Document:

Exhibit 4.2

 

13% Senior Secured Notes due 2018

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OR TRANSFER. EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE.

 

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE SECURITIES LAWS OF ANY OTHER JURISDICTION (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO

 

 

REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.

 

THIS SECURITY IS A REGULATION S TEMPORARY GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE. EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN THE INDENTURE, NO TRANSFER OR EXCHANGE OF AN INTEREST IN THIS TEMPORARY GLOBAL NOTE MAY BE MADE FOR AN INTEREST IN THE RESTRICTED GLOBAL NOTE. NO EXCHANGE OF AN INTEREST IN THIS TEMPORARY GLOBAL NOTE MAY BE MADE FOR AN INTEREST IN THE REGULATION S GLOBAL NOTE EXCEPT (A) ON OR AFTER THE TERMINATION OF THE DISTRIBUTION COMPLIANCE PERIOD (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) AND (B) UPON DELIVERY OF THE OWNER NOTES CERTIFICATION AND THE TRANSFEREE NOTES CERTIFICATION RELATING TO SUCH INTEREST IN ACCORDANCE WITH THE TERMS OF THE INDENTURE.

 

UNTIL 40 DAYS AFTER THE COMMENCEMENT OF THE OFFERING OF THE 13% SENIOR SECURED NOTES, AN OFFER OR SALE OF THE 13% SENIOR SECURED NOTES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT.

 

THIS 13% SENIOR SECURED NOTES WERE ISSUED WITH ORIGINAL ISSUE DISCOUNT, AS DEFINED IN SECTIONS 1272, 1273, AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE COMPANY WILL, BEGINNING NO LATER THAN TEN (10) DAYS AFTER THE ISSUE DATE, PROMPTLY PROVIDE TO HOLDERS OF THE 13% SENIOR SECURED NOTES UPON REQUEST THE ISSUE PRICE, THE ISSUE DATE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT AND THE YIELD TO MATURITY WITH RESPECT TO THE 13% SENIOR SECURED NOTES. FOR SUCH INFORMATION. PLEASE CONTACT PAUL I. DETW1LER, III, PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY OF THE COMPANY, AT 814-766-2211.

 

 

	
No. S-1
    	
 
    	
CUSIP NO. U64159 AB9
    

 

New Enterprise Stone & Lime Co., Inc.

 

promises to pay to Cede & Co. or registered assigns, the principal sum of SEVEN HUNDRED SEVENTY-FIVE THOUSAND Dollars ($ 775,000) on March 15, 2018.

 

Interest Payment Dates: March 15 and September 15 beginning September 15, 2012

 

Record Dates: March 1 and September 1

 

Reference is made to further provisions of this 13% Senior Secured Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this 13% Senior Secured Note shall not be entitled to any benefits under the Indenture referred to on the reverse hereof or be valid or obligatory for any purpose.

 

 

	
 
    	
NEW ENTERPRISE STONE & LIME CO., INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul I. Detwiler, III
    
	
 
    	
 
    	
Name:
    	
Paul I. Detwiler, III
    
	
 
    	
 
    	
Title:
    	
President, Chief Financial Officer, Secretary
    

 

 

	
This is one of the 13% Senior Secured Notes
    	
 
    
	
referred to in the within-mentioned Indenture:
    	
 
    
	
 
    	
 
    
	
Dated:
    	
March 15, 2012
    	
 
    
	
 
    	
 
    
	
WELLS FARGO BANK, NATIONAL
    	
 
    
	
ASSOCIATION, as Trustee
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Lynn M. Steiner
    	
 
    
				

 

 

[Signature page to Regulation S Global Note]

 

 

13% Senior Secured Notes due 2018

 

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

(1)           Interest.

 

(a)           New Enterprise Stone & Lime Co., Inc., a Delaware corporation, or its successor (together, “NESL” or the “Company”), promise to pay interest on the principal amount of this 13% Senior Secured Note as described below. NESL will pay interest in United States dollars (except as otherwise provided herein) semiannually in arrears on March 15 and September 15, commencing on September 15, 2012 or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on the 13% Senior Secured Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from March 15, 2012 (except as otherwise provided below with respect to PIK Notes); provided that if there is no existing Default or Event of Default in the payment of interest, and if this 13% Senior Secured Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date (but after March 15, 2012), interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of 13% Senior Secured Notes, in which case interest shall accrue from the date of authentication. NESL shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the 13% Senior Secured Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful. Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months. The interest rate on the 13% Senior Secured Notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application.

 

(b)           With respect to any interest payment date on or prior to March 15, 2017, NESL may, at its option, elect (an “Interest Form Election”)  by written notice delivered to the Trustee at least ten (10) Business Days prior to the beginning of the applicable interest period, which the Trustee shall promptly deliver to the Holders, to pay interest on the 13% Senior Secured Notes (i) entirely in cash (“Cash Interest”) or (ii) subject to any Interest Rate Increase, initially at the rate of 4% per annum in cash (“Cash Interest Portion”) and initially at the rate of 9% per annum by increasing the outstanding principal amount of the 13% Senior Secured Notes or by issuing Additional Notes (“PIK Notes”) under the Indenture on the same terms as the Initial Notes (in each case, “PIK Interest”, “PIK Interest Portion” or a “PIK Payment”).

 

In the absence of an Interest Form Election, interest on the 13% Senior Secured Notes will be payable as set forth in clause (ii) of the preceding paragraph. With respect to any interest payment payable after March 15, 2017, interest will be payable solely in cash. Notwithstanding anything to the contrary, the payment of accrued interest in connection with any redemption or purchase of 13% Senior Secured Notes, as described in Sections 3.7, 3.9, 3.10, 4.10 and 4.13 of the Indenture shall be made solely in cash.

 

 

In addition, at the beginning of and with respect to each 12-month period that begins on March 15, 2013, March 15, 2014 and March 15, 2015, the interest rate on the 13% Senior Secured Notes as of such date shall permanently increase by an additional 1.0% per annum (an “Interest Rate Increase”) unless NESL delivers a written notice to the Trustee at least ten (10) Business Days prior to the beginning of each such 12-month period, which the Trustee shall promptly deliver to the Holders, of NESL’s election for such 12-month period to either (x) alter the manner of interest payment on the 13% Senior Secured Notes going forward by increasing the Cash Interest Portion and decreasing the PIK Interest Portion in each case in effect with respect to the immediately preceding interest period for which any PIK interest was paid prior to each such election by, in each case, 1.0% per annum or (y) pay interest on the 13% Senior Secured Notes for such 12-month period entirely in cash (a “12-Month Cash Election”).  In the event of a 12-Month Cash Election for any 12-month period prior to March 15, 2017, the interest rate on the 13% Senior Secured Notes applicable for such 12-month period shall be 1.0% less than the total interest rate applicable to the 13% Senior Secured Notes in effect with respect to the immediately preceding interest period for which any PIK Interest was paid. Any Interest Rate Increase shall be effected by increasing the PIK Interest Portion in effect with respect to the immediately preceding interest period for which any PIK Interest was paid prior to each such Interest Rate Increase. The interest rate on the 13% Senior Secured Notes for and in respect of any 12-month period beginning on March 15, 2016 shall be equal to the interest rate applicable in the immediately preceding interest period; provided that if interest in such immediately preceding interest period was paid entirely as Cash Interest and NESL elects to pay a portion of the interest rate for and in respect of the 12-month period beginning on March 15, 2016 as PIK Interest, the total interest rate for such 12-month period beginning on March 15, 2016 shall be equal to the total interest rate applicable to the 13% Senior Secured Notes in effect with respect to the immediately preceding interest period for which any PIK Interest was paid, with the same split between PIK Interest and Cash interest. If NESL makes a 12-month Cash Election for and in respect of the 12-Month Period beginning on March 15, 2016, the same interest rate will apply for and in respect of the 12-month period beginning on March 15, 2017.

 

At all times, PIK Interest on the 13% Senior Secured Notes will be payable (x) with respect to 13% Senior Secured Notes represented by one or more Global Notes registered in the name of, or held by, The Depository Trust Company (“DTC”) or its nominee on the relevant record date, by increasing the principal amount of the outstanding Global Note by an amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar) as provided in writing by the Company to the Trustee and (y) with respect to 13% Senior Secured Notes represented by certificated 13% Senior Secured Notes, by issuing PIK Notes in certificated form in an aggregate principal amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar), and the Trustee will, at the written request of the Company, authenticate and deliver such PIK Notes in certificated form for original issuance to the Holders on the relevant record date, as shown by the records of the register of Holders. Following an increase in the principal amount of the outstanding Global Notes as a result of a PIK Payment, the 13% Senior Secured Notes will bear interest on such increased principal amount from and after the date of such PIK Payment. Any PIK Notes issued in certificated form will be dated as of the applicable interest payment date and will bear interest from and after such date. All PIK Notes will accrue interest from the date of such PIK Payment, will mature on the same date as the13% Senior Secured Notes and will be

 

 

governed by, and subject to the terms, provisions and conditions of, the Indenture and shall have the same rights and benefits as the 13% Senior Secured Notes other than the date from which interest will start accruing. Any certificated PIK Notes will be issued with the description “PIK” on the face of such PIK Note.

 

(c)           Registration Rights Agreement. The Holder of this 13% Senior Secured Note is entitled to the benefits of a Registration Rights Agreement, dated as of the Issue Date, among the Issuer, the Guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers.

 

(2)           Method of Payment. NESL will pay interest on the 13% Senior Secured Notes (except defaulted interest) on the applicable Interest Payment Date to the Persons who are registered Holders of 13% Senior Secured Notes at the close of business on the March 1 and September 1 preceding the Interest Payment Date, even if such 13% Senior Secured Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The 13% Senior Secured Notes shall be payable as to principal, premium and interest at the office or agency of NESL maintained for such purpose, which initially shall be the office of the Trustee located at MAC N9311-110, 625 Marquette Avenue, Minneapolis, MN 55479, or, at the option of NESL, payment of Cash Interest or the Cash Interest Portion, as applicable, may be made, at the option of the paying agent by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds shall be required with respect to principal of, premium, if any, and Cash Interest or the Cash Interest Portion, as applicable on, all Global Notes and all other 13% Senior Secured Notes the Holders of which shall have provided written wire transfer instructions to NESL and the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

Any payments of principal of this 13% Senior Secured Note prior to Stated Maturity shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. The amount due and payable at the maturity of this Note shall be payable only upon presentation and surrender of this Note at an office of the Trustee or the Trustee’s agent appointed for such purposes.

 

(3)           Paying Agent and Registrar. Initially, Wells Fargo Bank, National Association, the Trustee under the Indenture, shall act as Paying Agent and Registrar. NESL may change any Paying Agent or Registrar without notice to any Holder. NESL or any of its Subsidiaries may act in any such capacity.

 

(4)           Indenture. NESL issued the 13% Senior Secured Notes under an Indenture, dated as of March 15, 2012 (the “Indenture”), among New Enterprise Stone & Lime Co., Inc. and the Trustee. The terms of the 13% Senior Secured Notes include those stated in the Indenture and those made a part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”). To the extent the provisions of this 13% Senior Secured Note are inconsistent with the provisions of the Indenture, the Indenture shall govern.

 

 

The 13% Senior Secured Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. The 13% Senior Secured Notes issued on the Issue Date are senior Obligations of NESL limited to $265,000,000 in aggregate principal amount, plus amounts, if any, sufficient to pay premium and interest on outstanding 13% Senior Secured Notes as set forth in Paragraph 2 hereof. The Indenture permits the issuance of Additional Notes subject to compliance with certain conditions.

 

The payment of principal and interest on the 13% Senior Secured Notes is unconditionally guaranteed on a senior basis by the Guarantors.

 

(5)           Optional Redemption.

 

(a)           The 13% Senior Secured Notes are subject to redemption, at the option of the Company, in whole or in part, at any time on or after March 15, 2015, upon not less than 30 nor more than 60 days’ notice (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of Notes or a satisfaction and discharge of the Indenture) at the following Redemption Prices (expressed as percentages of the principal amount to be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of Holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the redemption date), if redeemed during the 12-month period beginning March 15 of the years indicated:

 

	
 
    	
 
    	
Redemption
    	
 
    
	
Year
    	
 
    	
Price
    	
 
    
	
2015
    	
 
    	
106.500
    	
%
    
	
2016
    	
 
    	
103.250
    	
%
    
	
2017
    	
 
    	
100.000
    	
%
    

 

(b)           At any time prior to March 15, 2015, the Company may also redeem all or a part of the 13% Senior Secured Notes, upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to 100% of the principal amount of 13% Senior Secured Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest thereon, if any, to, but not including, the date of redemption (the “Redemption Date”),  subject to the rights of Holders of 13% Senior Secured Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date.

 

(c)           In addition to the optional redemption of the 13% Senior Secured Notes in accordance with the provisions of the preceding paragraphs, prior to March 15, 2015, the Company may, with the net proceeds of one or more Public Equity Offerings, redeem up to 35% of the aggregate principal amount of the outstanding 13% Senior Secured Notes at a redemption price equal to 113.000% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to the Redemption Date; provided that at least 65% of the principal amount of 13% Senior Secured Notes originally issued under the Indenture remains outstanding immediately after the occurrence of any such redemption (excluding 13% Senior Secured Notes held by the Company or its Subsidiaries) and that any such redemption occurs within 120 days following the closing of any such Public Equity Offering.

 

 

(6)           Mandatory Redemption. Except to the extent NESL may be required to offer to purchase the 13% Senior Secured Notes as set forth in Sections 4.10 and 4.13 and except for a Mandatory Principal Redemption, NESL shall not be required to make mandatory redemption or sinking fund payments with respect to the 13% Senior Secured Notes.

 

(7)           Mandatory Principal Redemption. If the 13% Senior Secured Notes would otherwise constitute “applicable high yield discount obligations” (AHYDO) within the meaning of Section 163(i)(1) of the Internal Revenue Code of 1986, as amended, at the end of the first accrual period ending after the fifth anniversary of the Issue Date and each accrual period thereafter, the Company will be required to redeem for cash a portion of each 13% Senior Secured Note then outstanding equal to the “Mandatory Principal Redemption Amount” as set forth in the Indenture.

 

(8)           Repurchase at Option of Holder.

 

(a)           Upon the occurrence of a Change of Control, each Holder will have the right to require NESL to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000) (or in the case of PIK Notes denominations of $1.00 and any integral multiple of $1.00 in excess thereof) of such Holder’s 13% Senior Secured Notes pursuant to the offer described below (the “Change of Control Offer”) at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest thereon to the date of purchase. Within 30 days following any Change of Control, NESL will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control setting forth the procedures governing the Change of Control Offer required by the Indenture.

 

(b)           Upon the occurrence of certain Asset Sales, the Company may be required to offer to purchase 13% Senior Secured Notes.

 

(c)           Holders of the 13% Senior Secured Notes that are the subject of an offer to purchase will receive notice of an Offer to Purchase pursuant to an Asset Sale or a Change of Control from NESL prior to any related purchase date and may elect to have such 13% Senior Secured Notes purchased by completing the form titled “Option of Holder to Elect Purchase” appearing below.

 

(9)           Notice of Redemption. Notice of redemption shall be mailed at least 30 days but not more than 60 days before a Redemption Date (except that a redemption notice may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of 13% Senior Secured Notes or satisfaction and discharge of Indenture) to each Holder whose 13% Senior Secured Notes are to be redeemed at its registered address. 13% Senior Secured Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 (or in the case of PIK Notes denominations of $1.00 and any integral multiple of $1.00 in excess thereof), unless all of the 13% Senior Secured Notes held by a Holder are to be redeemed. On and after the Redemption Date, interest ceases to accrue on the 13% Senior Secured Notes or portions hereof called for redemption so long as the Company timely delivers funds to the Trustee for such redemption.

 

 

(10)         Denominations, Transfer, Exchange. The 13% Senior Secured Notes are in registered form without coupons in initial denominations of $2,000 and integral multiples of $1,000 (or in the case of PIK Notes denominations of $1.00 and any integral multiple of $1.00 in excess thereof). The transfer of the 13% Senior Secured Notes may be registered and the 13% Senior Secured Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and NESL may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. NESL need not exchange or register the transfer of any 13% Senior Secured Note or portion of a 13% Senior Secured Note selected for redemption, except for the unredeemed portion of any 13% Senior Secured Note being redeemed in part. Also, it need not exchange or register the transfer of any 13% Senior Secured 13% Senior Secured Notes for a period of 15 days before a selection of 13% Senior Secured Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

 

(11)         Persons Deemed Owners. The registered holder of a 13% Senior Secured Note may be treated as its owner for all purposes.

 

(12)         Amendment, Supplement and Waiver. The Indenture, the Security Documents, the Intercreditor the Guarantees or the 13% Senior Secured Notes may be amended or supplemented in accordance with their terms.

 

(13)         Defaults and Remedies.

 

Events of Default shall be as set forth in Article VI of the Indenture.

 

If an Event of Default (other than an Event of Default relating to certain events of bankruptcy or insolvency with respect to the Company) occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the outstanding 13% Senior Secured Notes may declare the principal of the 13% Senior Secured Notes and any accrued interest on the 13% Senior Secured Notes to be due and payable immediately by a notice in writing to the Company (and to the Trustee if given by Holders); provided, however, that after such acceleration, but before a judgment or decree based on acceleration, the Holders of a majority in aggregate principal amount of the outstanding 13% Senior Secured Notes may, under certain circumstances, rescind and annul such acceleration if all Events of Default, other than the nonpayment of accelerated principal of or interest on the 13% Senior Secured Notes, have been cured or waived as provided in the Indenture.

 

In the event of a declaration of acceleration of the 13% Senior Secured Notes solely because an Event of Default relating to default or defaults under any bonds, debentures, notes or other evidences of Debt (other than the 13% Senior Secured Notes) by the Company or any Restricted Subsidiary having, individually or in the aggregate, a principal or similar amount outstanding of at least $25.0 million has occurred and is continuing, the declaration of acceleration of the 13% Senior Secured Notes shall be automatically rescinded and annulled if the event of default or payment default triggering such Event of shall be remedied or cured by the Company or a Restricted Subsidiary of the Company or waived by the holders of the relevant Debt within 20 Business Days after the declaration of acceleration with respect thereto and if the rescission and annulment of the acceleration of the 13% Senior Secured Notes would not conflict

 

 

with any judgment or decree of a court of competent jurisdiction obtained by the Trustee for the payment of amounts due on the 13% Senior Secured Notes.

 

Certain events of bankruptcy or insolvency with respect to the Company are Events of Default which shall result in the 13% Senior Secured Notes being due and payable immediately upon the occurrence of such Events of Default. The Trustee may withhold from Holders notice of any Default (except Default in payment of principal of, premium, if any, and interest) if the Trustee determines that withholding notice is in the interest of the Holders to do so.

 

(14)         Trustee Dealings with NESL. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for NESL, the Guarantors or their respective Affiliates, and may otherwise deal with NESL, the Guarantors or their respective Affiliates, as if it were not the Trustee.

 

(15)         No Recourse Against Others. No director, officer, employee, stockholder, general or limited partner or incorporator, past, present or future, of the Company or any of its Subsidiaries, as such or in such capacity, shall have any personal liability for any obligations of the Company under the 13% Senior Secured Notes, any Note Guarantee or the Indenture by reason of his, her or its status as such director, officer, employee, stockholder, general or limited partner or incorporator.

 

(16)         Authentication. This 13% Senior Secured Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

(17)         Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

(18)         CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the 13% Senior Secured Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to the Holders. No representation is made as to the accuracy of such numbers either as printed on the 13% Senior Secured Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

NESL shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

 

New Enterprise Stone & Lime Co., Inc.

3912 Brumbaugh Road

P.O. Box 77

New Enterprise, PA 16664

Facsimile: (814) 766-0219

Attention: Paul I. Detwiler, III

 

 

ASSIGNMENT FORM

 

To assign this 13% Senior Secured Note, fill in the form below: (I) or (we) assign and transfer this 13% Senior Secured Note to

 

	
 
    	
(Insert assignee’s soc.   sec. or tax I.D. no.)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint 

 

to transfer this 13% Senior Secured Note on the books of NESL. The agent may substitute another to act for him.

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
(Sign exactly as your name appears on the face of this 13% Senior   Secured Note)
    

 

Signature guarantee:

 

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this 13% Senior Secured Note purchased by NESL pursuant to Section 4.10 or 4.13 of the Indenture, check the box below:

 

[  ] Section 4.10    [  ] Section 4.13

 

If you want to elect to have only part of the 13% Senior Secured Note purchased by NESL pursuant to Section 4.10 or Section 4.13 of the Indenture, state the amount you elect to have purchased: $

 

 

	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
(Sign exactly as your name appears on the 13% Senior Secured Note)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Tax Identification No.:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature guarantee:
    	
 
    
						

 

 

[Form of]

INTEREST FORM ELECTION

 

Wells Fargo Bank, National Association

MAC N9311-110

625 Marquette Avenue

Minneapolis, MN 55479

Attention: New Enterprise Stone & Lime Administrator

 

[  ], 20[  ]

 

(1)

 

	
 
    	
Re: CUS1P #
    

 

This Interest Form Election is delivered to you pursuant to that certain Indenture dated March 15, 2012 (the “Indenture”)  among New Enterprise Stone & Lime Co., Inc. (“NESL”), Wells Fargo Bank, National Association, as trustee, and Wells Fargo Bank, National Association, as collateral agent. Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture.

 

NESL hereby irrevocably elects to pay interest on Notes in respect of the interest payment on [       ], [       ](2) in the form of(3):

 

	
 
    	
[  ] 100% Cash Option
    
	
 
    	
[  ] %   Applicable Cash Rate
    
	
 
    	
 
    
	
 
    	
OR
    
	
 
    	
 
    
	
 
    	
[  ] Cash/PIK Option
    
	
 
    	
[  ] %   Applicable Cash Rate
    
	
 
    	
[  ] %   Applicable PIK Rate
    

 

[Signature Page Follows]

 

	
(1)
    	
Must be dated and delivered to Trustee at least 10 Business Days   prior to the beginning of the relevant interest period.
    
	
 
    	
 
    
	
(2)
    	
May only be an interest payment date on or prior to   March 15, 2017.
    
	
 
    	
 
    
	
(3)
    	
Check the appropriate box and specify the applicable rate for such   period, including giving effect to any prior period interest rate increases.
    

 

 

NESL has caused this Interest Form Election to be executed and delivered by its duly authorized officer as of the date first written above.

 

	
 
    	
NEW ENTERPRISE STONE & LIME CO., INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

[Form of]

12-MONTH CASH ELECTION

 

Wells Fargo Bank, National Association

MAC N9311-110

625 Marquette Avenue

Minneapolis, MN 55479

Attention: New Enterprise Stone & Lime Administrator

 

[  ], 20[  ](1)

 

	
 
    	
Re: CUSIP #
    

 

This 12 Month Cash Election is delivered to you pursuant to that certain Indenture dated March 15, 2012 (the ‘‘Indenture”) among New Enterprise Stone & Lime Co., Inc. (the “NESL”),  Wells Fargo Bank, National Association, as trustee, and Wells Fargo Bank, National Association, as collateral agent. Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture.

 

NESL hereby irrevocably elects, in respect of the 12-month period beginning on               , 20[  ] including the interest payment dates on                    and                    to pay interest on the Notes entirely in cash.

 

[Signature Page Follows]

 

(1)           Must be dated and delivered to Trustee at least 10 business days prior to the beginning of the relevant interest period.

 

 

NESL has caused this 12-Month Cash Election to be executed and delivered by its duly authorized officer as of the date first written above.

 

 

	
 
    	
NEW ENTERPRISE STONE & LIME CO., INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

CERTIFICATE TO BE DELIVERED UPON

EXCHANGE OF TRANSFER RESTRICTED NOTES

 

New Enterprise Stone & Lime Co., Inc.

3912 Brumbaugh Road

P.O. Box 77

New Enterprise, PA 16664

Facsimile: (814) 766-0219

Attention: Paul I. Detwiler, III

 

Wells Fargo Bank, National Association

MAC N9311-110

625 Marquette Avenue

Minneapolis, MN 55479

Attention: New Enterprise Stone & Lime Administrator

 

	
 
    	
Re: CUSIP #
    

 

Reference is hereby made to that certain Indenture dated March 15, 2012 (the “Indenture”) among New Enterprise Stone & Lime Co., Inc. (“NESL”),  Wells Fargo Bank, National Association, as trustee (the “Trustee”),  and Wells Fargo Bank, National Association, as collateral agent (the “Notes Collateral Agent”). Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture.

 

This certificate relates to $              principal amount of Notes held in (check applicable space)         book-entry or         definitive form by the undersigned.

 

The undersigned                                (transferor) (check one box below):

 

	
o
    	
hereby requests the Registrar to deliver in exchange for its   beneficial interest in the Global Note held by the Depositary a Note or Notes   in definitive, registered form of authorized denominations and an aggregate   principal amount equal to its beneficial interest in such Global Note (or the   portion thereof indicated above), in accordance with Section 2.6 of the   Indenture;
    
	
 
    	
 
    
	
o
    	
hereby requests the Trustee to exchange a Note or Notes to                                 (transferee).
    

 

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the periods referred to in Rule 144(k) under the Securities Act of 1933, as amended, the undersigned confirms that such Notes are being transferred in accordance with its terms:

 

CHECK ONE BOX BELOW:

 

	
(1)
    	
o
    	
to  NESL or any of its   subsidiaries; or
    

 

 

	
(2)
    	
o
    	
inside the United States to a “qualified institutional buyer” (as   defined in Rule 144A under the Securities Act of 1933, as amended) that   purchases for its own account or for the account of a qualified institutional   buyer to whom notice is given that such transfer is being made in reliance on   Rule 144A under the Securities Act of 1933, as amended, in each case   pursuant to and in compliance with Rule 144A thereunder; or
    
	
 
    	
 
    	
 
    
	
(3)
    	
o
    	
outside the United States in an offshore transaction within the   meaning of Regulation S under the Securities Act of 1933, as amended, in   compliance with Rule 904 thereunder.
    

 

 

Unless one of the boxes is checked, the Registrar will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof.

 

	
 
    	
 
    
	
 
    	
Signature
    
	
 
    
	
Signature Guarantee:
    	
 
    
	
 
    	
(Signature must be guaranteed by a participant in a recognized   signature guarantee medallion program)
    
			

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

 

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”), and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

	
 
    	
[Name of Transferee]
    
	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
NOTICE: To be executed by an executive officer
    
				

 

 

SCHEDULE OF EXCHANGES OF 13% SENIOR SECURED NOTES

 

The following exchanges of a part of this Global Note for other 13% Senior Secured Notes have been made:

 

	
Date of Exchange
    	
 
    	
Amount of Decrease
   in Principal Amount
   of this Global Note
    	
 
    	
Amount of Increase
   in Principal Amount
   of this Global Note
    	
 
    	
Principal Amount of
   this Global Note
   Following Such
   Decrease (or
   Increase)
    	
 
    	
Signature of
   Authorized Officer
   of Trustee or 13%
   Senior Secured Note
   Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

NOTATION OF NOTE GUARANTEE

 

The Guarantor listed below (hereinafter referred to as the “Guarantor,”  which term includes any successors or assigns under that certain Indenture, dated as of March 15, 2012, by and among New Enterprise Stone & Lime Co., Inc. (“NESL”), the Trustee and the Notes Collateral Agent (as amended and supplemented from time to time, the “Indenture”) and any additional Guarantor, has guaranteed the Notes and the obligations of NESL under the Indenture, which include (i) the due and punctual payment of the principal of, premium, if any, and interest on the 13% Senior Secured Notes due 2018 (the “Notes”) of New Enterprise Stone & Lime Co., Inc., a Delaware corporation, whether at stated maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal and premium, if any, and (to the extent permitted by law) interest on any interest, if any, on the Notes, and the due and punctual performance of all other obligations of NESL to the Holders or the Trustee all in accordance with the terms set forth in Article X of the Indenture, (ii) in case of any extension of time of payment or renewal of any Notes or any such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise, and (iii) the payment of any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Note Guarantee or the Indenture.

 

The obligations of each Guarantor to the Holders and to the Trustee pursuant to this Note Guarantee and the Indenture are expressly set forth in Article X of the Indenture and reference is hereby made to such Indenture for the precise terms of this Note Guarantee.

 

No stockholder, employee, officer, director or incorporator, as such, past, present or future of each Guarantor shall have any liability under this Note Guarantee by reason of his or its status as such stockholder, employee, officer, director or incorporator.

 

This is a continuing Note Guarantee and shall remain in full force and effect and shall be binding upon each Guarantor and its successors and assigns until full and final payment of all of NESL’s obligations under the Notes and Indenture or until released in accordance with the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders, and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a Note Guarantee of payment and not of collectibility.

 

This Note Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Note Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. The Obligations of each Guarantor under its Note Guarantee shall be limited to the extent necessary to insure that it does not constitute a fraudulent conveyance under applicable law.

 

 

THE TERMS OF ARTICLE X OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

 

Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated.

 

	
Dated as of March 15, 2012
    	
 
    
	
 
    	
 
    
	
 
    	
ASTI TRANSPORTATION SYSTEMS, INC.
    
	
 
    	
EII TRANSPORT INC.
    
	
 
    	
GATEWAY TRADE CENTER INC.
    
	
 
    	
PRECISION SOLAR CONTROLS INC.
    
	
 
    	
PROTECTION SERVICES INC.
    
	
 
    	
SCI PRODUCTS INC
    
	
 
    	
WORK AREA PROTECTION CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul I. Detwiler, III
    
	
 
    	
 
    	
Name:
    	
Paul I. Detwiler, III
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

 

[Signature Page to Notation of Regulation S Note Guarantee]

 

 

13% Senior Secured Notes due 2018

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE.

 

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (l)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE SECURITIES LAWS OF ANY OTHER JURISDICTION (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO

 

 

REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.

 

THIS 13% SENIOR SECURED NOTES WERE ISSUED WITH ORIGINAL ISSUE DISCOUNT, AS DEFINED IN SECTIONS 1272, 1273, AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE COMPANY WILL, BEGINNING NO LATER THAN TEN (10) DAYS AFTER THE ISSUE DATE, PROMPTLY PROVIDE TO HOLDERS OF THE 13% SENIOR SECURED NOTES UPON REQUEST THE ISSUE PRICE, THE ISSUE DATE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT AND THE YIELD TO MATURITY WITH RESPECT TO THE 13% SENIOR SECURED NOTES. FOR SUCH INFORMATION, PLEASE CONTACT PAUL I. DETWILER, III, PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY OF THE COMPANY, AT 814-766-2211.

 

 

	
No. A-1
    	
 
    	
CUSIP NO. 644274 AC6
    

 

New Enterprise Stone & Lime Co., Inc.

 

promises to pay to Cede & Co. or registered assigns, the principal sum of TWO HUNDRED SIXTY-FOUR MILLION TWO HUNDRED TWENTY-FIVE THOUSAND Dollars ($ 264,225,000) on March 15, 2018.

 

Interest Payment Dates: March 15 and September 15 beginning September 15, 2012

 

Record Dates: March 1 and September 1

 

Reference is made to further provisions of this 13% Senior Secured Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this 13% Senior Secured Note shall not be entitled to any benefits under the Indenture referred to on the reverse hereof or be valid or obligatory for any purpose.

 

 

	
 
    	
NEW   ENTERPRISE STONE & LIME CO., INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paul I. Detwiler, III
    
	
 
    	
 
    	
Name:
    	
Paul   I. Detwiler, III
    
	
 
    	
 
    	
Title:
    	
President,   Chief Financial Officer, Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
This   is one of the 13% Senior Secured Notes
    	
 
    
	
referred   to in the within-mentioned Indenture:
    	
 
    
	
 
    	
 
    
	
Dated:
    	
March 15,   2012
    	
 
    	
 
    
	
 
    	
 
    
	
WELLS   FARGO BANK, NATIONAL
    	
 
    
	
ASSOCIATION, as Trustee
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Lynn M. Steiner
    	
 
    	
 
    
								

 

 

[Signature page to Rule 144A Global Note]

 

 

13% Senior Secured Notes due 2018

 

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

(1)            Interest.

 

(a)            New Enterprise Stone & Lime Co., Inc., a Delaware corporation, or its successor (together, “NESL” or the “Company”), promise to pay interest on the principal amount of this 13% Senior Secured Note as described below. NESL will pay interest in United States dollars (except as otherwise provided herein) semiannually in arrears on March 15 and September 15, commencing on September 15, 2012 or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on the 13% Senior Secured Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from March 15, 2012 (except as otherwise provided below with respect to PIK Notes); provided that if there is no existing Default or Event of Default in the payment of interest, and if this 13% Senior Secured Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date (but after March 15, 2012), interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of 13% Senior Secured Notes, in which case interest shall accrue from the date of authentication. NESL shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the 13% Senior Secured Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful. Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months. The interest rate on the 13% Senior Secured Notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application.

 

(b)            With respect to any interest payment date on or prior to March 15, 2017, NESL may, at its option, elect (an “Interest Form Election”) by written notice delivered to the Trustee at least ten (10) Business Days prior to the beginning of the applicable interest period, which the Trustee shall promptly deliver to the Holders, to pay interest on the 13% Senior Secured

Notes (i) entirely in cash (“Cash Interest”) or (ii) subject to any Interest Rate Increase, initially at the rate of 4% per annum in cash (“Cash Interest Portion”) and initially at the rate of 9% per  annum by increasing the outstanding principal amount of the 13% Senior Secured Notes or by issuing Additional Notes (“PIK Notes”) under the Indenture on the same terms as the Initial Notes (in each case, “PIK Interest”, “PIK Interest Portion” or a “PIK Payment”).

 

In the absence of an Interest Form Election, interest on the 13% Senior Secured Notes will be payable as set forth in clause (ii) of the preceding paragraph. With respect to any interest payment payable after March 15, 2017, interest will be payable solely in cash. Notwithstanding anything to the contrary, the payment of accrued interest in connection with any redemption or purchase of 13% Senior Secured Notes, as described in Sections 3.7, 3.9, 3.10, 4.10 and 4.13 of the Indenture shall be made solely in cash.

 

 

In addition, at the beginning of and with respect to each 12-month period that begins on March 15, 2013, March 15, 2014 and March 15, 2015, the interest rate on the 13% Senior Secured Notes as of such date shall permanently increase by an additional 1.0% per annum (an “Interest Rate Increase”) unless NESL delivers a written notice to the Trustee at least ten (10) Business Days prior to the beginning of each such 12-month period, which the Trustee shall promptly deliver to the Holders, of NESL’s election for such 12-month period to either (x) alter the manner of interest payment on the 13% Senior Secured Notes going forward by increasing the Cash Interest Portion and decreasing the PIK Interest Portion in each case in effect with respect to the immediately preceding interest period for which any PIK interest was paid prior to each such election by, in each case, 1.0% per annum or (y) pay interest on the 13% Senior Secured Notes for such 12-month period entirely in cash (a “12-Month Cash Election”). In the event of a 12-Month Cash Election for any 12-month period prior to March 15, 2017, the interest rate on the 13% Senior Secured Notes applicable for such 12-month period shall be 1.0% less than the total interest rate applicable to the 13% Senior Secured Notes in effect with respect to the immediately preceding interest period for whish any PIK Interest was paid. Any Interest Rate Increase shall be effected by increasing the PIK interest Portion in effect with respect to the immediately preceding interest period for which any PIK Interest was paid prior to each such Interest Rate Increase. The interest rate on the 13% Senior Secured Notes for and in respect of any 12-month period beginning on March 15, 2016 shall be equal to the interest rate applicable in the immediately preceding interest period; provided that if interest in such immediately preceding interest period was paid entirely as Cash Interest and NESL elects to pay a portion of the interest rate for and in respect of the 12-month period beginning on March 15, 2016 as PIK Interest, the total interest rate for such 12-month period beginning on March 15, 2016 shall be equal to the total interest rate applicable to the 13% Senior Secured Notes in effect with respect to the immediately preceding interest period for which any PIK Interest was paid, with the same split between PIK Interest and Cash interest. If NESL makes a 12-month Cash Election for and in respect of the 12-Month Period beginning on March 15, 2016, the same interest rate will apply for and in respect of the 12-month period beginning on March 15, 2017.

 

At all times, PIK Interest on the 13% Senior Secured Notes will be payable (x) with respect to 13% Senior Secured Notes represented by one or more Global Notes registered in the name of, or held by. The Depository Trust Company (“DTC”) or its nominee on the relevant record date, by increasing the principal amount of the outstanding Global Note by an amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar) as provided in writing by the Company to the Trustee and (y) with respect to 13% Senior Secured Notes represented by certificated 13% Senior Secured Notes, by issuing PIK Notes in certificated form in an aggregate principal amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar), and the Trustee will, at the written request of the Company, authenticate and deliver such PIK Notes in certificated form for original issuance to the Holders on the relevant record date, as shown by the records of the register of Holders. Following an increase in the principal amount of the outstanding Global Notes as a result of a PIK Payment, the 13% Senior Secured Notes will bear interest on such increased principal amount from and after the date of such PIK Payment. Any PIK Notes issued in certificated form will be dated as of the applicable interest payment date and will bear interest from and after such date. All PIK Notes will accrue interest from the date of such PIK Payment, will mature on the same date as the l3% Senior Secured Notes and will be

 

 

governed by, and subject to the terms, provisions and conditions of, the Indenture and shall have the same rights and benefits as the 13% Senior Secured Notes other than the date from which interest will start accruing. Any certificated PIK Notes will be issued with the description “PIK” on the face of such PIK Note.

 

(c)            Registration Rights Agreement. The Holder of this 13% Senior Secured Note is entitled to the benefits of a Registration Rights Agreement, dated as of the Issue Date, among the Issuer, the Guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers.

 

(2)            Method of Payment. NESL will pay interest on the 13% Senior Secured Notes (except defaulted interest) on the applicable Interest Payment Date to the Persons who are registered Holders of 13% Senior Secured Notes at the close of business on the March 1 and September 1 preceding the Interest Payment Date, even if such 13% Senior Secured Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The 13% Senior Secured Notes shall be payable as to principal, premium and interest at the office or agency of NESL maintained for such purpose, which initially shall be the office of the Trustee located at MAC N9311-110, 625 Marquette Avenue, Minneapolis, MN 55479, or, at the option of NESL, payment of Cash Interest or the Cash Interest Portion, as applicable, may be made, at the option of the paying agent by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds shall be required with respect to principal of, premium, if any, and Cash Interest or the Cash Interest Portion, as applicable on, all Global Notes and all other 13% Senior Secured Notes the Holders of which shall have provided written wire transfer instructions to NESL and the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

Any payments of principal of this 13% Senior Secured Note prior to Stated Maturity shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. The amount due and payable at the maturity of this Note shall be payable only upon presentation and surrender of this Note at an office of the Trustee or the Trustee’s agent appointed for such purposes.

 

(3)            Paying Agent and Registrar. Initially, Wells Fargo Bank, National Association, the Trustee under the Indenture, shall act as Paying Agent and Registrar. NESL may change any Paying Agent or Registrar without notice to any Holder. NESL or any of its Subsidiaries may act in any such capacity.

 

(4)            Indenture. NESL issued the 13% Senior Secured Notes under an Indenture, dated as of March 15, 2012 (the “Indenture”), among New Enterprise Stone & Lime Co., Inc. and the Trustee. The terms of the 13% Senior Secured Notes include those stated in the Indenture and those made a part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”). To the extent the provisions of this 13% Senior Secured Note are inconsistent with the provisions of the Indenture, the Indenture shall govern.

 

 

The 13% Senior Secured Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. The 13% Senior Secured Notes issued on the Issue Date are senior Obligations of NESL limited to $265,000,000 in aggregate principal amount, plus amounts, if any, sufficient to pay premium and interest on outstanding 13% Senior Secured Notes as set forth in Paragraph 2 hereof. The Indenture permits the issuance of Additional Notes subject to compliance with certain conditions.

 

The payment of principal and interest on the 13% Senior Secured Notes is unconditionally guaranteed on a senior basis by the Guarantors.

 

(5)            Optional Redemption.

 

(a)            The 13% Senior Secured Notes are subject to redemption, at the option of the Company, in whole or in part, at any time on or after March 15, 2015, upon not less than 30 nor more than 60 days’ notice (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of Notes or a satisfaction and discharge of the Indenture) at the following Redemption Prices (expressed as percentages of the principal amount to be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of Holders of record on the relevant regular record date to receive interest due on an interest payment date that is on or prior to the redemption date), if redeemed during the 12-month period beginning March 15 of the years indicated:

 

	
 
    	
 
    	
Redemption
    	
 
    
	
Year
    	
 
    	
Price
    	
 
    
	
2015
    	
 
    	
106.500
    	
%
    
	
2016
    	
 
    	
103.250
    	
%
    
	
2017
    	
 
    	
100.000
    	
%
    

 

(b)            At any time prior to March 15, 2015, the Company may also redeem all or a part of the 13% Senior Secured Notes, upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to 100% of the principal amount of 13% Senior Secured Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest thereon, if any, to, but not including, the date of redemption (the “Redemption Date”), subject to the rights of Holders of 13% Senior Secured Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date.

 

(c)          In addition to the optional redemption of the 13% Senior Secured Notes in accordance with the provisions of the preceding paragraphs, prior to March 15, 2015, the Company may, with the net proceeds of one or more Public Equity Offerings, redeem up to 35% of the aggregate principal amount of the outstanding 13% Senior Secured Notes at a redemption price equal to 113.000% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to the Redemption Date; provided that at least 65% of the principal amount of 13% Senior Secured Notes originally issued under the Indenture remains outstanding immediately after the occurrence of any such redemption (excluding 13% Senior Secured Notes held by the Company or its Subsidiaries) and that any such redemption occurs within 120 days following the closing of any such Public Equity Offering.

 

 

(6)            Mandatory Redemption. Except to the extent NESL may be required to offer to purchase the 13% Senior Secured Notes as set forth in Sections 4.10 and 4.13 and except for a Mandatory Principal Redemption, NESL shall not be required to make mandatory redemption or sinking fund payments with respect to the 13% Senior Secured Notes.

 

(7)            Mandatory Principal Redemption. If the 13% Senior Secured Notes would otherwise constitute “applicable high yield discount obligations” (AHYDO) within the meaning of Section 163(i)(1) of the Internal Revenue Code of 1986, as amended, at the end of the first accrual period ending after the fifth anniversary of the Issue Date and each accrual period thereafter, the Company will be required to redeem for cash a portion of each 13% Senior Secured Note then outstanding equal to the “Mandatory Principal Redemption Amount” as set forth in the Indenture.

 

(8)            Repurchase at Option of Holder.

 

(a)            Upon the occurrence of a Change of Control, each Holder will have the right to require NESL to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000) (or in the case of PIK Notes denominations of $1.00 and any integral multiple of $1.00 in excess thereof) of such Holder’s 13% Senior Secured Notes pursuant to the offer described below (the “Change of Control Offer”) at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest thereon to the date of purchase. Within 30 days following any Change of Control, NESL will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control setting forth the procedures governing the Change of Control Offer required by the Indenture.

 

(b)            Upon the occurrence of certain Asset Sales, the Company may be required to offer to purchase 13% Senior Secured Notes.

 

(c)            Holders of the 13% Senior Secured Notes that are the subject of an offer to purchase will receive notice of an Offer to Purchase pursuant to an Asset Sale or a Change of Control from NESL prior to any related purchase date and may elect to have such 13% Senior Secured Notes purchased by completing the form titled “Option of Holder to Elect Purchase” appearing below.

 

(9)            Notice of Redemption. Notice of redemption shall be mailed at least 30 days but not more than 60 days before a Redemption Date (except that a redemption notice may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of 13% Senior Secured Notes or satisfaction and discharge of Indenture) to each Holder whose 13% Senior Secured Notes are to be redeemed at its registered address. 13% Senior Secured Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 (or in the case of PIK Notes denominations of $1.00 and any integral multiple of $1.00 in excess thereof), unless all of the 13% Senior Secured Notes held by a Holder are to be redeemed. On and after the Redemption Date, interest ceases to accrue on the 13% Senior Secured Notes or portions hereof called for redemption so long as the Company timely delivers funds to the Trustee for such redemption.

 

 

(10)           Denominations, Transfer, Exchange. The 13% Senior Secured Notes are in registered form without coupons in initial denominations of $2,000 and integral multiples of $1,000 (or in the case of PIK Notes denominations of $1.00 and any integral multiple of $1.00 in excess thereof). The transfer of the 13% Senior Secured Notes may be registered and the 13% Senior Secured Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and NESL may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. NESL need not exchange or register the transfer of any 13% Senior Secured Note or portion of a 13% Senior Secured Note selected for redemption, except for the unredeemed portion of any 13% Senior Secured Note being redeemed in part. Also, it need not exchange or register the transfer of any 13% Senior Secured 13% Senior Secured Notes for a period of 15 days before a selection of 13% Senior Secured Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

 

(11)          Persons Deemed Owners. The registered holder of a 13% Senior Secured Note may be treated as its owner for all purposes.

 

(12)          Amendment, Supplement and Waiver. The Indenture, the Security Documents, the Intercreditor the Guarantees or the 13% Senior Secured Notes may be amended or supplemented in accordance with their terms.

 

(13)          Defaults and Remedies.

 

Events of Default shall be as set forth in Article VI of the Indenture.

 

If an Event of Default (other than an Event of Default relating to certain events of bankruptcy or insolvency with respect to the Company) occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the outstanding 13% Senior Secured Notes may declare the principal of the 13% Senior Secured Notes and any accrued interest on the 13% Senior Secured Notes to be due and payable immediately by a notice in writing to the Company (and to the Trustee if given by Holders); provided, however, that after such acceleration, but before a judgment or decree based on acceleration, the Holders of a majority in aggregate principal amount of the outstanding 13% Senior Secured Notes may, under certain circumstances, rescind and annul such acceleration if all Events of Default, other than the nonpayment of accelerated principal of or interest on the 13% Senior Secured Notes, have been cured or waived as provided in the Indenture.

 

In the event of a declaration of acceleration of the 13% Senior Secured Notes solely because an Event of Default relating to default or defaults under any bonds, debentures, notes or other evidences of Debt (other than the 13% Senior Secured Notes) by the Company or any Restricted Subsidiary having, individually or in the aggregate, a principal or similar amount outstanding of at least $25.0 million has occurred and is continuing, the declaration of acceleration of the 13% Senior Secured Notes shall be automatically rescinded and annulled if the event of default or payment default triggering such Event of shall be remedied or cured by the Company or a Restricted Subsidiary of the Company or waived by the holders of the relevant Debt within 20 Business Days after the declaration of acceleration with respect thereto and if the rescission and annulment of the acceleration of the 13% Senior Secured Notes would not conflict

 

 

with any judgment or decree of a court of competent jurisdiction obtained by the Trustee for the payment of amounts due on the 13% Senior Secured Notes.

 

Certain events of bankruptcy or insolvency with respect to the Company are Events of Default which shall result in the 13% Senior Secured Notes being due and payable immediately upon the occurrence of such Events of Default. The Trustee may withhold from Holders notice of any Default (except Default in payment of principal of, premium, if any, and interest) if the Trustee determines that withholding notice is in the interest of the Holders to do so.

 

(14)          Trustee Dealings with NESL. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for NESL, the Guarantors or their respective Affiliates, and may otherwise deal with NESL, the Guarantors or their respective Affiliates, as if it were not the Trustee.

 

(15)          No Recourse Against Others. No director, officer, employee, stockholder, general or limited partner or incorporator, past, present or future, of the Company or any of its Subsidiaries, as such or in such capacity, shall have any personal liability for any obligations of the Company under the 13% Senior Secured Notes, any Note Guarantee or the Indenture by reason of his, her or its status as such director, officer, employee, stockholder, general or limited partner or incorporator.

 

(16)          Authentication. This 13% Senior Secured Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

(17)          Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties). JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

(18)          CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the 13% Senior Secured Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to the Holders. No representation is made as to the accuracy of such numbers either as printed on the 13% Senior Secured Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

NESL shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

 

New Enterprise Stone & Lime Co., Inc.

3912 Brumbaugh Road

P.O. Box 77

New Enterprise, PA 16664

Facsimile: (814) 766-0219

Attention: Paul I. Detwiler, III

 

 

ASSIGNMENT FORM

 

To assign this 13% Senior Secured Note, fill in the form below: (1) or (we) assign and transfer this 13% Senior Secured Note to

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint                                                                               

 

to transfer this 13% Senior Secured Note on the books of NESL. The agent may substitute another to act for him.

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
(Sign   exactly as your name appears on the face of this 13% Senior Secured Note)
    
	
 
    	
 
    
	
Signature   guarantee:
    	
 
    

 

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this 13% Senior Secured Note purchased by NESL pursuant to Section 4.10 or 4.13 of the Indenture, check the box below:

[  ] Section 4.10    [  ] Section 4.13

 

If you want to elect to have only part of the 13% Senior Secured Note purchased by NESL pursuant to Section 4.10 or Section 4.13 of the Indenture, state the amount you elect to have purchased: $

 

	
Date:
    	
 
    	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
(Sign   exactly as your name appears on the 13% Senior Secured Note)
    
	
 
    	
 
    
	
 
    	
 
    
	
Tax Identification No.:
    
	
 
    
	
 
    	
Signature guarantee:
    
						

 

 

[Form of]

INTEREST FORM ELECTION

 

Wells Fargo Bank, National Association

MAC N9311-110

625 Marquette Avenue

Minneapolis, MN 55479

Attention: New Enterprise Stone & Lime Administrator

 

[  ], 20[  ]

 

(1)

 

	
 
    	
Re:   CUSIP #
    

 

This Interest Form Election is delivered to you pursuant to that certain Indenture dated March 15, 2012 (the “Indenture”) among New Enterprise Stone & Lime Co., Inc. (“NESL”), Wells Fargo Bank, National Association, as trustee, and Wells Fargo Bank, National Association, as collateral agent. Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture.

 

NESL hereby irrevocably elects to pay interest on Notes in respect of the interest payment on [        ], [        ](2) in the form of(3):

 

	
 
    	
[  ]   100% Cash Option
    
	
 
    	
[  ] % Applicable Cash Rate
    
	
 
    	
 
    
	
 
    	
OR
    
	
 
    	
 
    
	
 
    	
[  ]   Cash/PIK Option
    
	
 
    	
[  ] % Applicable Cash Rate
    
	
 
    	
[  ] % Applicable PIK Rate
    

 

[Signature Page Follows]

 

	
(1)
    	
Must   be dated and delivered to Trustee at least 10 Business Days prior to the   beginning of the relevant interest period.
    
	
 
    	
 
    
	
(2)
    	
May only   be an interest payment date on or prior to March 15, 2017.
    
	
 
    	
 
    
	
(3)
    	
Check   the appropriate box and specify the applicable rate for such period,   including giving effect to any prior period interest rate increases.
    

 

 

NESL has caused this Interest Form Election to be executed and delivered by its duly authorized officer as of the date first written above.

 

	
 
    	
NEW   ENTERPRISE STONE & LIME CO., INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

[Form of]

12-MONTH CASH ELECTION

 

Wells Fargo Bank, National Association

MAC N9311-110

625 Marquette Avenue

Minneapolis, MN 55479

Attention: New Enterprise Stone & Lime Administrator

 

[  ], 20[  ](1)

 

	
 
    	
Re: CUSIP #
    

 

This 12 Month Cash Election is delivered to you pursuant to that certain Indenture dated March 15, 2012 (the “Indenture”) among New Enterprise Stone & Lime Co., Inc. (the “NESL”), Wells Fargo Bank, National Association, as trustee, and Wells Fargo Bank, National Association, as collateral agent. Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture.

 

NESL hereby irrevocably elects, in respect of the 12-month period beginning on            , 20[  ] including the interest payment dates on                  and                  to pay interest on the Notes entirely in cash.

 

[Signature Page Follows]

 

(1)           Must be dated and delivered to Trustee at least 10 business days prior to the beginning of the relevant interest period.

 

 

NESL has caused this 12-Month Cash Election to be executed and delivered by its duly authorized officer as of the date first written above.

 

	
 
    	
NEW   ENTERPRISE STONE & LIME CO., INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OF TRANSFER RESTRICTED NOTES

 

New Enterprise Stone & Lime Co., Inc.

3912 Brumbaugh Road

P.O. Box 77

New Enterprise, PA 16664

Facsimile: (814) 766-0219

Attention: Paul I. Detwiler, III

 

Wells Fargo Bank, National Association

MAC N9311-110

625 Marquette Avenue

Minneapolis, MN 55479

Attention: New Enterprise Stone & Lime Administrator

 

	
 
    	
Re: CUSIP #
    

 

Reference is hereby made to that certain Indenture dated March 15, 2012 (the “Indenture”) among New Enterprise Stone & Lime Co., Inc. (“NESL”), Wells Fargo Bank, National Association, as trustee (the “Trustee”), and Wells Fargo Bank, National Association, as collateral agent (the “Notes Collateral Agent”). Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture.

 

This certificate relates to $                principal amount of Notes held in (check applicable space)      book-entry or      definitive form by the undersigned.

 

The undersigned                             (transferor) (check one box below):

 

	
o
    	
hereby   requests the Registrar to deliver in exchange for its beneficial interest in   the Global Note held by the Depositary a Note or Notes in definitive,   registered form of authorized denominations and an aggregate principal amount   equal to its beneficial interest in such Global Note (or the portion thereof   indicated above), in accordance with Section 2.6 of the Indenture;
    
	
 
    	
 
    
	
o
    	
hereby   requests the Trustee to exchange a Note or Notes to                             (transferee).
    

 

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the periods referred to in Rule 144(k) under the Securities Act of 1933, as amended, the undersigned confirms that such Notes are being transferred in accordance with its terms:

 

CHECK ONE BOX BELOW:

 

	
(1) 
    	
o
    	
to   NESL or any of its subsidiaries; or
    

 

 

	
(2)
    	
o
    	
inside   the United States to a “qualified institutional buyer” (as defined in Rule 144A   under the Securities Act of 1933, as amended) that purchases for its own   account or for the account of a qualified institutional buyer to whom notice   is given that such transfer is being made in reliance on Rule 144A under   the Securities Act of 1933, as amended, in each case pursuant to and in   compliance with Rule 144A thereunder; or
    
	
 
    	
 
    	
 
    
	
(3)
    	
o
    	
outside   the United States in an offshore transaction within the meaning of Regulation   S under the Securities Act of 1933, as amended, in compliance with Rule 904   thereunder.
    

 

 

Unless one of the boxes is checked, the Registrar will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof.

 

	
 
    	
 
    
	
 
    	
Signature
    
	
 
    
	
Signature   Guarantee:
    	
 
    
	
 
    	
(Signature   must be guaranteed by a participant in a recognized signature guarantee   medallion program)
    
			

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

 

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”), and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

	
 
    	
[Name   of Transferee]
    
	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
NOTICE:   To be executed by an executive officer
    
				

 

 

SCHEDULE OF EXCHANGES OF 13% SENIOR SECURED NOTES

 

The following exchanges of a part of this Global Note for other 13% Senior Secured Notes have been made:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Principal Amount of
    	
 
    	
Signature of
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
this Global Note
    	
 
    	
Authorized Officer
    
	
 
    	
 
    	
Amount of Decrease
    	
 
    	
Amount of Increase
    	
 
    	
Following Such
    	
 
    	
of Trustee or 13%
    
	
 
    	
 
    	
in Principal Amount
    	
 
    	
in Principal Amount
    	
 
    	
Decrease (or
    	
 
    	
Senior Secured Note
    
	
Date of Exchange
    	
 
    	
of this Global Note
    	
 
    	
of this Global Note
    	
 
    	
Increase)
    	
 
    	
Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

NOTATION OF NOTE GUARANTEE

 

The Guarantor listed below (hereinafter referred to as the “Guarantor” which term includes any successors or assigns under that certain Indenture, dated as of March 15, 2012, by and among New Enterprise Stone & Lime Co., Inc. (“NESL”), the Trustee and the Notes Collateral Agent (as amended and supplemented from time to time, the “Indenture”) and any additional Guarantor, has guaranteed the Notes and the obligations of NESL under the Indenture, which include (i) the due and punctual payment of the principal of, premium, if any, and interest on the 13% Senior Secured Notes due 2018 (the “Notes”) of New Enterprise Stone & Lime Co., Inc., a Delaware corporation, whether at stated maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal and premium, if any, and (to the extent permitted by law) interest on any interest, if any, on the Notes, and the due and punctual performance of all other obligations of NESL to the Holders or the Trustee all in accordance with the terms set forth in Article X of the Indenture, (ii) in case of any extension of time of payment or renewal of any Notes or any such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise, and (iii) the payment of any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Note Guarantee or the Indenture.

 

The obligations of each Guarantor to the Holders and to the Trustee pursuant to this Note Guarantee and the Indenture are expressly set forth in Article X of the Indenture and reference is hereby made to such Indenture for the precise terms of this Note Guarantee.

 

No stockholder, employee, officer, director or incorporator, as such, past, present or future of each Guarantor shall have any liability under this Note Guarantee by reason of his or its status as such stockholder, employee, officer, director or incorporator.

 

This is a continuing Note Guarantee and shall remain in full force and effect and shall be binding upon each Guarantor and its successors and assigns until full and final payment of all of NESL’s obligations under the Notes and Indenture or until released in accordance with the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders, and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a Note Guarantee of payment and not of collectibility.

 

This Note Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Note Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. The Obligations of each Guarantor under its Note Guarantee shall be limited to the extent necessary to insure that it does not constitute a fraudulent conveyance under applicable law.

 

 

THE TERMS OF ARTICLE X OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

 

Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated.

 

Dated as of March 15, 2012

 

	
 
    	
ASTI   TRANSPORTATION SYSTEMS, INC.
    
	
 
    	
EII   TRANSPORT INC.
    
	
 
    	
GATEWAY   TRADE CENTER INC.
    
	
 
    	
PRECISION   SOLAR CONTROLS INC.
    
	
 
    	
PROTECTION   SERVICES INC.
    
	
 
    	
SCI   PRODUCTS INC.
    
	
 
    	
WORK   AREA PROTECTION CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paul I. Detwiler, III
    
	
 
    	
 
    	
Name:
    	
Paul   I. Detwiler, III
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

 

[Signature Page to Notation of Rule 144A Note Guarantee]Exhibit 4.3

 

EXECUTION COPY

 

REGISTRATION RIGHTS AGREEMENT

 

 

by and among

 

 

New Enterprise Stone & Lime Co., Inc.

and the Guarantors party hereto

 

 

and

 

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated

 

 

Dated as of March 15, 2012

 

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of March 15, 2012, by and among New Enterprise Stone & Lime Co., Inc., a Delaware corporation (the “Company”), the guarantors party hereto (collectively, the “Guarantors”), and Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative (the “Representative”) of the several initial purchasers listed on Schedule A to the Purchase Agreement (as defined below) (collectively, the “Initial Purchasers”), each of whom has agreed to purchase the Company’s 13% Senior Secured Notes due 2018 (the “Initial Notes”) fully and unconditionally guaranteed by the Guarantors (the “Initial Guarantees”) pursuant to the Purchase Agreement (as defined below). The Initial Notes and the Initial Guarantees attached thereto are herein collectively referred to as the “Initial Securities.”

 

This Agreement is made pursuant to the Purchase Agreement, dated March 1, 2012 (the “Purchase Agreement”), among the Company, the Guarantors and the Initial Purchasers (i) for the benefit of the Initial Purchasers and (ii) for the benefit of the holders from time to time of the Initial Securities, including the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Initial Securities, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 5(f) of the Purchase Agreement.

 

The parties hereby agree as follows:

 

SECTION 1.           Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings:

 

Additional Interest Payment Date:  With respect to the Initial Securities, each Interest Payment Date.

 

Affiliate:  As defined in Rule 144 of the Securities Act.

 

Broker-Dealer:  Any broker or dealer registered under the Exchange Act.

 

Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions or trust companies located in New York, New York, and Pennsylvania are authorized or obligated to be closed. If the time to perform any action hereunder falls on a day that is not a Business Day, such time will be extended to the next Business Day and no additional interest shall accrue on such payment for the interim period.

 

Closing Date:  The date of this Agreement.

 

Commission:  The Securities and Exchange Commission.

 

Company:  As defined in the preamble hereto.

 

 

Consummate:  A registered Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Securities to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar under the Indenture of Exchange Securities in the same aggregate principal amount as the aggregate principal amount of Initial Securities that were tendered by Holders thereof pursuant to the Exchange Offer.

 

Effectiveness Target Date:  As defined in Section 5 hereof.

 

Exchange Act:  The Securities Exchange Act of 1934, as amended.

 

Exchange Offer:  The registration by the Company under the Securities Act of the Exchange Securities pursuant to a Registration Statement pursuant to which the Company offers the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Securities in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.

 

Exchange Offer Registration Statement:  The Registration Statement relating to the Exchange Offer, including the related Prospectus.

 

Exempt Resales:  The transactions in which the Initial Purchasers propose to sell the Initial Securities to certain “qualified institutional buyers,” as such term is defined in Rule 144A under the Securities Act and to certain non-U.S. persons pursuant to Regulation S under the Securities Act.

 

Exchange Securities:  The 13% Senior Secured Notes due 2018, of the same series under the Indenture as the Initial Notes and the Initial Guarantees attached thereto, to be issued to Holders in exchange for Transfer Restricted Securities pursuant to this Agreement.

 

FINRA:  The Financial Industry Regulatory Authority, Inc.

 

Guarantors:  As defined in the preamble hereto.

 

Holders:  As defined in Section 2(b) hereof.

 

Indemnified Holder:  As defined in Section 8(a) hereof.

 

Indenture:  The Indenture, dated as of March 15, 2012, by and among the Company, the Guarantors, Wells Fargo Bank, National Association, as trustee (the “Trustee”) and as collateral agent (the “Notes Collateral Agent”), pursuant to which the Securities are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

 

Initial Guarantees:  As defined in the preamble hereto.

 

2

 

Initial Purchasers:  As defined in the preamble hereto.

 

Initial Notes:  As defined in the preamble hereto.

 

Initial Placement:  The issuance and sale by the Company of the Initial Securities to the Initial Purchasers pursuant to the Purchase Agreement.

 

Interest Payment Date:  As defined in the Indenture and the Securities.

 

Initial Securities:  As defined in the preamble hereto.

 

Person:  An individual, partnership, corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof.

 

Prospectus:  The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

 

Registration Default:  As defined in Section 5 hereof.

 

Registration Statement:  Any registration statement of the Company relating to (a) an offering of Exchange Securities pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

 

Securities:  The Initial Securities and the Exchange Securities.

 

Securities Act:  The Securities Act of 1933, as amended.

 

Shelf Filing Deadline:  As defined in Section 4(a) hereof.

 

Shelf Registration Statement:  As defined in Section 4(a) hereof.

 

Transfer Restricted Securities:  Each Initial Security, until the earliest to occur of (a) the date on which such Initial Security is exchanged in the Exchange Offer for an Exchange Security entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Initial Security has been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement, (c) the date on which such Initial Security is distributed to the public by a Broker-Dealer pursuant to the “Plan of Distribution” contemplated by the Exchange Offer Registration Statement (including delivery of the Prospectus contained therein) and (d) during an Effectiveness Period in which such Initial Securities were eligible to be included in a Shelf Registration Statement, the date on which such Initial Securities are sold pursuant to Rule 144 under the Securities Act. For purposes of this definition, the “Effectiveness Period” shall be from the date on which the Shelf Registration Statement is declared effective by the Commission until the second anniversary of the Closing Date.

 

3

 

Trust Indenture Act:  The Trust Indenture Act of 1939, as amended.

 

Underwritten Registration or Underwritten Offering:  A registration in which securities of the Company are sold to an underwriter for reoffering to the public.

 

SECTION 2.           Securities Subject to this Agreement.

 

(a)           Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

 

(b)           Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”) whenever such Person owns Transfer Restricted Securities.

 

SECTION 3.           Registered Exchange Offer.

 

(a)           Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), each of the Company and the Guarantors shall (i) cause to be filed with the Commission as soon as practicable after the Closing Date, a Registration Statement under the Securities Act relating to the Exchange Securities and the Exchange Offer, (ii) use its commercially reasonable efforts to cause such Registration Statement to become effective at the earliest possible time, (iii) in connection with the foregoing use its commercially reasonable efforts to file (A) all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430A under the Securities Act and (C) cause all necessary filings in connection with the registration and qualification of the Exchange Securities to be made under the state securities or blue sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer; provided, however that neither the Company nor the Guarantors shall be required to take any action that would subject them to general service of process or taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where they are not already subject, and (iv) as promptly as practicable after the effectiveness of such Registration Statement, commence the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting registration of the Exchange Securities to be offered in exchange for the Transfer Restricted Securities and to permit resales of Initial Securities held by Broker-Dealers that were acquired for their own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company or any of its Affiliates) as contemplated by Section 3(c) hereof.

 

(b)           Unless not permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), the Company and the Guarantors shall use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to be effective continuously and keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days from the date notice of the Exchange Offer is mailed to the

 

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Holders. The Company shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Securities shall be included in the Exchange Offer Registration Statement. The Company shall use its commercially reasonable efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 360 days after the Closing Date (or if such 360th day is not a Business Day, the next succeeding Business Day).

 

(c)           The Company shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Securities that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company or any of its Affiliates), may exchange such Initial Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Securities received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Initial Securities held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.

 

Each of the Company and the Guarantors shall use its commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(a) and Section 6(c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company or any of its Affiliates), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 180 days from the date on which the Exchange Offer Registration Statement is declared effective, (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities and (iii) all Transfer Restricted Securities covered by such Exchange Offer Registration Statement have been sold pursuant thereto.

 

The Company shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon reasonable request at any time during such 180-day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.

 

If the Board of Directors of the Company determines in good faith that it is in the best interests of the Company not to disclose the existence of, or facts surrounding, any proposed or pending material corporate transaction or other material development involving the Company or the Guarantors, the Company may allow the Exchange Offer Registration Statement to fail to be

 

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effective or the Prospectus contained therein to be unusable as a result of such nondisclosure for up to 90 days in any twelve-month period.

 

SECTION 4.           Shelf Registration.

 

(a)           Shelf Registration. If (i) the Company is not required to file an Exchange Offer Registration Statement or to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), (ii) for any reason the Exchange Offer is not Consummated within 360 days after the Closing Date (or if such 360th day is not a Business Day, the next succeeding Business Day), or (iii) with respect to any Holder of Transfer Restricted Securities who notifies the Company prior to the 20th Business Day following Consummation of the Exchange Offer that (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Initial Securities acquired directly from the Company or one of its Affiliates, then, upon such Holder’s request, the Company and the Guarantors shall:

 

(x)            use their commercially reasonable efforts to cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”) on or prior to the earliest to occur of (1) the 30th day after the date on which the Company determines that it is not required to file the Exchange Offer Registration Statement, (2) the 30th day after the date on which the Company receives notice from a Holder of Transfer Restricted Securities as contemplated by clause (iii) above, and (3) the 360th day after the Closing Date (or if such 360th day is not a Business Day, the next succeeding Business Day) (such earliest date being the “Shelf Filing Deadline”), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and

 

(y)           use their commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the Commission on or before the 60th day after the Shelf Filing Deadline (or if such 60th day is not a Business Day, the next succeeding Business Day).

 

Each of the Company and the Guarantors shall use its commercially reasonable efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years following the date such Shelf Registration Statement initially becomes effective (or shorter period that will terminate when all

 

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the Transfer Restricted Securities covered by such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement).

 

(b)           Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such (i) Holder furnishes to the Company in writing, within 20 days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein and (ii) in the case of an Underwritten Registration, such Holder complies with Section 10 hereof. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading. No Holder of Transfer Restricted Securities shall be entitled to additional interest pursuant to Section 5 hereof unless and until such Holder shall have provided all such information. If the board of Directors of the Company determines in good faith that it is in the best interests of the Company not to disclose the existence of, or facts surrounding, any proposed or pending material corporate transaction or other material development involving the Company or the Guarantors, the Company may allow the Shelf Registration Statement to fail to be effective or the Prospectus contained therein to be unusable as a result of such nondisclosure for up to 90 days in any twelve-month period.

 

SECTION 5.           Additional Interest. If (i) the Shelf Registration Statement required by this Agreement is not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) the Shelf Registration Statement has not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the “Effectiveness Target Date”), (iii) the Exchange Offer has not been Consummated on or prior to the 360th day after the Closing Date (or if such 360th day is not a Business Day, the next succeeding Business Day) or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded as promptly as practicable by a post-effective amendment to such Registration Statement that cures such failure and that is itself declared effective (each such event referred to in clauses (i) through (iv), a “Registration Default”), the Company hereby agrees that the interest rate borne by the Transfer Restricted Securities shall be increased by 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall such increase exceed 1.00% per annum. Following the cure of all Registration Defaults relating to any particular Transfer Restricted Securities, the interest rate borne by the relevant Transfer Restricted Securities will be reduced to the original interest rate borne by such Transfer Restricted Securities; provided, however, that, if after any such reduction in interest rate, a different Registration Default occurs, the interest rate borne by the relevant Transfer Restricted Securities shall again be increased pursuant to the foregoing provisions.

 

All obligations of the Company and the Guarantors set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full. A Holder of Transfer Restricted

 

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Securities shall not be entitled to additional interest if it has failed to comply with its obligations under Section 4(b) above below.

 

SECTION 6.           Registration Procedures.

 

(a)           Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall comply with all of the provisions of Section 6(c) hereof, shall use their commercially reasonable efforts to effect such exchange to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

 

(i)          If in the reasonable opinion of counsel to the Company there is a question as to whether the Exchange Offer is permitted by applicable law, each of the Company and the Guarantors hereby agrees to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Initial Securities. Each of the Company and the Guarantors hereby agrees to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy. Each of the Company and the Guarantors hereby agrees, however, to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursue a favorable resolution by the Commission staff of such submission.

 

(ii)           As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Company, prior to the Consummation thereof, a written representation to the Company and the Guarantors (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an Affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution of the Exchange Securities to be issued in the Exchange Offer and (C) it is acquiring the Exchange Securities in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise cooperate in the Company’s preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as

 

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applicable, of Regulation S-K if the resales are of Exchange Securities obtained by such Holders in exchange for Initial Securities acquired by such Holder directly from the Company.

 

(b)           Shelf Registration Statement. In connection with the Shelf Registration Statement, each of the Company and the Guarantors shall comply with all the provisions of Section 6(c) hereof and shall use its commercially reasonable efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Company pursuant to Section 4(b) hereof), and pursuant thereto each of the Company and the Guarantors will as expeditiously as possible prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof.

 

(c)           General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Initial Securities by Broker-Dealers), each of the Company and the Guarantors shall:

 

(i)          use its commercially reasonable efforts to keep such Registration Statement continuously effective and provide all requisite financial statements (including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantors for the period specified in Section 3 or 4 hereof, as applicable); Upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company shall file as promptly as practicable an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use its commercially reasonable efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

 

(ii)           prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

 

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(iii)             advise the underwriter(s), if any, and selling Holders under a Shelf Registration Statement promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or blue sky laws, each of the Company and the Guarantors shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time;

 

(iv)          furnish without charge to each of the Initial Purchasers, each selling Holder named in any Registration Statement, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which an Initial Purchaser of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within five Business Days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of an Initial Purchaser or underwriter, if any, shall be deemed to be reasonable if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission;

 

(v)           promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the Initial Purchasers, each selling Holder named in any Registration Statement, and to the underwriter(s), if any, make the Company’s and the Guarantors’ representatives available for discussion of such document and other customary due diligence matters subject to the execution of customary confidentiality agreements, and include such

 

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information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;

 

(vi)          make available at reasonable times for inspection by the Initial Purchasers, the managing underwriter(s), if any, participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such Initial Purchasers or any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of each of the Company and the Guarantors and cause the Company’s and the Guarantors’ officers, directors and employees to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness and to participate in meetings with investors to the extent reasonably requested by the managing underwriter(s), if any, in each case, subject to the execution of customary confidentiality agreements;

 

(vii)         if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

 

(viii)        furnish to each Initial Purchaser, each selling Holder under a Shelf Registration Statement and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules, without documents incorporated by reference therein and all exhibits (unless expressly requested);

 

(ix)           deliver to each selling Holder under a Shelf Registration Statement and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request except that if such are not effective or usable in accordance with Section 6(c)(iii) hereof, the Company shall deliver a notice to that effect; each of the Company and the Guarantors hereby consents to the use in compliance with applicable law of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;

 

(x)            enter into such agreements (including an underwriting agreement on customary terms), and make such representations and warranties, and take all such other

 

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actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by any Initial Purchaser or by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, each of the Company and the Guarantors shall:

 

(A)          furnish to each Initial Purchaser, each selling Holder under a Shelf Registration Statement and each underwriter, if any, in such substance and scope as they may request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the Consummation of the Exchange Offer or, if applicable, the effectiveness of the Shelf Registration Statement:

 

(1)           a certificate, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, signed by (y) the President or any Vice President and (z) a principal financial or accounting officer of each of the Company and the Guarantors, confirming, as of the date thereof, the matters set forth in paragraphs (i), (ii) and (iii) of Section 5(e) of the Purchase Agreement and such other matters as such parties may reasonably request;

 

(2)           an opinion and negative assurance letter, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the Company and the Guarantors, covering the matters set forth in Section 5(c) of the Purchase Agreement and such other matter as such parties may reasonably request;

 

(3)           a customary comfort letter, dated the date of effectiveness of the Shelf Registration Statement, from the Company’s independent accountants, in the customary form and covering matters of the type customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten offerings, and covering or affirming the matters set forth in the comfort letters delivered pursuant to Section 5(a) of the Purchase Agreement, without exception;

 

(B)           set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and

 

(C)           deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with Section 6(c)(x)(A) hereof and with any customary conditions contained in the underwriting agreement or

 

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other agreement entered into by the Company or any of the Guarantors pursuant to this Section 6(c)(x), if any.

 

If at any time the representations and warranties of the Company and the Guarantors contemplated in Section 6(c)(x)(A)(1) hereof cease to be true and correct, the Company or the Guarantors shall so advise the Initial Purchasers and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;

 

(xi)           prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders under a Shelf Registration Statement, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the state securities or blue sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may reasonably request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that neither the Company nor the Guarantors shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;

 

(xii)          shall issue, upon the request of any Holder of Initial Securities covered by the Shelf Registration Statement and provided such Holder shall have provided all documentation reasonably requested by the Company in connection therewith, Exchange Securities having an aggregate principal amount equal to the aggregate principal amount of Initial Securities surrendered to the Company by such Holder in exchange therefor or being sold by such Holder; such Exchange Securities to be registered in the name of such Holder or in the name of the purchaser(s) of such Securities, as the case may be; in return, the Initial Securities held by such Holder shall be surrendered to the Company for cancellation;

 

(xiii)          cooperate with the selling Holders under a Shelf Registration Statement and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Transfer Restricted Securities made by such Holders or underwriter(s);

 

(xiv)        use its commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in Section 6(c)(xii) hereof;

 

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(xv)         if any fact or event contemplated by Section 6(c)(iii)(D) hereof shall exist or have occurred, use commercially reasonable efforts to prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading;

 

(xvi)        provide a CUSIP number for all Securities not later than the effective date of the Registration Statement covering such Securities and provide the Trustee under the Indenture with printed certificates for such Securities which are in a form eligible for deposit with the Depository Trust Company and take all other action necessary to ensure that all such Securities are eligible for deposit with the Depository Trust Company;

 

(xvii)        cooperate and assist in any filings required to be made with the FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of the FINRA;

 

(xviii)        otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period beginning after the effective date of the Registration Statement (as such term is defined in rule 158(c) of the Securities Act);

 

(xix)         cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Securities to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute and use its commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and

 

(xx)          provide promptly to each Holder of Transfer Restricted Securities upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.

 

Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof, or until it is advised in writing (the “Advice”) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are

 

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incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or shall have received the Advice.

 

SECTION 7.           Registration Expenses.

 

(a)           All expenses incident to the Company’s and the Guarantors’ performance of or compliance with this Agreement will be borne by the Company and the Guarantors, jointly and severally, regardless of whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by any Initial Purchaser or Holder with the FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of the FINRA)); (ii) all fees and expenses of compliance with federal securities and state securities or blue sky laws; (iii) all expenses of printing (including printing certificates for the Exchange Securities to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company, the Guarantors and, subject to Section 7(b) hereof, the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Exchange Securities on a securities exchange or automated quotation system pursuant to the requirements thereof; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).

 

Each of the Company and the Guarantors will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors.

 

(b)           In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantors, jointly and severally, will reimburse the Initial Purchasers and the Holders of Transfer Restricted Securities being tendered in the Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Cahill Gordon & Reindel LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared.

 

15

 

SECTION 8.           Indemnification.

 

(a)           The Company and the Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), caused by, based upon, arising out of or in connection with (x) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (y) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except with respect to clauses (x) or (y) insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability which the Company or the Guarantors may otherwise have.

 

In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company or the Guarantors, such Indemnified Holder (or the Indemnified Holder controlled by such controlling person) shall promptly notify the Company and the Guarantors in writing; provided that the failure to so notify the Company and the Guarantors will not relieve the Company and Guarantors from any liability under this Section 8(a) except to the extent they are prejudiced as a proximate result of such failure. In case any such action is brought against any Indemnified Holder and such Indemnified Holder seeks or intends to seek indemnity from the Company and the Guarantors, the Company and the Guarantors will be entitled to participate in and, to the extent that they shall elect, jointly with all other indemnifying parties similarly notified, to assume the defense thereof with counsel reasonably satisfactory to such Indemnified Holders; provided, however, if the defendants in any such action include both the Indemnified Holders and the Company or any of the Guarantors and the Indemnified Holders shall have reasonably concluded that a conflict may arise between their position and the position of the Company or any of the Guarantors in conducting the defense of any such action or that there may be one or more legal defenses available to them and/or other Indemnified Holders which are different from or additional to those available to the Company or any of the Guarantors, the Indemnified Holders shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of

 

16

 

such Indemnified Holders. Upon receipt of notice from the Company of its election to assume the defense of such action, the Company and the Guarantors will not be liable to such Indemnified Holder under this Section 8(a) for any legal or other expenses subsequently incurred by such Indemnified Holder in connection with the defense thereof unless the Indemnified Holder shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that the Company and the Guarantors shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders. The Company and the Guarantors shall be liable for any settlement of any such action or proceeding effected with the Company’s and the Guarantors’ prior written consent, but if settled with such consent or there be a final judgment for the plaintiff, each of the Company and the Guarantors agrees to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Company and the Guarantors. The Company and the Guarantors shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding.

 

(b)           Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors and their respective directors, officers of the Company and the Guarantors who sign a Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company or any of the Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such Person, to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement. In case any action or proceeding shall be brought against the Company, the Guarantors or their respective directors or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Company and the Guarantors, and the Company, the Guarantors, their respective directors and officers and such controlling person shall have the rights and duties given to each Holder by the preceding paragraph.

 

(c)           If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or (b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the

 

17

 

one hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the Company and the Guarantors shall be deemed to be equal to the total gross proceeds to the Company and the Guarantors from the Initial Placement), or if such allocation is not permitted by applicable law, the relative fault of the Company and the Guarantors, on the one hand, and the Indemnified Holders, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnified Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any of the Guarantors, on the one hand, or the Indemnified Holders, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

 

The Company, the Guarantors and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds received by such Holder with respect to the sale of the Initial Securities exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Initial Securities held by each of the Holders hereunder and not joint.

 

SECTION 9.           Rule 144A. Each of the Company and the Guarantors hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A under the Securities Act.

 

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SECTION 10.         Participation in Underwritten Registrations. No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required by the Company and the underwriters or under the terms of such underwriting arrangements.

 

SECTION 11.         Selection of Underwriters. The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker(s) and managing underwriter(s) that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided, however, that such investment banker(s) and managing underwriter(s) must be reasonably satisfactory to the Company.

 

SECTION 12.         Miscellaneous.

 

(a)           Remedies. Each of the Company and the Guarantors hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

(b)           No Inconsistent Agreements. Each of the Company and the Guarantors will not on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Neither the Company nor any of the Guarantors has previously entered into any agreement granting any registration rights with respect to its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company’s or any of the Guarantors’ securities under any agreement in effect on the date hereof.

 

(c)           Adjustments Affecting the Securities. Except as permitted by, or pursuant to the terms of, the Indenture, the Company will not take any action, or permit any change to occur, with respect to the Securities that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer.

 

(d)           Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has (i) in the case of Section 5 hereof and this Section 12(d)(i), obtained the written consent of Holders of all outstanding Transfer Restricted Securities and (ii) in the case of all other provisions hereof, obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding any Transfer Restricted Securities held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose

 

19

 

securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered; provided, however, that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Company shall obtain the written consent of each such Initial Purchaser with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.

 

(e)           Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested) facsimile or courier guaranteeing overnight delivery:

 

(i)            if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

 

(ii)           if to the Company or the Guarantors:

 

	
 
    	
New Enterprise Stone & Lime Co., Inc.
    
	
 
    	
3912 Brumbaugh Road, PO Box 77
    
	
 
    	
New Enterprise, PA 16664
    
	
 
    	
Facsimile:
    	
(814) 766-0219
    
	
 
    	
Attention:
    	
Paul Detwiler III
    

 

With a copy to:

 

	
 
    	
Pepper Hamilton LLP
    
	
 
    	
3000 Two Logan Square
    
	
 
    	
Eighteenth and Arch Streets
    
	
 
    	
Philadelphia, PA 19103-2799
    
	
 
    	
Facsimile:
    	
(215) 981-4750
    
	
 
    	
Attention:
    	
Cary Levinson
    
	
 
    	
 
    	
Brian Katz
    

 

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if by facsimile; and on the next Business Day, if timely delivered to a courier guaranteeing overnight delivery.

 

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

 

(f)            Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder. If any transferee of any Holder shall acquire Transfer Restricted Securities in any manner, whether by operation of law or otherwise, such

 

20

 

Transfer Restricted Securities shall be held subject to all of the terms of this Agreement and by taking and holding such Transfer Restricted Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such Person shall be entitled to receive the benefits hereof.

 

(g)           Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile, email or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement.

 

(h)           Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(i)            Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES THEREOF.

 

(j)            Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

(k)           Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

21

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
 
    	
NEW ENTERPRISE STONE & LIME CO., INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Paul I. Detwiler, III
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    	
Paul I. Detwiler, III
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    	
President, Chief Financial Officer and Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
GUARANTORS:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
GATEWAY TRADE CENTER INC.
    
	
 
    	
 
    	
EII TRANSPORT INC.
    
	
 
    	
 
    	
ASTI TRANSPORTATION   SYSTEMS, INC.
    
	
 
    	
 
    	
PROTECTION SERVICES INC.
    
	
 
    	
 
    	
SCI PRODUCTS INC.
    
	
 
    	
 
    	
WORK AREA PROTECTION CORP
    
	
 
    	
 
    	
PRECISION SOLAR CONTROLS   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
as Guarantors
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Paul I. Detwiler, III
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    	
Paul I. Detwiler, III
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    	
Vice President
    

 

 

[Signature page to Registration Rights Agreement]

 

 

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:

 

	
MERRILL LYNCH, PIERCE,   FENNER & SMITH INCORPORATED
    	
 
    	
 
    
	
Acting on behalf of itself and as the Representative of the several   Initial Purchasers
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
Merrill Lynch, Pierce,   Fenner & Smith Incorporated
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Mark Kushemba
    	
 
    	
 
    
	
Name:
    	
Mark Kushemba
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    	
 
    
					

 

 

[Registration Rights Agreement Signature Page]

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