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
GLASS AGGREGATES, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President

 

-28-


SOUTH CENTRAL KENTUCKY LIMESTONE, LLC
By:   Glass Aggregates, LLC, its sole member
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
KILGORE COMPANIES, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
ALTAVIEW CONCRETE, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
PEAK CONSTRUCTION MATERIALS, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
PEAK MANAGEMENT, L.C.
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
WASATCH CONCRETE PUMPING, LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President

 

-29-


KILGORE TRUCKING, LLC
By:  

/s/ Jason T. Kilgore

  Name:   Jason T. Kilgore
  Title:   Manager
KILGORE EQUIPMENT, LLC
By:  

/s/ Jason T. Kilgore

  Name:   Jason T. Kilgore
  Title:   Manager
WIND RIVER MATERIALS, LLC
By:  

/s/ Jason T. Kilgore

  Name:   Jason T. Kilgore
  Title:   Manager
CORNEJO & SONS, L.L.C.
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President
CORNEJO QUALITY STONE LLC
By:  

/s/ Anya Fonina

  Name:   Anya Fonina
  Title:   Vice President
AUSTIN MATERIALS, LLC
By:  

/s/ Michael Brady

  Name:   Michael Brady
  Title:   Vice President

 

-30-


INDUSTRIAL ASPHALT, LLC
By:  

/s/ Anya Fonina

  Name: Anya Fonina
  Title:   Manager
ASPHALT PAVING COMPANY OF AUSTIN, LLC
By:  

/s/ Anya Fonina

  Name: Anya Fonina
  Title:   Manager
KBDJ, L.P.
By: KBDJ Materials, LLC, its general partner
By:  

/s/ Anya Fonina

  Name: Anya Fonina
  Title:   Vice President
KBDJ MATERIALS, LLC
By:  

/s/ Anya Fonina

  Name: Anya Fonina
  Title:   Vice President
RTI HOT MIX, LLC
By:  

/s/ Anya Fonina

  Name: Anya Fonina
  Title:   Vice President

 

-31-


RTI EQUIPMENT CO., LLC
By:  

/s/ Anya Fonina

  Name: Anya Fonina
  Title:   Vice President
J.D. RAMMING PAVING CO., LLC
By:  

/s/ Anya Fonina

  Name: Anya Fonina
  Title:   Vice President
RAMMING TRANSPORATION CO., LLC
By:  

/s/ Anya Fonina

  Name: Anya Fonina
  Title:   Vice President

 

-32-


BANK OF AMERICA, N.A., as Collateral Agent
By:  

/s/ Joon Ko

  Name:   Joon Ko
  Title:   Vice President

 

-33-


Schedule I to

the Security Agreement

SUBSIDIARY PARTIES

 

Current Legal Entities Owned

 

Record Owner

 

Jurisdiction

 

Percent of

Ownership/Interest

Summit Materials Holdings I, LLC

  Summit Materials, LLC   Delaware   100%

Summit Materials Holdings II, LLC

  Summit Materials, LLC   Delaware   100%

Summit Materials Companies I, LLC

  Summit Materials Holdings I, LLC   Delaware   100%

Summit Materials Corporations I, Inc.

  Summit Materials Companies I, LLC   Delaware   100%

RK Hall, LLC

  Summit Materials Companies I, LLC   Delaware   100%

Con-Agg of MO, L.L.C.

  Summit Materials Companies I, LLC   Missouri   100%

Hinkle Contracting Company, LLC

  Summit Materials Companies I, LLC   Kentucky   100%

Kilgore Companies, LLC

  Summit Materials Companies I, LLC   Delaware   100%

Cornejo & Sons, L.L.C.

  Summit Materials Companies I, LLC   Kansas   100%

Austin Materials, LLC

  Summit Materials Companies I, LLC   Delaware   100%

B & B Resources, Inc.

  Summit Materials Corporations I, Inc.   Utah   100%

Elam Construction, Inc.

  Summit Materials Corporations I, Inc.   Colorado   100%

Hamm, Inc.

  Summit Materials Corporations I, Inc.   Kansas   100%

Salt Lake Valley Sand & Gravel, Inc.

  B & B Resources, Inc.   Utah   100%

Valley Ready Mix, Inc.

  B & B Resources, Inc.   Utah   100%

Elam Paving, Inc.

  Elam Construction, Inc.   New Mexico   100%

Hamm Asphalt, LLC

  Hamm, Inc.   Kansas   100%

N. R. Hamm Contractor, LLC

  Hamm, Inc.   Kansas   100%

N. R. Hamm Quarry, LLC

  Hamm, Inc.   Kansas   100%

R. K. Hall Construction, Ltd.

  RK Hall, LLC   Texas   100%

SCS Materials, L.P.

  RK Hall, LLC   Texas   100%

B&H Contracting, L.P.

  RK Hall, LLC   Texas   100%

RKH Capital, L.L.C.

  RK Hall, LLC   Texas   100%

Quarry Properties, L.L.C.

  Con-Agg of MO, L.L.C.   Missouri   100%

Fischer Quarries, L.L.C.

  Con-Agg of MO, L.L.C.   Missouri   100%


Current Legal Entities Owned

 

Record Owner

 

Jurisdiction

 

Percent of

Ownership/Interest

Bourbon Limestone Company

  Hinkle Contracting Company, LLC   Kentucky   100%

Glass Aggregates, LLC

  Hinkle Contracting Company, LLC   Kentucky   100%

Kentucky Hauling, Inc.

  Hinkle Contracting Company, LLC   Kentucky   100%

South Central Kentucky Limestone, LLC

  Glass Aggregates, LLC   Kentucky   100%

Altaview Concrete, LLC

  Kilgore Companies, LLC   Utah   100%

Peak Construction Materials, LLC

  Kilgore Companies, LLC   Utah   100%

Peak Management, L.C.

  Kilgore Companies, LLC   Utah   100%

Wasatch Concrete Pumping, LLC

  Kilgore Companies, LLC   Utah   100%

Kilgore Trucking, LLC

  Kilgore Companies, LLC   Utah   100%

Kilgore Equipment, LLC

  Kilgore Companies, LLC   Utah   100%

Wind River Materials, LLC

  Kilgore Companies, LLC   Wyoming   100%

Cornejo Quality Stone LLC

  Cornejo & Sons, L.L.C.   Delaware   100%

Industrial Asphalt, LLC

  Austin Materials, LLC   Texas   100%

Asphalt Paving Company of Austin, LLC

  Austin Materials, LLC   Texas   100%

KBDJ, L.P.

  Austin Materials, LLC   Texas   100%

KBDJ Materials, LLC

  Austin Materials, LLC   Delaware   100%

J.D. Ramming Paving Co., LLC

  Austin Materials, LLC   Texas   100%

RTI Hot Mix, LLC

  Austin Materials, LLC   Texas   100%

RTI Equipment Co., LLC

  Austin Materials, LLC   Texas   100%

Ramming Transportation Co., LLC

  Austin Materials, LLC   Texas   100%

Continental Cement Company, L.L.C.

  Summit Materials Holdings II, LLC   Delaware   -100% of Class A Units

-0% of Class B Units


Schedule II to

the Security Agreement

PLEDGED EQUITY AND PLEDGED DEBT

PLEDGED EQUITY

 

Issuer

  

Record Owner

  

Certificate No.

  

No. Shares/Interest

  

Percent Pledged

Summit Materials, LLC

  

Summit Materials Intermediate Holdings, LLC

   N/A    100% of interests    100%

Summit Materials Holdings I, LLC

  

Summit Materials, LLC

   N/A    100% of interests    100%

Summit Materials Companies I, LLC

  

Summit Materials Holdings I, LLC

   N/A    100% of interests    100%

Summit Materials Corporations I, Inc.

  

Summit Materials Companies I, LLC

   N/A   

1,000 shares of

common stock

(100% of shares)

   100%

B & B Resources, Inc.

  

Summit Materials Corporations I, Inc.

   N/A   

50,000 shares of common stock

(100% of shares)

   100%

Salt Lake Valley Sand & Gravel, Inc.

  

B & B Resources, Inc.

   N/A   

50,000 shares of common stock

(100% of shares)

   100%

Valley Ready Mix, Inc.

  

B & B Resources, Inc.

   N/A   

50,000 shares of

common stock

(100% of shares)

   100%

Elam Construction, Inc.

  

Summit Materials Corporations I, Inc.

   N/A    64,209 shares of common stock    100%

Elam Paving, Inc.

  

Elam Construction, Inc.

   N/A   

1,000 shares of

common stock

(100% of shares)

   100%

Hamm, Inc.

  

Treasury Stock

   Retired.   

7,047 (Class A

Common Stock)

   N/A
  

Summit Materials Corporations I, Inc.

   27A   

81,773 (Class A

Common Stock)

   100%
  

Treasury Stock

   Retired.   

37,059 (Class B

Common Stock)

   N/A
  

Summit Materials Corporations I, Inc.

   28B   

63,120.8011 (Class B

Common Stock)

   100%
  

ESOP Participants

   A-1 (redeemed and cancelled 12/18/09)   

4,356.40 shares

(ESOP Participants)

   N/A

Hamm Asphalt, LLC

  

Hamm, Inc.

   N/A    100% of interests    100%

N. R. Hamm Contractor, LLC

  

Hamm, Inc.

   N/A    100% of interests    100%

N. R. Hamm Quarry, LLC

  

Hamm, Inc.

   N/A    100% of interests    100%

RK Hall, LLC

  

Summit Materials Companies I, LLC

   N/A    100% of interests    100%

R. K. Hall Construction, Ltd.

  

RK Hall, LLC

   N/A    100% of interests    100%

SCS Materials, L.P.

  

RK Hall, LLC

   N/A    100% of interests    100%


Issuer

  

Record Owner

  

Certificate No.

  

No. Shares/Interest

  

Percent Pledged

B&H Contracting, L.P.    

  

RK Hall, LLC

   N/A    100% of interests    100%

RKH Capital, L.L.C.

  

RK Hall, LLC

   02   

1,000 member shares

(100% of interests)

   100%

Con-Agg of MO, L.L.C.

  

Summit Materials Companies I, LLC

   N/A    100% of interests    100%

Quarry Properties, L.L.C.

  

Con-Agg of MO, L.L.C.

   N/A    100% of interests    100%

Fischer Quarries, L.L.C.

  

Con-Agg of MO, L.L.C.

   N/A    100% of interests    100%

Hinkle Contracting Company, LLC

  

Summit Materials Companies I, LLC

   N/A    100% of interests    100%

Bourbon Limestone Company

  

Hinkle Contracting Company, LLC

   R-1    100% of interests    100%

Kentucky Hauling, Inc.

  

Hinkle Contracting Company, LLC (f/k/a Hinkle Contracting Corporation)

   10    100% of interests    100%

Glass Aggregates, LLC

  

Hinkle Contracting Company, LLC

   N/A   

1000 LLC interests

(100% of interests)

   100%

South Central Kentucky Limestone, LLC

  

Glass Aggregates, LLC

   2   

100 units

(100% of interests)

   100%

Ohio Valley Asphalt, LLC

  

Hinkle Contracting Company, LLC

   N/A    80% interest    0%

Kilgore Companies, LLC

  

Summit Materials Companies I, LLC

   N/A    100% of interests    100%

Altaview Concrete, LLC

  

Kilgore Companies, LLC

   N/A    100% of interests    100%

Peak Construction Materials, LLC

  

Kilgore Companies, LLC

   N/A    100% of interests    100%

Peak Management, L.C.

  

Kilgore Companies, LLC

   N/A    100% of interests    100%

Wasatch Concrete Pumping, LLC

  

Kilgore Companies, LLC

   N/A    100% of interests    100%

Kilgore Trucking, LLC

  

Kilgore Companies, LLC

   N/A    100% of interests    100%

Kilgore Equipment, LLC

  

Kilgore Companies, LLC

   N/A    100% of interests    100%

Wind River Materials, LLC

  

Kilgore Companies, LLC

   N/A    100% of interests    100%

Cornejo & Sons, L.L.C.

  

Summit Materials Companies I, LLC

   N/A   

2,000 units

(100% of interests)

   100%

Cornejo Quality Stone LLC

  

Cornejo & Sons, L.L.C.

   N/A    100% of interests    100%

Austin Materials, LLC

  

Summit Materials Companies I, LLC

   N/A    100% of interests    100%

Industrial Asphalt, LLC

  

Austin Materials, LLC

   N/A    100% of interests    100%


Issuer

  

Record Owner

  

Certificate No.

  

No. Shares/Interest

  

Percent Pledged

Asphalt Paving Company of Austin, LLC    

  

Austin Materials, LLC

   N/A    100% of interests    100%

KBDJ, L.P.

  

Austin Materials, LLC

   N/A    100% of interests    100%

KBDJ Materials, LLC

  

Austin Materials, LLC

   N/A    100% of interests    100%

J.D. Ramming Paving Co., LLC

  

Austin Materials, LLC

   N/A    100% of interests    100%

RTI Hot Mix, LLC

  

Austin Materials, LLC

   N/A    100% of interests    100%

RTI Equipment Co., LLC

  

Austin Materials, LLC

   N/A    100% of interests    100%

Ramming Transportation Co., LLC

  

Austin Materials, LLC

   N/A    100% of interests    100%

Summit Materials Holdings II, LLC

  

Summit Materials, LLC

   N/A    100% of interests    100%

Summit Materials Finance Corp.

  

Summit Materials, LLC

   N/A    100% of interests    0%

Continental Cement Company, L.L.C.

  

Summit Materials Holdings II, LLC

   N/A   

-100% of

Class A Units

-0% of Class B Units

   100% of

Class A Units

Green America Recycling, LLC

  

Continental Cement Company, L.L.C.

   N/A    100% of interests    0%

PLEDGED DEBT

None.


Schedule III to

the Security Agreement

COMMERCIAL TORT CLAIMS

None.


Exhibit I to the

Security Agreement

SUPPLEMENT NO.              dated as of [ ], to the Security Agreement (the “ Security Agreement ”), dated as of January 30, 2012, among the Grantors identified therein and Bank of America, N.A., as Collateral Agent.

A. Reference is made to the Credit Agreement dated as of January 30, 2012 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Summit Materials, LLC, a Delaware corporation (the “ Borrower ”), the Guarantors from time to time party thereto, Bank of America, N.A., as Administrative Agent and Collateral Agent, each lender from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), Bank of America, N.A., as L/C Issuer and Swing Line Lender, and the other agents named therein.

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Security Agreement.

C. The Grantors have entered into the Security Agreement in order to induce the Lenders to make Loans and the L/C Issuers to issue Letters of Credit. Section 6.13 of the Security Agreement provides that additional Subsidiaries of the Borrower may become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned (the “ New Grantor ”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Grantor under the Security Agreement in order to induce the Lenders to make additional Loans and the L/C Issuers to issue additional Letters of Credit and as consideration for Loans previously made and Letters of Credit previously issued.

Accordingly, the Collateral Agent and the New Grantor agree as follows:

SECTION 1. In accordance with Section 6.13 of the Security Agreement, the New Grantor by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof. In furtherance of the foregoing, the New Grantor, as security for the payment and performance in full of the Secured Obligations, does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Grantor’s right, title and interest in and to the Collateral (as defined in the Security Agreement) of the New Grantor. Each reference to a “Grantor” in the Security Agreement shall be deemed to include the New Grantor. The Security Agreement is hereby incorporated herein by reference.

SECTION 2. The New Grantor represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity.

SECTION 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Grantor


and the Collateral Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile transmission or other electronic communication shall be as effective as delivery of a manually signed counterpart of this Supplement.

SECTION 4. The New Grantor hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of the information required by Schedules II and III to the Security Agreement applicable to it and its and its’ subsidiaries legal name, jurisdiction of formation and location of Chief Executive Office and (b) set forth under its signature hereto is the true and correct legal name of the New Grantor, its jurisdiction of formation and the location of its chief executive office.

SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. If any provision of this Supplement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Supplement shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 8. All communications and notices hereunder shall be in writing and given as provided in Section 6.01 of the Security Agreement.

SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with the execution and delivery of this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent.

[ Signature pages follow ]


IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written.

 

[NAME OF NEW GRANTOR]
By:  

 

Name:  

 

Title:  

 

Legal Name:
Jurisdiction of Formation:
Location of Chief Executive office:


BANK OF AMERICA, N.A.,

as Collateral Agent

By:  

 

Name:  

 

Title:  

 


Schedule I

to the Supplement No   to the

Security Agreement

• EQUITY INTERESTS

 

• Issuer

  

• Number of Certificate

  

• Registered Owner

  

• Number and Class of

Equity Interest

  

• Percentage of

Equity Interests

           

           

           

INSTRUMENTS AND DEBT SECURITIES

 

• Issuer

  

• Principal Amount

  

• Date of Note

  

• Maturity Date

        

        


Exhibit II to the

Security Agreement

PERFECTION CERTIFICATE

Reference is hereby made to (i) that certain Security Agreement dated as of January 30, 2012 (as amended, restated, supplemented or amended and restated from time to time, the “ Security Agreement ”), between Summit Materials, LLC, a Delaware limited liability company (“ Borrower ”), the Guarantors party thereto (collectively, the “ Guarantors ”) and the Collateral Agent (as hereinafter defined) and (ii) that certain Credit Agreement dated as of January 30, 2012 (as amended, restated, supplemented or amended and restated from time to time, the “ Credit Agreement ”) among the Borrower, Summit Materials Intermediate Holdings, LLC, a Delaware limited liability company (“ Holdings ”), certain other U.S. Subsidiaries of the Borrower, certain other parties thereto and Bank of America, N.A., as Administrative Agent and Collateral Agent (in such capacity, the “ Collateral Agent ”). Capitalized terms used but not defined herein have the meanings assigned in the Credit Agreement or the Security Agreement, as applicable, unless otherwise noted herein.

As used herein, the term “ Companies ” means Holdings, Borrower and each of the other Guarantors.

The undersigned hereby certify to the Collateral Agent as follows:

1. Names .

2. The exact legal name of each Company, as such name appears in its respective certificate of incorporation or any other organizational document, is set forth in Schedule 1(a) . Each Company is (i) the type of entity disclosed next to its name in Schedule 1(a) and (ii) a registered organization except to the extent disclosed in Schedule 1(a) . Also set forth in Schedule 1(a) is the organizational identification number, if any, of each Company that is a registered organization, the Federal Taxpayer Identification Number of each Company and the jurisdiction of formation of each Company.

3. Set forth in Schedule 1(b) is a list of any other corporate or organizational names each Company has had in the past five years, together with the date of the relevant change.

4. Set forth in Schedule 1(c) is a list of all other names used by each Company, or any other business or organization to which each Company became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, on any filings with the Internal Revenue Service, at any time between January 1, 2007 and the date hereof. Except as set forth in Schedule 1(c) , no Company has changed its jurisdiction of organization at any time during the past four months.

5. Current Locations . The chief executive office of each Company is located at the address set forth in Schedule 2 .

6. Extraordinary Transactions . Except for those purchases, acquisitions and other transactions described in Schedule 1(c) or Schedule 3 , in the past five years, all of the Collateral with a fair market value in excess of $5,000,000 has been originated by the relevant Company in the ordinary course of business or consists of goods which have been acquired by such Company in the ordinary course of business.


7. Schedule of Filings . Attached hereto as Schedule 4 is a schedule of (i) the appropriate filing offices for the financing statements, (ii) the appropriate filing offices for the filings described in Schedule 8(c) and (iii) the appropriate filing offices for the Mortgages and fixture filings relating to the Mortgaged Property set forth in Schedule 5 .

8. Real Property . Attached hereto as Schedule 5A is a list of all real property owned or otherwise held by each Company located in the United States as of the Closing Date. Attached hereto as Schedule 5B is a list of all (i) fee owned real property with a fair market value in excess of $5.0 million owned by any Loan Party on the Closing Date and (ii) to the extent available, common names, addresses and uses of each Mortgaged Property.

9. Stock Ownership and Other Equity Interests . Attached hereto as Schedule 6(a) is a true and correct list of each of all of the authorized, and the issued and outstanding, stock, partnership interests, limited liability company membership interests or other equity interest of each Company and its Subsidiaries and the record and beneficial owners of such stock, partnership interests, membership interests or other equity interests setting forth the percentage of such equity interests pledged under the Security Agreement. Also set forth in Schedule 6(b) is each equity investment of each Company that represents 50% or less of the equity of the entity in which such investment was made setting forth the percentage of such equity interests pledged under the Security Agreement.

10. Instruments and Tangible Chattel Paper . Attached hereto as Schedule 7 is a true and correct list of all promissory notes, instruments (other than checks to be deposited in the ordinary course of business), tangible chattel paper, electronic chattel paper and other evidence of indebtedness held by each Company as of the Closing Date, the value of which is in excess of $2,500,000, including all intercompany notes between or among any two or more Companies or any of their Subsidiaries, stating if such instruments, chattel paper or other evidence of indebtedness is pledged under the Security Agreement.

11. Intellectual Property . (a) Attached hereto as Schedule 8(a ) is a schedule setting forth all of each Company’s Patents and Trademarks (each as defined in the Security Agreement) applied for or registered with the United States Patent and Trademark Office (“ USPTO ”) in the name of each Company, including the name of the registered owner or applicant and the registration, application, or publication number, as applicable, of each registered or applied for United States Patent or Trademark owned by each Company.

(b) Attached hereto as Schedule 8(b) is a schedule setting forth all of each Company’s United States Copyrights (each as defined in the Security Agreement), applied for or registered with the United States Copyright Office (the “ USCO ”), including the name of the registered owner and the registration number of each registered or applied for Copyright owned by each Company.

(c) Attached hereto as Schedule 8(c) is a schedule setting forth all Patent Licenses, Trademark Licenses and Copyright Licenses (each as defined in the Security Agreement) in which the applicable Company is listed as an exclusive licensee, and where the licensed intellectual property is applied for or registered with the USPTO or USCO, including the name of the registered owner and the registration,

 

-2-


application or publication number, as applicable, of each registered or applied for United States Patent, Trademark or Copyright, as the case may be, owned by each licensor along with the date of execution thereof.

9. Commercial Tort Claims . Attached hereto as Schedule 9 is a true and correct list of all Commercial Tort Claims (as defined in the Security Agreement) in excess of $5,000,000, held by each Company, including a brief description thereof.

10. Deposit Accounts, Securities Accounts and Commodity Accounts . No information is provided with respect to the Deposit Accounts, Securities Accounts and/or Commodity Accounts since they are not required to be subject to Collateral Agent’s control pursuant to the Security Agreement.

11. Letter-of-Credit Rights . Attached hereto as Schedule 11 is a true and correct list of all Letters of Credit issued in favor of each Company, as beneficiary thereunder, stating if letter-of-credit rights with respect to such Letters of Credit are required to be subject to a control arrangement pursuant to the Security Agreement.

[The Remainder of this Page has been intentionally left blank]

 

-3-


IN WITNESS WHEREOF , we have hereunto signed this Perfection Certificate as of this             day of January [    ], 2012.

 

SUMMIT MATERIALS, LLC
By:  

 

  Name:  
  Title:  
SUMMIT MATERIALS INTERMEDIATE HOLDINGS, LLC
By:  

 

  Name:  
  Title:  
[Each of the Guarantors]
By:  

 

  Name:  
  Title:  

 

-4-


Schedule 1(a)

Legal Names, Etc .

 

Legal Name

  

Type of Entity

  

Registered
Organization

(Yes/No)

  

Organizational
Number 1

  

Federal Taxpayer
Identification Number

  

State of Formation

              
              
              

 

1   If none, so state.

 

-5-


Schedule 1(b)

Prior Organizational Names

 

Company/Subsidiary

  

Prior Name

   Date of Change
     
     
     
     

 

-6-


Schedule 1(c)

Changes in Corporate Identity; Other Names

 

Company/Subsidiary

   Action    Date of
Action
   State of
Formation
  

List of All Other Names Used on Any

Filings with the Internal Revenue

Service During Past Five Years

           
           
           
           
           
           
           
           
           

[Add Information required by Section 1 to the extent required by Section 1(c) of the Perfection Certificate]

 

-7-


Schedule 2

Chief Executive Offices

 

Company/Subsidiary

  

Address

  

County

  

State

        
        
        
        
        
        
        

 

-8-


Schedule 3

Transactions Other Than in the Ordinary Course of Business

 

Company/Subsidiary

  

Description of Transaction Including Parties Thereto

  

Date of Transaction

     
     
     

 

-9-


Schedule 4

Filings/Filing Offices

 

Type of Filing 2

  

Entity

  

Applicable

Collateral Document

[Mortgage, Security

Agreement or Other]

  

Filing Office

        
        
        
        

 

2   UCC-1 financing statement, fixture filing, mortgage, intellectual property filing or other necessary filing.

 

-10-


Schedule 5

Real Property

I. Owned Real Property

 

Entity of Record

  

Purpose/Use

  

Legal Description

(if Encumbered by
Mortgage and/or

Fixture Filing)

  

To be Encumbered by
Mortgage and Fixture Filing

  

Option to Purchase/ Right
of First Refusal

[    ]

   [    ]    [See Schedule A to Mortgage and/or fixture filing encumbering this property.]    [YES/NO]    [YES/NO]
           

 

-11-


II. Leased Real Property

 

Entity of Record

  

Description of
Lease

  

Purpose/Use

  

Legal Description
(if Encumbered by
Mortgage and/or
Fixture Filing)

  

To be Encumbered
by Mortgage

  

To be Encumbered
by Fixture Filing

  

Option to
Purchase/
Right of First
Refusal

[    ]

   [    ]    [    ]    [See Schedule A to Mortgage and/or fixture filing encumbering this property.]    [YES/NO]    [YES/NO]    [YES/NO]
                 

 

-12-


Schedule 6

(a) Equity Interests of Companies and Subsidiaries

 

Current Legal

Entities Owned

  

Record Owner

  

Certificate No.

  

No. Shares/Interest

  

Percent Pledged

           
           
           
           

(b) Other Equity Interests

 

Current Legal

Entities Owned

  

Record Owner

  

Certificate No.

  

No. Shares/Interest

  

Percent Pledged


Schedule 7

Instruments and Tangible Chattel Paper

 

1. Promissory Notes:

 

Entity

  

Principal Amount

  

Date of Issuance

  

Interest Rate

  

Maturity Date

  

Pledged

[Yes/No]

              
              
              

 

2. Chattel Paper:

 

Description

   Pledged
[Yes/No]
  
  
  

 

-2-


Schedule 8(a)

Patents and Trademarks

UNITED STATES PATENTS:

Registrations:

 

OWNER

  

REGISTRATION

NUMBER

  

DESCRIPTION

     

Applications:

 

OWNER

  

APPLICATION

NUMBER

  

DESCRIPTION

     

UNITED STATES TRADEMARKS:

Registrations:

 

OWNER

  

REGISTRATION

NUMBER

  

TRADEMARK

     

Applications:

 

OWNER

  

APPLICATION

NUMBER

  

TRADEMARK

     

 

-3-


Schedule 8(b)

Copyrights

UNITED STATES COPYRIGHTS

Registrations:

 

OWNER

  

TITLE

  

REGISTRATION NUMBER

     

Applications:

 

OWNER

  

APPLICATION NUMBER

  

 

-4-


Schedule 8(c)

Intellectual Property Licenses

Patent Licenses:

 

LICENSEE

  

LICENSOR

  

COUNTRY/STATE

  

REGISTRATION/
APPLICATION

NUMBER

  

DESCRIPTION

Trademark Licenses

 

LICENSEE

  

LICENSOR

  

COUNTRY/STATE

  

REGISTRATION/
APPLICATION

NUMBER

  

TRADEMARK

Copyright Licenses:

 

LICENSEE

  

LICENSOR

  

COUNTRY/STATE

  

REGISTRATION/
APPLICATION

NUMBER

  

DESCRIPTION

 

-5-


Schedule 9

Commercial Tort Claims

 

Description

   Pledged
[Yes/No]
  
  
  

 

-6-


Schedule 11

Letter of Credit Rights

 

Issuer

  

Beneficiary

  

Principal Amount

  

Date of Issuance

  

Maturity Date

  

Subject to Control
Requirement

[Yes/No]

              
              

 

-7-


Exhibit III to the

Security Agreement

FORM OF

PATENT SECURITY AGREEMENT (SHORT FORM)

PATENT SECURITY AGREEMENT

Patent Security Agreement , dated as of [    ], by [    ] and [            ] (the “ Grantor ”), in favor of BANK OF AMERICA, N.A., in its capacity as collateral agent pursuant to the Credit Agreement (in such capacity, the “ Collateral Agent ”).

W I T N E S S E T H :

WHEREAS, the Grantor is party to a Security Agreement dated as of January 30, 2012 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Security Agreement ”) in favor of the Collateral Agent pursuant to which the Grantor is required to execute and deliver this Patent Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Credit Agreement, the Grantor hereby agrees with the Collateral Agent as follows:

SECTION 1. Defined Terms . Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

SECTION 2. Grant of Security Interest in Patent Collateral . The Grantor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a lien on and security interest in and to all of its right, title and interest in, to and under all the following Pledged Collateral (excluding any Excluded Assets) of the Grantor:

(a) Patents of the Grantor listed on Schedule I attached hereto.

SECTION 3. The Security Agreement . The security interest granted pursuant to this Patent Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and the Grantor hereby acknowledges and affirms that the rights and remedies of the Collateral Agent with respect to the security interest in the Patents made and granted hereby are more fully set forth in the Security Agreement. In the event that any provision of this Patent Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

SECTION 4. Termination . Upon the termination of the Security Agreement in accordance with Section 6.12 thereof, the Collateral Agent shall, at the expense of the Grantor, execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form releasing the lien on and security interest in the Patents under this Patent Security Agreement and any other documents required to evidence the termination of the Collateral Agent’s interest in the Patents.

SECTION 5. Counterparts . This Patent Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Patent Security Agreement by signing and delivering one or more counterparts.


[Signature pages follow.]

 

-2-


[GRANTOR]
By:  

 

  Name:
  Title:

 

-3-


BANK OF AMERICA, N.A.,
as Collateral Agent
By:  

 

  Name:
  Title:

 

-4-


Schedule I

to

PATENT SECURITY AGREEMENT

UNITED STATES PATENTS AND PATENT APPLICATIONS

Patents:

 

• OWNER

  

• PATENT NUMBER

  

• TITLE

     

Patent Applications:

 

• OWNER

  

• APPLICATION NUMBER

  

• TITLE

     


Exhibit IV to the

Security Agreement

FORM OF

TRADEMARK SECURITY AGREEMENT (SHORT FORM)

TRADEMARK SECURITY AGREEMENT

Trademark Security Agreement , dated as of [    ], by [    ] and [                    ] (the “ Grantor ”), in favor of BANK OF AMERICA, N.A., in its capacity as collateral agent pursuant to the Credit Agreement (in such capacity, the “ Collateral Agent ”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement dated as of January 30, 2012 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Security Agreement ”) in favor of the Collateral Agent pursuant to which the Grantor is required to execute and deliver this Trademark Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Credit Agreement, the Grantor hereby agrees with the Collateral Agent as follows:

SECTION 1. Defined Terms . Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

SECTION 2. Grant of Security Interest in Trademark Collateral . The Grantor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a lien on and security interest in and to all of its right, title and interest in, to and under all the following Pledged Collateral (excluding any Excluded Assets) of the Grantor:

(a) registered Trademarks of the Grantor listed on Schedule I attached hereto.

SECTION 3. The Security Agreement . The security interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and Grantor hereby acknowledges and affirms that the rights and remedies of the Collateral Agent with respect to the security interest in the Trademarks made and granted hereby are more fully set forth in the Security Agreement. In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

SECTION 4. Termination . Upon the termination of the Security Agreement in accordance with Section 6.12 thereof, the Collateral Agent shall, at the expense of the Grantor, execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form releasing the lien on and security interest in the Trademarks under this Trademark Security Agreement and any other documents required to evidence the termination of the Collateral Agent’s interest in the Trademarks.


SECTION 5. Counterparts . This Trademark Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Trademark Security Agreement by signing and delivering one or more counterparts.

[Signature pages follow]

 

-2-


[GRANTOR]
By:  

 

  Name:
  Title:

 

-3-


BANK OF AMERICA, N.A.,

as Collateral Agent

By:  

 

 

Name:

 

Title:

 

-4-


Schedule I

to

TRADEMARK SECURITY AGREEMENT

UNITED STATES TRADEMARK REGISTRATIONS AND APPLICATIONS

Trademark Registrations:

 

OWNER

  

REGISTRATION NUMBER

  

TRADEMARK

     

Trademark Applications:

 

OWNER

  

APPLICATION NUMBER

  

TRADEMARK

     


Exhibit V to the

Security Agreement

FORM OF

COPYRIGHT SECURITY AGREEMENT (SHORT FORM)

COPYRIGHT SECURITY AGREEMENT

Copyright Security Agreement , dated as of [    ], by [    ] and [                    ] (the “ Grantor ”), in favor of BANK OF AMERICA, N.A., in its capacity as collateral agent pursuant to the Credit Agreement (in such capacity, the “ Collateral Agent ”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement dated as of January 30, 2012 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Security Agreement ”) in favor of the Collateral Agent pursuant to which the Grantor is required to execute and deliver this Copyright Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Credit Agreement, the Grantor hereby agrees with the Collateral Agent as follows:

SECTION 1. Defined Terms . Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

SECTION 2. Grant of Security Interest in Copyright Collateral . The Grantor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a lien on and security interest in and to all of its right, title and interest in, to and under all the following Pledged Collateral (excluding any Excluded Assets) of the Grantor:

(a) registered Copyrights of the Grantor listed on Schedule I attached hereto.

SECTION 3. The Security Agreement . The security interest granted pursuant to this Copyright Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and the Grantor hereby acknowledges and affirms that the rights and remedies of the Collateral Agent with respect to the security interest in the Copyrights made and granted hereby are more fully set forth in the Security Agreement. In the event that any provision of this Copyright Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

SECTION 4. Termination . Upon termination of the Security Agreement in accordance with Section 6.12 thereof, the Collateral Agent shall, at the expense of the Grantor, execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form releasing the lien on and security interest in the Copyrights under this Copyright Security Agreement and any other documents required to evidence the termination of the Collateral Agent’s interest in the Copyrights.


SECTION 5. Counterparts . This Copyright Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Copyright Security Agreement by signing and delivering one or more counterparts.

[Signature pages follow.]

 

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[GRANTOR]
By:  

 

  Name:
  Title:

 

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BANK OF AMERICA, N.A.,

as Collateral Agent

By:  

 

  Name:
  Title:

 

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Schedule I

to

COPYRIGHT SECURITY AGREEMENT

UNITED STATES COPYRIGHT REGISTRATIONS

 

OWNER

  

REGISTRATION NUMBER

  

COPYRIGHT TITLE

     

Exhibit 10.5

EXECUTION COPY

EMPLOYMENT AGREEMENT

(THOMAS HILL)

EMPLOYMENT AGREEMENT (the “ Agreement ”) dated July 30, 2009 by and between Summit Materials Holdings L.P. (the “ Company ”) and Thomas Hill (“ Executive ”).

The Company desires to employ Executive and to enter into an agreement embodying the terms of such employment;

Executive desires to accept such employment and enter into such an agreement;

In consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Term of Employment . Subject to the provisions of Section 6 of this Agreement, Executive shall be employed by the Company for a period commencing on July 30, 2009 (the “ Commencement Date ”) and ending on the third anniversary of the Commencement Date (the “ Employment Term ”) on the terms and subject to the conditions set forth in this Agreement; provided , however, that (a) commencing with third anniversary of the Commencement Date and on each anniversary thereafter (each an “ Extension Date ”), the Employment Term shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other party hereto 60 days prior written notice before the next Extension Date that the Employment Term shall not be so extended and (b) if the Company is dissolved pursuant to the terms of the LP Agreement (a “ Dissolution ”), then the Employment Term shall automatically and immediately be terminated and, except as expressly provided in Section 6(d), no Person shall have any obligation hereunder except to the extent such obligation arose prior to, or directly as a result of, such termination.

2. Position .

a. During the Employment Term, Executive shall serve as the Chief Executive Officer of the Company and the Chief Executive Officer of Summit Materials Holdings GP, Ltd. (the “ General Partner ”). In such positions, Executive shall have such duties and authority as shall be determined from time to time by the Board of Directors of the General Partner (the “ Board ”). Executive shall also serve as a member of the Board so long as he serves in the foregoing capacities, and if requested by the General Partner, as a member of any committees thereof or a member of the board of directors (and any committees thereof) of any of the Company’s affiliates, in each respect without additional compensation.

b. During the Employment Term, Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude Executive, subject to the prior approval of the Board, from accepting appointment to or


continuing to serve on any board of directors or trustees of any business corporation or any charitable organization; provided in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of Executive’s duties hereunder or conflict with Sections 7 and 8.

3. Compensation .

a. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $300,000, payable in regular installments in accordance with the Company’s usual payment practices. The rate of Executive’s base salary will be reviewed annually by the Board, and may be increased (but not decreased). Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “ Base Salary .”

b. Unless and until the Company completes an acquisition (the “ Initial Acquisition ”) of a company primarily engaged in the U.S. and Canadian aggregates and related downstream product sectors (including, but not limited to, asphalt, paving, cement, concrete and concrete products), Executive shall not be eligible to earn an annual bonus award (an “ Annual Bonus ”). With respect to each full or partial fiscal year during the Employment Term following an Initial Acquisition, Executive shall be eligible to earn an Annual Bonus of up to one-hundred percent (100%) of Executive’s Base Salary (the “ Target ”) based upon the achievement of performance targets (which may be based on EBITDA and/or free cash flow targets) established by the Board within the first three months of each fiscal year during the Employment Term; provided , however, the Board, in its sole discretion, may appropriately adjust such performance targets in any fiscal year to reflect any merger, acquisition or divestiture effected by the Company during such fiscal year. In respect of the fiscal year during which the Initial Acquisition occurs, Executive shall be eligible to earn a pro-rated portion of the Target Annual Bonus based upon the number of days Executive was employed by the Company during such year after the date of such Initial Acquisition. The Annual Bonus, if any, shall be paid by the Company to Executive during the calendar year immediately following the year in which it is earned, promptly after the Company receives its audited financial statements with respect to the year in which the Annual Bonus was earned.

c. Executive and the Company have entered into separate agreements relating to the Company’s grant of equity awards to Executive and the Executive’s investment in the equity of the Company.

4. Employee Benefits . During the Employment Term, Executive shall be entitled to participate in the Company’s employee benefit plans as in effect from time to time (collectively “ Employee Benefits ”), on the same basis as those benefits are generally made available to other senior executives of the Company.

5. Business Expenses . During the Employment Term, reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies.

6. Termination . The Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be

 

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required to give the Company at least 60 days advance written notice of any resignation of Executive’s employment. Notwithstanding any other provision of this Agreement, the provisions of this Section 6 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.

a. By the Company With Cause or By Executive Other Than As a Result of a Constructive Termination; No Initial Acquisition by December 1, 2010 .

(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company with Cause (as defined below) and shall terminate automatically upon the effective date of Executive’s resignation other than as a result of a Constructive Termination (as defined in Section 6(c)); provided that Executive will be required to give the Company at least 60 days advance written notice of a resignation other than as a result of a Constructive Termination.

(ii) For purposes of this Agreement, “ Cause ” shall mean that the Board, based on information then known to the Company or the General Partner, determines in good faith (A) Executive’s willful or grossly negligent continued failure to substantially perform Executive’s material duties hereunder (other than as a result of total or partial incapacity due to physical or mental illness) for a period of 10 days following written notice by the Company or the General Partner to Executive of such failure, (B) dishonesty in the performance of Executive’s material duties hereunder, (C) an act or acts on Executive’s part constituting, or plea of guilty or nolo contendere to a crime constituting, (x) a felony under the laws of the United States or any state thereof or (y) a misdemeanor involving moral turpitude, (D) Executive’s willful malfeasance or willful misconduct in connection with Executive’s duties hereunder or (E) Executive’s breach, in a material respect, of Sections 7 or 8 of this Agreement that is not cured (to the extent curable) for a period of 10 days following written notice by the Company or the General Partner to Executive of such breach.

(iii) If Executive’s employment is terminated by the Company with Cause, if Executive resigns other than as a result of a Constructive Termination, or if Executive’s employment terminates for any reason (other than due to death or Disability) after December 1, 2010 if no Initial Acquisition occurs on or before such termination date, Executive shall be entitled to receive:

(A) the Base Salary accrued through the date of termination, payable in accordance with the Company’s usual payment practices;

(B) any Annual Bonus earned, but unpaid, as of the date of termination for the immediately preceding fiscal year, paid in accordance with Section 3(b) (except to the extent payment is otherwise deferred pursuant to any applicable deferred compensation arrangement with the Company);

(C) reimbursement, within 60 days following submission by Executive to the Company of appropriate supporting documentation) for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; provided that claims for such

 

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reimbursement (accompanied by appropriate supporting documentation) are submitted to the Company within 90 days following the date of Executive’s termination of employment; and

(D) such fully vested and nonforfeitable Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company (the amounts described in clauses (A) through (D) hereof being referred to as the “ Accrued Rights ”).

Following such termination of Executive’s employment by the Company with Cause or resignation by Executive other than as a result of a Constructive Termination, except as set forth in this Section 6(a)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

b. Disability or Death .

(i) The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company if Executive becomes physically or mentally incapacitated and is therefore unable for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period to perform Executive’s duties (such incapacity is hereinafter referred to as “ Disability ”). Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of this Agreement.

(ii) Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive:

(A) the Accrued Rights; and

(B) a pro-rata portion of the Annual Bonus, if any, that Executive would have been entitled to receive pursuant to Section 3(b) hereof in such year based upon the percentage of the fiscal year that shall have elapsed through the date of Executive’s termination of employment, payable when such Annual Bonus would have otherwise been payable to Executive pursuant to Section 3(b) had Executive’s employment not terminated (the “ Pro-Rata Bonus ”).

Following Executive’s termination of employment due to death or Disability, except as set forth in this Section 6(b)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

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c. By the Company Without Cause or Resignation by Executive as a result of a Constructive Termination .

(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company without Cause or by Executive’s resignation as a result of a Constructive Termination.

(ii) For purposes of this Agreement, a “ Constructive Termination ” shall mean any of the following, without the Executive’s prior written consent: (A) a material reduction in the Executive’s Base Salary or Target Annual Bonus; (B) a material diminution of the Executive’s authority, duties or responsibilities; (C) an acquisition, within five years following the date of this Agreement, by Blackstone Capital Partners (Cayman) V L.P. or any of its subsidiaries (“ Blackstone ”) of an equity interest of more than $200 million in any entity that engages in a Competitive Business, other than any such acquisition that is consummated by the Company or any of its subsidiaries; (D) a required relocation of the Executive’s primary place of business by more than fifty (50) miles from its location as of the Commencement Date; (E) the failure of the Company to pay or cause to be paid Executive’s Base Salary or Annual Bonus, when due hereunder or (F) any material breach by the Company of this Agreement or any agreement between the Company and the Executive relating to Executive’s compensation (including any equity awards); provided that either of the events described in clauses (A), (B), (D), (E) and (F) of this Section 6(c)(ii) shall constitute a Constructive Termination only if the Company fails to cure such event within 30 days after receipt from Executive of written notice of the event which constitutes such Constructive Termination; provided , further , that a “Constructive Termination” shall cease to exist for an event on the 60 th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company written notice thereof prior to such date.

(iii) If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns as a result of a Constructive Termination, in each case other than a termination or resignation after December 1, 2010 if no Initial Acquisition occurs on or before such termination date, Executive shall be entitled to receive:

(A) the Accrued Rights; and

(B) subject to Executive’s continued compliance with the provisions of Sections 7 and 8 and execution, within 30 days after the date of Executive’s termination of employment, and non-revocation of a general release of claims against the Company and its affiliates in a form and substance reasonably satisfactory to the Company,

(1) continued payment of the Base Salary in accordance with the Company’s normal payroll practices, as in effect on the date of termination of Executive’s employment, until eighteen months after the date of such termination (twelve months after the date of such termination if Section 7(a)(8) applies); and

(2) following the Initial Acquisition, an amount equal to one and one-half (1.5) times (one (1) times if Section 7(a)(8) applies) Executive’s Annual Bonus in respect of the fiscal year immediately

 

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preceding the applicable year of Executive’s termination of employment, except that, if the Executive’s employment is terminated in the fiscal year in which the Initial Acquisition occurs, such amount shall be in an amount equal to one and one-half (1.5) times (one (1) times if Section 7(a)(8) applies) the Target Annual Bonus, payable in each case in equal monthly installments for eighteen months after the date of such termination;

provided that the aggregate amounts described in this clause (B) shall be reduced by the present value of any other cash severance or termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates.

Following Executive’s termination of employment by the Company without Cause (other than by reason of Executive’s death or Disability) or by Executive’s resignation as a result of a Constructive Termination, except as set forth in this Section 6(c)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

d. Expiration of Employment Term or Dissolution . In the event (A) Executive elects not to extend the Employment Term pursuant to Section 1 of this Agreement or (B) of a Dissolution with a Negative Return, unless Executive’s employment is earlier terminated pursuant to paragraphs (a), (b) or (c) of this Section 6, Executive’s termination of employment hereunder (whether or not Executive continues as an employee of the Company thereafter) shall be deemed to occur on the close of business on the earlier of the effective date of Dissolution or the day immediately preceding the next scheduled Extension Date, and Executive shall be entitled to receive the Accrued Rights. Following such termination of Executive’s employment hereunder, Executive shall have no further rights to any compensation or any other benefits under this Agreement. In the event (A) that the Company elects not to extend the Employment Term pursuant to Section 1 of this Agreement or (B) of a Dissolution with a Positive Return, Executive shall be treated as terminated without Cause effective as of (as applicable) the close of business on the day immediately preceding the next scheduled Extension Date or the effective date of the Dissolution, and shall be entitled to receive the amounts and benefits specified in Section 6(c)(iii). For purposes hereof, “ Positive Return ” means the Sponsor shall have received aggregate cash proceeds and the fair market value of property in respect of its Class A-1 Interests in the Company equal to more than 100% of its aggregate Capital Contributions (as defined in the LP Agreement) in respect of such Class A-1 Interests, and “ Negative Return ” means that the Sponsor shall have received aggregate cash proceeds and the fair market value of property in respect of its Class A-1 Interests in the Company of equal to or less than 100% of its aggregate Capital Contributions (as defined in the LP Agreement) in respect of such Class A-1 Interests. Capitalized terms in the immediately-preceding sentence shall have the same meaning as specified in the Management Interest Subscription Agreement between Executive and the Company, dated as of the date of the Initial Acquisition Closing (as defined in the Amended and Restated Agreement of Exempted Limited Partnership of the Company dated July 30, 2009).

e. Notice of Termination . Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 10(i) hereof. For purposes of this Agreement, a “ Notice of Termination ” shall mean a notice which shall

 

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indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

f. Board/Committee Resignation . Upon termination of Executive’s employment from the Company for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and the board of directors (and any committees thereof) of any of the Company’s affiliates and any positions held at the General Partner.

7. Restrictive Covenants .

a. Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows:

(1) During the Employment Term and, for a period of eighteen months following the date Executive ceases to be employed by the Company (or such shorter time as provided in Section 7(a)(8)) (the “ Restricted Period ”), Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“ Person ”), directly or indirectly solicit or assist in soliciting in competition with the Company, the business of any client or prospective client:

 

  (i) with whom Executive had personal contact or dealings on behalf of the Company during the one-year period preceding Executive’s termination of employment;

 

  (ii) with whom employees reporting to Executive have had personal contact or dealings on behalf of the Company during the one year immediately preceding the Executive’s termination of employment; or

 

  (iii) for whom Executive had direct or indirect responsibility during the one year immediately preceding Executive’s termination of employment.

(2) During the Restricted Period, Executive will not directly or indirectly:

 

  (i) engage in any business involved, either directly or indirectly, in (x) the acquisition of companies primarily engaged in the U.S. and Canadian aggregates and related downstream product sectors (including, but not limited to, asphalt, paving, cement, concrete and concrete products) (any such company, a “ Business ”) or (y) the operation of any Business (any such business as described in subclauses (x) or (y), a “ Competitive Business ”);

 

  (ii) enter the employ of, or render any services to, any Person (or any division or controlled or controlling affiliate of any Person) who or which engages in a Competitive Business;

 

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  (iii) acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or

 

  (iv) interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the date of this Agreement) between the Company or any of its affiliates, customers, clients, suppliers, partners, members, investors or acquisition targets.

(3) Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly own, solely as an investment, securities of any Person engaged in a Competitive Business which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a controlling Person of, or a member of a group which controls, such Person and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such Person.

(4) During the Restricted Period, Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any Person, directly or indirectly:

 

  (i) solicit or encourage any employee of the Company or its affiliates to leave the employment of the Company or its affiliates; or

 

  (ii) hire any such employee who was employed by the Company or its affiliates as of the date of Executive’s termination of employment with the Company or who left the employment of the Company or its affiliates coincident with, or within one year prior to or after, the termination of Executive’s employment with the Company.

(5) During the Restricted Period, Executive will not, directly or indirectly, solicit or encourage to cease to work with the Company or its affiliates any consultant then under contract with the Company or its affiliates.

(6) Executive will not, other than as required by law or by order of a court or other competent authority, make or publish, or cause any other person to make or publish, any statement that is disparaging or that reflects negatively upon the Company or its affiliates, or that is or reasonably would be expected to be damaging to the reputation of the Company or its affiliates.

(7) If total equity investments by the Company are less than $200 million, there is a proposed Dissolution, and the Executive is not terminated for Cause and does not resign other than due to a Constructive Termination before the Dissolution is completed (or such earlier time as determined by the Company), (a) the Restricted Period shall be twelve months following termination of employment with the Company, and (b) the term Competitive Business for purposes hereof shall be limited to operations within 100 miles of a Company facility.

 

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(8) Notwithstanding the above, the covenants in this Section 7(a) shall not apply if (i) an Initial Acquisition does not occur on or before December 1, 2010 and Executive’s employment terminates prior to an Initial Acquisition, or (ii) Blackstone acquires, within five years following the date of this Agreement, an equity interest of more than $200 million in any entity that engages in a Competitive Business, other than any such acquisition that is consummated by the Company or its subsidiaries.

b. It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 7 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

8. Confidentiality; Intellectual Property .

a. Confidentiality .

(i) Executive will not at any time (whether during or after Executive’s employment with the Company) (x) retain or use for the benefit, purposes or account of Executive or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information — including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals — concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“ Confidential Information ”) without the prior written authorization of the Board, except as specifically necessary during the term of the Executive’s employment in order to perform the duties of his or her position and in the best interests of the Company.

(ii) “Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties; (b) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (c) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

 

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(iii) Except as required by law, Executive will not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the existence or contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Sections 7 and 8 of this Agreement provided they agree to maintain the confidentiality of such terms.

(iv) Upon termination of Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware.

b. Intellectual Property .

(i) If Executive has created, invented, designed, developed, contributed to or improved any works of authorship, inventions, intellectual property, materials, documents or other work product (including without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content, or audiovisual materials) (“ Works ”), either alone or with third parties, prior to Executive’s employment by the Company, that are relevant to or implicated by such employment (“ Prior Works ”), Executive hereby grants the Company a perpetual, non-exclusive, royalty-free, worldwide, assignable, sublicensable license under all rights and intellectual property rights (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) therein for all purposes in connection with the Company’s current and future business.

(ii) If Executive creates, invents, designs, develops, contributes to or improves any Works, either alone or with third parties, at any time during Executive’s employment by the Company and within the scope of such employment and/or with the use of any the Company resources (“ Company Works ”), Executive shall promptly and fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.

(iii) Executive agrees to keep and maintain adequate and current written records (in the form of notes, sketches, drawings, and any other form or media requested by the Company) of all Company Works. The records will be available to and remain the sole property and intellectual property of the Company at all times.

 

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(iv) Executive shall take all requested actions and execute all requested documents (including any licenses or assignments required by a government contract) at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Prior Works and Company Works. If the Company is unable for any other reason to secure Executive’s signature on any document for this purpose, then Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney in fact, to act for and on Executive’s behalf and stead to execute any documents and to do all other lawfully permitted acts in connection with the foregoing.

(v) Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Executive hereby indemnifies, holds harmless and agrees to defend the Company and its officers, directors, partners, employees, agents and representatives from any breach of the foregoing covenant. Executive shall comply with all relevant policies and guidelines of the Company, including regarding the protection of confidential information and intellectual property and potential conflicts of interest. Executive acknowledges that the Company may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version.

(vi) The provisions of Sections 7, 8 and 9 shall survive the termination of Executive’s employment for any reason.

9. Specific Performance . Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 7 or Section 8 would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

10. Miscellaneous .

a. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof that would direct the application of the laws of any other jurisdiction.

b. Entire Agreement/Amendments . This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company, and supersedes any prior agreements or understandings between the parties relating to the subject

 

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matter of this Agreement (except that matters relating to the Company’s grant of equity awards to Executive and Executive’s investment in the equity of the Company shall be governed by the separate agreements relating thereto). There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

c. No Waiver . The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

d. Severability . In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

e. Assignment . This Agreement, and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a Person or entity which is an affiliate or a successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor Person or entity.

f. No Mitigation . Executive shall not be obligated to mitigate the amount of severance payments payable hereunder by seeking other employment, or otherwise, nor shall the amounts payable to Executive hereunder be reduced by compensation earned by Executive by any subsequent employer.

g. Compliance with IRC Section 409A . Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) and the deferral of the commencement of any payments or benefits otherwise payable hereunder or pursuant to any other agreement with the Company as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code without any accelerated or additional tax) and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that is reasonably expected not to cause such an accelerated or additional tax. For purposes of

 

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Section 409A of the Code, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of the Section 409A of the Code, and references herein to Executive’s “termination of employment” shall refer to Executive’s separation from service with the Company Group within the meaning of Section 409A. To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 10(g); provided that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect thereto.

h. Successors; Binding Agreement . This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

i. Notice . For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

If to the Company:

Summit Materials Holdings L.P.

2900 K Street, NW, #450

Harbourside North Tower Building

Washington, D.C. 20007

Attention: Office of General Counsel/Chief Legal Officer

with a copy (which shall not constitute notice) to:

Silverhawk Capital Partners

4725 Piedmont Row Drive, Suite 420

Charlotte, NC 28210

Attention: Ted Gardner

with a copy (which shall not constitute notice) to:

The Blackstone Group L.P.

345 Park Avenue

New York, New York 10154

Attention: Neil Simpkins

Fax: 212-583-5712

with a copy (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

 

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New York, New York 10017

Telecopy: (212) 455-2502

Attention: Gregory Grogan

If to Executive:

To the most recent address of Executive set forth in the personnel records of the Company.

j. Executive Representation . Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

k. Prior Agreements . This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company and/or its affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its affiliates.

l. Cooperation . Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive’s employment with the Company and its affiliates. This provision shall survive any termination of this Agreement.

m. Withholding Taxes . The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

n. No Recourse . Notwithstanding anything to the contrary herein, Executive agrees and acknowledges that with respect to any payment, benefit or any other obligation or right under this Agreement, Executive shall have no recourse against The Blackstone Group L.P., Silverhawk Capital Partners or any of their respective affiliates (other than the Company).

o. Counterparts . This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

SUMMIT MATERIALS HOLDINGS L.P.     THOMAS HILL
By:  

Summit Materials Holdings GP, Ltd.,

its general partner

   
By:  

/s/ Neil Simpkins

   

/s/ Thomas Hill

  Name:   Neil Simpkins    
  Title:   Authorized Person    

[SIGNATURE PAGE TO TOM HILL EMPLOYMENT AGREEMENT]

Exhibit 10.6

EMPLOYMENT AGREEMENT

DOUGLAS C. RAUH

EMPLOYMENT AGREEMENT (the “ Agreement ”) dated as of December 29, 2011 by and between Summit Materials Holdings L.P. (the “ Company ”) and Douglas C. Rauh (“ Executive ”).

The Company desires to employ Executive and to enter into an agreement embodying the terms of such employment;

Executive desires to accept such employment and enter into such an agreement;

In consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Term of Employment . Subject to the provisions of Section 6 of this Agreement, Executive shall be employed by the Company hereunder for a period commencing January 1, 2012 (the “ Commencement Date ”) and ending on the third anniversary of the Commencement Date (the “ Employment Term ”) on the terms and subject to the conditions set forth in this Agreement; provided , however, that (a) commencing with the third anniversary of the Commencement Date and on each anniversary thereafter (each an “ Extension Date ”), the Employment Term shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other party hereto 60 days prior written notice before the next Extension Date that the Employment Term shall not be so extended and (b) if the Company is dissolved pursuant to the terms of the LP Agreement (a “ Dissolution ”), then the Employment Term shall automatically and immediately be terminated and, except as expressly provided in Section 6(d), no Person shall have any obligation hereunder except to the extent such obligation arose prior to, or directly as a result of, such termination.

2. Position .

a. During the Employment Term, Executive shall serve as President, Eastern Division of the Company. In such position, Executive shall have such duties and authority as shall be determined from time to time by the Board of Directors of Summit Materials Holdings GP, Ltd. (the “ General Partner ”) (the “ Board ”). Executive shall report to the Chief Executive Officer of the Company. Executive’s duties shall at all times be consistent with the duties of a regional president of a company of similar size and complexity.

b. During the Employment Term, Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude Executive, subject to the prior approval of the Board, from accepting appointment to or continuing to serve on any board of directors or trustees of any business corporation or any charitable organization; provided in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of Executive’s duties hereunder or conflict with Sections 7 and 8.


3. Compensation .

a. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $450,000.00 per annum, payable in regular installments in accordance with the Company’s usual payment practices. The rate of Executive’s base salary will be reviewed annually by the Board, and may be increased (but not decreased). Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “ Base Salary .”

b.(i) With respect to each full or partial fiscal year during the Employment Term, Executive shall be eligible to earn an annual bonus (an “ Annual Bonus ”) of up to sixty percent (60%) of Executive’s Base Salary (the “ Target ”) based upon the achievement of performance targets (which may be based on EBITDA and/or free cash flow targets) established by the Board within the first three months of each fiscal year during the Employment Term, with a potential bonus of up to ninety percent (90%) of the Target for extraordinary performance; provided , however, the Board, in its sole discretion, may appropriately adjust such performance targets in any fiscal year to reflect any merger, acquisition or divestiture effected by the Company during such fiscal year. The Annual Bonus, if any, shall be paid by the Company to Executive during the calendar year immediately following the year in which it is earned, promptly after the Company receives its audited financial statements with respect to the year in which the Annual Bonus was earned. Notwithstanding the foregoing, the minimum Annual Bonus for 2012 (payable in 2013) shall be $150,000.

(ii) Promptly after Executive commences his employment hereunder, by January 17, 2012 the Company shall pay him a starting bonus of $400,000, which shall be paid in a lump sum minus applicable deductions.

(iii) Car allowance: the Company shall provide Executive with an allowance in the amount of $1,000 per month for car expenses, to be paid on or before the last day of each calendar month and shall, in addition, reimburse Executive for the amount of his actual expenditures for gasoline, upon submission of appropriate documentation.

c. Executive and the Company have entered into separate agreements relating to the Company’s grant of equity awards to Executive and the Executive’s investment in the equity of the Company.

d. The Company shall reimburse Executive for (i) any loss suffered by Executive in connection with the sale of his current residence in Ohio (i.e., the amount by which Executive’s tax basis therein, estimated by Executive to be $1,100,000, exceeds the net proceeds received by Executive upon the good faith sale of such residence); such reimbursement payment by the Company to Executive shall be in an amount equal to both: a) the actual out of pocket loss incurred by Executive on the sale of his current residence, and b) an additional amount equal to all income taxes imposed on Executive in connection with the reimbursement payment plus the additional amount of taxes imposed on Executive due to the Company’s reimbursement of payment of such taxes; (ii) the cost of up to three (3) visits by Executive and

 

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his family to the area proximate to Executive’s Company offices, in connection with the search for a new residence; (iii) three (3) months of the reasonable rental of a house proximate to Executive’s Company offices; and (iv) reasonable moving expenses incurred by Executive in connection with his relocation.

e. The Company shall also reimburse Executive for his out of pocket costs for payment of COBRA continuation premiums in connection with health care insurance covering Executive and his family and maintained by his former employer, until such time as Executive and his family obtain coverage under the Company’s health care insurance plan.

f. The Company shall provide Executive with four (4) weeks of paid vacation during each calendar year during the Employment Term; in addition, the period January 1, 2012 through January 16, 2012 shall also be paid vacation.

g. For all purposes under this Agreement, the period from the Commencement Date through and including December 31, 2012 shall be considered a full calendar year. For the purposes of clarity, the amount of Executive’s salary from the Commencement Date through and including December 31, 2012, inclusive of paid vacations, shall be $450,000.

4. Employee Benefits . During the Employment Term, Executive shall be entitled to participate in the Company’s employee benefit plans as in effect from time to time (collectively “ Employee Benefits ”), on the same basis as those benefits are generally made available to other senior executives of the Company.

5. Business Expenses . During the Employment Term, reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies.

6. Termination . The Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be required to give the Company at least 60 days advance written notice of any resignation of Executive’s employment. Notwithstanding any other provision of this Agreement, the provisions of this Section 6 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.

a. By the Company With Cause or By Executive Other Than As a Result of a Constructive Termination .

(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company with Cause (as defined below) and shall terminate automatically upon the effective date of Executive’s resignation other than as a result of a Constructive Termination (as defined in Section 6(c)(ii)); provided that Executive will be required to give the Company at least 60 days advance written notice of a resignation other than as a result of a Constructive Termination.

 

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(ii) For purposes of this Agreement, “ Cause ” shall mean that the Board, based on information then known to the Company or the General Partner, determines in good faith (A) Executive’s willful or grossly negligent continued failure to substantially perform Executive’s material duties hereunder (other than as a result of total or partial incapacity due to physical or mental illness) for a period of 10 days following written notice by the Company or the General Partner to Executive of such failure, (B) dishonesty in the performance of Executive’s material duties hereunder, (C) an act or acts on Executive’s part constituting, or plea of guilty or nolo contendere to a crime constituting, (x) a felony under the laws of the United States or any state thereof or (y) a misdemeanor involving moral turpitude, (D) Executive’s willful malfeasance or willful misconduct in connection with Executive’s duties hereunder or (E) Executive’s breach, in a material respect, of Sections 7 or 8 of this Agreement that is not cured (to the extent curable) for a period of 10 days following written notice by the Company or the General Partner to Executive of such breach.

(iii) If Executive’s employment is terminated by the Company with Cause or if Executive resigns other than as a result of a Constructive Termination, Executive shall be entitled to receive:

(A) the Base Salary accrued through the date of termination, payable in accordance with the Company’s usual payment practices;

(B) any Annual Bonus earned, but unpaid, as of the date of termination for the immediately preceding fiscal year, paid in accordance with Section 3(b) (except to the extent payment is otherwise deferred pursuant to any applicable deferred compensation arrangement with the Company);

(C) reimbursement, within 60 days following submission by Executive to the Company of appropriate supporting documentation for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; provided that claims for such reimbursement (accompanied by appropriate supporting documentation) are submitted to the Company within 90 days following the date of Executive’s termination of employment; and

(D) such fully vested and nonforfeitable Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company (the amounts described in clauses (A) through (D) hereof being referred to as the “ Accrued Rights ”).

Following such termination of Executive’s employment by the Company with Cause or resignation by Executive other than as a result of a Constructive Termination, except as set forth in this Section 6(a)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

b. Disability or Death .

(i) The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company if Executive becomes physically or mentally incapacitated and is therefore unable for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period

 

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to perform Executive’s duties (such incapacity is hereinafter referred to as “ Disability ”). Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of this Agreement.

(ii) Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive:

(A) the Accrued Rights;

(B) a pro-rata portion of the Annual Bonus, if any, that Executive would have been entitled to receive pursuant to Section 3(b) hereof in such year based upon the percentage of the fiscal year that shall have elapsed through the date of Executive’s termination of employment, payable when such Annual Bonus would have otherwise been payable to Executive pursuant to Section 3(b) had Executive’s employment not terminated (the “ Pro-Rata Bonus ”); and

(C) the costs of “COBRA” health continuation coverage for eighteen (18) months (or, if shorter, until COBRA coverage ends under the Company’s group health plan).

Following Executive’s termination of employment due to death or Disability, except as set forth in this Section 6(b)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

c. By the Company Without Cause or Resignation by Executive as a result of a Constructive Termination .

(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company without Cause or by Executive’s resignation as a result of a Constructive Termination.

(ii) For purposes of this Agreement, a “ Constructive Termination ” shall mean any of the following, without the Executive’s prior written consent: (A) a material reduction in the Executive’s Base Salary or Target Annual Bonus; (B) a material diminution of the Executive’s authority, duties or responsibilities; (C) a required relocation of the Executive’s primary place of business by more than fifty (50) miles from its location as of the Commencement Date; (D) the failure of the Company to pay or cause to be paid Executive’s Base Salary or Annual Bonus, when due hereunder or (E) any material breach by the Company of this Agreement or any agreement between the Company and the Executive relating to Executive’s compensation (including any equity awards); provided that any of the events described in clauses (A), (B), (D) and (E) of this Section 6(c)(ii) shall constitute a Constructive Termination only if the Company fails to cure such event within 30 days after receipt from

 

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Executive of written notice of the event which constitutes such Constructive Termination; provided , further , that a “Constructive Termination” shall cease to exist for an event on the 60 th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company written notice thereof prior to such date.

(iii) If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns as a result of a Constructive Termination, Executive shall be entitled to receive:

(A) the Accrued Rights; and

(B) subject to Executive’s continued compliance with the provisions of Sections 7 and 8 and execution, within 30 days after the date of Executive’s termination of employment, and non-revocation of a general release of claims against the Company and its affiliates in a form and substance reasonably satisfactory to the Company,

(1) continued payment of the Base Salary in accordance with the Company’s normal payroll practices, as in effect on the date of termination of Executive’s employment, until twenty-four months after the date of such termination (twelve months if the termination occurs on or after January 1, 2014) (the “Severance Period”);

(2) an amount equal to one and two (2) times (one (1) times if the termination occurs on or after January 1, 2014) Executive’s Annual Bonus in respect of the fiscal year immediately preceding the applicable year of Executive’s termination of employment, payable in equal monthly installments for eighteen months after the date of such termination; if the termination occurs prior to January 1, 2013, the amount payable pursuant to this section shall be $300,000; and

(3) the costs of “COBRA” health continuation coverage for the lesser of the Severance Period or eighteen (18) months (or, if shorter, until COBRA coverage ends under the Company’s group health plan).

provided that the aggregate amounts described in this clause (B) shall be reduced by the present value of any other cash severance or termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates.

Following Executive’s termination of employment by the Company without Cause (other than by reason of Executive’s death or Disability) or by Executive’s resignation as a result of a Constructive Termination, except as set forth in this Section 6(c)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

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d. Expiration of Employment Term or Dissolution . In the event (A) Executive elects not to extend the Employment Term pursuant to Section 1 of this Agreement or (B) of a Dissolution with a Negative Return, unless Executive’s employment is earlier terminated pursuant to paragraphs (a), (b) or (c) of this Section 6, Executive’s termination of employment hereunder (whether or not Executive continues as an employee of the Company thereafter) shall be deemed to occur on the close of business on the earlier of the effective date of Dissolution or the day immediately preceding the next scheduled Extension Date, and Executive shall be entitled to receive the Accrued Rights. Following such termination of Executive’s employment hereunder, Executive shall have no further rights to any compensation or any other benefits under this Agreement. In the event (A) that the Company elects not to extend the Employment Term pursuant to Section 1 of this Agreement or (B) of a Dissolution with a Positive Return, Executive shall be treated as terminated without Cause effective as of (as applicable) the close of business on the day immediately preceding the next scheduled Extension Date or the effective date of the Dissolution, and shall be entitled to receive the amounts and benefits specified in Section 6(c)(iii). For purposes hereof, “ Positive Return ” means the Sponsor shall have received aggregate cash proceeds and the fair market value of property in respect of its Class A-1 Interests in the Company equal to more than 100% of its aggregate Capital Contributions (as defined in the LP Agreement) in respect of such Class A-1 Interests, and “ Negative Return ” means that the Sponsor shall have received aggregate cash proceeds and the fair market value of property in respect of its Class A-1 Interests in the Company of equal to or less than 100% of its aggregate Capital Contributions (as defined in the LP Agreement) in respect of such Class A-1 Interests. Capitalized terms in the immediately-preceding sentence shall have the same meaning as specified in the Management Interest Subscription Agreement between Executive and the Company, dated as of December 29, 2011.

e. Notice of Termination . Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 10(i) hereof. For purposes of this Agreement, a “ Notice of Termination ” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

f. Resignation from Other Positions . Upon termination of Executive’s employment from the Company for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the board of directors (and any committees thereof) of any of the Company’s affiliates and any positions held at the General Partner.

7. Restrictive Covenants .

a. Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows:

(1) During the Employment Term and, for a period of twelve (12) months (twenty-four (24) months if the Severance Period is twenty-four (24) months) following the date Executive ceases to be employed by the Company (the “ Restricted Period ”), Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“ Person ”), directly or indirectly solicit or assist in soliciting in competition with the Company, the business of any client or prospective client:

 

  (i) with whom Executive had personal contact or dealings on behalf of the Company during the one-year period preceding Executive’s termination of employment;

 

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  (ii) with whom employees reporting to Executive have had personal contact or dealings on behalf of the Company during the one year immediately preceding the Executive’s termination of employment; or

 

  (iii) for whom Executive had direct or indirect responsibility during the one year immediately preceding Executive’s termination of employment.

(2) During the Restricted Period, Executive will not directly or indirectly:

 

  (i) engage in any business involved, either directly or indirectly, in (x) the acquisition of companies primarily engaged in the U.S. and Canadian aggregates and related downstream product sectors (including, but not limited to, asphalt, paving, cement, concrete and concrete products) (any such company, a “ Business ”) or (y) the operation of any Business (any such business as described in subclauses (x) or (y), a “ Competitive Business ”);

 

  (ii) enter the employ of, or render any services to, any Person (or any division or controlled or controlling affiliate of any Person) who or which engages in a Competitive Business;

 

  (iii) acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or

 

  (iv) interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the date of this Agreement) between the Company or any of its affiliates, customers, clients, suppliers, partners, members, investors or acquisition targets.

(3) Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly own, solely as an investment, securities of any Person engaged in a Competitive Business which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a controlling Person of, or a member of a group which controls, such Person and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such Person.

 

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(4) During the Restricted Period, Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any Person, directly or indirectly:

 

  (i) solicit or encourage any employee of the Company or its affiliates to leave the employment of the Company or its affiliates; or

 

  (ii) hire any such employee who was employed by the Company or its affiliates as of the date of Executive’s termination of employment with the Company or who left the employment of the Company or its affiliates coincident with, or within one year prior to or after, the termination of Executive’s employment with the Company.

(5) During the Restricted Period, Executive will not, directly or indirectly, solicit or encourage to cease to work with the Company or its affiliates any consultant then under contract with the Company or its affiliates.

(6) Executive will not, other than as required by law or by order of a court or other competent authority, make or publish, or cause any other person to make or publish, any statement that is disparaging or that reflects negatively upon the Company or its affiliates, or that is or reasonably would be expected to be damaging to the reputation of the Company or its affiliates. The Company and its affiliates will not, other than as required by law or by order of a court or other competent authority, make or publish, or cause any other person to make or publish, any statement that is disparaging or that reflects negatively upon Executive, or that is or reasonably would be expected to be damaging to the reputation of Executive.

b. It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 7 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

8. Confidentiality; Intellectual Property .

a. Confidentiality .

(i) Executive will not at any time (whether during or after Executive’s employment with the Company) (x) retain or use for the benefit, purposes or account of Executive or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information —including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors,

 

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customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals — concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“ Confidential Information ”) without the prior written authorization of the Board, except as specifically necessary during the term of the Executive’s employment in order to perform the duties of his or her position and in the best interests of the Company.

(ii) “Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties; (b) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (c) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

(iii) Except as required by law, Executive will not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the existence or contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Sections 7 and 8 of this Agreement provided they agree to maintain the confidentiality of such terms.

(iv) Upon termination of Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware.

b. Intellectual Property .

(i) If Executive has created, invented, designed, developed, contributed to or improved any works of authorship, inventions, intellectual property, materials, documents or other work product (including without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content, or audiovisual materials) (“ Works ”), either alone or with third parties, prior to Executive’s employment by the Company, that are relevant to or implicated by such employment (“ Prior Works ”), Executive hereby grants the Company a perpetual, non-exclusive, royalty-free, worldwide, assignable, sublicensable license under all rights and intellectual property rights (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) therein for all purposes in connection with the Company’s current and future business.

 

10


(ii) If Executive creates, invents, designs, develops, contributes to or improves any Works, either alone or with third parties, at any time during Executive’s employment by the Company and within the scope of such employment and/or with the use of any the Company resources (“ Company Works ”), Executive shall promptly and fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.

(iii) Executive agrees to keep and maintain adequate and current written records (in the form of notes, sketches, drawings, and any other form or media requested by the Company) of all Company Works. The records will be available to and remain the sole property and intellectual property of the Company at all times.

(iv) Executive shall take all requested actions and execute all requested documents (including any licenses or assignments required by a government contract) at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Prior Works and Company Works. If the Company is unable for any other reason to secure Executive’s signature on any document for this purpose, then Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney in fact, to act for and on Executive’s behalf and stead to execute any documents and to do all other lawfully permitted acts in connection with the foregoing.

(v) Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Executive hereby indemnifies, holds harmless and agrees to defend the Company and its officers, directors, partners, employees, agents and representatives from any breach of the foregoing covenant. Executive shall comply with all relevant policies and guidelines of the Company, including regarding the protection of confidential information and intellectual property and potential conflicts of interest. Executive acknowledges that the Company may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version.

(vi) The provisions of Sections 7, 8 and 9 shall survive the termination of Executive’s employment for any reason.

9. Specific Performance . Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 7 or Section 8 would be inadequate and the Company would suffer irreparable damages as a

 

11


result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

10. Miscellaneous .

a. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof that would direct the application of the laws of any other jurisdiction.

b. Entire Agreement/Amendments . This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company, and supersedes any prior agreements or understandings between the parties relating to the subject matter of this Agreement (except that matters relating to the Company’s grant of equity awards to Executive and Executive’s investment in the equity of the Company shall be governed by the separate agreements relating thereto). There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

c. No Waiver . The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

d. Severability . In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

e. Assignment . This Agreement, and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a Person or entity which is an affiliate or a successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor Person or entity (provided that the Company shall be secondarily liable to Executive if the affiliate or successor Person or entity fails to comply with its rights and obligations to Executive hereunder).

f. No Mitigation . Executive shall not be obligated to mitigate the amount of severance payments payable hereunder by seeking other employment, or otherwise, nor shall the amounts payable to Executive hereunder be reduced by compensation earned by Executive by any subsequent employer.

 

12


g. Compliance with IRC Section 409A . Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the U.S. Department of Treasury regulations and other interpretive guidance issued thereunder (“Section 409A”), and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, then such portion deferred under this Section shall be paid or distributed to Executive in a lump sum on the earlier of (i) the date that is six (6) months following termination of Executive’s employment, (ii) a date that is no later than thirty (30) days after the date of Executive’s death or (iii) the earliest date as is permitted under Section 409A. For purposes of clarity, the six (6) month delay shall not apply in the case of severance pay contemplated by Treasury Regulation Section 1.409A-1(b)(9)(iii) to the extent of the limits set forth therein. Any remaining payments due under this Agreement shall be paid as otherwise provided herein. If any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that is reasonably expected not to cause such an accelerated or additional tax. For purposes of Section 409A, Executive’s right to receive installment payments under this Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such payment made under this Agreement shall at all times be considered a separate and distinct payment within the meaning of the Section 409A, and references herein to Executive’s “termination of employment” shall refer to Executive’s “separation from service” with the Company Group within the meaning of Treas. Reg. Section 409A-1(h) (and any successor provision). To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). To the maximum extent permitted by applicable law, the amounts payable to Executive under this Agreement shall be made in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (with respect to separation pay plans) or Treas. Reg. Section 1.409A-1(b)(4) (with respect to short-term deferrals) The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 10(g); provided that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect thereto.

h. Successors; Binding Agreement . This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

i. Notice . For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 

13


If to the Company:

Summit Materials Holdings L.P.

2900 K Street, NW, #450

Harbourside North Tower Building

Washington, D.C. 20007

Attention: Office of General Counsel/Chief Legal Officer

with a copy (which shall not constitute notice) to:

Silverhawk Capital Partners

4725 Piedmont Row Drive, Suite 420

Charlotte, NC 28210

Attention: Ted Gardner

with a copy (which shall not constitute notice) to:

The Blackstone Group L.P.

345 Park Avenue

New York, New York 10154

Attention: Neil Simpkins

Fax: 212-583-5712

with a copy (which shall not constitute notice) to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, New York 10063

Telecopy: (212) 351-4035

Attention: Steven R. Shoemate, Esq.

If to Executive:

To the most recent address of Executive set forth in the personnel records of the Company.

j. Executive Representation . Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

k. Prior Agreements . This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company and/or its affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its affiliates.

l. Cooperation . Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive’s employment with the Company and its affiliates. This provision shall survive any termination of this Agreement.

 

14


m. Withholding Taxes . The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

n. No Recourse . Notwithstanding anything to the contrary herein, Executive agrees and acknowledges that with respect to any payment, benefit or any other obligation or right under this Agreement, Executive shall have no recourse against The Blackstone Group L.P., Silverhawk Capital Partners or any of their respective affiliates (other than the Company).

o. Counterparts . This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

SUMMIT MATERIALS HOLDINGS L.P.

 

By:   Summit Materials Holdings GP, Ltd.,
  its general partner

 

By:  

/s/ Thomas Hill

   

 

Name:  

 

   
Title:   Authorized Person    

Executive

 

/s/ Douglas C. Rauh

Douglas C. Rauh

 

15

Exhibit 12

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

Computation of Ratios of Earnings to Fixed Charges

 

     Successor          Predecessor  

(in thousands)

   Year Ended
December 29, 2012
    Year Ended
December 31, 2011
    Year Ended
December 31, 2010
    August 26, 2009 to
December 31, 2009
         April 1, 2009 to
August 25, 2009
     Year Ended
March 31, 2009
 

Loss from continuing operations before income taxes (1)

   $ (51,723   $ (2,906   $ (21,089   $ (5,040 )         $ 5,945       $ 11,381   

Add (deduct)

                  

Distributions from equity investments

     817        156        —          —             —           —     

(Income) loss from equity method investees

     (683     894        656        —             —           —     

Capitalized interest

     (193     —          (433     —             —           —     

Fixed Charges

     59,438        49,218        27,262               
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

    

 

 

 

Earnings, as defined

   $ 7,656      $ 47,362      $ 6,396      $ (5,040      $ 5,945       $ 11,381   
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

    

 

 

 

Fixed Charges:

                  

Interest on indebtedness and amortization of deferred financing costs

   $ 58,079      $ 47,784      $ 25,430      $ 574         $ —         $ —     

Capitalized interest

     193        —          433        —             —           —     

Portion of rental expense under operating leases representative of the interest factor

     1,166        1,434        1,399        19           16         33   
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

    

 

 

 

Total fixed charges

   $ 59,438      $ 49,218      $ 27,262      $ 593         $ 16       $ 33   
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

    

 

 

 

Ratio of earnings
to fixed
charges (2)(3)

     0.1        1.0        0.2        N/A           364         341   
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

    

 

 

 

 

(1) Represents earnings from continuing operations before adjustments for noncontrolling interests in consolidated subsidiaries.
(2) The ratio of earnings to fixed charges is determined by dividing earnings, as adjusted, by fixed charges. Fixed charges consist of interest on all indebtedness plus that portion of operating lease rentals representative of the interest factor (deemed to be 33% of operating lease rentals)
(3) Earnings were insufficient to cover fixed charges for the period from August 26, 2009 to December 31, 2009 by $5.6 million.

Exhibit 16

March 26, 2013

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Ladies and Gentlemen:

We have read the second paragraph on page 207 of the Form S-4 dated March 26, 2013, of Summit Materials, LLC and Subsidiaries and Continental Cement Company, L.L.C. and subsidiary and are in agreement with the statements contained therein. We have no basis to agree or disagree with other statements of the registrant contained therein.

 

/s/ Deloitte & Touche LLP
McLean, Virginia

Exhibit 21

Subsidiaries of Summit Materials, LLC

 

Name

  

Jurisdiction of Incorporation or Organization

Austin Materials, LLC

   Delaware

Continental Cement Company, L.L.C.

   Delaware

Kilgore Companies, LLC

   Delaware

Norris Quarries, LLC

   Delaware

RK Hall, LLC

   Delaware

Summit Materials Companies I, LLC

   Delaware

Summit Materials Corporations I, Inc.

   Delaware

Summit Materials Holdings I, LLC

   Delaware

Summit Materials Holdings II, LLC

   Delaware

Elam Construction, Inc.

   Colorado

Cornejo & Sons, L.L.C.

   Kansas

Hamm Asphalt, LLC

   Kansas

Hamm, Inc.

   Kansas

N.R. Hamm Contractor, LLC

   Kansas

N.R. Hamm Quarry, LLC

   Kansas

Bourbon Limestone Company

   Kentucky

Glass Aggregates, LLC

   Kentucky

Hinkle Contracting Company, LLC

   Kentucky

Kentucky Hauling, Inc.

   Kentucky

South Central Kentucky Limestone, LLC

   Kentucky

Con-Agg of MO, L.L.C.

   Missouri

Fischer Quarries, L.L.C.

   Missouri

Quarry Properties, L.L.C.

   Missouri

Elam Paving, Inc.

   New Mexico

B&H Contracting, L.P.

   Texas

Industrial Asphalt, LLC

   Texas

R.K. Hall Construction, Ltd.

   Texas

RKH Capital, L.L.C.

   Texas

SCS Materials, L.P.

   Texas

Altaview Concrete, LLC

   Utah

B&B Resources, Inc.

   Utah

Kilgore Equipment, LLC

   Utah

Kilgore Trucking, LLC

   Utah

Peak Construction Materials, LLC

   Utah

Peak Management, L.C.

   Utah

Salt Lake Valley Sand & Gravel, Inc.

   Utah

Valley Ready Mix, Inc.

   Utah

Wasatch Concrete Pumping, LLC

   Utah

Wind River Materials, LLC

   Wyoming

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Summit Materials, LLC:

We consent to the use of our report dated March 27, 2013, with respect to the consolidated balance sheet of Summit Materials, LLC as of December 29, 2012, and the related consolidated statements of operations, comprehensive (loss) income, cash flows and changes in redeemable noncontrolling interest and member’s interest for year then ended, included herein and to the reference to our firm under the heading “Experts” in the prospectus.

/s/ KPMG LLP

McLean, Virginia

March 27, 2013

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Summit Materials, L.L.C.:

We consent to the use of our report dated March 27, 2013, with respect to the consolidated balance sheet of Continental Cement Company, L.L.C. as of December 31, 2012, and the related consolidated statements of operations, comprehensive income (loss), cash flows and changes in redeemable members’ interest and member’s interest for year then ended, included herein and to the reference to our firm under the heading “Experts” in the prospectus.

/s/ KPMG LLP

McLean, Virginia

March 27, 2013

Exhibit 23.3

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Registration Statement on Form S-4 of our report dated May 1, 2012 (March 26, 2013 as to Note 3), relating to the consolidated financial statements of Summit Materials, LLC and Subsidiaries (which report expresses an unqualified opinion and includes an explanatory paragraph regarding retrospective adjustments for discontinued operations) for the years ended December 31, 2011 and 2010 appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the headings “Experts” in such Prospectus.

/s/ DELOITTE & TOUCHE LLP

McLean, Virginia

March 26, 2013

Exhibit 23.4

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to use in this Registration Statement of Summit Materials, LLC on Form S-4 of our report dated April 18, 2012, relating to the consolidated financial statements of Continental Cement Company, L.L.C. and Subsidiary as of and for the year ended December 31, 2011 and for the periods from May 27, 2010 to December 31, 2010 (Successor) and from January 1, 2010 to May 26, 2010 (Predecessor) appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the headings “Experts” in such Prospectus.

/s/ DELOITTE & TOUCHE LLP

McLean, Virginia

March 26, 2013

Exhibit 23.5

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated December 15, 2011, with respect to the consolidated financial statements of Cornejo & Sons, Inc. and Subsidiaries included in the Registration Statement (Form S-4) and related Prospectus for the registration of $250 million aggregate principal amount of 10.5% Senior Notes due 2020.

/s/ Allen, Gibbs & Houlik, L.C.

March 25, 2013

Exhibit 23.6

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Members

Summit Materials, LLC and Subsidiaries

We consent to the use of our report dated October 25, 2011, with respect to the balance sheets of Kilgore Pavement Maintenance, LLC as of August 1, 2010 and December 31, 2009, and the related statements of operations and members’ equity and cash flows, for the period from January 1, 2010 through August 1, 2010 and for the year ended December 31, 2009, included herein and to the reference to our firm under the heading “Experts” in the prospectus.

/s/ Wisan, Smith, Racker & Prescott, LLP

Salt Lake City, Utah

March 25, 2013

Exhibit 23.7

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Summit Materials, LLC Washington, DC

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated October 23, 2012, with respect to the financial statements of Norris Aggregate Products, a division of Norris Asphalt Paving Co., included in the Registration Statement (Form S-4) of Summit Materials, LLC and Summit Materials Finance Corp. and related Prospectus for the registration of $250 million aggregate principal amount of 10.5% Senior Notes due 2020.

/s/ Clifton Larson Allen LLP

West Des Moines, Iowa

March 25, 2013

Exhibit 23.8

CONSENT OF INDEPENDENT AUDITOR

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated September 21, 2011, with respect to the combined financial statements and schedule of R.K. Hall Construction, Ltd. included in the Registration Statement (Form S-4) and related Prospectus for the registration of $250 million aggregate principal amount of 10.5% Senior Notes due 2020.

/s/ Perryman Chaney Russell, LLP

Perryman Chaney Russell, LLP

March 25, 2013

Exhibit 25.1

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM T-1

 

 

STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939

OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

 

¨ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)

 

 

WILMINGTON TRUST, NATIONAL ASSOCIATION

(Exact name of trustee as specified in its charter)

 

 

16-1486454

(I.R.S. employer identification no.)

1100 North Market Street

Wilmington, DE 19890

(Address of principal executive offices)

Robert C. Fiedler

Vice President and Counsel

1100 North Market Street

Wilmington, Delaware 19890

(302) 651-8541

(Name, address and telephone number of agent for service)

 

 

SUMMIT MATERIALS, LLC

SUMMIT MATERIALS FINANCE CORP. 1

(Exact name of obligor as specified in its charter)

 

 

 

Delaware   24-4138486
(State of incorporation)   (I.R.S. employer identification no.)

2900 K Street N.W., Suite 100

Harbourisde North Tower Building

Washington, D.C.

  20007
(Address of principal executive offices)   (Zip Code)

10.5% Senior Notes due 2020

(Title of the indenture securities)

 

1  

SEE TABLE OF ADDITIONAL OBLIGORS

 

 

 


TABLE OF ADDITIONAL OBLIGORS

 

Exact Name of Obligor Guarantor as
Specified in its Charter (or Other
Organizational Document)

   State or Other
Jurisdiction of
Incorporation or
Organization
   I.R.S.
Employer
Identification
Number
   Industrial
Classification
Code Number
  

Address, Including Zip Code and
Telephone Number, Including Area
Code, of Obligor Guarantor’s
Principal Executive Offices

Austin Materials, LLC

   Delaware    45-2840524    1400    9020 N. Capital of Texas Highway, Suite 250, Austin, TX 78759

Continental Cement Company, L.L.C.

   Delaware    27-2594654    3241    14755 North Outer Forth Drive #514, Chesterfield, MO 63017

Kilgore Companies, LLC

   Delaware    27-2910651    1400    7057 West 2100 South, West Valley, UT 84128

Norris Quarries, LLC

   Delaware    45-4506838    1400    2604 N Stadium Blvd, Columbia, MO 65202

RK Hall, LLC

   Delaware    27-3722217    1600    2810 NW Loop 286, Paris, TX 75460

Summit Materials Companies I, LLC

   Delaware    27-1395580    1400    2900 K Street NW Suite 100, Harbourside North Tower Building, Washington, DC 20007

Summit Materials Corporations I, Inc.

   Delaware    27-5206889    1400    2900 K Street NW Suite 100, Harbourside North Tower Building, Washington, DC 20007

Summit Materials Holdings I, LLC

   Delaware    27-2779766    1400    2900 K Street NW Suite 100, Harbourside North Tower Building, Washington, DC 20007

Summit Materials Holdings II, LLC

   Delaware    27-2606667    3241    2900 K Street NW Suite 100, Harbourside North Tower Building, Washington, DC 20007

Elam Construction, Inc.

   Colorado    84-0484380    1400    556 Struthers Avenue, Grand Junction, CO 81501

Cornejo & Sons, L.L.C.

   Kansas    27-2336713    1600    2060 E. Tulsa, Wichita, KS 67216

Hamm Asphalt, LLC

   Kansas    48-0765153    2951    609 Perry Place, Perry, KS 66073

Hamm, Inc.

   Kansas    48-1243726    1400    609 Perry Place, Perry, KS 66073

N.R. Hamm Contractor, LLC

   Kansas    48-0581200    1600    609 Perry Place, Perry, KS 66073

N.R. Hamm Quarry, LLC

   Kansas    48-0581201    1400    609 Perry Place, Perry, KS 66073

Bourbon Limestone Company

   Kentucky    61-0592947    1400    395 North Middletown Rd, Paris, KY 40361

Glass Aggregates, LLC

   Kentucky    20-4710585    1400    395 North Middletown Rd, Paris, KY 40361

Hinkle Contracting Company, LLC

   Kentucky    61-0725598    1400    395 North Middletown Rd, Paris, KY 40361

Kentucky Hauling, Inc.

   Kentucky    61-0930534    4700    395 North Middletown Rd, Paris, KY 40361

South Central Kentucky Limestone, LLC

   Kentucky    27-3004607    1400    395 North Middletown Rd, Paris, KY 40361


Exact Name of Obligor Guarantor as
Specified in its Charter (or Other
Organizational Document)

   State or Other
Jurisdiction of
Incorporation or
Organization
   I.R.S.
Employer
Identification
Number
   Industrial
Classification
Code Number
  

Address, Including Zip Code and
Telephone Number, Including Area
Code, of Obligor Guarantor’s
Principal Executive Offices

Con-Agg of MO, L.L.C.

   Missouri    43-1765061    3273    2604 N Stadium Blvd, Columbia, MO 65202

Fischer Quarries, L.L.C.

   Missouri    43-1767807    1400    2604 N Stadium Blvd, Columbia, MO 65202

Quarry Properties, L.L.C.

   Missouri    20-1136159    1400    2604 N Stadium Blvd, Columbia, MO 65202

Elam Paving, Inc.

   New Mexico    85-0473651    1400    556 Struthers Avenue, Grand Junction, CO 81501

B&H Contracting, L.P.

   Texas    26-3160017    7389    2810 NW Loop 286, Paris, TX 75460

Industrial Asphalt, LLC

   Texas    74-2766027    1600    16409 Bratton Lane, Austin, TX 78728

R.K. Hall Construction, Ltd.

   Texas    20-2347198    1600    2810 NW Loop 286, Paris, TX 75460

RKH Capital, L.L.C.

   Texas    20-4632566    6799    2810 NW Loop 286, Paris, TX 75460

SCS Materials, L.P.

   Texas    20-1932670    1600    2810 NW Loop 286, Paris, TX 75460

Altaview Concrete, LLC

   Utah    87-0431601    1600    7057 West 2100 South, West Valley, UT 84128

B&B Resources, Inc.

   Utah    87-0490366    1600    7057 West 2100 South, West Valley, UT 84128

Kilgore Equipment, LLC

   Utah    81-0551726    1600    7057 West 2100 South, West Valley, UT 84128

Kilgore Trucking, LLC

   Utah    85-0487373    1600    7057 West 2100 South, West Valley, UT 84128

Peak Construction Materials, LLC

   Utah    20-5978846    1600    7057 West 2100 South, West Valley, UT 84128

Peak Management, L.C.

   Utah    87-0623232    8741    7057 West 2100 South, West Valley, UT 84128

Salt Lake Valley Sand & Gravel, Inc.

   Utah    87-0561870    1600    7057 West 2100 South, West Valley, UT 84128

Valley Ready Mix, Inc.

   Utah    87-0506149    1600    7057 West 2100 South, West Valley, UT 84128

Wasatch Concrete Pumping, LLC

   Utah    87-0551837    1600    7057 West 2100 South, West Valley, UT 84128

Wind River Materials, LLC

   Wyoming    27-3823267    1600    7057 West 2100 South, West Valley, UT 84128


Item 1. GENERAL INFORMATION. Furnish the following information as to the trustee:

 

  (a) Name and address of each examining or supervising authority to which it is subject.

Comptroller of Currency, Washington, D.C.

Federal Deposit Insurance Corporation, Washington, D.C.

 

  (b) Whether it is authorized to exercise corporate trust powers.

Yes.

 

Item 2. AFFILIATIONS WITH THE OBLIGOR . If the obligor is an affiliate of the trustee, describe each affiliation:

Based upon an examination of the books and records of the trustee and upon information furnished by the obligor, the obligor is not an affiliate of the trustee.

 

Item 16. LIST OF EXHIBITS. Listed below are all exhibits filed as part of this Statement of Eligibility and Qualification.

 

  1. A copy of the Charter for Wilmington Trust, National Association, incorporated by reference to Exhibit 1 of Form T-1.

 

  2. The authority of Wilmington Trust, National Association to commence business was granted under the Charter for Wilmington Trust, National Association, incorporated herein by reference to Exhibit 1 of Form T-1.

 

  3. The authorization to exercise corporate trust powers was granted under the Charter for Wilmington Trust, National Association, incorporated herein by reference to Exhibit 1 of Form T - 1.

 

  4. A copy of the existing By-Laws of Trustee, as now in effect, incorporated herein by reference to Exhibit 4 of form T-1.

 

  5. Not applicable.

 

  6. The consent of Trustee as required by Section 321(b) of the Trust Indenture Act of 1939, incorporated herein by reference to Exhibit 6 of Form T-1.

 

  7. Current Report of the Condition of Trustee, published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

 

  8. Not applicable.

 

  9. Not applicable.


SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Wilmington Trust, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Guilford and State of Connecticut on the 27 th day of March, 2013.

 

WILMINGTON TRUST,

NATIONAL ASSOCIATION

By:  

/s/ Joseph P. O’Donnell

Name:   Joseph P. O’Donnell

Title:

  Vice President


EXHIBIT 1

CHARTER OF WILMINGTON TRUST, NATIONAL ASSOCIATION


ARTICLES OF ASSOCIATION

OF

WILMINGTON TRUST, NATIONAL ASSOCIATION

For the purpose of organizing an association to perform any lawful activities of national banks, the undersigned do enter into the following articles of association:

FIRST. The title of this association shall be Wilmington Trust, National Association.

SECOND. The main office of the association shall be in the City of Wilmington, County of New Castle, State of Delaware. The general business of the association shall be conducted at its main office and its branches.

THIRD. The board of directors of this association shall consist of not less than five nor more than twenty-five persons, unless the OCC has exempted the bank from the 25-member limit. The exact number is to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a majority of the shareholders at any annual or special meeting thereof. Each director shall own common or preferred stock of the association or of a holding company owning the association, with an aggregate par, fair market or equity value $1,000. Determination of these values may be based as of either (i) the date of purchase or (ii) the date the person became a director, whichever value is greater. Any combination of common or preferred stock of the association or holding company may be used.

Any vacancy in the board of directors may be filled by action of a majority of the remaining directors between meetings of shareholders. The board of directors may not increase the number of directors between meetings of shareholders to a number which:

 

  1) exceeds by more than two the number of directors last elected by shareholders where the number was 15 or less; or

 

  2) exceeds by more than four the number of directors last elected by shareholders where the number was 16 or more, but in no event shall the number of directors exceed 25, unless the OCC has exempted the bank from the 25-member limit.

Directors shall be elected for terms of one year and until their successors are elected and qualified. Terms of directors, including directors selected to fill vacancies, shall expire at the next regular meeting of shareholders at which directors are elected, unless the directors resign or are removed from office. Despite the expiration of a director’s term, the director shall continue to serve until his or her successor is elected and qualifies or until there is a decrease in the number of directors and his or her position is eliminated.

Honorary or advisory members of the board of directors, without voting power or power of final decision in matters concerning the business of the association, may be appointed by resolution of a majority of the full board of directors, or by resolution of shareholders at any annual or special meeting. Honorary or advisory directors shall not be counted to determine the number of directors of the association or the presence of a quorum in connection with any board action, and shall not be required to own qualifying shares.

FOURTH. There shall be an annual meeting of the shareholders to elect directors and transact whatever other business may be brought before the meeting. It shall be held at the main office or any other convenient place the board of directors may designate, on the day of each year specified therefor in the bylaws, or, if that day falls on a legal holiday in the state in which the association is located, on the next following banking day. If no election is held on the day fixed, or in the event of a legal holiday on the following banking day, an election may be held on any subsequent day within 60 days of the day fixed, to be designated by the board of directors, or, if the directors fail to fix the day, by shareholders representing two-thirds of the shares issued and outstanding. In all cases at least 10 days advance notice of the time, place and purpose of a shareholders’ meeting shall be given to the shareholders by first class mail, unless the OCC determines that an emergency circumstance exists. The sole shareholder of the bank is permitted to waive notice of the shareholders’ meeting.


In all elections of directors, the number of votes each common shareholder may cast will be determined by multiplying the number of shares such shareholder owns by the number of directors to be elected. Those votes may be cumulated and cast for a single candidate or may be distributed among two or more candidates in the manner selected by the shareholder. If, after the first ballot, subsequent ballots are necessary to elect directors, a shareholder may not vote shares that he or she has already fully cumulated and voted in favor of a successful candidate. On all other questions, each common shareholder shall be entitled to one vote for each share of stock held by him or her.

Nominations for election to the board of directors may be made by the board of directors or by any stockholder of any outstanding class of capital stock of the association entitled to vote for election of directors. Nominations other than those made by or on behalf of the existing management shall be made in writing and be delivered or mailed to the president of the association not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors; provided, however, that if less than 21 days notice of the meeting is given to shareholders, such nominations shall be mailed or delivered to the president of the association not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder:

 

  1) The name and address of each proposed nominee.

 

  2) The principal occupation of each proposed nominee.

 

  3) The total number of shares of capital stock of the association that will be voted for each proposed nominee.

 

  4) The name and residence address of the notifying shareholder.

 

  5) The number of shares of capital stock of the association owned by the notifying shareholder.

Nominations not made in accordance herewith may, in his/her discretion, be disregarded by the chairperson of the meeting, and the vote tellers may disregard all votes cast for each such nominee. No bylaw may unreasonably restrict the nomination of directors by shareholders.

A director may resign at any time by delivering written notice to the board of directors, its chairperson, or to the association, which resignation shall be effective when the notice is delivered unless the notice specifies a later effective date.

A director may be removed by shareholders at a meeting called to remove the director, when notice of the meeting stating that the purpose or one of the purposes is to remove the director is provided, if there is a failure to fulfill one of the affirmative requirements for qualification, or for cause; provided, however, that a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against the director’s removal.

FIFTH. The authorized amount of capital stock of this association shall be ten thousand shares of common stock of the par value of one hundred dollars ($100) each; but said capital stock may be increased or decreased from time to time, according to the provisions of the laws of the United States.

No holder of shares of the capital stock of any class of the association shall have any preemptive or preferential right of subscription to any shares of any class of stock of the association, whether now or hereafter authorized, or to any obligations convertible into stock of the association, issued, or sold, nor any right of subscription to any thereof other than such, if any, as the board of directors, in its discretion, may from time to time determine and at such price as the board of directors may from time to time fix. Preemptive rights also must be approved by a vote of holders of two-thirds of the bank’s outstanding voting shares. Unless otherwise specified in these articles of association or required by law, (1) all matters requiring shareholder action, including amendments to the articles of association, must be approved by shareholders owning a majority voting interest in the outstanding voting stock, and (2) each shareholder shall be entitled to one vote per share.

Unless otherwise specified in these articles of association or required by law, all shares of voting stock shall be voted together as a class, on any matters requiring shareholder approval. If a proposed amendment would


affect two or more classes or series in the same or a substantially similar way, all the classes or series so affected must vote together as a single voting group on the proposed amendment.

Shares of one class or series may be issued as a dividend for shares of the same class or series on a pro rata basis and without consideration. Shares of one class or series may be issued as share dividends for a different class or series of stock if approved by a majority of the votes entitled to be cast by the class or series to be issued, unless there are no outstanding shares of the class or series to be issued. Unless otherwise provided by the board of directors, the record date for determining shareholders entitled to a share dividend shall be the date authorized by the board of directors for the share dividend.

Unless otherwise provided in the bylaws, the record date for determining shareholders entitled to notice of and to vote at any meeting is the close of business on the day before the first notice is mailed or otherwise sent to the shareholders, provided that in no event may a record date be more than 70 days before the meeting.

If a shareholder is entitled to fractional shares pursuant to a stock dividend, consolidation or merger, reverse stock split or otherwise, the association may: (a) issue fractional shares; (b) in lieu of the issuance of fractional shares, issue script or warrants entitling the holder to receive a full share upon surrendering enough script or warrants to equal a full share; (c) if there is an established and active market in the association’s stock, make reasonable arrangements to provide the shareholder with an opportunity to realize a fair price through sale of the fraction, or purchase of the additional fraction required for a full share; (d) remit the cash equivalent of the fraction to the shareholder; or (e) sell full shares representing all the fractions at public auction or to the highest bidder after having solicited and received sealed bids from at least three licensed stock brokers; and distribute the proceeds pro rata to shareholders who otherwise would be entitled to the fractional shares. The holder of a fractional share is entitled to exercise the rights for shareholder, including the right to vote, to receive dividends, and to participate in the assets of the association upon liquidation, in proportion to the fractional interest. The holder of script or warrants is not entitled to any of these rights unless the script or warrants explicitly provide for such rights. The script or warrants may be subject to such additional conditions as: (1) that the script or warrants will become void if not exchanged for full shares before a specified date; and (2) that the shares for which the script or warrants are exchangeable may be sold at the option of the association and the proceeds paid to scriptholders.

The association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. Obligations classified as debt, whether or not subordinated, which may be issued by the association without the approval of shareholders, do not carry voting rights on any issue, including an increase or decrease in the aggregate number of the securities, or the exchange or reclassification of all or part of securities into securities of another class or series.

SIXTH. The board of directors shall appoint one of its members president of this association, and one of its members chairperson of the board and shall have the power to appoint one or more vice presidents, a secretary who shall keep minutes of the directors’ and shareholders’ meetings and be responsible for authenticating the records of the association, and such other officers and employees as may be required to transact the business of this association.

A duly appointed officer may appoint one or more officers or assistant officers if authorized by the board of directors in accordance with the bylaws.

The board of directors shall have the power to:

 

  1) Define the duties of the officers, employees, and agents of the association.

 

  2) Delegate the performance of its duties, but not the responsibility for its duties, to the officers, employees, and agents of the association.

 

  3) Fix the compensation and enter into employment contracts with its officers and employees upon reasonable terms and conditions consistent with applicable law.


  4) Dismiss officers and employees.

 

  5) Require bonds from officers and employees and to fix the penalty thereof.

 

  6) Ratify written policies authorized by the association’s management or committees of the board.

 

  7) Regulate the manner in which any increase or decrease of the capital of the association shall be made, provided that nothing herein shall restrict the power of shareholders to increase or decrease the capital of the association in accordance with law, and nothing shall raise or lower from two-thirds the percentage required for shareholder approval to increase or reduce the capital.

 

  8) Manage and administer the business and affairs of the association.

 

  9) Adopt initial bylaws, not inconsistent with law or the articles of association, for managing the business and regulating the affairs of the association.

 

  10) Amend or repeal bylaws, except to the extent that the articles of association reserve this power in whole or in part to shareholders.

 

  11) Make contracts.

 

  12) Generally perform all acts that are legal for a board of directors to perform.

SEVENTH. The board of directors shall have the power to change the location of the main office to any other place within the limits of Wilmington, Delaware, without the approval of the shareholders, or with a vote of shareholders owning two-thirds of the stock of such association for a relocation outside such limits and upon receipt of a certificate of approval from the Comptroller of the Currency, to any other location within or outside the limits of Wilmington Delaware, but not more than 30 miles beyond such limits. The board of directors shall have the power to establish or change the location of any branch or branches of the association to any other location permitted under applicable law, without approval of shareholders, subject to approval by the Comptroller of the Currency.

EIGHTH. The corporate existence of this association shall continue until termination according to the laws of the United States.

NINTH. The board of directors of this association, or any one or more shareholders owning, in the aggregate, not less than 50 percent of the stock of this association, may call a special meeting of shareholders at any time. Unless otherwise provided by the bylaws or the laws of the United States, a notice of the time, place, and purpose of every annual and special meeting of the shareholders shall be given at least 10 days prior to the meeting by first-class mail, unless the OCC determines that an emergency circumstance exists. If the association is a wholly-owned subsidiary, the sole shareholder may waive notice of the shareholders’ meeting. Unless otherwise provided by the bylaws or these articles, any action requiring approval of shareholders must be effected at a duly called annual or special meeting.

TENTH. For purposes of this Article Tenth, the term “institution-affiliated party” shall mean any institution-affiliated party of the association as such term is defined in 12 U.S.C. 1813(u).

Any institution-affiliated party (or his or her heirs, executors or administrators) may be indemnified or reimbursed by the association for reasonable expenses actually incurred in connection with any threatened, pending or completed actions or proceedings and appeals therein, whether civil, criminal, governmental, administrative or investigative, in accordance with and to the fullest extent permitted by law, as such law now or hereafter exists; provided, however, that when an administrative proceeding or action instituted by a federal banking agency results in a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association, then the association shall require the repayment of all legal fees and expenses advanced pursuant to the next succeeding paragraph and may not indemnify such institution-affiliated parties (or their heirs, executors or administrators) for expenses, including expenses for legal fees, penalties or


other payments incurred. The association shall provide indemnification in connection with an action or proceeding (or part thereof) initiated by an institution-affiliated party (or by his or her heirs, executors or administrators) only if such action or proceeding (or part thereof) was authorized by the board of directors.

Expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding under 12 U.S.C. 164 or 1818 may be paid by the association in advance of the final disposition of such action or proceeding upon (a) a determination by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding that the institution-affiliated party (or his or her heirs, executors or administrators) has a reasonable basis for prevailing on the merits, (b) a determination that the indemnified individual (or his or her heirs, executors or administrators) will have the financial capacity to reimburse the bank in the event he or she does not prevail, (c) a determination that the payment of expenses and fees by the association will not adversely affect the safety and soundness of the association, and (d) receipt of an undertaking by or on behalf of such institution-affiliated party (or by his or her heirs, executors or administrators) to repay such advancement in the event of a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association. In all other instances, expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding as to which indemnification may be given under these articles of association may be paid by the association in advance of the final disposition of such action or proceeding upon (a) receipt of an undertaking by or on behalf of such institution-affiliated party (or by or on behalf of his or her heirs, executors or administrators) to repay such advancement in the event that such institution-affiliated party (or his or her heirs, executors or administrators) is ultimately found not to be entitled to indemnification as authorized by these articles of association and (b) approval by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding or, if such a quorum is not obtainable, then approval by stockholders. To the extent permitted by law, the board of directors or, if applicable, the stockholders, shall not be required to find that the institution-affiliated party has met the applicable standard of conduct provided by law for indemnification in connection with such action or proceeding.

In the event that a majority of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the remaining members of the board may authorize independent legal counsel to review the indemnification request and provide the remaining members of the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Article Tenth have been met. If independent legal counsel opines that said conditions have been met, the remaining members of the board of directors may rely on such opinion in authorizing the requested indemnification.

In the event that all of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the board shall authorize independent legal counsel to review the indemnification request and provide the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Article Tenth have been met. If legal counsel opines that said conditions have been met, the board of directors may rely on such opinion in authorizing the requested indemnification.

To the extent permitted under applicable law, the rights of indemnification and to the advancement of expenses provided in these articles of association (a) shall be available with respect to events occurring prior to the adoption of these articles of association, (b) shall continue to exist after any restrictive amendment of these articles of association with respect to events occurring prior to such amendment, (c) may be interpreted on the basis of applicable law in effect at the time of the occurrence of the event or events giving rise to the action or proceeding, or on the basis of applicable law in effect at the time such rights are claimed, and (d) are in the nature of contract rights which may be enforced in any court of competent jurisdiction as if the association and the institution-affiliated party (or his or her heirs, executors or administrators) for whom such rights are sought were parties to a separate written agreement.


The rights of indemnification and to the advancement of expenses provided in these articles of association shall not, to the extent permitted under applicable law, be deemed exclusive of any other rights to which any such institution affiliated party (or his or her heirs, executors or administrators) may now or hereafter be otherwise entitled whether contained in these articles of association, the bylaws, a resolution of stockholders, a resolution of the board of directors, or an agreement providing such indemnification, the creation of such other rights being hereby expressly authorized. Without limiting the generality of the foregoing, the rights of indemnification and to the advancement of expenses provided in these articles of association shall not be deemed exclusive of any rights, pursuant to statute or otherwise, of any such institution-affiliated party (or of his or her heirs, executors or administrators) in any such action or proceeding to have assessed or allowed in his or her favor, against the association or otherwise, his or her costs and expenses incurred therein or in connection therewith or any part thereof.

If this Article Tenth or any part hereof shall be held unenforceable in any respect by a court of competent jurisdiction, it shall be deemed modified to the minimum extent necessary to make it enforceable, and the remainder of this Article Tenth shall remain fully enforceable.

The association may, upon affirmative vote of a majority of its board of directors, purchase insurance to indemnify its institution-affiliated parties to the extent that such indemnification is allowed in these articles of association; provided, however, that no such insurance shall include coverage to pay or reimburse any institution-affiliated party for the cost of any judgment or civil money penalty assessed against such person in an administrative proceeding or civil action commenced by any federal banking agency. Such insurance may, but need not, be for the benefit of all institution-affiliated parties.

ELEVENTH. These articles of association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of this association, unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount. The association’s board of directors may propose one or more amendments to the articles of association for submission to the shareholders.


EXHIBIT 4

BY-LAWS OF WILMINGTON TRUST, NATIONAL ASSOCIATION


AMENDED AND RESTATED BYLAWS

OF

WILMINGTON TRUST, NATIONAL ASSOCIATION

ARTICLE I

Meetings of Shareholders

Section 1. Annual Meeting . The annual meeting of the shareholders to elect directors and transact whatever other business may properly come before the meeting shall be held at the main office of the association, Rodney Square North, 1100 Market Street, City of Wilmington, State of Delaware, at 1:00 o’clock p.m. on the first Tuesday in March of each year, or at such other place and time as the board of directors may designate, or if that date falls on a legal holiday in Delaware, on the next following banking day. Notice of the meeting shall be mailed by first class mail, postage prepaid, at least 10 days and no more than 60 days prior to the date thereof, addressed to each shareholder at his/her address appearing on the books of the association. If, for any cause, an election of directors is not made on that date, or in the event of a legal holiday, on the next following banking day, an election may be held on any subsequent day within 60 days of the date fixed, to be designated by the board of directors, or, if the directors fail to fix the date, by shareholders representing two-thirds of the shares. In these circumstances, at least 10 days’ notice must be given by first class mail to shareholders.

Section 2. Special Meetings . Except as otherwise specifically provided by statute, special meetings of the shareholders may be called for any purpose at any time by the board of directors or by any one or more shareholders owning, in the aggregate, not less than fifty percent of the stock of the association. Every such special meeting, unless otherwise provided by law, shall be called by mailing, postage prepaid, not less than 10 days nor more than 60 days prior to the date fixed for the meeting, to each shareholder at the address appearing on the books of the association a notice stating the purpose of the meeting.

The board of directors may fix a record date for determining shareholders entitled to notice and to vote at any meeting, in reasonable proximity to the date of giving notice to the shareholders of such meeting. The record date for determining shareholders entitled to demand a special meeting is the date the first shareholder signs a demand for the meeting describing the purpose or purposes for which it is to be held.

A special meeting may be called by shareholders or the board of directors to amend the articles of association or bylaws, whether or not such bylaws may be amended by the board of directors in the absence of shareholder approval.

If an annual or special shareholders’ meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time or place, if the new date, time or place is announced at the meeting before adjournment, unless any additional items of business are to be considered, or the association becomes aware of an intervening event materially affecting any matter to be voted on more than 10 days prior to the date to which the meeting is adjourned. If a new record date for the adjourned meeting is fixed, however, notice of the adjourned meeting must be given to persons who are shareholders as of the new record date. If, however, the meeting to elect the directors is adjourned before the election takes place, at least ten days’ notice of the new election must be given to the shareholders by first-class mail.

Section 3. Nominations of Directors . Nominations for election to the board of directors may be made by the board of directors or by any stockholder of any outstanding class of capital stock of the association entitled to vote for the election of directors. Nominations, other than those made by or on behalf of the existing management of the association, shall be made in writing and shall be delivered or mailed to the president of the association and the Comptroller of the Currency, Washington, D.C., not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors; provided, however, that if less than 21 days’ notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the president of the association not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder:

 

  (1) The name and address of each proposed nominee;


  (2) The principal occupation of each proposed nominee;

 

  (3) The total number of shares of capital stock of the association that will be voted for each proposed nominee;

 

  (4) The name and residence of the notifying shareholder; and

 

  (5) The number of shares of capital stock of the association owned by the notifying shareholder.

Nominations not made in accordance herewith may, in his/her discretion, be disregarded by the chairperson of the meeting, and upon his/her instructions, the vote tellers may disregard all votes cast for each such nominee.

Section 4. Proxies . Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing, but no officer or employee of this association shall act as proxy. Proxies shall be valid only for one meeting, to be specified therein, and any adjournments of such meeting. Proxies shall be dated and filed with the records of the meeting. Proxies with facsimile signatures may be used and unexecuted proxies may be counted upon receipt of a written confirmation from the shareholder. Proxies meeting the above requirements submitted at any time during a meeting shall be accepted.

Section 5. Quorum . A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law, or by the shareholders or directors pursuant to Article IX, Section 2, but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the articles of association, or by the shareholders or directors pursuant to Article IX, Section 2. If a meeting for the election of directors is not held on the fixed date, at least 10 days’ notice must be given by first-class mail to the shareholders.

ARTICLE II

Directors

Section 1. Board of Directors . The board of directors shall have the power to manage and administer the business and affairs of the association. Except as expressly limited by law, all corporate powers of the association shall be vested in and may be exercised by the board of directors.

Section 2. Number . The board of directors shall consist of not less than five nor more than twenty-five members, unless the OCC has exempted the bank from the 25-member limit. The exact number within such minimum and maximum limits is to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a majority of the shareholders at any meeting thereof.

Section 3. Organization Meeting . The secretary or treasurer, upon receiving the certificate of the judges of the result of any election, shall notify the directors-elect of their election and of the time at which they are required to meet at the main office of the association, or at such other place in the cities of Wilmington, Delaware or Buffalo, New York, to organize the new board of directors and elect and appoint officers of the association for the succeeding year. Such meeting shall be held on the day of the election or as soon thereafter as practicable, and, in any event, within 30 days thereof. If, at the time fixed for such meeting, there shall not be a quorum, the directors present may adjourn the meeting, from time to time, until a quorum is obtained.

Section 4. Regular Meetings . The Board of Directors may, at any time and from time to time, by resolution designate the place, date and hour for the holding of a regular meeting, but in the absence of any such designation, regular meetings of the board of directors shall be held, without notice, on the first Tuesday of each March, June and September, and on the second Tuesday of each December at the main office or other such place as the board of directors may designate. When any regular meeting of the board of directors falls upon a holiday, the meeting shall be held on the next banking business day unless the board of directors shall designate another day.


Section 5. Special Meetings . Special meetings of the board of directors may be called by the Chairman of the Board of the association, or at the request of two or more directors. Each member of the board of directors shall be given notice by telegram, first class mail, or in person stating the time and place of each special meeting.

Section 6. Quorum . A majority of the entire board then in office shall constitute a quorum at any meeting, except when otherwise provided by law or these bylaws, but a lesser number may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. If the number of directors present at the meeting is reduced below the number that would constitute a quorum, no business may be transacted, except selecting directors to fill vacancies in conformance with Article II, Section 7. If a quorum is present, the board of directors may take action through the vote of a majority of the directors who are in attendance.

Section 7. Meetings by Conference Telephone. Any one or more members of the board of directors or any committee thereof may participate in a meeting of such board or committees by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at such meeting.

Section 8. Procedures . The order of business and all other matters of procedure at every meeting of the board of directors may be determined by the person presiding at the meeting.

Section 9. Removal of Directors . Any director may be removed for cause, at any meeting of stockholders notice of which shall have referred to the proposed action, by vote of the stockholders. Any director may be removed without cause, at any meeting of stockholders notice of which shall have referred to the proposed action, by the vote of the holders of a majority of the shares of the Corporation entitled to vote. Any director may be removed for cause, at any meeting of the directors notice of which shall have referred to the proposed action, by vote of a majority of the entire Board of Directors.

Section 10. Vacancies . When any vacancy occurs among the directors, a majority of the remaining members of the board of directors, according to the laws of the United States, may appoint a director to fill such vacancy at any regular meeting of the board of directors, or at a special meeting called for that purpose at which a quorum is present, or if the directors remaining in office constitute fewer than a quorum of the board of directors, by the affirmative vote of a majority of all the directors remaining in office, or by shareholders at a special meeting called for that purpose in conformance with Section 2 of Article I. At any such shareholder meeting, each shareholder entitled to vote shall have the right to multiply the number of votes he or she is entitled to cast by the number of vacancies being filled and cast the product for a single candidate or distribute the product among two or more candidates. A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

ARTICLE III

Committees of the Board

The board of directors has power over and is solely responsible for the management, supervision, and administration of the association. The board of directors may delegate its power, but none of its responsibilities, to such persons or committees as the board may determine.

The board of directors must formally ratify written policies authorized by committees of the board of directors before such policies become effective. Each committee must have one or more member(s), and who may be an officer of the association or an officer or director of any affiliate of the association, who serve at the pleasure of the board of directors. Provisions of the articles of association and these bylaws governing place of meetings, notice of meeting, quorum and voting requirements of the board of directors, apply to committees and their members as well. The creation of a committee and appointment of members to it must be approved by the board of directors.


Section 1. Loan Committee . There shall be a loan committee composed of not less than 2 directors, appointed by the board of directors annually or more often. The loan committee, on behalf of the bank, shall have power to discount and purchase bills, notes and other evidences of debt, to buy and sell bills of exchange, to examine and approve loans and discounts, to exercise authority regarding loans and discounts, and to exercise, when the board of directors is not in session, all other powers of the board of directors that may lawfully be delegated. The loan committee shall keep minutes of its meetings, and such minutes shall be submitted at the next regular meeting of the board of directors at which a quorum is present, and any action taken by the board of directors with respect thereto shall be entered in the minutes of the board of directors.

Section 2. Investment Committee . There shall be an investment committee composed of not less than 2 directors, appointed by the board of directors annually or more often. The investment committee, on behalf of the bank, shall have the power to ensure adherence to the investment policy, to recommend amendments thereto, to purchase and sell securities, to exercise authority regarding investments and to exercise, when the board of directors is not in session, all other powers of the board of directors regarding investment securities that may be lawfully delegated. The investment committee shall keep minutes of its meetings, and such minutes shall be submitted at the next regular meeting of the board of directors at which a quorum is present, and any action taken by the board of directors with respect thereto shall be entered in the minutes of the board of directors.

Section 3. Examining Committee . There shall be an examining committee composed of not less than 2 directors, exclusive of any active officers, appointed by the board of directors annually or more often. The duty of that committee shall be to examine at least once during each calendar year and within 15 months of the last examination the affairs of the association or cause suitable examinations to be made by auditors responsible only to the board of directors and to report the result of such examination in writing to the board of directors at the next regular meeting thereafter. Such report shall state whether the association is in a sound condition, and whether adequate internal controls and procedures are being maintained and shall recommend to the board of directors such changes in the manner of conducting the affairs of the association as shall be deemed advisable.

Notwithstanding the provisions of the first paragraph of this section 3, the responsibility and authority of the Examining Committee may, if authorized by law, be given over to a duly constituted audit committee of the association’s parent corporation by a resolution duly adopted by the board of directors.

Section 4. Trust Audit Committee. There shall be a trust audit committee in conformance with Section 1 of Article V.

Section 5. Other Committees . The board of directors may appoint, from time to time, from its own members, compensation, special litigation and other committees of one or more persons, for such purposes and with such powers as the board of directors may determine.

However, a committee may not:

 

  (1) Authorize distributions of assets or dividends;

 

  (2) Approve action required to be approved by shareholders;

 

  (3) Fill vacancies on the board of directors or any of its committees;

 

  (4) Amend articles of association;

 

  (5) Adopt, amend or repeal bylaws; or

 

  (6) Authorize or approve issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares.

Section 6. Committee Members’ Fees . Committee members may receive a fee for their services as committee members and traveling and other out-of-pocket expenses incurred in attending any meeting of a committee of which they are a member. The fee may be a fixed sum to be paid for attending each meeting or a fixed sum to be paid quarterly, or semiannually, irrespective of the number of meetings attended or not attended. The amount of the fee and the basis on which it shall be paid shall be determined by the Board of Directors.


ARTICLE IV

Officers and Employees

Section 1. Chairperson of the Board . The board of directors shall appoint one of its members to be the chairperson of the board to serve at its pleasure. Such person shall preside at all meetings of the board of directors. The chairperson of the board shall supervise the carrying out of the policies adopted or approved by the board of directors; shall have general executive powers, as well as the specific powers conferred by these bylaws; and shall also have and may exercise such further powers and duties as from time to time may be conferred upon or assigned by the board of directors.

Section 2. President . The board of directors shall appoint one of its members to be the president of the association. In the absence of the chairperson, the president shall preside at any meeting of the board of directors. The president shall have general executive powers and shall have and may exercise any and all other powers and duties pertaining by law, regulation, or practice to the office of president, or imposed by these bylaws. The president shall also have and may exercise such further powers and duties as from time to time may be conferred or assigned by the board of directors.

Section 3. Vice President . The board of directors may appoint one or more vice presidents. Each vice president shall have such powers and duties as may be assigned by the board of directors. One vice president shall be designated by the board of directors, in the absence of the president, to perform all the duties of the president.

Section 4. Secretary . The board of directors shall appoint a secretary, treasurer, or other designated officer who shall be secretary of the board of directors and of the association and who shall keep accurate minutes of all meetings. The secretary shall attend to the giving of all notices required by these bylaws; shall be custodian of the corporate seal, records, documents and papers of the association; shall provide for the keeping of proper records of all transactions of the association; shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice to the office of treasurer, or imposed by these bylaws; and shall also perform such other duties as may be assigned from time to time, by the board of directors.

Section 5. Other Officers . The board of directors may appoint one or more assistant vice presidents, one or more trust officers, one or more assistant secretaries, one or more assistant treasurers, one or more managers and assistant managers of branches and such other officers and attorneys in fact as from time to time may appear to the board of directors to be required or desirable to transact the business of the association. Such officers shall respectively exercise such powers and perform such duties as pertain to their several offices, or as may be conferred upon or assigned to them by the board of directors, the chairperson of the board, or the president. The board of directors may authorize an officer to appoint one or more officers or assistant officers.

Section 6. Tenure of Office . The president and all other officers shall hold office for the current year for which the board of directors was elected, unless they shall resign, become disqualified, or be removed; and any vacancy occurring in the office of president shall be filled promptly by the board of directors.

Section 7. Resignation . An officer may resign at any time by delivering notice to the association. A resignation is effective when the notice is given unless the notice specifies a later effective date.

ARTICLE V

Fiduciary Activities

Section 1. Trust Audit Committee. There shall be a Trust Audit Committee composed of not less than 2 directors, appointed by the board of directors, which shall, at least once during each calendar year make suitable audits of the association’s fiduciary activities or cause suitable audits to be made by auditors responsible only to the board, and at such time shall ascertain whether fiduciary powers have been administered according to law, Part 9 of the Regulations of the Comptroller of the Currency, and sound fiduciary principles. Such committee: (1) must not include any officers of the bank or an affiliate who participate significantly in the administration of the bank’s fiduciary activities; and (2) must consist of a majority of members who are not also members of any committee to which the board of directors has delegated power to manage and control the fiduciary activities of the bank.


Notwithstanding the provisions of the first paragraph of this section 1, the responsibility and authority of the Trust Audit Committee may, if authorized by law, be given over to a duly constituted audit committee of the association’s parent corporation by a resolution duly adopted by the board of directors.

Section 2. Fiduciary Files. There shall be maintained by the association all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged.

Section 3. Trust Investments. Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and applicable law. Where such instrument does not specify the character and class of investments to be made, but does vest in the association investment discretion, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under applicable law.

ARTICLE VI

Stock and Stock Certificates

Section 1. Transfers . Shares of stock shall be transferable on the books of the association, and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall in proportion to such shareholder’s shares, succeed to all rights of the prior holder of such shares. The board of directors may impose conditions upon the transfer of the stock reasonably calculated to simplify the work of the association with respect to stock transfers, voting at shareholder meetings and related matters and to protect it against fraudulent transfers.

Section 2. Stock Certificates . Certificates of stock shall bear the signature of the president (which may be engraved, printed or impressed) and shall be signed manually or by facsimile process by the secretary, assistant secretary, treasurer, assistant treasurer, or any other officer appointed by the board of directors for that purpose, to be known as an authorized officer, and the seal of the association shall be engraved thereon. Each certificate shall recite on its face that the stock represented thereby is transferable only upon the books of the association properly endorsed.

The board of directors may adopt or use procedures for replacing lost, stolen, or destroyed stock certificates as permitted by law.

The association may establish a procedure through which the beneficial owner of shares that are registered in the name of a nominee may be recognized by the association as the shareholder. The procedure may set forth:

 

  (1) The types of nominees to which it applies;

 

  (2) The rights or privileges that the association recognizes in a beneficial owner;

 

  (3) How the nominee may request the association to recognize the beneficial owner as the shareholder;

 

  (4) The information that must be provided when the procedure is selected;

 

  (5) The period over which the association will continue to recognize the beneficial owner as the shareholder;

 

  (6) Other aspects of the rights and duties created.

ARTICLE VII

Corporate Seal

Section 1. Seal . The seal of the association shall be in such form as may be determined from time to time by the board of directors. The president, the treasurer, the secretary or any assistant treasurer or assistant secretary, or other officer thereunto designated by the board of directors shall have authority to affix the corporate seal to any document requiring such seal and to attest the same. The seal on any corporate obligation for the payment of money may be facsimile.


ARTICLE VIII

Miscellaneous Provisions

Section 1. Fiscal Year . The fiscal year of the association shall be the calendar year.

Section 2. Execution of Instruments . All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, delivered or accepted on behalf of the association by the chairperson of the board, or the president, or any vice president, or the secretary, or the treasurer, or, if in connection with the exercise of fiduciary powers of the association, by any of those offices or by any trust officer. Any such instruments may also be executed, acknowledged, verified, delivered or accepted on behalf of the association in such other manner and by such other officers as the board of directors may from time to time direct. The provisions of this section 2 are supplementary to any other provision of these bylaws.

Section 3. Records . The articles of association, the bylaws and the proceedings of all meetings of the shareholders, the board of directors, and standing committees of the board of directors shall be recorded in appropriate minute books provided for that purpose. The minutes of each meeting shall be signed by the secretary, treasurer or other officer appointed to act as secretary of the meeting.

Section 4. Corporate Governance Procedures. To the extent not inconsistent with federal banking statutes and regulations, or safe and sound banking practices, the association may follow the Delaware General Corporation Law, Del. Code Ann. tit. 8 (1991, as amended 1994, and as amended thereafter) with respect to matters of corporate governance procedures.

Section 5. Indemnification. For purposes of this Section 5 of Article VIII, the term “institution-affiliated party” shall mean any institution-affiliated party of the association as such term is defined in 12 U.S.C. 1813(u).

Any institution-affiliated party (or his or her heirs, executors or administrators) may be indemnified or reimbursed by the association for reasonable expenses actually incurred in connection with any threatened, pending or completed actions or proceedings and appeals therein, whether civil, criminal, governmental, administrative or investigative, in accordance with and to the fullest extent permitted by law, as such law now or hereafter exists; provided, however, that when an administrative proceeding or action instituted by a federal banking agency results in a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association, then the association shall require the repayment of all legal fees and expenses advanced pursuant to the next succeeding paragraph and may not indemnify such institution-affiliated parties (or their heirs, executors or administrators) for expenses, including expenses for legal fees, penalties or other payments incurred. The association shall provide indemnification in connection with an action or proceeding (or part thereof) initiated by an institution-affiliated party (or by his or her heirs, executors or administrators) only if such action or proceeding (or part thereof) was authorized by the board of directors.

Expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding under 12 U.S.C. 164 or 1818 may be paid by the association in advance of the final disposition of such action or proceeding upon (a) a determination by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding that the institution-affiliated party (or his or her heirs, executors or administrators) has a reasonable basis for prevailing on the merits, (b) a determination that the indemnified individual (or his or her heirs, executors or administrators) will have the financial capacity to reimburse the bank in the event he or she does not prevail, (c) a determination that the payment of expenses and fees by the association will not adversely affect the safety and soundness of the association, and (d) receipt of an undertaking by or on behalf of such institution-affiliated party (or by his or her heirs, executors or administrators) to repay such advancement in the event of a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from


participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association. In all other instances, expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding as to which indemnification may be given under these articles of association may be paid by the association in advance of the final disposition of such action or proceeding upon (a) receipt of an undertaking by or on behalf of such institution-affiliated party (or by or on behalf of his or her heirs, executors or administrators) to repay such advancement in the event that such institution-affiliated party (or his or her heirs, executors or administrators) is ultimately found not to be entitled to indemnification as authorized by these bylaws and (b) approval by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding or, if such a quorum is not obtainable, then approval by stockholders. To the extent permitted by law, the board of directors or, if applicable, the stockholders, shall not be required to find that the institution-affiliated party has met the applicable standard of conduct provided by law for indemnification in connection with such action or proceeding.

In the event that a majority of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the remaining members of the board may authorize independent legal counsel to review the indemnification request and provide the remaining members of the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Section 5 of Article VIII have been met. If independent legal counsel opines that said conditions have been met, the remaining members of the board of directors may rely on such opinion in authorizing the requested indemnification.

In the event that all of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the board shall authorize independent legal counsel to review the indemnification request and provide the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Section 5 of Article VIII have been met. If legal counsel opines that said conditions have been met, the board of directors may rely on such opinion in authorizing the requested indemnification.

To the extent permitted under applicable law, the rights of indemnification and to the advancement of expenses provided in these articles of association (a) shall be available with respect to events occurring prior to the adoption of these bylaws, (b) shall continue to exist after any restrictive amendment of these bylaws with respect to events occurring prior to such amendment, (c) may be interpreted on the basis of applicable law in effect at the time of the occurrence of the event or events giving rise to the action or proceeding, or on the basis of applicable law in effect at the time such rights are claimed, and (d) are in the nature of contract rights which may be enforced in any court of competent jurisdiction as if the association and the institution-affiliated party (or his or her heirs, executors or administrators) for whom such rights are sought were parties to a separate written agreement.

The rights of indemnification and to the advancement of expenses provided in these bylaws shall not, to the extent permitted under applicable law, be deemed exclusive of any other rights to which any such institution-affiliated party (or his or her heirs, executors or administrators) may now or hereafter be otherwise entitled whether contained in the association’s articles of association, these bylaws, a resolution of stockholders, a resolution of the board of directors, or an agreement providing such indemnification, the creation of such other rights being hereby expressly authorized. Without limiting the generality of the foregoing, the rights of indemnification and to the advancement of expenses provided in these bylaws shall not be deemed exclusive of any rights, pursuant to statute or otherwise, of any such institution-affiliated party (or of his or her heirs, executors or administrators) in any such action or proceeding to have assessed or allowed in his or her favor, against the association or otherwise, his or her costs and expenses incurred therein or in connection therewith or any part thereof.

If this Section 5 of Article VIII or any part hereof shall be held unenforceable in any respect by a court of competent jurisdiction, it shall be deemed modified to the minimum extent necessary to make it enforceable, and the remainder of this Section 5 of Article VIII shall remain fully enforceable.


The association may, upon affirmative vote of a majority of its board of directors, purchase insurance to indemnify its institution-affiliated parties to the extent that such indemnification is allowed in these bylaws; provided, however, that no such insurance shall include coverage for a final order assessing civil money penalties against such persons by a bank regulatory agency. Such insurance may, but need not, be for the benefit of all institution-affiliated parties.

ARTICLE IX

Inspection and Amendments

Section 1. Inspection . A copy of the bylaws of the association, with all amendments, shall at all times be kept in a convenient place at the main office of the association, and shall be open for inspection to all shareholders during banking hours.

Section 2. Amendments . The bylaws of the association may be amended, altered or repealed, at any regular meeting of the board of directors, by a vote of a majority of the total number of the directors except as provided below, and provided that the following language accompany any such change.

I,                                 , certify that: (1) I am the duly constituted (secretary or treasurer) of and secretary of its board of directors, and as such officer am the official custodian of its records; (2) the foregoing bylaws are the bylaws of the association, and all of them are now lawfully in force and effect.

I have hereunto affixed my official signature on this                      day of             .

 

 

(Secretary or Treasurer)

The association’s shareholders may amend or repeal the bylaws even though the bylaws also may be amended or repealed by the board of directors.


EXHIBIT 6

Section 321(b) Consent

Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended, Wilmington Trust, National Association hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon requests therefor.

 

   

WILMINGTON TRUST,

NATIONAL ASSOCIATION

Dated: March 27, 2013     By: /s/ Joseph P. O’Donnell                                             
    Name:   Joseph P. O’Donnell
    Title:   Vice President


EXHIBIT 7

R E P O R T  O F  C O N D I T I O N

WILMINGTON TRUST, NATIONAL ASSOCIATION

As of the close of business on December 31, 2012:

 

     Thousands of Dollars  

ASSETS

  

Cash and balances due from depository institutions:

     1,158,614   

Securities:

     13,651   

Federal funds sold and securities purchased under agreement to resell:

     0   

Loans and leases held for sale:

     0   

Loans and leases net of unearned income, allowance:

     583,026   

Premises and fixed assets:

     12,868   

Other real estate owned:

     41   

Investments in unconsolidated subsidiaries and associated companies:

     0   

Direct and indirect investments in real estate ventures:

     0   

Intangible assets:

     7,692   

Other assets:

     70,647   

Total Assets:

     1,846,539   

 

     Thousands of Dollars  

LIABILITIES

  

Deposits

     1,240,175   

Federal funds purchased and securities sold under agreements to repurchase

     139,200   

Other borrowed money:

     0   

Other Liabilities:

     62,077   

Total Liabilities

     1,441,452   

 

     Thousands of Dollars  

EQUITY CAPITAL

  

Common Stock

     1,000   

Surplus

     382,176   

Retained Earnings

     26,966   

Accumulated other comprehensive income

     (5,055

Total Equity Capital

     405,087   

Total Liabilities and Equity Capital

     1,846,539   

Exhibit 99.1

SUMMIT MATERIALS LLC

SUMMIT MATERIALS FINANCE CORP.

LETTER OF TRANSMITTAL

OFFER TO EXCHANGE

$250,000,000 PRINCIPAL AMOUNT OF THEIR 10.5% SENIOR NOTES DUE 2020,

WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, FOR ANY AND ALL OF THEIR OUTSTANDING UNREGISTERED 10.5%

SENIOR NOTES DUE 2020.

 

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,

ON                     , 2013 (THE “EXPIRATION DATE”), UNLESS THE EXCHANGE

OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN PRIOR

TO 5:00 P.M., NEW YORK CITY TIME, ON                     , 2013.

The Exchange Agent for the Exchange Offer is:

Wilmington Trust, National Association

 

By Registered or Certified Mail:

Wilmington Trust, National Association

c/o Wilmington Trust Company

Corporate Capital Markets

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1626

Attn: Sam Hamed

  

By Facsimile:

(302) 636-4139

Attn: Sam Hamed

  

By Overnight Courier or Hand:

Wilmington Trust, National Association

c/o Wilmington Trust Company

Corporate Capital Markets

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1626

Attn: Sam Hamed

  

To Confirm by Telephone:

(302) 636-6181

Attn: Sam Hamed

  

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

Holders of Outstanding Notes (as defined below) should complete this Letter of Transmittal either if Outstanding Notes are to be forwarded herewith or if tenders of Outstanding Notes are to be made by book-entry transfer to an account maintained by the Exchange Agent at the book-entry transfer facility specified by the holder pursuant to the procedures set forth in “The Exchange Offer—Book-Entry Delivery Procedures” and “The Exchange Offer—Procedures for Tendering Outstanding Notes” in the Prospectus (as defined below) and an Agent’s Message (as defined below) is not delivered. If tender is being made by book-entry transfer, the holder must have an Agent’s Message delivered in lieu of this Letter of Transmittal.

Holders of Outstanding Notes whose certificates for such Outstanding Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in “The Exchange Offer—Guaranteed Delivery Procedures” in the Prospectus.


Unless the context otherwise requires, the term “holder” for purposes of this Letter of Transmittal means any person in whose name Outstanding Notes are registered or any other person who has obtained a properly completed bond power from the registered holder or any person whose Outstanding Notes are held of record by The Depository Trust Company (“DTC”).

The undersigned acknowledges receipt of the Prospectus dated                     , 2013 (as it may be amended or supplemented from time to time, the “Prospectus”) of Summit Materials LLC, a Delaware limited liability company, and Summit Materials Finance Corp., a Delaware corporation (the “Issuers”), and certain of the Issuers’ subsidiaries (each, a “Guarantor” and collectively, the “Guarantors”), and this Letter of Transmittal (the “Letter of Transmittal”), which together constitute the Issuers’ offer (the “Exchange Offer”) to exchange an aggregate principal amount of up to $250,000,000 of the Issuers’ 10.5% Senior Notes due 2020 which have been registered under the Securities Act of 1933, as amended (the “Securities Act”) (the “Exchange Notes”), for any and all of the Issuers’ outstanding unregistered 10.5% Senior Notes due 2020 that were issued on January 23, 2012 (the “Outstanding Notes”). The Outstanding Notes are unconditionally guaranteed (the “Outstanding Guarantees”) by the Guarantors and the Exchange Notes will be unconditionally guaranteed (the “New Guarantees”) by the Guarantors. Upon the terms and subject to the conditions set forth in the Prospectus and this Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to the related Exchange Notes issued in the Exchange Offer in exchange for the Outstanding Guarantees of the Outstanding Notes for which such Exchange Notes are issued in the Exchange Offer. Throughout this Letter of Transmittal, unless the context otherwise requires and whether so expressed or not, references to the “Exchange Offer” include the Guarantors’ offer to exchange the New Guarantees for the Outstanding Guarantees, references to the “Exchange Notes” include the related New Guarantees and references to the “Outstanding Notes” include the related Outstanding Guarantees.

For each Outstanding Note accepted for exchange, the holder of such Outstanding Note will receive an Exchange Note having a principal amount equal to that of the surrendered Outstanding Note. The Exchange Notes will accrue interest at a rate of 10.5% per annum and will be payable on January 31 and July 31 of each year.

Capitalized terms used but not defined herein shall have the same meaning given them in the Prospectus.

YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT, WHOSE ADDRESS AND TELEPHONE NUMBER APPEAR ON THE FRONT PAGE OF THIS LETTER OF TRANSMITTAL.

The undersigned has completed the appropriate boxes below and signed this Letter of Transmittal to indicate the action that the undersigned desires to take with respect to the Exchange Offer.

PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS

CAREFULLY BEFORE CHECKING ANY BOX BELOW.

 

2


List below the Outstanding Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and aggregate principal amounts of Outstanding Notes should be listed on a separate signed schedule affixed hereto.

All Tendering Holders Complete Box 1:

Box 1

Description of Outstanding Notes Tendered Herewith*

 

Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank, exactly as name(s)
appear(s) on Certificate(s))
  Certificate or
Registration Amount
Number(s) of
Outstanding
Notes**
  Aggregate Principal
Amount of
Represented by
Outstanding
Notes
  Aggregate Principal
Outstanding
Notes
Being Tendered***
             
             
             
             
Total:              

*  If the space provided is inadequate, list the certificate numbers and principal amount of Outstanding Notes on a separate signed schedule and attach the list to this Letter of Transmittal.

**  Need not be completed by book-entry holders.

***  The minimum permitted tender is $2,000 in principal amount. All tenders must be in denominations of $2,000 and integral multiples of $1,000 in excess thereof in principal amount. Unless otherwise indicated in this column, the holder will be deemed to have tendered the full aggregate principal amount represented by such Outstanding Notes. See instruction 2.

 

Box 2

Book-Entry Transfer

 

  ¨ CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:  

 

Name of Tendering Institution:    

 

Account Number:    

 

Transaction Code Number:    

 

Holders of Outstanding Notes that are tendering by book-entry transfer to the Exchange Agent’s account at DTC can execute the tender through DTC’s Automated Tender Offer Program (“ATOP”) for which the transaction will be eligible. DTC participants that are accepting the Exchange Offer must transmit their acceptances to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent’s account at DTC. DTC will then send a computer-generated message (an “Agent’s Message”) to the Exchange Agent for its acceptance in which the holder of the Outstanding Notes acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal, and the DTC participant confirms on behalf of itself and the beneficial owners of such Outstanding Notes all provisions of this Letter of Transmittal (including any representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent. Each DTC participant transmitting an acceptance of the Exchange Offer through the ATOP procedures will be deemed to

 

3


have agreed to be bound by the terms of this Letter of Transmittal. Delivery of an Agent’s Message by DTC will satisfy the terms of the Exchange Offer as to execution and delivery of a Letter of Transmittal by the participant identified in the Agent’s Message. DTC participants may also accept the Exchange Offer by submitting a Notice of Guaranteed Delivery through ATOP.

 

Box 3

Notice of Guaranteed Delivery

(See Instruction 1 below)

 

¨         CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

   
Name(s) of Registered
Holder(s):                             
 

 

   

Description of Outstanding

Notes being delivered

pursuant to a Notice of

Guaranteed Delivery:

 

 

   

Window Ticket Number (if

any):

 

 

   
Name of Eligible Guarantor Institution that
Guaranteed Delivery:                                                  
 

 

   
Date of Execution of Notice of Guaranteed
Delivery:                                                          
 

 

 

IF GUARANTEED DELIVERY IS TO BE MADE BY BOOK-ENTRY TRANSFER:

   

Name of Tendering

Institution:                         

 

 

   

Account

Number:            

 

 

   

Transaction Code

Number:                         

 

 

 

Box 4

Return of Non-Exchanged Outstanding Notes

Tendered by Book-Entry Transfer

 

¨         CHECK HERE IF OUTSTANDING NOTES TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OUTSTANDING NOTES ARE TO BE RETURNED BY CREDITING THE ACCOUNT NUMBER SET FORTH ABOVE.

 

Box 5

Participating Broker-Dealer

 

¨         CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OUTSTANDING NOTES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES AND WISH TO RECEIVE TEN (10) ADDITIONAL COPIES OF THE PROSPECTUS AND OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

 

Name:                                                                                                                                                                                                             

 

Address:                                                                                                                                                                                                        

 

 

4


If the undersigned is not a broker-dealer, the undersigned represents that it is acquiring the Exchange Notes in the ordinary course of business and has no arrangement or understanding with any person to participate in a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale or transfer of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. A broker-dealer may not participate in the Exchange Offer with respect to Outstanding Notes acquired other than as a result of market-making activities or other trading activities. Any broker-dealer who purchased Outstanding Notes from the Issuers to resell pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act must comply with the registration and prospectus delivery requirements under the Securities Act.

 

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PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Issuers the aggregate principal amount of the Outstanding Notes indicated above. Subject to, and effective upon, the acceptance for exchange of all or any portion of the Outstanding Notes tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Issuers all right, title and interest in and to such Outstanding Notes as are being tendered herewith.

The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as the agent of the Issuers, in connection with the Exchange Offer) with respect to the tendered Outstanding Notes, with full power of substitution and resubstitution (such power of attorney being deemed an irrevocable power coupled with an interest) to (1) deliver certificates representing such Outstanding Notes, or transfer ownership of such Outstanding Notes on the account books maintained by the book-entry transfer facility specified by the holder(s) of the Outstanding Notes, together, in each such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Issuers, (2) present and deliver such Outstanding Notes for transfer on the books of the Issuers and (3) receive all benefits or otherwise exercise all rights and incidents of beneficial ownership of such Outstanding Notes, all in accordance with the terms of the Exchange Offer.

The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, exchange, assign and transfer the Outstanding Notes tendered hereby, (b) when such tendered Outstanding Notes are accepted for exchange, the Issuers will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and (c) the Outstanding Notes tendered for exchange are not subject to any adverse claims or proxies when accepted by the Issuers. The undersigned hereby further represents that any Exchange Notes acquired in exchange for Outstanding Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the undersigned, that neither the holder of such Outstanding Notes nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes, and that neither the holder of such Outstanding Notes nor any such other person is an “affiliate,” as such term is defined in Rule 405 under the Securities Act, of the Issuers or any Guarantor. If the undersigned is a person in the United Kingdom, the undersigned represents that its ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business.

The undersigned also acknowledges that the Exchange Offer is being made based on the Issuers’ understanding of an interpretation by the staff of the Securities and Exchange Commission (the “SEC”) as set forth in no-action letters issued to third parties, including Morgan Stanley & Co. Incorporated (available June 5, 1991), Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling , dated July 2, 1993, or similar no-action letters, that the Exchange Notes issued in exchange for the Outstanding Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by each holder thereof (other than a broker-dealer who acquires such Exchange Notes directly from the Issuers for resale pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act or any such holder that is an “affiliate” of the Company or the Guarantors within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such holder’s business and such holder is not engaged in, and does not intend to engage in, a distribution of such Exchange Notes and has no arrangement or understanding with any person to participate in the distribution of such Exchange Notes. If a holder of the Outstanding Notes is an affiliate of the Issuers or the Guarantors, is not acquiring the Exchange Notes in the ordinary course of its business, is engaged in or intends to engage in a distribution of the Exchange Notes or has any arrangement or understanding with respect to the distribution of

 

6


the Exchange Notes to be acquired pursuant to the Exchange Offer, such holder (x) may not rely on the applicable interpretations of the staff of the SEC and (y) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction. If the undersigned is a broker-dealer that will receive the Exchange Notes for its own account in exchange for the Outstanding Notes, it represents that the Outstanding Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale or transfer of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

The undersigned will, upon request, execute and deliver any additional documents deemed by the Issuers or the Exchange Agent to be necessary or desirable to complete the exchange, assignment and transfer of the tendered Outstanding Notes or transfer ownership of such Outstanding Notes on the account books maintained by the book-entry transfer facility. The undersigned further agrees that acceptance of any and all validly tendered Outstanding Notes by the Issuers and the issuance of Exchange Notes in exchange therefor shall constitute performance in full by the Issuers of the Issuers’ obligations under the Registration Rights Agreement, dated as of January 30, 2012, among the Issuers, the Guarantors named therein and Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the initial purchasers, relating to the Outstanding Notes (the “Registration Rights Agreement”), and that the Issuers shall have no further obligations or liabilities thereunder except as provided in Section 7 of such agreement. The undersigned will comply with its obligations under the Registration Rights Agreement.

The Exchange Offer is subject to certain conditions as set forth in the Prospectus under the caption “The Exchange Offer—Conditions to the Exchange Offer.” The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Issuers), as more particularly set forth in the Prospectus, the Issuers may not be required to exchange any of the Outstanding Notes tendered hereby and, in such event, the Outstanding Notes not exchanged will be returned to the undersigned at the address shown above, promptly following the expiration or termination of the Exchange Offer. In addition, the Issuers may amend the Exchange Offer at any time prior to the Expiration Date if any of the conditions set forth under “The Exchange Offer—Conditions to the Exchange Offer” occur.

All authority herein conferred or agreed to be conferred in this Letter of Transmittal shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, administrators, trustees in bankruptcy and legal representatives of the undersigned. Tendered Outstanding Notes may be withdrawn at any time prior to the Expiration Date in accordance with the procedures set forth in the terms of this Letter of Transmittal. Unless otherwise indicated herein in the box entitled “Special Registration Instructions” below, please deliver the Exchange Notes (and, if applicable, substitute certificates representing the Outstanding Notes for any Outstanding Notes not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of the Outstanding Notes, please credit the account indicated above. Similarly, unless otherwise indicated under the box entitled “Special Delivery Instructions” below, please send the Exchange Notes (and, if applicable, substitute certificates representing the Outstanding Notes for any Outstanding Notes not exchanged) to the undersigned at the address shown above in the box entitled “Description of Outstanding Notes Tendered Herewith.”

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF OUTSTANDING NOTES TENDERED HEREWITH” ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OUTSTANDING NOTES AS SET FORTH IN SUCH BOX.

 

7


Box 6

SPECIAL REGISTRATION INSTRUCTIONS

(See Instructions 4 and 5)

 

To be completed ONLY if certificates for the Outstanding Notes not tendered and/or certificates for the Exchange Notes are to be issued in the name of someone other than the registered holder(s) of the Outstanding Notes whose name(s) appear(s) above.

 

Issue:     ¨ Outstanding Notes not tendered to:

 

                ¨ Exchange Notes to:

   

Name(s):

 

 

    (Please Print or Type)
   

Address:

 

 

    (Include Zip Code)
 

Daytime Area Code and Telephone

Number:                                                                        

 

Taxpayer Identification or Social Security

Number:                                                                        

 

Box 7

SPECIAL DELIVERY INSTRUCTIONS

(See Instructions 4 and 5)

 

To be completed ONLY if certificates for the Outstanding Notes not tendered and/or certificates for the Exchange Notes are to be sent to someone other than the registered holder(s) of the Outstanding Notes whose name(s) appear(s) above.

 

Issue:     ¨ Outstanding Notes not tendered to:

 
                 ¨ Exchange Notes to:
   

Name(s):

 

 

    (Please Print or Type)
   

Address:

 

 

    (Include Zip Code)
 

Daytime Area Code and Telephone

Number:                                                                        

 

Taxpayer Identification or Social Security

Number:                                                                        

 

 

 

8


Box 8

TENDERING HOLDER(S) SIGN HERE

(Complete accompanying Substitute Form W-9 or applicable Form W-8)

 

Must be signed by the registered holder(s) (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) of the Outstanding Notes exactly as their name(s) appear(s) on the Outstanding Notes hereby tendered or by any person(s) authorized to become the registered holder(s) by properly completed bond powers or endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth the full title of such person. See Instruction 4.

 

(Signature(s) of Holder(s))

 

Date: 

    

Name(s): 

    
(Please Print or Type)
Capacity (full title):      

Address: 

    
(Including Zip Code)

Daytime Area Code and Telephone

Number:                                                                                                                                                                                                       

Taxpayer Identification or Social Security

Number:                                                                                                                                                                                                       

GUARANTEE OF SIGNATURE(S)
(If Required—See Instruction 4)

 

Authorized

Signature:                                                                                                                                                                                                    

Name:                                                                                                                                                                                                           

Title:                                                                                                                                                                                                             

Name of

Firm:                                                                                                                                                                                                             

Address of Firm:                                                                                                                                                                                      
 

                                                                                                                                                                                                                       

                                                                                        (Include Zip Code)
Area Code and Telephone Number:                                                                                                                                                  
Taxpayer Identification or Social Security Number:                                                                                                                  

 

 

 

9


Box 9

PAYER’S NAME: SUMMIT MATERIALS LLC

SUMMIT MATERIALS FINANCE CORP.

 

SUBSTITUTE

 

FORM W-9

 

Department of the

Treasury,

Internal Revenue Service

 

Payor’s Request

for Taxpayer

Identification

Number (TIN)

 

 

Part 1 —PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.

 

 

Name

 

Social Security Number

 

OR

 

Employer Identification Number

 

  Part 2— Certification—UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (including a U.S. resident alien).
  CERTIFICATE INSTRUCTIONS—You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2).  

Part 3

 

Awaiting TIN   ¨

    The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.    
   

Sign Here

   
   

Signature                                                          

 

Date                                                                 

         

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.

 

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
   

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 28% of all reportable payments made to me will be withheld and, if the Exchange Agent is not provided with a taxpayer identification number within 60 days, such amounts will be paid over to the Internal Revenue Service.

   

 

     

 

   
Signature       Date    
               

 

NOTE:

  FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY REPORTABLE PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

 

10


GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number for the payee (You) to Give the Payer. —Social security numbers have nine digits separated by two hyphens, i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen, i.e., 00-0000000. The table below will help determine the number to give the payer. All “Section” references are to the Internal Revenue Code of 1986, as amended. “IRS” is the Internal Revenue Service.

 

For this type of account:   

    
Give the
SOCIAL SECURITY

number of—

1.        Individual    The individual
2.        Two or more individuals (joint account)    The actual owner of the account
or, if combined account fund, the first individual on the account 1
3.        Custodian account of a minor (Uniform Gift to Minors Act)    The minor 2
4.       

a. The usual revocable

    savings trust account (grantor is

    also trustee)

   The grantor-trustee 1
 

b. So-called trust

    that is not a legal or valid

    trust under state law

   The actual owner 1
5.        Sole proprietorship or disregarded entity owned by an individual    The owner 3

 

 

 

 

 

For this type of account:

  

Give the EMPLOYER
IDENTIFICATION

number of

  6.   Disregarded entity not owned by an individual    The owner
  7.      A valid trust, estate, or pension trust    The legal entity 4
  8.      Corporate    The corporation
  9.      Association, club, religious,
charitable, educational, or
other tax-exempt organization account
   The organization
10.      Partnership    The partnership
11.      A broker or registered
nominee
   The broker or nominee            
12.      Account with the Department
of Agriculture in the name of
a public entity (such as a
state or local government,
school district, or prison) that
receives agricultural program
payments
   The public entity    

 

 

 

 

 

1. List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person’s number must be furnished.
2. Circle the minor’s name and furnish the minor’s social security number.
3. You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your social security number or your employer identification number (if you have one).
4. List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

 

NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.

 

11


GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

 

Obtaining a Number

If you don’t have a taxpayer identification number or you don’t know your number, obtain Form SS-5, Application for a Social Security Card, at the local Social Security Administration office, or Form SS-4, Application for Employer Identification Number, by calling 1 (800) TAX-FORM, and apply for a number.

Payees Exempt from Backup Withholding

Payees specifically exempted from withholding include:

   

An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2).

   

The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or wholly-owned agency or instrumentality of any one or more of the foregoing.

   

An international organization or any agency or instrumentality thereof.

   

A foreign government and any political subdivision, agency or instrumentality thereof.

Payees that may be exempt from backup withholding include:

   

A corporation.

   

A financial institution.

   

A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.

   

A real estate investment trust.

   

A common trust fund operated by a bank under Section 584(a).

   

An entity registered at all times during the tax year under the Investment Company Act of 1940.

   

A middleman known in the investment community as a nominee or custodian.

   

A futures commission merchant registered with the Commodity Futures Trading Commission.

   

A foreign central bank of issue.

   

A trust exempt from tax under Section 664 or described in Section 4947.

Payments of dividends and patronage dividends generally exempt from backup withholding include:

   

Payments to nonresident aliens subject to withholding under Section 1441.

   

Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner.

   

Payments of patronage dividends not paid in money.

   

Payments made by certain foreign organizations.

   

Section 404(k) payments made by an ESOP.

Payments of interest generally exempt from backup withholding include:

   

Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and you have not provided your correct taxpayer identification number to the payer.

   

Payments described in Section 6049(b)(5) to nonresident aliens.

   

Payments on tax-free covenant bonds under Section 1451.

   

Payments made by certain foreign organizations.

   

Mortgage interest paid to you.

Certain payments, other than payments of interest, dividends, and patronage dividends, that are exempt from information reporting are also exempt from backup withholding. For details, see the regulations under Sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N.

Exempt payees described above must file Form W-9 or a substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.

Privacy Act Notice. —Section 6109 requires you to provide your correct taxpayer identification number to payers, who must report the payments to the IRS. The IRS uses the number for identification purposes and may also provide this information to various government agencies for tax enforcement or litigation purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to the payer. Certain penalties may also apply.

Penalties

(1) Failure to Furnish Taxpayer Identification Number.—If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Information with Respect to Withholding.—If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

(3) Criminal Penalty for Falsifying Information.—Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE IRS.

 

 

12


INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

General

Please do not send certificates for Outstanding Notes directly to the Issuers. Your certificates for Outstanding Notes, together with your signed and completed Letter of Transmittal and any required supporting documents, should be mailed or otherwise delivered to the Exchange Agent at the address set forth on the first page hereof. The method of delivery of Outstanding Notes, this Letter of Transmittal and all other required documents is at your sole option and risk and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, or overnight or hand delivery service is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

1. Delivery of this Letter of Transmittal and Certificates; Guaranteed Delivery Procedures. A holder of Outstanding Notes (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) may tender the same by (i) properly completing and signing this Letter of Transmittal or a facsimile hereof (all references in the Prospectus to the Letter of Transmittal shall be deemed to include a facsimile thereof) and delivering the same, together with the certificate or certificates, if applicable, representing the Outstanding Notes being tendered and any required signature guarantees and any other documents required by this Letter of Transmittal, to the Exchange Agent at its address set forth above on or prior to the Expiration Date, (ii) complying with the procedure for book-entry transfer described below or (iii) complying with the guaranteed delivery procedures described below.

Holders of Outstanding Notes that are tendering by book-entry transfer to the Exchange Agent’s account at DTC can execute the tender through DTC’s Automated Tender Offer Program (“ATOP”) for which the transaction will be eligible. DTC participants that are accepting the Exchange Offer must transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent’s account at DTC. DTC will then send a computer-generated message (an “Agent’s Message”) to the Exchange Agent for its acceptance in which the holder of the Outstanding Notes acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal, and the DTC participant confirms on behalf of itself and the beneficial owners of such Outstanding Notes all provisions of this Letter of Transmittal (including any representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent. Each DTC participant transmitting an acceptance of the Exchange Offer through the ATOP procedures will be deemed to have agreed to be bound by the terms of this Letter of Transmittal.

Delivery of an Agent’s Message by DTC will satisfy the terms of the Exchange Offer as to execution and delivery of a Letter of Transmittal by the participant identified in the Agent’s Message. DTC participants may also accept the Exchange Offer by submitting a Notice of Guaranteed Delivery through ATOP.

Holders who wish to tender their Outstanding Notes and (i) whose Outstanding Notes are not immediately available or (ii) who cannot deliver their Outstanding Notes, this Letter of Transmittal and all other required documents to the Exchange Agent on or prior to the Expiration Date or (iii) who cannot comply with the book-entry transfer procedures on a timely basis, must tender their Outstanding Notes pursuant to the guaranteed delivery procedure set forth in “The Exchange Offer—Guaranteed Delivery Procedures” in the Prospectus and by completing Box 3. Holders may tender their Outstanding Notes if: (i) the tender is made by or through an Eligible Guarantor Institution (as defined below); (ii) the Exchange Agent receives (by facsimile transmission, mail or hand delivery), on or prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery in the form provided with this Letter of Transmittal that (a) sets forth the name and address

 

13


of the holder of Outstanding Notes, if applicable, the certificate number(s) of the Outstanding Notes to be tendered and the principal amount of Outstanding Notes tendered; (b) states that the tender is being made thereby; and (c) guarantees that, within three New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal, or a facsimile thereof, together with the Outstanding Notes or a book-entry confirmation, and any other documents required by the Letter of Transmittal, will be deposited by the Eligible Guarantor Institution with the Exchange Agent; or (iii) the Exchange Agent receives a properly completed and executed Letter of Transmittal, or facsimile thereof and the certificate(s) representing all tendered Outstanding Notes in proper form or a confirmation of book-entry transfer of the Outstanding Notes into the Exchange Agent’s account at the appropriate book-entry transfer facility and all other documents required by this Letter of Transmittal within three New York Stock Exchange trading days after the Expiration Date.

Any Holder who wishes to tender Outstanding Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery relating to such Outstanding Notes prior to the Expiration Date. Failure to complete the guaranteed delivery procedures outlined above will not, of itself, affect the validity or effect a revocation of any Letter of Transmittal form properly completed and executed by a holder who attempted to use the guaranteed delivery procedures.

No alternative, conditional, irregular or contingent tenders will be accepted. Each tendering holder, by execution of this Letter of Transmittal (or facsimile thereof), shall waive any right to receive notice of the acceptance of the Outstanding Notes for exchange.

2. Partial Tenders; Withdrawals. Tenders of Outstanding Notes will be accepted only in the principal amount of $2,000 and integral multiples of $1,000 in excess thereof. If less than the entire principal amount of Outstanding Notes evidenced by a submitted certificate is tendered, the tendering holder(s) must fill in the aggregate principal amount of Outstanding Notes tendered in the column entitled “Description of Outstanding Notes Tendered Herewith” in Box 1 above. A newly issued certificate for the Outstanding Notes submitted but not tendered will be sent to such holder promptly after the Expiration Date, unless otherwise provided in the appropriate box on this Letter of Transmittal. All Outstanding Notes delivered to the Exchange Agent will be deemed to have been tendered in full unless otherwise clearly indicated. Outstanding Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date, after which tenders of Outstanding Notes are irrevocable.

To be effective with respect to the tender of Outstanding Notes, a written notice of withdrawal (which may be by telex, facsimile or letter) must: (i) be received by the Exchange Agent at the address for the Exchange Agent set forth above before the Issuers notify the Exchange Agent that it has accepted the tender of Outstanding Notes pursuant to the Exchange Offer; (ii) specify the name of the person who tendered the Outstanding Notes to be withdrawn; (iii) identify the Outstanding Notes to be withdrawn (including the principal amount of such Outstanding Notes, or, if applicable, the certificate numbers shown on the particular certificates evidencing such Outstanding Notes and the principal amount of Outstanding Notes represented by such certificates); (iv) include a statement that such holder is withdrawing its election to have such Outstanding Notes exchanged; (v) specify the name in which any such Outstanding Notes are to be registered, if different from that of the withdrawing holder; and (vi) be signed by the holder in the same manner as the original signature on this Letter of Transmittal (including any required signature guarantee). The Exchange Agent will return the properly withdrawn Outstanding Notes promptly following receipt of notice of withdrawal. If Outstanding Notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn Outstanding Notes or otherwise comply with the book-entry transfer facility’s procedures. All questions as to the validity, form and eligibility of notices of withdrawals, including time of receipt, will be determined by the Issuers, and such determination will be final and binding on all parties.

Any Outstanding Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Outstanding Notes which have been tendered for exchange but which are

 

14


not accepted for exchange for any reason will be returned to the holder thereof without cost to such holder (or, in the case of Outstanding Notes tendered by book-entry transfer into the Exchange Agent’s account at the book entry transfer facility pursuant to the book-entry transfer procedures described above, such Outstanding Notes will be credited to an account with such book-entry transfer facility specified by the holder) promptly after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Outstanding Notes may be retendered by following one of the procedures described under the caption “The Exchange Offer—Procedures for Tendering Outstanding Notes” in the Prospectus at any time prior to the Expiration Date.

Neither the Issuers, any affiliate or assigns of the Issuers, the Exchange Agent nor any other person will be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give such notification (even if such notice is given to other persons).

3. Beneficial Owner Instructions. Only a holder of Outstanding Notes (i.e., a person in whose name Outstanding Notes are registered on the books of the registrar of, or, in the case of Outstanding Notes held through book-entry, such book-entry transfer facility specified by the holder), or the legal representative or attorney-in-fact of a holder, may execute and deliver this Letter of Transmittal. Any beneficial owner of Outstanding Notes who wishes to accept the Exchange Offer must arrange promptly for the appropriate holder to execute and deliver this Letter of Transmittal on his or her behalf through the execution and delivery to the appropriate holder of the “Instructions to Registered Holder from Beneficial Owner” form accompanying this Letter of Transmittal.

4. Signature on this Letter of Transmittal; Written Instruments and Endorsements; Guarantee of Signatures. If this Letter of Transmittal is signed by the registered holder(s) (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) of the Outstanding Notes tendered hereby, the signature must correspond exactly with the name(s) as written on the face of the certificates (or on such security listing) without alteration, addition, enlargement or any change whatsoever.

If any of the Outstanding Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

If a number of Outstanding Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal (or facsimiles thereof) as there are different registrations of Outstanding Notes.

When this Letter of Transmittal is signed by the registered holder(s) of Outstanding Notes (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) listed and tendered hereby, no endorsements of certificates or separate written instruments of transfer or exchange are required. If, however, this Letter of Transmittal is signed by a person other than the registered holder(s) of the Outstanding Notes listed or the Exchange Notes are to be issued, or any untendered Outstanding Notes are to be reissued, to a person other than the registered holder(s) of the Outstanding Notes, such Outstanding Notes must be endorsed or accompanied by separate written instruments of transfer or exchange in form satisfactory to the Issuers and duly executed by the registered holder, in each case signed exactly as the name or names of the registered holder(s) appear(s) on the Outstanding Notes and the signatures on such certificates must be guaranteed by an Eligible Guarantor Institution. If this Letter of Transmittal, any certificates or separate written instruments of transfer or exchange are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Issuers, submit proper evidence satisfactory to the Issuers, in the Issuers’ sole discretion, of such persons’ authority to so act.

Endorsements on certificates for the Outstanding Notes or signatures on bond powers required by this Instruction 4 must be guaranteed by a member firm of a registered national securities exchange or of

 

15


the Financial Industry Regulatory Authority, Inc. (FINRA), a commercial bank or trust company having an office or correspondent in the United States or another “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an “Eligible Guarantor Institution”).

Signatures on this Letter of Transmittal must be guaranteed by an Eligible Guarantor Institution, unless Outstanding Notes are tendered: (i) by a registered holder (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) who has not completed the box entitled “Special Registration Instructions” or “Special Delivery Instructions” on this Letter of Transmittal; or (ii) for the account of an Eligible Guarantor Institution.

5. Special Registration and Delivery Instructions. Tendering holders should indicate, in the applicable Box 6 or Box 7, the name and address in/to which the Exchange Notes and/or certificates for Outstanding Notes not exchanged are to be issued or sent, if different from the name(s) and address(es) of the person signing this Letter of Transmittal. In the case of issuance in a different name, the tax identification number or social security number of the person named must also be indicated. A holder tendering the Outstanding Notes by book-entry transfer may request that the Outstanding Notes not exchanged be credited to such account maintained at the book-entry transfer facility as such holder may designate. See Box 4.

If no such instructions are given, the Exchange Notes (and any Outstanding Notes not tendered or not accepted) will be issued in the name of and sent to the holder signing this Letter of Transmittal or deposited into such holder’s account at the applicable book-entry transfer facility.

6. Transfer Taxes. The Issuers shall pay all transfer taxes, if any, applicable to the transfer and exchange of the Outstanding Notes to it or its order pursuant to the Exchange Offer. If, however, the Exchange Notes are delivered to or issued in the name of a person other than the registered holder, or if a transfer tax is imposed for any reason other than the transfer and exchange of Outstanding Notes to the Issuers or the Issuers’ order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder.

Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Outstanding Notes listed in this Letter of Transmittal.

7. Waiver of Conditions . The Issuers reserve the absolute right to waive, in whole or in part, any of the conditions to the Exchange Offer set forth in the Prospectus.

8. Mutilated, Lost, Stolen or Destroyed Securities. Any holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed, should promptly contact the Exchange Agent at the address set forth on the first page hereof for further instructions. The holder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen certificate(s) have been completed.

9. No Conditional Tenders; No Notice of Irregularities. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Outstanding Notes for exchange. The Issuers reserve the right, in the Issuers’ reasonable judgment, to waive any defects, irregularities or conditions of tender as to particular Outstanding Notes. The Issuers’ interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Notes must be cured within such time as the Issuers shall determine. Although the Issuers intend to notify holders of defects or irregularities with respect

 

16


to tenders of Outstanding Notes, neither the Issuers, the Exchange Agent nor any other person is under any obligation to give such notice nor shall they incur any liability for failure to give such notification. Tenders of Outstanding Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Outstanding Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holder promptly following the Expiration Date.

10. Requests for Assistance or Additional Copies. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number set forth on the first page hereof.

IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE OR COPY THEREOF (TOGETHER WITH CERTIFICATES OF OUTSTANDING NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.

 

17


IMPORTANT TAX INFORMATION

Under U.S. federal income tax law, a tendering holder whose Outstanding Notes are accepted for exchange may be subject to backup withholding unless the holder provides the Exchange Agent with either (i) such holder’s correct taxpayer identification number (“TIN”) on the Substitute Form W-9 attached hereto, certifying (A) that the TIN provided on Substitute Form W-9 is correct (or that such holder of Outstanding Notes is awaiting a TIN), (B) that the holder of Outstanding Notes is not subject to backup withholding because (x) such holder of Outstanding Notes is exempt from backup withholding, (y) such holder of Outstanding Notes has not been notified by the Internal Revenue Service that he or she is subject to backup withholding as a result of a failure to report all interest or dividends or (z) the Internal Revenue Service has notified the holder of Outstanding Notes that he or she is no longer subject to backup withholding and (C) that the holder of Outstanding Notes is a U.S. person (including a U.S. resident alien); or (ii) an adequate basis for exemption from backup withholding. If such holder of Outstanding Notes is an individual, the TIN is such holder’s social security number. If the Exchange Agent is not provided with the correct TIN, the holder of Outstanding Notes may also be subject to certain penalties imposed by the Internal Revenue Service and any reportable payments that are made to such holder may be subject to backup withholding (see below).

Certain holders of Outstanding Notes (including, among others, all corporations and certain foreign holders) are not subject to these backup withholding and reporting requirements. However, exempt holders of Outstanding Notes should indicate their exempt status on the Substitute Form W-9, by writing “Exempt” on the face of the form. For example, a corporation should complete the Substitute Form W-9, providing its TIN and indicating that it is exempt from backup withholding. In order for a foreign holder to qualify as an exempt recipient, the holder must submit a Form W-8BEN (or other applicable Form W-8), signed under penalties of perjury, attesting to that holder’s exempt status. A Form W-8BEN (or other applicable Form W-8) can be obtained from the Exchange Agent. See the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for more instructions. Holders are encouraged to consult their own tax advisors to determine whether they are exempt from these backup withholding and reporting requirements.

If backup withholding applies, the Exchange Agent is required to withhold 28% of any reportable payments made to the holder of Outstanding Notes or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service, provided the required information is furnished. The Exchange Agent cannot refund amounts withheld by reason of backup withholding.

A holder who does not have a TIN may check the box in Part 3 of the Substitute Form W-9 if the surrendering holder of Outstanding Notes has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the holder of Outstanding Notes or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Exchange Agent will withhold 28% of all reportable payments made prior to the time a properly certified TIN is provided to the Exchange Agent and, if the Exchange Agent is not provided with a TIN within 60 days, such amounts will be paid over to the Internal Revenue Service. The holder of Outstanding Notes is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the record owner of the Outstanding Notes. If the Outstanding Notes are in more than one name or are not in the name of the actual owner, consult the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for additional guidance on which number to report.

 

18

Exhibit 99.2

SUMMIT MATERIALS, LLC

SUMMIT MATERIALS FINANCE CORP.

OFFER TO EXCHANGE

$250,000,000 PRINCIPAL AMOUNT OF THEIR 10.5% SENIOR NOTES DUE 2020,

WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, FOR ANY AND ALL OF THEIR OUTSTANDING UNREGISTERED

10.5% SENIOR NOTES DUE 2020.

                    , 2013

To Brokers, Dealers, Commercial Banks,

Trust Companies and other Nominees:

As described in the enclosed Prospectus, dated                     , 2013 (as the same may be amended or supplemented from time to time, the “Prospectus”), and Letter of Transmittal (the “Letter of Transmittal”), Summit Materials, LLC and Summit Materials Finance Corp. (together, the “Issuers”) and certain subsidiaries of the Issuers (the “Guarantors”), are offering to exchange (the “Exchange Offer”) an aggregate principal amount of up to $250,000,000 of the Issuers’ 10.5% Senior Notes due 2020 (the “Exchange Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for any and all of the Issuers’ outstanding unregistered 10.5% Senior Notes due 2020 (the “Outstanding Notes”), in denominations of $2,000 and integral multiples of $1,000 in excess thereof upon the terms and subject to the conditions of the enclosed Prospectus and the related Letter of Transmittal. The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Outstanding Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof, upon the terms and subject to the conditions of the enclosed Prospectus and the related Letter of Transmittal, and are not subject to any covenant regarding registration under the Securities Act. The Outstanding Notes are unconditionally guaranteed (the “Outstanding Guarantees”) by the Guarantors, and the Exchange Notes will be unconditionally guaranteed (the “New Guarantees”) by the Guarantors. Upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offer in exchange for the Outstanding Guarantees of the Outstanding Notes for which such Exchange Notes are issued in the Exchange Offer. Throughout this letter, unless the context otherwise requires and whether so expressed or not, references to the “Exchange Offer” include the Guarantors’ offer to exchange the New Guarantees for the Outstanding Guarantees, references to the “Exchange Notes” include the related New Guarantees and references to the “Outstanding Notes” include the related Outstanding Guarantees. The Issuers will accept for exchange any and all Outstanding Notes properly tendered according to the terms of the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offer is subject to certain conditions described in the Prospectus.

WE URGE YOU TO PROMPTLY CONTACT YOUR CLIENTS FOR WHOM YOU HOLD OUTSTANDING NOTES REGISTERED IN YOUR NAME OR IN THE NAME OF YOUR NOMINEE. PLEASE BRING THE EXCHANGE OFFER TO THEIR ATTENTION AS PROMPTLY AS POSSIBLE.

Enclosed are copies of the following documents:

 

  1. The Prospectus;

 

  2. The Letter of Transmittal for your use in connection with the tender of Outstanding Notes and for the information of your clients, including a Substitute Form W-9 and Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (providing information relating to U.S. federal income tax backup withholding);

 

  3. A form of Notice of Guaranteed Delivery; and


  4. A form of letter, including a letter of instructions to a registered holder from a beneficial owner, which you may use to correspond with your clients for whose accounts you hold Outstanding Notes that are held or record in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions regarding the Exchange Offer.

Your prompt action is requested. Please note that the Exchange Offer will expire at 5:00 p.m., New York City time, on                         , 2013 (the “Expiration Date”), unless the Issuers otherwise extend the Exchange Offer.

To participate in the Exchange Offer, certificates for Outstanding Notes, together with a duly executed and properly completed Letter of Transmittal or facsimile thereof, or a timely confirmation of a book-entry transfer of such Outstanding Notes into the account of Wilmington Trust, National Association (the “Exchange Agent”), at the book-entry transfer facility, with any required signature guarantees, and any other required documents, must be received by the Exchange Agent by the Expiration Date as indicated in the Prospectus and the Letter of Transmittal.

The Issuers will not pay any fees or commissions to any broker or dealer or to any other persons (other than the Exchange Agent) in connection with the solicitation of tenders of the Outstanding Notes pursuant to the Exchange Offer. However, the Issuers will pay or cause to be paid any transfer taxes, if any, applicable to the tender of the Outstanding Notes to their order, except as otherwise provided in the Prospectus and Letter of Transmittal.

If holders of the Outstanding Notes wish to tender, but it is impracticable for them to forward their Outstanding Notes prior to the Expiration Date or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus and in the Letter of Transmittal.

Any inquiries you may have with respect to the Exchange Offer should be addressed to the Exchange Agent at its address and telephone number set forth in the enclosed Prospectus and Letter of Transmittal. Additional copies of the enclosed materials may be obtained from the Exchange Agent.

Very truly yours,

SUMMIT MATERIALS, LLC

SUMMIT MATERIALS FINANCE CORP.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS AN AGENT OF THE ISSUERS OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF EITHER OF THEM IN CONNECTION WITH THE EXCHANGE OFFER, OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS EXPRESSLY CONTAINED THEREIN.

 

2

Exhibit 99.3

SUMMIT MATERIALS, LLC

SUMMIT MATERIALS FINANCE CORP.

OFFER TO EXCHANGE

$250,000,000 PRINCIPAL AMOUNT OF THEIR 10.5% SENIOR NOTES DUE 2020,

WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, FOR ANY AND ALL OF THEIR OUTSTANDING UNREGISTERED

10.5% SENIOR NOTES DUE 2020.

                    , 2013

To Our Clients:

Enclosed for your consideration are a Prospectus, dated                     , 2013 (as the same may be amended or supplemented from time to time, the “Prospectus”), and a Letter of Transmittal (the “Letter of Transmittal”), relating to the offer by Summit Materials, LLC and Summit Materials Finance Corp. (together, the “Issuers”) and certain subsidiaries of the Issuers (the “Guarantors”), to exchange (the “Exchange Offer”) an aggregate principal amount of up to $250,000,000 of the Issuers’ 10.5% Senior Notes due 2020 (the “Exchange Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for any and all of the Issuers’ outstanding unregistered 10.5% Senior Notes due 2020 (the “Outstanding Notes”), in denominations of $2,000 and integral multiples of $1,000 in excess thereof upon the terms and subject to the conditions of the enclosed Prospectus and the enclosed Letter of Transmittal. The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Outstanding Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof, upon the terms and subject to the conditions of the enclosed Prospectus and the related Letter of Transmittal, and are not subject to any covenant regarding registration under the Securities Act. The Outstanding Notes are unconditionally guaranteed (the “Outstanding Guarantees”) by the Guarantors, and the Exchange Notes are unconditionally guaranteed (the “New Guarantees”) by the Guarantors. Upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offer in exchange for the Outstanding Guarantees of the Outstanding Notes for which such Exchange Notes are issued in the Exchange Offer. Throughout this letter, unless the context otherwise requires and whether so expressed or not, references to the “Exchange Offer” include the Guarantors’ offer to exchange the New Guarantees for the Outstanding Guarantees, references to the “Exchange Notes” include the related New Guarantees and references to the “Outstanding Notes” include the related Outstanding Guarantees. The Issuers will accept for exchange any and all Outstanding Notes properly tendered according to the terms of the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offer is subject to certain conditions described in the Prospectus.

PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                     , 2013 (THE “EXPIRATION DATE”), UNLESS THE ISSUERS EXTEND THE EXCHANGE OFFER.

The enclosed materials are being forwarded to you as the beneficial owner of the Outstanding Notes held by us for your account but not registered in your name. A tender of such Outstanding Notes may only be made by us as the registered holder and pursuant to your instructions. Therefore, the Issuers urge beneficial owners of Outstanding Notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee to contact such registered holder promptly if such beneficial owners wish to tender their Outstanding Notes in the Exchange Offer.

Accordingly, we request instructions as to whether you wish to tender any or all such Outstanding Notes held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal. If you wish to have us tender any or all of your Outstanding Notes, please so instruct us by completing, signing and returning to us the “Instructions to Registered Holder from Beneficial Owner” form that appears below. We urge you to read the Prospectus and the Letter of Transmittal carefully before instructing us as to whether to tender your Outstanding Notes.


The accompanying Letter of Transmittal is furnished to you for your information only and may not be used by you to tender Outstanding Notes held by us and registered in our name for your account or benefit.

If we do not receive written instructions in accordance with the below and the procedures presented in the Prospectus and the Letter of Transmittal, we will not tender any of the Outstanding Notes on your account.

 

2


INSTRUCTIONS TO REGISTERED HOLDER FROM BENEFICIAL OWNER

The undersigned beneficial owner acknowledges receipt of your letter and the accompanying Prospectus and the Letter of Transmittal relating to the Exchange Offer by the Issuers and the Guarantors to exchange an aggregate principal amount of up to $250,000,000 of the Issuers’ 10.5% Senior Notes due 2020, which have been registered under the Securities Act (the “Exchange Notes”), for any and all of the Issuers’ outstanding unregistered 10.5% Senior Notes due 2020, (the “Outstanding Notes”), upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus. This will instruct you, the registered holder, to tender the principal amount of the Outstanding Notes indicated below held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal.

 

Principal Amount of Outstanding Notes Held
for Account Holder(s)
  Principal Amount of Outstanding Notes to be
Tendered*
       
       
       

 

* Unless otherwise indicated, the entire principal amount of Outstanding Notes held for the account of the undersigned will be tendered.

If the undersigned instructs you to tender the Outstanding Notes held by you for the account of the undersigned, it is understood that you are authorized (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner of the Outstanding Notes, including but not limited to the representations that the undersigned (i) is not an “affiliate,” as defined in Rule 405 under the Securities Act, of the Issuers or the Guarantors, (ii) is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of Exchange Notes, (iii) is acquiring the Exchange Notes in the ordinary course of its business and (iv) is not a broker-dealer tendering Outstanding Notes acquired for its own account directly from the Issuers. If a holder of the Outstanding Notes is an affiliate of the Issuers or the Guarantors, is not acquiring the Exchange Notes in the ordinary course of its business, is engaged in or intends to engage in a distribution of the Exchange Notes or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, such holder may not rely on the applicable interpretations of the staff of the Securities and Exchange Commission relating to exemptions from the registration and prospectus delivery requirements of the Securities Act and must comply with such requirements in connection with any secondary resale transaction.

 

SIGN HERE

    Dated: 

 

 

 

, 2013  

    Signature(s):   

 

 

    Print Name(s): 

 

 

 
    Address:   

 

 
   

 

 
  (Please include Zip Code)

    Telephone Number 

 

 

 
  (Please include Area Code)

    Tax Identification Number or Social Security Number: 

 

 

 

    My Account Number With You: 

 

 

 

Exhibit 99.4

SUMMIT MATERIALS, LLC

SUMMIT MATERIALS FINANCE CORP.

NOTICE OF GUARANTEED DELIVERY

OFFER TO EXCHANGE

$250,000,000 PRINCIPAL AMOUNT OF THEIR 10.5% SENIOR NOTES DUE 2020,

WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, FOR ANY AND ALL OF THEIR OUTSTANDING UNREGISTERED

10.5% SENIOR NOTES DUE 2020.

This form, or one substantially equivalent hereto, must be used to accept the Exchange Offer made by Summit Materials, LLC, a Delaware limited liability company, and Summit Materials Finance Corp., a Delaware corporation (together, the “Issuers”), and the Guarantors, pursuant to the Prospectus, dated                     , 2013 (the “Prospectus”), and the enclosed Letter of Transmittal (the “Letter of Transmittal”), if the certificates for the Outstanding Notes are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date of the Exchange Offer. Such form may be delivered or transmitted by facsimile transmission, mail or hand delivery to Wilmington Trust, National Association (the “Exchange Agent”) as set forth below. In addition, in order to utilize the guaranteed delivery procedure to tender the Outstanding Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof) must also be received by the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date of the Exchange Offer. Capitalized terms not defined herein have the meanings ascribed to them in the Letter of Transmittal.

The Exchange Agent is:

Wilmington Trust, National Association

 

By Registered or Certified Mail:   By Facsimile:   By Overnight Courier or Hand:
Wilmington Trust, National Association   (302) 636-4139   Wilmington Trust, National Association
c/o Wilmington Trust Company   Attn: Sam Hamed   c/o Wilmington Trust Company
Corporate Capital Markets     Corporate Capital Markets
Rodney Square North     Rodney Square North
1100 North Market Street     1100 North Market Street
Wilmington, Delaware 19890-1626     Wilmington, Delaware 19890-1626
Attn: Sam Hamed     Attn: Sam Hamed
 

To Confirm by Telephone :
(302) 636-6181

Attn: Sam Hamed

 

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Guarantor Institution (as defined in the Letter of Transmittal), such signature guarantee must appear in the applicable space in Box 8 provided on the Letter of Transmittal for Guarantee of Signatures.


Ladies and Gentlemen:

Upon the terms and subject to the conditions set forth in the Prospectus and the accompanying Letter of Transmittal, the undersigned hereby tenders to the Issuers the principal amount of Outstanding Notes indicated below, pursuant to the guaranteed delivery procedures described in “The Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus.

 

Certificate Number(s) (if known)
of Outstanding
Notes or Account Number at
Book-Entry Transfer Facility
  Aggregate Principal
Amount Represented
by Outstanding
Notes
  Aggregate Principal
Amount of Outstanding
Notes
Being Tendered
   
   
   
   
   

 

     
    PLEASE COMPLETE AND SIGN    
   

 

   
    (Signature(s) of Record Holder(s))    
   

 

   
    (Please Type or Print Name(s) of Record Holder(s))    
   
    Dated:                                                                                            , 2013    
   
    Address:                                                                                                               
    (Zip Code)    
   
       
    (Daytime Area Code and Telephone No.)    
   

¨          Check this Box if the Outstanding Notes will be delivered by book-entry
transfer to The Depository Trust Company.

   
   

Account

Number:                                                                                                   

 

   

THE ACCOMPANYING GUARANTEE MUST BE COMPLETED.


GUARANTEE OF DELIVERY

(Not to be used for signature guarantee)

 

The undersigned, a member of a recognized signature medallion program or an “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), hereby (a) represents that the above person(s) “own(s)” the Outstanding Notes tendered hereby within the meaning of Rule 14e-4(b)(2) under the Exchange Act, (b) represents that the tender of those Outstanding Notes complies with Rule 14e-4 under the Exchange Act, and (c) guarantees to deliver to the Exchange Agent, at its address set forth in the Notice of Guaranteed Delivery, the certificates representing all tendered Outstanding Notes, in proper form for transfer, or a book-entry confirmation (a confirmation of a book-entry transfer of the Outstanding Notes into the Exchange Agent’s account at The Depository Trust Company), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, and any other documents required by the Letter of Transmittal within three (3) New York Stock Exchange trading days after the Expiration Date.

 

Name of

Firm:                                                                                                                                                                                                        

                                                                                  (Authorized Signature)
 

Address:                                                                                                                                                                                                    

                                                                                                                                                                (Zip Code)
 

Area Code and Tel.

No.:                                                                                                                                                                                                       

 

Name:                                                                                                                                                                                                         

                                                                          (Please Type or Print)
 

Title:                                                                                                                                                                                                           

 

Dated:                                  , 2013

 

NOTE:    DO NOT SEND OUTSTANDING NOTES WITH THIS NOTICE OF
GUARANTEED DELIVERY. OUTSTANDING NOTES SHOULD BE SENT WITH
YOUR LETTER OF TRANSMITTAL.

 

 

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INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY

 

1. Delivery of this Notice of Guaranteed Delivery.

A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address set forth on the cover page hereof prior to the Expiration Date of the Exchange Offer. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the Exchange Agent is at the election and risk of the holders and the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that the holders use an overnight or hand delivery service, properly insured. If such delivery is by mail, it is recommended that the holders use properly insured, registered mail with return receipt requested. In all cases, sufficient time should be allowed to assure timely delivery. For a description of the guaranteed delivery procedures, see Instruction 1 of the Letter of Transmittal. No Notice of Guaranteed Delivery should be sent to the Issuers.

 

2. Signatures on this Notice of Guaranteed Delivery.

If this Notice of Guaranteed Delivery is signed by the registered holder(s) of the Outstanding Notes referred to herein, the signatures must correspond with the name(s) written on the face of the Outstanding Notes without alteration, addition, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a person other than the registered holder(s) of any Outstanding Notes listed, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name of the registered holder(s) appear(s) on the Outstanding Notes without alteration, addition, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and, unless waived by the Issuers, evidence satisfactory to the Issuers of their authority so to act must be submitted with this Notice of Guaranteed Delivery.

 

3. Questions and Requests for Assistance or Additional Copies.

Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address set forth on the cover hereof. Holders may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the Exchange Offer.

 

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