EX-10.1 2 0002.txt FOURTH AMENDMENT TO CREDIT AGREEMENT FOURTH AMENDMENT THIS FOURTH AMENDMENT dated as of September 29, 2000 (this "Amendment") is to the Third Amended and Restated Credit Agreement (as amended, the "Credit Agreement") dated as of June 5, 1998 among U.S. AGGREGATES, INC., a Delaware corporation (the "Company"), various financial institutions (the "Lenders") and BANK OF AMERICA, N.A., as agent for the Lenders (the "Agent"). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as defined in the Credit Agreement. WHEREAS, the parties hereto desire to amend the Credit Agreement in certain respects; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows: SECTION 1 AMENDMENTS. Effective on (and subject to the occurrence of) the Fourth Amendment Effective Date (as defined below): 1.1 Section 1.1 of the Credit Agreement shall be amended by inserting the following definitions in the appropriate alphabetical order: "Fourth Amendment Effective Date means the `Fourth Amendment Effective Date' as defined in the Fourth Amendment to this Agreement dated as of September 29, 2000. Maintenance Capital Spending means, for any period, the aggregate amount of Capital Expenditures made by the Company and its Subsidiaries during such period necessary to maintain the then existing properties of the Company and its Subsidiaries in good working order and condition; provided that Maintenance Capital Spending shall be equal to (a) $17,200,000 for each of the Computation Periods ending September 30, 2000 and December 31, 2000 and (b) $10,000,000 for each Computation Period ending in the 2001 Fiscal Year." 1.2 The definition of "Capital Expenditures" in Section 1.1 of the Credit Agreement shall be amended by (a) replacing the comma immediately prior to the designation "(b)" therein with the word "and"; and (b) deleting all text in such definition immediately following the word "replaced" at the end of clause (ii) thereof. 1.3 The definition of "EBITDA" in Section 1.1 of the Credit Agreement shall be amended and restated in its entirety to read as follows: "EBITDA means, for any period, Consolidated Net Income of the Company for such period before accounting for Minority Interests plus, to the extent deducted in determining Consolidated Net Income, Interest Expense, income tax expense, depreciation, depletion and amortization for such period plus, to the extent deducted in determining Consolidated Net Income, any loss realized upon the sale or other disposition of property of the Company or any Subsidiary that is not sold or otherwise disposed of in the ordinary course of business minus, to the extent reflected in determining Consolidated Net Income, any gain realized upon the sale or other disposition of property of the Company or any Subsidiary that is not sold or otherwise disposed of in the ordinary course of business plus, to the extent deducted in determining Consolidated Net Income (and without duplication), expense that is both non-operating and non-recurring minus, to the extent reflected in determining Consolidated Net Income (and without duplication), income that is both non-operating and non- recurring and plus, to the extent deducted in determining Consolidated Net Income (and without duplication), restructuring charges incurred in connection with business closures; provided that the consolidated net income (plus, to the extent deducted in calculating such consolidated net income, interest expense, income tax expense, depreciation and amortization) of any Person, or attributable to any division or similar business unit, in each case set forth on the schedule of assets to be sold delivered by the Company to the Lenders prior to the Fourth Amendment Effective Date (the `Designated Asset Schedule'), disposed of by the Company or any Subsidiary to an unaffiliated third party in an Asset Sale during such period (a `Sold Business') will be included on a pro forma basis for the portion of such period after such Sold Business was sold or otherwise disposed of in an amount equal to the amount forecasted in good faith by the Company for such Sold Business as what such Sold Business would have earned during the remainder of such period until the time of sale or disposition (as such time was anticipated by the Company in the estimates referred to below) had it not been sold or otherwise disposed of, which forecast is set forth in estimates delivered by the Company to the Agent and the Lenders prior to the Fourth Amendment Effective Date." 1.4 The definition of "Excess Cash Flow" in Section 1.1 of the Credit Agreement shall be amended by deleting clause (b)(viii) of such definition and inserting the following in lieu thereof: "(viii) any gains resulting from receipt of insurance or condemnation proceeds (or similar recoveries) during such period to the extent that (A) such gains were included in calculating EBITDA and (B) the proceeds of such gains were applied to prepay Loans pursuant to Section 6.2.1." 1.5 The definition of "Fixed Charge Coverage Ratio" in Section 1.1 of the Credit Agreement shall be amended by (a) deleting the term "Capital Expenditures" in clause (ii) thereof and substituting the term "Maintenance Capital Spending" therefor and (b) inserting the following immediately after the term "Subsidiaries" in clause (iii) thereof: "(other than taxes that are directly attributable to Asset Sales)". 1.6 The definition of "Maximum Proceeds Amount" in Section 1.1 of the Credit Agreement shall be amended by deleting the amount "$30,000,000" therein and substituting the amount "$100,000,000" therefor. 1.7 The definition of "Net Cash Proceeds" in Section 1.1 of the Credit Agreement shall be amended by inserting the words "within one year after the closing of the related Asset Sale" immediately after the words "or payable" where they appear in clause (a) of such definition. 1.8 Section 2.1.1 of the Credit Agreement shall be amended by deleting the dollar amount set forth in clause (i) of the proviso thereto and substituting the amount "$90,000,000" for such amount. 1.9 Section 6.1.1 of the Credit Agreement shall be amended by inserting an "(a)" immediately prior to the word "After" and (b) inserting the following clause (b): "(b) The Revolving Commitments shall be automatically and permanently reduced to an aggregate amount equal to (x) $70,000,000 on December 31, 2001, (y) $60,000,000 on June 30, 2002 and (z) $0 on the Revolving Termination Date. Voluntary reductions of the Revolving Commitments pursuant to Section 6.1.2 shall be applied to diminish the amount of scheduled reductions to the Revolving Commitments thereafter becoming effective in inverse order of scheduled occurrence." 1.10 Section 6.2.1 of the Credit Agreement shall be amended by deleting clause (a)(ii) of such Section and substituting the following therefor: "(ii) Forthwith upon any Asset Sale that results in any Excess Cash Proceeds, in an amount equal to 100% of such Excess Cash Proceeds." 1.11 Section 10.1.2 of the Credit Agreement shall be amended and restated in its entirety as follows: "10.1.2 Interim Reports. Promptly when available and (i) in any event within 30 days after the end of each month, consolidated balance sheets of the Company and its Subsidiaries as of the end of such month, and consolidated statements of earnings and cash flows for such month and for the period beginning with the first day of the applicable Fiscal Year and ending on the last day of such month, including a comparison with the corresponding month and period of the previous Fiscal Year and a comparison with the budget for such month and for such period of the current Fiscal Year, together with a certificate of the President or the chief financial officer of the Company to the effect that such financial statements fairly present the financial condition and results of operations of the Company and its Subsidiaries as of the date and periods indicated (subject to normal year-end adjustments and the absence of footnotes) and (ii) in any event within 30 days after the end of each Fiscal Quarter, consolidating balance sheets of the Company and its Subsidiaries as of the end of such Fiscal Quarter and consolidating statements of earnings and cash flows of the Company and its Subsidiaries for the period from the end of the last Fiscal Year to the end of such Fiscal Quarter, certified by the President or the chief financial officer of the Company to the effect that such consolidating financial statements fairly present the financial condition and results of operations of the Company and its Subsidiaries." 1.12 Section 10.1 of the Credit Agreement shall be amended by adding the following as Section 10.1.13: "10.1.13 Cash Flow Forecasts. As soon as practicable and in any event within five Business Days following the end of each week, (i) a rolling thirteen week cash flow forecast for the Company and its Subsidiaries on a consolidated and consolidating basis in reasonable detail and (ii) a report comparing the actual cash flow of the Company and its Subsidiaries for such week on a consolidated and consolidating basis to the cash flow forecast for such week delivered to the Agent pursuant to clause (i) of this Section 10.1.13, together with an explanation in reasonable detail of any variance and a certification from the Chief Financial Officer or the Treasurer of the Company as to the accuracy of all actual receipts and disbursements set forth therein." 1.13 Section 10.6.1 of the Credit Agreement shall be amended by replacing the table in such Section with the following: "Computation Period Ending Ratio -------------- ----- 9/30/2000 2.50:1 12/31/2000 1.75:1 3/31/2001 1.80:1 6/30/2001 1.30:1 9/30/2001 1.30:1 12/31/2001 and thereafter 3.00:1." 1.14 Section 10.6.2 of the Credit Agreement shall be amended and restated to read in its entirety as follows: "10.6.2 Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio as of the last day of any Computation Period to be less than the ratio set forth below for such Computation Period: "Computation Period Ending Ratio -------------- ----- 9/30/2000 1.10:1 12/31/2000 0.80:1 3/31/2001 0.80:1 6/30/2001 0.70:1 9/30/2001 0.70:1 12/31/2001 and thereafter 1.10:1." 1.15 Section 10.6.3 of the Credit Agreement shall be amended by replacing the table in such Section with the following: "Computation Period Ending Ratio -------------- ----- 9/30/2000 4.25:1 12/31/2000 5.75:1 3/31/2001 5.50:1 6/30/2001 5.50:1 9/30/2001 5.00:1 12/31/2001 and thereafter 3.00:1." 1.16 Section 10.6 of the Credit Agreement shall be amended by adding the following Section 10.6.4: "10.6.4 Minimum EBITDA. (a) Not permit EBITDA for the period from January 1, 2001 through any date set forth below to be less than the amount set forth below opposite such date: Date Amount ---- ------ January 31, 2001 ($331,887) February 28, 2001 $106,210 March 31, 2001 $2,178,475 April 30, 2001 $4,634,975 May 31, 2001 $9,302,445 June 30, 2001 $14,834,295 July 31, 2001 $19,964,394 August 31, 2001 $25,312,488 September 30, 2001 $30,343,112 October 31, 2001 $33,785,578 November 30, 2001 $35,135,456 December 31, 2001 $35,456,015. (b) Not permit EBITDA for periods in any Fiscal Year ending after December 31, 2001 to be less than the levels negotiated in good faith by the Company and the Required Lenders with respect to such periods and such Fiscal Year as promptly as practicable after the Company delivers to the Lenders the projections required by Section 10.1.8 with respect to such Fiscal Year." 1.17 Section 10.10(k) of the Credit Agreement shall be amended by (a) deleting the word "and" at the end of subclause (iv) thereof; (b) replacing the semi-colon at the end of subclause (v) thereof with a ","; and (c) inserting the following: "(vi) the total consideration for all such Permitted Acquisitions (including cash and noncash purchase price, liabilities assumed, deferred or financed purchase price, purchase price characterized as noncompetition payments and the like) does not exceed (x) $0 during the 2001 Fiscal Year or (y) $10,000,000 in any Fiscal Year thereafter, and (vii) both before and after giving effect to such acquisition, the Leverage Ratio shall be less than 3.0:1 on a pro forma basis." 1.18 Section 10.11 of the Credit Agreement shall be amended by deleting clause (x) of the proviso thereof and inserting in lieu thereof the following: "(x) if no Event of Default or Unmatured Event of Default exists or would result therefrom and, if both immediately prior and immediately after giving effect thereto, the Leverage Ratio is equal to or less than 3.0:1, the Company may declare and pay dividends on its common stock in any Fiscal Year in an amount not to exceed 15% of Consolidated Net Income for the immediately preceding Fiscal Year (provided, that the Company may only pay any dividend pursuant to this clause (x) if, after giving effect thereto, the Company shall be in compliance with all financial covenants in Section 10.6 on a pro forma basis for the twelve consecutive month period ending on the date of payment, as determined by the Company in good faith in a certificate provided to the Lenders on or prior to the date of declaration of such dividend), it being understood that, unless an Event of Default under Section 12.1.1 exists, dividends may be paid within 60 days after the date of declaration thereof if at such date of declaration such dividend complied with this clause (x) even if at the time of payment thereof the Company is not in compliance with this clause (x)." 1.19 Section 10.12 of the Credit Agreement shall be amended by (a) replacing the word "and" immediately prior to the designation "(ii)" therein with a comma; and (b) deleting all text in such Section immediately following the figure "$35,000,000" and substituting the following therefor: "in the 2000 Fiscal Year, and (iii) $10,000,000 in any Fiscal Year thereafter." 1.20 Section 10.13 of the Credit Agreement shall be amended by deleting clause (b) of such Section and inserting the following in lieu thereof: "(b) arrangements which, together with all other such arrangements which shall then be in effect, will not require the payment of any aggregate amount of rentals by the Company and its Subsidiaries in any Fiscal Year exceeding the lesser of (i) 4% of Net Revenues for the immediately preceding Fiscal Year and (ii) $10,000,000 (each being tested as of the end of such Fiscal Year);". 1.21 Section 10.25 of the Credit Agreement shall be amended and restated in its entirety to read as follows: "10.25 Interest Rate Protection. Enter into, not later than 45 days after the Fourth Amendment Effective Date, one or more Hedging Agreements, each with a term of at least two years, on an ISDA standard form with one or more Lenders or Affiliates thereof or with counterparties reasonably acceptable to the Agent to fix the interest rate with respect to not less than one-half of the principal amount of the Term Loans outstanding on the Fourth Amendment Effective Date in form and substance reasonably satisfactory to the Agent." 1.22 Section 10 of the Credit Agreement shall be amended by adding the following Section 10.29: "10.29 Financial Consultant/Appraisal. (a) The Company shall engage and retain, at the sole expense of the Company, a financial consultant satisfactory to the Agent to perform such financial consulting as the Agent may request, with such financial advisor to provide a written report to the lenders addressing such matters as the Agent may request no later than January 15, 2001. (b) The Company shall engage and retain, at the sole expense of the Company, an appraiser satisfactory to the Agent to conduct an appraisal of all quarries and aggregate reserves of each of the properties of the Company and its Subsidiaries which is not set forth on the Designated Asset Schedule and which had EBITDA attributable to such property during the 1999 Fiscal Year or the 2000 Fiscal Year of greater than $1,500,000, and to report thereon to the Lenders in writing no later than March 31, 2001." 1.23 Section 14.9.1 of the Credit Agreement shall be amended by (i) deleting the figure "$5,000,000" where it appears in such Section and inserting in lieu thereof the figure "$1,000,000" and (ii) adding the following at the end of the last paragraph thereof: "Any Lender that is a fund that invests in bank loans may pledge all or any portion of its rights in connection with this Agreement to the trustee for holders of obligations owed, or securities issued, by such fund as security for such obligations or securities, provided that any foreclosure or other exercise of remedies by such trustee shall be subject to the provisions of this Section regarding assignments in all respects. No pledge described in the immediately preceding clause shall release such Lender from its obligations hereunder." 1.24 Schedule 1.1A of the Credit Agreement shall be replaced by Schedule 1.1A hereto. SECTION 2 REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to the Agent and the Lenders that (a) the representations and warranties made in Section 9 (excluding Sections 9.6 and 9.8) of the Credit Agreement are true and correct on and as of the Fourth Amendment Effective Date with the same effect as if made on and as of the Fourth Amendment Effective Date (except to the extent relating solely to an earlier date, in which case they were true and correct as of such earlier date); (b) no Event of Default or Unmatured Event of Default exists or will result from the execution of this Amendment; (c) no event or circumstance has occurred since the Effective Date that has resulted, or would reasonably be expected to result, in a Material Adverse Effect; (d) the execution and delivery by the Company of this Amendment and the performance by the Company of its obligations under the Credit Agreement as amended hereby (as so amended, the "Amended Credit Agreement") (i) are within the corporate powers of the Company, (ii) have been duly authorized by all necessary corporate action, (iii) have received all necessary approval from any Governmental Authority and (iv) do not and will not contravene or conflict with any provision of any law, rule or regulation or any order, decree, judgment or award which is binding on the Company or any Guarantor or any of their respective Subsidiaries or of any provision of the certificate of incorporation or bylaws or other organizational documents of the Company or of any agreement, indenture, instrument or other document which is binding on the Company or any Guarantor or any of their respective Subsidiaries; and (e) the Amended Credit Agreement is the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. SECTION 3 EFFECTIVENESS. The amendments set forth in Section 1 above shall become effective as of the date hereof on such date (the "Fourth Amendment Effective Date") when the Agent shall have received (a) a counterpart of this Amendment executed by the Company and the Required Lenders (or, in the case of any party other than the Company from which the Agent have not received a counterpart hereof, facsimile confirmation of the execution of a counterpart hereof by such party) (provided that the amendments set forth in Sections 1.7 and 1.10 shall not become effective unless and until the Agent shall have received counterparts of this Amendment executed by the Company, the Required Revolving Lenders, the Required Term A Lenders and the Required Term B Lenders), (b) for the account of each Lender that has executed and delivered a counterpart hereof to counsel for the Agent by 1:00 p.m. (Chicago time) on November 13, 2000, an amendment fee in an amount equal to 0.50% of such Lender's Revolving Commitment plus the Term Loans of such Lender outstanding on the Fourth Amendment Effective Date, (c) for the account of BofA and Banc of America Securities LLC ("BAS"), fees in the amount set forth in a separate letter between BofA, BAS and the Company, (d) evidence satisfactory to the Agent that with respect to the Note and Warrant Purchase Agreement, Section 8A (Interest Expense Coverage) thereof, Section 8B (Fixed Charge Coverage) thereof and Section 8C (Leverage Ratio) thereof shall have been amended in form and substance satisfactory to the Agent and (e) each of the following documents, each in form and substance satisfactory to the Agent: 3.1 Reaffirmation. Counterparts of the Reaffirmation of Loan Documents, substantially in the form of Exhibit A, executed by the Company, each Guarantor and each Pledgor. 3.2 Resolutions. Certified copies of resolutions of the Board of Directors of the Company authorizing or ratifying the execution, delivery and performance by the Company of this Amendment, the Amended Credit Agreement and each other Loan Document contemplated by this Amendment to which the Company is a party. 3.3 Incumbency and Signature Certificates. A certificate of the Secretary or an Assistant Secretary of the Company, certifying the names of the officer or officers of the Company authorized to sign this Amendment and the other Loan Documents contemplated hereby to which the Company is a party, together with a sample of the true signature of each such officer. 3.4 Other Documents. Such other documents as the Agent or any Lender may reasonably request. SECTION 4 MISCELLANEOUS. 4.1 Continuing Effectiveness, etc. As herein amended, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. After the Fourth Amendment Effective Date, all references in the Credit Agreement, the Notes, each other Loan Document and any similar document to the "Credit Agreement" or similar terms shall refer to the Amended Credit Agreement. 4.2 Counterparts. This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same Amendment. 4.3 Expenses. The Company agrees to pay the reasonable costs and expenses of the Agent (including reasonable fees and disbursements of counsel, including, without duplication, the allocable costs of internal legal services and all disbursements of internal legal counsel) in connection with the preparation, execution and delivery of this Amendment. 4.4 Governing Law. This Amendment shall be a contract made under and governed by the laws of the State of Illinois applicable to contracts made and to be wholly performed within the State of Illinois. 4.5 Successors and Assigns. This Amendment shall be binding upon the Company, the Lenders and the Agent and their respective successors and assigns, and shall inure to the benefit of the Company, the Lenders and the Agent and the successors and assigns of the Lenders and the Agent. 4.6 Fees. The fees referred to in Sections 3(b) and (c) hereof are not subject to Section 7.5 of the Credit Agreement. Delivered as of the day and year first above written. U.S. AGGREGATES, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary BANK OF AMERICA, N.A., as Agent By: /s/ Kathleen M. Carry Title: Vice President BANK OF AMERICA, N.A., as a Lender and as Issuing Lender By: /s/ James D. Cockey Title: Principal FLEET NATIONAL BANK (formerly known as BankBoston, N.A.), as a Lender By: Title: NATIONAL CITY BANK, as a Lender By: /s/ Tom Gurbach Title: Vice President BANK OF SCOTLAND, as a Lender By: /s/ Joseph Fratus Title: Vice President IBJ WHITEHALL BANK AND TRUST COMPANY, as a Lender By: Title: COMERICA BANK - CALIFORNIA, as a Lender By: /s/ Lori Edwards Title: Senior Vice President ZIONS FIRST NATIONAL BANK, as a Lender By: /s/ illegible Title: Vice President UNION BANK OF CALIFORNIA, N.A., as a Lender By: /s/ illegible Title: Vice President PILGRIM PRIME RATE TRUST, as a Lender By: Pilgrim Investments, Inc., as its Investment Manager By: /s/ Mark F. Haak Title: Assistant Vice President SENIOR DEBT PORTFOLIO By: Boston Management and Research, as Investment Advisor By: /s/ Payson F. Swaffield Title: Vice President EATON VANCE INSTITUTIONAL SENIOR LOAN FUND By: Eaton Vance Management, as Investment Advisor By: /s/ Payson F. Swaffield Title: Vice President EATON VANCE SENIOR INCOME TRUST By: Eaton Vance Management, as Investment Advisor By: /s/ Payson F. Swaffield Title: Vice President KZH-HIGHLAND - 2 LLC By: /s/ Kimberly Rowe Title: Authorized Agent ARCHIMEDES FUNDING, LLC By: ING Capital Advisors, LLC, as Collateral Manager By: /s/ Steven Gorski Title: Vice President and Senior Credit Analyst ARCHIMEDES FUNDING III, LLC By: ING Capital Advisors, LLC, as Collateral Manager By: /s/ Steven Gorski Title: Vice President and Senior Credit Analyst SEQUILS-ING 1 (HBDGM), LTD. By: ING Capital Advisors, LLC, as Collateral Manager By: /s/ Steven Gorski Title: Vice President and Senior Credit Analyst BANK ONE, N.A. By: /s/ Stephen C. Price Title: First Vice President BRANCH BANKING AND TRUST COMPANY By: /s/ illegible Title: Corp. Accts. Officer EXHIBIT A REAFFIRMATION OF LOAN DOCUMENTS as of September 29, 2000 Bank of America, N.A., as Agent and the other parties to the Third Amended and Restated Credit Agreement referred to below 1455 Market Street San Francisco, California 94103 Attn: Agency Management Services #5596 Re: Reaffirmation of Loan Documents Ladies and Gentlemen: Please refer to: 1. The Amended and Restated Security Agreement dated as of June 5, 1998 (the "Security Agreement") among U.S. Aggregates, Inc. (the "Company"), Western Aggregates Holding Corporation, a Delaware corporation, Jensen Construction and Development, Inc., a Nevada corporation, Sandia Construction, Inc., a Nevada corporation, Cox Rock Products Inc., a Utah corporation, Cox Transport Corporation, a Utah corporation, SRM Holdings Corp., a Delaware corporation, Southern Ready Mix, Inc., an Alabama corporation, A-Block Company, Inc., an Arizona corporation, A-Block Company, Inc., a California corporation, Mohave Concrete and Materials, Inc., an Arizona corporation, Mohave Concrete and Materials, Inc., a Nevada corporation, Mulberry Rock Corporation, a Georgia corporation, Valley Asphalt, Inc., a Utah corporation, BHY Ready Mix, Inc., a Tennessee corporation, Geodyne Beck Rock Products, Inc., a Utah corporation, Western Rock Products Corp., a Utah corporation, Tri-State Testing Laboratories, Inc., a Utah Corporation, Dekalb Stone, Inc., a Georgia corporation, Bradley Stone & Sand, Inc., a Tennessee corporation, Monroc, Inc., a Delaware corporation, Western Aggregates, Inc., a Utah corporation, and Bank of America, N.A. in its capacity as Agent (in such capacity, the "Agent"); 2. The Amended and Restated Guaranty dated as of June 5, 1998 (the "Guaranty") executed in favor of the Agent and various other parties by Western Aggregates Holding Corporation, Jensen Construction and Development, Inc., Sandia Construction, Inc., Cox Rock Products Inc., Cox Transport Corporation, SRM Holdings Corp., Southern Ready Mix, Inc., A- Block Company, Inc., A-Block Company, Inc., Mohave Concrete and Materials, Inc., Mohave Concrete and Materials, Inc., Mulberry Rock Corporation, Valley Asphalt, Inc., BHY Ready Mix, Inc., Geodyne Beck Rock Products, Inc., Western Rock Products Corp., Tri-State Testing Laboratories, Inc., Dekalb Stone, Inc., Bradley Stone & Sand, Inc. and Monroc, Inc.; 3. The following Pledge Agreements: (a) the Amended and Restated Company Pledge Agreement dated as of June 5, 1998 between the Company and the Agent, and (b) the Amended and Restated Subsidiary Pledge Agreement dated as of June 5, 1998 between Western Aggregates Holding Corp., Western Rock Products Corp., SRM Holdings Corp., Southern Ready Mix, Inc., Monroc, Inc., and the Agent, (all of the foregoing Pledge Agreements, in each case as heretofore amended, being collectively referred to herein as the "Pledge Agreements"). 4. The Patent Security Agreement made as of March 30, 1995 by Cox Rock Products Inc. in favor of the Agent (the "Patent Security Agreement"). The Security Agreement, the Guaranty, the Pledge Agreements and the Patent Security Agreement, in each case as heretofore amended, are collectively referred to herein as the "Loan Documents". Capitalized terms not otherwise defined herein will have the meanings given in the Credit Agreement referred to below. Each of the undersigned acknowledges that the Company, the Banks and the Agent have executed the Fourth Amendment (the "Amendment") to the Third Amended and Restated Credit Agreement dated as of June 5, 1998 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"). Each of the undersigned hereby confirms that each Loan Document to which such undersigned is a party remains in full force and effect after giving effect to the effectiveness of the Amendment and that, upon such effectiveness, all references in such Loan Document to the "Credit Agreement" shall be references to the Credit Agreement as amended by the Amendment. The letter agreement may be signed in counterparts and by the various parties as herein on separate counterparts. This letter agreement shall be governed by the laws of the State of Illinois applicable to contracts made and to be performed entirely within such State. U.S. AGGREGATES, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary SRM HOLDINGS CORP. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary WESTERN AGGREGATES HOLDING CORP. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary WESTERN ROCK PRODUCTS CORP. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary JENSEN CONSTRUCTION & DEVELOPMENT, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary SANDIA CONSTRUCTION, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary TRI-STATE TESTING LABORATORIES, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary MOHAVE CONCRETE AND MATERIALS, INC., a Nevada corporation By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary MOHAVE CONCRETE AND MATERIALS, INC., an Arizona corporation By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary A-BLOCK COMPANY, INC., an Arizona corporation By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary A-BLOCK COMPANY, INC., a California corporation By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary COX ROCK PRODUCTS, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary COX TRANSPORT CORPORATION By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary VALLEY ASPHALT, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary GEODYNE BECK ROCK PRODUCTS, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary SOUTHERN READY MIX, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary DEKALB STONE, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary MULBERRY ROCK CORPORATION By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary BHY READY MIX, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary BRADLEY STONE & SAND, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary MONROC, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary WESTERN AGGREGATES, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary ACKNOWLEDGED AND AGREED as of the date first written above BANK OF AMERICA, N.A., as Agent By: /s/ Kathleen M. Carry Title: Vice President SCHEDULE 1.1A PRICING SCHEDULE From November __, 2000 through December 31, 2000, the Applicable ABR Margin for Revolving Loans and Term A Loans shall be 2.25% per annum, the Applicable Eurodollar Margin for Revolving Loans and Term A Loans shall be 3.50% per annum, the Applicable ABR Margin for Term B Loans shall be 2.25% per annum, the Applicable Eurodollar Margin for Term B Loans shall be 4.00% per annum and the Non-Use Fee Rate shall be 0.50%. From and after January 1, 2001, the Applicable ABR Margin, Applicable Eurodollar Margin and Non-Use Fee Rate shall be determined based on the Leverage Ratio as follows: on and after any date specified below on which the Applicable ABR Margin and Applicable Eurodollar Margin for Revolving Loans, Term A Loans and Term B Loans and the Non-Use Fee Rate are to be adjusted, the rate per annum set forth in the table below opposite the applicable Leverage Ratio: Applicable Applicable Eurodollar ABR Margin Margin (Revolving Applicable Applicable (Revolving Loans and Eurodollar ABR Margin Leverage Loans and Term A Non-Use Margin (Term (Term B Ratio Term A Loans) Loans) Fee Rate B Loans) Loans) Greater than 3.50% 2.25% 0.50% 4.00% 2.25% or equal to 4.50:1 Greater than 3.25% 2.00% 0.50% 3.75% 2.25% or equal to 4.00:1 but less than 4.50:1 Greater than 3.00% 1.75% 0.50% 3.75% 2.25% or equal to 3.50:1 but less than 4.00:1 Greater than 2.50% 1.50% 0.425% 3.50% 2.00% or equal to 3.00:1 but less than 3.50:1 Less than 2.00% 1.00% 0.375% 3.25% 2.00% 3.00:1 The Applicable ABR Margin, Applicable Eurodollar Margin and Non-Use Fee Rate shall be adjusted, to the extent applicable, following each Fiscal Quarter (commencing with the Fiscal Quarter ended September 30, 2000) on the earlier to occur of (x) 30 days (or, in the case of the last Fiscal Quarter of any year, 120 days) after the end of each Fiscal Quarter (or, in the case of the Fiscal Quarter ended September 30, 2000, January 1, 2001), based on the Leverage Ratio as of the last day of such Fiscal Quarter and (y) the date the financial statements required by Section 10.1.1 or 10.1.2, as applicable, and the related Compliance Certificate, if any, required by Section 10.1.3, are delivered in accordance with such Sections (provided that this clause (y) shall not apply to calculations for the Computation Period ended on September 30, 2000); it being understood that if the Company fails to deliver the financial statements required by Section 10.1.1 or 10.1.2, as applicable, and the related Compliance Certificate, if any, required by Section 10.1.3 by the 30th day (or, if applicable, the 120th day) after any Fiscal Quarter, the Applicable ABR Margin for Revolving Loans and Term A Loans shall be 2.25% per annum, the Applicable Eurodollar Margin for Revolving Loans and Term A Loans shall be 3.50% per annum, the Applicable ABR Margin for Term B Loans shall be 2.25% per annum, the Applicable Eurodollar Margin for Term B Loans shall be 4.00% per annum and the Non-Use Fee Rate shall be 0.50% per annum until such financial statements and Compliance Certificate are delivered. In addition, at all times when an Event of Default or Unmatured Event of Default shall have occurred and be continuing, there shall be no reduction in the Applicable ABR Margin, the Applicable Eurodollar Margin or the Non-Use Fee Rate.