J.P.MORGAN SECURITIES INC. 270 ParkAvenue New York,New York 10017 JPMORGANCHASE BANK, N.A. 270 ParkAvenue New York,New York 10017 WELLSFARGO CAPITAL FINANCE, LLC 2450Colorado Avenue, Suite 3000W SantaMonica, CA 90404

 

J.P. MORGAN SECURITIES INC.

270 Park Avenue

New York, New York 10017

 

JPMORGAN CHASE BANK, N.A.

270 Park Avenue

New York, New York 10017

 

WELLS FARGO CAPITAL FINANCE, LLC

2450 Colorado Avenue, Suite 3000W

Santa Monica, CA 90404

 

 July 27, 2010

 

U.S. Concrete, Inc.

2925 Briarpark, Suite 1050

Houston, Texas 77042

Attention:  Michael Harlan

 

Ladies and Gentlemen:

 

You have advised J.P. Morgan Securities Inc. (“JPMorgan”), JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank”) and Wells Fargo Capital Finance, LLC (“Wells Fargo”; together with JPMorgan and JPMorgan Chase Bank, the “Commitment Parties”) that U.S. Concrete, Inc. and certain of its subsidiaries ( the “Company” or “you”) (i) have commenced voluntary cases under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), (ii) expect the Company and its domestic subsidiaries to be reorganized pursuant to their Chapter 11 plan of reorganization (the “Plan”), (iii) intend to obtain a $75,000,000 senior secured revolving credit facility (the “Facility”) and (iv) intend to obtain $50,000,000 in cash proceeds from the issuance of senior secured convertible notes (the “Notes”) in a private placement pursuant to Section 4(2) and Regulation D of the Securities Act, with such proceeds from clauses (iii) and (iv) being used (x) to refinance the Company’s outstanding credit facilities and its emergence from Chapter 11 of the United States Bankruptcy Code and (y) for working capital and general corporate purposes to the extent permitted by the Definitive Documentation (as defined herein).  In connection therewith, the Company has requested that JPMorgan and JPMorgan Chase Bank agree to structure, arrange and syndicate the Facility.  Capitalized terms used but not defined herein have the meanings assigned to them in the Term Sheet (as defined below).

 

 

JPMorgan is pleased to advise you that it is willing to act as joint lead arranger and sole bookrunner for the Facility, each of JPMorgan Chase Bank and Wells Fargo is pleased to advise you of its several, but not joint, commitment, upon the effectiveness of this Commitment Letter, to provide 50% of the Facility, and Wells Fargo is pleased to advise you that it is willing to act as joint lead arranger and the documentation agent for the Facility.  This Commitment Letter and the Summary of Terms and Conditions attached as Exhibit A hereto (the “Term Sheet”) set forth the principal terms and conditions on and subject to which each of JPMorgan Chase Bank and Wells Fargo is willing to make available the Facility.

 

It is agreed that JPMorgan and Wells Fargo will act as the joint lead arrangers in respect of the Facility (in such capacities, the “Lead Arrangers”), with JPMorgan having left lead placement in any marketing materials or other documentation used in connection with the Facility and Wells Fargo having right lead placement, that JPMorgan will act as the sole bookrunner in respect of the Facility, that JPMorgan Chase Bank will act as the sole administrative agent in respect of the Facility and that Wells Fargo will act as the documentation agent in respect of the Facility.  You agree that, as a condition to the commitments and agreements hereunder, no other agents, co-agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated by the Term Sheet and Fee Letters referred to below) will be paid in connection with the Facility unless you and we shall so agree.

 

JPMorgan intends to syndicate the Facility to a group of financial institutions (together with JPMorgan Chase Bank and Wells Fargo, the “Lenders”) identified by JPMorgan in consultation with you.  JPMorgan intends to commence syndication efforts promptly, and you agree to use commercially reasonable efforts until the date that is sixty (60) days after the Closing Date of the Facility to assist JPMorgan in completing a reasonably satisfactory syndication.  Such assistance shall include (a) your using commercially reasonable efforts to ensure that the syndication efforts benefit from the existing banking relationships of you and your subsidiaries, (b) assisting JPMorgan in one or more meetings or conference calls hosted by JPMorgan with the Lenders, (c) as set forth in the next paragraph, assistance from you and your subsidiaries in the preparation of customary materials to be used in connection with the syndication (collectively, with the Term Sheet, the “Information Materials”) and (d) entry into confidentiality agreements with prospective Lenders that are in form and substance reasonably acceptable to you, in each case, until the date that is sixty (60) days after the Closing Date of the Facility.  Each of JPMorgan Chase Bank and Wells Fargo agrees that neither the commencement nor completion of the syndication of the Facility is a condition to its commitments hereunder.  Notwithstanding the Lead Arrangers’ right to syndicate the Facility and receive commitments with respect thereto, no assignment of commitments of the Commitment Parties on or prior to the Closing Date shall reduce or release such Commitment Party’s obligation to fund its entire commitment in the event any assignee of such Commitment Party shall fail to do so on the Closing Date.

 

You will use commercially reasonable efforts to assist JPMorgan in preparing Information Materials, including confidential information memoranda, for distribution to prospective Lenders.  If reasonably requested, you also will assist JPMorgan in preparing an additional version of the Information Materials (the “Public-Side Version”) to be used by prospective Lenders’ public-side employees and representatives (“Public-Siders”) who do not wish to receive material non-public information (within the meaning of United States federal securities laws) with respect to you and your subsidiaries and any of their respective securities (“MNPI”) and who may be engaged in investment and other market related activities with respect to any such entity’s securities or loans.  Before distribution of any Information Materials, you agree to execute and deliver to JPMorgan (i) a letter in which you authorize distribution of the Information Materials to a prospective Lender’s employees willing to receive MNPI (“Private-Siders”) and (ii) a separate letter in which you authorize distribution of the Public-Side Version to Public-Siders and represent that no MNPI is contained therein.  You also acknowledge that Commitment Party Public-Siders who are publishing debt analysts may participate in any meetings held pursuant to clause (b) of the preceding paragraph; provided that such analysts shall not publish any information obtained from such meetings (i) until the syndication of the Facility has been completed upon the making of allocations by JPMorgan and JPMorgan freeing the Facility to trade or (ii) in violation of any confidentiality agreement between you and the relevant Commitment Party.  Except as set forth below, you and we agree that unless specifically labeled “Public – Contains Public Information”, all information, documentation or other data disseminated to prospective Lenders under the Facility in connection with the marketing of the Facility, whether through an Internet website (including, without limitation, an IntraLinks workspace), electronically, in presentations at meetings or otherwise, will contain MNPI concerning the Company or its securities.

 

The Company agrees that the following documents may be distributed to both Private-Siders and Public-Siders, unless the Company advises JPMorgan in writing (including by email) within a reasonable time prior to their intended distribution that such materials should only be distributed to Private-Siders:  (a) administrative materials prepared by the Commitment Parties for prospective Lenders (such as a lender meeting invitation, lender allocation, if any, and funding and closing memoranda) and (b) notification of changes in the terms of the Facility.  If you advise JPMorgan that any of the foregoing should be distributed only to Private-Siders, then Public-Siders will not receive such materials without your consent.

The Company hereby authorizes JPMorgan and JPMorgan Chase Bank to distribute draft and final definitive documentation with respect to the Facility to Private-Siders and Public-Siders.

 

JPMorgan, in its capacity as a Lead Arranger, will manage, in consultation with you, all aspects of the syndication, including, but not limited to, decisions as to the selection of institutions to be approached and when they will be approached, when their commitments will be accepted, which institutions will participate, the allocation of the commitments among the Lenders and the amount and distribution of fees among the Lenders.  In its capacity as a Lead Arranger, JPMorgan will have no responsibility other than to arrange the syndication as set forth herein and in no event shall any Commitment Party be subject to any fiduciary or other implied duties hereunder.  Additionally, the Company acknowledges and agrees that no Commitment Party is advising the Company as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.  The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Commitment Parties shall have no responsibility or liability to the Company with respect thereto.

 

To assist JPMorgan in its syndication efforts, you agree to use commercially reasonable efforts to promptly prepare and provide to JPMorgan all customary information with respect to you and your subsidiaries, including all financial information and projections (the “Projections”), as JPMorgan may reasonably request in connection with the arrangement and syndication of the Facility.  You hereby represent and covenant that (a) all written information other than the Projections, budgets, estimates, forward looking information or general market data (the “Information”) that has been or will be made available to JPMorgan or JPMorgan Chase Bank by you or any of your representatives is or will be, when furnished and taken as a whole, complete and correct in all material respects and does not or will not, when furnished and taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made and (b) the Projections that have been or will be made available to JPMorgan or JPMorgan Chase Bank by you or any of your representatives have been or will be prepared in good faith based upon assumptions believed by you to be reasonable (it being understood that Projections are inherently uncertain and actual results may be materially different, and no assurance can be given that the projected results will be realized).  You agree that if at any time prior to the execution of definitive financing documentation with respect to the Facility any of the representations in the preceding sentence would be incorrect in any material respect if the Information and Projections were being furnished, and such representations were being made, at such time, then you will promptly supplement, or cause to be supplemented, the Information and Projections so that such representations will be correct in all material respects at such time.  You understand that in arranging and syndicating the Facility JPMorgan and JPMorgan Chase Bank may use and rely on the Information and Projections without independent verification thereof.

 

As consideration for the commitments and agreements of the Commitment Parties hereunder, you agree to cause to be paid the nonrefundable fees described in the Fee Letters dated the date hereof and delivered herewith (the “Fee Letters”).

 

Each Commitment Party’s commitments and agreements hereunder are subject to: (a) since May 31, 2010, there not occurring or becoming known to such Commitment Party any event, development or circumstance that has had or could reasonably be expected to have a material adverse effect on the business, operations, property or financial condition of you and your subsidiaries, taken as a whole; (b) such Commitment Party not becoming aware after the date hereof of any information or other matter (including any matter relating to financial models and underlying assumptions relating to the Projections) affecting you and your subsidiaries that is inconsistent in a material and adverse manner with any such information or other matter disclosed (taken as a whole) to such Commitment Party prior to the date hereof or would materially impair the syndication of the Facility; (c) our satisfaction with, and the approval by the Bankruptcy Court, as necessary, of (1) the Facility and the transactions contemplated thereby (including the repayment in full of the obligations outstanding under the DIP Credit Agreement (as defined in the Term Sheet)) and all definitive documentation in connection therewith, (2) all actions to be taken, undertakings to be made, obligations to be incurred by the Company and all liens to be granted by the Company in connection with the Facility (all such approvals to be evidenced by the entry of one or more orders of the Bankruptcy Court reasonably satisfactory in form and substance to the Commitment Parties), which orders shall, among other things, approve the payment by the Company of all of the fees that are provided for in the Fee Letters and (3) the Plan; (d) the closing of the Facility on or before September 27, 2010; (e) the closing of the Notes before, or concurrently with, the closing of the Facility and (f) the other conditions set forth or referred to in the Term Sheet.  The terms and conditions of the commitments hereunder and of the Facility are not limited to those set forth herein and in the Term Sheet.  Those matters that are not covered by the provisions hereof and of the Term Sheet are subject to the approval and agreement of the Commitment Parties and the Company.

 

This Commitment Letter shall not become effective until the entry of an order by the Bankruptcy Court in the cases reasonably satisfactory to the Commitment Parties (a) approving this Commitment Letter and (b) otherwise authorizing the Company to execute, perform and incur its obligations under this Commitment Letter, including the payment of fees and expenses as set forth herein and in the Fee Letters and the provision of indemnities as set forth herein.

 

You agree (a) to indemnify and hold harmless the Commitment Parties, their affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “indemnified person”) from and against any and all losses, claims, damages and liabilities to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Fee Letters, the Facility, or the use of the proceeds thereof or any claim, litigation, investigation or proceeding relating to any of the foregoing (any of the foregoing, a “Proceeding”), regardless of whether any indemnified person is a party thereto or whether a Proceeding is initiated by or on behalf of a third party or you or any of your affiliates, and to reimburse each indemnified person promptly upon written demand (including written documentation reasonably supporting such request) for reasonable and documented out-of-pocket legal or other expenses incurred in connection with investigating or defending any of the foregoing, provided that the foregoing indemnity will not, as to any indemnified person, apply to (i) losses, claims, damages, liabilities or related expenses to the extent they are found by a final, non-appealable judgment of a court to arise from the willful misconduct or gross negligence of such indemnified person, any affiliate of such indemnified person or any officer, director, employee, advisor, agent or controlling person of such indemnified person or such affiliate or (ii) disputes solely among indemnified persons, (b) to reimburse each Commitment Party and its affiliates promptly upon written demand (including written documentation reasonably supporting such request for all reasonable and documented out-of-pocket expenses (including due diligence expenses, syndication expenses, consultant’s fees and expenses, travel expenses, and reasonable fees, charges and disbursements of one counsel for the Commitment Parties, collectively, exclusive of any local counsel)) incurred in connection with the Facility and any related documentation (including, without limitation, this Commitment Letter, the Fee Letters and the definitive financing documentation) or the administration, amendment, modification or waiver thereof and (c) to reimburse each Commitment Party and its affiliates promptly upon written demand (including written documentation reasonably supporting such request) for all reasonable and documented out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel for each of the Commitment Parties) in connection with the enforcement of the Commitment Letter and the Fee Letters.  No indemnified person shall be liable for any damages arising from the use by others of Information or other materials obtained through electronic, telecommunications or other information transmission systems.  In addition, no indemnified person shall be liable for any special, indirect, consequential or punitive damages in connection with this Commitment Letter, the Fee Letters, the Facility or the use of the proceeds thereof.

 

It is understood and agreed that this Commitment Letter shall not constitute or give rise to any obligation on the part the Commitment Parties or any of their respective affiliates to provide any financing, except as expressly provided herein.

 

You acknowledge and agree that each Commitment Party and its affiliates (the term “Commitment Party” as used below in this paragraph being understood to include such affiliates) may be providing debt financing, equity capital or other services (including, but not limited to, financial advisory services) to other persons or entities in respect of which you may have conflicting interests regarding the transactions described herein and otherwise.  No Commitment Party will use confidential information obtained from you by virtue of the transactions contemplated hereby or its other relationships with you in connection with the performance by such Commitment Party of services for other companies, and no Commitment Party will furnish any such information to other companies.  You also acknowledge that no Commitment Party has any obligation to use in connection with the transactions contemplated hereby, or to furnish to you, confidential information obtained from other persons or entities.  You further acknowledge that each of JPMorgan and Wells Fargo is a full service securities firm and each of JPMorgan and Wells Fargo may from time to time effect transactions, for its own or its affiliates’ account or the account of customers, and hold positions in loans, securities or options on loans or securities of the Company and its affiliates and of other companies that may be the subject of the transactions contemplated by this Commitment Letter.

 

Each Commitment Party may employ the services of its affiliates in providing certain services hereunder and, in connection with the provision of such services, may exchange with such affiliates information concerning you and the other companies that may be the subject of the transactions contemplated by this Commitment Letter, and, to the extent so employed, such affiliates shall be entitled to the benefits afforded such Commitment Party hereunder.

 

This Commitment Letter shall not be assignable by you without the prior written consent of each Commitment Party (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and the indemnified persons.  This Commitment Letter may not be amended or waived except by an instrument in writing signed by you and each Commitment Party.  This Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement.  Delivery of an executed signature page of this Commitment Letter by email or facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.  This Commitment Letter and the Fee Letters are the only agreements that have been entered into among us with respect to the Facility and set forth the entire understanding of the parties with respect thereto.

 

This Commitment Letter shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York.  The parties hereto consent to the non-exclusive jurisdiction and venue of the state or federal courts located in the City of New York.  Each party hereto irrevocably waives, to the fullest extent permitted by applicable law, (a) any objection that it may now or hereafter have to the laying of venue of any such legal proceeding in the state or federal courts located in the City of New York and (b) any right it may have to a trial by jury in any suit, action, proceeding, claim or counterclaim brought by or on behalf of any party related to or arising out of this Commitment Letter, the Fee Letters, the Term Sheet, the transactions contemplated hereby or the performance of services hereunder.

 

This Commitment Letter is delivered to you on the understanding that neither this Commitment Letter, the Term Sheet or the Fee Letters nor any of their terms or substance shall be disclosed, directly or indirectly, to any other person (including, without limitation, other potential providers or arrangers of financing) except (a) to your officers, directors, agents, advisors and representatives who are directly involved in the consideration of this matter, (b) as may be compelled or required in a judicial or administrative proceeding (including in connection with approval by the Bankruptcy Court) or as otherwise required by law (in which case you agree to (i) inform us promptly thereof and (ii) use commercially reasonable efforts to maintain the confidentiality of the compensation arrangements herein and in the Fee Letters by making any necessary filings either under seal or in redacted form pursuant to section 107(b) of the Bankruptcy Code or seeking confidential treatment of such information) and (c) with respect to the Commitment Letter and Term Sheet only, subject to an agreement to comply with the provisions of this paragraph, to any advisor or counsel to any informal committee of noteholders or to any official committee appointed in the bankruptcy cases and to the purchasers (and their advisors) of the Notes.  Other than as required by law, each of the Commitment Parties may not, without its prior written consent (not to be unreasonably withheld, delayed or conditioned), be quoted or referred to in any document, release or communication prepared, issued or transmitted by the Company (including any entity controlled by, or under common control with, the Company or any director, officer, employee or agent thereof).

 

Each of the Commitment Parties hereby notifies you that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law on October 26, 2001) (the “Patriot Act”), it and each of the Lenders may be required to obtain, verify and record information that identifies the Company and each Guarantor, which information includes names and addresses and other information that will allow such Commitment Party and each of the Lenders to identify the Company and each Guarantor in accordance with the Patriot Act.  This notice is given in accordance with the requirements of the Patriot Act and is effective for the Commitment Parties and each of the Lenders.

 

The compensation, reimbursement, indemnification and confidentiality provisions contained herein and in the Fee Letters and any other provision herein or therein which by its terms expressly survives the termination of this Commitment Letter shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the commitments hereunder.

 

If the foregoing correctly sets forth the terms of our agreement as will be submitted to the Bankruptcy Court for approval, please indicate your acceptance of such terms and of the Term Sheet and the Fee Letters by returning to us executed counterparts hereof and of the Fee Letters not later than 5:00 p.m., New York City time, on July 27, 2010.  The commitments of the Commitment Parties hereunder and the agreement of JPMorgan hereunder to perform the services contemplated herein are contingent upon (i) our receiving such executed counterparts in accordance with the immediately preceding sentence by such date and (ii) your obtaining Bankruptcy Court approval of this Commitment Letter as contemplated above by July 30, 2010.  In the event that the initial borrowing under the Facility does not occur on or before September 27, 2010, then this Commitment Letter and the commitments hereunder shall automatically terminate.

 

We are pleased to have been given the opportunity to assist you in connection with this important financing.

 

[Signature Page Follows]

 

 

Accepted and agreed to as of

the date first above written: