PLEDGE AGREEMENT (Ready Mix)
Exhibit 99.2
(Ready
Mix)
PLEDGE AGREEMENT, dated as of
February 2, 2009 (this "Agreement"), made by
MEADOW VALLEY PARENT CORP., a Delaware corporation ("Pledgor"), in favor
of LBC CREDIT PARTNERS II, L.P., as agent for the lenders from time to time
party to the Loan Agreement described below (the "Agent").
W I T N E S S E T H:
WHEREAS, pursuant to that
certain Holdco Term Loan and Security Agreement dated as of the date hereof, by
and among Pledgor, as Borrower, Meadow Valley Contractors, Inc., a Nevada
corporation, Meadow Valley Solutions LLC, a Delaware limited liability company,
Meadow Valley Corporation, a Nevada corporation, Apex Testing Corp., a Nevada
corporation, each of the financial institutions from time to time party thereto
(individually each a "Lender" and
collectively, the "Lenders") and Agent
(including all annexes, exhibits and schedules thereto, and as from time to time
amended, amended and restated, joined, extended, supplemented or otherwise
modified, the "Loan
Agreement"; capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Loan Agreement),
Agent and the Lenders have agreed to make the Term Loan to Pledgor;
WHEREAS, Pledgor is the legal
record and beneficial owner of all of the Pledged Shares (as defined below);
and
WHEREAS, in order to induce
Agent and the Lenders to make the Term Loan as provided for in the Loan
Agreement, Pledgor has agreed to pledge the Pledged Collateral (as defined
below) to Agent for the benefit of the Lenders in accordance herewith and has
determined that such pledge is necessary or convenient to the conduct, promotion
or attainment of its business.
NOW, THEREFORE, in
consideration of the premises and the covenants hereinafter contained and to
induce Agent and the Lenders to make the Term Loan under the Loan Agreement, it
is agreed as follows:
SECTION
1. Definitions. As
used herein, the following terms shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms
defined):
"EBITDA" means, for
any period, with respect to Ready Mix, (i) net income (as determined in
accordance with GAAP) for such period, plus (ii) the amount of depreciation and
amortization of fixed and intangible assets deducted in determining such net
income for such period, plus (iii) all Interest Expense and, to the extent
deducted in determining net income, all fees for the use of money or the
availability of money, including commitment, facility and like fees and charges
upon Indebtedness paid, payable or accrued during such period, plus (iv) all tax
liabilities paid or accrued during such period, less (v) the amount of all gains
(or plus the amount of all losses) realized during such period upon the sale or
other disposition of property or assets that are sold or otherwise disposed of
outside the ordinary course of business, plus (vi) any other non-cash charges
(or minus the amount of all non-cash income) for such period, plus (vii)
non-recurring charges related to the winding down of exited facilities and the
discontinuance of certain product lines, in each case included in the
determination of net income during such period in an aggregate amount not to
exceed $100,000.
"Exchange Act" means
the Securities Exchange Act of 1934, as amended.
"Pledged Collateral"
has the meaning set forth in Section
2.
"Pledged Shares" has
the meaning set forth in Section
2.
"Ready Mix ERISA
Affiliate" means any entity required to be aggregated with Ready Mix
under Section 414(b), (c), (m) or (o) of the Internal Revenue Code.
"Ready Mix Material Adverse
Effect" means (i) a material adverse effect on the business,
operations, results of operations, assets, liabilities or financial condition of
Ready Mix, (ii) the material impairment of the ability of the Agent or the
Lenders to realize upon the Pledged Collateral, or (iii) a material adverse
effect on (A) the value or saleability of the Pledged Collateral taken as a
whole or (B) the rights and remedies of the Agent or the Lenders under the Loan
Documents with respect to Pledged Collateral.
"Ready Mix Multiemployer
Plan" means a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, to which Ready Mix or any Ready Mix ERISA Affiliate has contributed
within the past six years or with respect to which Ready Mix or any Ready Mix
ERISA Affiliate may incur any liability.
"Ready Mix Pension
Plan" means a pension plan (as defined in Section 3(2) of ERISA) subject
to Title IV of ERISA (other than a Ready Mix Multiemployer Plan) which Ready Mix
or any Ready Mix ERISA Affiliate sponsors or maintains, or to which it makes, is
making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five plan years.
"Ready Mix Permitted
Liens" means (i) Liens created hereunder, and (ii) other Liens
encumbering assets of Ready Mix which could not be expected to have a Ready Mix
Material Adverse Effect, as determined by Agent in its sole
discretion.
"Ready Mix Plan" means
any employee benefit plan, as defined in Section 3(3) of ERISA, maintained
or contributed to by Ready Mix or any Ready Mix ERISA Affiliate or with respect
to which Ready Mix or any Ready Mix ERISA Affiliate may incur
liability.
"Ready Mix SEC
Reports" means all filings made by Ready Mix with the Securities and
Exchange Commission or any Governmental Authority which may be substituted
therefor or any national securities exchange.
"Ready Mix Tax
Affiliate" means (a) Ready Mix and its Subsidiaries and (b) any Affiliate
of Ready Mix with which Ready Mix files or is eligible to file consolidated,
combined or unitary tax returns.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act"
means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended.
"Triggering Event" has
the meaning set forth in Section
12(a).
SECTION
2. Pledge. The
Pledgor hereby pledges to Agent and grants to Agent a Lien on and security
interest in the following, whether now owned or at any time hereafter acquired
by the Pledgor (collectively, the "Pledged
Collateral"):
(a) all of
the issued and outstanding Capital Stock specified in Schedule 1 (the
"Pledged
Shares") of Ready Mix, Inc., a Nevada corporation ("Ready Mix") and the
certificates representing the Pledged Shares, and all dividends, distributions,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Shares, and all additional Capital Stock of or in Ready Mix from time to time
acquired in any manner by the Pledgor, and the certificates, if any,
representing such additional Capital Stock, and all dividends, distributions,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of any or all of such additional Capital Stock;
and
(b) all
proceeds of any of the foregoing (including, without limitation, proceeds
constituting any property of the types described above).
The
Pledgor will deliver to Agent each of the certificates representing the Pledged
Shares not later than the date specified on Schedule 7.1(p) to the Loan
Agreement and has delivered to the Agent on the Closing Date an undated stock
power with respect to each such certificate, executed in blank by
Pledgor.
SECTION 3. Security
for Obligations. The pledge of,
and the grant of a Lien on and security interest in, the Pledged Collateral
hereunder secures the prompt and complete payment when due (whether at the
stated maturity, by acceleration or otherwise) of all of the
Obligations.
SECTION 4. Representations
and Warranties. Pledgor
represents and warrants as follows:
(a)
Organization and
Qualification. Ready Mix is a duly organized and validly
existing corporation in good standing under the laws of Nevada. Ready
Mix has the requisite corporate or similar power and authority to own, lease and
operate its properties and conduct its business as currently
conducted. Ready Mix is duly qualified and in good standing as a
foreign corporation authorized to do business in each of the jurisdictions in
which the character of the properties owned by or held under lease by it or the
nature of the business transacted by it makes such qualification necessary,
except as has not had and could not be expected to have, individually or in the
aggregate, a Ready Mix Material Adverse Effect. Ready Mix is not in
breach of its organizational or governing documents in any material
respect.
(b)
Reports; SEC Matters;
Financial Statements.
(i)
To the
knowledge of a Responsible Officer of the Pledgor, except as previously
disclosed to the Agent in writing on or prior to the Closing Date, Ready Mix has
filed or furnished all forms, reports, statements, certifications and other
documents required to be filed or furnished by it with or to the Securities and
Exchange Commission since August 23, 2005, all of which have complied, as to
form, as of their respective filing dates (and, if amended, as of the date of
the last such amendment) in all material respects with all applicable
requirements of the Securities Act, the Exchange Act and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act. To the knowledge of a Responsible Officer of the Pledgor, none
of the Ready Mix SEC Reports, including any financial statements or schedules
included or incorporated by reference therein, at the time filed or furnished
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(ii) Except as
set forth in Section
3.5(b)(ii) of the Company Disclosure Letter, the audited and unaudited
consolidated financial statements (including the related notes thereto) of Ready
Mix included (or incorporated by reference) in the Ready Mix SEC Reports, as
amended or supplemented, have been prepared in accordance with GAAP and fairly
present in all material respects the consolidated financial position of Ready
Mix and its Subsidiaries as of their respective dates, and the consolidated
stockholders’ equity, results of operations and cash flows for the periods
presented therein (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments that are not expected to be material in amount or
effect). As of the Closing Date, Ready Mix does not have any
Subsidiaries.
(c)
Litigation. To
the knowledge of a Responsible Officer of the Pledgor, there is no claim,
action, suit, proceeding, arbitration, mediation or governmental investigation
pending or overtly threatened against (or for which Ready Mix has assumed
liability) Ready Mix, or any properties or assets of Ready Mix, including by way
of indemnity or contribution that could be expected to have, individually or in
the aggregate, a Ready Mix Material Adverse Effect.
(d)
Sufficiency of
Assets. Except as could not be expected to have a Ready Mix
Material Adverse Effect, the assets of Ready Mix and its Subsidiaries include
all of the tangible and intangible assets, properties and rights material to
Ready Mix and its Subsidiaries and all of the assets or properties necessary to
conduct Ready Mix’s and its Subsidiaries’ businesses as presently
conducted.
(e)
Incorporation
of Representations and Warranties from Closing Date Merger
Agreement. Each of the representations and warranties set
forth in Article III of the Closing Date Merger Agreement made with respect to
Ready Mix are hereby incorporated herein by reference mutatis mutandis and such
representations and warranties are true and correct (without giving effect to
any “materiality” or “Material Adverse Effect” qualifications contained therein)
with respect to Ready Mix, except for such failures to be true and correct as
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect (as defined in the Closing Date Merger Agreement), in
each case as of the date of the Closing Date Merger Agreement and as of the
Closing Date as though made as of such date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case the truth and correctness of such representations and warranties shall be
measured on and as of such earlier date), without giving effect to the proviso
in such definition of “Material Adverse Effect” that states that any events,
changes, effects, developments, conditions or occurrences that cause, or are
reasonably likely to cause, either individually or in the aggregate, a decrease
in the fair market value of the Company (as defined in the Closing Date Merger
Agreement) in excess of $6.0 million shall constitute a Material Adverse
Effect.
SECTION 5. Further
Assurances.
(a)
The Pledgor covenants and agrees that at any time and from time to time, at the
expense of the Pledgor, the Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that Agent may request in the exercise of its
Permitted Discretion, in order to perfect and protect any Liens granted or
purported to be granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Pledged
Collateral. Without limiting the generality of the foregoing, the
Pledgor will execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Agent may request in the exercise of its Permitted
Discretion, in order to perfect and preserve the Liens granted or purported to
be granted hereby.
(b)
The Pledgor hereby authorizes Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Pledged Collateral. A carbon, photographic or other reproduction
of this Agreement or any financing statement covering the Pledged Collateral or
any part thereof shall be sufficient as a financing statement where permitted by
law.
SECTION
6. Affirmative
Covenants
Until
payment and satisfaction of all Obligations (other than Unasserted Obligations)
in full, each of the following shall continue to occur or exist at all times and
any failure thereof shall be a Triggering Event hereunder:
(a)
Corporate
Existence. Ready Mix shall (i) preserve and maintain its
corporate existence and good standing under the laws of its jurisdiction of
incorporation and (ii) preserve, renew and keep in full force and effect,
its respective rights, privileges and franchises necessary or desirable in the
normal conduct of business, except as could not be expected to have a Ready Mix
Material Adverse Effect in the determination of Agent in its sole
discretion.
(b)
Maintenance of
Property. Ready Mix shall keep all property useful and
necessary to Ready Mix's business in good working order and condition (ordinary
wear and tear excepted), except as could not be expected to have a Ready Mix
Material Adverse Effect in the determination of Agent in its sole
discretion.
(c)
Taxes. Ready
Mix and each of the Ready Mix Tax Affiliates (other than the Pledgor) shall pay
when due (i) all material tax assessments, and other governmental charges
and levies imposed against it or any of its property and (ii) all lawful
claims that, if unpaid, might by law become a Lien upon its property, except, in
each case, as could not be expected to have a Ready Mix Material Adverse Effect
as determined by Agent in its sole discretion.
(d)
Requirements of
Law. Ready Mix shall comply with all Requirements of Law
applicable to Ready Mix, including, without limitation, all applicable federal,
state, local or foreign laws and regulations, including, without limitation,
those relating to environmental and employee matters (including the collection,
payment and deposit of employees' income, unemployment, Social Security and
Medicare hospital insurance taxes) and with respect to pension liabilities,
provided that
it shall not be a violation hereof if the failure to comply with any of the
foregoing could not be expected to have a Ready Mix Material Adverse Effect as
determined by the Agent in its sole discretion.
(e)
Qualify to Transact
Business. Ready Mix shall qualify to transact business as a
foreign corporation in each jurisdiction where the nature or extent of its
business or the ownership of its property requires it to be so qualified or
authorized and where failure to qualify or be authorized could be expected to
have a Ready Mix Material Adverse Effect as determined by Agent in its sole
discretion.
(f)
Financial
Reporting. Agent shall receive the following: (i) within
ninety days after the end of each fiscal year of Ready Mix (or such other time
period as required or expressly permitted by the Securities and Exchange
Commission), annual audited Financial Statements of Ready Mix; and (ii) within
forty five days after the end of each fiscal quarter of Ready Mix (or
such other time period as required or expressly permitted by the Securities and
Exchange Commission), quarterly Financial Statements of Ready Mix; provided,
however, that the Financial Statements required to be received by Agent
hereunder shall be deemed delivered and received upon Ready Mix’s timely filing
of the Ready Mix SEC Reports containing the Financial Statements required
hereunder.
(g)
ERISA. Except
as could not be expected to have a Ready Mix Material Adverse Effect as
determined by Agent in its sole discretion, Ready Mix and each of its Ready Mix
ERISA Affiliates shall (i) maintain each Ready Mix Plan intended to qualify
under Section 401(a) of the Internal Revenue Code so as to satisfy the
qualification requirements thereof, (ii) contribute, or require that
contributions be made, in a timely manner to each Ready Mix Plan in amounts
sufficient (A) to satisfy the minimum funding requirements of Section 302
of ERISA or Section 412 of the Internal Revenue Code, if applicable and
(B) to satisfy any other Requirements of Law, (iii) cause each Ready
Mix Plan to comply in all material respects with applicable law (including all
applicable statutes, orders, rules and regulations) and (iv) pay in a
timely manner, in all material respects, all required premiums to the
PBGC.
(h)
Environmental
Matters. Except as could not be expected to have a Ready Mix
Material Adverse Effect as determined by Agent in its sole discretion, Ready Mix
shall conduct its business so as to comply in all respects with all applicable
Environmental Laws including, without limitation, compliance in all respects
with the terms and conditions of all applicable permits and governmental
authorizations.
SECTION
7. Negative
Covenants
Until
payment and satisfaction of all Obligations (other than Unasserted Obligations)
in full, each of the following shall continue to occur or exist at all times and
any failure thereof shall be a Triggering Event hereunder:
(a)
Indebtedness. Ready
Mix shall not directly or indirectly, at any time create, incur, assume or
suffer to exist any Indebtedness other than such Indebtedness that could not be
expected to have a Ready Mix Material Adverse Effect, as determined by Agent in
its sole discretion.
(b)
Contingent
Obligations. Ready Mix shall not directly or indirectly,
incur, assume, or suffer to exist any Contingent Obligation other than such
Contingent Obligations that could not be expected to have a Ready Mix Material
Adverse Effect, as determined by Agent in its sole discretion.
(c)
Corporate Changes,
Etc. Ready Mix shall not (i) merge or consolidate with any
Person, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to or in favor of any Person, or
liquidate or dissolve itself (or suffer any liquidation or dissolution),
(ii) issue any Capital Stock, or (iii) amend, supplement or modify its
Governing Documents, except, in each case, as could not be expected to have a
Ready Mix Material Adverse Effect, as determined by Agent in its sole
discretion.
(d)
Change in Nature of
Business. Ready Mix shall not engage in any line of business
other than those businesses engaged in on the Closing Date and businesses
reasonably related thereto, except as could not be expected to have a Ready Mix
Material Adverse Effect, as determined by Agent in its sole
discretion.
(e)
Sales, Etc. of
Assets. Ready Mix shall not in any fiscal year, (i) sell,
transfer or otherwise dispose of any of its assets; or (ii) grant any option or
other right to purchase or otherwise acquire any of its assets, except, in each
case, as could not be expected to have a Ready Mix Material Adverse Effect, as
determined by Agent in its sole discretion.
(f)
Liens,
Etc. Ready Mix shall not directly or indirectly, at any time
create, incur, assume or suffer to exist any Lien on or with respect to any of
its assets, other than Ready Mix Permitted Liens.
(g)
Stock Redemptions,
Stock Issuances, Exchange, Etc. Ready Mix shall not directly
or indirectly, purchase, redeem or retire any shares of any class of its Capital
Stock, or make any payment on account of or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of its Capital Stock, except, in each case, as could not be
expected to have a Ready Mix Material Adverse Effect, as determined by Agent in
its sole discretion.
(h)
ERISA. Except
as could not be expected to have a Ready Mix Material Adverse Effect, as
determined by Agent in its sole discretion, neither Ready Mix nor any Ready Mix
ERISA Affiliate shall, directly or indirectly:
(i) engage
in any Prohibited Transaction which could reasonably be expected to result in a
civil penalty or excise tax described in Section 406 of ERISA or Section 4975 of
the Internal Revenue Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from the
Department of Labor;
(ii) permit
to exist with respect to any Ready Mix Plan any accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Internal Revenue
Code), whether or not waived;
(iii)
terminate any Ready Mix Plan where such event would result in any liability of
Ready Mix or any Ready Mix ERISA Affiliate under Title IV of ERISA;
(iv)
fail to make any required contribution or payment to any Ready Mix Multiemployer
Plan;
(v) fail
to pay any required installment or any other payment required under Section 412
of the Internal Revenue Code on or before the due date for such installment or
other payment;
(vi) amend
a Ready Mix Plan resulting in an increase in current liability for the plan year
such that Ready Mix or any Ready Mix ERISA Affiliate is required to provide
security to such Ready Mix Plan under Section 436(f) of the Internal Revenue
Code; or
(vii) withdraw
from any Ready Mix Multiemployer Plan where such withdrawal is reasonably likely
to result in any liability of any such entity under Title IV of
ERISA.
(i)
No Restrictions on
Ready Mix Distributions. Ready Mix shall not, directly or
indirectly create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of Ready Mix to
pay dividends or make any other distribution on any of its Capital Stock owned
by the Pledgor except (i) in connection with Ready Mix’s existing credit
facilities with ▇▇▇▇▇ Fargo Equipment Finance, Inc. and any refinancing or
replacement credit facilities thereof or (ii) as could not be expected to have a
Ready Mix Material Adverse Effect, as determined by Agent in its sole
discretion.
(j)
Affiliate
Transactions. Ready Mix shall not enter into or permit to
exist any transaction (including the purchase, sale, lease or exchange of any
property or the payment for the rendering of any management, consulting,
investment banking, advisory or other similar services) with any Affiliate or
with any director, officer or employee of Ready Mix or any Loan Party except (i)
transactions in the ordinary course of and pursuant to the reasonable
requirements of the business of Ready Mix and upon fair and reasonable terms
which are fully disclosed to Agent and are no less favorable to Ready Mix than
would be obtained in a comparable arm's length transaction with a Person that is
not an Affiliate, and (ii) transactions that could not be expected to have a
Ready Mix Material Adverse Effect, as determined by Agent in its sole
discretion.
(k)
Ready Mix Material
Adverse Effect. No event shall occur or condition shall exist
which could be expected to have a Ready Mix Material Adverse Effect as
determined by Agent in its sole discretion.
SECTION 8. Distributions;
Voting; Etc.
(a)
So long as no Triggering Event shall have occurred and be continuing, the
Pledgor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Pledged Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement and in a manner which could
not reasonably be expected to impair any of the Pledged Collateral in any
material respect and to receive and retain any and all distributions paid in
respect of the Pledged Collateral; provided, however, that any and
all:
(i)
dividends and distributions paid or payable other than in cash in respect of,
and instruments and other property received, receivable or otherwise distributed
in respect of, or in exchange for, any Pledged Collateral,
(ii) dividends
and distributions paid or payable in cash in respect of any Pledged Collateral
in connection with a partial or total liquidation or dissolution of Ready Mix,
or in connection with a reduction of capital, capital surplus or paid-in-surplus
of Ready Mix, and
(iii) cash
paid, payable or otherwise distributed in exchange for, or in redemption of, any
Pledged Collateral
shall, if
received by the Pledgor, be received in trust for the benefit of Agent,
segregated from the other property or funds of the Pledgor, and forthwith
delivered to Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).
(b) Upon
the occurrence and during the continuance of a Triggering Event:
(i) All
rights of the Pledgor to receive any distributions that it would otherwise be
authorized to receive and retain pursuant to Section 8(a)
shall cease, and all such rights shall thereupon become vested in Agent who
shall thereupon have the sole right to receive and hold as Pledged Collateral
such distributions.
(ii) Any
and all distributions payable to the Pledgor in respect of the Pledged
Collateral shall be received by the Pledgor in trust for the benefit of Agent,
segregated from other funds of the Pledgor and forthwith paid over to Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement).
(c)
The Pledgor hereby irrevocably constitutes and appoints Agent, with full power
of substitution, as its true and lawful attorney-in-fact with full power and
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, upon the occurrence and during the continuance of a Triggering
Event and to the extent permitted by applicable law, to exercise the voting and
other consensual rights which the Pledgor would otherwise be entitled to
exercise pursuant to Section 8(a)
(whereupon all rights of the Pledgor to exercise such rights shall
cease). This power of attorney is coupled with an interest and is
irrevocable.
SECTION 9. Agent Appointed Attorney-in-Fact; Irrevocable Authorization
and Instruction to Ready Mix. The Pledgor
hereby appoints Agent as the Pledgor’s attorney-in-fact, with full authority in
the place and stead of the Pledgor and in the name of the Pledgor or otherwise,
from time to time in Agent’s Permitted Discretion, to take any action and to
execute any instrument which Agent may deem necessary or advisable in its
Permitted Discretion to accomplish the purposes of this Agreement, including,
without limitation, to receive, endorse and collect all instruments made payable
to the Pledgor representing any distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the
same. The Pledgor hereby authorizes and instructs Ready Mix to comply
with any instruction received by it from Agent in writing that (a) states that a
Triggering Event has occurred and is then continuing and (b) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from the Pledgor, and the Pledgor agrees that Ready Mix shall be
fully protected in so complying. This power of attorney is coupled
with an interest and is irrevocable. The foregoing power shall not be
exercisable except after the occurrence and during the continuance of a
Triggering Event.
SECTION
10. Agent May Perform. If the Pledgor
fails to timely perform any agreement contained herein, Agent may perform, or
cause performance of, such agreement, and the expenses of Agent incurred in
connection therewith shall be payable by the Pledgor.
SECTION 11.
Reasonable
Care; Return of Pledged Collateral.
(a)
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral (including, without limitation, the
certificates representing the Pledged Shares) in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which Agent accords
its own property, it being understood that Agent shall not have the
responsibility under this Agreement for taking any necessary steps to preserve
rights against any parties with respect to any Pledged Collateral except as set
forth in subsection (b) below.
(b)
Upon the indefeasible payment in full of all the Obligations (other than
Unasserted Obligations), Agent shall return to the Pledgor all certificates
representing the Pledged Shares and the stock powers therefor and all cash held
by Agent as collateral hereunder which have not been disposed of, used or
applied in connection with or toward the payment of the
Obligations.
Pledge
Agreement
-10-
SECTION
12. Triggering
Event; Remedies.
(a)
The occurrence of any of the following events shall constitute a "Triggering
Event":
(i) (A)
default in the performance or observance of any agreement, covenant, condition,
provision or term contained in Sections 6(a)(i),
7, 12(e), 12(f) or 12(g) hereof or (B)
default in the performance or observance of any agreement, covenant, condition,
provision or term contained in this Agreement (other than those referred to in
Sections
12(a)(i)(A)) and such failure continues for a period of fifteen days;
or
(ii) Ready
Mix dissolves, winds up or otherwise ceases to conduct its business;
or
(iii) Ready
Mix becomes the subject of an Insolvency Event; or
(iv) (A) Ready
Mix fails to make any payment in respect of any Indebtedness when due (whether
at scheduled maturity or by required prepayment, acceleration, demand or
otherwise), or (B) any event or condition occurs that results in any
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits the holder or holders (or a trustee or agent on behalf of such holder or
holders) to declare any Indebtedness to be due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity,
in each case, which could be expected to have a Ready Mix Material Adverse
Effect as determined by Agent in its sole discretion; or
(v) any
representation or warranty made in this Agreement shall prove to have been
incorrect in any material respect when made or deemed made, as determined by
Agent in its sole discretion; or
(vi) any
judgment or order for the payment of money shall be rendered against Ready Mix
which could reasonably be expected to have a Ready Mix Material Adverse Effect
as determined by Agent in its sole discretion and shall not be stayed, vacated,
bonded or discharged within thirty days; or
(vii) the
Sponsor and its Controlled Investment Affiliates collectively cease to own and
control, directly or indirectly, all of the economic and voting rights
associated with ownership of at least 60% of all classes of the outstanding
voting common Capital Stock of Ready Mix on a fully diluted basis;
(viii) the
occurrence and continuance of any Event of Default under the Loan Agreement or
any other Loan Document;
(ix) the
EBITDA of Ready Mix shall be negative for any two consecutive fiscal quarters;
or
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Agreement
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(x) the
occurrence of any event or condition that could be expected to have a Ready Mix
Material Adverse Effect as determined by Agent in its sole
discretion.
(b)
If any Triggering Event shall have occurred and be continuing, Agent shall have
all rights and remedies with respect to the obligations hereunder and the
Pledged Collateral under applicable law and Agent may exercise in respect of the
Pledged Collateral, in addition to the other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a secured
party under the Code and other applicable law, and Agent may also bid or become
a purchaser at any sale, free from any right of redemption, which right is
expressly waived by each Pledgor. If notice of intended disposition
of any Pledged Collateral is required by law, it is agreed that ten days’ notice
shall constitute reasonable notification. The Agent may sell
the Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker’s board or at any of the Agent’s offices
or elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Agent may deem commercially reasonable. The Agent shall
not be obligated to make any sale of Pledged Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. If a Triggering Event shall have occurred and be
continuing, Agent may, pursuant to the power of attorney granted herein,
transfer the Pledged Collateral on the books of the Pledgor and Ready Mix, in
whole or in part, to the name of Agent or such other Person or Persons as Agent
may designate and take all such other and further actions as the Pledgor could
have taken with respect to the Pledged Collateral which Agent in its absolute
discretion determines to be necessary or appropriate to accomplish the purposes
of this Agreement.
(c)
Pledgor acknowledges and agrees that it is difficult or impossible to determine
with precision the amount of damages that would or might be incurred by Agent
and the Lenders as a result of Pledgor's failure to comply with the
representations, warranties, and covenants of this Agreement. It is
understood and agreed by Pledgor that (i) Agent and the Lenders shall be damaged
by failure of Pledgor to meet such obligations, (ii) it would be impracticable
or extremely difficult to fix the actual damages resulting therefrom, (iii) the
rights of Agent hereunder to foreclose upon the Pledged Collateral following any
Triggering Event and to apply any proceeds thereof to the Term Loan in
accordance with Section 9.4(b) of the Loan Agreement are a fair and reasonable
remedy under the circumstances, and (iv) the proceeds of the Pledged Collateral
represents fair compensation for the losses that may reasonably be anticipated
from such failure, and shall, without duplication, be the sole and exclusive
measure of damages with respect to any such breach of the representations,
warranties or covenants under this Agreement.
(d)
In view of the fact that federal and state securities laws may impose certain
restrictions on the method by which a sale of all or any part of the Pledged
Collateral may be effected after a Triggering Event, the Pledgor agrees that,
after the occurrence and during the continuation of a Triggering Event, Agent
may, from time to time, attempt to sell all or any part of the Pledged
Collateral by means of a private placement restricting the bidders and
prospective purchasers to those who are qualified and will represent and agree
that they are purchasing for investment only and not for
distribution. In so doing, Agent may solicit offers to buy all or any
part of the Pledged Collateral from a limited number of Persons deemed by Agent,
in its sole discretion, to be financially responsible parties who might be
interested in purchasing such Pledged Collateral. If Agent solicits
such offers from not less than three such Persons (none of which is an Affiliate
of Agent), then the acceptance by Agent of the highest offer obtained therefrom
shall be deemed to be a commercially reasonable method of disposing of such
Pledged Collateral; provided, however, that this
subsection shall not be construed to impose a requirement that Agent solicit
offers from three or more Persons for any such sale to be deemed commercially
reasonable.
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Agreement
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(e) Pledgor
agrees that, during the existence of a Triggering Event, upon written request of
Agent (which request may be made by Agent in its sole discretion), Pledgor will
request, and will use its commercially reasonable efforts to obtain, Ready Mix’s
agreement and cooperation to (i) execute and deliver all instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of Agent, advisable to register the Pledged
Collateral under the provisions of the Securities Act and to cause the
registration statement relating thereto to become effective and to remain
effective for such period of time not to exceed two years (with such two year
period being extended for any period of time that Ready Mix requires a black out
period or the registration statement ceases to be effective), and make all
amendments and supplements thereto and to the related prospectus which, in the
opinion of Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto; (ii) use its commercially
reasonable efforts to qualify the Pledged Collateral under all applicable state
securities or "Blue Sky" laws and to obtain all necessary governmental approvals
for the sale of the Pledged Collateral, as requested by Agent; (iii) make
available to its security holders, as soon as practicable, an earnings statement
which will satisfy the provisions of Section 11(a) of the Securities Act; (iv)
do or cause to be done all such other acts and things as may be necessary to
make such sale of the Pledged Collateral or any part thereof valid and binding
and in compliance with applicable securities law; and (v) bear all costs and
expenses, including reasonable attorneys' fees, of carrying out its obligations
under this Section
12(e).
(f)
In the event of any registered offering described herein, Pledgor will request,
and will use its commercially reasonable efforts to obtain, Ready Mix’s
agreement to indemnify and hold harmless Agent and each of its directors,
officers, employees and agents from and against any loss, fee, cost, expense,
damage, liability or claim, joint or several, to which any such Persons may
become subject or for which any of them may be liable, under the Securities Act
or otherwise, insofar as such losses, fees, costs, expenses, damages,
liabilities or claims (or any litigation commenced or threatened in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus,
registration statement, prospectus or other such document published or filed in
connection with such registered offering, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and to reimburse Agent and such other
Persons for any legal or other expenses reasonably incurred by Agent and such
other Persons in connection with any litigation, of any nature whatsoever,
commenced or threatened in respect thereof (including any and all fees, costs
and expenses whatsoever reasonably incurred by Agent and such other Persons and
counsel for Agent and such other Persons in investigating, preparing for,
defending against or providing evidence, producing documents or taking any other
action in respect of, any such commenced or threatened litigation or any claims
asserted); provided, however, the foregoing shall not apply with respect to any
matter arising out of any material fact or omission of or related to the party
or parties on whose behalf the Pledged Collateral is being registered and each
such party shall provide the foregoing indemnification to Ready Mix with respect
to any such material fact or omission. This indemnity, if provided, shall be in
addition to any liability which any party may otherwise have and shall extend
upon the same terms and conditions to each Person, if any, that controls Agent
or such Persons within the meaning of the Securities Act.
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Agreement
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(g)
Upon the written request of Agent, Pledgor shall and will use its commercially
reasonable efforts to obtain Ready Mix’s cooperation to: (i) permit the officers
and designated agents of the Agent and any independent appraisers selected by
Agent, on reasonable notice and during normal business hours absent the
existence of a Triggering Event (and at any time during the existence of a
Triggering Event), access to the premises of Ready Mix for the purposes of
conducting a valuation of Ready Mix as a going concern, including discussing the
affairs, finances and business of Ready Mix with any officer, employee or
director thereof or with the Auditors and the reasonable cooperation of such
officers, employees or directors thereof or with the Auditors in connection with
conducting such valuation, and (ii) authorize all such officers, employees and
directors to disclose to the Agent and the Lenders all financial statements,
work papers, and other information relating to such affairs, finances or
business of Ready Mix, subject to standard confidentiality agreements (it being
understood and agreed that no officer, employee or director shall be required to
disclose any material nonpublic information or any other information relating to
the affairs, finances or business of Ready Mix that is prohibited by applicable
law or would be a violation of such Person’s fiduciary duties, if any, to Ready
Mix); provided, however, that unless a Triggering Event exists, the Pledgor
shall have the right to be present at all such meetings; provided, further, that
absent the existence of a Triggering Event, Agent may conduct only one such
valuation in any fiscal year. Absent the existence of a Triggering
Event, such valuations shall be at the sole cost and expense of the
Agent. During the existence of a Triggering Event, such valuations
shall be at the sole cost and expense of Pledgor, and Pledgor’s reimbursement of
Agent’s expenses and payment thereto shall be in the same manner as the
reimbursement and payment of Agent’s expenses and costs as set forth in Section
7.1(f) of the Loan Agreement, including without limitation, the reimbursement of
Agent’s expenses with respect to any professional expenses or other costs
relating to the appraisal and valuation of Ready Mix as a going
concern.
(h)
The parties hereto understand and agree that Pledgor shall not be in default of
its obligations set forth under Section 12(e), Section 12(f) or
Section 12(g)
above if the board of directors of Ready Mix determines, in the
exercise of its fiduciary duties, that despite the efforts and requests
undertaken by Pledgor in compliance with the terms hereof, Ready Mix will not
undertake the subject registration or indemnification obligations.
Pledge
Agreement
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SECTION
13. Application
of Proceeds. All money held by
Agent as Pledged Collateral and all cash proceeds received by Agent in respect
of any sale of, collection from, or other realization upon, all or any part of
the Pledged Collateral, shall be applied to the Obligations in accordance with
Section 9.4(b) of the Loan Agreement.
SECTION
14. Indemnity
and Expenses.
(a)
The Pledgor agrees that it will indemnify Agent from and against any and all
claims, damages, losses, liabilities and expenses arising out of, in connection
with, or resulting from, this Agreement (including, without limitation,
enforcement of this Agreement) other than such as arise from Agent’s gross
negligence, willful misconduct or bad faith.
(b)
The Pledgor shall, upon demand, pay to the Agent all costs and expenses incurred
by the Agent (including the reasonable and documented fees and disbursements of
counsel and other professionals) in connection with the preparation, execution,
delivery, administration, modification and amendment of this Agreement, and pay
to the Agent and each Lender all costs and expenses (including the reasonable
and documented fees and disbursements of counsel and other professionals) paid
or incurred by the Agent or such Lender in (A) enforcing or defending its
rights under or in respect of this Agreement, the other Loan Documents or any
other document or instrument now or hereafter executed and delivered in
connection herewith, (B) collecting the Obligations or otherwise
administering this Agreement and (C) foreclosing or otherwise realizing
upon the Pledged Collateral or any part thereof.
SECTION
15. Amendments,
Etc. No amendment of
any provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed by the Pledgor and Agent; no waiver of any
provision of this Agreement, and no consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which
given. No failure to exercise and no delay in exercising on the part
of Agent any right, power or privilege under this Agreement shall operate as a
waiver thereof. No single or partial exercise of any right, power or
privilege under this Agreement shall preclude any other or further exercise
thereof or the exercise of any other right, power or
privilege.
SECTION
16. Security
Interest Absolute. All rights of
Agent and the Lien and security interest granted to it hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a)
any lack of enforceability of the Loan Agreement or any of the other Loan
Documents;
(b)
any change in the time, manner or place of payment of, or in any other term of,
all or any of the Obligations, or any other amendment or waiver of or any
consent to departure from the Loan Agreement or any of the other Loan
Documents;
(c)
any taking and holding of collateral or guarantees for all or any of the
Obligations, or any amendment, alteration, exchange, substitution, transfer,
enforcement, waiver, subordination, termination or release of any collateral or
such guarantees, or any non-perfection of any collateral, or any consent to
departure from any such guaranty;
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(d)
any manner of application of collateral, or proceeds thereof, to all or any of
the Obligations, or the manner of sale or other disposition of any collateral or
the collection of proceeds thereof;
(e)
any consent by Agent to the restructure or refinancing of the Obligations or any
portion thereof;
(f)
any other modification, compromise, settlement or release by Agent, by operation
of law or otherwise, of the Obligations or the liability of any obligor or
guarantor, or of any collateral, in whole or in part, and any refusal by Agent
to accept any payment, in whole or in part, from any obligor or guarantor in
connection with any of the Obligations, in each case whether or not with notice
to, further assent by, or any reservation of rights against, the Pledgor;
or
(g)
any other circumstance (including, without limitation, any statute of
limitations) which might otherwise constitute a defense available to, or a
discharge of, any third party pledgor or guarantor.
SECTION
17. Addresses
for Notices. All notices and
other communications provided for hereunder shall be in writing and given as
provided in Section 11.1 of the Loan Agreement.
SECTION
18. Continuing
Security Interest; Assignment. This Agreement
shall create a continuing Lien on and security interest in the Pledged
Collateral and shall (a) remain in full force and effect until released in
accordance herewith, (b) be binding upon the Pledgor and its successors and
assigns, and (c) inure, together with the rights and remedies of Agent
hereunder, to the benefit of Agent and its successors and permitted
assigns. Without limiting the generality of the foregoing clause (c),
Agent may assign or otherwise transfer all or any portion of its rights and
obligations under this Agreement to any other Person which is an assignee of
Agent under the Loan Agreement, and such other Person shall thereupon become
vested with all the benefits in respect hereof granted to Agent
herein.
SECTION
19. Counterparts;
Telecopied
Signature. This
Agreement and any waiver or amendment hereto may be executed in counterparts and
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all of which shall together constitute
one and the same instrument. This Agreement may be executed and delivered by
telecopier or other facsimile transmission all with the same force and effect as
if the same was a fully executed and delivered original manual
counterpart.
SECTION
20. Governing
Law. THIS AGREEMENT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
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[REMAINDER
OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the
Pledgor has caused this Agreement to be executed by its proper and duly
authorized officers as of the date first set forth above.
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MEADOW
VALLEY PARENT CORP.
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By:
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
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Title:
Managing Director
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
Executive Director
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[Signature
Page to Pledge Agreement (Ready Mix)]
Schedule
1
Description
of Pledged Shares
|
Issuer
|
Class
of
Stock
|
No.
of
Shares
|
Percentage
of
Total Outstanding
Shares
as of the Closing Date
|
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Ready
Mix
|
Common
|
2,025,000
|
53.2%
|
|||
|
Ready
Mix
|
Common
|
620,212
|
16.3%
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