Second Amendment to Members Operating Agreement




 EXHIBIT 10.18.1 
  
 AMENDMENT NO. TWO TO MEMBERS
OPERATING AGREEMENT 
 OF WEST VALLEY MRF, LLC

 (SPECIAL ALLOCATION OF DEPRECIATION) 
  
 This AMENDMENT NO. TWO TO MEMBER OPERATING AGREEMENT
(“Amendment”) is made and entered into by and between Kaiser Recycling, LLC, a Delaware limited liability company “Kaiser”), and West Valley Recycling & Transfer, Inc., a California corporation
(“WVRT”) to be effective as the date specified herein. 
  
 RECITALS 
  
 A. Kaiser and WVRT are
the current members of West Valley MRF, LLC, a California limited liability company (the “Company”). In November 2001, Kaiser Recycling Corporation, an original member of the Company, converted from a corporation to a limited
liability company by a merger with and into Kaiser. Kaiser Recycling Corporation’s parent company, Kaiser Ventures Inc. also converted from a corporation to a limited liability company. 
  
 B. As result of the above referenced conversions to limited liability
companies, the United States Internal Revenue Code of 1986, as amended, required that the Company modify its then current rate of depreciation by effectively treating the assets being depreciated at the time of the conversion as being first placed
in service effective as of December 1, 2002. In recognition of the changed depreciation schedule, the parties desire to make a special allocation of the depreciation expense for the assets being depreciated at the time of the conversion.
Accordingly, the parties hereto desire to amend Exhibit “G” to the Members Operating Agreement of West Valley MRF, LLC dated effective June 19, 1997, as amended by Amendment No. One dated October 31, 1997 (as amended, the
“Operating Agreement”), which exhibit is a part of the Operating Agreement, as provided in this Amendment. 
  
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows: 
  
 1. RECITALS.
The foregoing “Recitals” are incorporated herein and made a part of this Amendment by this reference. 
  
 2. DEFINITION OF EXCESS DEPRECIATION. Exhibit “G” of
the Operating Agreement is hereby amended by the addition of a new Section 1.1.1 to Exhibit “G” defining the term “Excess Depreciation” as follows: 
  
 “1.1.1 “Excess Depreciation” shall be the amount of
depreciation equal to the amount of depreciation that WVRT receives on a cumulative basis pursuant to Section 3.3 that exceeds the amount of depreciation that Kaiser receives under that section.”  
  

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 3. AMENDMENT OF EXHIBIT “G.” Exhibit
“G” of the Operating Agreement is hereby amended by the addition of the following new Sections 3.3 and 3.4. 
  
 “3.3 SPECIAL ALLOCATION OF
DEPRECIATION. Notwithstanding anything contained herein to the contrary, commencing effective December 1, 2001, there shall be a special allocation of depreciation between the Members as
set forth in Schedule G-1, attached hereto and incorporated herein by this reference. For all assets acquired and placed into service after December 1, 2001, there shall be no special allocation of depreciation and the deprecation expense shall be
allocated between the Members as provided in this Exhibit G and the Members Operating Agreement of West Valley MRF, LLC. 
  
 3.4 SPECIAL ALLOCATION. In the event of a sale of the business of the Company resulting in a
taxable gain, prior to any other allocations of income, gain, loss or deduction; WVRT will receive an allocation of gain equal to the Excess Depreciation it has received up to the date of sale. In the event of a sale of the business resulting in a
taxable loss, prior to any other allocations of income, gain, loss or deduction, Kaiser will receive an allocation of loss equal to the Excess Depreciation WVRT has received up to the date of sale. Any remaining income, gain, loss or deduction will
be allocated among the Members as provided in this Exhibit G and the Members Operating Agreement of West Valley MRF, LLC. 
  
 4. EFFECTIVE DATE OF AMENDMENT. This Amendment shall be effective as of
December 1, 2001, notwithstanding the actual date of signature by Kaiser or WVRT. 
  
 5. NO OTHER MODIFICATIONS. Except as expressly amended by this Amendment, the provisions of the Operating Agreement are not otherwise modified,
altered or amended. 
  
 6. GOVERNING
LAW. This Agreement is executed and delivered in, and shall be governed by and construed in accordance with, the laws of the State of California and, where applicable, other local, state, and federal rules,
regulations, ordinances, statutes, and laws. 
  
 IN WITNESS
WHEREOF, this Amendment is executed by the members of the Company to be effective as specified in Paragraph 4 of this Amendment. 
  

							
	“WVRT”	  	“KAISER”
	WEST VALLEY RECYCLING & TRANSFER, INC.	  	KAISER RECYCLING, LLC
				
	By:	 	 /s/ Cole Burr

	  	By:	 	 /s/ James F. Verhey


	 	 	Cole Burr, President	  	 	 	James F. Verhey

  

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 REVISED SCHEDULE G-1 
  
 WEST VALLEY MRF 
 TECHNICAL TERMINATION DEPRECIATION CALCULATION 
  

											
	 YEAR

	  	 PRIOR TO
 TECHNICAL TERM

	  	 AFTER
 TECH TERM
 ADJUSTED

	  	DIFFERENCE

	 	 	 BWI
 50%

	 
	 2001
	  	1,518,097	  	1,068,625	  	(449,472	)	 	(224,736	)
	 2002
	  	1,742,634	  	1,647,738	  	(94,896	)	 	(47,448	)
	 2003
	  	1,571,587	  	1,426,972	  	(144,615	)	 	(72,308	)
	 2004
	  	1,453,845	  	1,280,942	  	(172,903	)	 	(86,452	)
	 2005
	  	1,313,083	  	1,198,409	  	(114,674	)	 	(57,337	)
	 2006
	  	1,227,115	  	1,171,043	  	(56,072	)	 	(28,036	)
	 2007
	  	1,192,831	  	1,123,405	  	(69,426	)	 	(34,713	)
	 2008
	  	995,412	  	1,085,077	  	89,665	 	 	44,832	 
	 2009
	  	818,289	  	940,938	  	122,649	 	 	61,324	 
	 2010
	  	820,391	  	942,983	  	122,592	 	 	61,296	 
	 2011
	  	622,393	  	922,081	  	299,688	 	 	149,844	 
	 2012
	  	438,300	  	394,289	  	(44,011	)	 	(22,005	)
	 2013
	  	483,300	  	394,278	  	(44,022	)	 	(22,011	)
	 2014
	  	438,300	  	394,032	  	(44,268	)	 	(22,134	)
	 2015
	  	438,300	  	394,032	  	(44,268	)	 	(22,134	)
	 2016
	  	422,621	  	392,148	  	(30,473	)	 	(15,236	)
	 2017
	  	414,781	  	371,427	  	(43,354	)	 	(21,677	)
	 2018
	  	249,001	  	371,427	  	122,426	 	 	61,213	 
	 2019
	  	240,207	  	371,427`	  	131,220	 	 	65,610	 
	 2020
	  	240,207	  	371,427	  	131,220	 	 	65,610	 
	 2021
	  	201,762	  	362,539	  	160,777	 	 	80,389	 
	 2022
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2023
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2024
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2025
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2026
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2027
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2028
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2029
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2030
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2031
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2032
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2033
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2034
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2035
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2036
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2037
	  	166,394	  	158,116	  	(8,278	)	 	(4,139	)
	 2038
	  	97,119	  	158,116	  	60,997	 	 	30,499	 
	 2039
	  	93,315	  	158,116	  	64,801	 	 	32,401	 
	 2040
	  	81,130	  	157,314	  	76,184	 	 	38,092	 
	 2041
	  	34,666	  	137,342	  	102,676	 	 	51,338	 
	 	  	
	  	
	  	
	
	 	
	

	 Total
	  	19,765,990	  	19,765,990	  	(0	)	 	(0	)

  
  

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 WEST VALLEY MRF 
  
 TECHNICAL TERMINATION
DEPRECIATION CALCULATION 
  

								
	 YEAR

	  	UNADJUSTED

	  	ADJUSTED

	  	DIFFERENCE

	 
	 2001
	  	1,518,097	  	1,068,625	  	(449,472	)
	 2002
	  	1,742,634	  	1,647,738	  	(94,896	)
	 2003
	  	1,582,223	  	1,439,136	  	(143,087	)
	 2004
	  	1,472,046	  	1,298,027	  	(174,019	)
	 2005
	  	1,327,720	  	1,212,287	  	(115,433	)
	 2006
	  	1,239,206	  	1,182,631	  	(56,575	)
	 2007
	  	1,203,104	  	1,133,356	  	(69,748	)
	 2008
	  	1,005,685	  	1,095,028	  	89,343	 
	 2009
	  	828,562	  	950,889	  	122,327	 
	 2010
	  	828,391	  	950,889	  	122,498	 
	 2011
	  	628,120	  	927,942	  	299,822	 
	 2012
	  	444,027	  	400,150	  	(43,877	)
	 2013
	  	444,027	  	400,139	  	(43,888	)
	 2014
	  	444,027	  	399,893	  	(44,134	)
	 2015
	  	444,027	  	399,893	  	(44,134	)
	 2016
	  	428,348	  	398,009	  	(30,339	)
	 2017
	  	420,508	  	377,288	  	(43,220	)
	 2018
	  	254,728	  	377,288	  	122,560	 
	 2019
	  	245,934	  	377,288	  	131,354	 
	 2020
	  	245,934	  	377,288	  	131,354	 
	 2021
	  	207,490	  	368,400	  	160,910	 
	 2022
	  	172,121	  	163,977	  	(8,144	)
	 2023
	  	172,121	  	163,977	  	(8,144	)
	 2024
	  	172,121	  	163,977	  	(8,144	)
	 2025
	  	172,121	  	163,977	  	(8,144	)
	 2026
	  	172,121	  	163,977	  	(8,144	)
	 2027
	  	172,121	  	163,977	  	(8,144	)
	 2028
	  	172,121	  	163,977	  	(8,144	)
	 2029
	  	172,121	  	163,977	  	(8,144	)
	 2030
	  	172,121	  	163,977	  	(8,144	)
	 2031
	  	172,121	  	163,977	  	(8,144	)
	 2032
	  	172,121	  	163,977	  	(8,144	)
	 2033
	  	172,121	  	163,977	  	(8,144	)
	 2034
	  	172,121	  	163,977	  	(8,144	)
	 2035
	  	172,121	  	163,977	  	(8,144	)
	 2036
	  	172,121	  	163,977	  	(8,144	)
	 2037
	  	172,121	  	163,977	  	(8,144	)
	 2038
	  	102,846	  	163,977	  	61,131	 
	 2039
	  	99,042	  	163,977	  	64,935	 
	 2040
	  	86,857	  	163,175	  	76,318	 
	 2041
	  	38,115	  	138,689	  	100,574	 
				
	 Total
	  	20,035,634	  	20,035,634	  	(0	)

  

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