Document:

EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

     THIS AGREEMENT (the "Agreement"), is made and entered into as of December
14, 2001, between GRUBB & ELLIS COMPANY, a Delaware corporation (the "Company"),
and ROBERT J. WALNER (the "Executive").

     1. POSITION AND DUTIES. The Executive shall have the title and position of
Chief Administrative Officer, Chief Legal Officer, Executive Vice President and
Corporate Secretary of the Company. The Executive shall have such duties and
responsibilities commensurate with his titles and position as shall be assigned
to him, from time to time, by the Chief Executive Officer of the Company (the
"CEO"), and shall report to the Chief Executive Officer of the Company. Subject
to the preceding sentence, Executive's supervisory responsibilities shall
include, without limitation, responsibilities relating to legal matters and risk
management. Executive shall be an Executive Officer of the Company during the
Period of Contract Employment.

     2. LOCATION OF EMPLOYMENT. Executive's principal place of employment during
the entire Period of Contract Employment shall be Northbrook, Illinois.

     3. PERIOD OF CONTRACT EMPLOYMENT. The term "Period of Contract Employment,"
as used in this Agreement, means the period beginning on the date set forth
above and ending on the earlier of June 30, 2004 (the "Expiration Date") or,
subject to the terms hereof, upon termination of the Executive's employment with
the Company. Upon Executive's written request therefor, no sooner than 180 days
and no later than 120 days prior to the Expiration Date, the Company will advise
the Executive of the Company's preliminary intentions regarding renewal of
Executive's employment (without any obligation regarding a renewal).

     4. ANNUAL BASE SALARY. Executive's base salary for the period July 1, 2001
through December 31, 2001 shall be $325,000. The Company agrees to pay the
Executive a base salary (the "Base Salary") in the annual amount of $375,000 for
the twelve month period commencing on January 1, 2002 and ending December 31,
2002, and $450,000 (annually) for the eighteen month period beginning on January
1, 2003 and ending June 30, 2004. The Base Salary shall be payable as current
salary, in installments (not less frequently than monthly) subject to all
applicable withholding and deductions, in accordance with the Company's
customary payroll practices applicable to all employees in positions comparable
to the Executive. Subject to the preceding sentences hereof, on January 2, 2002,
Executive shall be paid a sum necessary to retroactively increase Executive's
Base Salary as provided above to $325,000 effective as of July 1, 2001.

     5. BONUS COMPENSATION. During the Period of Contract Employment, the
Executive shall receive annual cash bonus compensation ("Bonus Compensation") as
follows:

   PERIOD                                                    BONUS COMPENSATION
   Guaranteed Bonus for period ending
   December 31, 2001                                              $120,000

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Annually thereafter through the end of the         Target bonus of 50% of Base
Term                                               Salary; Maximum Bonus of 80%
                                                   of Base Salary

     Except for the Guaranteed Bonus, Bonus Compensation shall be based upon the
performance of the Executive of goals to be established by the Chief Executive
Officer of the Company, in consultation with the Executive, within three (3)
months of the date of this Agreement. All Bonus Compensation shall be payable
after December 31st of the year to which the Bonus Compensation is applicable in
one lump sum, subject to all applicable withholding and deductions, in
accordance with the Company's customary payroll and bonus payment practices. In
the absolute discretion of the Company, Executive may be paid bonuses in excess
of guaranteed sums or maximum targets. Notwithstanding the above, a pro-rata
bonus, if any, for the six (6) month period ending June 30, 2004 shall be paid
to Executive promptly after said date.

     6. STOCK OPTIONS. Pursuant to the Company's 1990 Amended and Restated Stock
Option Plan (referred to throughout this Agreement as the "Plan"), subject to
the approval of the Compensation Committee of the Board of Directors of the
Company, and if required by the Plan, the Board of Directors of the Company (the
"Board"), on the date of the next most practicable meeting of the Board, the
Company shall grant the Executive a stock option (the "Option") to purchase an
aggregate of fifty thousand (50,000) shares of the Company's common stock, $.01
par value per share (the "Common Stock"), at an exercise price, pursuant to the
terms of the Plan, equal to the closing price of the Common Stock on The New
York Stock Exchange on the trading day next preceding the date of grant (the
"Exercise Price"). The terms of the Options shall be set forth in an agreement
between the Company and the Executive, which shall reflect the terms hereof and
the terms and conditions set forth in the Company's standard form of option
agreement (the "Option Agreement"). The Options shall become exercisable: (i)
twenty percent (20%) one year from the date of grant, (ii) an additional twenty
percent (20%) two years from the date of grant, and (iii) the remaining sixty
percent (60%) on the day preceding the last day of the Period of Contract
Employment, and shall expire ten (10) years after the date of grant; provided,
however, that in the event that the Executive's employment with the Company is
terminated by the Company for any reason other than for "Cause", the Executive
resigns for Good Reason or the Period of Contract Employment is not extended,
the Executive shall have the right to exercise vested Options (i.e., Options
which are exercisable as of the termination date) for a period of six (6) months
after such termination date. Notwithstanding the foregoing, (i) in the event of
a "Change of Control" as defined in the Plan, or (ii) if the Executive
terminates his employment for "Good Reason" as defined herein, or (iii) if the
Executive is terminated by the Company other than for "Cause" as defined herein,
pursuant to Section 8(a) hereof, then, in any of such events, all unvested
Options shall immediately vest and become exercisable and remain so for a period
of six (6) months unless otherwise cancelled or assumed following a Change of
Control as provided by the terms of the Plan. In addition, at the discretion of
the Administrator (as defined in the Plan), the Executive may receive further
grants of Options, subject to the terms of the Plan. Provided that Executive is
still actively employed by the Company following the expiration of the Period of
Contract Employment, Executive shall be entitled to the benefits of the second
preceding sentence, which shall survive the expiration of the Period of Contract
Employment, for so long as Executive shall be so actively employed, such that in
the event that an event set forth in (i), (ii) or (iii) of the second preceding
sentence shall

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occur following the expiration of the Period of Contract Employment but while
Executive shall be actively employed by the Company, Executive shall
nevertheless be entitled to the benefits thereof.

     7. BENEFITS. During the Period of Contract Employment, and in the event of
a termination under Section 8(a) or 8(d) of this Agreement during the Severance
Period (as defined below), as applicable, the Executive shall be entitled to
participate in or receive benefits equivalent to any employee benefit plan or
other arrangement, including but not limited to any medical, dental, retirement,
disability, life insurance, sick leave and vacation plans or arrangements, as
well as perquisites for executive officers of the Company, generally made
available by the Company to its employees having a title and position equivalent
to Executive's, subject to or on a basis consistent with the terms, conditions
and overall administration of such plans or arrangements; PROVIDED, that such
plans and arrangements are made available at the discretion of the Company and
nothing in this Agreement establishes any right of the Executive to the
availability or continuance of any such plan or arrangement. The Company shall
reimburse the Executive for the reasonable attorneys fees expended in the
negotiation of this Agreement not to exceed $5,000. Provided that Executive is
insurable at commercially reasonable rates, during the Period of Contract
Employment, the Company shall pay the cost of providing to executive $1,000,000
of term life insurance coverage naming the Executive's estate or designated
beneficiary as the beneficiary thereof.

     8. TERMINATION. The following termination provisions and benefits are in
lieu of the benefits available under the Company's Executive Change of Control
Plan ("COC Plan"). Executive agrees that his termination provisions and benefits
shall not be governed by such Plan:

          (a) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
     terminate the Executive's employment under this Agreement without Cause at
     any time by giving written notice to the Executive. Such termination will
     become effective upon the date specified in such notice (the "Effective
     Date"), provided that such date is at least 30 days after the date of such
     notice. Upon any such termination, the Company will pay the Executive,
     within five days of the Effective Date of termination and subject to the
     Executive's execution and delivery of such documents of release as the
     Company may reasonably request: (i) all earned but unpaid Base Salary and
     vacation pay through the Effective Date, payable in a lump sum within five
     (5) days after the Effective Date; and (ii) all Base Salary payable in
     accordance with the Company's customary payroll practices, and the benefits
     set forth in Section 7 above for the period (the "Severance Period") of
     either twelve (12) months following the Effective Date or through the end
     of the Contract Period of Employment, whichever period is shorter (the
     "Severance Benefit").

          (b) TERMINATION BY THE COMPANY FOR CAUSE. The Company may immediately
     terminate the Executive's employment at any time for Cause by giving
     written notice to the Executive. Upon any such termination for Cause, the
     Executive shall have no right to compensation under Section 8(a)(ii),
     including, without limitation, and except as required by law, to
     participate in any employee benefit programs under Section 7 for any period
     subsequent to the date of termination. For purposes of this Section 8(b),
     "Cause" shall mean: (i) the Executive is convicted of or pleads guilty or
     nolo contendere to a felony;

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     (ii) the Executive, in carrying out his duties hereunder, commits unlawful
     acts involving dishonesty (including, without limitation, misappropriation
     and embezzlement) or fraud or is guilty of gross negligence or willful
     misconduct; or (iii) the Executive refuses to comply with any reasonable
     lawful directive of the Board that is commensurate with the Executive's
     duties within 15 days after written notice has been given to the Executive
     by the Company.

          (c) DEATH OR DISABILITY. This Agreement and the obligations of the
     Company hereunder will, upon the Company's election in writing to the
     Executive within 30 (thirty) days thereafter, terminate upon the death or
     disability of the Executive. For purposes of this Section 8(c),
     "disability" shall mean that for a period of more than twelve (12) weeks in
     any twelve (12) month period the Executive is unable to perform the
     essential functions of his duties because of physical, mental or emotional
     incapacity resulting from injury, sickness or disease.

          (d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive may
     terminate his employment under this Agreement at any time for Good Reason
     by giving written notice to the Company. For purposes of this Section 8(d),
     "Good Reason" shall mean: (i) there is a Change of Control; (ii) the
     Executive's principal place of employment is moved to a location other than
     in the Chicago metropolitan area; (iii) the Executive suffers a reduction
     in title or is required to report to someone other than the Chief Executive
     Officer of the Company; (iv) a material breach of the Agreement by the
     Company that is not cured fifteen (15) days after written notice of the
     breach has been given to the Company by the Executive or (v) a material
     reduction in Executive's responsibilities or the assignment of duties not
     commensurate with Executive's positions and titles. In the event of such a
     termination, the Executive shall be entitled to the Severance Benefit set
     forth in Section 8(a) and benefits set forth in Section 7 during the
     Severance Period.

          (e) TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON. The Executive
     may terminate his employment under this Agreement without Good Reason at
     any time by giving written notice to the Company. Such termination will
     become effective upon the date specified in such notice, provided that such
     date is at least 30 days after the date of delivery of the notice. Upon any
     such termination, the Company shall be relieved of all of its obligations
     under this Agreement, except for payment of salary and the provision of
     benefits through the effective date of termination.

     9. NO SOLICITATION. The Executive hereby covenants and agrees that during
the Period of Contract Employment and for one (1) year following the expiration
or termination of employment with the Company, he will not, for himself or any
third party, directly or indirectly: (i) divert or attempt to divert from the
Company any business of any kind in which the Company is engaged, or (ii) employ
or solicit for employment any person employed by the Company during the period
of such person's employment.

     10. COMPETING BUSINESS. The Executive hereby covenants and agrees that,
during the Period of Contract Employment: (i) the Executive will not have any
investment in a Competing Business (as defined in this Section) other than an
investment in a mutual fund or

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other similar entity, or an equity interest of less than five percent (5%) of
any company whose securities are listed on The New York Stock Exchange, The
American Stock Exchange or quoted on NASDAQ; and (ii) Executive will not render
personal services to any Competing Business in any manner, including, without
limitation, as owner, partner, director, trustee, officer, employee, consultant
or advisor thereof.

     For purposes of this Agreement, "Competing Business" shall mean any
business which derives a substantial portion of its revenue from business
similar or competitive to that now, or at any time during the Period of Contract
Employment, conducted by the Company, in any metropolitan area, city, county or
other political subdivision, where the Company presently does business or, at
any time during the Period of Contract Employment, will do business.

     If the Executive breaches the agreement contained in this Section, such
breach may render the Executive liable to the Company for damages therefor and
entitle the Company to enjoin the Executive from making such investment or from
rendering such personal services. In addition, the Company shall have the right
in such event to enjoin the Executive from disclosing any confidential
information concerning the Company to any Competing Business, to enjoin any
Competing Business from receiving from the Executive or using such confidential
information and/or to enjoin any Competing Business from retaining or seeking to
retain any other employees or other associates of the Company.

     11. CONFIDENTIALITY. The Executive hereby covenants and agrees, for a
period of five (5) years from the date hereof (the "Restricted Period"), he will
not, directly or indirectly, make use of or divulge to any other person, firm or
corporation any trade or business secret, process, method or means or any other
confidential information concerning the business or policies of the Company or
any subsidiary thereof. The Executive's obligations shall not apply to any
information which (i) is known publicly; (ii) is in the public domain or
hereafter enters the public domain without the fault of the Executive; (iii) is
known to the Executive prior to his receipt of such information from the Company
or any of its subsidiaries, as evidenced by the Executive's written records;
(iv) is disclosed to the Executive by a third party not under an obligation of
confidence to the Company; or (v) is required to be disclosed by law or legal
proceeding.

     12. SEVERABILITY, ENFORCEABILITY. In the event that the provisions of the
Sections captioned "Competing Business" or "No Solicitation" or
"Confidentiality" or any portion thereof, should ever be adjudicated by a court
of competent jurisdiction in proceedings to which the Company is a proper party
to exceed the time or geographic or other limitations permitted by applicable
law, then such provisions will be deemed reformed to the maximum time or other
limitations permitted by applicable law, as determined by such court in such
action, the parties hereby acknowledging their desire that in such event such
action be taken. Without limiting the foregoing, the covenants contained herein
will be construed as separate covenants covering their respective subject
matters, including, without limitation, with respect to (a) each of the separate
cities, counties, metropolitan areas, and each other political subdivision of
the United States in which any of the Company or its successors now transact any
business or propose to transact business, (b) each business now conducted by the
Company or its successors, and (c) the Company and its successors separately. In
addition to the above, all provisions of this Agreements are severable, and the
invalidity or unenforceability of any provision or

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provisions of this Agreement or portions or aspects thereof will not affect the
validity or enforceability of any other provision, or portion of this Agreement,
which will remain in full force and effect as if executed with the unenforceable
or invalid provision or portion or aspect thereof modified, as set forth above.

     13. GOVERNING LAW. This Agreement is being made and executed in and is
intended to be performed in the State of Illinois and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of Illinois, without regard to the conflict of laws principles
thereof.

     14. ENTIRE AGREEMENT. The obligations of the Company under this Agreement
shall be binding on the Company and its successors and assigns. This Agreement
and the Option Agreement comprise the entire agreement between the parties
hereto relating to the subject matter hereof and, as of the date hereof,
supersede, cancel and annul all previous employment agreements between the
Company (and/or its predecessors) and the Executive, including without
limitation, the COC Plan, as the same may have been amended or modified, and any
right of the Executive thereunder, and all agreements executed in connection
therewith, and, supersede, cancel and annul all other prior written and oral
agreements between the Executive and the Company or any predecessor to the
Company. The parties agree that notwithstanding the foregoing, nothing contained
herein shall, subject to the provisions set forth in Section 7 hereof, operate
to cancel or annul any right of Executive under the plans, programs or
agreements set forth on Exhibit A annexed hereto. The terms of this Agreement
and the Option Agreement are intended by the parties to be the final expression
of their agreement with respect to the employment of the Executive by the
Company and may not be contradicted by evidence of any prior or contemporaneous
agreement. The parties acknowledge that the award of Options is a material
inducement to Executive in entering into this Agreement with the Company.

     15. DISPUTES. In the event a claim or controversy arises concerning any
provision of this Agreement or the performance of this Agreement, such claim or
controversy shall be settled by final, binding arbitration in accordance with
the Streamlined Arbitration Rules of JAMS, which rules are incorporated herein
by reference. All persons nominated to act as arbitrators of such claim or
controversy shall be attorneys at law duly licensed to practice before the
courts of the state where the arbitration is conducted. The arbitrator(s) shall
apply the internal law of the State of Illinois, without regard to the
conflict-of-law provisions, and should the arbitrator(s) fail to follow such
law, the ruling of the arbitrator(s) can be appealed to the court of general
jurisdiction in the state where the arbitration is conducted. The arbitration
shall be conducted in the city of Chicago, Illinois. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Discovery may be obtained during such arbitration proceedings to the
same extent as authorized in Illinois civil judicial proceedings. The
unsuccessful party shall pay the costs of conducting the arbitration. In the
event any arbitration proceeding, or any legal action to enforce an arbitration
award, is commenced hereunder, the prevailing party shall be entitled to recover
its expenses and reasonable attorneys' fees incurred therein from the
unsuccessful party.

     16. NOTICES. Any notice, request, claim, demand, document and other
communication hereunder to any party will be effective upon receipt (or refusal
of receipt) and will be in writing and delivered personally or sent by telecopy
or certified or registered mail,

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postage prepaid, as follows: if to the Company, addressed to the attention of
its Chief Executive Officer at 55 East 59th Street, New York, New York 10022;
and if to the Executive, at:

                  Robert J. Walner
                  1889 Cavell Avenue
                  Highland Park, IL  60035

     Either party may change the notice address by notifying the other party in
writing.

     17. AMENDMENTS; WAIVERS. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, approved by the Compensation
Committee of the Board and signed by the Executive and the Company. By an
instrument in writing similarly executed, the Executive or the Company may waive
compliance by the other party with any provision of this Agreement that such
other party was or is obligated to comply with or perform; provided, that such
waiver shall not operate as a waiver of, or estoppel with respect to, any other
or subsequent failure. No failure to exercise and no delay in exercising any
right, remedy or power hereunder shall preclude any other or further exercise of
any other right, remedy or power provided herein or by law or in equity.

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

GRUBB & ELLIS COMPANY

By:  /s/ BARRY M. BAROVICK                            /s/ ROBERT J. WALNER
     ----------------------                           ------------------------
     Barry M. Barovick                                Robert J. Walner
     Chief Executive Officer and President

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                                    EXHIBIT A

1.       Health and welfare plans

2.       Company stock options previously granted to the Executive

3.       Retirement and deferred compensation plans

4.       Executive perquisites and fringe benefits

                                       8EXHIBIT 4.1

                       TENTH AMENDMENT TO CREDIT AGREEMENT
                                       AND
                              FORBEARANCE AGREEMENT

     THIS TENTH AMENDMENT TO CREDIT  AGREEMENT AND  FORBEARANCE  AGREEMENT (this
"AGREEMENT")  is  entered  into  as of  January  31,  2002  by  and  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").

                                    RECITALS:

         WHEREAS,  the  Company,  the Lenders and the Agent have  entered into a
Third  Amended  and  Restated  Credit  Agreement  dated  as of June 5,  1998 (as
amended,  the  "CREDIT  AGREEMENT";  capitalized  terms  used but not  otherwise
defined  herein  have the  meanings  assigned  thereto in the Credit  Agreement)
pursuant to which, as of the date hereof,  the Company is indebted and liable to
the Agent and the Lenders for various Loans, other financial  accommodations and
obligations (the "INDEBTEDNESS");

         WHEREAS,   the parties  hereto desire to amend the Credit  Agreement in
certain respects;

         WHEREAS,  the Company and certain of the Lenders previously  executed a
Tenth Amendment to the Credit  Agreement dated as of November 15, 2001, but such
document never became effective; and

         WHEREAS,  the Company is in default of certain provisions of the Credit
Agreement and the Required Lenders have agreed to forbear to the extent,  and on
the terms and subject to the conditions, set forth in this Agreement;

         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:

1        SECTION  AMENDMENTS  TO CREDIT  AGREEMENT. Effective on (and subject to
the occurrence of) the Tenth Amendment Effective Date (as defined below):

         1.1 Section 1.1 of the Credit  Agreement shall be amended by adding the
following definitions thereto, each in its appropriate alphabetical position:

                  IDAHO  SALE means the sale by Monroc of  substantially  all of
         its assets and properties  used in its operations in the State of Idaho
         pursuant to the  Agreement  of  Purchase  and Sale of Asets dated as of
         February 5, 2002 among  Oldcastle  MMG, Inc.,  Monroc,  the Company and
         Oldcastle  Materials,  Inc.  for  a  purchase  price  of  approximately
         $21,750,000  (with  expected Net Cash Proceeds to the Agent pursuant to

<PAGE>

         SECTION 6.2.1(A) of approximately  $16,000,000),  subject to adjustment
         as provided in such Agreement, which shall close no later than February
         8, 2002.

                  IDAHO SALE CASH COLLATERAL ACCOUNT - see SECTION 6.2.1(A).

                  OPERATING BUDGET means a weekly budget for the Company and its
         Subsidiaries setting forth cash receipts and anticipated  disbursements
         on a weekly basis for the period from  February 1, 2002  through  March
         16,  2002  and  delivered  to  the  Lenders  in  connection   with  the
         effectiveness of the Tenth Amendment.

                  TENTH  AMENDMENT  means the Tenth  Amendment to this Agreement
         and Forbearance Agreement dated as of January 31, 2002.

         1.2 Section 4.1 of the Credit  Agreement  shall be amended and restated
to read in its entirety as follows:

                  4.1 INTEREST  RATES.  The Company  promises to pay interest on
         the unpaid principal  amount of each Loan for the period  commencing on
         and including the date of such Loan to but excluding the date such Loan
         is paid in full, as follows:

                  (a) at all times while such Loan is an ABR Loan, at a rate per
         annum equal to the sum of the Alternate  Base Rate from time to time in
         effect plus the Applicable ABR Margin; and

                  (b) at all times while such Loan is a  Eurodollar  Loan,  at a
         rate  per  annum  equal  to the  sum of the  Eurodollar  Rate  (Reserve
         Adjusted)  applicable  to each  Interest  Period for such Loan plus the
         Applicable Eurodollar Margin;

         PROVIDED,  HOWEVER,  that  upon  notice to the  Company  from the Agent
         (acting upon the request of the Required  Lenders) at any time an Event
         of Default exists,  and for so long as such Event of Default continues,
         the  interest  rate  applicable  to all Loans shall be increased by 2%.
         Notwithstanding  anything to the contrary herein,  (i) each Term C Loan
         shall bear  interest  from and  including  the date of such Loan to but
         excluding  the date such Loan is paid in full at a rate per annum equal
         to the  Alternate  Base Rate plus 7%  (subject  to the  PROVISO  to the
         immediately  preceding  sentence) and (ii) at all times after the Idaho
         Sale,  a portion of the Loans in each  Facility  (other than the Term C
         Loans) equal to the  principal  amount of Loans in such  Facility  that
         would have been  prepaid  with the Net Cash  Proceeds of the Idaho Sale
         but for CLAUSE (2) of the last PROVISO to SECTION  6.2.1 (with  respect
         to each Facility,  such Facility's "DEFERRED PREPAYMENT PORTION") shall
         bear  interest  at a rate per annum  equal to the sum of the  Alternate
         Base Rate plus 7% (subject to the PROVISO to the immediately  preceding
         sentence), and the principal amount of Loans in each Facility in excess
         of such Facility's  Deferred  Prepayment Portion shall bear interest as
         set forth in the first  sentence of this  SECTION  4.1. For purposes of
         calculating  interest on the Loans,  all  payments of principal on each
         Facility shall be
<PAGE>

         applied first to  the Deferred  Prepayment Portion of such Facility and
         second to the remainder of such Facility.

         1.3 Section  6.2.1 of the Credit  Agreement  shall be amended by adding
the following immediately after the existing text of CLAUSE (A):

         ; PROVIDED,  FURTHER, that notwithstanding anything to the contrary set
         forth in this  Agreement,  the Net Cash  Proceeds  from the Idaho  Sale
         shall be applied or  distributed  as  follows:  (1) FIRST to the Term C
         Loans,  together with any Capitalized  Interest and accrued interest on
         the principal  amount  prepaid and to fees  attributable  to the Term C
         Loans  (with  application  first to fees  thereon  then due and  owing,
         second to  interest  thereon  then due and  owing,  and third to unpaid
         principal);  (2) SECOND to a cash collateral  account under the Agent's
         control  and as to which the  Company  shall  have the  ability to make
         withdrawals  therefrom only in the  circumstances  specified below (the
         "IDAHO  SALE  CASH  COLLATERAL  Account")  in an  amount  not to exceed
         $5,000,000;  (3) THIRD to pay the fees of the Lenders  that are due and
         owing under Section 3 of the Seventh  Amendment  hereto dated as of May
         29, 2001 and other fees and expenses of the Agent  (including  fees and
         expenses,  or reserves to add to  appropriate  retainers  in respect of
         such fees and expenses,  of professional advisors to the Agent) and (4)
         FOURTH to the Loans as set forth  above in this  SECTION  6.2.1(A),  IT
         BEING  UNDERSTOOD  that the Company shall be entitled to withdraw funds
         from the Idaho  Sale Cash  Collateral  Account  solely  for (x)  paying
         amounts  specified in the  Operating  Budget or (y)  prepayment  of the
         Loans  in  accordance  with  this  SECTION  6.2.1(A),  and  only if the
         following conditions precedent are satisfied (A) the Company shall have
         submitted to the Agent a written  certification  (executed by the Chief
         Executive Officer or Chief Financial Officer of the Company) describing
         the requested  withdrawal  specifying that the proceeds thereof will be
         applied  to  one  of  such  permitted  uses  and  certifying  as to the
         following CLAUSES (B) and (C), which certification shall be in form and
         substance  satisfactory  to the Agent  (PROVIDED  that for  purposes of
         paying amounts specified in the Operating Budget,  the Company may only
         make one  withdrawal  per week in an amount  not to exceed  115% of the
         aggregate   expenses  set  forth  in  the  Operating   Budget  for  the
         then-current week plus the amount set forth in the Operating Budget for
         any  prior   week  that  was  not   spent  in  that   week),   (B)  the
         representations and warranties of the Company set forth in Section 9 of
         this  Agreement  (excluding  SECTION  9.6 and  9.8)  shall  be true and
         correct  on such date of  withdrawal  (except  to the  extent  relating
         solely to an earlier  date, in which case they were true and correct as
         of such  earlier  date) and (C) other than the  Specified  Defaults (as
         defined in the Tenth Amendment), no Event of Default or Unmatured Event
         of Default shall exist.

         SECTION 2 FORBEARANCE.  Subject to the  satisfaction  of the conditions
precedent  set forth in SECTION 4.2 below,  the Agent and the  Required  Lenders
agree that  during the  Forbearance  Period  (defined  below)  they will not (i)
declare  the  Commitments  to be  terminated  or declare all Notes and all other
Indebtedness  to be due and  payable  or  (ii)  commence  any  legal  action  or
otherwise  sue,  foreclose or take any action under any of the Loan Documents to
(a)  seek to  enforce  payment  of the  Indebtedness  or (b)  foreclose  upon or
otherwise enforce the security  interests,  liens or mortgages in, to or against
any of the collateral  granted to the Agent

<PAGE>

under  the   Collateral   Documents  (the   "COLLATERAL").   When  used  herein,
"FORBEARANCE  PERIOD"  means the period of time  commencing  on the  Forbearance
Effective  Date and  terminating  on the  earliest to occur of (i) 11:59 p.m. on
March 16, 2002,  (ii) the date on which the  forbearance  period under any Other
Forbearance  Agreement  (defined  below)  shall  have  terminated  and (iii) the
occurrence of a Forbearance  Default. The Agent may (and at the direction of the
Required  Lenders shall),  if any Specified  Default (defined below) exists upon
the expiration or termination of the Forbearance  Period, or upon the occurrence
of any  Forbearance  Default,  declare the  Commitments to be terminated  and/or
declare all Notes and all other Indebtedness to be due and payable and otherwise
exercise all rights and remedies  under the Loan  Documents.  The Company agrees
that, upon the expiration or termination of the  Forbearance  Period and without
any further action on the part of the Agent or any Lender, any obligation of the
Agent or any  Lender to forbear  from  exercising  rights  under any of the Loan
Documents, this Agreement or applicable law shall terminate and, thereafter, the
Agent and the Lenders shall be entitled,  in their sole discretion,  to exercise
any or all of such rights as they may deem appropriate.

         SECTION 3 ACKNOWLEDGMENTS; REPRESENTATIONS AND WARRANTIES.

         3.1 The Company  expressly  acknowledges and agrees that the obligation
of the  Company  and the  other  Loan  Parties  to repay the Loans and the other
obligations  under the Loan Documents is absolute and  unconditional,  and there
exists no right of setoff or recoupment,  counterclaim  or defense of any nature
whatsoever to payment of such obligations.  The Company  acknowledges and agrees
that each of the Loan  Documents is the legal,  valid and binding  obligation of
each Loan Party thereto,  enforceable against such Loan Party in accordance with
its  terms.  The  Company  agrees  that it shall,  and shall  cause  each of its
Subsidiaries to, not dispute the validity or  enforceability  of any of the Loan
Documents,  or any of its  obligations  thereunder,  or the validity,  priority,
enforceability  or extent of the  Agent's  security  interest,  mortgage or lien
against any item of Collateral described in the Loan Documents, in any judicial,
administrative or other proceeding, either during or following the expiration or
termination of the Forbearance Period.

         3.2 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 Tenth Amendment  Effective Date and the Forbearance  Effective Date with the
same  effect  as if made on and as of the  Tenth  Amendment  Effective  Date and
Forbearance  Effective  Date, as the case may be (except to the extent  relating
solely to an earlier  date,  in which case they were true and correct as of such
earlier  date);  (b) other than the Specified  Defaults,  no Event of Default or
Unmatured  Event of Default  exists or will  result from the  execution  of this
Agreement;  (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 Agreement
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

<PAGE>

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;  (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; (f) the obligation of the Company and the
other Loan Parties to repay the Loans and the other  obligations  under the Loan
Documents is absolute and unconditional,  and there exists no right of setoff or
recoupment,  counterclaim or defense of any nature whatsoever to payment of such
obligations; and (g) no Forbearance Default has occurred and is continuing.

         SECTION 4  EFFECTIVENESS.

         4.1 TENTH AMENDMENT EFFECTIVENESS.  The amendments set forth in SECTION
1 above shall  become  effective  as of the date hereof on such date (the "TENTH
AMENDMENT  EFFECTIVE DATE") when the Agent shall have received (a) a counterpart
of this Agreement  executed by the Company and the Required  Revolving  Lenders,
the Required Term A Lenders, and the Required Term B Lenders (or, in the case of
any party  other  than the  Company  from  which the  Agent has not  received  a
counterpart  hereof,  facsimile  confirmation  of the execution of a counterpart
hereof by such party) and (b) each of the following documents,  each in form and
substance satisfactory to the Agent:

         4.1.1.   REAFFIRMATION.  Counterparts of  the   Reaffirmation  of  Loan
Documents, substantially in the form of EXHIBIT A, executed by the Company, each
Guarantor and each Pledgor.

         4.1.2.  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 Agreement,  the Amended Credit  Agreement and
each other Loan Document  contemplated by this Agreement to which the Company is
a party.

         4.1.3.  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  Agreement  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.

         4.1.4.  OPERATING  BUDGET.  An  operating  budget for the  period  from
February 1, 2002  through  March 16,  2002 for the Company and its  Subsidiaries
(setting forth anticipated cash receipts and disbursements for each week in such
month in an aggregate amount not to exceed $5,000,000).

<PAGE>

         4.1.5.   OTHER DOCUMENTS.  Such other documents  as  the  Agent  or any
Lender may reasonably request.

         4.2      FORBEARANCE  EFFECTIVENESS. The   forbearance   set  forth  in
SECTION 2 above shall become  effective as of the date hereof (the  "FORBEARANCE
EFFECTIVE DATE"), if and only if:

         4.2.1.   EXECUTION OF THIS AGREEMENT.  The  Agent  shall have  received
counterparts  of this  Agreement  duly  executed by the Company and the Required
Lenders.

         4.2.2. ABSENCE OF DEFAULT. No Forbearance Default or Unmatured Event of
Default or Event of Default (other than the defaults  listed on EXHIBIT B hereto
(the "SPECIFIED  DEFAULTS")) under the Loan Documents shall have occurred and be
continuing.

         4.2.3.   AGREEMENTS WITH OTHER LENDERS.  The Company shall have entered
into one or more forbearance  agreements  (collectively,  the "OTHER FORBEARANCE
AGREEMENTS")  that are binding  upon,  and in full force and effect with respect
to,  (i)  each  of  the  holders  of  the  1996  Subordinated  Notes,  the  1998
Subordinated  Notes and the 2001 Subordinated  Note and (ii) BancBoston  Leasing
and Fleet  Capital  Corporation,  and  shall  have  disclosed  the terms of each
thereof to the Lenders,  and in each case the terms of which shall be acceptable
to the Agent.

         4.2.4.   REAFFIRMATION.  The Agent shall have received  counterparts of
the  Reaffirmation  of Loan Documents,  substantially  in the form of EXHIBIT A,
executed by the Company, each Guarantor and each Pledgor.

It is the current  intention of the undersigned  Lenders to forbear as specified
in the  first  sentence  of  SECTION  2 hereof  if the  conditions  set forth in
SECTIONS 4.2.1,  4.2.2 and 4.2.4 are satisfied from the date such conditions are
satisfied  until the  earlier  to occur of (x)  termination  of the  Forbearance
Period that would have  commenced had all  conditions  set forth in this SECTION
4.2 been  satisfied on such date and (y) any  acceleration  of maturity,  or the
exercise of any other remedy, by any holder of the 1996 Subordinated  Notes, the
1998 Subordinated  Notes or the 2001 Subordinated  Note,  BancBoston  Leasing or
Fleet Capital Corporation.

         SECTION 5  MISCELLANEOUS.

         5.1      CONTINUING EFFECTIVENESS, ETC.

         5.1.1.  Except as otherwise  expressly provided in this Agreement,  and
both during and  following  the  expiration or  termination  of the  Forbearance
Period, the Loan Documents shall each remain in full force and effect, and shall
not be waived, modified, supplemented,  superseded or otherwise affected by this
Agreement.  This  Agreement is not a novation  nor is it to be construed  as, or
otherwise  deemed  to be,  a  release,  waiver  or  modification  of  any  term,
condition, representation,  warranty, covenant, right or remedy set forth in any
of the Loan Documents,  except as specifically  set forth herein.  The Agent and
the Lenders  specifically

<PAGE>

reserve  any and all  rights,  claims  and  remedies  that they have or may have
against  the  Company  under  any  of  the  Loan  Documents,  applicable  law or
otherwise.

         5.1.2.  As herein  amended,  the Credit  Agreement shall remain in full
force and effect and is hereby ratified and confirmed in all respects. After the
Tenth  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.

         5.2  COUNTERPARTS.  This  Agreement  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 Agreement.

         5.3  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 and the  reasonable  fees of
PricewaterhouseCoopers,  L.L.P. ("PWC"),  which shall continue to be retained as
financial  advisor to the Agent) in connection with the  preparation,  execution
and  delivery  of this  Agreement  and the  ongoing  work  being  done by PwC in
connection with the workout of the Company's Debt.

         5.4      GOVERNING LAW.  This Agreement 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.

         5.5  SUCCESSORS AND ASSIGNS.  This Agreement  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.

         5.6      LOAN DOCUMENT.  This Agreement is a Loan Document.

         5.7  FORBEARANCE  DEFAULTS.   The  following  events  shall  constitute
"FORBEARANCE  DEFAULTS":  (a) the Company  fails to observe or perform any term,
covenant,  or agreement  binding on it contained in this  Agreement,  any of the
Loan  Documents,  or any other  agreement,  instrument  or document  executed in
connection with any of the foregoing;  (b) the occurrence of an Event of Default
or  Unmatured  Event of  Default,  other than a  Specified  Default;  or (c) any
warranty  made by the Company  herein is untrue or  misleading  in any  material
respect. Upon the expiration or termination of the Forbearance Period, the Agent
and the Lenders  shall be entitled  (but not  required) to exercise any of their
rights  and  remedies  under  any of  the  Loan  Documents  or  applicable  law,
including,  without  limitation,  the right to  terminate  the  Commitments,  to
declare all of the Indebtedness to be immediately due and payable and to enforce
its liens on, and security  interests in, the Collateral.  The occurrence of any
Forbearance  Default  shall  constitute  an  Event  of  Default  under  the Loan
Documents.

<PAGE>

         SECTION 6 RELEASE OF CLAIMS. THE COMPANY HEREBY ACKNOWLEDGES AND AGREES
THAT IT DOES NOT HAVE ANY DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT,  CLAIM
OR DEMAND OF ANY KIND OR NATURE  WHATSOEVER  THAT CAN BE  ASSERTED  TO REDUCE OR
ELIMINATE  ALL OR ANY PART OF LIABILITY OF THE COMPANY TO REPAY THE AGENT OR ANY
LENDER AS PROVIDED IN THE CREDIT  AGREEMENT  AND THE OTHER LOAN  DOCUMENTS OR TO
SEEK  AFFIRMATIVE  RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE AGENT OR ANY
LENDER.  THE COMPANY  HEREBY  VOLUNTARILY  AND  KNOWINGLY  RELEASES  AND FOREVER
DISCHARGES  THE  AGENT  AND THE  LENDERS,  AND THE  AGENT'S  AND  EACH  LENDER'S
PREDECESSORS,  AGENTS,  EMPLOYEES,  SUCCESSORS  AND  ASSIGNS,  FROM ALL POSSIBLE
CLAIMS,  DEMANDS,  ACTIONS,  CAUSES OF ACTION,  DAMAGES,  COSTS OR EXPENSES, AND
LIABILITIES  WHATSOEVER,   KNOWN  OR  UNKNOWN,   ANTICIPATED  OR  UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT OR CONDITIONAL, AT LAW OR IN EQUITY,
ORIGINATING  IN  WHOLE  OR IN PART ON OR  BEFORE  THE  DATE  THIS  AGREEMENT  IS
EXECUTED,  WHICH THEY MAY NOW OR  HEREAFTER  HAVE  AGAINST THE AGENT OR ANY SUCH
LENDER,  AND THE  AGENT'S  OR SUCH  LENDER'S  PREDECESSORS,  AGENTS,  EMPLOYEES,
SUCCESSORS  AND  ASSIGNS,  IF ANY, AND  IRRESPECTIVE  OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF  CONTRACT,  TORT,  VIOLATION  OF LAW OR  REGULATION  OR  OTHERWISE,
INCLUDING,  WITHOUT  LIMITATION,  THE  EXERCISE OF ANY RIGHT OR REMEDY UNDER THE
CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS,  AND NEGOTIATION AND EXECUTION OF THIS
AGREEMENT.

<PAGE>

         Delivered as of the day and year first above written.

1

                   U.S. AGGREGATES, INC.

                  By:
                     --------------------------------------------------------
                  Title:
                        -----------------------------------------------------

                   BANK OF AMERICA, N.A., as Agent

                  By:
                     --------------------------------------------------------
                  Title:
                        -----------------------------------------------------

                   BANK OF AMERICA, N.A., as a Lender and as Issuing Lender

                  By:
                     --------------------------------------------------------
                  Title:
                        -----------------------------------------------------

                   FLEET NATIONAL BANK (formerly known as BankBoston,
                   N.A.), as a Lender

                  By:
                     --------------------------------------------------------
                  Title:
                        -----------------------------------------------------

                   NATIONAL CITY BANK, as a Lender

                  By:
                     --------------------------------------------------------
                  Title:
                        -----------------------------------------------------

<PAGE>

                     BANK OF SCOTLAND, as a Lender

                    By:
                       --------------------------------------------------------
                    Title:
                          -----------------------------------------------------

                     IBJ WHITEHALL BANK AND TRUST COMPANY, as a Lender

                    By:
                       --------------------------------------------------------
                    Title:
                          -----------------------------------------------------

                     COMERICA BANK - CALIFORNIA, as a Lender

                    By:
                       --------------------------------------------------------
                    Title:
                          -----------------------------------------------------

                     ZIONS FIRST NATIONAL BANK, as a Lender

                    By:
                       --------------------------------------------------------
                    Title:
                          -----------------------------------------------------

                     UNION BANK OF CALIFORNIA, N.A., as a
                     Lender

                    By:
                       --------------------------------------------------------
                    Title:
                          -----------------------------------------------------

                                       10

<PAGE>

                 PILGRIM PRIME RATE TRUST, as a Lender

                 By: Pilgrim Investments, Inc., as its Investment Manager

                By:
                   --------------------------------------------------------
                Title:
                      -----------------------------------------------------

                 SENIOR DEBT PORTFOLIO

                 By: Boston Management and Research, as Investment Advisor

                By:
                   --------------------------------------------------------
                Title:
                      -----------------------------------------------------

                 EATON VANCE INSTITUTIONAL SENIOR LOAN FUND

                 By: Eaton Vance Management, as Investment Advisor

                By:
                   --------------------------------------------------------
                Title:
                      -----------------------------------------------------

                 EATON VANCE SENIOR INCOME TRUST

                 By: Eaton Vance Management, as Investment Advisor

                By:
                   --------------------------------------------------------
                Title:
                      -----------------------------------------------------

                KZH-HIGHLAND - 2 LLC

                By:
                   --------------------------------------------------------
                Title:
                      -----------------------------------------------------

                                       11

<PAGE>

           ARCHIMEDES FUNDING II, LLC

           By: ING Capital Advisors, LLC, as Collateral Manager

           By:
              --------------------------------------------------------
           Title:
                 -----------------------------------------------------

           ARCHIMEDES FUNDING III, LLC

           By: ING Capital Advisors, LLC, as Collateral Manager

           By:
              --------------------------------------------------------
           Title:
                 -----------------------------------------------------

           SEQUILS-ING 1 (HBDGM), LTD.

           By: ING Capital Advisors, LLC, as Collateral Manager

           By:
              --------------------------------------------------------
           Title:
                 -----------------------------------------------------

           BANK ONE, N.A.

           By:
              --------------------------------------------------------
           Title:
                 -----------------------------------------------------

           BRANCH BANKING AND TRUST COMPANY

           By:
              --------------------------------------------------------
           Title:
                 -----------------------------------------------------

                                       12
<PAGE>

                                     HIGHLAND CRUSADER OFFSHORE PARTNERS

                                           By:________________________________
                                           Title:_____________________________

                                       13
<PAGE>

                                    EXHIBIT A

                              FORM OF REAFFIRMATION
                                OF LOAN DOCUMENTS
                              ---------------------

                                                          as of January 31, 2002

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, SRM
Aggregates, 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, Eagle Valley Materials, Inc., Nevada
Aggregates, Inc., Bama Crushed Corporation, Grove Materials 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

                                       14
<PAGE>

Products Inc., Cox Transport Corporation, SRM Holdings Corp., SRM Aggregates,
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., Monroc, Inc., Eagle Valley Materials, Inc.,
Nevada Aggregates, Inc., Bama Crushed Corporation, Grove Materials Corporation ;

     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").

     5. Each other Loan Document (as defined in the Credit Agreement referred to
below).

     The Security Agreement, the Guaranty, the Pledge Agreements, the Patent
Security Agreement and the other Loan Documents referred to above, in each case
as heretofore amended, are collectively referred to herein as the "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 Tenth Amendment to Credit Agreement and Forbearance
Agreement (the "AGREEMENT") with respect 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 (i) confirms that each Document to which
such undersigned is a party remains in full force and effect after giving effect
to the effectiveness of the Agreement and that, upon the Tenth Amendment
Effective Date, all references in such Document to the "Credit Agreement" shall
be references to the Credit Agreement as amended by the Agreement, (ii)
acknowledges and agrees that its obligations under the Documents are absolute
and unconditional, and there exists no right of setoff or recoupment,
counterclaim or defense of any nature whatsoever thereto and (iii) VOLUNTARILY
AND KNOWINGLY RELEASES AND

<PAGE>

FOREVER DISCHARGES THE AGENT AND THE LENDERS, AND THE AGENT'S AND LENDER'S
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE
CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, OR EXPENSES, AND
LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT OR CONDITIONAL, AT LAW OR IN EQUITY,
ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THE FOREGOING AGREEMENT IS
EXECUTED, WHICH IT MAY NOW OR HEREAFTER HAVE AGAINST THE AGENT OR ANY SUCH
LENDER, AND THE AGENT'S OR SUCH LENDER'S PREDECESSORS, AGENTS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATION, OR OTHERWISE,
INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY RIGHT OR REMEDY UNDER THE
CREDIT AGREEMENT OR ANY OTHER DOCUMENT, AND NEGOTIATION AND EXECUTION OF THE
FOREGOING AGREEMENT.

                                       3
<PAGE>

        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:_______________________________
                                          Title:____________________________

                                          SRM HOLDINGS CORP.

                                          By:________________________________
                                          Title:_____________________________

                                          WESTERN AGGREGATES HOLDING CORP.

                                          By:________________________________
                                          Title:_____________________________

                                          WESTERN ROCK PRODUCTS CORP.

                                          By:________________________________
                                          Title:_____________________________

                                          JENSEN CONSTRUCTION & DEVELOPMENT,
                                          INC.

                                          By:________________________________
                                          Title:_____________________________

                                          SANDIA CONSTRUCTION, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          TRI-STATE TESTING LABORATORIES, INC.

                                          By:________________________________
                                          Title:_____________________________

                                       4
<PAGE>

                                          MOHAVE CONCRETE AND MATERIALS, INC.,
                                          a Nevada corporation

                                          By:________________________________
                                          Title:_____________________________

                                          MOHAVE CONCRETE AND MATERIALS, INC.,
                                          an Arizona corporation

                                          By:________________________________
                                          Title:_____________________________

                                          A-BLOCK COMPANY, INC.,
                                          an Arizona corporation

                                          By:________________________________
                                          Title:_____________________________

                                          A-BLOCK COMPANY, INC.,
                                          a California corporation

                                          By:________________________________
                                          Title:_____________________________

                                       5
<PAGE>

                                          COX ROCK PRODUCTS, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          COX TRANSPORT CORPORATION

                                          By:________________________________
                                          Title:_____________________________

                                          VALLEY ASPHALT, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          GEODYNE BECK ROCK PRODUCTS, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          SRM AGGREGATES, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          DEKALB STONE, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          MULBERRY ROCK CORPORATION

                                          By:________________________________
                                          Title:_____________________________

                                       6

<PAGE>

                                          BHY READY MIX, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          BRADLEY STONE & SAND, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          MONROC, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          WESTERN AGGREGATES, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          EAGLE VALLEY MATERIALS, INC.

                                          By:________________________________
                                          Title:________________________

                                          NEVADA AGGREGATES, INC.

                                          By:________________________________
                                          Title:_____________________________

                                          BAMA CRUSHED CORPORATION

                                          By:________________________________
                                          Title:__________________________

                                          GROVE MATERIALS CORPORATION

                                          By:________________________________
                                          Title:_____________________________

                                       7

<PAGE>

ACKNOWLEDGED AND AGREED
as of the date first written above

BANK OF AMERICA, N.A., as Agent

By:________________________________
Title:_______________________________

                                       8

<PAGE>

                                    EXHIBIT B

                               SPECIFIED DEFAULTS

1. Any Event of  Default  caused  by  failure  to pay the Term C Loans  (and all
Capitalized  Interest and other amounts  owing with respect  thereto) on January
31, 2002.

2. Any Event of Default  caused by failure  to pay the  interest  in cash on the
Loans on at any time from and  including  January 31, 2002 through and including
the termination of the Forbearance Period.

3. Any Event of  Default  caused by  failure to pay fees on at any time from and
including  January  31,  2002  through  and  including  the  termination  of the
Forbearance Period.

4. Any Event of Default  caused by the failure to comply with Section  10.6.4 of
the Credit Agreement on December 31, 2001.

5. Any Event of  Default  caused by the  failure of the  Company to comply  with
Section  6.2.1(b) of the Credit  Agreement  at any time  during the  Forbearance
Period.

                                       9

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