Exhibit 4.17
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CEMEX SOUTHEAST LLC,
A DELAWARE LIMITED LIABILITY COMPANY
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
"LLC Agreement") of CEMEX SOUTHEAST LLC, a Delaware limited liability company
(the "Company"), effective as of July 1, 2005, is by and among the Company,
CEMEX SOUTHEAST HOLDINGS, LLC, a Delaware limited liability company ("Cemex"),
and READY MIX USA, INC., an Alabama corporation ("RMUSA") (Cemex and RMUSA are
hereinafter sometimes collectively referred to as the "Members"), and, solely
for the purposes set forth in Section 9.6, CEMEX, INC., a Louisiana corporation
("Cemex, Inc.")
W I T N E S S E T H:
WHEREAS, the Company was formed for the purpose of engaging in the
Primary Business (as defined herein) and now desire to set forth the agreement
among the Members and the Company regarding the governance of the affairs of
the Company and the conduct of its business; and
WHEREAS, Cemex, Inc. has agreed to enter into this LLC Agreement
solely for the purposes set forth in Section 9.6 hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and undertakings of the Members and the Company contained
herein, it is agreed as follows:
1. Name, Office, Agent for Service of Process and Members' Names and
Mailing Addresses.
1.1 Name. The name of the Company shall be CEMEX SOUTHEAST LLC.
1.2 Office. The address of the registered office and the mailing
address of the Company shall be c/o The Corporation Trust Company, Corporation
Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇, or such other address(es) as the Manager may hereafter determine.
1.3 Agent for Service of Process. The name and address of the
Company's initial registered agent for service of process shall be c/o The
Corporation Trust Company, Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
1.4 Initial Members' Names, Mailing Addresses and Percentage and
Voting Interests. The name and mailing address of each of the initial Members
of the Company, and the Percentage Interest and Voting Interest of each such
Member, are as set forth on Exhibit A attached hereto. The Manager shall update
Exhibit A from time to time as necessary to accurately reflect the information
therein, including any adjustment of the Percentage Interests required by this
LLC Agreement, and to reflect the admission of additional Members in accordance
with this LLC Agreement. Any such amendment or revisions to Exhibit A shall not
be deemed an amendment to this LLC Agreement requiring approval of the Board.
2. Duration. The existence of the Company shall commence on the date
of the filing of the Certificate of Formation in the Office of the Secretary of
State of Delaware, and shall continue in perpetuity until dissolved pursuant to
Section 12.1 hereof.
3. Purpose and Definitions.
3.1 Purpose. The Company is organized for the following purposes:
(a) to engage in the production and sale of Portland cement (excluding
white cement), blended cement and masonry products within the Cement Boundaries
(as defined in Section 3.2 hereof) (the "Primary Business"); and
(b) to engage in such additional activities that are necessary or
appropriate to conduct the Primary Business.
3.2 Definitions. Capitalized terms used in this LLC Agreement and not
otherwise defined herein shall have the meanings set forth below:
"Acquired Business" has the meaning set forth in Section 9.6.3.(c)
hereof.
"Acquisition Date" has the meaning set forth in Section 9.6.3.(c)
hereof.
"Additional Capital Contributions" has the meaning set forth in
Section 4.1(b)(i) hereof.
"Adjusted Book Value" means total assets less total liabilities as
determined under GAAP, as consistently applied and as reflected on the
Company's balance sheet as of the date of the event giving rise to the
calculation of Adjusted Book Value, plus the aggregate depreciation expense
reflected in net income during the measurement period minus the Put Option
Depreciation amount for the measurement period. For the avoidance of doubt, and
as reflected in the Contribution Agreement, the assets contributed to the
Company by RMUSA and Cemex on the Contribution Date will be valued for book
purposes at $8,000,000.00 and $398,193,477.60, respectively, subject to
adjustment as provided in Section 2.3 of the Contribution Agreement. An example
of this calculation is shown in Exhibit B-3.
"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) credit to such Capital Account any amounts which such
Member is obligated to restore or is deemed to be obligated to restore
pursuant to the penultimate sentence of Sections 1.704-2(g)(1) and
1.704-2(i)(5) of the Regulations; and
(ii) debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.
"Adverse Act" means, with respect to a particular Member or Cemex,
Inc., any of the following:
(i) the occurrence of an Event of Bankruptcy with respect to
such Member or Cemex, Inc.;
(ii) any dissolution of such Member that is a corporation,
partnership, limited liability company or other entity, or any
dissolution of Cemex, Inc., without the prior written consent of the
Manager, provided that if the Member to be dissolved, or Cemex, Inc.,
as the case may be, is also the Manager, or an Affiliate of the
Manager, such consent shall be required to be obtained from the Board;
(iii) any failure by Cemex, Inc. to tender the Purchase Price
as and when due in accordance with Section 9.6 hereof; provided, that
RMUSA and each of its Affiliates has tendered its Percentage Interest
or Membership Interest, as the case may be, free of any Liens at the
Put Option Closing or such later closing on the first anniversary or
second anniversary of the Put Option Closing, as the case may be.
(iv) at the election of the Transferring Member, the failure
of a Non-Transferring Member who gives an Offer Acceptance Notice
within the Offer Option Period to consummate the contemplated
transaction within one (1) year after it gives such Offer Acceptance
Notice, as provided in Section 9.3(a) hereof;
(v) at the election of the Contribution Complying Members,
the failure of a Delinquent Member to make an Additional Capital
Contribution pursuant to Section 4.1 hereof if the aggregate
outstanding amount of (i) Additional Capital Contributions that the
Delinquent Member and its Affiliates have failed to make under this
Agreement and (ii) "Additional Capital Contributions" under the Ready
Mix LLC Agreement with respect to such Member or any of its Affiliates
is a "Delinquent Member" under Section 4.1 of the Ready Mix LLC
Agreement, exceeds $10 million; or
(vi) at the election of the Transferring Member, a breach by
a Non-Transferring Member who gives a Tag Along Notice within the
Offer Option Period to Transfer its entire Membership Interest
pursuant to the transaction set forth in the Offer Notice of any of
its obligations to the purchaser under the Non-Transferring Member's
agreement with the purchaser related to such transaction, which breach
causes the contemplated transaction to be terminated, as provided in
Section 9.4 hereof.
"Adverse Act Exercise Date" has the meaning set forth in Section
11.1(d)(i) hereof.
"Adverse Member" means, with respect to a particular Adverse Act, the
Member with respect to which such Adverse Act has occurred.
"Adverse Member Buyout Closing" has the meaning set forth in Section
11.1(d) hereof.
"Affiliate" when used with respect to a specified Person, means a
Person that:
(i) directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control
with such specified Person;
(ii) is a director, officer, employee, trustee, member or
general partner of, or an owner of an equity interest of more than
fifty percent (50%), or a beneficiary of a trust owning an equity
interest of more than fifty percent (50%) in, such specified Person or
any Person specified in clause (i) of this definition; or
(iii) is a member of the immediate family of such specified
Person or any Person specified in clause (i) or (ii) of this
definition, and any partnership, corporation, trust, limited liability
company, association or other entity or organization that is
controlled by such immediate family member. For purposes hereof, the
members of a Person's "immediate family" shall include such Person's
parents, grandparents, spouse, children (natural or adopted),
grandchildren (natural or adopted), siblings (natural or adopted) and
children of siblings (natural or adopted). For purposes of this
definition, the term "control" (and any derivative thereof) means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether
through the ownership of voting stock, by contract or otherwise.
"Approved Extraordinary Required Additional Capital Contribution" has
the meaning set forth in Section 4.1(b) hereof.
"Applicable Tax Rate" means the then maximum current statutory
corporate federal tax rate (currently 35%) plus 65% of the maximum statutory
corporate state tax rate of the states in which the joint venture transacts
business, both rates to be adjusted annually for changes in the tax rates and
the states in which the Company operates.
"Back-Up Supply Agreement" means the Cement Supply Agreement of even
date herewith between the Company and Cemex, Inc., as such agreement may be
amended or modified from time to time.
"Base Member" has the meaning set forth in Section 9.1(c) hereof.
"Board" means a group of eight (8) individuals, four (4) of whom shall
be appointed by each Member pursuant to Section 8.1(e) hereof.
"Budgeted Additional Capital Contribution" has the meaning set forth
in Section 4.1(b) hereof.
"Business Day" means a day (other than a Saturday) on which banks
generally are open in New York City, Houston, Texas and Birmingham, Alabama,
for a full range of business.
"Buyout Option" has the meaning set forth in Section 11.1(d) hereof.
"Buyout Purchase Price" has the meaning set forth in Section 11.1(d)
hereof.
"Capital Account" means, with respect to any Member, the Capital
Account maintained for such Member in accordance with Section 4.5 hereof.
"Capital Contributions" means, with respect to any Member, the amount
of money and the initial Gross Asset Value of any assets (other than money)
contributed to the Company with respect to the Membership Interests in the
Company held or purchased by such Member, including additional Capital
Contributions.
"Certificate of Formation" means the Certificate of Formation of the
Company which was filed on March 1, 2005 (the "Effective Date"), in the Office
of the Secretary of State of Delaware, and all amendments thereto.
"Cemex" has the meaning set forth in the Introduction hereof.
"Cemex. Inc." has the meaning set forth in the Introduction hereof.
"Cement Boundaries" means the states of Alabama, Georgia and
Mississippi, the Cement Florida Panhandle (as defined herein) and the Cement
Limited Tennessee Area (as defined herein).
"Cement Florida Panhandle" means the following counties in the State
of Florida: Escambia, Santa ▇▇▇▇, Okaloosa, Walton, Holmes, Washington,
Jackson, Bay, ▇▇▇▇▇▇▇, Gulf and Franklin. The Cement Florida Panhandle shall
exclude the City of Tallahassee, Florida.
"Cement Limited Tennessee Area" means the Metropolitan Statistical
Areas of Chattanooga and Memphis, Tennessee.
"Cemex Post-Exercise Regular Cash Distribution" has the meaning set
forth in Section 9.6.4(c) hereof.
"Cemex Post-Exercise Special Cash Distribution" has the meaning set
forth in Section 9.6.4(a) hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any federal laws of similar import, and to the extent applicable,
any Regulations promulgated thereunder.
"Company" means CEMEX SOUTHEAST LLC, a Delaware limited liability
company, and any successor limited liability company.
"Company Minimum Gain" has the meaning of "partnership minimum gain"
as set forth in Section 1.704-2(d) of the Regulations.
"Company's Accounting Firm" has the meaning set forth in Section 7.1
hereof.
"Competitive Business" means any business that sells Portland cement
(excluding white cement), blended cement and/or masonry products within the
Cement Boundaries and which is owned, operated or controlled by any Person
other than the Company or any of its Subsidiaries.
"Competitive Business Approval" has the meaning set forth in Section
19(a) hereof.
"Contribution Agreement" means the Asset and Capital Contribution
Agreement by and among the Members and the Company dated July 1, 2005.
"Contribution Complying Member" has the meaning set forth in Section
4.1(b)(iii) hereof.
"Contribution Date" means the later of (a) the date upon which the
Company is legally formed and (b) the date upon which initial Capital
Contributions are made pursuant to Section 4.1(a) hereof.
"Contributing Member" has the meaning set forth in Section 19(a)
hereof.
"DGCL" means the Delaware General Corporation Law, as the same may be
amended from time to time.
"Damages" has the meaning set forth in the Contribution Agreement.
"Debt(s)" means all borrowed funds of the Company or any of its
Subsidiaries and all other obligations or liabilities of the Company or any of
its Subsidiaries under Statement of Financial Accounting Standards No. 5,
including, for the avoidance of doubt, capital leases but not operating leases;
provided, however, that "Debt" shall not include any current liabilities.
"Debt Reduction Capital Contribution" has the meaning set forth in
Section 4.1(b)(ii) hereof.
"Delinquent Member" has the meaning set forth in Section 4.1(b)(iv)
hereof.
"EBITDA" means with respect to a particular Person for a particular
period, the consolidated operating income plus depreciation and amortization of
such Person for such period and refers to the earnings of continuing operations
and shall not include the effect of cumulative changes in accounting principles
and material nonrecurring items for such entities on a combined basis for such
period.
"Event of Bankruptcy" means, with respect to any Member, or Cemex,
Inc., any of the following:
(i) making a general assignment for the benefit of creditors;
(ii) filing a voluntary petition in bankruptcy;
(iii) filing a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any bankruptcy, insolvency or
other similar law;
(iv) seeking, consenting to, or acquiescing in the
appointment of a trustee, receiver or liquidator of such Member, or
Cemex, Inc., or of all or any substantial part of its properties or
assets under any bankruptcy, insolvency or other similar law; or
(v) the passage of one hundred twenty (120) days after the
commencement of any involuntary proceeding against such Member, or
Cemex, Inc., seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
bankruptcy, insolvency or other similar law, if the proceeding has not
been dismissed, or the passage of ninety (90) days after the
appointment without its consent or acquiescence of a trustee, receiver
or liquidator of such Member, or Cemex, Inc., or of all or any
substantial part of its properties or assets, if the appointment is
not vacated or stayed, or the passage of ninety (90) days after the
expiration of any such stay, if the appointment is not vacated.
"Excess Amount" has the meaning set forth in Section 4.1(b)(ii)
hereof.
"Excess Distribution Amount" has the meaning set forth in Section
6.1(b)(i) hereof.
"Exercise Date" means the date upon which the Put Notice is actually
or constructively delivered to Cemex, Inc.
"External Competitive Business" means a Competitive Business where
less than fifty percent (50%) of such Competitive Business' consolidated total
revenues during the most recently completed calendar year were derived from
sales of Portland cement (excluding white cement), blended cement and masonry
products within the Cement Boundaries.
"Extraordinary Required Additional Capital Contribution" has the
meaning set forth in Section 4.1(b)(i) hereof.
"Fiscal Year" means (i) the period commencing on the Contribution Date
and ending on December 31, 2005, (ii) any subsequent twelve (12) month period
commencing on January 1 and ending on December 31, or (iii) any portion of the
period described in clauses (i) or (ii) for which the Company is required to
allocate Profits, Losses and other items of Company income, gain, loss or
deduction pursuant to Section 5 hereof.
"GAAP" means generally accepted accounting principles in effect in
the United States of America from time to time.
"Governmental Authority" means (i) any domestic or foreign national,
state or local government, any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, court, department, bureau or entity,
or (ii) any arbitrator with authority to legally bind a party or any of its
Affiliates.
"Gross Asset Depreciation" means, for each Fiscal Year, an amount
equal to the depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such Fiscal Year, 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 Fiscal Year, Gross Asset
Depreciation shall be an amount that bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation amortization or other
cost recovery deduction for such Fiscal Year bears to such beginning adjusted
tax basis; provided, however, that if the adjusted basis for federal income tax
purposes of an asset at the beginning of such Fiscal Year is zero, Gross Asset
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the Manager.
"Gross Asset Value" means with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(i) 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, as determined by the Board; provided that the initial Gross
Asset Values of the assets contributed to the Company pursuant to
Section 4.1 hereof shall be as set forth in such section;
(ii) the Gross Asset Values of all Company assets shall be
adjusted to equal their respective gross fair market values (taking
Code Section 7701(g) into account), as determined by the Board as of
the following times: (A) the acquisition of an additional Membership
Interest or other interest in the Company by any new or existing
Member in exchange for more than a de minimis Capital Contribution;
(B) the distribution by the Company to a Member of more than a de
minimis amount of Company property or assets as consideration for a
Membership Interest or other interest in the Company; and (C) the
liquidation of the Company within the meaning of Section
1.704-1(b)(2)(ii)(g) of the Regulations, provided that an adjustment
described in clauses (A) and (B) of this paragraph shall be made only
if the Board reasonably determines that such adjustment is necessary
to reflect the relative economic interests of the Members in the
Company;
(iii) the Gross Asset Value of any item of the Company assets
distributed to any Member shall be adjusted to equal the gross fair
market value (taking Code Section 7701(g) into account) of such asset
on the date of distribution as determined by the Board; and
(iv) the Gross Asset Values of the 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 Section
1.704-1(b)(2)(iv)(m) of the Regulations and subparagraph (vi) of the
definition of "Profits" and "Losses" or Section 5.2(g) hereof;
provided, however, that Gross Asset Values shall not be adjusted
pursuant to this subparagraph (iv) to the extent that an adjustment
pursuant to subparagraph (ii) is required in connection with a
transaction that would otherwise result in an adjustment pursuant to
this subparagraph (iv).
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter
be adjusted by the Depreciation taken into account with respect to such asset,
for purposes of computing Profits and Losses.
"HSR Act" has the meaning set forth in Section 9.6.6(c) hereof.
"Indemnified Party" has the meaning set forth in Section 21.1 hereof.
"Indemnifying Party" has the meaning set forth in Section 21.1 hereof.
"Indirect Sale" has the meaning set forth in Section 9.3(f) hereof.
"Initial Payment" has the meaning set forth in Section 9.6.4(b)(i)
hereof.
"Internal Boundaries Assets" has the meaning set forth in Section
19(a) hereof.
"Internal Boundaries Assets Value" has the meaning set forth in
Section 19(a) hereof.
"Investment" shall mean, for any Person: (a) the acquisition (whether
for cash, property, services or securities or otherwise) of equity interests,
equity rights, bonds, notes, debentures or other securities of any other
Person, together with all items that are or would be classified as investments
on a balance sheet prepared in accordance with GAAP, but excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business; (b) the making of any deposit with, or advance, loan or
other extension of credit (including without limitation a guarantee) to, any
other Person (including the purchase of property from another Person subject to
an understanding or agreement, contingent or otherwise, to resell such property
to such Person); and (c) any capital contribution to (by means of any transfer
of cash or other property to others or any payment for property or services for
the account or use of others) any other Person. "Investment" shall exclude
extensions of trade credit by the Company and its Subsidiaries in accordance
with normal trade practices of the Company and such Subsidiary, as the case may
be.
"Law" means all applicable provisions of any constitution, statute,
law, ordinance, code, rule, regulation, decision, order, decree, judgment,
release, license, permit, stipulation or other official pronouncement enacted
or issued by any Governmental Authority.
"Lien" mean liens (whether statutory or otherwise), mortgages,
pledges, charges, security interest, sureties, options, easements, covenants,
restrictions or other encumbrances.
"Liquidating Event" has the meaning set forth in Section 12.1 hereof.
"Liquidating Member" has the meaning set forth in Section 12.2 hereof.
"LLC Act" means the Delaware Limited Liability Company Act, as the
same may be amended from time to time.
"LLC Agreement" has the meaning set forth in the Introduction hereof.
"Major Acquisition" means the acquisition (whether by merger,
consolidation, share or asset acquisition, joint venture or similar
transaction) of any business, in a single transaction or series of related
transactions, the cost of which shall exceed US$10,000,000.
"Major Investment" means any Investment in any Person (other than a
wholly owned Subsidiary), in a single transaction or series of related
transactions, the cost of which shall exceed US$10,000,000.
"Majority-in-Interest" means, with respect to a particular matter,
Members holding in excess of fifty percent (50%) of the Voting Interests at the
time of the vote or action with respect to such matter.
"Majority Member" means, as of a particular time, any Member, or group
of Affiliated Members that collectively hold in excess of fifty percent (50%)
of the Voting Interests at such time.
"Manager" means CEMEX, or any replacement Manager elected pursuant to
Section 8.6 hereof.
"Member Nonrecourse Debt" has the meaning of "partner nonrecourse
debt" as set forth in Section 1.704-2(b)(4) of the Regulations.
"Member Nonrecourse Debt Minimum Gain" means an amount with respect to
each Member Nonrecourse Debt equal to the Company Minimum Gain that would
result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Section 1.704-2(i)(3) of the Regulations.
"Member Nonrecourse Deductions" has the meaning of "partner
nonrecourse deductions" as set forth in Section 1.704-2(i)(2) of the
Regulations.
"Members" means the Persons designated as Members in the first
paragraph of this LLC Agreement, together with any Person(s) who become
substituted or additional Members as provided herein, in such Person(s)
capacities as Members of the Company. Any Member that transfers its entire
Membership Interest in the Company pursuant to the terms of this LLC Agreement
shall be deemed to have retired and shall cease to be a Member as of the
effective date of such transfer. "Member" means any one of the Members.
"Member Shortfall Amount" shall have the meaning set forth in Section
6.1(b)(ii) hereof.
"Membership Interest" shall mean, with respect to a Member at any
particular time, such Member's entire equity and beneficial interest in the
Company, including, without limitation, such Member's Percentage Interest,
Voting Interest, and the right of such Member to any and all other benefits to
which a Member may be entitled as provided in this LLC Agreement, together with
the obligations of such Member to comply with all the terms and provisions of
this LLC Agreement.
"Minor Acquisition" means the acquisition (whether by merger,
consolidation, share or asset acquisition, joint venture or similar
transaction) of any business, in a single transaction or series of related
transactions, the cost of which shall be in excess of US$1,000,000, but less
than US$10,000,000.
"Minor Acquisition Criteria" has the meaning set forth in Section
8.2(b)(iv) hereof.
"Minor Investment" means any Investment in any Person (other than a
wholly owned Subsidiary), in a single transaction or series of related
transactions, the cost of which shall be in excess of US$1,000,000, but less
than US$10,000,000.
"Minor Investment Criteria" has the meaning set forth in Section
8.2(b)(xxv) hereof.
"Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(b)(1) of the Regulations.
"Nonrecourse Liability" has the meaning set forth in Sections
1.704-2(b)(3) and 1.752-1(a)(2) of the Regulations.
"Non-Transferring Member" has the meaning set forth in Section 9.3(a)
hereof.
"Notice" has the meaning set forth in Section 9.6.2 hereof.
"Offer Acceptance Notice" has the meaning set forth in Section 9.3(a)
hereof.
"Offer Notice" has the meaning set forth in Section 9.3(a) hereof.
"Offer Option Period" has the meaning set forth in Section 9.3(a)
hereof.
"Offer Price" has the meaning set forth in Section 9.3(a) hereof.
"Offer Sale Reference Date" has the meaning set forth in Section
9.3(e) hereof.
"Overlapping Members" has the meaning set forth in Section 4.1(b)(ii)
hereof.
"Paid Services" means any and all administrative and corporate support
services provided by or procured by the Manager or any Affiliate thereof,
including, without limitation, the following services: (a) the administration,
management and preparation of the Company's and its Subsidiaries' payroll,
compensation and benefits plans, customer billing and collections; (b) the
corporate arrangement, management, administration and coordination of the
Company's and its Subsidiaries' employee and labor relations and credit
analysis; and (c) the corporate management and administration of the following
support services: accounting, safety, information technology, logistics,
procurement, legal and technical services. For purposes of this definition,
none of Cemex, RMUSA or any of their respective Affiliates shall be deemed to
be Affiliates of the Company or any of its Subsidiaries.
"Parties" has the meaning set forth in Section 7.2 hereof.
"Percentage Interest" means a Member's relative share of the Company's
Profits and Losses and other allocations and distributions which are to be
shared in proportion to Percentage Interests under the terms of this LLC
Agreement, as set forth opposite such Member's name on Exhibit A attached
hereto, as shall be amended from time to time in accordance with Section 1.4
hereof.
"Permitted Affiliate Transaction" means (i) the provision of the Paid
Services and the payment of the Services Fee, (ii) transactions pursuant to the
Back-Up Supply Agreement, and (iii) transactions listed on Schedule 3.2
attached hereto, and (iv) payments made by the Company pursuant to Section 20
hereof.
"Permitted Transfer" has the meaning set forth in Section 9.5 hereof.
"Permitted Transferee" has the meaning set forth in Section 9.5
hereof.
"Person" means any individual, partnership, corporation, trust,
limited liability company, association or other entity or organization,
including any government or political subdivision or any agency or
instrumentality thereof.
"Primary Business" has the meaning set forth in Section 3.1 hereof.
"Profits" and "Losses" mean, for each Fiscal Year, 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 (without duplication):
(i) any income of the Company that is exempt from federal
income tax and not otherwise taken into account in computing Profits
or Losses pursuant to this definition of "Profits" and "Losses" shall
be added to such taxable income or loss;
(ii) 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 Section 1.704-1(b)(2)(iv)(i) of the
Regulations, and not otherwise taken into account in computing Profits
or Losses pursuant to this definition of "Profits" and "Losses" shall
be subtracted from such taxable income or loss;
(iii) in the event the Gross Asset Value of any Company asset
is adjusted pursuant to subparagraphs (ii) or (iii) of the definition
of Gross Asset Value, the amount of such adjustment shall be treated
as an item of gain (if the adjustment increases the Gross Asset Value
of the asset) or an item of loss (if the adjustment decreases the
Gross Asset Value of the asset) from the disposition of such asset and
shall be taken into account for purposes of computing Profits or
Losses;
(iv) gain or loss resulting from any disposition of assets
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 assets disposed of, notwithstanding that the adjusted tax basis
of such assets differs from its Gross Asset Value;
(v) in lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Gross Asset
Depreciation for such Fiscal Year, computed in accordance with the
definition of Gross Asset Depreciation;
(vi) to the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Code Section 734(b) is required,
pursuant to Section 1.704-(b)(2)(iv)(m)(4) of the Regulations, to be
taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Member's Membership
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 such basis) from the
disposition of such asset and shall be taken into account for purposes
of computing Profits or Losses; and
(vii) notwithstanding any other provision of this definition,
any items which are specially allocated pursuant to Section 5.2 or
Section 5.3 hereof shall not be taken into account in computing
Profits or Losses.
The amounts of the items of the Company income, gain, loss or
deduction available to be specially allocated pursuant to Sections 5.2 and 5.3
hereof shall be determined by applying rules analogous to those set forth in
subparagraphs (i) through (vi) above.
"Prorata EBITDA" has the meaning set forth in Section 9.6.3 hereof.
"Prorata Portion" has the meaning set forth in Section 9.4(a) hereof.
"Purchase Price" has the meaning set forth in Section 9.6.3 hereof.
"Purchased Interests" has the meaning set forth in Section 11.1(d)
hereof.
"Put Option" has the meaning as set forth in Section 9.6 hereof.
"Put Option Closing" has the meaning set forth in Section 9.6.5
hereof.
"Put Option Depreciation Amount" means, with respect to a particular
period, an amount equal to a ten percent (10%) per annum reduction in the value
of the Company's fixed assets on a declining basis during such period.
Acquisitions of fixed assets and capital investments will also be depreciated
with a ten percent (10%) per annum declining basis. These shall be adjusted on
a prorated basis with respect to the date of closing in the case of an
acquisition or the date of purchase in the case of a capital investment.
"Ready Mix Contribution Agreement" means that certain Asset and
Capital Contribution Agreement, dated July 1, 2005, by and among Ready Mix LLC
and the Members.
"Ready Mix Distribution" has the meaning set forth in Section
4.1(b)(ii) hereof.
"Ready Mix LLC" means READY MIX USA, LLC, a Delaware limited liability
company, and any successor limited liability company.
"Ready Mix LLC Agreement" means that certain Limited Liability Company
Agreement by and among RMUSA, Cemex and Ready Mix LLC dated July 1, 2005.
"Ready Mix LLC Percentage Interest" means, with respect to a
particular member of Ready Mix LLC, the "Percentage Interest" of such member as
defined in the Ready Mix LLC Agreement.
"Regulations" means the federal income tax 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 5.3
hereof.
"RMUSA" has the meaning set forth in the Introduction hereof.
"Ready Mix Boundaries" means the states of Alabama, Arkansas, Georgia,
excluding the Metropolitan Statistical Area of Brunswick, Georgia, Mississippi
and Tennessee and the Ready Mix Florida Panhandle (as defined herein).
"Ready Mix Florida Panhandle" means the following counties in the
State of Florida: Escambia, Santa ▇▇▇▇, Okaloosa, Walton, Holmes, Washington,
Jackson, Bay, ▇▇▇▇▇▇▇, Gulf, Franklin, Liberty, ▇▇▇▇▇▇▇, ▇▇▇▇, Wakulla,
Jefferson, Madison and ▇▇▇▇▇▇.
"Second Installment" has the meaning set forth in Section 9.6.4(b)(ii)
hereof.
"Services Fee" has the meaning set forth in Section 8.8(a) hereof.
"Significant Prepayment" has the meaning set forth in Section 9.6.5(c)
hereof.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited partnership, limited liability partnership, limited
liability company, joint venture or other legal entity in which such Person
(either directly or through or together with other Subsidiaries) owns more than
fifty percent (50%) of the voting securities of such corporation, partnership,
limited liability company, joint venture or other legal entity.
"Supply Agreement" means that certain Supply Agreement dated July 1,
2005, by and between the Company and Ready Mix LLC.
"Tag Along Notice" has the meaning set forth in Section 9.4(a) hereof.
"Tag Along Right" has the meaning set forth in Section 9.4(a) hereof.
"Tax Distributions" has the meaning set forth in Section 6.2 hereof.
"Tax Matter Member" has the meaning set forth in Section 8.3 hereof.
"Third Installment" has the meaning set forth in Section 9.6.4(b)(iii)
hereof.
"Transaction Documents" means this LLC Agreement, the Contribution
Agreement and all other agreements entered into in connection herewith or
therewith.
"Transfer" means, as a noun, any voluntary or involuntary transfer,
sale, assignment, pledge, hypothecation or other disposition, and, as a verb,
voluntarily or involuntarily to transfer, sell, assign, pledge, hypothecate or
otherwise dispose of, in each case, including, but not limited to, any
involuntary transfer or transfer by operation of law in bankruptcy or otherwise
or by way of execution, seizure or sale by legal process.
"Transfer Closing" has the meaning set forth in Section 9.3(b) hereof.
"Transferring Member" has the meaning set forth in Section 9.3(a)
hereof.
"Ultimate Percent" has the meaning set forth in Section 9.1(b) hereof.
"Unfunded Portion" has the meaning set forth in Section 4.1(b)(iii)
hereof.
"Voting Interest" means the relative right of a Member to vote on,
consent to, or otherwise participate in any decision, vote or action of or by
the Members required or permitted pursuant to this LLC Agreement or the LLC
Act, as set forth opposite such Member's name on Exhibit A attached hereto, as
shall be amended from time to time in accordance with Section 1.4 hereof.
"Working Capital" means the sum of the Company's inventory, accounts
receivable, prepaid expenses and cash minus the current liabilities of the
Company, as such current liabilities are reflected by the most recent balance
sheet prepared by or for the Company.
4. Capital Contributions and Capital Accounts.
4.1 Members' Capital Contributions.
(a) The Members shall initially contribute to the capital of the
Company upon or prior to the execution of this LLC Agreement the contributions
specified in the Contribution Agreement.
(b) If, subsequent to the making of the initial Capital Contributions
referred to in Section 4.1(a) hereof, the annual business plan and the annual
budget of the Company specifically provide for additional contributions to
capital in order to fund the Company's business, the Manager may from time to
time give written notice to each Member of the amount(s) and date(s) on which
such additional contributions are required (a "Budgeted Additional Capital
Contribution"). If, subsequent to the making of the initial Capital
Contributions referred to in Section 4.1(a) hereof, the Manager determines that
the Company requires additional contributions to capital in order to pay when
due the obligations or expenses of the Company, or to fund the Company's
business, and such contributions to capital are not provided for in the annual
business plan and annual budget for the Company, the Manager shall give written
notice to each Member of the amount(s) and date(s) on which such additional
contributions are required (an "Extraordinary Required Additional Capital
Contribution"); provided that any such Extraordinary Required Additional
Capital Contribution shall require the prior approval of the Board (an approved
Extraordinary Required Additional Capital Contribution being hereinafter
sometimes referred to as an "Approved Extraordinary Required Additional Capital
Contribution"). Each Member's respective share of each Budgeted Additional
Capital Contribution or Approved Extraordinary Required Additional Capital
Contribution (an "Additional Capital Contribution") specified in a notice from
the Manager shall be in proportion to each Member's Percentage Interest
immediately prior to the request for the Additional Capital Contribution and
shall be specified in such notice and shall be contributed no later than thirty
(30) days from the date of such notice. Each Member shall contribute to the
capital of the Company its share (based on its Percentage Interest) of the
Additional Capital Contribution in cash on or before the due date specified in
such notice. A Member's obligation to make Additional Capital Contributions
shall be enforceable by the Company or by any other Member, or by the Manager,
against a Member, but the Company may not assign a Member's obligation to make
Additional Capital Contributions to any creditor or other third party nor may
any creditor or other third party enforce such a Member's obligation, as the
Member's obligations hereunder are not for the benefit of any creditor or third
party.
(ii) The foregoing provisions of paragraph (i)
notwithstanding, in the event that (A) the Manager determines that an
additional contribution to the capital of the Company in an amount not
to exceed $2,000,000 is necessary or desirable in order to pay
indebtedness of the Company (including indebtedness to a Member), and
(B) Ready Mix LLC is at such time maintaining cash in an amount in
excess of the sum of (x) the average current liabilities of Ready Mix
LLC for the preceding twelve (12) months, plus (y) its projected
distributions for the then current quarter to be made pursuant to
Section 6.1 of the Ready Mix LLC Agreement, plus (z) its budgeted
capital expenditures through the next quarter (the amount in excess of
the sum of (x), (y) and (z) being hereinafter referred to as the
"Excess Amount"), and (1) such Excess Amount, when multiplied by the
Overlapping Members' (as herein defined) combined Percentage Interest
in Ready Mix LLC (as such term is defined in the Ready Mix LLC
Agreement), produces a product in excess of the proposed additional
capital contribution (a "Debt Reduction Capital Contribution"), and
(2) such Overlapping Members together hold or control a
Majority-in-Interest in Ready Mix LLC, the Manager may give written
notice to each Member who is also a member of Ready Mix LLC or an
Affiliate of a Member of Ready Mix LLC (the "Overlapping Members")
setting forth the amount(s) and date(s) on which such Debt Reduction
Capital Contributions are required and, within thirty (30) days of the
giving of such notice, the Overlapping Members shall take all
commercially reasonable action (including directing their respective
board members of Ready Mix LLC to vote in favor of such action) to
require Ready Mix LLC to make a distribution to its members in an
aggregate amount at least equal to the Debt Reduction Capital
Contribution (the "Ready Mix Distribution") and such Overlapping
Members shall, within five (5) business days after such distribution
is made by Ready Mix LLC, contribute to the capital of the Company the
lesser of (i) its share of the Debt Reduction Capital Contribution, or
(ii) the portion of the Ready Mix Distribution received by it. In the
event the amount of the Ready Mix Distribution received by an
Overlapping Member is less than its share of the Debt Reduction
Capital Contribution, such Member shall have the right, but not the
obligation to contribute an additional amount to fund its share of the
Debt Reduction Capital Contribution. In the event such Overlapping
Member elects not to fund such shortfall, the other Member(s) shall
have the rights set forth in paragraphs (iii) and (iv) below. A
Member's obligation hereunder shall be enforceable by the Company or
by any other Member, or by the Manager, but the Company may not assign
such Member's obligation to any creditor or other third party nor may
any creditor or other third party enforce such a Member's obligation,
as the Member's obligations hereunder are not for the benefit of any
creditor or third party. The Manager shall not be authorized to call
for more than one (1) Debt Reduction Capital Contribution per fiscal
quarter pursuant to this subsection (ii).
(iii) In addition to the right of the Company, a Member
and/or the Manager to enforce another Member's obligation to fund an
Additional Capital Contribution or Debt Reduction Capital Contribution
as provided in subsections (i) and (ii) above, the Member(s) which
have fully funded their Additional Capital Contribution(s) or Debt
Reduction Capital Contribution(s), as the case may be (the
"Contribution Complying Members"), shall have the right, but not the
obligation, to contribute all or any portion of any such Additional
Capital Contribution or Debt Reduction Capital Contribution not funded
as required above (the "Unfunded Portion") as additional capital to
the Company.
(iv) In addition to the rights set forth in paragraph (iii)
above, the Contribution Complying Members shall have the right, but
not the obligation, to deliver to the Company all or any portion of
any Unfunded Portion and have such amount treated as a loan to the
Member who failed to fulfill its obligation to make an Additional
Capital Contribution or Debt Reduction Capital Contribution as
required herein (such Member, a "Delinquent Member"), which loan shall
be repaid in a maximum term of five (5) years, in monthly
installments, on the first (1st) business day of each month commencing
immediately following the date on which the Contribution Complying
Members contributed the Unfunded Portion to the Company, based on
level principal amortization, and shall bear interest at the rate of
ten percent (10%) per annum, or, if lower, the highest rate permitted
by applicable law.
(v) In addition to other remedies available under this
Agreement or otherwise, in the event that all of the obligations of a
Delinquent Member are not fulfilled by another Member in accordance
with paragraph (iv) above, the Percentage Interest of the Contribution
Complying Member shall be increased, and the Percentage Interest of
the Delinquent Member shall be reduced, as follows:
(A) the Percentage Interest of the Contribution
Complying Member shall be increased to the amount obtained by
dividing (x) an amount equal to the sum of (1) the product of
the Percentage Interest of the Contribution Complying Member
prior to such adjustment and the Adjusted Book Value
immediately prior to such Additional Capital Contribution or
Debt Reduction Capital Contribution, as the case may be, and
(2) the amount of the Additional Capital Contribution or Debt
Reduction Capital Contribution, as the case may be, actually
made by the Contribution Complying Member, including any
amount contributed by such Member pursuant to paragraph (iii)
above (but excluding for the avoidance of doubt any amount
loaned by such Member to a Delinquent Member pursuant to
paragraph (iv) above), by (y) the Adjusted Book Value
immediately after such Additional Capital Contribution or
Debt Reduction Capital Contribution, as the case may be; and
(B) the Percentage Interest of the Delinquent Member
shall be reduced to the amount obtained by dividing (x) an
amount equal to the sum of (1) the product of the Percentage
Interest of the Delinquent Member prior to such adjustment
and the Adjusted Book Value immediately prior to such
Additional Capital Contribution or Debt Reduction Capital
Contribution, as the case may be, and (2) the amount of the
Additional Capital Contribution or Debt Reduction Capital
Contribution, as the case may be, actually made by the
Delinquent Member (or on behalf of the Delinquent Member
pursuant to paragraph (iv) above), by (y) the Adjusted Book
Value immediately after such Additional Capital Contribution
or Debt Reduction Capital Contribution, as the case may be.
For purposes of making any calculation pursuant to this paragraph (v),
references to "such Additional Capital Contribution or Debt Reduction
Capital Contribution" shall mean all amounts contributed by all
Members with respect to a particular required Additional Capital
Contribution or Debt Reduction Capital Contribution, as the case may
be.
(vi) In the event a Contribution Complying Member shall elect
to fulfill the obligation of a Delinquent Member pursuant to
paragraphs (iii) or (iv) of this Section 4.1(b), the failure of the
Delinquent Member to make such an Additional Capital Contribution
shall not constitute an Adverse Act, notwithstanding anything to the
contrary contained in this LLC Agreement.
4.2 Additional Members. The Company shall not admit additional Members
to the Company unless either (x) one hundred percent (100%) of the Members or
(y) the Board shall consent to the same in writing. The Company may, however,
if either of the above written consents are obtained, admit additional Members
upon such terms and conditions as may be set forth in such written consent. In
the event that upon the admission of an additional Member, the Company shall
make an election under Section 743(b) of the Code, such additional Member shall
pay all expenses incurred by the Company in the making of such election,
including, but not limited to, legal and accounting expenses.
4.3 Execute Adoption Agreement. Any additional Member who makes a
Capital Contribution to the Company and who is admitted to the Company after
the execution of this LLC Agreement shall execute and deliver an Adoption
Agreement substantially in the form of Exhibit D attached hereto.
4.4 Summary of Capital Contributions. For the purposes of this LLC
Agreement, the capital of the Company shall be deemed to include the initial
Capital Contributions to the Company made by the Members at the values referred
to in the Contribution Agreement and any other amounts subsequently contributed
to the capital by the Members.
4.5 Capital Accounts. A separate capital account ("Capital Account")
shall be maintained in the name of each Member. The Capital Account shall
reflect the capital interest of each Member as defined below and shall be
maintained in accordance with Section 1.704-1(b)(2)(iv) of the Regulations. The
Capital Contributions actually paid into the Company (which for this purpose
shall include "deemed" contributions of property to the Company under Code
Section 708) shall be credited to each Member's Capital Account. The Capital
Account of each Member shall be increased by (1) the amount of money
contributed by that Member to the Company, (2) the fair market value of
property or assets contributed by that Member to the Company (net of
liabilities secured by such contributed property or assets that the Company is
considered to assume or take subject to under Code Section 752), and (3)
allocations to that 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 Section 1.704-1(b)(2)(iv)(g) of the
Regulations, but excluding income and gain described in Section
1.704-1(b)(4)(i) of the Regulations; and shall be decreased by (a) the amount
of money distributed to that Member by the Company, (b) the fair market value
of property or assets distributed to that Member by the Company (net of
liabilities secured by such distributed property or assets that such Member is
considered to assume or take subject to under Code Section 752), (c)
allocations to that Member of expenditures of the Company described in Code
Section 705(a)(2)(B), and (d) allocations of the Company loss and deduction (or
items thereof), including loss and deduction computed for book purposes, as
described in Section 1.704-1(b)(2)(iv)(g) of the Regulations, but excluding
items of expenditures of the Company described in Code Section 705(a)(2)(B)
allocated to that Member and loss or deduction described in Section
1.704-1(b)(4)(i) or (b)(4)(iii) of the Regulations.
4.6 Interest on Capital Contributions. In no event shall any Member
receive any interest on such Member's contribution to the capital of the
Company, and no Member shall have the right to withdraw or to demand the return
of all or any part of its capital contribution, except as specifically provided
in this LLC Agreement.
4.7 Limited Liability. Except as required by law, no Member or Manager
shall be personally liable for any debt, obligation, or liability of the
Company, whether that liability or obligation arises in contract, tort, or
otherwise.
4.8 Members are not Agents. Pursuant to Section 8.2 hereof, the
management of the Company is vested in the Manager, subject to the limitations
set forth therein. The Members shall have no power to participate in the
management of the Company except as expressly authorized by this LLC Agreement
and except as expressly required by the LLC Act. No Member, acting solely in
the capacity of a Member, is an agent of the Company nor does any Member,
unless expressly and duly authorized in writing to do so by the Manager, have
any power or authority to bind or act on behalf of the Company in any way, to
pledge its credit, to execute any instrument on its behalf or to render it
liable for any purpose.
5. Allocation of Profits and Losses.
5.1 Profits and Losses. After giving effect to the special allocations
set forth in Sections 5.2 and 5.3 hereof, and notwithstanding any provision to
the contrary contained herein, all Profits and Losses derived from the Company,
and each item of income, gain, loss, deduction and credit entering into the
computation thereof, shall be allocated among the Members in accordance with
their respective Percentage Interests in the Company.
5.1.1. Loss Limitation. Losses allocated pursuant to Section 5.1
hereof shall not exceed the maximum amount of Losses that can be allocated
without causing any Member to have an Adjusted Capital Account Deficit at the
end of any Fiscal Year. In the event some but not all of the Members would have
Adjusted Capital Account Deficits as a consequence of an allocation of Losses
pursuant to Section 5.1 hereof, the limitation set forth in this Section 5.1.1
shall be applied on a Member by Member basis and Losses not allocable to any
Member as a result of such limitation shall be allocated to the other Members
in accordance with the positive balances in such Member's Capital Accounts so
as to allocate the maximum permissible Losses to each Member under Section
1.704-1(b)(2)(ii)(d) of the Regulations.
5.2 Special Allocations. The special allocations shall be made in the
following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in Section
1.704-2(f) of the Regulations, notwithstanding any other provision of this
Section 5, if there is a net decrease in Company Minimum Gain during any Fiscal
Year of the Company, each Member shall be specially allocated items of Company
income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal
Years) in an amount equal to such Member's share of the net decrease in Company
Minimum Gain, determined in accordance with Section 1.704-2(g) of the
Regulations. Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be determined in
accordance with Sections 1.704-2(f)(6) and 1.704-1(j)(2) of the Regulations.
This Section 5.2(a) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-1(f) of the Regulations and shall be interpreted
consistently therewith.
(b) Member Minimum Gain Chargeback. Except as otherwise provided in
Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision
of this Section 5, if there is a net decrease in Member Nonrecourse Debt
Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal Year
of the Company, each Member who has a share of the Member Nonrecourse Debt
Minimum Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Section 1.704-2(i)(5) of the Regulations shall be specially
allocated items of Company income and gain for such Fiscal Year (and, if
necessary, subsequent Fiscal Years) in an amount equal to such Member's share
of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to
such Member Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be determined in
accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations.
This Section 5.2(b) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(i)(4) of the Regulations and shall be
interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Member unexpectedly
receives any adjustments, allocations, or distributions described in Section
1.704-1(b)(2)(ii)(d)(4), Section 1.704-1(b)(2)(ii)(d)(5), or Section
1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of Company income and gain
shall be specially allocated to each such Member in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the
Adjusted Capital Account Deficit of such Member as quickly as possible,
provided that an allocation pursuant to this Section 5.2(c) shall be made only
if and to the extent that such Member would have an adjusted Capital Account
Deficit after all other allocations provided for this Section 5 have been
tentatively made as if this Section 5.2(c) were not in the LLC Agreement.
(d) Gross Income Allocation. In the event any Member has a deficit
Capital Account at the end of any Fiscal Year which is in excess of the sum of
(i) the amount such Member is obligated to restore pursuant to any provision of
this LLC Agreement, and (ii) the amount such Member is deemed to be obligated
to restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and
1.704-2(i)(5) of the Regulations, each such Member shall be specially allocated
items of Company income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section 5.2(d) shall be
made only if and to the extent that such Member would have a deficit Capital
Account in excess of such sum after all other allocations provided for in this
Section 5 have been made as if Section 5.2(c) hereof and this Section 5.2(d)
were not in this LLC Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year
shall be specially allocated among the Members in proportion to their
respective Percentage Interests in the Company.
(f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions
for any Fiscal Year shall be specially allocated to the Member 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)(1).
(g) Code Section 754 Adjustment. To the extent an adjustment to the
adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Section 1.704-1(b)(2)(iv)(m)(2) or
Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations, to be taken into account in
determining Capital Accounts as the result of a distribution to a Member in
complete liquidation of its Membership Interest in the Company, the amount of
such adjustment to the Capital Accounts shall be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Members in accordance with their interests in the Company in the event Section
1.704-1(b)(2)(iv)(m)(2) of the Regulations applies, or to the Member to whom
such distribution was made in the event Section 1.704-1(b)(2)(iv)(m)(4) of the
Regulations applies.
5.3 Curative Allocations. The allocations set forth in Sections 5.1.1
and 5.2 hereof (collectively, the "Regulatory Allocations") are intended to
comply with certain requirements of the Regulations. It is the intent of the
Members that, to the extent possible, all Regulatory Allocations shall be
offset either by other Regulatory Allocations or with special allocations of
other items of Company income, gain, loss, or deduction pursuant to this
Section 5.3. Therefore, notwithstanding any other provisions of this Section 5
(other than the Regulatory Allocations), the Manager shall make such offsetting
special allocations in whatever manner they determine appropriate so that,
after such offsetting allocations are made, each Member's Capital Account
balance is, to the extent possible, equal to the Capital Account balance such
Member would have had if the Regulatory Allocations were not part of this LLC
Agreement and all Company items were allocated pursuant to Section 5.1 hereof;
provided, however, that the Manager and the manager of Ready Mix LLC shall use
the same allocation methodology with respect thereto. In exercising its
discretion under this Section 5.3, the Manager shall take into account future
Regulatory Allocations under Sections 5.2(a) and 5.2(b) hereof that, although
not yet made, are likely to offset other Regulatory Allocations previously made
under Sections 5.2(e) and 5.2(f) hereof.
5.4 Other Allocation Rules.
(a) The Members are aware of the federal, state, and local income tax
consequences of the allocations made by this Section 5 and hereby agree to be
bound by the provisions of this Section 5 in reporting their shares of Company
income and loss for income tax purposes.
(b) For purposes of determining the Profits, Losses, or any other
items allocable to any period, profits, losses, and any such other items shall
be determined on a daily, monthly, or other basis, as determined by the Manager
using any permissible method under Code Section 706 and the Regulations
thereunder.
5.5 Priority Tax Allocation Rules Where Property Was Contributed To
Company With Tax Basis Different From Value (704(c)). Notwithstanding any
provision of this LLC Agreement to the contrary, but solely for tax purposes,
any gain or loss with respect to property or assets contributed to the Company
by a Member shall be allocated among the Members so as to take account of the
variation between the adjusted basis and the fair market value of contributed
property or assets at the time of contribution. The appreciation or diminution
in value represented by the difference between the adjusted basis and the fair
market value of the contributed property or assets at the time of the
contribution will thus be attributed to the contributing Member upon a
subsequent sale or exchange of the property or assets by the Company as
required by Section 704(c) of the Code. The appreciation or diminution will
also be used in allocating the allowable depreciation or depletion with respect
to the property or assets among the contributing Member and the noncontributing
Member(s) as required by Section 704(c) of the Code. Furthermore, any gain,
loss, depreciation, depletion or amortization, as computed for tax purposes,
with respect to property or assets which are revalued pursuant to Section
1.704-1(b)(2)(iv)(f) of the Regulations shall be allocated so as to take
account of the variation between the adjusted tax basis and book value of the
property or assets as required by Section 704(c) of the Code and Section
1.704-1(b)(4)(i) of the Regulations. Any elections or other decisions relating
to allocations under this Section 5.5 will be made in any manner that the
Members determine reasonably reflects the purpose and intention of this LLC
Agreement; provided, however, that the same allocation methodology shall be
used at Ready Mix LLC. Allocations under this Section 5.5 are solely for
purposes of federal, state and local taxes and will not affect, or in any way
be taken into account in computing, any Member's Capital Account or share of
income, losses or other items or distributions under any provision of this LLC
Agreement.
6. Distributions.
6.1 Required EBITDA Distributions.
(a) Except as provided in Section 12 hereof relating to the
liquidation of the Company, the Manager shall make quarterly distributions to
the Members in an amount which shall be at least fifty percent (50%) of EBITDA
for such period, but which may, in the sole discretion of the Manager, be as
much as seventy-five percent (75%) of EBITDA for such period. For example, if
EBITDA shall be US$5,000,000 for the applicable period, each Member's required
distribution shall be at least an amount equal to US$2,500,000 multiplied by
the Member's respective Percentage Interest, but, if the Manger so determines,
the distribution may be as much as US$3,750,000 multiplied by each Member's
respective Percentage Interest. Such distributions shall be in proportion to
each Member's respective Percentage Interest and shall be made at such times
and with such frequency as shall be determined by the Manager, in its
discretion, provided that such distributions shall be made not less than on a
quarterly basis.
(b) The Manager shall determine the Company's EBITDA for the period
with respect to which the distribution is to be made (i.e., month, quarter or
other multi-month period) from the regular internal financial reports of the
Company prepared by the Manager. Upon the close of each Fiscal Year the Manager
shall determine within thirty (30) days following receipt of the audited
financial statements for such Fiscal Year (as required by Section 7 hereof) the
Company's EBITDA for the Fiscal Year, as reflected by such audited financial
statements and:
(i) in the event the total of all periodic distributions made
to Members during the Fiscal Year exceeds seventy-five percent (75%)
of the EBITDA of the Company for the Fiscal Year, the Manager shall
determine the amount of each Member's respective distribution received
in excess of said Member's Percentage Interest in seventy-five percent
(75%) of the Company's EBITDA (the "Excess Distribution Amount") and
the Company shall retain all future distributions to the Member until
the Member's Excess Distribution Amount has been recouped by the
Company; or
(ii) in the event the total of all periodic distributions
made to the Members during the Fiscal Year is less than fifty percent
(50%) of the EBITDA of the Company for the Fiscal Year, the Manager
shall determine the amount of the shortfall and each Member's
Percentage Interest in such shortfall amount (the "Member Shortfall
Amount") and, within ten (10) days of such determination, shall cause
the Company to distribute to each Member the Member Shortfall Amount.
6.2 Tax Distributions. If for any reason the distributions of EBITDA
pursuant to Section 6.1 hereof are not adequate for such purpose, the Manager
shall distribute sufficient amounts of cash to the Members to permit the
Members to discharge their obligations to pay federal, state, and local taxes
(including estimated taxes) with regard to the Profits and Losses of the
Company, if any, calculated at the highest combined local, state and federal
marginal income tax rates ("Tax Distributions") applicable to each Member. In
the case of Members which are pass through entities, tax distributions shall be
computed on the basis of the estimated taxes of the owners of such pass through
entities which are attributable to the Profits and Losses of the Company. The
Manager shall have the discretion to estimate the amount of taxable income
applicable to each Member during the applicable quarter, and to determine the
tax rate to be applied to such income; provided, however, that the Manager and
the manager of Ready Mix LLC shall use the same methodology to make such
estimates.
6.3 Amounts Withheld. All amounts withheld pursuant to the Code or any
provision of any state or local tax law with respect to any payment or
distribution to the Members shall be treated as amounts distributed to the
Members pursuant to this Section 6 for all purposes under this LLC Agreement.
The Manager may allocate any such amounts among the Members in any manner that
is in accordance with applicable law.
7. Fiscal Matters; Books of Account.
7.1 Books and Records. The Company books shall be maintained by the
Manager at the office of the Company in accordance with the LLC Act. Each
Member, Member's agent or attorney shall, upon reasonable request and at the
expense of the Member or the Member's agent or attorney during regular business
hours, have the right to inspect and copy or be sent copies of all such books
and records and any other books and records of the Company. In addition, the
Company shall maintain at its offices the following records: (a) a current list
of the full name and last known business or residence address of each Member
and Manager (which address shall be a street address); (b) a copy of the filed
Certificate of Formation, together with executed copies of any powers of
attorney pursuant to which any documents have been executed pursuant to the LLC
Act; (c) copies of the Company's federal, state, and local income tax returns
and reports, if any, for the three (3) most recent years; (d) copies of any
then effective limited liability company agreement of the Company, including
any amendments thereto; (e) copies of the Company's financial statements for at
least the three (3) most recent years; and (f) a copy of the Minor Acquisition
Criteria and Minor Investment Criteria, as such criteria may be amended from
time to time by the Board. The books shall be closed and balanced at the end of
each Fiscal Year and shall be audited for each Fiscal Year by a certified
public accounting firm selected by the Manager, subject to the approval of the
Board pursuant to Section 8.2(b) (the "Company's Accounting Firm"). The Manager
shall be authorized, but not required, to establish reserves for annual
accounting and legal fees, real estate taxes, insurance, and any other item for
which reserves should be established, as determined by Manager or upon advice
of accountants.
7.2 Confidentiality. Except as otherwise required by law or judicial
order or decree or by any governmental agency or authority, each Member agrees
that any information obtained by such Member with respect to the Company and
its Subsidiaries shall be treated with the same degree of care (and in no event
less than reasonable care) that such Member uses to protect its other
confidential information; provided that each such Member may (a) disclose such
information to legal counsel, consultants, financial advisors, professionals
advising it on matters relating to the Transaction Documents where (i) such
disclosure is related to the performance or enforcement of obligations under
the Transaction Documents or the consummation of transactions contemplated
under the Transaction Documents and (ii) such Member informs the Person to
which it is making such disclosure that the disclosed information is
confidential, instructs such Person to keep such information confidential and
not disclose it to any third party (other than those persons to whom it has
already been disclosed in accordance with this Section 7.2), or (b) in
connection with the sale or transfer of any Membership Interest, if such
Member's transferee or prospective transferee agrees with the Company in
writing to be bound by the provisions hereof. In addition, confidential
information shall not include information that (i) is or becomes generally
available to the public other than as a result of any disclosure or other
action or inaction by such Member or anyone to whom such Member or any of its
representatives transmit or have transmitted any information, (ii) is or
becomes known or available to such Member on a nonconfidential basis from a
source (other than the other Company), or (iii) was independently developed by
such Member, provided such independent development can reasonably be proven by
the Member's written records. Notwithstanding anything to the contrary in this
LLC Agreement, the Company and the Members (collectively, the "Parties") (and
each of their employees, representatives, or other agents) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax
structure of the transaction, provided, however, that neither Party (nor any of
its employees, representatives, or other agents) may disclose any information
that is not necessary to understanding the tax treatment and tax structure of
the transaction (including the identity of any Party and any information that
could lead another to determine the identity of any Party), or any other
information to the extent that such disclosure could result in a violation of
any federal or state securities law.
8. Management and Operations of the Company; Powers, and Duties of the
Manager.
8.1 Various Matters Relating to Members and the Board.
(a) Unless otherwise provided in this LLC Agreement or by nonwaivable
provisions of the LLC Act, all Members who have not ceased to be a Member shall
be entitled to vote on any matter submitted to a vote of the Members. Except as
otherwise provided in this LLC Agreement or by nonwaivable provisions of the
LLC Act, all decisions concerning the business and affairs of the Company shall
be made by the Manager in accordance with this LLC Agreement. Any action which
requires the approval of the Members under this LLC Agreement or by applicable
law shall require the approval of a Majority-in-Interest of the Members present
or represented by proxy at a meeting at which a quorum is present, or such
other proportion of the Members as may be specified in the particular provision
of this LLC Agreement which requires any such approval.
(b) Any meeting of the Members shall be held at a location which shall
be suggested by Manager and reasonably satisfactory to the Board. Members may
be present at any meeting of the Members by telephone or other means of
communication, provided that each Member can hear all other present Members.
Members may also attend a meeting, and be represented at such meeting, by proxy
executed in writing by such Member. The presence (in person, by a
representative thereof or by proxy) of one hundred percent (100%) of the
Members shall constitute a quorum. In case a quorum shall not be present at any
meeting, a Majority-in-Interest present (in person or by proxy) at the meeting
shall have the power to adjourn the meeting from time to time until a quorum is
present.
(c) Any action which may be taken by the Members at a meeting may be
taken in writing without a meeting if approved by the unanimous written consent
of all Members.
(d) Notice of any meeting of the Members may be waived by a Member in
writing, signed by the designated representative of the Member entitled to the
notice, whether before, at or after the time stated for the meeting. Attendance
of a Member at any meeting, whether in person, by proxy as provided above or by
telephone or other means of communication as provided above, shall constitute
waiver of notice of such meeting. Any waiver of notice of a meeting by a Member
hereunder shall be equivalent to the giving of such notice for all purposes.
(e) Appointment of Board.
(i) The Board shall consist of eight individuals, four of
whom shall be appointed by Cemex and four of whom shall be appointed
by RMUSA. The Chairman of the Board shall be a member of the Board
appointed by Cemex as determined by the members of the Board appointed
by Cemex. Each member of the Board shall serve until the earlier of
(i) the appointment of such Board member's successor, (ii) the removal
of such Board member in accordance with the terms of this LLC
Agreement, (iii) such Board member's resignation, and (iv) such Board
member's death.
(ii) Any Board member may resign at any time by giving
written notice to the Company or the Member who appointed such Board
member and the remaining Board members. The resignation of any Board
member shall take effect upon receipt of that notice or at such later
time as shall be specified in the notice. Unless otherwise specified
in the notice, the acceptance of the resignation shall not be
necessary to make it effective. Upon the resignation of any Board
member, a successor may be appointed by the Member who appointed such
Board member.
(iii) Any Board member may be removed at any time and with or
without cause only by the Member who appointed such Board member. Upon
the removal of any Board member with or without cause, a successor may
be appointed by the Member who appointed such removed Board member.
(iv) Upon the vacancy of any Board member for any reason, a
successor shall be appointed by the Member who appointed such Board
member.
(f) Action by Board.
(i) A meeting of the Board shall be held at least quarterly,
at such time and place as shall be designated by the Chairman of the
Board or by a majority of the Board. Other meetings of the Board may
be called by the Manager, by the Chairman of the Board or by any Board
member. All meetings shall be held upon at least two business days'
written notice (with confirmed receipt) to all Board members. Notice
of a meeting need not be given to any Board member who signs a waiver
of notice or a consent to holding the meeting (which waiver or consent
need not specify the purpose of the meeting) or an approval of the
minutes thereof, whether before or after the meeting, or who attends
the meeting without protesting, prior to its commencement, the lack of
notice to such Board member. All such waivers, consents and approvals
shall be filed with the Company records or made a part of the minutes
of the meeting. Meetings of the Board may be held at any place within
or without the State of Delaware which has been designated in the
notice of the meeting or at such place as may be approved by the
Board. Notwithstanding the foregoing provisions of this paragraph (i),
any meetings of the Board shall be held in Houston, Texas or
Birmingham, Alabama unless otherwise required by law or agreed to by
the Board. Board members may participate in a meeting through use of
conference telephone, electronic video screen communication, or other
communications equipment, so long as all Board members participating
in such meeting can hear one another. Participation in a meeting in
such manner constitutes a presence in person at such meeting. The
presence of a majority of the members of the entire Board constitutes
a quorum of the Board for the transaction of business with respect to
such matter.
(ii) Except as otherwise specifically set forth herein, the
vote of a majority of the Board members present shall constitute the
act of the Board; provided, that such majority of the Board members
voting (which vote constitutes the act of the Board) includes at least
one Board member appointed by each Member.
(iii) Any action required or permitted to be taken by the
Board may be taken by the Board without a meeting. Such action by
written consent shall have the same force and effect as if taken at a
meeting of the Board. The text of any such proposed action shall be
sent to all members of the Board.
8.2 Management and Operations.
(a) Subject to the provisions of this LLC Agreement, including
Sections 8.2(b) and (c), the business, property and affairs of the Company
shall be managed and all powers of the Company shall be exercised by or under
the direction of the Manager. Without limiting the generality of the foregoing,
but subject to Sections 8.2(b) and (c), and subject to the express limitations
set forth elsewhere in this LLC Agreement, the Manager shall have full
authority and discretion and all necessary powers to (i) take any actions it
deems necessary or advisable for the administration of the Company's affairs
and (ii) manage and carry out the purposes, business, property, and affairs of
the Company, including, the power to exercise, on behalf and in the name of the
Company, all of the powers described in the LLC Act. The Members shall from
time to time at the request of the Manager execute a resolution or other
appropriate document which shall evidence the rights and duties of the Manager
hereunder.
(b) Notwithstanding any other provisions of this LLC Agreement,
without the prior approval of the Board in accordance with Section 8.1(f), the
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
(i) Adopt or amend in any material respect the annual
business plan and the annual budget, including the capital expenditure
budget;
(ii) Make a single capital investment or series of related
capital investments in plants, equipment or other capital assets in
excess of US$1,000,000, other than (x) Minor Acquisitions that meet
the Minor Acquisition Criteria (as defined below) and, (y) a single
capital investment or series of related capital investments in plants,
equipment or other capital assets which (I) do not, individually or in
the aggregate, exceed $10,000,000, and (II) are required by Law or a
Governmental Authority or are embodied in an order or settlement
agreement with a Governmental Authority in a proceeding not initiated
by the Company or its Affiliates, provided that, in the case of this
clause (y), such investment or series of investments are --------
undertaken by the Company in a manner so as to cause the cost to the
Company to be the lowest cost investment(s) that meets the
requirements of the applicable Law, are acceptable to the applicable
Governmental Authority, or comply with the applicable order or
settlement agreement.
(iii) Make any Major Acquisition;
(iv) Make any Minor Acquisition which shall not be in
compliance with the criteria set forth in Exhibit B-1 (the "Minor
Acquisition Criteria"), as such criteria may be amended by the Board
from time to time;
(v) Other than the sale of inventory in the ordinary course
of business, make any sale, lease, exchange, transfer or other
disposition of assets in any Fiscal Year where the aggregate value of
all such assets during such Fiscal Year would exceed US$2,000,000;
(vi) Incur any indebtedness for borrowed money where the
amount of such indebtedness incurred, together with all other
indebtedness of the Company and its Subsidiaries, exceeds US$1,000,000
in the aggregate, provided that (x) the incurring of indebtedness
pursuant to Section 19(a)(ii) or Section 19(c)(ii) shall not require
approval of the Board so long as the incurring of such indebtedness,
after giving effect thereto, shall not cause the Company's ratio of
indebtedness for borrowed money to EBITDA to exceed 3.5:1. and (y) the
incurring of indebtedness pursuant to Section 19(a)(iii) or Section
19(c)(iii) shall not require approval of the Board;
(vii) Issue any equity;
(viii) Make aggregate distributions to any Member of cash at
any level above seventy-five percent (75%) or below fifty percent
(50%) of EBITDA for any given Fiscal Year;
(ix) Amend the Cement Boundaries;
(x) Change, modify or amend this LLC Agreement;
(xi) Make any determination of the gross fair market value of
any property or assets contributed to the Company;
(xii) Make any request for an Extraordinary Required
Additional Capital Contribution pursuant to Section 4.1(b)(i) hereof;
(xiii) Enter into any material joint venture, partnership or
consortium;
(xiv) Redeem, repurchase, retire or otherwise acquire for
value any equity interest in the Company;
(xv) Engage in any material business activity outside the
general scope of the Primary Business, taken as a whole;
(xvi) Approve the selection of any independent accounting
firm to audit the Company's financial statements if such firm is not a
"Global Six" accounting firm;
(xvii) Engage in any merger, consolidation or similar
transaction;
(xviii) Engage in any transaction or series of related
transactions (other than any Permitted Affiliate Transaction) with or
for the benefit of the Manager or any of its Affiliates with a value
in excess of US$ 1,000,000; provided, that (x) this paragraph (xviii)
shall not apply to any swap or other sale transaction with or for the
benefit of the Manager or any of its Affiliates (which are the subject
of paragraph (xix) below); (y) in any event, any such transaction or
series of related transactions, shall be entered on terms no less
favorable to the Company than those which it could obtain at that time
on an arm's length basis from an unaffiliated third party; and (z) for
purposes of this paragraph, none of Cemex, RMUSA or any of their
respective Affiliates shall be deemed to be Affiliates of the Company
or any of its Subsidiaries;
(xix) Engage in any swap or other sale transaction with or
for the benefit of the Manager or any of its Affiliates; provided,
that (a) in any event, any such swap or other sale transaction shall
be entered on terms no less favorable to the Company than those which
it could obtain at that time on an arm's length basis from an
unaffiliated third party; (b) no Board approval shall be required with
respect to: (I) purchases of Cement by the Company under the Back-Up
Supply Agreement; or (II) any swap or other sale of Cement with, to or
for the benefit of Cemex or any of its Affiliates where (A) the
Company or one or more of its Subsidiaries either (1) receives (or
directs the receipt for its account) a like quantity of cement or (2)
receives payment in an amount not less than the applicable
Most-Favored Nation Price (as defined in the Supply Agreement) for the
Cement it delivers, and (B) the quantities of Cement involved in such
swap or sale do not affect the Company's ability to supply Ready Mix
LLC the Required Amount (as defined in the Supply Agreement); and (c)
for purposes of this paragraph, none of Cemex, RMUSA or any of their
respective Affiliates shall be deemed to be Affiliates of the Company
or any of its Subsidiaries;
(xx) Guarantee or otherwise provide any financial
accommodation with respect to any indebtedness for borrowed money of
any other Person;
(xxi) Make any proposal to cause the Company to wind up,
dissolve, liquidate or file for, or consent to, any bankruptcy or
similar proceeding with respect to the Company;
(xxii) Make any non-cash distribution to the Members;
(xxiii) Grant any lien or encumbrance with respect to any
asset of the Company or any of its Subsidiaries;
(xxiv) Make any Major Investment;
(xxv) Make any Minor Investment which shall not be in
compliance with the criteria set forth in Exhibit B-2 (the "Minor
Investment Criteria"), as such criteria may be amended by the Board
from time to time;
(xxvi) Adopt any equity or other incentive plans for
officers, directors or employees of the Company or any of its
Subsidiaries; and
(xxvii) Make any payments to Cemex or any of its Affiliates
to pay the Company's pro rata share of any rebate payable to national
accounts of Cemex, Inc. where the amount to be paid by the Company
exceeds ten percent (10%) of the purchase price subject to such rebate
on a per ton basis; provided that for purposes of this paragraph, none
of Cemex, RMUSA or any of their respective Affiliates shall be deemed
to be Affiliates of the Company or any of its Subsidiaries.
(c) For so long as the Manager is a Member or an Affiliate of a
Member, the other Member(s) shall have the right to reasonably direct the
Company's prosecution or defense of any litigation or claim with, by or against
the Member that is the Manager or any of such Member's Affiliates (other than
the Company and any of its Subsidiaries).
(d) Officers.
(i) The Manager may, in its sole discretion, from time to
time, appoint officers who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be
determined from time to time by the Manager. A single person may hold
multiple offices. If appointed, the officers listed below shall have
the following duties and authority, unless otherwise determined by the
Manager, in connection with the management and operations of the
Primary Business (provided that if an officer enters into a written
employment agreement with the Company, such officer shall also have
the duties and authority described in such employment agreement;
provided further, that if there are any inconsistencies between such
employment agreement and this Section 8.2(d), the provisions set forth
in the employment agreement shall control).
(ii) President. The president shall be the chief executive
officer of the Company and, subject to the general supervision by the
Manager, shall have the general and active management, supervision and
control of the business and all operations of the Company. The
president shall, when present, preside at all meetings of the Members,
Board and of the Manager. The president may sign and deliver deeds,
mortgages, bonds, contracts, or other instruments on behalf of the
Company, except where required by law to be otherwise signed and
executed and except where the signing and execution thereof shall be
expressly delegated by the Manager to some other officer or agent of
the Company. In general, the president shall perform all duties and
shall have the authority incident to the office of president and such
other duties and authority as may be prescribed by the Manager from
time to time.
(iii) Vice-Presidents. In the absence of the president or in
the event of the president's death or inability to act, the
vice-president (or in the event there be more than one vice-president,
the vice-presidents acting in the order determined by the Manager)
shall perform 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. Any vice-president shall perform such other duties as from
time to time may be assigned to the vice-president by the president or
by the Manager.
(iv) Secretary. The secretary shall prepare and keep the
minutes of the proceedings of the Members and of the Manager in one or
more books provided for that purpose; have responsibility for
authenticating records of the Company; see that all notices are duly
given in accordance with the provisions of this LLC Agreement or as
required by law; be custodian of the records of the Company; keep a
register of the post office address of each Member and Manager which
shall be furnished to the secretary by such Member or Manager; and in
general perform all duties incident to the office of secretary and
such other duties as from time to time may be assigned to the
secretary by the president, any vice president or the Manager. If
there is no treasurer of the Company, the secretary shall assume the
authority and duties of treasurer.
(v) Treasurer. The treasurer shall have charge and custody of
and be responsible for all funds and securities of the Company,
receive and give receipts for moneys due and payable to the Company
from any source whatsoever, and deposit all such moneys in the name of
the Company in such banks, trust companies or other depositories as
may be designated by the Manager, and in general perform all of the
duties incident to the office of treasurer and such other duties as
from time to time may be assigned to the treasurer by the president,
any vice-president or the Manager.
(vi) Assistant Secretaries and Assistant Treasurers. The
assistant secretary, or if there shall be more than one, the assistant
secretaries acting in the order determined by the Manager, shall, in
the absence or disability of the secretary, perform the duties and
exercise the powers of the secretary. The assistant treasurer, or, if
there shall be more than one, the assistant treasurers acting in the
order determined by the Manager, shall, in the absence or disability
of the treasurer, perform the duties and exercise the powers of the
treasurer. The assistant secretaries and assistant treasurers shall
all perform such other duties as shall be assigned to them by the
secretary and treasurer, respectively, or by the president, any
vice-president or the Manager.
(vii) Additional Officers. The Manager may appoint such other
officers and agents as it shall deem necessary who shall hold their
offices for such term and shall exercise such powers and perform such
duties as shall be determined from time to time by the Manager.
All actions taken by the foregoing officers of the Company in
accordance with the authority granted to them in this Section 8.2(d)
shall be binding on the Company and may be relied upon by third
parties, except to the extent any such third party has actual
knowledge that such action is in contravention of a resolution passed
by the Manager.
8.3 Tax Matter and Elections. The Manager shall, without any further
consent of the Members being required (except as specifically required herein),
make any and all elections for federal, state, local, and foreign tax purposes
including, without limitation, any election, if permitted by applicable law:
(i) to adjust the basis of Company assets pursuant to Code Sections 754, 734(b)
and 743(b), or comparable provisions of state, local or foreign law, in
connection with Transfers of Membership Interests and Company distributions;
(ii) with the consent of all of the Members, to extend the statute of
limitations for assessment of tax deficiencies against the Members with respect
to adjustments to the Company's federal, state, local or foreign tax returns;
and (iii) to the extent provided in Code Sections 6221 through 6231 and similar
provisions of federal, state, local, or foreign law, to represent the Company
and the Members before taxing authorities or courts of competent jurisdiction
in tax matters affecting the Company or the Members in their capacities as
Members, and to file any tax returns and execute any agreements or other
documents relating to or affecting such tax matters, including agreements or
other documents that bind the Members with respect to such tax matters or
otherwise affect the rights of the Company and the Members. Cemex is
specifically authorized to act as the "Tax Matters Member" under the Code and
in any similar capacity under state or local law.
8.4 Cash Deposits. All funds of the Company shall be deposited in a
United States national or state bank with federal deposit insurance, or in a
national brokerage house with deposit insurance. However, the Manager shall not
have a duty to seek the highest possible yield for Company funds. Only the
Manager (or, in the case of a corporate Manager, its authorized officers or
officers of the Company authorized by the Manager) may sign checks and drafts
on such account or accounts.
8.5 General Duties. The Manager shall take all action that may be
necessary or appropriate for the continuation of the Company's valid existence
as a limited liability company under the laws of the State of Delaware (and
each other jurisdiction in which such existence is necessary to protect the
limited liability of the Members or to enable the Company to conduct the
business in which it is engaged).
8.6 Removal.
(a) In the event the Manager is the Majority Member or an Affiliate
thereof, the Majority Member shall have the right to remove and replace the
Manager at any time with any Affiliate of the Majority Member (other than the
Company and any of its Subsidiaries), provided that at the time of appointment
as Manager, such Affiliate shall have, as of the end of the most recently
completed fiscal quarter, and maintain a net worth of at least US $350,000,000
and a debt to equity ratio not to exceed 1.75, in each case, based on the most
recent consolidated balance sheet of such Affiliate prepared in accordance with
GAAP.
(b) In the event the Manager is not the Majority Member or an
Affiliate thereof, at a meeting of the Members called expressly for that
purpose, the Manager may be removed at any time, with or without cause, by the
affirmative vote of Members holding a Majority-in-Interest in the Company. A
successor Manager may be elected by the affirmative vote of Members holding a
Majority-in-Interest in the Company.
(c) In the event of a Transfer of Membership Interests by one or more
Members that results in a change in the Majority Member, the new Majority
Member shall have the power to remove the Manager and appoint itself or any of
its Affiliates as Manager.
8.7 Indemnification of Manager(s), Members, Officers and Employees.
(a) Every Person (and the heirs, executors and administrators of such
Person) who serves, or has served as a manager (including the Manager), member
(including the Members), officer, member of the Board, director or employee of
the Company, or of any other entity when requested by the Company, and of which
the Company directly or indirectly is or was a security holder or creditor, or
otherwise interested, or in the stocks, bonds, securities or other obligations
of which it is in any way interested, shall be indemnified by the Company
against any and all liability and reasonable expense that may be incurred by
such Person in connection with or resulting from any claim, action, suit or
proceeding (whether brought by or in the right of the Company or such other
entity or otherwise), civil or criminal, or in connection with an appeal
relating thereto, in which such Person may become involved, as a party or
otherwise, by reason of such Person being or having been a manager, member,
officer, member of the Board, director or employee of the Company or such other
entity, or by reason of any action taken or not taken by such Person in such
capacity, whether such Person continues to be such manager, member, officer,
member of the Board, director or employee at the time such liability or expense
shall have been incurred, provided such Person acted in good faith and within
the scope of such Person's authority in the course of the Company's or such
other entity's business and, in addition, in any criminal action or proceeding,
had no reasonable cause to believe that such Person's conduct was unlawful.
(b) As used herein, the terms "liability" and "expense" shall include,
but shall not be limited to, counsel fees and disbursements and amounts of
judgments, fines or penalties against, and amounts paid and settlements by or
for such Person. The termination of any claim, action, suit or proceedings,
civil or criminal by judgment, settlement (whether with or without court
approval) or conviction shall not create a presumption that such person does
not meet the standards of conduct set forth herein. Except in the case of an
action or suit by or in the right of the Company to procure a judgment in its
favor, 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 gross
negligence or willful misconduct in the performance of such Person's duties 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 the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper.
(c) Expenses incurred with respect to any such claim, action, suit or
proceeding may be advanced by the Company prior to the final disposition
thereof upon receipt of an undertaking by or on behalf of such Person to repay
such amount if and to the extent that it shall ultimately be determined that
such Person is not entitled to indemnification hereunder.
(d) The Manager shall be fully protected in relying in good faith upon
the records of the Company and its Subsidiaries and upon such information,
opinions, reports or statements presented to the Company and its Subsidiaries
by any of its other Members, or any of the officers, employees or committees of
the Company or any of its Subsidiaries, 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 or any of its Subsidiaries (including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, or losses of the Company or any of its Subsidiaries 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 them, and any
opinion of any such person as to matters which the Manager reasonably believe
to be within such person's professional or expert competence shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by the Manager hereunder in good faith and in accordance
with such opinion.
(e) The Company shall have the power to purchase and maintain
insurance on behalf of any Person who 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, officer, partner, employee or agent of another company,
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 his status as such, whether or not the Company
would have the power to indemnify him against such liability under the
provisions of this LLC Agreement.
(f) The indemnification authorized in and provided by this Section 8.7
shall not be deemed exclusive of and shall be in addition to any other right to
which those indemnified may be entitled under any statute, rule of law,
provision of the Certificate of Formation, this LLC Agreement, other agreement,
vote or action of Members or by the Manager, or otherwise, and shall continue
as to a Person who has ceased to be a Member or Manager and shall inure to the
benefit of the heirs, executors and administrators of such a Person.
8.8 Paid Services.
(a) The Company shall pay the Manager a management fee equal to one
and one-half percent (1.5%) of gross revenues of the Company (the "Services
Fee") for the performance by Manager of the Paid Services, and neither Manager
nor any Affiliate of Manager shall be entitled to the payment of any other fees
from the Company with respect to the Paid Services. The Company shall pay the
Services Fee on a monthly basis, and the amount of each monthly installment of
such fee shall be based on the gross revenues of the Company in the immediately
preceding month. The Manager shall have the right to subcontract with an
Affiliate of Manager, to provide the Paid Services to the Company.
Notwithstanding the foregoing, the Manager shall be responsible, and neither
the Company nor RMUSA shall be responsible, for (i) any costs or expenses of
the Paid Services, and (ii) making any payments to providers of the Paid
Services. Cemex, RMUSA and the Company acknowledge and agree that the Paid
Services include and require the provision of substantive administrative and
corporate support services (as enumerated in the definition of Paid Services)
and not merely the procurement of such administrative and corporate support
services from other unaffiliated parties; provided, however, that
notwithstanding anything in this LLC Agreement to the contrary and for the
avoidance of doubt (i) Paid Services shall not be deemed to include any
non-administrative or non-corporate support services or functions (e.g.,
without limitation, legal and engineering services provided by non-affiliated
third parties or transportation services regardless of whether provided by
Affiliates or by third parties), notwithstanding that the administration or
management of such function is a Paid Service and (ii) the cost and expense of
any such non-administrative or non-corporate support services or functions
(other than the costs of administrating or managing such service or function)
shall be borne by the Company. For purposes of this Section 8.8, none of Cemex,
RMUSA or any of their respective Affiliates shall be deemed to be Affiliates of
the Company or any of its Subsidiaries.
(b) With respect to the Paid Services, the Manager shall only be
liable to the Company for any loss, liability, damage, claim, expense, fine,
penalty, interest cost, or other obligation of any nature arising out of this
LLC Agreement to the extent caused by the Manager's, its Affiliates', and their
respective directors', officers', employees', and agents' gross negligence,
willful misconduct or fraud with respect to the Paid Services under this LLC
Agreement. The Company hereby releases the Manager and its Affiliates, and
their respective directors, officers, employees, and agents from, and the
Company shall indemnify such Persons against, any claim, loss, damage,
liability or obligation (including reasonable attorneys' fees and expenses)
claimed or asserted in connection with the Paid Services by the Company or any
third party attributable to causes other than such Persons' gross negligence,
willful misconduct, fraud, or intentional breach of the Manager's obligations
with respect to the Paid Services under this LLC Agreement. It is the intention
of the parties hereto that the release by, and indemnity obligations of, the
Company under this Section 8.8(b) hold the Manager and its Affiliates, and
their respective directors, officers, employees, and agents harmless from and
against the consequences of their own ordinary negligence with respect to the
Paid Services under this LLC Agreement, including to the extent such ordinary
negligence is the sole, concurrent, or joint cause of any such claim, loss,
damage, liability or obligation.
8.9 Fiduciary Duties.
(a) Duty of Loyalty. The purposes of this Section 8.9(a) are (i) to
set forth the agreement among the Members with respect to the duty of loyalty
that the Manager owes to the Members and the Members owe to each other and (ii)
to identify the types and categories of activities by the Manager and the
Members that do not violate such duty of loyalty. The Members hereby agree that
the duty of loyalty consists solely of the duty of the Manager (in its capacity
as such) to act in good faith in a manner the Manager reasonably believes to be
in the best interest of the Company and the Members. Except as expressly
provided in Section 19, the Members and their Affiliates (including, if
applicable, the Manager) 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 that might be in direct or
indirect competition with the Company. Except as expressly provided in Section
19, neither the Company nor any other Member shall have any right in or to such
other ventures or activities or to the income or proceeds derived therefrom.
Except as expressly provided in Section 19, neither any Member nor the Manager
shall be obligated to present any investment opportunity or prospective
economic advantage to the Company, even if the opportunity is of the character
that, if presented to the Company, could be taken by the Company. Except as
expressly provided in Section 19, the Members and the Manager shall have the
right to hold any investment opportunity or prospective economic advantage for
their own account or to recommend such opportunity to Persons other than the
Company. Each Member acknowledges that the other Members and their Affiliates
(including, if applicable, the Manager) conduct other businesses, including
businesses that may compete with the Company and for the Members' time. Each
Member hereby waives any and all rights and claims that it may otherwise have
against the other Members and their Affiliates (including, if applicable, the
Manager) as a result of any of such activities. No Member or officer of the
Company shall be required to manage the Company as such Member's or officer's
sole and exclusive function. The parties hereby agree and acknowledge that the
members of the Board shall be entitled to act solely in the interest of the
Member that appointed them. For purposes of this paragraph, neither the Company
nor any of its Subsidiaries shall be deemed an Affiliate of any Member.
(b) Duty of Care. The purpose of this Section 8.9(b) is to set forth
the agreement among the Members with respect to the duty of care that the
Manager owes to the Members and to the Company. The Members hereby agree that
such duty of care consists solely of the duty to act with such care as an
ordinarily prudent person in a like position would use under similar
circumstances. A Manager who so performs such duty of care shall not be liable
to the Company or to any other Member for any loss or damage sustained by the
Company or any other Member.
(c) Totality of Duties. Without limiting the generality of the
foregoing, the Members agree that the foregoing subsections (a) and (b)
describe in its totality the fiduciary duties of the Manager to the Company and
its Members, and that the fiduciary duties of the Manager to the Company and
its Members shall not be those of a director to a corporation and its
shareholders under the DGCL or those of a partner to a partnership and its
partners. Any Manager who performs the duties of a Manager in compliance with
this Section 8.9 shall not have any liability by reason of being or having been
a Manager of the Company. In any action challenging any action or determination
of the Board of Managers, the party challenging such action or determination
shall have the burden of proving its allegations, and nothing shall shift the
burden of proof with respect to the satisfaction of the standard set forth
above to the Manager.
8.10 Antitrust Compliance. The Members agree and will adhere to the
appropriate competitive rules and firewalls set forth herein.
(a) RMUSA personnel who sit on the Company's Board shall not be
involved in or privy to any decision making regarding customers or the price,
terms, or conditions at which Cement is sold to other ready mix companies in
the Cement Boundaries or Concrete Boundaries nor shall they have access to any
such information.
(b) The Company agrees to develop and implement antitrust compliance
programs to assure its compliance with all applicable antitrust and competition
laws.
8.11 Cemex Intellectual Property. Notwithstanding anything contained
herein to the contrary, at such time as Cemex and its Affiliates no longer hold
Majority-In-Interest, the Company will cease using any Cemex, Inc., Cemex S.A.
de C.V., Cemex Trademark Worldwide, Ltd. or any of their Affiliates' owned
intellectual property, including trademarks, software and know-how.
9. Transfers of Membership Interest.
9.1 Transfer Restrictions.
(a) No Member shall Transfer all or any portion of its Membership
Interest in the Company except in strict compliance with the terms and
conditions of this Section 9. The foregoing notwithstanding, neither RMUSA nor
any of its Affiliates shall Transfer (other than a Permitted Transfer or upon
exercise of the Put Option or pursuant to Section 9.4) all or any portion of
its Membership Interest in the Company for a period commencing on the date
hereof and ending on the date on which the Put Option is no longer exercisable
by RMUSA pursuant to Section 9.6 hereof. Any attempted Transfer in violation of
this Article 9 shall be null and void and of no effect whatsoever. Each Member
hereby acknowledges the reasonableness of the restrictions on Transfer imposed
by this LLC Agreement in view of the Company's purposes and the relationship
between the Members. Accordingly, the restrictions on Transfer contained herein
shall be specifically enforceable. Each Member hereby further agrees to hold
the Company and each other Member (and each such Member's successors and
permitted assigns) wholly and completely harmless from any cost, liability, or
damage (including, without limitation, liabilities for income taxes, legal
fees, expenses and other costs of enforcing this indemnity) incurred by any of
such other Members and indemnified Persons as a result of a Transfer or an
attempted Transfer by the Member in violation of this LLC Agreement. A Member
shall not be entitled to Transfer all or any portion of its Membership Interest
in the Company unless such Member is also transferring a pro rata portion of
its membership interest in Ready Mix LLC.
(b) With respect to each Member, any transaction or series of related
transactions that results in any holder of the Membership Interests no longer
being an Affiliate of the ultimate parent of such Member on the Contribution
Date (with respect to such Member, the "Ultimate Parent") shall constitute a
Transfer of the Membership Interest held by such holder for all purposes of
this Section 9.
(c) If a Member is a Member by virtue of the fact that an Affiliate of
such Member (the "Base Member") has transferred any of the Membership Interest
owned by such Base Member to such Member, but as a result of a proposed
transaction such Member will no longer be an Affiliate of the Ultimate Parent
of such Base Member then unless the consent contemplated by Section 9.2(c)(i)
hereof is obtained prior to the consummation of such proposed transaction, any
Membership Interest beneficially owned by such Member must be transferred to an
Affiliate of the Ultimate Parent of such Base Member prior to such Member's
loss of Affiliate status in respect of the Ultimate Parent of such Base Member,
provided that if such transfer does not occur prior to such loss of such
Affiliate status, in addition to any remedy available to the Company for the
breach of this LLC Agreement resulting therefrom, such Member shall
automatically cease to be a Member, and the Company shall be entitled to treat
the Ultimate Parent of such Base Member as the holder of the Membership
Interest held by such Member for all purposes hereunder, notwithstanding any
prior registration or recognition of the transfer of such Membership Interest
to such Member.
(d) For purposes of this Section 9.1, the "Ultimate Parent" of each
Member shall be as set forth on Schedule 9.1(d) hereof.
9.2 Consent and Other Requirements. Neither Member will Transfer
(other than a Permitted Transfer) all or any portion of its Membership Interest
in the Company, unless:
(a) prior to the Transfer, the Company receives, unless waived by the
non-transferring Member, in writing, an opinion of counsel reasonably
satisfactory to the non-transferring Member that such Transfer is not subject
to registration under, or is exempt from the registration requirements of, the
applicable state and federal securities laws;
(b) contemporaneously with the Transfer, the transferee shall execute
the Adoption Agreement in the form of Exhibit D and the transferee shall pay
all reasonable expenses, including attorneys' fees, incurred by the Company in
connection with such Transfer; and
(c) the transferring Member shall either:
(i) first obtain the written consent to such Transfer by each
of the non-transferring Members; or
(ii) comply with the provisions of Sections 9.3 and 9.4
hereof, as applicable.
9.3 Right of First Refusal.
(a) Subject to the second sentence of Section 9.1(a) hereof, in the
event any Member (the "Transferring Member") receives a bona fide third party
offer to acquire any or all of such Transferring Member's Membership Interest
or any interest therein (other than a Permitted Transfer), including any
transaction that constitutes a Transfer under Section 9.1(b) or (c), which
offer such Transferring Member wishes to accept, such Transferring Member shall
promptly notify the other Member (the "Non-Transferring Member") in writing of
such offer (the "Offer Notice"), setting forth the name and address of the
prospective purchaser or acquiror, the amount of the Transferring Member's
Membership Interests to be Transferred, the price or method of determining such
price as designated by the Transferring Member and the prospective purchaser or
acquiror (the "Offer Price"), and the material terms and conditions of such
proposed Transfer, subject to Section 9.3(f). The Non-Transferring Member shall
have a period of thirty (30) days (the "Offer Option Period") after the receipt
of the Offer Notice within which to notify such Transferring Member in writing
that it wishes to acquire all (but not less than all) of such Membership
Interests that are proposed to be Transferred at a price equal to the Offer
Price and, upon the same terms and conditions set forth in the Offer Notice
(the "Offer Acceptance Notice"), subject to Section 9.3(f); provided, however,
that the Non-Transferring Member shall not be entitled to provide both an Offer
Acceptance Notice under this Section 9.3 and a Tag Along Notice pursuant to the
terms of Section 9.4 hereof.
(b) If the Non-Transferring Member gives the Transferring Member an
Offer Acceptance Notice within the Offer Option Period, then it shall be
obligated to purchase all (but not less than all) of such Membership Interests
that are proposed to be Transferred at a price equal to the Offer Price and
upon the same terms and conditions set forth in the Offer Notice, subject to
Section 9.3(f), and shall have up to one (1) year after it gives such Offer
Acceptance Notice to do all the things necessary to consummate the transaction,
including, but not limited to, receiving consents and entering into agreements.
If the Non-Transferring Member receives such consents and enters into such
agreements as are necessary to consummate the transactions, then such
Transferring Member shall be obligated to Transfer to the Non-Transferring
Member, and the Non-Transferring Member shall be obligated to acquire from such
Transferring Member, such Membership Interests at the Offer Price and, on the
terms and conditions set forth in the Offer Notice, subject to Section 9.3(f).
Within thirty (30) days following the closing of the purchase by the
Non-Transferring Member of the Transferring Member's Membership Interests (the
"Transfer Closing"), the Company shall distribute to the Transferring Member
(A) an amount equal to the product of (x) the Percentage Interest of the
Transferring Member immediately prior to the Transfer Closing and (y) all
EBITDA earned by the Company from the date of the Offer Acceptance Notice
through the date of the Transfer Closing that has not been distributed to the
Members pursuant to and in accordance with Section 6.1(a) hereof and (B) an
amount equal to the product of (x) the Percentage Interest of the Transferring
Member immediately prior to the Transfer Closing and (y) all cash in excess of
the sum of (i) the average current liabilities of the Company for the preceding
twelve (12) months and (ii) the aggregate amount of cash necessary to fund
budgeted capital expenditures.
(c) Subject to Section 9.4 hereof, if the Non-Transferring Member does
not give an Offer Acceptance Notice to such Transferring Member within such
Offer Option Period, such Transferring Member shall be free to Transfer such
Membership Interests to the party named in the Offer Notice, provided that such
Transfer is consummated within one (1) year after the Offer Sale Reference Date
(as defined below) at a price equal to or greater than the Offer Price and upon
substantially the same terms and conditions (other than the price, which may be
higher than the Offer Price) as are set forth in the Offer Notice.
(d) If the Non-Transferring Member gives an Offer Acceptance Notice
within the Offer Option Period and fails to consummate the transaction within
one (1) year after it gives such Offer Acceptance Notice, in addition to other
available remedies in respect of such failure, the Transferring Member shall be
free to Transfer its Membership Interest to the party named in the Offer Notice
at a price and on terms determined by the Transferring Member (which shall not
be required to be the terms set forth in the Offer Notice), provided that such
Transfer is consummated within one (1) year after the Offer Sale Reference
Date. In addition to the foregoing, such failure by the Non-Transferring Member
to consummate the transaction within the one (1) year period after it gives the
Offer Acceptance Notice shall, at the election of the Transferring Member,
constitute an Adverse Act; provided, however, that notwithstanding anything to
the contrary in Section 11.1 hereof, the Transferring Member must make such
election within one (1) year after the Offer Sale Reference Date. The right of
the Transferring Member to elect an Adverse Act shall not be assignable to the
purchaser in the proposed Transfer transaction and in the event the
Transferring Member elects to have the failure by the Non-Transferring Member
constitute an Adverse Act, the subsequent Transfer by the Transferring Member
of its Membership Interest as contemplated in the first sentence of this
paragraph shall result in the Non-Transferring Member no longer being an
Adverse Member. If the Transferring Member elects to cause the Non-Transferring
Member to be an Adverse Member, as provided above, the Non-Transferring Member
will be an Adverse Member until the earliest to occur of (i) a Transfer by the
Transferring Member of its Membership Interest as contemplated in the first
sentence of this paragraph, (ii) the purchase by the Transferring Member of the
Membership Interest of the Non-Transferring Member pursuant to Section 11.1(d),
or (iii) in the event that the Non-Transferring Member makes a bona fide tender
to the Transferring Member of the Offer Price set forth in the Offer Notice in
immediately available funds against delivery of the Membership Interest of the
Transferring Member then, (x) if the Transferring Member accepts such tender
(which it shall be entitled to accept or reject in its sole discretion), the
date of the transfer of such Membership Interest to the Non-Transferring Member
or (y) if the Non-Transferring Member does not accept such tender, the 60th day
after such tender.
(e) The "Offer Sale Reference Date" shall mean (i) the date on which
the Offer Option Period expires or (ii) if the Non-Transferring Member shall
have given the requisite written notice during the Offer Option Period but
shall have failed to consummate such transaction within the one (1) year period
provided above, the date on which such one year period shall end; provided,
that if during such one year period the Non-Transferring Member shall have
notified such Transferring Member in writing that the Non-Transferring Member
will not consummate such transaction and that the Non-Transferring Member
waives its rights under this Section 9.3 with respect to that particular Offer
Notice, then the Offer Sale Reference Date shall be the date of such notice
from the Non-Transferring Member.
(f) For purposes of this Section 9.3 and Section 9.4 hereof, with
respect to any transaction that constitutes a Transfer under Section 9.1(b) or
(c) (an "Indirect Sale"):
(i) the Offer Price shall be the amount designated by the
Transferring Member and the prospective purchaser or acquiror;
(ii) the "terms and conditions" of such Indirect Sale shall
be deemed to contemplate a direct transfer of the Membership Interest
on the other terms and conditions of such Indirect Sale; provided,
however, that for purposes of this Section 9.3 any such terms and
conditions that relate solely to the form of transaction which are not
applicable to such deemed form shall be disregarded (for example, if
the Indirect Sale is a merger, and a condition to such merger is the
filing of a certificate of merger with the applicable secretary of
state, such condition shall be disregarded for purposes of this
Section 9.3); and
(iii) with respect to this Section 9.3, at the election of
the Transferring Member, the sale of the Membership Interest pursuant
to Section 9.3(b) shall be conditioned upon the closing of the
Indirect Sale that gave rise to the obligation to provide the Offer
Notice with respect to such sale.
(g) For the avoidance of doubt, for purposes of this Section 9.3, with
respect to any transaction that constitutes a Transfer under Section 9.1(b) or
(c), the only right of the Non-Transferring Member shall be to purchase the
Membership Interest of the Transferring Member, and not any other assets or
securities being transferred by the Transferring Member or any of its
Affiliates.
9.4 Tag Along Right.
(a) In lieu of delivering an Offer Acceptance Notice, the
Non-Transferring Member shall have the right (the "Tag Along Right"), during
the Offer Option Period, to deliver a written notice (the "Tag Along Notice")
to the Transferring Member, requesting to include in such Transfer a percentage
of its Membership Interest equal to or less than the Prorata Portion (as
hereinafter defined) of the Membership Interest of the Non-Transferring Member.
The "Prorata Portion" with respect to the Non-Transferring Member shall equal
the product of (i) the Membership Interest of the Non-Transferring Member, and
a fraction (x) the numerator of which shall be equal to the amount of the
Transferring Member's Membership Interests to be Transferred and (y) the
denominator of which shall be equal to the total Membership Interests of the
Transferring Member.
(b) In the event the Non-Transferring Member shall have delivered a
Tag Along Notice to the Transferring Member prior to the expiration of the
Offer Option Period, the Transferring Member, shall include in any such
Transfer upon the same terms and conditions, the Pro Rata Portion of the
Non-Transferring Member's Membership Interest. Such terms and conditions shall
include, without limitation, (i) the Transfer consideration and (ii) the
provision of information, representations, warranties, covenants and requisite
indemnifications. Any Tag Along Notice shall be irrevocable once received by
the Transferring Member.
(c) If the Non-Transferring Member shall not have delivered the Tag
Along Notice during the Offer Option Period, it shall be deemed to have
irrevocably waived its rights under this Section 9.4 with respect to the
Transfer contemplated by the Offer Notice.
(d) In addition to any other available remedies, in the event that the
Non-Transferring Member who gives a Tag Along Notice within the Offer Option
Period to Transfer its Membership Interest pursuant to the transaction set
forth in the Offer Notice breaches any of its obligations to the purchaser
under the Non-Transferring Member's agreement with the purchaser related to
such transaction, where (i) such transaction involves the Transfer of all of
the Membership Interest of the Non-Transferring Member as well as all of such
Member's membership interest in Ready Mix LLC, and (ii) such breach causes the
contemplated transaction to be terminated by the purchaser, shall, at the
election of the Transferring Member, constitute an Adverse Act; provided,
however, that notwithstanding anything to the contrary in Section 11.1 hereof,
the Transferring Member must make such election within sixty (60) days after
the date on which the Transfer subject to such Tag Along Notice would have
occurred but for the failure of the Non-Transferring Member. The right of the
Transferring Member to elect an Adverse Act shall not be assignable to the
purchaser in the proposed Transfer transaction. If the Transferring Member
elects to cause the Non-Transferring Member to be an Adverse Member, as
provided above, the Non-Transferring Member will be an Adverse Member until the
earliest to occur of (i) the purchase by the Transferring Member of the
Membership Interest of the Non-Transferring Member pursuant to Section 11.1(d),
or (ii) the Non-Transferring Member has fully indemnified the Transferring
Member from and against any and all Damages incurred by the Transferring Member
arising out of or relating to the Non-Transferring Member's failure to
consummate such transaction.
9.5 Certain Permitted Transfers. Subject to Sections 9.1(a), (b) and
(c) hereof, each Member shall be entitled to Transfer all or any portion of its
Membership Interest in the Company to such Member's Affiliates (a "Permitted
Transfer"); provided, however, that such transferee(s) (the "Permitted
Transferee(s)") shall become parties to, and shall be subject to the terms and
conditions of, this LLC Agreement; provided, further, that if any such Transfer
shall result in a termination of the Company within the meaning of ss. 708 of
the Code, such Transfer shall be prohibited and not constitute a Permitted
Transfer. Any such Permitted Transferee shall automatically and without further
action of the Board, the Manager or the Members become an additional or
substitute member of the Company, as applicable. For purposes of this Section
9.5, none of Cemex, RMUSA or any of their respective Affiliates shall be deemed
to be Affiliates of the Company or Ready Mix LLC or any of their respective
Subsidiaries.
9.6 Option of RMUSA to Put Membership Interest. Notwithstanding any
provision herein to the contrary, RMUSA shall have the option, exercisable at
its sole and absolute discretion, to require Cemex, Inc. to purchase all, but
not less than all, of the Membership Interest in the Company held by RMUSA and
its Affiliates on the terms and conditions contained in this Section 9.6 (the
"Put Option"). RMUSA and Cemex, Inc. acknowledge and agree that the Put Option
may only be exercised by RMUSA together with an exercise of its similar right
to require Cemex, Inc. to purchase all of the membership interests of RMUSA and
its Affiliates in Ready Mix LLC pursuant to the Ready Mix LLC Operating
Agreement. For purposes of this Section 9.6, neither the Company nor any of its
Subsidiaries shall be deemed an Affiliate of any Member.
9.6.1 Put Option Term.
(a) Subject to paragraph (b) below, the Put Option may be exercised by
RMUSA at any time during the period commencing on the expiration of three (3)
years from the Contribution Date and expiring twenty-five (25) years from the
Contribution Date. The foregoing notwithstanding, in the event Cemex or any of
its Affiliates receives a bona fide third party offer to acquire any or all of
its Membership Interest or any interest therein (other than a Permitted
Transfer), including any transaction that constitutes a Transfer under Section
9.1(b) or (c), which results in Cemex or an Affiliate thereof giving an Offer
Notice as contemplated in Section 9.3 prior to the third (3rd) anniversary of
the Contribution Date, the Put Option shall become exercisable immediately and
shall remain exercisable, subject to paragraph (b) below, until (i) the
proposed Transfer is consummated, or (ii) the proposed Transfer is abandoned by
Cemex or its Affiliates or the proposed purchaser (unless such event occurs on
or following the date which is the third (3rd) anniversary of the Contribution
Date, in which case the Put Option shall remain exercisable subject to the
other terms and conditions of this LLC Agreement).
(b) Notwithstanding anything in this LLC Agreement to the contrary,
(i) in the event either RMUSA delivers an Offer Acceptance
Notice or a Tag Along Notice with respect to a proposed Transfer by
Cemex or any of its Affiliates in accordance with Section 9.3 or 9.4,
as the case may be, or RMUSA fails to deliver a Notice pursuant to
Section 9.6.2 during any Offer Option Period with respect to a
Transfer Notice concerning a Transfer by Cemex or any of its
Affiliates of all of the Membership Interest in the Company held by
Cemex and its Affiliates, then RMUSA's right to exercise the Put
Option shall be suspended as of the date of such Offer Acceptance
Notice or Tag Along Notice, or at the end of such Option Offer Period,
as the case may be, and either (x) the Put Option shall terminate and
be of no further effect (1) upon the consummation of the purchase by
RMUSA of all of the Membership Interest of Cemex and its Affiliates in
the Company pursuant to Section 9.3 whereupon neither Cemex nor any of
its Affiliates remain as Members of the Company, or (2) upon the
consummation of the sale by RMUSA (or its Affiliates) of all of the
Membership Interest of RMUSA (or its Affiliates, as the case may be)
in the Company pursuant to Section 9.4 whereupon neither RMUSA nor any
of its Affiliates remain as Members of the Company, or (y) RMUSA's
right to exercise the Put Option shall be reinstated from and after
(A) the termination of the proposed Transfer by
Cemex (or its Affiliates) of all of the Membership Interest
of Cemex (and its Affiliates) pursuant to Section 9.3 where
such termination is due to the failure of Cemex (or its
Affiliates) to consummate such Transfer in breach of its
obligations with respect thereto,
(B) the consummation of the purchase by RMUSA of the
Membership Interest of Cemex and its Affiliates in the
Company pursuant to Section 9.3 which constitutes a Transfer
of less than all of the Membership Interest of Cemex and its
Affiliates in the Company and whereupon following such
purchase Cemex or its Affiliates continue to hold a
Membership Interest in the Company, or
(C) the abandonment of the proposed Transfer that
was the subject of the Tag Along Notice and the termination
of any definitive agreement with respect to such proposed
Transfer; provided however, that in the event the proposed
Transfer giving rise to rights in RMUSA under Section 9.4 is
with respect to a transfer of less than all of Cemex's (or
its Affiliate's) Membership Interest, the suspension
contemplated above shall apply only to the Put Option as it
concerns the Membership Interests proposed to be transferred
by RMUSA (or its Affiliate) pursuant to Section 9.4 and RMUSA
shall retain its rights to exercise the Put Option with
respect to any remaining portion of its Membership Interest;
(ii) in the event that RMUSA is the Non-Transferring Member
who failed to consummate the Transfer pursuant to the terms of Section
9.3(b), then RMUSA's right to exercise the Put Option shall remain
suspended as of the Offer Sale Reference Date and the Put Option shall
terminate and be of no further effect upon the Transfer of all of
Cemex's (or its Affiliate's) Membership Interests in accordance with
Section 9.3(d) hereof;
(iii) in the event RMUSA or any of its Affiliates is the
Non-Transferring Member and Cemex or any of its Affiliates is the
Transferring Member, as contemplated in Section 9.3, and the proposed
Transfer will result in the Transfer of all of the remaining
Membership Interest of Cemex and all of its Affiliates (and a Transfer
of all of the remaining Membership Interest of Cemex and all of its
Affiliates in Ready Mix LLC, if any), and upon receiving the Offer
Notice neither RMUSA nor any of its Affiliates gives an Offer
Acceptance Notice or Tag Along Notice to Cemex within the Offer Option
Period, and RMUSA does not exercise its Put Option, and Cemex and any
of its Affiliates, as the case may be, thereafter consummates the
Transfer of all of the remaining Membership Interest of Cemex and its
Affiliates (and a Transfer of all of the remaining Membership Interest
of Cemex and all of its Affiliates in Ready Mix LLC, if any), as
contemplated herein, upon the consummation of the Transfer the Put
Option shall terminate and be of no further effect;
(iv) in the event RMUSA is an Adverse Member pursuant to
clauses (ii) or (v) of the definition of Adverse Act, then RMUSA's
right to exercise the Put Option shall be suspended until RMUSA is no
longer an Adverse Member; and
(v) in the event RMUSA or any of its Affiliates is an Adverse
Member pursuant to clause (i) of the definition of Adverse Act, then,
in the event RMUSA exercises the Put Option following the sixtieth
(60th) day after the Non-Adverse Member gives the written notice set
forth in Section 11.1 to RMUSA or any of such Affiliates, the Purchase
Price shall be reduced to the Buyout Purchase Price.
9.6.2 Exercise. RMUSA may exercise the Put Option by delivering to
Cemex, Inc. a written notice of such exercise (the "Notice").
9.6.3 Purchase Price. (a) Except as provided in Section 9.6.1(b)(v)
above, the price which Cemex, Inc. shall pay to RMUSA for RMUSA's Membership
Interest pursuant to the Put Option (the "Purchase Price") shall be determined
based on one of the following formulas in accordance with paragraph (b) below:
(i) an amount equal to the product of (x) RMUSA's Percentage
Interest as of the Exercise Date and (y) the Adjusted Book Value as of
the Exercise Date;
(ii) an amount equal to (x) (A) eight (8) times the average
EBITDA of the Company over the three (3) Fiscal Years immediately
preceding the Exercise Date minus (B) the Company's Debt as of the
Exercise Date, multiplied by (y) RMUSA's Percentage Interest as of the
Exercise Date [(A - B) * y]; or
(iii) an amount equal to (x) (A) eight (8) times the EBITDA
of the Company during the Fiscal Year immediately preceding the
Exercise Date minus (B) the Company's Debt as of the Exercise Date,
multiplied by (y) RMUSA's Percentage Interest as of the Exercise Date
[(A - B) * y].
For the avoidance of doubt, the Purchase Price shall be determined as
set forth above and there shall be no adjustment to the amounts so determined
for Working Capital (although the parties acknowledge that the amount of
Working Capital will affect the calculation pursuant to clause (i) above). The
parties acknowledge that Cemex shall be entitled to retain all Working Capital
in the Company as of the Put Option Closing.
(b) RMUSA and Cemex, Inc. acknowledge and agree that the pricing
methodology which shall apply to the sale of the Membership Interests of RMUSA
and its Affiliates in the Company shall be the same methodology as applies to
the sale by RMUSA and its Affiliates of their Membership Interests in Ready Mix
LLC and shall be the methodology that yields the highest result for the
combined companies even if the methodology utilized results in a negative
number under this Section 9.6.3 or under Section 9.6.3 of the Ready Mix LLC
Agreement. In the event that the pricing methodology utilized under this
Agreement pursuant to the immediately preceding sentence results in a negative
Purchase Price, then Cemex, Inc. shall be entitled to a credit in an amount
equal to the absolute value of the Purchase Price against any amounts due from
Cemex, Inc. to RMUSA pursuant to Section 9.6.3 of the Ready Mix LLC Agreement.
In the event that the pricing methodology utilized under the Ready Mix LLC
Agreement results in a negative purchase price thereunder, then Cemex, Inc.
shall be entitled to a credit in an amount equal to the absolute value of such
purchase price against any amounts due from Cemex, Inc. to RMUSA pursuant to
this Section 9.6.3, such credit to be applied as of the Put Option Closing. In
the event that the pricing methodology utilized results in a negative Purchase
Price and a negative purchase price under the Ready Mix LLC Agreement (an
absolute negative number), then RMUSA shall pay to Cemex, Inc. the amount equal
to the absolute value of such total negative amount at the Put Option Closing
by wire transfer of immediately available funds.
(c) For purposes of determining the Purchase Price under this Section
9.6.3, to the extent the Company shall acquire any business(es) or assets
associated therewith ("Acquired Business"), which shall have been owned by the
Company for less than twelve (12) calendar months during the Fiscal Year
immediately preceding the Exercise Date, EBITDA of the Company for the Fiscal
Year immediately preceding the Exercise Date shall be increased by an amount
which shall consist of the Prorata EBITDA, as such term is defined below, in
connection with such Acquired Business. For purposes hereof, the term "Prorata
EBITDA" shall mean, with respect to a particular Acquired Business, the EBITDA
of the Acquired Business for the twelve (12) month period immediately preceding
the date of the acquisition of the Acquired Business ("Acquisition Date") by
the Company multiplied by a fraction, the numerator of which shall be equal to
(x) twelve (12) less (y) the number of months that have elapsed from the
Acquisition Date to the end of the Fiscal Year immediately preceding the
Exercise Date, or, with respect to Section 11, the Adverse Act Exercise Date,
and the denominator of which shall be twelve (12). For example, if the EBITDA
of the Acquired Business for the twelve (12) month period prior to the
Acquisition Date shall be US$1,000,000 and the Acquisition Date shall be three
(3) months prior to the end of the Fiscal Year immediately preceding the
Exercise Date, EBITDA shall increase by US$750,000, or US$1,000,000 x 9/12.
(d) For purposes of the calculations of clauses (a)(ii) and (iii)
above, in the event that EBITDA of the Company includes EBITDA of assets that
have been divested by the Company at any time prior to the Exercise Date,
EBITDA of the Company shall be adjusted to subtract the EBITDA attributable to
the divested assets during the period of time referred to in clauses (a)(ii)
and (iii), respectively.
9.6.4 Payment Terms.
(a) Within sixty (60) days after the Exercise Date, the Company shall
distribute to the Members all cash, if any, in excess of the sum of (i) the
average current liabilities of the Company for the preceding twelve (12) months
and (ii) the aggregate amount of cash necessary to fund budgeted capital
expenditures. A percentage of the portion of such distribution to which Cemex
would otherwise be entitled equal to one minus the Applicable Tax Rate shall be
paid to RMUSA (the amount so paid to RMUSA is referred to herein as the "Cemex
Post-Exercise Special Cash Distribution") and credited against the Initial
Payment (as defined below).
(b) Cemex, Inc. shall pay the Purchase Price as follows:
(i) at the Put Option Closing, Cemex, Inc. shall pay by wire
transfer of immediately available funds an amount (the "Initial
Payment") equal to the greater of $200,000,000 or forty percent (40%)
of the Purchase Price;
(ii) on the first (1st) anniversary of the Put Option
Closing, Cemex, Inc. shall pay by wire transfer of immediately
available funds an amount (the "Second Installment") equal to thirty
percent (30%) of the Purchase Price; and
(iii) on the second (2nd) anniversary of the Put Option
Closing, Cemex, Inc. shall pay by wire transfer of immediately
available funds an amount (the "Third Installment") equal to the
remainder of the Purchase Price.
provided, however, that notwithstanding the foregoing in no event shall the
aggregate amount paid (and deemed paid) by Cemex, Inc. pursuant to clauses (i),
(ii) and (iii) exceed the Purchase Price. For purposes of the foregoing, Cemex,
Inc. shall be deemed to have paid to RMUSA (and shall be credited against the
amounts payable pursuant to the immediately preceding sentence), the Cemex
Post-Exercise Special Cash Distribution (which shall be credited against the
Initial Payment) and any Cemex Post-Exercise Regular Cash Distributions (each
of which shall be credited against the immediately following installment).
Notwithstanding the foregoing, Cemex, Inc. shall have the right to prepay all
or any part of the remaining amount of the Purchase Price at any time. For
example, if the Purchase Price is $700,000,000 and the Cemex Post-Exercise
Special Cash Distribution is $5,001,000, and assuming no Cemex Post-Exercise
Regular Cash Distributions or prepayments are made, then $274,999,000 shall be
paid by Cemex, Inc. to RMUSA at the Put Option Closing, $210,000,000 shall be
paid by Cemex, Inc. to RMUSA on the first anniversary of the Put Option Closing
and $210,000,000 shall be paid by Cemex, Inc. to RMUSA on the second
anniversary of the Put Option Closing.
(c) Beginning on the Exercise Date and continuing until the Purchase
Price is paid in full to RMUSA, a percentage of the portion of each cash
distribution made by the Company to which Cemex would otherwise be entitled
(other than the distribution contemplated by Section 9.6.4(a)) equal to one
minus the Applicable Tax Rate shall be paid to RMUSA (the amount so paid to
RMUSA is referred to herein as the "Cemex Post-Exercise Regular Cash
Distributions") and credited against the next installment of the Purchase
Price.
(d) In the event as of the Put Option Closing RMUSA owes an
outstanding indemnity obligation to Cemex or its Affiliates or to the Company
or Ready Mix LLC or any of their respective Subsidiaries pursuant to Section
9.2 of the Contribution Agreement or Section 9.2 of the Ready Mix Contribution
Agreement, which indemnity obligation has been finally determined and
quantified (whether through agreement of the parties or final, non-appealable
judgment) pursuant to the terms and procedures set forth in Article 9 of the
Contribution Agreement or the Ready Mix Contribution Agreement, as the case may
be, the amount of such indemnity obligation shall be offset against the
Purchase Price, and the amount thereof shall be deemed paid at the Put Option
Closing.
9.6.5 Closing. (a) The closing of the transaction contemplated by this
Section 9.6 (the "Put Option Closing") shall occur on a date chosen by Cemex,
Inc., in no event later than twelve (12) months after the Exercise Date, at a
time and place mutually agreeable to RMUSA and Cemex, Inc. At the Put Option
Closing:
(i) Cemex, Inc. shall deliver to RMUSA:
(x) the balance of the Initial Payment in
immediately available funds; and
(y) a release(s) and indemnity(ies) of RMUSA from
any and all guaranty(ies) with respect to which RMUSA may
have guaranteed debts, obligations or liabilities of the
Company.
(ii) RMUSA shall deliver to Cemex, Inc., or at its direction:
(x) duly executed assignment of that certain portion
of its Percentage Interest determined in accordance with
Section 9.6.5(b);
(y) a certificate, dated as of the closing date,
containing a representation and warranty that on the closing
date RMUSA has transferred, or caused to be transferred, to
Cemex, Inc. (or its Affiliate) good and marketable title to
the portion of its Percentage Interest being transferred,
free and clear of all claims, equities, liens, charges and
encumbrances; and
(z) any other documents or agreements required by
this LLC Agreement or necessary to effectuate the intended
transfer.
(b) In connection with the sale of its Membership Interest pursuant to
the Put Option, RMUSA shall assign and transfer its Membership Interest to
Cemex, Inc. (or its designated Affiliate) as follows:
(i) At the Put Option Closing, and upon the receipt by RMUSA
of payment in full of the Initial Payment, RMUSA shall assign and
transfer to Cemex, Inc. (or its designated Affiliate) a portion of the
Percentage Interest owned by RMUSA immediately prior to the Put Option
Closing equal to the product of the total amount of the Percentage
Interest owned by RMUSA immediately prior to the Put Option Closing
multiplied by a fraction, the numerator of which is the amount of the
Purchase Price paid or deemed paid by Cemex, Inc. and received by
RMUSA at or prior to the Put Option Closing and the denominator of
which is the Purchase Price.
(ii) In the event that RMUSA still owns a Percentage Interest
in the Company as of the first (1st) anniversary of the Put Option
Closing, on such anniversary and upon the receipt by RMUSA of payment
in full of the Second Installment, RMUSA shall assign and transfer to
Cemex, Inc. (or its designated Affiliate) a portion of the Percentage
Interest owned by RMUSA immediately prior to the Put Option Closing
equal to the product of the total amount of Percentage Interest owned
by RMUSA immediately prior to the Put Option Closing multiplied by a
fraction, the numerator of which is the amount of the Purchase Price
paid or deemed paid by Cemex, Inc. and received by RMUSA after the Put
Option Closing and at or prior to the first Anniversary of the Put
Option Closing, other than any other Significant Prepayment made
during such period for which a Percentage Interest was delivered under
Section 9.6.5(c) and the denominator of which is the Purchase Price.
RMUSA shall also deliver to Cemex, Inc. (or its designated Affiliate)
a certificate as referenced in Section 9.6.5(a)(ii)(y) related to the
Percentage Interest being assigned and transferred pursuant to this
Section 9.6.5(b)(ii).
(iii) In the event that RMUSA still owns a Percentage
Interest in the Company immediately prior to the second (2nd)
anniversary of the Put Option Closing, on such anniversary and upon
the receipt by RMUSA of payment of the balance of the Purchase Price,
RMUSA shall assign and transfer to Cemex, Inc. (or its designated
Affiliate) the remainder of the Membership Interest owned by RMUSA
(which shall include the Voting Interest of RMUSA) immediately prior
to the Put Option Closing. RMUSA shall also deliver to Cemex, Inc. (or
its designated Affiliate) a certificate, dated as of such date,
containing a representation and warranty that on the date of such
assignment and transfer RMUSA has transferred, or caused to be
transferred, to Cemex, Inc. (or its designated Affiliate) good and
marketable title to such Membership Interest, free and clear of all
claims, equities, liens, charges and encumbrances as referenced in
Section 9.6.5(a)(ii)(y).
In the event Cemex, Inc. prepays to RMUSA the outstanding amount of the
Purchase Price, upon receipt of such payment in full of the Purchase Price
RMUSA shall assign and transfer to Cemex, Inc. (or its designated Affiliate)
the remainder of the Membership Interest then owned by RMUSA and shall deliver
to Cemex, Inc. (or its designated Affiliate) a certificate as contemplated in
paragraph (b)(iii) above. Notwithstanding any provision herein to the contrary,
RMUSA shall retain its full Voting Interest until the Purchase Price has been
paid in full.
(c) If at any time prior to any scheduled payment date pursuant to
Section 9.6.5(b), Cemex, Inc. pays or is deemed to have paid an amount under
the Put Option equal to or greater than US$ 10 million (a "Significant
Prepayment"), within three (3) Business Days after receipt by RMUSA or any of
its Affiliates of such Significant Prepayment, RMUSA shall (or shall cause one
or more of its Affiliates to) assign and transfer to Cemex, Inc. (or its
designated Affiliate) a portion of the Percentage Interest owned by RMUSA and
its Affiliates immediately prior to the Put Option Closing multiplied by a
fraction, the numerator of which is the amount of the Significant Prepayment
and the denominator of which is the Purchase Price. RMUSA shall also deliver to
Cemex, Inc. (or its designated Affiliate) a certificate as referenced in
Section 9.6.5(a)(ii)(y) related to the Percentage Interest being assigned and
transferred pursuant to this Section 9.6.5(c).
(d) At or prior to any installment payment date pursuant to Section
9.6.5(b) or any Significant Prepayment pursuant to Section 9.6.5(c), RMUSA or
its Affiliate, as may be the case, shall deliver to Cemex, Inc. a certificate,
in the form described in Treasury Regulation Section 1.1445-2(b)(2)(iv)(B),
certifying its compliance with Treasury Regulation Section 1.1445-2(b) that, as
of the date of such installment payment or Significant Prepayment, RMUSA or its
Affiliate is not a "foreign person" within the meaning of Section 1445 of the
Code. If RMUSA does not deliver such certificate to Cemex, Inc., Cemex, Inc.
shall be permitted to withhold from the payment amount, the amount required to
be withheld pursuant to Section 1445 of the Code, as calculated by Cemex, Inc.
in good faith, and (i) Cemex, Inc. shall not be deemed to be in default of any
of its obligations under this LLC Agreement (including this Section 9.6) by
virtue of having withheld such amount and (ii) the amount so withheld and
remitted to Department of Treasury shall be deemed to have been paid to RMUSA
or its Affiliates on the date that any amounts not so withheld were paid for
all purposes under this LLC Agreement. If RMUSA or its Affiliate does deliver
such certificate to Cemex, Inc., Cemex, Inc. shall not withhold under Section
1445 of the Code.
9.6.6 Regulatory and Other Authorizations; Cooperation.
(a) Upon the exercise by RMUSA of the Put Option, Cemex, Inc. shall
use its best efforts to promptly obtain (and, in the event Cemex, Inc. is or
its Affiliates are the Manager or Majority Member of the Company, to cause the
Company to obtain) all authorizations, consents, orders and approvals of all
governmental authorities and officials and third parties that may be or become
necessary for its performance of its obligations pursuant to the Put Option;
provided, however, that notwithstanding the foregoing, prior to the date which
is twelve (12) months after the Exercise Date, Cemex, Inc. shall not be
required to accept, as a condition to obtaining any required approval or
resolving any objection of any governmental authority, any requirement to
divest or hold separate or in trust (or the imposition of any other condition
or restriction with respect to) any of the respective businesses of Cemex,
Inc., Cemex, the Company, Ready Mix LLC or any of their respective subsidiaries
or assets.
(b) Upon the exercise by RMUSA of the Put Option, RMUSA shall use its
best efforts to promptly obtain all authorizations, consents, orders and
approvals of all governmental authorities and officials and third parties that
may be or become necessary for its performance of its obligations pursuant to
the Put Option.
(c) Each of RMUSA and Cemex, Inc. agrees to make, and to cause its
Affiliates, as necessary, to make its filing pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, or any successor law (the "HSR Act"), with
respect to the acquisition and sale pursuant to the exercise of the Put Option
within forty-five (45) days after the Exercise Date and to supply as promptly
as practicable to the appropriate governmental authorities any information and
documentary material that may be requested pursuant to the HSR Act. Each of
RMUSA and Cemex, Inc. further agrees to make, and to cause its Affiliates, as
necessary, to make responses (including providing required information) to the
Federal Trade Commission or the United States Department of Justice, as the
case may be, and state antitrust regulators as required of such party by any
such regulators with respect to the Put Option transaction.
(d) RMUSA agrees that, in its capacity as "Manager" of Ready Mix LLC
(or, if an Affiliate of RMUSA is then the "Manager" of Ready Mix LLC it will
cause such Affiliate, in such capacity, to), it will provide reasonable access
to the books, records and properties to Cemex's potential financing sources,
and shall cause the officers and employees of Ready Mix LLC to provide
reasonable cooperation to Cemex in obtaining financing in order to consummate
the transactions contemplated by this Section 9.6.
(e) From and after exercise of the Put Option, RMUSA agrees that it
shall not, directly or indirectly, create, incur, assume or suffer to exist any
Lien of any kind upon its Membership Interest.
9.7 Effect of Transfer. Any Member that Transfers its entire
Membership Interest in the Company to an un-Affiliated third party pursuant to
the terms of this LLC Agreement shall be deemed to have retired and shall cease
to be a Member as of the effective date of such Transfer, and shall cease to
have any rights or obligations under this LLC Agreement; provided, however,
that the foregoing shall not limit or modify (i) any rights of such Member
under Sections 8.7, 8.8, 8.9 and 9.3(d) hereof with respect to matters
occurring prior to such transaction; (ii) the obligations of such Member under
this LLC Agreement arising prior to or in connection with such transaction or
the obligations of such Member under Sections 7.2 and 19(h) hereof; or (iii)
the rights of such Member under this LLC Agreement arising as a result of a
breach of the other Member's obligations under this LLC Agreement prior to such
transaction. The Transfer of any Membership Interest pursuant to Section 9.5
shall not relieve the transferring Member from any of its obligations under
this Agreement.
10. Substituted Members. Notwithstanding any other provision of this
LLC Agreement to the contrary, no permitted assignee or permitted transferee of
the whole or any portion of any Membership Interest in the Company shall have
the right to become a substituted Member in place of his assignor unless all of
the following conditions are satisfied:
10.1 Written Assignment. The assignor and assignee shall have executed
and acknowledged a written instrument of assignment, together with such other
instruments as the Manager may deem necessary or desirable to effect the
admission of the assignee as a Member.
10.2 Assignment Delivered. Such instrument of assignment provided for
herein shall have been delivered to and received by the Manager.
10.3 Approval by Members. The written consent or approval of a
Majority-In-Interest shall have been first obtained.
10.4 Transfer Fee Paid. A transfer fee (in an amount determined by the
Manager) has been paid to the Company which is sufficient to cover all
reasonable expenses connected with such assignment and admission.
11. Adverse Action.
11.1 Remedies. Upon receipt of written notice from a non-Adverse
Member, an Adverse Member shall have thirty (30) days to cure an Adverse Act.
Thereafter, provided that the non-Adverse Member giving notice (i) is also a
non-adverse Member under this Agreement and the Ready Mix LLC Agreement and
(ii) with respect to clause (iii) of the definition of Adverse Act, the
non-Adverse Member (RMUSA) has complied with its obligations under Sections
9.6.6(b) and (c), the failure of which to be performed would have an adverse
effect on Cemex's ability to close the Put Option, the non-Adverse Member may,
in its sole discretion, elect one or more of the following remedies:
(a) during the continuance of the Adverse Act, the Adverse Member
shall cease to be represented on the Board and the size of the Board shall be
reduced to four (4) individuals, all of whom shall be appointed by the
non-Adverse Member;
(b) during the continuance of the Adverse Act, the Adverse Member will
have all of its voting rights under this LLC Agreement and applicable Law, in
its capacity as a Member, a Manager or otherwise, suspended, and the
non-Adverse Member will have the voting rights of the Majority Member;
(c) during the continuance of the Adverse Act, the Adverse Member
shall not be entitled to receive any distributions of cash or property from the
Company and the non-Adverse Member will be entitled to receive and retain all
distributions of cash or property that otherwise would have been made to the
Adverse Member, but the Adverse Member shall continue to be liable for its
obligations as a Member under this LLC Agreement; or
(d) the non-Adverse Member shall have the right, exercisable in its
sole and absolute discretion from the thirtieth (30th) day following the
expiration of the Adverse Member's right to cure and thereafter for the period
that the Adverse Act continues, to purchase all of the Adverse Member's
Membership Interest in the Company (a "Buyout Option") at a purchase price (the
"Buyout Purchase Price") equal to seventy-five percent (75%) of the amount
which is the highest of the following:
(i) an amount equal to the product of (x) the Adverse
Member's Percentage Interest as of the date the non-Adverse Member
gives written notice of its election to exercise its rights under this
paragraph (d) (the "Adverse Act Exercise Date") and (y) the Adjusted
Book Value as of the date of the Adverse Exercise Date;
(ii) an amount equal to (x) (A) eight (8) times the average
EBITDA of the Company over the three (3) Fiscal Years immediately
preceding the Adverse Act Exercise Date minus (B) the Company's Debt
as of the Adverse Act Exercise Date, multiplied by (y) the Adverse
Member's Percentage Interest as of the Adverse Act Exercise Date [(A -
B) * y]; or
(iii) an amount equal to (x) (A) eight (8) times the EBITDA
of the Company during the Fiscal Year immediately preceding the
Adverse Act Exercise Date minus (B) the Company's Debt as of the
Adverse Act Exercise Date, multiplied by (y) the Adverse Member's
Percentage Interest as of the Adverse Act Exercise Date [(A - B) * y].
For the avoidance of doubt, the Buyout Purchase Price shall be determined as
set forth above and there shall be no adjustment to the amounts so determined
for Working Capital (although the parties acknowledge that the amount of
Working Capital will affect the calculation pursuant to clause (i) above). The
parties acknowledge that the non-Adverse Member shall be entitled to retain all
Working Capital in the Company as of the Adverse Member Buyout Closing.
The parties acknowledge and agree that, in the event the non-Adverse Member
that exercises its right to purchase the Membership Interest of the Adverse
Member pursuant to this Section 11.1(d) also exercises its similar right to
purchase the Membership Interest of the Adverse Member (or its Affiliate)
pursuant to the Ready Mix LLC Agreement, the pricing methodology which shall
apply to the sale of the Membership Interest of the Adverse Member in the
Company shall be the same methodology as applies to its sale of its Membership
Interest in Ready Mix LLC and shall be the methodology that yields the highest
result for the combined companies even if the methodology utilized results in a
negative number under this Section 11.1(d) or under Section 11.1(d) of the
Ready Mix LLC Agreement. In the event that the methodology utilized under this
Agreement pursuant to the immediately preceding sentence results in a negative
Purchase Price, then the non-Adverse Member shall be entitled to a credit in an
amount equal to the absolute value of the Buyout Purchase Price against any
amounts due from the non-Adverse Member to the Adverse Member pursuant to
Section 11.1(d) of the Ready Mix LLC Agreement. In the event that the pricing
methodology utilized under the Ready Mix LLC Agreement results in a negative
purchase price thereunder, then the non-Adverse Member shall be entitled to a
credit in an amount equal to the absolute value of such purchase price against
any amounts due from the non-Adverse Member to the Adverse Member pursuant to
this Section 11.1(d), such credit to be applied as of the Adverse Member Buyout
Closing.
In the event that the Buyout Option is exercised by RMUSA as a result of a
breach by Cemex of Section 9.6 hereof, at the Adverse Member Buyout Closing
RMUSA shall (i) repurchase the Percentage Interests purchased by Cemex prior to
its Adverse Act pursuant to RMUSA's exercise of the Put Option (the "Purchased
Interests") for the amount paid by Cemex to RMUSA for such Purchased Interests
and the purchase price paid by RMUSA for the remaining Percentage Interest of
Cemex shall be the Buyout Purchase Price as determined above and (ii) refund to
Cemex any amounts paid or deemed paid by Cemex in respect of the Put Option for
which no Percentage Interest has been transferred whether before or after the
Adverse Act.
For purposes of determining the Buyout Purchase Price under this Section 11.1,
to the extent the Company shall acquire any Acquired Business, which shall have
been owned by the Company for less than twelve (12) calendar months during the
Fiscal Year immediately preceding the Adverse Act Exercise Date, EBITDA of the
Company for the Fiscal Year immediately preceding the Adverse Act Exercise Date
shall be increased by an amount which shall consist of the Prorata EBITDA in
connection with such Acquired Business.
For purposes of the calculations of clauses (ii) and (iii) above, in the event
that Adverse Act EBITDA of the Company includes EBITDA of assets that have been
divested by the Company at any time prior to the Exercise Date, EBITDA of the
Company shall be adjusted to subtract the EBITDA attributable to the divested
assets during the period of time referred to in clauses (ii) and (iii),
respectively.
The closing of such transaction (the "Adverse Member Buyout Closing") shall
occur at a time and place mutually agreeable to the non-Adverse Member and the
Adverse Member, provided that the closing date shall be no later than six (6)
months after the date on which the Buyout Option is exercised. At the closing
of such transaction:
(i) the non-Adverse Member shall deliver to the Adverse
Member:
(A) the amount of the Buyout Purchase Price in
immediately available funds; and
(B) a release(s) and indemnity(ies) of the Adverse
Member from any and all guaranty(ies) with respect to which
the Adverse Member may have guaranteed debts, obligations or
liabilities of the Company.
(ii) the Adverse Member shall deliver to the non-Adverse
Party:
(A) a duly exercised assignment of its Membership
Interest in the Company;
(B) a certificate, dated as of the closing date,
containing a representation and warranty that on the closing
date the Adverse Member has transferred, or caused to be
transferred, to the non-Adverse Member good and marketable
title to its Membership Interest, free and clear of all
claims, equities, liens, charges and encumbrances; and
(C) any other documents or agreements required by
this LLC Agreement or necessary to effectuate the intended
transfer.
11.2 Notwithstanding the foregoing, the remedies provided in this
Section 11 are cumulative and are not exclusive, and the Company and the
non-Adverse Member shall be entitled to all other remedies available at law or
equity.
12. Dissolution of Company.
12.1 Events of Dissolution. (a) The Company shall be dissolved and its
affairs shall be wound up upon the happening of the first to occur of the
following (a "Liquidating Event"):
(i) the unanimous written consent of all of the Members of
the Company; or
(ii) an entry of a final decree of dissolution of the Company
by a court of competent jurisdiction.
(b) In the event of dissolution of the Company, Cemex shall be
entitled to elect to receive, to the extent of its interest, and subject to the
order of priority set forth in Section 12.4, the cement plants and other assets
contributed by Cemex pursuant to the Contribution Agreement. In addition, in
the event of dissolution of the Company, notwithstanding anything in this LLC
Agreement to the contrary, Cemex shall have the right to purchase all of the
remaining assets of the Company not distributed to Cemex pursuant to the
immediately preceding sentence for a price equal the Purchase Price.
(c) In the event that (x) the Company is dissolved, (y) Ready Mix LLC
is not dissolved contemporaneously and (z) Cemex exercises its right under
paragraph (b) above, Cemex shall cause Cemex, Inc. to assume all of the
obligations of the Company under the Cement Supply Agreement.
12.2 Special Meeting to Appoint Liquidating Member. In the event that
the Company is dissolved by reason of the occurrence of a Liquidating Event and
the Manager has been removed, disqualified, or resigned, then a special meeting
of all the Members shall be held at the office of the Company for the purpose
of appointing a liquidating Member (the "Liquidating Member") to wind up the
affairs of the Company, to liquidate its assets and distribute the proceeds
therefrom. Such special meeting shall be held, without notice, on the fifteenth
(15th) day after the happening of the Liquidating Event causing dissolution of
the Company, or if such day is a Sunday or a legal holiday, then on the first
day immediately following the fifteenth (15th) day which is not a Sunday or a
legal holiday. In the event the Manager has not been removed, disqualified or
resigned, the Manager shall wind up the affairs of the Company and it shall not
be necessary to call a special meeting to appoint a Liquidating Member.
12.3 Statement of Assets and Liabilities. Upon the happening of a
Liquidating Event under Section 12.1 hereof, a statement shall be prepared
under the direction of the Manager or the Liquidating Member, as the case may
be, setting forth the assets and liabilities of the Company, and a copy of such
statement shall be furnished to all Members within thirty (30) days after such
Liquidating Event. The Manager or the Liquidating Member, as the case may be,
shall promptly take such action as is necessary so that the Company's business
shall be terminated, its liabilities discharged and its assets distributed as
hereinafter described. A reasonable period of time shall be allowed for the
orderly termination of the Company's business, the discharge of its liabilities
and the distribution of its remaining assets so as to enable the Company to
minimize the normal losses incurred in the liquidation process.
12.4 Sale of Assets and Distribution of Proceeds. Upon the dissolution
and winding up of the Company, either, as determined by a Majority-in-Interest
of the Members, (x) the Company's assets and properties shall be distributed or
(y) the assets and properties of the Company shall be sold for cash or a cash
equivalent and any gain or loss resulting therefrom shall be allocated among
the Members as provided in Section 5 hereof. Such assets and property or cash
proceeds, as applicable, shall be distributed in the following order of
priority:
(a) to creditors (other than Members who are creditors) in
satisfaction of the liabilities of the Company;
(b) to Members in satisfaction of liabilities owed to them as
creditors of the Company; and
(c) the balance, if any, to the Members in accordance with their
positive Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods.
12.5 Contributions Upon Liquidation. The provisions of this Section 12
shall be applied only after giving full effect to all distributions pursuant to
Sections 5.2 and 12.4 hereof. Notwithstanding anything contained in this LLC
Agreement or in applicable state law to the contrary, no Member shall have any
liability to the Company or to any other Member or Person with respect to any
deficit balance in such Person's Capital Account and any such deficit shall not
be considered a debt owed to the Company or to any other Person for any purpose
whatsoever.
13. Notices. Any notices or document required or desired to be given
to the Manager or the Members, as the case may be, shall be in writing (which
may include facsimile) and will be deemed to have been given and received when
(a) delivered to the address specified by the party to receive the notice, if
delivered personally, (b) five (5) days after deposited with the U.S. postal
service for delivery by first class mail or, an internationally recognized
express courier, (c) immediately upon delivery by facsimile if a confirmation
is received and (d) one (1) day after deposit with a nationally recognized
overnight carrier for next-day delivery. Such notices shall be given to Members
at their respective addresses set forth on Exhibit A and to the Manager at its
address set forth on Exhibit C as may be updated from time to time. Any party
may, at any time by giving five (5) business days' prior written notice to the
other parties, designate any other address in substitution of the foregoing
address to which such notice will be given.
14. Certain Member Representations and Warranties. Each Member, and in
the case of an organization, the Person(s) executing this LLC Agreement on
behalf of the organization, hereby represents and warrants to the Company and
each other Member that: (a) that if such Member is an organization, it is duly
organized, validly existing, and in good standing under the law of its state of
organization and has full organizational power and authority to execute this
LLC Agreement and to perform its obligations hereunder; (b) that the Member is
acquiring its Membership Interest in the Company for such Member's own account
as an investment and without an intent to distribute the same; (c) the Member
acknowledges that the Membership Interests in the Company have not been
registered under the Securities Act of 1933, as amended, or any state
securities laws, and may not be resold or transferred by the Member without
appropriate registration or the availability of an exemption from such
requirements.
15. Disclaimer. The Members agree that their Membership Interests in
the Company are not being sold by any one or more Members, but that the Company
is being formed, and the Membership Interests are being sold, as a private
offering under applicable federal and state securities laws, and that there is
no sponsor, promoter or seller of such securities. To induce the Manager to
serve as a Manager of the Company, and to induce the Manager to take an active
role in procuring properties and business opportunities for the Company, all
Members agree that neither the Manager nor any Member is a sponsor, promoter or
seller of any securities, and neither the Manager nor any Member shall be
liable for any disclosures or failures to disclose any matters pertaining to
any new properties purchased, or relating to the formation of the Company or
issuance of any Membership Interests. Each Member agrees that it is each
Member's responsibility to obtain full information concerning the Company, the
Membership Interests therein, and any acquisition, sale, or business
transaction entered into by the Company, and each Member acknowledges that
decisions of the Company are made by the Manager or the Members, as applicable.
Accordingly, each Member hereby disclaims any right to assert that any other
Member violated any federal or state securities laws in connection with the
formation of this Company, the acquisition of such Member's Membership
Interest, or in connection with any acquisition or sale by the Company in the
conduct of its business.
16. No Right to Dissolve or Demand Partition. Except as otherwise
expressly permitted by the terms and conditions of this LLC Agreement, until
such time as the Company is dissolved pursuant to the provisions of this LLC
Agreement, no Member shall have, and each such Member hereby expressly waives,
any right or power to: (i) maintain an action for partition; or (ii) in any way
cause a dissolution of the Company.
17. No Partnership Intended for Non-tax Purposes. The Members have
formed the Company under the LLC Act, and expressly do not intend hereby to
form a partnership under either the Delaware Revised Uniform Partnership Act or
the Delaware Uniform Limited Partnership Act. The Members do not intend to be
partners one to another, or partners as to any third party.
18. Rights of Creditors and Third Parties under this LLC Agreement.
This LLC Agreement is entered into among the Company and the Members for the
exclusive benefit of the Company, its Members, and their successors and
permitted assigns. This LLC Agreement is expressly not intended for the benefit
of any creditor of the Company or any other Person. Except and only to the
extent provided by applicable statute, no such creditor or third party shall
have any rights under this LLC Agreement or any agreement between the Company
and any Member with respect to any Capital Contribution or Additional Capital
Contribution, or otherwise.
19. Non-Competition Agreement. (a) Without the prior written consent
of the Board ("Competitive Business Approval"), neither Member shall, and each
Member shall cause each of its Affiliates not to, directly or indirectly, own
or operate a Competitive Business, unless the Competitive Business shall be an
External Competitive Business. In the event a Member or any of its Affiliates
acquires or otherwise operates an External Competitive Business, or in the
event a Member or any of its Affiliates acquires or otherwise operates a
Competitive Business that is not an External Competitive Business, but the
required Competitive Business Approval shall have been obtained, the operating
and other assets associated therewith that are located or operated within the
Cement Boundaries ("Internal Boundaries Assets") shall, subject to receipt of
any required governmental consents or approvals, be contributed or sold by the
Member or its Affiliate, as the case may be (the "Contributing Member"), to the
Company as provided herein. Within thirty (30) days after the acquisition of
Internal Boundaries Assets by the Contributing Member, the value of the
Internal Boundaries Assets shall be determined by the Board based on the
applicable multiples of EBITDA of the predecessor business during the last
Fiscal Year immediately prior to the acquisition as set forth on Schedule 19
attached hereto. In the event that the EBITDA of the Internal Boundaries Assets
takes into account acquisitions or divestitures of certain assets of the
Internal Boundaries Assets during the Fiscal Year immediately prior to such
acquisition, then such EBITDA shall be adjusted to reflect such acquisitions
and divestitures. Upon the determination by the Board of the value of the
Internal Boundaries Assets (the "Internal Boundaries Assets Value"), the Board
shall notify the Members in writing of the Board's determination of the
Internal Boundaries Assets Value and the Non-Contributing Member shall elect,
within thirty (30) days after its receipt of such notice, one of the following
options by giving written notice of such election to the Contributing Member:
(i) that the Contributing Member shall contribute the
Internal Boundaries Assets to the Company (whereupon the Internal
Boundaries Assets Value shall be credited to the contributing Member's
Capital Account) and the Non-Contributing Member shall simultaneously
make a Capital Contribution to the Company in cash in an amount equal
to the Internal Boundaries Assets Value (which shall be credited to
such Member's Capital Account);
(ii) subject to Section 8.2(b)(vi) and paragraph (b) below,
that the Company shall borrow from a third party the funds necessary
to purchase the Internal Boundaries Assets from the Contributing
Member for the Internal Boundaries Assets Value and shall purchase the
Internal Boundaries Assets from the Contributing Member;
(iii) that the Company shall borrow the funds, as
contemplated in (ii) above, from the Contributing Member and purchase
the Internal Boundaries Assets from the Contributing Member, in which
case, at the closing of the purchase of the Internal Boundaries
Assets, the Company shall execute a promissory note payable to the
Contributing Member which provides for the payment of interest at an
annual rate of ten percent (10%), and which is amortized and payable
(principal and interest) over five (5) years; or
(iv) that the Contributing Member shall contribute the
Internal Boundaries Assets to the Company and the Non-Contributing
Member shall make no Capital Contribution to the Company, in which
case the Percentage Interest of the Contributing Member shall be
increased to the amount determined by dividing (x) an amount equal to
the sum of (1) the product of the Percentage Interest of the
Contributing Member prior to such adjustment and the Adjusted Book
Value immediately prior to the contribution of such Internal
Boundaries Assets and (2) the Internal Boundaries Assets Value with
respect to such Internal Boundaries Assets, by (y) the Adjusted Book
Value immediately after contribution of such Internal Boundaries
Assets, and the Percentage Interest of the Non-Contributing Member
shall be reduced to the amount obtained by dividing (x) an amount
equal to the product of the Percentage Interest of the Non
Contributing Member prior to such adjustment and the Adjusted Book
Value immediately prior to the contribution of such Internal
Boundaries Assets by (y) the Adjusted Book Value immediately after
contribution of such Internal Boundaries Assets.
(b) Notwithstanding any provision in the foregoing paragraph (a) to
the contrary, in the event the Non-Contributing Member elects the option set
forth in paragraph (a)(ii) above and the incurring of the indebtedness by the
Company as contemplated in such paragraph (a)(ii) above, after giving effect
thereto, would cause the ratio of indebtedness for borrowed money to EBITDA to
be greater than 2.5:1, then upon the making of such election by the
Non-Contributing Member the Contributing Member shall have the option (which
must be exercised within thirty (30) days after the Non-Contributing Member
makes its election or shall be deemed to be waived) to loan to the Company the
funds necessary to purchase the Internal Boundaries Assets, which loan shall
bear interest at an annual rate equal to the lesser of (i) the best rate
available to the Company from its proposed third party lender, or (ii) ten
percent (10%), and be amortized and payable (principal and interest) over five
(5) years.
(c) In the event the Non-Contributing Member fails to make its
election within the thirty (30) day period, such Member shall be deemed to have
waived its right to make an election, and the Contributing Member shall elect,
within thirty (30) days thereafter, one of the following options by giving
written notice of such election to the Non-Contributing Member.
(i) that the Contributing Member shall contribute the
Internal Boundaries Assets to the Company in which case the Percentage
Interest of the Contributing Member shall be increased to the amount
obtained by dividing (x) an amount equal to the sum of (1) the product
of the Percentage Interest of the Contributing Member prior to such
adjustment and the Adjusted Book Value immediately prior to the
contribution of such Internal Boundaries Assets and (2) the Internal
Boundaries Assets Value with respect to such Internal Boundaries
Assets, by (y) the Adjusted Book Value immediately after contribution
of such Internal Boundaries Assets, and the Percentage Interest of the
Non-Contributing Member shall be reduced to the amount obtained by
dividing (x) an amount equal to the product of the Percentage Interest
of the Non-Contributing Member prior to such adjustment and the
Adjusted Book Value immediately prior to the contribution of such
Internal Boundaries Assets by (y) the Adjusted Book Value immediately
after contribution of such Internal Boundaries Assets;
(ii) subject to Section 8.2(b)(vi), that the Company shall
borrow from a third party the funds necessary to purchase the Internal
Boundaries Assets from the Contributing Member for the Internal
Boundaries Assets Value and shall purchase the Internal Boundaries
Assets from the Contributing Member; or
(iii) that the Company shall borrow the funds, as
contemplated in (ii) above, from the Contributing Member and purchase
the Internal Boundaries Assets from the Contributing Member, in which
case, at the closing of the purchase of the Internal Boundaries
Assets, the Company shall execute a promissory note payable to the
Contributing Member which provides for the payment of interest at an
annual rate of ten percent (10%), and which is amortized and payable
(principal and interest) over five (5) years.
(d) After the election has been made by the Non-Contributing Member or
the Contributing Member, as the case may be, as contemplated above, the
Company, the Manager and Members shall use their good faith efforts to
consummate the contribution or sale by the Contributing Member of the Internal
Boundaries Assets to the Company, and, if applicable, the financing of such
transaction, as soon as is reasonably practicable, but in any event within one
hundred eighty (180) days after acquisition of the Internal Boundaries Assets
by the Contributing Member. Without limiting the generality of the foregoing,
each of the Members and their Affiliates shall use its best efforts to promptly
obtain (and to cause the Company to obtain) all authorizations, consents,
orders and approvals of all governmental authorities and officials that may be
or become necessary to permit the contribution or sale to the Company of the
Internal Boundaries Assets, and will cooperate fully with the other party in
promptly seeking to obtain all such authorizations, consents, orders and
approvals, including making any required filing pursuant to the HSR Act, with
respect to the contribution or sale, and to supply as promptly as practicable
to the appropriate governmental authorities any information and documentary
material that may be requested pursuant to the HSR Act. In the event that the
Contributing Member or the Company shall not have consummated the contribution
or sale of the Internal Boundaries Assets to the Company in accordance with
this Section 19 prior to the end of such 180-day period for any reason,
including any failure to obtain any necessary authorization, consent, order or
approval, other than a breach by the Company, the Manager or any of the Members
of this Section 19, then the Non-Contributing Member shall have the right,
exercisable for a period of three hundred sixty-five (365) days thereafter, to
require the Contributing Member to sell or otherwise transfer the Internal
Boundaries Assets to an un-Affiliated third party. Upon the exercise by the
Non-Contributing Member of its right to require a sale of the Internal
Boundaries Assets, the Contributing Member shall use its best efforts to sell
or otherwise transfer such Internal Boundaries Assets to an un-Affiliated third
party as soon as reasonably practicable, and in no event more than one hundred
eighty (180) days after the Non-Contributing Member gives written notice to the
Contributing Member of its election. In the event the Non-Contributing Member
does not exercise its right to require the Contributing Member to sell the
Internal Boundaries Assets as contemplated in the foregoing sentence and the
Internal Boundaries Assets have not been purchased or otherwise contributed to
the Company as of the expiration of the 365-day period, then the Contributing
Member shall be entitled to own and operate or sell the said Assets without
such being a breach of this Section 19. In the event the Contributing Member
does not consummate a sale or transfer to an un-Affiliated third party within
the time allotted following the giving of written notice by the
Non-Contributing Member, in addition to other remedies available to the Company
and the Non-Contributing Member, the Contributing Member shall cease operation
of the Internal Boundaries Assets.
(e) Notwithstanding anything in this Agreement to the contrary,
pending consummation of the contribution or sale of the Internal Boundaries
Assets to the Company pursuant to this Section 19, or to an un-Affiliated third
party in accordance with the fourth sentence of Section 19(d), ownership and
operation of the Internal Boundaries Assets by the Contributing Member or its
Affiliates shall not constitute a breach of this Section 19.
(f) Notwithstanding anything to the contrary in this LLC Agreement,
this Section 19 shall not apply to a passive minority investment made by a
Member or any of its Affiliates or (ii) any sales by Cemex or any of its
Affiliates under the Back-up Supply Agreement. Further, notwithstanding
anything to the contrary in this LLC Agreement, this Section 19 shall not apply
to (y) a Person (and any of its Affiliates) that is not an Affiliate of the
Member prior to the transaction and that acquires (i) a majority of the equity
interests in a Member, or (ii) a majority of the equity interests in a
controlling Person of a Member; provided, that the provisions of this Section
19 shall continue to apply to such Member and such Persons that were Affiliates
of such Member prior to such transaction; nor shall this Section 19 apply to
(z) a Person (and any of its Affiliates) purchasing any assets or business from
a Member, which assets include the Membership Interest held by such Member,
where such Member's share of the revenues of the Company during the Fiscal Year
preceding such transaction represent less than 20% of the consolidated total
revenues during such Fiscal Year of the assets or business being transferred;
provided, that the Transferring Member complied with its obligations under
Sections 9.3 and 9.4 with respect to such transfer.
(g) In the event a Member acquires the Membership Interest of the
other Member pursuant to the exercise of such Member's right of first refusal
under Section 9.3(a) or pursuant to Section 11.1(d), the Member whose
Membership Interest is acquired shall at the closing of the acquisition execute
and deliver to the acquiring Member an agreement whereby such Transferring
Member covenants and agrees that it shall not, and shall cause its Affiliates
not to, directly or indirectly, own or operate a Competitive Business for a
period of five (5) years following the date of such closing. In the event Cemex
acquires the Membership Interest of RMUSA pursuant to the exercise by RMUSA of
its Put Option, at the Put Option Closing or upon the payment in full of the
Purchase Price, whichever is the later to occur, RMUSA shall execute and
deliver to Cemex an agreement whereby RMUSA covenants and agrees that it shall
not, and shall cause its Affiliates not to, directly or indirectly, own or
operate a Competitive Business for a period of five (5) years following the
delivery of such agreement.
(h) For purposes of this ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ or any of
their respective Affiliates shall be deemed to be Affiliates of the Company or
any of its Subsidiaries.
20. Cemex National Accounts. Notwithstanding anything to the contrary
in this LLC Agreement, in the event that the Company or any of its Subsidiaries
shall sell any products to customers who have national accounts with Cemex or
any of its Affiliates, the Company shall pay to Cemex, the Company's pro rata
share, on a per ton basis, of the rebates payable to such national accounts
based on the amount of the Company's and its Subsidiaries' sales to such
account, provided that, in no event shall the rebate amount to be paid by the
Company to Cemex, on a per ton basis, exceed the rebate amount to be paid by
Cemex or any of its Affiliates to such national account, on a per ton basis.
Notwithstanding the foregoing, except as approved by the Board pursuant to
Section 8.2(b)(xxvii) hereof, the amount that the Company is required to pay to
Cemex or any of its Affiliates for any rebate with respect to any national
account as provided herein, shall not exceed ten percent (10%) of the per ton
purchase price subject to such rebate. For purposes of this Section 20, neither
the Company nor any of its Subsidiaries shall be deemed an Affiliate of any
Member.
21. Contribution Agreement Indemnification Obligations.
21.1 Notwithstanding anything in this LLC Agreement to the contrary,
each of Cemex and RMUSA hereby agrees (and any Permitted Transferee of either
of the foregoing shall agree) that any Damages for which it or any of its
Affiliates (the "Indemnifying Party") owes the other party (or its Affiliates)
or the Company or Ready Mix LLC (the "Indemnified Party") an indemnification
obligation under the Contribution Agreement or the Ready Mix Contribution
Agreement shall be paid from any distributions that otherwise would be paid by
the Company to the Indemnifying Party pursuant to Section 6.1 or otherwise, and
each party hereby irrevocably waives all rights and title it would otherwise
have to, and irrevocably instructs the Manager to pay to the Indemnified Party,
all distributions that otherwise would be paid by the Company to the
Indemnifying Party under this LLC Agreement, until all such Damages have been
paid in full to the Indemnified Party. For purposes of this Section 21.1, each
party acknowledges that to the extent any distributions are paid to the
Indemnified Party under Section 21.1 of the Ready Mix LLC Agreement in respect
of a particular indemnification claim, such payments will also reduce the
amount of such Damages. In the event of multiple claims, the distributions
shall be applied against such claims in the order in which the amount of the
indemnification obligation in respect thereof is finally determined.
Notwithstanding anything in this LLC Agreement to the contrary, in no event
shall any amount of damages withheld by the Company under this Section 21.1 as
a payment of indemnified Damages incurred by the Company be treated as (i)
EBITDA for purposes of (x) calculating the amount of any required distribution
(including pursuant to Section 6.1) or (y) determining the Purchase Price or
the Buyout Purchase Price, or (ii) available cash for purposes of determining
the amount of any distribution under Section 9.6.4(a).
21.2 Notwithstanding anything in this LLC Agreement to the contrary,
prior to making any distribution to the Members, if there is any Net Indemnity
Obligation owed by any Member immediately prior to such distribution, each of
Cemex and RMUSA hereby agrees that the Percentage Interests of the Net
Indemnifying Party (and any Member that is an Affiliate of the Net Indemnifying
Party), on the one hand, and the Net Zero Indemnifying Party (and any Member
that is an Affiliate of the Net Zero Indemnifying Party), on the other hand,
shall be adjusted as follows:
(a) the aggregate Percentage Interest of the Net Indemnifying Party
and its Affiliates shall be adjusted to the amount obtained by dividing (i) an
amount equal to (1) the product of the aggregate Notional Pre-Damage Percentage
Interest of the Net Indemnifying Party and its Affiliates as of the time of
such adjustment and the Adjusted Book Value as of the time of such adjustment
(without regard to any adjustment for such Net Indemnity Obligation or any
component thereof), minus (2) the Net Indemnity Obligation as of such time, by
(ii) the Adjusted Book Value as of the time of such adjustment (without regard
to any adjustment for such Net Indemnity Obligation or any component thereof)
minus the Net Indemnity Obligation as of such time;
(b) the aggregate Percentage Interest of the Net Zero Indemnifying
Party and its Affiliates shall be adjusted to the amount obtained by dividing
(i) an amount equal to the product of the aggregate Notional Pre-Damage
Percentage Interest of the Net Zero Indemnifying Party and its Affiliates at
the time of such adjustment and the Adjusted Book Value as of the time of such
adjustment (without regard to any adjustment for such Net Indemnity Obligation
or any component thereof), by (ii) the Adjusted Book Value as of the time of
such adjustment (without regard to any adjustment for such Net Indemnity
Obligation or any component thereof) minus the Net Indemnity Obligation as of
such time; and
(c) If immediately prior to making any distribution to the Members,
there is no Net Indemnity Obligation owed by any Member, then immediately prior
to such distribution, each of Cemex and RMUSA hereby agrees that the Percentage
Interests of each Member shall be adjusted, if necessary, to equal such
Member's Notional Pre-Damage Percentage Interest as of such time.
21.3 Notwithstanding anything in this LLC Agreement to the contrary,
in the event that the aggregate Ready Mix Percentage Interest of Cemex and its
Affiliates or RMUSA and its Affiliates, as the case may be, under the Ready Mix
LLC Agreement is zero, then the amount of any Damages under the Ready Mix
Contribution Agreement that otherwise would have resulted in an adjustment to
the Ready Mix Percentage Interest under Section 21.2 of the Ready Mix LLC
Agreement shall be deemed to be Damages arising under the Contribution
Agreement for purposes of Section 21.2 hereof.
21.4 For purposes of this Section 21, the following terms shall have
the meanings set forth below:
"Net Zero Indemnifying Party" means, as of a particular time,
a Member (and its Affiliates) with a Net Indemnity Obligation at such
time of zero.
"Net Indemnifying Party" means, as of a particular time, an
Indemnified Party with a positive Net Indemnity Obligation at such
time.
"Net Indemnity Obligation" means, with respect to a
particular Indemnifying Party as of a particular time, the amount, if
any, by which (i) the aggregate Damages for which it and its
Affiliates owes the Indemnified Party and any of its Affiliates an
indemnification obligation under the Contribution Agreement as of such
time exceeds (ii) the aggregate Damages for which the other
Indemnifying Party (or Member, as the case may be) and any of its
Affiliates owes the Indemnified Party and any of its Affiliates an
indemnification obligation under the Contribution Agreement as of such
time. For purposes of determining the Net Indemnity Obligation, only
Damages which have been finally determined (whether by agreement of
the parties or by any final, non-appealable determination of any
tribunal with jurisdiction) shall be taken into account.
"Notional Pre-Damage Percentage Interest" of a Member as of a
particular time means the Percentage Interest of such Member as set
forth on Exhibit A as of the date of this Agreement, as adjusted
through such time pursuant to Section 1.4, other than any adjustments
pursuant to Section 21.2, which shall be disregarded for purposes of
determining the Notional Pre-Damage Percentage Interest.
22. Miscellaneous.
22.1 Applicable Law. This LLC Agreement and the rights of the parties
hereunder shall be interpreted in accordance with the laws of the State of
Delaware, without regard to conflicts of laws principles.
22.2 Consent to Jurisdiction. All disputes, litigation, proceedings or
other legal actions by any party to this Agreement in connection with or
relating to this LLC Agreement or any matters described or contemplated in this
LLC Agreement shall be instituted in the courts of the State of Georgia, or of
the United States in the State of Georgia, in either case, sitting in Atlanta,
Georgia. Each party to this LLC Agreement irrevocably submits to the exclusive
jurisdiction of the courts of the State of Georgia, and of the United States
sitting in the State of Georgia, in connection with any such dispute,
litigation, action or proceeding arising out of or relating to this LLC
Agreement. Each party to this LLC Agreement may receive the service of any
process or summons in connection with any such dispute, litigation, action or
proceeding brought in any such court by a mailed copy of such process or
summons sent to it at its address set forth, and in the manner provided, in
Section 13 hereof. Each party to this LLC Agreement irrevocably waives, to the
fullest extent permitted by applicable law, any defense or objection it may now
or hereafter have to the laying of venue of any proceeding under this LLC
Agreement brought in the courts of the State or of the United States in the
State of Georgia, in either case, sitting in Atlanta, Georgia, and any claim
that any proceeding under this LLC Agreement brought in any such court has been
brought in an inconvenient forum.
22.3 Entire Agreement. This LLC Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any and all prior understandings or agreements among the parties
with respect to that subject matter. There are no representations,
arrangements, understandings or agreements, oral or written, among the parties
hereto relating to the subject matter hereof, except those fully expressed
herein.
22.4 Transaction Agreements. The Members hereby authorize the Company
to execute and deliver this LLC Agreement, the Contribution Agreement, the
Supply Agreement and the Back-Up Supply Agreement, and to consummate the
transactions contemplated hereby and thereby.
22.5 Specific Performance. The parties to this LLC Agreement agree
that irreparable damage would occur in the event that any provision of this LLC
Agreement was not performed in accordance with the terms of this LLC Agreement
and that the parties shall be entitled to specific performance of the terms of
this LLC Agreement in addition to any other remedy at law or equity.
22.6 Assignment; Successors in Interests; No Third Party Rights.
Except as otherwise provided herein, all provisions of this LLC Agreement shall
be binding upon, inure to the benefit of and be enforceable by and against the
respective successors and permitted assigns of any of the parties to this LLC
Agreement. Except as otherwise provided herein, no Member may assign, by
operation of law or otherwise, any of its rights or obligations under this LLC
Agreement without the prior written consent of all of the other Members.
Nothing expressed or referred to in this LLC Agreement will be construed to
give any Person other than the parties to this LLC Agreement any legal or
equitable right, remedy, or claim under or with respect to this LLC Agreement
or any provision of this LLC Agreement.
22.7 Counterparts. This LLC Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument. Execution and delivery by facsimile shall constitute
good and valid execution and delivery unless and until replaced or substituted
by an original executed instrument.
22.8 Captions. The captions or headings in this LLC Agreement are made
for convenience and general reference only and shall not be construed to
describe, define or limit the scope or intent of the provisions of this LLC
Agreement.
22.9 Construction.
(a) Whenever the singular number is used in this LLC Agreement and
when required by the context, the same shall include the plural and vice versa,
and the masculine gender shall include the feminine and neuter genders and vice
versa.
(b) In the event any claim is made by any Member relating to any
conflict, omission or ambiguity in this LLC Agreement, no presumption or burden
of proof or persuasion shall be implied by virtue of the fact that this LLC
Agreement was prepared by or at the request of a particular Member or its
counsel.
(c) Whenever the words "include," "includes" or "including" are used
in this LLC Agreement, they shall be deemed to be followed by the words
"without limitation." The phrases "the date of this LLC Agreement," "the date
hereof" and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to July 1, 2005.
(d) If a payment hereunder is scheduled to be made on a date that is
not a Business Day, payment shall be made on the next succeeding day that is a
Business Day.
22.10 Severability. If any provision of this LLC Agreement or the
application thereof to any person or circumstance shall be invalid, illegal or
unenforceable to any extent, the remainder of this LLC Agreement and the
application thereof shall not be affected and shall be enforceable to the
fullest extent permitted by law.
22.11 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 LLC Agreement and
the transactions contemplated hereby.
[Signature Pages Follow]
MEMBER:
CEMEX SOUTHEAST HOLDINGS LLC
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Its President
---------------------------------
MEMBER:
READY MIX USA, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Its President
----------------------------------
THE COMPANY:
CEMEX SOUTHEAST LLC
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Its President
---------------------------------
SOLELY FOR PURPOSES OF SECTION 9.6:
CEMEX, INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Its President
---------------------------------
Schedule 3.2
------------
Permitted Affiliate Transactions
1) MRT, an indirect subsidiary of Cemex, Inc., pays a throughput charge
(based on market rates) to use Company terminals for the distribution
of fly ash. Chattanooga is currently the only contributed terminal
which distributes fly ash.
2) Company will pay the monthly lease rates of rail cars used in the
Company network to Cemex, Inc. This payment will be based on the
number of cars used in the Company network on a month to month basis.
3) Lease Agreement, dated as of July 1, 2005, between Company and Ready
Mix USA, LLC for the Ready Mix USA, LLC portion of the property
located in Freeport, Florida.
4) Company will pay insurance premiums to Cemex, Inc. Insurance premiums
and deductibles will be allocated in a manner consistent with
comparable Cemex, Inc. operating units.
5) Until the assignment date, necessary payments under the following
leases will be made by Cemex, Inc., and Company will reimburse Cemex,
Inc. for such payments:
a. BTM Master Lease Agreement, dated as of August 7, 2000,
between BTM Capital Corporation (Bank of Tokyo-Mitsubishi), as
Lessor, and Southdown, Inc., as Lessee, as it pertains to Schedule
#81[4]31902.
b. Master Lease Agreement 287309-000-001, dated as of January
28, 2004, between Caterpillar Financial Services Corporation, as
Lessor, and Cemex, Inc., as Lessee, as it pertains to Schedules
▇▇▇-▇▇▇▇▇▇▇-▇▇▇ 113277 and ▇▇▇-▇▇▇▇▇▇▇-▇▇▇ 113278.
c. Equipment Lease, dated as of May 17, 2002, between First
Union Commercial Corporation, as Lessor, and Cemex, Inc., as Lessee,
as it pertains to Schedule No. XXV (2030019-014).
d. Master Equipment Lease Agreement No. 34574, dated as of
March 26, 2001, between Fleet Capital Corporation, as Lessor, and
Cemex, Inc., as Lessee, as it pertains to Schedule No. 34574-00036.
e. Master Lease Agreement, dated as of August 1, 1997,
between General Electric Capital Corporation, as Lessor, and Sunbelt
Asphalt & Materials, Inc., as Lessee, as it pertains to Schedules ▇▇.
▇▇▇(▇▇▇▇▇▇▇-▇▇▇), ▇▇. ▇-▇ (4088542-005) and No. 058 (4045017-091).
f. Master Lease Finance Agreement, dated as of April 19,
1999, between STI Credit Corporation, as Lessor, and Southdown, Inc.,
as Lessee, as it pertains to Schedule No. ▇▇▇-▇▇▇▇▇▇▇-▇▇▇.
Schedule 9.1(d)
---------------
Member Ultimate Parent
Member
Name and
Mailing Address Ultimate Parent
--------------- ---------------
CEMEX SOUTHEAST CEMEX, INC.
HOLDINGS LLC ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
840 ▇▇▇▇▇▇▇, Suite 1400 Houston, TX 77024
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
READY MIX USA, INC. ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
P.O. Box 020152 ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Schedule 19
-----------
EBITDA Multiples
8x EBITDA
Exhibit A
---------
Initial Members' Names, Mailing Addresses, Initial Capital Contributions
and Initial Percentage and Voting Interests
Member Initial Initial Initial
Name and Capital Percentage Voting
Mailing Address Contribution Interest Interest
CEMEX SOUTHEAST $398,193,477.60 50.01% 50.01%
HOLDINGS LLC
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
READY MIX USA, INC. $8,000,000.00 49.99% 49.99%
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------- --------
Total 100.00% 100.00%
Exhibit B-1
-----------
"Minor Acquisition Criteria"
----------------------------
1) 5x EBITDA multiple for the respective business type times the
previous year EBITDA of the operations to be acquired.
Or
2) 5x EBITDA multiple for the respective business type times the
previous 3 year average EBITDA of the operations to be acquired.
Equity investments that do not represent 100% ownership shall be
subject to the Minor Acquisition criteria requirements of 1) or 2)
above, on a prorated basis, in accordance with the percent equity
share of the investment.
Exhibit B-2
-----------
"Minor Investment Criteria"
---------------------------
1) Margin Improvement or Growth Investments - minimum of 20% IRR (on a
free cash flow basis) for minor strategic capital investments.
2) Mandatory Investments - letter, report or notice from the applicable
governmental or legal authority in regards to the required
investment.
Exhibit B-3
-----------
"Adjusted Book Value Calculation"
---------------------------------
Attached.
Exhibit C
---------
Name and Mailing Address of Manager
CEMEX SOUTHEAST HOLDINGS LLC
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Exhibit D
---------
Form of Adoption Agreement
This Adoption Agreement (this "Adoption Agreement") is executed by the
undersigned Person (the "New Member") pursuant to the terms of that Limited
Liability Company Agreement of CEMEX SOUTHEAST LLC (the "Company") dated
[_______], 20[__] (as may be amended from time to time, the "LLC Agreement").
By the execution of this Adoption Agreement, the New Member agrees as follows:
1. Adoption. On the date of this Adoption Agreement, the New Member is
[acquiring Membership Interests from the Company]\[acquiring Membership
Interests from [identify transferor]]. The New Member hereby agrees to be bound
by the terms and conditions of the LLC Agreement to the same extent as if the
New Member had executed the LLC Agreement as an original Member thereto.
2. Representations and Warranties. The representations and warranties set forth
in Section 14 of the LLC Agreement are incorporated herein mutatis mutandis,
and the New Member hereby makes such representations and warranties as of the
date of this Adoption Agreement.
3. Notice. Any notice required as permitted by the LLC Agreement shall be given
to the New Member at the address listed below the New Member's signature below.
4. Definitions. Capitalized terms used in this Adoption Agreement which are not
otherwise defined have the meaning set forth in the LLC Agreement.
5. Counterparts. This Adoption Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
6. Governing Law. This Adoption Agreement shall be governed by the laws of the
State of Delaware, without reference to the principles of conflicts of law
thereof.
EXECUTED AND DATED this _____ day of _____ _____
[NEW MEMBER]
By:____________________
Name:
Title:
Address:
Attention:
Telecopy:
Agreed to and accepted by the Company:
CEMEX SOUTHEAST LLC
By:______________________
Name:
Title:
