<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________________ TO _________________
Commission File Number 1-7035
CALMAT CO.
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-0645790
- - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
3200 San Fernando Road, Los Angeles, California 90065
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (213) 258-2777
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [_]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES [_] NO [_]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
23,166,422 shares of Common Stock were outstanding at November 10, 1995.
-1-
<PAGE>
CALMAT CO.
INDEX
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<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Consolidated Balance Sheets:
September 30, 1995 and December 31, 1994 3
(b) Consolidated Statements of Operations:
For the Three and Nine Months Ended September 30, 1995
and 1994 4
(c) Consolidated Statements of Cash Flow:
For the Nine Months Ended September 30, 1995 and 1994 5
(d) Notes to the Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
-2-
<PAGE>
CALMAT CO.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
-------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,215 $ 2,139
Trade accounts receivable, less allowance for discounts and
doubtful accounts ($5,403 in 1995 and $4,254 in 1994) 64,442 61,353
Income taxes receivable 0 714
Inventories 7,281 6,439
Prepaid expenses and other 5,309 3,322
Deferred income taxes 7,545 9,089
Installment notes receivable 1,393 1,329
--------- ------------
Total current assets 87,185 84,385
Installment notes receivable and other assets 27,788 36,464
Costs in excess of net assets of subsidiaries 52,525 53,793
Property, plant and equipment, at cost:
Land and deposits 190,679 168,523
Buildings, machinery and equipment 473,145 476,023
Construction in progress 43,722 19,515
--------- ------------
707,546 664,061
Less: Accumulated depreciation and depletion (276,683) (265,866)
--------- ------------
Property, plant and equipment, net 430,863 398,195
--------- ------------
Total assets $ 598,361 $ 572,837
========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 23,488 $ 17,909
Accrued liabilities 32,237 29,185
Notes and bonds payable - current portion 115 95
Federal and state income taxes 476 -
Dividends payable 2,319 2,314
--------- ------------
Total current liabilities 58,635 49,503
Notes and bonds payable - long term portion 84,374 68,694
Other liabilities and deferred credits 22,679 21,333
Deferred income taxes 72,749 72,203
--------- ------------
Total liabilities 238,437 211,733
--------- ------------
Stockholders' Equity:
Common stock 23,166 23,139
Additional paid-in capital 40,353 39,930
Retained earnings 296,405 298,035
--------- ------------
Total stockholders' equity 359,924 361,104
--------- ------------
Total liabilities and stockholders' equity $ 598,361 $ 572,837
========= ============
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
CALMAT CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Net sales and operating revenues $100,254 $ 99,480 $267,108 $271,112
Gains on sales of real estate 0 1,787 3,828 2,340
Other income 608 600 2,927 1,581
-------- -------- -------- --------
100,862 101,867 273,863 275,033
-------- -------- -------- --------
Costs and expenses:
Cost of products sold and operating expenses 86,161 80,616 233,358 223,791
Selling, general and administrative expenses 8,314 8,815 26,451 24,624
Interest expense 847 1,182 1,829 3,685
Other expense 437 1,298 1,752 2,468
Special charge 0 0 2,000 0
-------- -------- -------- --------
95,759 91,911 265,390 254,568
-------- -------- -------- --------
Income before taxes 5,103 9,956 8,473 20,465
Federal and state income taxes 1,888 3,659 3,135 7,521
-------- -------- -------- --------
Net income $ 3,215 $ 6,297 $ 5,338 $ 12,944
======== ======== ======== ========
Per Share Data:
Net income $0.14 $0.27 $0.23 $0.56
======== ======== ======== ========
Weighted average shares outstanding 23,184 23,212 23,179 23,237
======== ======== ======== ========
Cash dividends per share $0.10 $0.10 $0.30 $0.30
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
CALMAT CO.
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited, amounts in thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30,
1995 1994
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 5,338 $ 12,944
Depreciation, cost depletion and amortization 23,008 22,479
Other 2,202 (8,683)
-------- --------
Cash provided by operating activities 30,548 26,740
-------- --------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (42,895) (17,425)
Proceeds from sale of real estate 18,114 3,582
Acquisition of business, net, of cash acquired (11,682) 0
Other (4,582) 2,042
-------- --------
Cash used for investing activities (41,045) (11,801)
-------- --------
FINANCING ACTIVITIES:
Notes payable to banks 15,750 (5,000)
Principal payments on notes and bonds payable (30) (12,824)
Payment of cash dividends (6,947) (6,939)
Other 800 752
-------- --------
Cash provided by (used for) financing activities 9,573 (24,011)
-------- --------
Decrease in cash and cash equivalents (924) (9,072)
Balance, beginning of period 2,139 10,596
-------- --------
Balance, end of period $ 1,215 $ 1,524
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
CALMAT CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. In the opinion of management, information furnished herein reflects all
adjustments necessary for a fair presentation of the financial position and
results of operations for the interim periods. There have been no changes in
the significant accounting policies as discussed in Note 1 of Notes to
Financial Statements contained in the Company's 1994 Annual Report on Form
10-K, filed with the Commission on March 31, 1995.
2. Earnings per common equivalent share (common shares adjusted for dilutive
effect of common stock options) have been computed by dividing net income
for each period by the weighted-average equivalent shares of common stock
outstanding.
3. Included in cash at September 30, 1995 was $1.2 million of proceeds from the
sale of real estate held in trust for potential tax-deferred real estate
exchanges.
4. Certain prior year amounts have been restated to conform to the current
year's presentation.
-6-
<PAGE>
CALMAT CO.
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
Results of Operations
- - ---------------------
The Company reported net income of $3.2 million, or $0.14 per share, for the
third quarter of 1995, compared with $6.3 million, or $0.27 per share, for the
prior year's third quarter.
The Company reported net income of $5.3 million, or $0.23 per share, for the
nine months ended September 30, 1995, which includes a second quarter special
charge of $1.2 million, after tax, or $0.05 per share, related to a management
consolidation of the Company's construction materials operations. Excluding the
special charge, net income would have been $6.5 million, or $0.28 per share,
compared with net income of $12.9 million, or $0.56 per share, for the
comparable period in 1994.
Record rainfall and related flooding in the Company's California markets in the
first quarter of 1995 and an organized labor strike in the Los Angeles area in
the third quarter of 1995 had a significant negative impact on operations in
1995. Also, 1994 benefitted from volumes generated by activity related to the
Los Angeles earthquake.
Business segment information for the three and nine months ended September 30,
1995 and 1994 is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
--------- --------- -------- ---------
(unaudited, amounts in thousands)
<S> <C> <C> <C> <C>
Revenues:
Construction Materials $ 95,099 $ 92,789 $252,468 $252,556
Properties - Operations 5,155 6,691 14,640 18,556
Properties - Real Estate Sales 0 1,787 3,828 2,340
Corporate and other 608 600 2,927 1,581
-------- -------- -------- --------
$100,862 $101,867 $273,863 $275,033
======== ======== ======== ========
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
--------- --------- -------- ---------
(unaudited, amounts in thousands)
<S> <C> <C> <C> <C>
Income before income taxes:
Construction Materials $ 5,713 $ 8,639 $ 9,020 $ 20,689
Properties - Operations 2,274 2,905 5,817 7,682
Properties - Real Estate Sales 0 1,787 3,828 2,340
Corporate and unallocated expenses, net (3,350) (3,738) (9,999) (11,042)
Other income 466 364 1,807 797
Special charge 0 0 (2,000)(a) 0
-------- -------- -------- --------
$ 5,103 $ 9,957 $ 8,473 $ 20,466
======== ======== ======== ========
</TABLE>
(a) Charge for severance and other costs related to the consolidation of the
management of the Concrete and Aggregates Division and the Asphalt Division
in the state of California.
-7-
<PAGE>
CALMAT CO.
Results of Operations - continued
- - ---------------------
Income from operations by segment represents total revenues less direct
operating expenses, segment selling, general and administrative expenses
and certain allocated corporate general and administrative expenses.
Corporate and unallocated expenses include corporate administrative
expenses, interest expense and support expenses not allocated to business
segments. Other income includes interest income, gains/losses on sale of
fixed assets and other miscellaneous items.
Construction Materials Division
- - -------------------------------
Aggregates sales volume by category is shown below.
<TABLE>
<CAPTION>
Aggregates - Tons Sold
(amounts in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
----- ----- ------ ------
<S> <C> <C> <C> <C>
Sales to outside customers 4,396 4,570 11,067 12,788
Used in Ready Mixed Concrete 800 623 2,158 1,946
Used in Asphalt 1,272 1,441 3,483 3,747
----- ----- ------ ------
6,468 6,634 16,708 18,481
===== ===== ====== ======
</TABLE>
Ready mixed concrete sales volume was 597,000 cubic yards in the third quarter
of 1995 compared with 467,000 cubic yards sold in the corresponding 1994 period,
and 1,626,000 cubic yards in the first nine months of 1995 compared with
1,434,000 cubic yards sold in the first nine months of 1994. Asphalt sales
volume was 1,968,000 tons in the third quarter of 1995, compared with 2,184,000
tons sold in the corresponding 1994 period, and 5,338,000 tons in the first nine
months of 1995, compared with 5,550,000 tons sold in the first nine months of
1994.
Revenues in the Construction Materials Division were $95.1 million in the third
quarter of 1995, up $2.3 million, or 2% compared with the corresponding 1994
period. Revenues were $252.5 million in the first nine months of 1995, virtually
equal to the same period in 1994. The revenue increase for the current quarter
was due to higher unit sales volume and a higher average selling price for ready
mixed concrete, which was not impacted by the labor strike in the current
quarter.
The Division's pre-tax income from operations was $5.7 million in the most
recent quarter compared with $8.6 million in the year earlier quarter. The
decrease is largely from higher costs and reduced volumes caused by the
previously announced organized labor strike, which began in late July and
affected most of the Company's Los Angeles area aggregates and asphalt
operations. The Company incurred incremental, out-of-pocket costs of $2.1
million as a result of the strike. Also, operating profits in the areas impacted
by the strike suffered due to unit sales volume declines of approximately 20%
and 31% for aggregates and asphalt, respectively, compared with the year earlier
quarter.
-8-
<PAGE>
CALMAT CO.
Results of Operations - continued
- - ---------------------
Aggregates gross profit, Company wide, was lower in the third quarter due to the
combination of a 3% volume decline and 5% lower average selling prices. The
reduced average selling price was due primarily to a product mix change. Asphalt
gross profit was also lower in the current quarter due to the combination of a
10% volume decline and an 8% increase in unit production costs, partially offset
by a 4% increase in average selling prices. The increase in production costs
relates primarily to the cost of purchased liquid asphalt and aggregates as well
as efficiency declines due to the aforementioned labor strike in Los Angeles. A
majority of the aggregates used by the asphalt operations are from the Company's
internal aggregates sources. Gross profit from ready mixed concrete sales was
higher in the third quarter due to the combination of a 28% increase in volume,
a 2% increase in average selling prices and a slight decrease in unit production
costs. The ready mixed concrete operations were not impacted by the labor strike
in the current quarter. However, the prior year's results for ready mixed
concrete operations were negatively impacted by an organized labor strike at our
Ventura County operations. Income from the Company's soil remediation operations
declined $0.7 million in the current period due to a substantial reduction in
volumes processed.
Pre-tax income from operations for the first nine months was $9.0 million
compared with $20.7 million in the year earlier period. Aggregates gross profit
was lower due to the combination of a 10% volume decline and 6% higher unit
production costs. Asphalt gross profit was also lower due to the combination of
a 4% volume decline and an 8% increase in unit production costs, partially
offset by a 4% increase in average selling prices. Gross profit from ready mixed
concrete sales was higher in the first nine months of 1995 due to a 13% increase
in unit sales volumes and a 2% increase in average selling prices, partially
offset by slightly higher unit production costs solely due to the increased cost
of purchased cement. Ready mixed concrete operations were not as negatively
impacted by the heavy rainfall in California in the first quarter, because a
much larger percentage of the Company's ready mixed concrete business is in
Arizona and New Mexico, where weather conditions were less severe. The prior
year's period also benefitted from higher income from soil remediation
operations.
Properties Division
- - -------------------
Revenues in the Properties Division, excluding gains on sales of real estate,
were $5.2 million in the third quarter of 1995, down $1.5 million from revenues
of $6.7 million in the corresponding 1994 period, and $14.6 million in the first
nine months of 1995, down $4.0 million from $18.6 million in the first nine
months of 1994. The decrease in revenue for the quarter and nine month period is
primarily due to decreased revenue from developed properties which was caused by
recent sales of such properties and a decline in revenue from landfill
operations. The prior year's third quarter included revenue from an unusually
large landfill contract in Arizona. The decrease in revenue for the nine month
period is due to decreased revenue from developed properties as mentioned above
and a decline in revenue from landfill operations due, in part, to the adverse
weather in California in the first quarter of 1995 and the large contract in
Arizona mentioned above.
The Division's pre-tax income from operations was $2.3 million for the third
quarter of 1995 compared with $4.7 million in the prior year's third quarter.
The current quarter includes no gains from real estate sales compared with gains
of $1.8 million in the prior year's quarter. Excluding real estate gains, pre-
tax income from operations decreased $0.6 million. This decrease relates to a
decline in income from developed properties due to recent sales of such
properties and reduced income from landfill operations. The landfill results for
the prior year's third quarter included income from an unusually large contract
in Arizona.
Pre-tax income from operations was $9.6 million in the first nine months of 1995
compared with $10.0 million in the prior period. Gains from real estate sales of
$3.8 million are included in 1995 versus gains of $2.3 million in
-9-
<PAGE>
CALMAT CO.
Properties Division - continued
- - -------------------------------
1994. Excluding real estate gains, pre-tax income from operations decreased $1.9
million because of a $1.0 million decrease in income from developed properties
due to recent sales of such properties, and a $0.9 million decrease in income
from landfill operations due, in part, to the adverse weather in California in
the first quarter of 1995 and an unusually large contract in Arizona in the
third quarter of 1994.
Liquidity and Capital Resources
- - -------------------------------
Cash and cash equivalents amounted to $1.2 million at September 30, 1995
compared with $2.1 million at December 31, 1994. Cash provided by operating
activities was $30.5 million for the nine months ended September 30, 1995. Cash
used for investing activities was $41.0 million, including $42.9 million for the
purchase of property, plant, and equipment and $11.7 million for the acquisition
of a business, offset by proceeds from the sale of real estate of $18.1 million.
Cash provided by financing activities was $9.6 million, including a $15.8
million net increase in debt, offset by cash dividend payments to stockholders
of $6.9 million. Overall, cash and cash equivalents decreased $0.9 million
during the first nine months of 1995. Working capital totaled $28.0 million at
September 30, 1995, down from $34.9 million at December 31, 1994. Current ratios
were 1.5 and 1.7 at September 30, 1995 and December 31, 1994, respectively.
Total consolidated long-term and short-term borrowings at September 30, 1995 and
December 31, 1994 were $84.5 million and $68.8 million, respectively. Debt as a
percent of total capitalization was 19.0% and 16.0%, at September 30, 1995 and
December 31, 1994, respectively. Management believes that cash provided by
operations and existing borrowing arrangements will provide adequate funds for
current commitments and expected working capital requirements during 1995.
-10-
<PAGE>
CALMAT CO.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- - ----------------------------------------
(a) Exhibit 10.1 Standby Letter of Credit Facility dated September 26, 1995,
between CalMat Co. and ABN-AMRO Bank N.V.
Exhibit 27. Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended September 30,
1995.
-11-
<PAGE>
CALMAT CO.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CALMAT CO.
-----------------------------------
(Registrant)
Date: November 13, 1995 By: /s/ Paul Stanford
-----------------------------------
Paul Stanford
Executive Vice President -
Administration, General Counsel
and Secretary
Date: November 13, 1995 By: /s/ Edward J. Kelly
-----------------------------------
Edward J. Kelly
Senior Vice President, Treasurer
and Chief Accounting Officer
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<PAGE>
[LETTERHEAD OF ABN-AMRO Bank N.V.]
EXHIBIT 10.1
September 28, 1995
Edward J. Kelly
Senior Vice President and Treasurer
Richard Yamashita
Assistant Treasurer
CalMat Co.
3200 San Fernando Road
Los Angeles, California 90065
RE: Standby Letter of Credit Facility dated September 26, 1995 (the "Facility
-------------------------------------------------------------------------
Letter"; capitalized terms used herein are the same as those in the
-------------------------------------------------------------------
Facility Letter, unless otherwise indicated).
---------------------------------------------
Gentlemen:
This letter is to modify the Facility Letter and the Master Letter of Credit
Agreement executed in connection with the Facility Letter, as follows:
Within the Facility Letter:
Availability section, sub section (iii): delete the word "July" and substitute
for it the word "June."
Events of Default section, the paragraph numbered 2: after the last word in
the paragraph, "creditors;" add the following, concluding phrase: "provided
that it will not be an Event of Default if the Applicant grants other major
creditors security which security equally and ratably secures Applicant's
obligations to the Bank;"
Events of Default section, the paragraph numbered 3: delete the word
"unsecured".
Within the Master Letter of Credit Agreement:
Section 8, Default; Remedies: the following wording is to be added to sub
section (i), after the word "Agreement", and before the semi-colon: "and
such failure is not remedied by Applicant or waived by the Bank within 5
business days of the failure or 3 business days after the Bank has provided
notice thereof".
Section 8, Default; Remedies: the sub segment (ii), the following wording
is to be added after the word "Bank" and prior to the semi-colon: "under
Letter of Credit drawings; on all other payments, within 5 business days of
the failure or 3 business days after the Bank has provided notice thereof".
<PAGE>
[LETTERHEAD OF ABN-AMRO Bank N.V.]
Section 12 Miscellaneous provisions, sub segment j), the following sentence
will be added as the concluding sentence of that section j): "The Bank will
provide the Applicant with notice of its intent not to renew at least 15 days
prior to the date at which the Bank is obligated to provide such notice to a
beneficiary under a Letter of Credit, if any."
If the preceding changes are acceptable, please sign and return this letter to
accompany the executed Facility Letter and Exhibits thereto.
Sincerely,
/s/ David J. Stassel /s/ Paul K. Stimpfl
David J. Stassel Paul K. Stimpfl
Vice President Vice President
To indicate CalMat Co.'s acceptance of the preceding changes, please insert the
date where indicated, execute and return an original copy of this letter.
Accepted this 29th day of September, 1995, by: CalMat Co.
--
By: /s/ H. James Gallagher By: /s/ Richard S. Yamashita
_________________________ ____________________________
H. James Gallagher Richard S. Yamashita
Title: Executive Vice President Title: Assistant Treasurer
_____________________________ ___________________________
- - --------------------------------------------------------------------------------
2
<PAGE>
[LETTERHEAD OF ABN-AMRO BANK N.V.]
As of September 26, 1995
Edward J. Kelly
Senior Vice President and Treasurer
Richard Yamashita
Assistant Treasurer
CalMat Co.
3200 San Fernando Road
Los Angeles, California 90065
Re: Standby Letter of Credit Facility
---------------------------------
Gentlemen:
ABN AMRO Bank N.V., Los Angeles International Branch (the "Bank") is pleased
to extend to CalMat Co. (the "Applicant") a committed line of credit (the
"Credit") in the aggregate amount of up to USD 20,000,000 (the "Limit") to
provide for the issuance by the Bank of irrevocable standby letters of credit
pursuant to insurance policy support needs and the Applicant's other
performance obligations. This Credit is available to the Applicant in U.S.
Dollars under the following terms and conditions outlined in this letter
(the "Facility Letter") and those terms and conditions contained in the Bank's
Master Letter of Credit Agreement, dated September 26, 1995, attached hereto as
Exhibit 1, which is incorporated herein by this reference (referred to herein,
together with this letter agreement, as the "Agreement"). Capitalized terms
used in Exhibit 1 shall have the same meanings ascribed to them herein unless
stated otherwise.
Credit: The issuance of irrevocable standby letters of
credit (each, a "Letter of Credit" and
collectively, "Letters of Credit") on the
Applicant's behalf pursuant to insurance policy
support needs and the Applicant's other
performance obligations.
Amount: The aggregate face amount of all Letters of
Credit, together with the aggregate amounts of all
Reimbursement Amounts (as defined below)
outstanding and unpaid shall not exceed the Limit
at any time.
Applicant: CalMat Co.
<PAGE>
[LETTERHEAD OF ABN-AMRO BANK N.V.]
Availability: September 26, 1995 through the earlier of (i) the
stated maturity of (i) that certain credit
facility evidenced by that certain $125,000,000
revolving credit facility in which CalMat Co. is
Borrower and Bank of America is Agent for the
banks stated therein, (ii) a revolving credit
facility that replaces the aforementioned
$125,000,000 revolving credit facility (for both
(i) and (ii), the "Revolving Maturity Date") or
(iii) July 30, 1998.
Letter of Letters of Credit shall expire no later than
Credit Tenors: one (1) year from the date of issuance; provided,
however, that Letters of Credit shall
automatically extend for one (1) year unless the
Bank states its affirmative intent not to renew.
Maturity Date: No Letter of Credit shall mature later than the
earlier of (i) the Revolving Maturity Date; or
(ii) or June 30, 1998.
Operation: The Bank will issue Letters of Credit on behalf
and upon the request of the Applicant. The
Applicant will request the issuance of each Letter
of Credit by completing, executing and delivering
to the Bank an application (an "Application") in
form and substance satisfactory to the Bank. The
Applicant may transmit an executed copy of an
Application to the Bank by telecopier. The Bank
shall be entitled to rely upon the signed
facsimile copy of the Applicant's Application as
though the copy was an original Application. The
Applicant shall send its original executed
Application to the Bank by regular U.S. mail. The
Bank's form of Application is attached hereto as
Exhibit 2.
Fees: The Applicant will pay to the Bank the following
fees in consideration of the issuance of each
Letter of Credit:
Issuance Fee the greater of $500.00 or
0.10% calculated on the face
amount of the Letter of
Credit, payable quarterly in
advance.
Amendments $ 50.00
Drawing Fee $100.00
Telex/Swift Costs $ 30.00
Postage Cost
- - --------------------------------------------------------------------------------
CalMat Co.
2
<PAGE>
[LETTERHEAD OF ABN-AMRO BANK N.V.]
Commitment The Applicant shall pay to the Bank a
Fee: commitment fee of 0.175% per annum calculated
against the Limit, payable quarterly in
arrears and calculated from the Effective
Date of this Agreement on an actual/actual
day basis.
Reimbursement If the Bank is required to make a payment under
Charges: any Letter of Credit issued pursuant to this
Agreement, the Bank will make a demand for the
amount due (the "Reimbursement Amount") from the
Applicant in satisfaction of the outstanding
obligation. The Applicant shall remit the
Reimbursement Amount due to the Bank within one
(1) Business Day of the Bank's demand. If such
Reimbursement Amount is not received by the Bank
within one (1) Business Day, the Applicant agrees
to pay interest to the Bank, pursuant to this
Agreement, calculated on the Reimbursement Amount
on an actual/actual day basis, for the period in
which the Bank has not been reimbursed, at the
following rates:
Unreimbursed Period Interest Rate
------------------- -------------
0 - 30 days Prime
Over 30 days Prime + 1%
"Prime" shall mean the rate of interest equal to
the higher (determined daily) of (i) the per annum
rate of interest announced by the Bank from time
to time as its principal office in Chicago as its
prime rate for U.S. dollar loans (with any change
in such rate to become effective as and when such
rate change shall become effective) or (ii) the
per annum rate of interest at which overnight
funds are from time to time offered to the Bank by
any bank in the interbank market in an amount
equal to the principal amount of the respective
interest bearing obligation, plus one half of one
percent (1/2%) per annum.
As used herein, "Business Day" shall mean a day on
which banks are open for business in California
and Chicago, U.S.A.
Events In addition to the Events of Default set forth on
of Default: Exhibit 1, Applicant, without demand or notice of
any kind, shall be in default under this Agreement
upon the occurrence of any of the following
events:
- - --------------------------------------------------------------------------------
CalMat Co.
3
<PAGE>
[LETTERHEAD OF ABN-AMRO BANK N.V.]
1. A default is declared or notified to
Applicant by a lender (or lenders) in the
payment or performance by Applicant of any
agreement between Applicant and any party
other than the Bank, evidencing the borrowing
of money or a guaranty where the aggregate
amount is equal to or greater than
$20,000,000.00 and such lender(s) declares
the outstanding amounts immediately due
and payable;
2. Applicant shall grant to one of its major
creditors, terms and conditions, or security
that renders the Bank's claims structurally
subordinate to the claims of that creditors;
3. Applicant shall fail to maintain a committed,
unsecured, unrestricted revolving credit
facility subject to either (a) or (b)
below:
(a) The facility amount will equal or exceed
One Hundred Twenty Five Million Dollars
($125,000,000.00); and
(b) For a smaller facility, the total unused
amount available for credit extensions
thereunder will at least equal 100% of
the total of outstanding letters of
credit.
4. Any Person or two or more Persons acting in
concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission
under the Securities and Exchange Act of
1934, as amended), directly or indirectly, of
securities of the Applicant (or other
securities convertible into such securities)
representing 20% or more of the combined
voting power of all securities of the
Applicant entitled to vote in the election of
Directors, other than securities having such
power only by reason of the happening of a
contingency; provided, however, that The Dan
Murphy Foundation and Persons acting in
concert with The Dan Murphy Foundation may
acquire an aggregate beneficial ownership
(within the meaning of 13d-3 of the
Securities and Exchange Commission under the
Securities and Exchange Act of 1934, as
amended), directly or indirectly, of
securities of the Applicant (or other
securities convertible into such securities)
representing up to 49% of the combined voting
power of all securities of the Applicant
entitled to vote in the election of
Directors, other than securities having such
power only by reason of the happening of a
contingency.
- - --------------------------------------------------------------------------------
CalMat Co.
4
<PAGE>
[LETTERHEAD OF ABN-AMRO BANK N.V.]
Person in the preceding paragraph means and
includes natural persons, corporations,
limited partnerships, general partnerships,
joint stock companies, joint ventures,
associations, companies, trusts, banks, trust
companies, land trusts or other
organizations, whether or not legal entities,
and governments and agencies and political
subdivisions thereof.
Upon the occurrence of an event of default set
forth above or in Exhibit 1, in addition to the
remedies set forth in Exhibit 1, the Bank shall
have no obligation to issue Letters of Credit
hereunder.
Conditions As a condition precedent to the issuance of any
Precedent: Letters of Credit, the Applicant shall provide the
Bank with all such documents as the Bank has
reasonably requested, including, but not limited
to:
1. A duly executed Master Letter of Credit
Agreement in the form attached hereto as
Exhibit 1;
2. Evidence of authority (certified copy of
corporate bank account resolution) and
specimen signatures (certificate of
incumbency) of the person or persons who are
authorized to sign this Agreement on behalf
of the Applicant and related documentation,
and of those persons who may sign
Applications and who are authorized to act on
behalf of the Applicant in the operation of
this Agreement; and
3. Application for Irrevocable Standby Letter of
Credit in the form attached hereto as Exhibit
2.
Law Governing: This Agreement will be governed in all respects by
and construed in accordance with the laws of the
State of California and the United States of
America. However, each Letter of Credit will, to
the extent possible, be governed by the Uniform
Customs and Practices for Documentary Credits in
effect from time to time.
If you are in agreement with the foregoing terms and conditions, please date
and sign the enclosed copy of this Agreement together with the other documents
referred to herein, and return it to the attention of the undersigned.
- - --------------------------------------------------------------------------------
CalMat Co.
5
<PAGE>
[LETTERHEAD OF ABN-AMRO BANK N.V.]
Very Truly Yours,
ABN AMRO Bank N.V.
By: /s/ David J. Stassel
________________________________
David J. Stassel, Vice President
By: /s/ John H. Penfield
________________________________
John H. Penfield, Vice President
The foregoing terms and conditions are accepted this 26 day of September, 1995.
CALMAT CO.
By: /s/ Edward J. Kelly
________________________________
Edward J. Kelly
Its: Senior Vice President, Treasurer
________________________________
and Chief Accounting Officer
- - --------------------------------------------------------------------------------
CalMat Co.
6
<PAGE>
EXHIBIT I
MASTER LETTER OF CREDIT AGREEMENT
---------------------------------
Date: September 26, 1995
MATURITY DATE: As set forth in a Facility Letter of even date hereof, as may
be subsequently amended.
To induce ABN AMRO Bank N.V.(the "Bank") to issue letters of credit (as the
same may be amended, each, a "Letter of Credit" and collectively, "Letters of
Credit") substantially in accordance with the Applications submitted to Bank
in accordance with Paragraph 1 of this Agreement, the undersigned, jointly and
severally if there is more than one of the undersigned (the "Applicant")
agrees as follows:
1. Applications.
------------
Each Application to Bank for the issuance of a Letter of Credit shall be
made by Applicant on the Bank's standard form application (the
"Application"), either sent by telecopy transmission, by United States mail
or by a courier service. In connection with such Applications, the Bank and
the Applicant agree that (i) the Bank is hereby authorized to act on any
Application which the Bank in good faith believes emanates from authorized
representatives of the Applicant and shall not be liable for any action
taken in good faith with respect to Applications from unauthorized persons;
(ii) the Bank shall not be under any duty to verify the identity of any
person submitting any Application; and (iii) the Applicant will indemnify
the Bank from all actions, proceedings, claims, loss, damage, reasonable
costs and expenses brought against, incurred or suffered by the Bank which
have arisen directly or indirectly from the acceptance by the Bank of any
Application.
2. Credit Limit.
------------
The aggregate amount of all Letters of Credit at any time issued and
outstanding hereunder shall not exceed the maximum amount (the "Limit")
indicated in the Facility Letter. Bank may (but is under no obligation
to so act) issue a Letter of Credit or Letters of Credit which would cause
the aggregate amount of all Letters of Credit to exceed the Limit, and this
Agreement will govern such Letters of Credit. Bank's books and records shall
be prima facie evidence of the number and aggregate amount of Letters of
Credit at any time outstanding and the amounts payable by Applicant
hereunder.
<PAGE>
3. Bank's General Obligations.
--------------------------
The Bank will issue Letters of Credit hereunder and subject to the terms and
conditions of the Facility Letter upon the request of Applicant. Upon Bank's
issuance of a Credit, Bank's obligations to Applicant relative to the Letter
of Credit include good faith and observance of general banking usage, but
shall NOT include liability or responsibility of any kind arising out of or
---
in connection with: (a) performance of the underlying contract for sale or
other transactions between Applicant and the beneficiary or any other
person; (b) acts, errors, defaults, or omissions of any person other than
Bank; (c) loss or destruction of any telegram, cable, letter, instrument, or
document while in transit or in the possession of others; (d) knowledge or
lack of knowledge of any custom or usage of any particular trade; (e)
delivery, transmission, translation, or interpretation of any message,
including any interruption, delay, error or omission therein; (f)
insufficiency, lack of authorization, invalidity of, or error or fraud in
any documents presented under the Credit or in any instructions purporting
to be from the Applicant or Bank's correspondents; (g) validity or
correctness of any transfer or proper identity of any transferee (if the
Credit is issued in transferable form); (h) waiver of any requirement which
exists for Bank's protection and not for the protection of the Applicant, or
which waiver does not in fact materially prejudice Applicant; or (i) any
other act or omission for which banks are relieved of responsibility under
the "Uniform Customs & Practice for Documentary Credits" of the
International Chamber of Commerce (hereafter, the "UCP") or the Uniform
Commercial Code, as in effect on the date hereof.
4. Bank's Obligations Concerning Documents.
---------------------------------------
a) Bank's obligations to Applicant relative to any
Letter of Credit include Bank's examination of
documents with reasonable care so as to ascertain
that on their face they appear to comply with the
terms of the Letter of Credit, but do NOT include
---
liability or responsibility of any kind arising out
of or in connection with: (i) validity,
sufficiency, truthfulness, genuineness or effect of
documents which appear on Bank's examination to be
regular on their face; (ii) honor of drafts or
demands for payment which appear on Bank's
examination to be regular on their face; or (iii)
the ultimate correctness of Bank's decision
regarding documentary compliance, where Bank's
decision is based on Bank's examination of the
documents, or Bank's exercise of judgment, in a
manner not manifestly unreasonable.
b) Unless otherwise specified in the Application, Bank
may, in Bank's discretion, but shall not be
obligated to, accept or honor as complying with a
Letter of Credit: (i) drafts or documents signed by
or issued by the purported executor, agent,
administrator, liquidator, receiver, trustee in
bankruptcy, or other legal representative of any
party designated in the Letter of Credit; (ii)
drafts or documents which comply under the laws,
2
<PAGE>
rules, regulations, and general banking or trade
customs and usages of the place of drawing,
negotiation or presentation; or (iii) drafts or
documents which comply with the UCP.
5. Form of Letters of Credit.
-------------------------
Applicant authorizes Bank to set forth the terms of each Application in the
Letter of Credit corresponding to such Application in such language as Bank
deems appropriate, with such variations from such terms as Bank may in its
discretion determine to be necessary and not materially inconsistent with
such Application unless specifically instructed otherwise by the Applicant
in writing. If Applicant does not notify Bank of any inconsistencies in such
Letter of Credit within ten (10) business days of its issuance, Applicant
agrees that such Letter of Credit is conclusively presumed to be in proper
form. Upon its receipt of timely notice of any discrepancy in any Credit,
Bank will endeavor to obtain the consent of the confirming bank (if any) and
the beneficiary for an appropriate modification to the Letter of Credit;
provided, however that Bank shall assume no liability or responsibility for
its failure to obtain such consent.
6. Payment; Commissions.
--------------------
a) With respect to each Letter of Credit, Applicant
shall pay Bank in United States currency and in
immediately available funds, by wire transfer or
otherwise, at the Bank's office identified in the
Application, the amount paid or to be paid by the
Bank, the Bank's agent or any other party on the
Bank's behalf, on each draft or other order,
instrument or demand drawn or presented or
purporting to be drawn or presented under a Letter
of Credit (the "Item") together with all other
amounts owing to Bank in connection therewith, such
payment to be made at the time of honor of each
Item. In the case of Items in foreign currency,
such payments shall be at the Bank's current rate
of exchange for transfers to the place of payment
in the currency in which such Item is drawn (or, if
for any reason Bank is unable to establish such a
rate of exchange, in an amount equal to Bank's
actual cost of settlement). The Applicant shall
reimburse the Bank in the same currency in which
the Item is payable, provided that at the Bank's
option, Applicant shall reimburse Bank in United
States dollars for Items payable in a foreign
currency at the rate at which Bank could sell such
foreign currency in exchange for United States
dollars for transfer to the place of payment of the
Item, or, if there is no such rate, the United
States dollar equivalent of Bank's actual cost of
settlement. Applicant agrees to pay Bank on demand
in United States dollars such amounts as Bank may
be required to expend to comply with any and all
governmental exchange regulations now or hereafter
applicable to the purchase of foreign currency.
3
<PAGE>
b) With respect to each Letter of Credit, the
Applicant will pay the Bank on demand, in United
States currency at the Bank's office identified on
the Application: (i) a non-refundable commission at
such rates as set forth in the Facility Letter;
(ii) interest on all amounts due and owing to the
Bank until payment in full, as set forth in the
Facility Letter; and (iii) all reasonable charges
and expenses incurred, including reasonable
attorney's fees, legal expenses, court costs, and
any similar costs paid or incurred by Bank in
connection with issuance or maintenance of the
Letter of Credit, Bank's performance under the
Letter of Credit and this Agreement, and all
transactions (including, without limitation, the
involvement of the Bank in any court proceedings
regarding the Letter of Credit) related to or
contemplated by this Agreement.
c) If, as a result of any law, regulation, treaty or
directive, or any change therein, or in the
interpretation or application thereof or Bank's
compliance with any request or directive (whether
or not having the force of law) from any court or
governmental authority, agency or instrumentality,
any reserve, capital requirement, premium, special
deposit, special assessment or similar requirements
against the Bank's assets, deposits or credit
extended by the Bank are imposed, modified or
deemed applicable and the Bank shall determine
that, by reason thereof, the cost to the Bank of
issuing or maintaining the Letter of Credit is
increased, the Applicant agrees to pay the Bank
upon demand such additional amounts as will
compensate the Bank for such additional costs that
are reasonably allocable to this agreement. A
certificate signed by an officer of the Bank
specifying in reasonable detail the amounts, the
calculation of such amounts and the basis therefor,
submitted to the Applicant by the Bank of the
additional amounts required to compensate the Bank
in respect of the foregoing shall be conclusive,
absent manifest error. The Applicant further
agrees to pay any applicable levies or other taxes
imposed in connection with the Letter of Credit
other than net income taxes payable by the Bank,
and to otherwise comply with all domestic and
foreign laws and regulations applicable to all
transactions under or in connection with the Letter
of Credit.
7. Assumption of Risk by Applicant; Applicant's Indemnification of Bank;
--------------------------------------------------------------------
Subrogation.
-----------
a) The Applicant's obligations to the Bank hereunder
are, and shall remain, absolute and unconditional
notwithstanding any lack of enforceability of any
of the Letters of Credit or the existence of any
claim, counterclaim, defense or right of set off
the Applicant may have against the Bank.
4
<PAGE>
b) The beneficiary and any other user of a Letter of
Credit and any other drawer of any draft or the
presenter of any demand for payment thereunder
shall be deemed Applicant's agents, and Applicant
assumes all risk, loss, liability, charges and
expenses with respect to their acts or omissions
and also with respect to any error, delay,
misdelivery or loss in or arising out of the
transmission of telegrams, cables, letters or other
communications or documents or items forwarded in
connection with the drafts or the Credit,
including, without limitation, any Application.
Applicant shall not be relieved from any obligation
or liability, nor shall the terms of this Agreement
be affected by the occurrence of any of the
foregoing. Any action or inaction by Bank or its
correspondents in connection with a Letter of
Credit or with instructions, drafts, or documents,
relative to a Letter of Credit, shall, if in good
faith, conclusively be deemed to have been
authorized by Applicant, and Bank shall have no
liability thereunder.
c) Applicant shall indemnify Bank and its
correspondents and shall defend and hold Bank and
its correspondents harmless from and against any
and all claims, damages, loss, costs, expenses
(including reasonable attorneys' fees) and
liabilities of any nature whatever, sustained,
incurred or asserted in connection with any Letters
of Credit, the payment or acceptance or refusal to
pay or accept any draft or other demand for
payment, and any other action or inaction in
reliance upon the provisions of this Agreement,
unless and to the extent that any such claims,
damages, loss, costs, expenses or liabilities shall
have been determined by a court of competent
jurisdiction to have been directly caused by the
willful misconduct or gross negligence of the Bank
in performing its obligations under the Letter of
Credit or by the Bank's failure to make payment of
any drawing or other demand for payment made in
strict conformity with the Credit. It is
understood that in making payment under the Letter
of Credit the Bank's exclusive reliance on the
documents presented to the Bank in accordance with
the terms of the Letter of Credit as to any and all
matters set forth therein, whether or not any
statement or any document presented pursuant to the
Letter of Credit proves to be forged, fraudulent,
invalid or insufficient in any respect whatsoever
shall not be deemed willful misconduct or gross
negligence of the Bank.
d) Bank shall be subrogated (for purposes of defending
against Applicant's claims and proceeding against
others to the extent of Bank's liability to
Applicant) to Applicant's rights against any person
who may be liable to Applicant on any underlying
transaction; to the rights of any holder in due
course or person with similar status against
Applicant; and to the rights of any beneficiary or
its assignee or person with similar status against
Applicant.
5
<PAGE>
8. Default; Remedies.
-----------------
Applicant shall be in default under this Agreement
upon the occurrence of any of the following: (i)
any failure by Applicant to perform its obligations
or covenants under this Agreement; (ii) Applicant's
failure to pay when and as due hereunder any sum
due Bank; (iii) any material misrepresentation made
by Applicant in connection with this Agreement or a
Letter of Credit.
a) Upon default, all of Applicant's obligations and
liabilities to Bank, of whatever nature, whether
contingent or absolute, shall become immediately
due and payable without presentment, protest,
notice or demand and without notice of
acceleration, all of which are hereby waived and,
without limiting the foregoing and any other rights
of the Bank hereunder, the Applicant shall
immediately pay to the Bank an amount equal to the
available undrawn amount of all outstanding Letters
of Credit.
b) All amounts due and payable shall accrue interest,
from and including the date such amount is paid or
incurred by the Bank up to but not including the
date payment is made, at the per annum rate set
forth in Section 6(b)(ii) hereof.
9. Waiver by Bank; Acts Not Affecting Agreement.
--------------------------------------------
Bank shall have no duty to exercise any of its rights hereunder, and Bank
shall not be liable for any failure to do so or delay in doing so. No such
failure or delay on the part of Bank or its correspondents shall be deemed a
waiver, and no notice to or demand by the Bank or its correspondents shall
be deemed a waiver of Bank's right to take any other or further action
without notice or demand. Bank's rights and security interests and
Applicant's obligations and liabilities under this Agreement shall continue
unimpaired and this Agreement shall remain binding upon each party hereto
signing as an Applicant, notwithstanding: (a) extension of the maturity or
time for presentation of drafts, acceptances, or documents; (b) any other
modification of the terms of any Letter of Credit at the request of any
party hereto signing as an Applicant, with or without notification to any
other party; or (c) any increase in the amount of any Letter of Credit at
the request of any party hereto. No delay, extension of time, renewal,
compromise or other indulgence which Bank may permit in connection with any
of Bank's rights hereunder shall impair those rights, and Bank shall not be
deemed to have waived any rights unless such waiver is in writing and signed
by Bank or its authorized agent; nor shall any such waiver constitute a
waiver of any other right or of the same right at any future time. Bank's
acceptance or honor of drafts or issuance of a Letter of Credit varying from
the terms of this Agreement will not affect the terms and conditions
applicable to any other drafts or Letters of Credit, whether such other
drafts or Letters of Credit are then existing or subsequently arising.
6
<PAGE>
10. Sole Obligation of Bank.
-----------------------
Without limiting any other provision herein, Bank is hereby expressly
authorized and directed to honor any request for payment which is made under
and in compliance with the terms of any Letter of Credit without regard to,
and without any duty on its part to inquire into, the existence of any
disputes or controversies between the Applicant, the beneficiary of a Letter
of Credit or any other person, firm or corporation, or the respective
rights, duties or liabilities of any of them or whether any facts or
occurrences represented in any of the documents presented under a Letter of
Credit are true or correct. Furthermore, the Applicant fully understands and
agrees that the Bank's sole obligation to Applicant shall be limited to
honoring requests for payment made under and in compliance with the terms of
any Letter of Credit and this Agreement and the Bank's obligation remains so
limited even if the Bank may have assisted Applicant in the preparation of
the wording of any Letter of Credit or any documents required to be
presented thereunder or that the Bank may otherwise be aware of the
underlying transaction giving rise to Letter of Credit and this Agreement
11. Duration of Agreement.
---------------------
This Agreement shall remain in full force and effect as to each and every
transaction between Bank and Applicant up to and including the Maturity Date
set forth above; provided, however no Letter of Credit may have an
expiration date later than such Maturity Date. All indemnities, covenants,
agreements, representations and warranties made in this Agreement shall
survive the issuance by the Bank of the Letters of Credit and shall continue
in full force and effect so long as any Letter of Credit, or any portion
thereof shall be unexpired or any sums drawn thereunder or other amounts
owing hereunder shall remain unpaid, provided, however, that the provisions
of Section 6(b)(iii), 6(c), 7(c), 12(i) and 12(k), 12(l) and 12(n) shall
survive the termination of this Agreement.
12. Miscellaneous Provisions.
------------------------
a) The Letters of Credit and this Agreement shall be
governed by and construed in accordance with the
laws of the State of California applicable to
contracts made and to be wholly performed within
such State. Unless inconsistent with such state
law or except so far as otherwise expressly stated
in the Letter of Credit, the Letters of Credit and
this Agreement are subject to the terms of the UCP
in effect on the date of the Application; provided,
however, without limiting the foregoing, Articles
41 and 43 of the UCP 500 shall have no application
to the Letters of Credit or this Agreement. In the
absence of proof expressly to the contrary, the UCP
shall serve as evidence of general banking usage.
7
<PAGE>
b) No party to this Agreement may assign its rights or
obligations under this Agreement without the prior
written consent of both the Bank and the Applicant,
except that the obligations of Bank under this
Agreement may be provided or fulfilled by any
affiliate of Bank so long as Bank assumes full
responsibility for such obligations.
c) This Agreement and any exhibits hereto constitute
the entire agreement and contract between the
parties and supersede any and all prior agreements,
proposals, negotiations and representations
pertaining to the obligations and duties to be
performed under this Agreement. No amendments or
modifications of this Agreement shall be valid
unless evidenced in writing and signed by or on
behalf of Applicant and Bank.
d) Except as otherwise provided in this Agreement, all
notices required to be given pursuant to this
Agreement shall be effective when received, and
shall be sufficient if given in writing, hand
delivered, sent by First Class United States Mail,
postage prepaid, by telecopier or air courier and
addressed to the appropriate party at its address
as shown on the signature page hereof or at such
other address as the sending party shall have been
advised in writing.
e) Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of
such prohibition or lack of enforceability without
invalidating the remaining provisions hereof or
affecting the validity or enforceability of such
provision in any other jurisdiction; wherever
possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and
valid under applicable law.
f) This Agreement may be executed in any number of
counterparts and by different parties hereto in
separate counterparts, each of which when so
executed and delivered shall be deemed to be an
original and all of which taken together shall
constitute but one and the same instrument.
g) If this Agreement is signed by two or more
Applicants, it shall constitute the joint and
several agreement of such parties, provided that
the Designated Party (as set forth below) shall
have the exclusive right to issue all instructions
relating to the Letters of Credit including,
without limitation, instructions as to the
disposition of documents and any unutilized funds,
waiver of discrepancies and to agree with the Bank
upon any amendments, modifications, extensions,
renewals or increases in the Letters of Credit or
further financing or refinancing of any transaction
effected hereunder, irrespective of whether the
same may now or hereafter affect the rights of any
party hereto or of their legal representatives,
heirs or assigns. The Designated Party shall have
specimen signatures on file
8
<PAGE>
with the Bank and the Bank may give notices
to the Designated Party without notice to any
other party.
h) Any and all payments made to Bank hereunder shall
be made free and clear of, and without deduction
for, any present or future taxes, levies, imposts,
deductions, charges or withholdings of any nature,
and all liabilities with respect thereto, excluding
taxes imposed on net income of the Bank and all
income and franchise taxes of the United States and
any political subdivision thereof imposed on the
Bank and any penalties for late taxes due
thereunder (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and
liabilities are referred to herein as "Taxes"). If
the Applicant shall be required by law to deduct
any Taxes from or in respect to any sum payable
hereunder (i) the sum payable shall be increased as
may be necessary so that after making all required
deductions (including deductions applicable to
additional sums payable under this Section 12(i),
the Bank shall receive an amount equal to the sum
the Bank would have received had no deductions been
made; (ii) the Applicant shall make all such
deductions; and (iii) the Applicant shall pay the
full amount deducted to the relevant taxation
authority or other authority in compliance with
applicable law. The Applicant shall indemnify the
Bank for the full amount of Taxes (including,
without limitation, any Taxes imposed by any
jurisdiction on amounts payable hereunder) paid by
the Bank and any liability (including penalties,
interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes were
correctly or legally asserted. Applicant reserves
the right to present a claim to the Bank for taxes
paid that the Applicant believes were incorrectly
or illegally asserted; provided that, the Bank is
under no obligation to honor such claim unless the
Bank has been fully reimbursed for such tax
payments arising from incorrectly or illegally
asserted taxes. Payment upon this indemnification
shall be made within thirty (30) days from the date
the Bank makes written demand therefor. Within
thirty (30) days after date of the payment of
Taxes, the Applicant will furnish to the Bank the
original or certified copy of a receipt evidencing
payment thereof.
i) If any of the Letters of Credit shall contain any
provision for automatic renewal, the Applicant
acknowledges and agrees that the Bank is under no
obligation to allow such renewal to occur and any
such renewal shall remain within the sole and
absolute discretion of the Bank. The Applicant
hereby irrevocably consents to the automatic
renewal of each such Letter of Credit in accordance
with its terms should the Bank decide to allow such
renewal to occur; provided, however, that the
Applicant shall have the right to request the Bank
to disallow such renewal on the condition that the
Applicant shall give the Bank prior written notice
of such request not
9
<PAGE>
less than thirty (30) days prior to the deadline
imposed upon the Bank for notification to the
beneficiary of non-renewal of the Letter of Credit.
j) Each party signing as Applicant and any guarantor
thereof agrees that if any amount paid to the Bank
hereunder is rescinded or must be otherwise
restored or returned by the Bank due to the
insolvency, bankruptcy, liquidation or
reorganization of any party hereto, each party's
obligations hereunder with respect to each such
amount shall be reinstated to the same extent as if
such payment had not been made.
k) Regardless of the expiration date of any Letter of
Credit, the Applicant shall remain liable hereunder
until the Bank is released from liability by every
person, firm, corporation or other entity which is
entitled to draw or demand payment under the Letter
of Credit.
l) Applicant agrees to indemnify and hold Bank
harmless from each and every claim, demand,
liability, loss incurred, cost or expense
(including, but not limited to, reasonable
attorneys' fees and court costs) which may arise or
be created by Bank's acceptance of
telecommunication instructions in connection with
the Letters of Credit, including, but not limited
to, telephone or facsimile instructions in
connection with any waiver of discrepancies.
m) Applicant, or in the case of more than one person
signing as Applicant, the Designated Party, agrees
to examine promptly all instruments and documents
delivered to the Applicant or Designated Party, as
the case may be, from time to time and in the event
the Applicant or Designated Party shall have any
claim of non-compliance with their instructions or
of discrepancies or other irregularity, the
Applicant or the Designated Party, as the case may
be, shall immediately notify the Bank thereof in
writing. The Applicant and the Designated Party
shall conclusively be deemed to have waived any
such claim against the Bank unless such notice is
given within 14 business days after the Applicant
or Designated Party has received constructive
notice of non-compliance with their instructions or
of discrepancies or other irregularities.
n) For multiple parties signing as Applicant, such
parties may request that the Letter of Credit be
issued with the name of one of the Applicants, and
agree that such Applicant shall be the Designated
Party for the purposes of this Agreement.
o) The parties hereto each hereby submit to the
jurisdiction of the courts of the State of
California, the venue of which shall be in the
County of Los Angeles and the United States
District Court located in such County, as well as
to the jurisdiction of all courts to which an
appeal may be taken or
10
<PAGE>
other review sought from the aforesaid courts, for
the purpose of any suit, action or other proceeding
arising out of Applicant's obligations under or with
respect to this Agreement and the Letters of Credit and
expressly waives any and all objections it may have
as to venue in any such courts.
IN WITNESS WHEREOF, Applicant and Bank have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
CALMAT CO. BANK
By: /s/ Edward J. Kelly By: /s/ John H. Penfield
______________________ ______________________
Edward J. Kelly John H. Penfield
Title: Sr. Vice President, Treasurer Title: Vice President
and Chief Accounting Officer
By: /s/ Richard S. Yamashita By: /s/ David J. Stassel
________________________ ______________________
Richard S. Yamashita David J. Stassel
Title: Assistant Treasurer Title: Vice President
Address: Address:
3200 San Fernando 300 South Grand Avenue
Los Angeles, California 90065 Suite 1115
Los Angeles, California 90071
Attn: Treasury Department Attn: David J. Stassel,
Vice President
APPLICANT Address:
3200 San Fernando
Los Angeles, California
By: /s/ Edward J. Kelly
______________________
Edward J. Kelly
Title: Sr. Vice President, Treasurer
and Chief Accounting Officer
By:______________________
Richard S. Yamashita
Title: Assistant Treasurer
11
<PAGE>
Exhibit 2
Application for a
Standby Letter of Credit
September 26, 1995
ABN AMRO Bank N.V.
Los Angeles International Branch
300 South Grand Avenue, Suite 1115
Los Angeles, California 90071
Attn: Ms. Lily Yang
Assistant Vice President and
Manager, Trade Services
Reference: Request for Standby Letter of Credit to be issued to:
(Beneficiary name)
Dear Lily:
CalMat Co. hereby authorizes ABN AMRO Bank to issue an Irrevocable Standby
Letter of Credit by teletransmission (or other means as CalMat determines) to:
Beneficiary: (Beneficiary name and full address)
Attn: (Beneficiary contact plus telephone number)
Amount: USD $________________
For the account of: CalMat Co. (and, where applicable, a CalMat subsidiary
as Co-applicant).
<PAGE>
- - --------------------------------------------------------------------------------
BENEFICIARY NAME
Standby Letter of Credit
- - --------------------------------------------------------------------------------
BEGIN TEXT
- - ----------
We hereby establish our irrevocable Standby Letter of Credit No. ______________
for the account of CalMat Co. as follows:
insert appropriate text; as an example:
For an amount not to exceed USD ___________________________________________
available by sight draft drawn on us by the Beneficiary in an amount not to
exceed the amount of this Standby Letter of Credit. Such sight draft to be
presented to us at _______________________ (bank location) ______________,
not later than (insert date), and to be accompanied by this Standby Letter
of Credit together with the following:
A Certificate executed by an officer of (Beneficiary), reading as follows:
"We are drawing under ___________________ (Bank Name) ______________ Letter of
Credit Number ______________ because .... (insert appropriate language, if
any)."
The sight draft will be honored and payment will be made by us on presentation
to us on or before (insert date), at which time this Standby Letter of Credit
expires, and becomes null and void, whether it is returned to us or not.
END TEXT
- - --------
- - --------------------------------------------------------------------------------
2
<PAGE>
Expiry Date of Standby Letter of Credit: (repeated date insertion)
STANDBY LETTER OF CREDIT TEXT ATTACHED
- - --------------------------------------
In consideration of your issuing this letter of credit pursuant to this
request/application, or amendment thereto requested by us, we agree with you
that it is established subject to the Master Letter of Credit Agreement on
file with you.
This letter of credit is subject to the Uniform Customs and Practices for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500.
For questions and clarification of any terms or conditions you may contact
(a CalMat contact) at (213) 258-2777.
Regards,
CalMat Co.
By:________________________
(authorized signer)
- - --------------------------------------------------------------------------------
3
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0
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