-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PQYo8S5FGySYX755m/5Cu3IvSTkCcTf72mT0JGNftXIhBEm9OHjGfhAR8tHjfzDU 1KaP0WwSHRk2ivLEDlZX9w== /in/edgar/work/0001054422-00-000026/0001054422-00-000026.txt : 20001129 0001054422-00-000026.hdr.sgml : 20001129 ACCESSION NUMBER: 0001054422-00-000026 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001115 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: U S AGGREGATES INC CENTRAL INDEX KEY: 0001054422 STANDARD INDUSTRIAL CLASSIFICATION: [1400 ] IRS NUMBER: 570990958 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-15217 FILM NUMBER: 777891 BUSINESS ADDRESS: STREET 1: 400 SOUTH EL CAMINO REAL, SUITE 500 CITY: SAN MATEO STATE: CA ZIP: 94402 BUSINESS PHONE: 6506854880 8-K 1 0001.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) November 15, 2000 ----------------- U.S. AGGREGATES, INC. ------------------------------------------------------ (Exact Name of Registrant as Specified in Its Charter) Delaware 001-15217 57-0990958 - -------------------------------------------------------------------------------- (State or Other (Commission File Number) (I.R.S. Employer Jurisdiction of Incorporation) Identification No.) 400 SOUTH EL CAMINO REAL, SUITE 500, SAN MATEO, CA 94402 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (650) 685-4880 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 5. OTHER EVENTS. Amendment to Senior Credit Facility - --------------------------------------- The Company has entered into a Fourth Amendment with our existing lenders pursuant to our senior secured credit facility effective September 29, 2000. The facility provides the Company with a $90 million revolving line of credit and a $105 million term loan. The term loan consists of an "A" tranche and a "B" tranche. The term loan A accrues interest at a rate per annum based on the Eurodollar rate plus a spread of 2.00% to 3.50% and the term loan B accrues interest at a rate per annum based on the Eurodollar rate plus a spread of 3.25% to 4.00%. The term loan A matures in March 2004 and the term loan B matures in March 2006. The Revolving facility of $90 million will be automatically and permanently reduced over the next three years and terminates on June 2004. The agreement also amends the following, amongst other matters, minimum interest coverage ratio, minimum fixed charge coverage ratio, maximum leverage ratios, a minimum EBITDA, limitations on capital expenditures and acquisitions, the use of proceeds from the sale of assets, and limitations on the Company's ability to pay dividends. A copy of the agreement is attached hereto as Exhibit 10.1. Amendment to Senior Subordinated Notes - ------------------------------------------ The Company has also similarly amended its agreements with the holders of our existing senior subordinated notes to parallel the covenants in the Fourth Amendment to our senior secured credit facility. Our $30 million senior subordinated notes interest rate is 12% per annum, which matures in November 2006. Our $15 million senior subordinated notes interest rate is 12% per annum, which matures in November 2008. In addition both senior subordinated notes will accrue interest at a rate per annum of 2%, which is not paid in cash until the maturity of these notes. A copy of the agreement is attached hereto as Exhibit 10.2. ITEM 7. EXHIBITS. Exhibit 10.1 Fourth Amendment to Third Amended and Restated Credit Agreement dated as of September 29, 2000 by and among the Company, various financial institutions and Bank of America National Trust and Savings Association, individually and as agent Exhibit 10.2 Amendment No. 3 to Amended and Restated Note and Warrant Purchase Agreement dated as of September 29, 2000 by and between the Company and The Prudential Insurance Company of America SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. U.S. AGGREGATES, INC. Date: November 27, 2000 By: /s/ Michael J. Stone ------------------- -------------------------------- Michael J. Stone Chief Financial Officer, Treasurer and Secretary EX-10.1 2 0002.txt FOURTH AMENDMENT TO CREDIT AGREEMENT FOURTH AMENDMENT THIS FOURTH AMENDMENT dated as of September 29, 2000 (this "Amendment") is to the Third Amended and Restated Credit Agreement (as amended, the "Credit Agreement") dated as of June 5, 1998 among U.S. AGGREGATES, INC., a Delaware corporation (the "Company"), various financial institutions (the "Lenders") and BANK OF AMERICA, N.A., as agent for the Lenders (the "Agent"). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as defined in the Credit Agreement. WHEREAS, the parties hereto desire to amend the Credit Agreement in certain respects; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows: SECTION 1 AMENDMENTS. Effective on (and subject to the occurrence of) the Fourth Amendment Effective Date (as defined below): 1.1 Section 1.1 of the Credit Agreement shall be amended by inserting the following definitions in the appropriate alphabetical order: "Fourth Amendment Effective Date means the `Fourth Amendment Effective Date' as defined in the Fourth Amendment to this Agreement dated as of September 29, 2000. Maintenance Capital Spending means, for any period, the aggregate amount of Capital Expenditures made by the Company and its Subsidiaries during such period necessary to maintain the then existing properties of the Company and its Subsidiaries in good working order and condition; provided that Maintenance Capital Spending shall be equal to (a) $17,200,000 for each of the Computation Periods ending September 30, 2000 and December 31, 2000 and (b) $10,000,000 for each Computation Period ending in the 2001 Fiscal Year." 1.2 The definition of "Capital Expenditures" in Section 1.1 of the Credit Agreement shall be amended by (a) replacing the comma immediately prior to the designation "(b)" therein with the word "and"; and (b) deleting all text in such definition immediately following the word "replaced" at the end of clause (ii) thereof. 1.3 The definition of "EBITDA" in Section 1.1 of the Credit Agreement shall be amended and restated in its entirety to read as follows: "EBITDA means, for any period, Consolidated Net Income of the Company for such period before accounting for Minority Interests plus, to the extent deducted in determining Consolidated Net Income, Interest Expense, income tax expense, depreciation, depletion and amortization for such period plus, to the extent deducted in determining Consolidated Net Income, any loss realized upon the sale or other disposition of property of the Company or any Subsidiary that is not sold or otherwise disposed of in the ordinary course of business minus, to the extent reflected in determining Consolidated Net Income, any gain realized upon the sale or other disposition of property of the Company or any Subsidiary that is not sold or otherwise disposed of in the ordinary course of business plus, to the extent deducted in determining Consolidated Net Income (and without duplication), expense that is both non-operating and non-recurring minus, to the extent reflected in determining Consolidated Net Income (and without duplication), income that is both non-operating and non- recurring and plus, to the extent deducted in determining Consolidated Net Income (and without duplication), restructuring charges incurred in connection with business closures; provided that the consolidated net income (plus, to the extent deducted in calculating such consolidated net income, interest expense, income tax expense, depreciation and amortization) of any Person, or attributable to any division or similar business unit, in each case set forth on the schedule of assets to be sold delivered by the Company to the Lenders prior to the Fourth Amendment Effective Date (the `Designated Asset Schedule'), disposed of by the Company or any Subsidiary to an unaffiliated third party in an Asset Sale during such period (a `Sold Business') will be included on a pro forma basis for the portion of such period after such Sold Business was sold or otherwise disposed of in an amount equal to the amount forecasted in good faith by the Company for such Sold Business as what such Sold Business would have earned during the remainder of such period until the time of sale or disposition (as such time was anticipated by the Company in the estimates referred to below) had it not been sold or otherwise disposed of, which forecast is set forth in estimates delivered by the Company to the Agent and the Lenders prior to the Fourth Amendment Effective Date." 1.4 The definition of "Excess Cash Flow" in Section 1.1 of the Credit Agreement shall be amended by deleting clause (b)(viii) of such definition and inserting the following in lieu thereof: "(viii) any gains resulting from receipt of insurance or condemnation proceeds (or similar recoveries) during such period to the extent that (A) such gains were included in calculating EBITDA and (B) the proceeds of such gains were applied to prepay Loans pursuant to Section 6.2.1." 1.5 The definition of "Fixed Charge Coverage Ratio" in Section 1.1 of the Credit Agreement shall be amended by (a) deleting the term "Capital Expenditures" in clause (ii) thereof and substituting the term "Maintenance Capital Spending" therefor and (b) inserting the following immediately after the term "Subsidiaries" in clause (iii) thereof: "(other than taxes that are directly attributable to Asset Sales)". 1.6 The definition of "Maximum Proceeds Amount" in Section 1.1 of the Credit Agreement shall be amended by deleting the amount "$30,000,000" therein and substituting the amount "$100,000,000" therefor. 1.7 The definition of "Net Cash Proceeds" in Section 1.1 of the Credit Agreement shall be amended by inserting the words "within one year after the closing of the related Asset Sale" immediately after the words "or payable" where they appear in clause (a) of such definition. 1.8 Section 2.1.1 of the Credit Agreement shall be amended by deleting the dollar amount set forth in clause (i) of the proviso thereto and substituting the amount "$90,000,000" for such amount. 1.9 Section 6.1.1 of the Credit Agreement shall be amended by inserting an "(a)" immediately prior to the word "After" and (b) inserting the following clause (b): "(b) The Revolving Commitments shall be automatically and permanently reduced to an aggregate amount equal to (x) $70,000,000 on December 31, 2001, (y) $60,000,000 on June 30, 2002 and (z) $0 on the Revolving Termination Date. Voluntary reductions of the Revolving Commitments pursuant to Section 6.1.2 shall be applied to diminish the amount of scheduled reductions to the Revolving Commitments thereafter becoming effective in inverse order of scheduled occurrence." 1.10 Section 6.2.1 of the Credit Agreement shall be amended by deleting clause (a)(ii) of such Section and substituting the following therefor: "(ii) Forthwith upon any Asset Sale that results in any Excess Cash Proceeds, in an amount equal to 100% of such Excess Cash Proceeds." 1.11 Section 10.1.2 of the Credit Agreement shall be amended and restated in its entirety as follows: "10.1.2 Interim Reports. Promptly when available and (i) in any event within 30 days after the end of each month, consolidated balance sheets of the Company and its Subsidiaries as of the end of such month, and consolidated statements of earnings and cash flows for such month and for the period beginning with the first day of the applicable Fiscal Year and ending on the last day of such month, including a comparison with the corresponding month and period of the previous Fiscal Year and a comparison with the budget for such month and for such period of the current Fiscal Year, together with a certificate of the President or the chief financial officer of the Company to the effect that such financial statements fairly present the financial condition and results of operations of the Company and its Subsidiaries as of the date and periods indicated (subject to normal year-end adjustments and the absence of footnotes) and (ii) in any event within 30 days after the end of each Fiscal Quarter, consolidating balance sheets of the Company and its Subsidiaries as of the end of such Fiscal Quarter and consolidating statements of earnings and cash flows of the Company and its Subsidiaries for the period from the end of the last Fiscal Year to the end of such Fiscal Quarter, certified by the President or the chief financial officer of the Company to the effect that such consolidating financial statements fairly present the financial condition and results of operations of the Company and its Subsidiaries." 1.12 Section 10.1 of the Credit Agreement shall be amended by adding the following as Section 10.1.13: "10.1.13 Cash Flow Forecasts. As soon as practicable and in any event within five Business Days following the end of each week, (i) a rolling thirteen week cash flow forecast for the Company and its Subsidiaries on a consolidated and consolidating basis in reasonable detail and (ii) a report comparing the actual cash flow of the Company and its Subsidiaries for such week on a consolidated and consolidating basis to the cash flow forecast for such week delivered to the Agent pursuant to clause (i) of this Section 10.1.13, together with an explanation in reasonable detail of any variance and a certification from the Chief Financial Officer or the Treasurer of the Company as to the accuracy of all actual receipts and disbursements set forth therein." 1.13 Section 10.6.1 of the Credit Agreement shall be amended by replacing the table in such Section with the following: "Computation Period Ending Ratio -------------- ----- 9/30/2000 2.50:1 12/31/2000 1.75:1 3/31/2001 1.80:1 6/30/2001 1.30:1 9/30/2001 1.30:1 12/31/2001 and thereafter 3.00:1." 1.14 Section 10.6.2 of the Credit Agreement shall be amended and restated to read in its entirety as follows: "10.6.2 Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio as of the last day of any Computation Period to be less than the ratio set forth below for such Computation Period: "Computation Period Ending Ratio -------------- ----- 9/30/2000 1.10:1 12/31/2000 0.80:1 3/31/2001 0.80:1 6/30/2001 0.70:1 9/30/2001 0.70:1 12/31/2001 and thereafter 1.10:1." 1.15 Section 10.6.3 of the Credit Agreement shall be amended by replacing the table in such Section with the following: "Computation Period Ending Ratio -------------- ----- 9/30/2000 4.25:1 12/31/2000 5.75:1 3/31/2001 5.50:1 6/30/2001 5.50:1 9/30/2001 5.00:1 12/31/2001 and thereafter 3.00:1." 1.16 Section 10.6 of the Credit Agreement shall be amended by adding the following Section 10.6.4: "10.6.4 Minimum EBITDA. (a) Not permit EBITDA for the period from January 1, 2001 through any date set forth below to be less than the amount set forth below opposite such date: Date Amount ---- ------ January 31, 2001 ($331,887) February 28, 2001 $106,210 March 31, 2001 $2,178,475 April 30, 2001 $4,634,975 May 31, 2001 $9,302,445 June 30, 2001 $14,834,295 July 31, 2001 $19,964,394 August 31, 2001 $25,312,488 September 30, 2001 $30,343,112 October 31, 2001 $33,785,578 November 30, 2001 $35,135,456 December 31, 2001 $35,456,015. (b) Not permit EBITDA for periods in any Fiscal Year ending after December 31, 2001 to be less than the levels negotiated in good faith by the Company and the Required Lenders with respect to such periods and such Fiscal Year as promptly as practicable after the Company delivers to the Lenders the projections required by Section 10.1.8 with respect to such Fiscal Year." 1.17 Section 10.10(k) of the Credit Agreement shall be amended by (a) deleting the word "and" at the end of subclause (iv) thereof; (b) replacing the semi-colon at the end of subclause (v) thereof with a ","; and (c) inserting the following: "(vi) the total consideration for all such Permitted Acquisitions (including cash and noncash purchase price, liabilities assumed, deferred or financed purchase price, purchase price characterized as noncompetition payments and the like) does not exceed (x) $0 during the 2001 Fiscal Year or (y) $10,000,000 in any Fiscal Year thereafter, and (vii) both before and after giving effect to such acquisition, the Leverage Ratio shall be less than 3.0:1 on a pro forma basis." 1.18 Section 10.11 of the Credit Agreement shall be amended by deleting clause (x) of the proviso thereof and inserting in lieu thereof the following: "(x) if no Event of Default or Unmatured Event of Default exists or would result therefrom and, if both immediately prior and immediately after giving effect thereto, the Leverage Ratio is equal to or less than 3.0:1, the Company may declare and pay dividends on its common stock in any Fiscal Year in an amount not to exceed 15% of Consolidated Net Income for the immediately preceding Fiscal Year (provided, that the Company may only pay any dividend pursuant to this clause (x) if, after giving effect thereto, the Company shall be in compliance with all financial covenants in Section 10.6 on a pro forma basis for the twelve consecutive month period ending on the date of payment, as determined by the Company in good faith in a certificate provided to the Lenders on or prior to the date of declaration of such dividend), it being understood that, unless an Event of Default under Section 12.1.1 exists, dividends may be paid within 60 days after the date of declaration thereof if at such date of declaration such dividend complied with this clause (x) even if at the time of payment thereof the Company is not in compliance with this clause (x)." 1.19 Section 10.12 of the Credit Agreement shall be amended by (a) replacing the word "and" immediately prior to the designation "(ii)" therein with a comma; and (b) deleting all text in such Section immediately following the figure "$35,000,000" and substituting the following therefor: "in the 2000 Fiscal Year, and (iii) $10,000,000 in any Fiscal Year thereafter." 1.20 Section 10.13 of the Credit Agreement shall be amended by deleting clause (b) of such Section and inserting the following in lieu thereof: "(b) arrangements which, together with all other such arrangements which shall then be in effect, will not require the payment of any aggregate amount of rentals by the Company and its Subsidiaries in any Fiscal Year exceeding the lesser of (i) 4% of Net Revenues for the immediately preceding Fiscal Year and (ii) $10,000,000 (each being tested as of the end of such Fiscal Year);". 1.21 Section 10.25 of the Credit Agreement shall be amended and restated in its entirety to read as follows: "10.25 Interest Rate Protection. Enter into, not later than 45 days after the Fourth Amendment Effective Date, one or more Hedging Agreements, each with a term of at least two years, on an ISDA standard form with one or more Lenders or Affiliates thereof or with counterparties reasonably acceptable to the Agent to fix the interest rate with respect to not less than one-half of the principal amount of the Term Loans outstanding on the Fourth Amendment Effective Date in form and substance reasonably satisfactory to the Agent." 1.22 Section 10 of the Credit Agreement shall be amended by adding the following Section 10.29: "10.29 Financial Consultant/Appraisal. (a) The Company shall engage and retain, at the sole expense of the Company, a financial consultant satisfactory to the Agent to perform such financial consulting as the Agent may request, with such financial advisor to provide a written report to the lenders addressing such matters as the Agent may request no later than January 15, 2001. (b) The Company shall engage and retain, at the sole expense of the Company, an appraiser satisfactory to the Agent to conduct an appraisal of all quarries and aggregate reserves of each of the properties of the Company and its Subsidiaries which is not set forth on the Designated Asset Schedule and which had EBITDA attributable to such property during the 1999 Fiscal Year or the 2000 Fiscal Year of greater than $1,500,000, and to report thereon to the Lenders in writing no later than March 31, 2001." 1.23 Section 14.9.1 of the Credit Agreement shall be amended by (i) deleting the figure "$5,000,000" where it appears in such Section and inserting in lieu thereof the figure "$1,000,000" and (ii) adding the following at the end of the last paragraph thereof: "Any Lender that is a fund that invests in bank loans may pledge all or any portion of its rights in connection with this Agreement to the trustee for holders of obligations owed, or securities issued, by such fund as security for such obligations or securities, provided that any foreclosure or other exercise of remedies by such trustee shall be subject to the provisions of this Section regarding assignments in all respects. No pledge described in the immediately preceding clause shall release such Lender from its obligations hereunder." 1.24 Schedule 1.1A of the Credit Agreement shall be replaced by Schedule 1.1A hereto. SECTION 2 REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to the Agent and the Lenders that (a) the representations and warranties made in Section 9 (excluding Sections 9.6 and 9.8) of the Credit Agreement are true and correct on and as of the Fourth Amendment Effective Date with the same effect as if made on and as of the Fourth Amendment Effective Date (except to the extent relating solely to an earlier date, in which case they were true and correct as of such earlier date); (b) no Event of Default or Unmatured Event of Default exists or will result from the execution of this Amendment; (c) no event or circumstance has occurred since the Effective Date that has resulted, or would reasonably be expected to result, in a Material Adverse Effect; (d) the execution and delivery by the Company of this Amendment and the performance by the Company of its obligations under the Credit Agreement as amended hereby (as so amended, the "Amended Credit Agreement") (i) are within the corporate powers of the Company, (ii) have been duly authorized by all necessary corporate action, (iii) have received all necessary approval from any Governmental Authority and (iv) do not and will not contravene or conflict with any provision of any law, rule or regulation or any order, decree, judgment or award which is binding on the Company or any Guarantor or any of their respective Subsidiaries or of any provision of the certificate of incorporation or bylaws or other organizational documents of the Company or of any agreement, indenture, instrument or other document which is binding on the Company or any Guarantor or any of their respective Subsidiaries; and (e) the Amended Credit Agreement is the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. SECTION 3 EFFECTIVENESS. The amendments set forth in Section 1 above shall become effective as of the date hereof on such date (the "Fourth Amendment Effective Date") when the Agent shall have received (a) a counterpart of this Amendment executed by the Company and the Required Lenders (or, in the case of any party other than the Company from which the Agent have not received a counterpart hereof, facsimile confirmation of the execution of a counterpart hereof by such party) (provided that the amendments set forth in Sections 1.7 and 1.10 shall not become effective unless and until the Agent shall have received counterparts of this Amendment executed by the Company, the Required Revolving Lenders, the Required Term A Lenders and the Required Term B Lenders), (b) for the account of each Lender that has executed and delivered a counterpart hereof to counsel for the Agent by 1:00 p.m. (Chicago time) on November 13, 2000, an amendment fee in an amount equal to 0.50% of such Lender's Revolving Commitment plus the Term Loans of such Lender outstanding on the Fourth Amendment Effective Date, (c) for the account of BofA and Banc of America Securities LLC ("BAS"), fees in the amount set forth in a separate letter between BofA, BAS and the Company, (d) evidence satisfactory to the Agent that with respect to the Note and Warrant Purchase Agreement, Section 8A (Interest Expense Coverage) thereof, Section 8B (Fixed Charge Coverage) thereof and Section 8C (Leverage Ratio) thereof shall have been amended in form and substance satisfactory to the Agent and (e) each of the following documents, each in form and substance satisfactory to the Agent: 3.1 Reaffirmation. Counterparts of the Reaffirmation of Loan Documents, substantially in the form of Exhibit A, executed by the Company, each Guarantor and each Pledgor. 3.2 Resolutions. Certified copies of resolutions of the Board of Directors of the Company authorizing or ratifying the execution, delivery and performance by the Company of this Amendment, the Amended Credit Agreement and each other Loan Document contemplated by this Amendment to which the Company is a party. 3.3 Incumbency and Signature Certificates. A certificate of the Secretary or an Assistant Secretary of the Company, certifying the names of the officer or officers of the Company authorized to sign this Amendment and the other Loan Documents contemplated hereby to which the Company is a party, together with a sample of the true signature of each such officer. 3.4 Other Documents. Such other documents as the Agent or any Lender may reasonably request. SECTION 4 MISCELLANEOUS. 4.1 Continuing Effectiveness, etc. As herein amended, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. After the Fourth Amendment Effective Date, all references in the Credit Agreement, the Notes, each other Loan Document and any similar document to the "Credit Agreement" or similar terms shall refer to the Amended Credit Agreement. 4.2 Counterparts. This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same Amendment. 4.3 Expenses. The Company agrees to pay the reasonable costs and expenses of the Agent (including reasonable fees and disbursements of counsel, including, without duplication, the allocable costs of internal legal services and all disbursements of internal legal counsel) in connection with the preparation, execution and delivery of this Amendment. 4.4 Governing Law. This Amendment shall be a contract made under and governed by the laws of the State of Illinois applicable to contracts made and to be wholly performed within the State of Illinois. 4.5 Successors and Assigns. This Amendment shall be binding upon the Company, the Lenders and the Agent and their respective successors and assigns, and shall inure to the benefit of the Company, the Lenders and the Agent and the successors and assigns of the Lenders and the Agent. 4.6 Fees. The fees referred to in Sections 3(b) and (c) hereof are not subject to Section 7.5 of the Credit Agreement. Delivered as of the day and year first above written. U.S. AGGREGATES, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary BANK OF AMERICA, N.A., as Agent By: /s/ Kathleen M. Carry Title: Vice President BANK OF AMERICA, N.A., as a Lender and as Issuing Lender By: /s/ James D. Cockey Title: Principal FLEET NATIONAL BANK (formerly known as BankBoston, N.A.), as a Lender By: Title: NATIONAL CITY BANK, as a Lender By: /s/ Tom Gurbach Title: Vice President BANK OF SCOTLAND, as a Lender By: /s/ Joseph Fratus Title: Vice President IBJ WHITEHALL BANK AND TRUST COMPANY, as a Lender By: Title: COMERICA BANK - CALIFORNIA, as a Lender By: /s/ Lori Edwards Title: Senior Vice President ZIONS FIRST NATIONAL BANK, as a Lender By: /s/ illegible Title: Vice President UNION BANK OF CALIFORNIA, N.A., as a Lender By: /s/ illegible Title: Vice President PILGRIM PRIME RATE TRUST, as a Lender By: Pilgrim Investments, Inc., as its Investment Manager By: /s/ Mark F. Haak Title: Assistant Vice President SENIOR DEBT PORTFOLIO By: Boston Management and Research, as Investment Advisor By: /s/ Payson F. Swaffield Title: Vice President EATON VANCE INSTITUTIONAL SENIOR LOAN FUND By: Eaton Vance Management, as Investment Advisor By: /s/ Payson F. Swaffield Title: Vice President EATON VANCE SENIOR INCOME TRUST By: Eaton Vance Management, as Investment Advisor By: /s/ Payson F. Swaffield Title: Vice President KZH-HIGHLAND - 2 LLC By: /s/ Kimberly Rowe Title: Authorized Agent ARCHIMEDES FUNDING, LLC By: ING Capital Advisors, LLC, as Collateral Manager By: /s/ Steven Gorski Title: Vice President and Senior Credit Analyst ARCHIMEDES FUNDING III, LLC By: ING Capital Advisors, LLC, as Collateral Manager By: /s/ Steven Gorski Title: Vice President and Senior Credit Analyst SEQUILS-ING 1 (HBDGM), LTD. By: ING Capital Advisors, LLC, as Collateral Manager By: /s/ Steven Gorski Title: Vice President and Senior Credit Analyst BANK ONE, N.A. By: /s/ Stephen C. Price Title: First Vice President BRANCH BANKING AND TRUST COMPANY By: /s/ illegible Title: Corp. Accts. Officer EXHIBIT A REAFFIRMATION OF LOAN DOCUMENTS as of September 29, 2000 Bank of America, N.A., as Agent and the other parties to the Third Amended and Restated Credit Agreement referred to below 1455 Market Street San Francisco, California 94103 Attn: Agency Management Services #5596 Re: Reaffirmation of Loan Documents Ladies and Gentlemen: Please refer to: 1. The Amended and Restated Security Agreement dated as of June 5, 1998 (the "Security Agreement") among U.S. Aggregates, Inc. (the "Company"), Western Aggregates Holding Corporation, a Delaware corporation, Jensen Construction and Development, Inc., a Nevada corporation, Sandia Construction, Inc., a Nevada corporation, Cox Rock Products Inc., a Utah corporation, Cox Transport Corporation, a Utah corporation, SRM Holdings Corp., a Delaware corporation, Southern Ready Mix, Inc., an Alabama corporation, A-Block Company, Inc., an Arizona corporation, A-Block Company, Inc., a California corporation, Mohave Concrete and Materials, Inc., an Arizona corporation, Mohave Concrete and Materials, Inc., a Nevada corporation, Mulberry Rock Corporation, a Georgia corporation, Valley Asphalt, Inc., a Utah corporation, BHY Ready Mix, Inc., a Tennessee corporation, Geodyne Beck Rock Products, Inc., a Utah corporation, Western Rock Products Corp., a Utah corporation, Tri-State Testing Laboratories, Inc., a Utah Corporation, Dekalb Stone, Inc., a Georgia corporation, Bradley Stone & Sand, Inc., a Tennessee corporation, Monroc, Inc., a Delaware corporation, Western Aggregates, Inc., a Utah corporation, and Bank of America, N.A. in its capacity as Agent (in such capacity, the "Agent"); 2. The Amended and Restated Guaranty dated as of June 5, 1998 (the "Guaranty") executed in favor of the Agent and various other parties by Western Aggregates Holding Corporation, Jensen Construction and Development, Inc., Sandia Construction, Inc., Cox Rock Products Inc., Cox Transport Corporation, SRM Holdings Corp., Southern Ready Mix, Inc., A- Block Company, Inc., A-Block Company, Inc., Mohave Concrete and Materials, Inc., Mohave Concrete and Materials, Inc., Mulberry Rock Corporation, Valley Asphalt, Inc., BHY Ready Mix, Inc., Geodyne Beck Rock Products, Inc., Western Rock Products Corp., Tri-State Testing Laboratories, Inc., Dekalb Stone, Inc., Bradley Stone & Sand, Inc. and Monroc, Inc.; 3. The following Pledge Agreements: (a) the Amended and Restated Company Pledge Agreement dated as of June 5, 1998 between the Company and the Agent, and (b) the Amended and Restated Subsidiary Pledge Agreement dated as of June 5, 1998 between Western Aggregates Holding Corp., Western Rock Products Corp., SRM Holdings Corp., Southern Ready Mix, Inc., Monroc, Inc., and the Agent, (all of the foregoing Pledge Agreements, in each case as heretofore amended, being collectively referred to herein as the "Pledge Agreements"). 4. The Patent Security Agreement made as of March 30, 1995 by Cox Rock Products Inc. in favor of the Agent (the "Patent Security Agreement"). The Security Agreement, the Guaranty, the Pledge Agreements and the Patent Security Agreement, in each case as heretofore amended, are collectively referred to herein as the "Loan Documents". Capitalized terms not otherwise defined herein will have the meanings given in the Credit Agreement referred to below. Each of the undersigned acknowledges that the Company, the Banks and the Agent have executed the Fourth Amendment (the "Amendment") to the Third Amended and Restated Credit Agreement dated as of June 5, 1998 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"). Each of the undersigned hereby confirms that each Loan Document to which such undersigned is a party remains in full force and effect after giving effect to the effectiveness of the Amendment and that, upon such effectiveness, all references in such Loan Document to the "Credit Agreement" shall be references to the Credit Agreement as amended by the Amendment. The letter agreement may be signed in counterparts and by the various parties as herein on separate counterparts. This letter agreement shall be governed by the laws of the State of Illinois applicable to contracts made and to be performed entirely within such State. U.S. AGGREGATES, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary SRM HOLDINGS CORP. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary WESTERN AGGREGATES HOLDING CORP. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary WESTERN ROCK PRODUCTS CORP. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary JENSEN CONSTRUCTION & DEVELOPMENT, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary SANDIA CONSTRUCTION, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary TRI-STATE TESTING LABORATORIES, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary MOHAVE CONCRETE AND MATERIALS, INC., a Nevada corporation By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary MOHAVE CONCRETE AND MATERIALS, INC., an Arizona corporation By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary A-BLOCK COMPANY, INC., an Arizona corporation By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary A-BLOCK COMPANY, INC., a California corporation By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary COX ROCK PRODUCTS, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary COX TRANSPORT CORPORATION By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary VALLEY ASPHALT, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary GEODYNE BECK ROCK PRODUCTS, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary SOUTHERN READY MIX, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary DEKALB STONE, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary MULBERRY ROCK CORPORATION By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary BHY READY MIX, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary BRADLEY STONE & SAND, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary MONROC, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary WESTERN AGGREGATES, INC. By: /s/ Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary ACKNOWLEDGED AND AGREED as of the date first written above BANK OF AMERICA, N.A., as Agent By: /s/ Kathleen M. Carry Title: Vice President SCHEDULE 1.1A PRICING SCHEDULE From November __, 2000 through December 31, 2000, the Applicable ABR Margin for Revolving Loans and Term A Loans shall be 2.25% per annum, the Applicable Eurodollar Margin for Revolving Loans and Term A Loans shall be 3.50% per annum, the Applicable ABR Margin for Term B Loans shall be 2.25% per annum, the Applicable Eurodollar Margin for Term B Loans shall be 4.00% per annum and the Non-Use Fee Rate shall be 0.50%. From and after January 1, 2001, the Applicable ABR Margin, Applicable Eurodollar Margin and Non-Use Fee Rate shall be determined based on the Leverage Ratio as follows: on and after any date specified below on which the Applicable ABR Margin and Applicable Eurodollar Margin for Revolving Loans, Term A Loans and Term B Loans and the Non-Use Fee Rate are to be adjusted, the rate per annum set forth in the table below opposite the applicable Leverage Ratio: Applicable Applicable Eurodollar ABR Margin Margin (Revolving Applicable Applicable (Revolving Loans and Eurodollar ABR Margin Leverage Loans and Term A Non-Use Margin (Term (Term B Ratio Term A Loans) Loans) Fee Rate B Loans) Loans) Greater than 3.50% 2.25% 0.50% 4.00% 2.25% or equal to 4.50:1 Greater than 3.25% 2.00% 0.50% 3.75% 2.25% or equal to 4.00:1 but less than 4.50:1 Greater than 3.00% 1.75% 0.50% 3.75% 2.25% or equal to 3.50:1 but less than 4.00:1 Greater than 2.50% 1.50% 0.425% 3.50% 2.00% or equal to 3.00:1 but less than 3.50:1 Less than 2.00% 1.00% 0.375% 3.25% 2.00% 3.00:1 The Applicable ABR Margin, Applicable Eurodollar Margin and Non-Use Fee Rate shall be adjusted, to the extent applicable, following each Fiscal Quarter (commencing with the Fiscal Quarter ended September 30, 2000) on the earlier to occur of (x) 30 days (or, in the case of the last Fiscal Quarter of any year, 120 days) after the end of each Fiscal Quarter (or, in the case of the Fiscal Quarter ended September 30, 2000, January 1, 2001), based on the Leverage Ratio as of the last day of such Fiscal Quarter and (y) the date the financial statements required by Section 10.1.1 or 10.1.2, as applicable, and the related Compliance Certificate, if any, required by Section 10.1.3, are delivered in accordance with such Sections (provided that this clause (y) shall not apply to calculations for the Computation Period ended on September 30, 2000); it being understood that if the Company fails to deliver the financial statements required by Section 10.1.1 or 10.1.2, as applicable, and the related Compliance Certificate, if any, required by Section 10.1.3 by the 30th day (or, if applicable, the 120th day) after any Fiscal Quarter, the Applicable ABR Margin for Revolving Loans and Term A Loans shall be 2.25% per annum, the Applicable Eurodollar Margin for Revolving Loans and Term A Loans shall be 3.50% per annum, the Applicable ABR Margin for Term B Loans shall be 2.25% per annum, the Applicable Eurodollar Margin for Term B Loans shall be 4.00% per annum and the Non-Use Fee Rate shall be 0.50% per annum until such financial statements and Compliance Certificate are delivered. In addition, at all times when an Event of Default or Unmatured Event of Default shall have occurred and be continuing, there shall be no reduction in the Applicable ABR Margin, the Applicable Eurodollar Margin or the Non-Use Fee Rate. EX-10.2 3 0003.txt AMENDMENT NO. 3 TO PURCHASE AGREEMENT U.S. AGGREGATES, INC. ----------------------------------- AMENDMENT NO. 3 TO AMENDED AND RESTATED NOTE AND WARRANT PURCHASE AGREEMENT ----------------------------------- Dated as of September 29, 2000 $30,000,000 Senior Subordinated Notes Due November 22, 2006 and $15,000,000 Senior Subordinated Notes Due November 22, 2008 U.S. AGGREGATES, INC. $30,000,000 Senior Subordinated Notes Due November 22, 2006 and $15,000,000 Senior Subordinated Notes Due November 22, 2008 AMENDMENT NO. 3 TO AMENDED AND RESTATED NOTE AND WARRANT PURCHASE AGREEMENT As of September 29, 2000 The Prudential Insurance Company of America c/o Prudential Capital Group Two Ravinia Drive, Suite 1400 Atlanta, Georgia 30346 Ladies and Gentlemen: U.S. AGGREGATES, INC., a Delaware corporation (together with its successors and assigns, the "COMPANY"), agrees with you as follows: 1. PRIOR AMENDMENT AND ISSUANCE OF NOTES. The Company has entered into an Amendment No. 1 to Amended and Restated Note and Warrant Purchase Agreement, dated as of April 14, 1999 and an Amendment No. 2 to Amended and Restated Note and Warrant Purchase Agreement, dated as of August 12, 1999, pursuant to which certain amendments were made to the Amended and Restated Note and Warrant Purchase Agreement dated as of June 5, 1998 (as in effect immediately prior to giving effect to the amendments provided for by this Agreement, the "Existing Note Purchase Agreement" and, as amended pursuant to this Agreement and as may be further amended, restated or otherwise modified from time to time, the "Amended Note Purchase Agreement") whereby $30,000,000 aggregate principal amount of 10.34% Senior Subordinated Notes due November 22, 2006 and $15,000,000 aggregate principal amount of 10.09% Senior Subordinated Notes due November 22, 2008 (such Notes as in effect immediately prior to giving effect to the amendments provided for by this Agreement, the "Existing Notes" and, as amended pursuant to this Agreement and as may be further, as may be amended, restated or otherwise modified from time to time, the "Notes") of the Company have been issued to you and are currently outstanding. 2. DEFINED TERMS. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Existing Note Purchase Agreement. 3. REQUEST FOR CONSENT TO AMENDMENTS. The Company requests that you consent to the amendments to the Existing Note Purchase Agreement and the Existing Notes provided for by this Agreement (the "Amendments"). 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. To induce you to enter into this Agreement and to consent to the Amendments, the Company represents and warrants as follows: 4.1 Organization and Existence. The Company is a corporation duly organized and existing in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations under the Amended Note Purchase Agreement. 4.2 Actions Pending. There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, or any properties or rights of the Company or any of its Subsidiaries, by or before any court, arbitrator or administrative or governmental body that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 4.3 Amendment Authorized; Obligations Enforceable. (a) Agreement is Legal and Authorized. The execution and delivery by the Company of this Agreement, and compliance by the Company with all of the provisions of the Amended Note Purchase Agreement, are within the corporate powers of the Company. (b) Company Obligations are Enforceable. The Company has duly authorized this Agreement by all necessary action on its part. This Agreement has been executed and delivered by one or more duly authorized officers of the Company, and each of this Agreement and the Amended Note Purchase Agreement constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except that the enforceability thereof may be: (i) limited by applicable bankruptcy, reorganization, arrangement, insolvency, moratorium, or other similar laws affecting the enforceability of creditors' rights generally; and (ii) subject to the availability of equitable remedies. 4.4 No Conflicts. Neither the execution nor delivery of this Agreement, nor fulfillment of nor compliance with the terms and provisions of the Amended Note Purchase Agreement and the other Financing Documents will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the Properties of the Company or any of its Subsidiaries pursuant to, the charter or bylaws of the Company or any of its Subsidiaries, any award of any arbitrator or any agreement (including any agreement with stockholders), instrument, order, judgment, decree, statute, law, rule or regulation to which the Company or any of its Subsidiaries is subject. 4.5 Governmental Consent. Neither the execution and delivery of this Amendment, nor the performance by the Company of its obligations under the Amended Note Purchase Agreement and the other Financing Documents, is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body (other than routine filings with the Securities and Exchange Commission and/or state Blue Sky authorities) on the part of the Company in connection with the execution and delivery of this Agreement or fulfillment of or compliance with the terms and provisions of the Amended Note Purchase Agreement or of the other Financing Documents. 4.6 Full Disclosure. This Agreement and the documents, certificates or other writings delivered to you by or on behalf of the Company in connection with the proposal and negotiation of the Amendments, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the other documents, certificates and other writings delivered to you by or on behalf of the Company specifically for use in connection with the transactions contemplated by the Note Purchase Agreement and this Agreement. 4.7 Amendment of Bank Credit Agreement. Attached hereto as Exhibit C is a copy of the Fourth Amendment to the Bank Credit Agreement (the "Fourth Amendment"), which has been duly executed and delivered by each of the parties thereto, is true, correct and complete, and (subject only to the effectiveness of this Agreement) is in full force and effect. 4.8 No Defaults. No event has occurred and no condition exists that, upon the execution and delivery of this Agreement and the effectiveness of the Amendments and the Fourth Amendment, would constitute a Default or an Event of Default. 5. AMENDMENTS. 5.1 Amendments to Existing Note Purchase Agreement and Existing Notes. Subject to paragraph 5.2, (i) the Existing Note Purchase Agreement is hereby amended in the manner specified in Exhibit A1 to this Agreement and (ii) the Existing Notes are hereby amended in the manner specified in Exhibit A2. 5.2 Effectiveness of Amendments. The amendments of the Existing Note Purchase Agreement and the Existing Notes contemplated by paragraph 5.1, Exhibit A1 and Exhibit A2 shall become effective only upon the date of the satisfaction in full of the following conditions precedent (which date shall be the "Effective Date"): (a) the Company and you shall have executed and delivered a counterpart of this Agreement; (b) the representations and warranties set forth in paragraph 4 shall be true and correct; (c) the Company shall have authorized, by all necessary corporate action, the execution and delivery of this Agreement and the performance of all obligations of, and the satisfaction of all closing conditions set forth in, this paragraph 5 by, and the consummation of all transactions contemplated by this Agreement by, the Company; (d) each Restricted Subsidiary shall have executed and delivered the Guarantor Consent in respect of its obligations under the Subsidiary Guaranty, substantially in the form attached hereto as Exhibit B; (e) the Company shall have paid you an amendment fee in the amount of $225,000; (e) the Company shall have paid the fees and expenses of your special counsel as provided in Section 6; and (f) all proceedings taken in connection with this Agreement and all documents and papers relating thereto shall be satisfactory to you and your special counsel, and you and your special counsel shall have received copies of such documents and papers as you or your special counsel may reasonably request in connection herewith, including any legal opinions of counsel to the Company in respect of the transactions contemplated hereunder. 6. EXPENSES. Whether or not the Amendments become effective, the Company will on the Effective Date (or if an invoice is delivered subsequent to the Effective Date or if the Amendments do not become effective, promptly and in any event within 10 days of receiving any statement or invoice therefor) pay all fees, expenses and costs relating to this Agreement, including, but not limited to, (a) the cost of reproducing this Agreement and the other documents delivered in connection herewith and (b) the reasonable fees and disbursements of your special counsel (namely, Bingham Dana LLP, or its successor or assigns) incurred in connection with the preparation, negotiation and delivery of this Agreement. Nothing in this paragraph 6 shall limit the Company's obligations under paragraph 14B of the Amended Note Purchase Agreement. 7. MISCELLANEOUS. 7.1 Part of Note Purchase Agreement, Future References, etc. This Agreement shall be construed in connection with and as a part of the Existing Note Purchase Agreement and, except as expressly amended by this Agreement, all terms, conditions and covenants contained in the Existing Note Purchase Agreement and the Existing Notes are hereby ratified and shall be and remain in full force and effect. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to the Existing Note Purchase Agreement and the Existing Notes without making specific reference to this Agreement, but nevertheless all such references shall include this Agreement unless the context otherwise requires. 7.2 Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Delivery of an executed signature page by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Agreement. 7.3 Successors and Assigns. All covenants and other agreements in this Agreement contained by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not. 7.4 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK. [Remainder of page intentionally left blank; next page is signature page.] If you are in agreement with the foregoing, please so indicate by signing the agreement below on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement among you and the Company. Very truly yours, U.S. AGGREGATES, INC. By: /s/ Michael J. Stone Name: Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary The foregoing Agreement is hereby accepted as of the date first above written. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /s/ Robert R. Derrick Name: Robert R. Derrick Title: Vice President EXHIBIT A1 AMENDMENTS TO EXISTING NOTE PURCHASE AGREEMENT 1. The first sentence of Paragraphs 3(i) (Authorization of 1998 Notes) of the Existing Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: "The Company will authorize the issue of its senior subordinated promissory notes in the aggregate principal amount of Fifteen Million Dollars ($15,000,000), to be dated the date of issue thereof, to mature November 22, 2008, to bear interest, payable quarterly in arrears, on the unpaid balance thereof until the principal thereof shall have become due and payable at the rate and manner specified therein, and to be in substantially the form of Exhibit A2 hereto (the "1998 Notes")." 2. Paragraphs 8A (Interest Expense Coverage), 8B (Fixed Charge Coverage), 8C (Leverage Ratio) and 8E of the Existing Note Purchase Agreement are hereby amended and restated in its entirety to read respectively as follows: "8A. Interest Expense Coverage. The Company will not permit the ratio of EBITDA to Consolidated Interest Expense, (i) for the period of twelve (12) consecutive calendar months most recently ended as of the Closing Date, to be less than 1.75 to 1.0, and (ii) for any period of four (4) consecutive fiscal quarters of the Company ending in any period specified in the table below, to be less than the ratio set forth opposite such period in such table: Fiscal Period Ratio Closing Date 1.75 to 1.00 through September 29, 1999 September 30, 2.00 to 1.00 1999 through September 29, 2000 September 30, 2.25 to 1.00 2000 through December 30, 2000 December 31, 2000 1.60 to 1.00 through March 30, 2001 March 31, 2001 1.65 to 1.00 through June 29, 2001 June 30, 2001 1.20 to 1.00 through December 30, 2001 December 31, 2001 2.25 to 1.00 and at all times thereafter "8B. Fixed Charge Coverage. The Company will not permit the ratio of (i) EBITDA for any period of four (4) consecutive fiscal quarters of the Company to (ii) Consolidated Fixed Charges for such period to be less than the ratio set forth opposite such period in such table: Fiscal Period Ratio Closing Date .85 to 1.00 through December 30, 2000 December 31, 2000 .65 to 1.00 through June 29, 2001 June 30, 2001 .55 to 1.00 through December 30, 2001 December 31, 2001 .90 to 1.00 and at all times thereafter "8C. Leverage Ratio. The Company will not, as of any Calculation Date in any period specified in the table below, permit the ratio (the "Leverage Ratio") of (i) Consolidated Debt (excluding, to the extent included in the computation of Consolidated Debt at such time, any outstanding indebtedness for borrowed money evidenced by the Harris Trust Note), determined on such Calculation Date after giving effect to the incurrence of any Debt by the Company or any Restricted Subsidiary on such date and the application of the proceeds thereof, to (ii) EBITDA for the period of four (4) consecutive fiscal quarters of the Company most recently ended at such time, to be greater than the ratio set forth opposite such period in such table: Fiscal Period Ratio Closing Date up to but not 6.0 to 1.00 including September 30, 1998 September 30, 1998 up to but not 5.25 to 1.00 including September 30, 1999 September 30, 1999 up to but not 4.75 to 1.00 including September 30, 2000 September 30, 2000 up to but not 5.00 to 1.00 including December 31, 2000 December 31, 2000 up to but not 6.50 to 1.00 including March 31, 2001 March 31, 2001 up to but not 6.25 to 1.00 including September 30, 2001 September 30, 2001 up to but not 6.00 to 1.00 including December 31, 2001 December 31, 2001 and thereafter 4.00 to 1.00 As used in this paragraph 8C, "Calculation Date" means (a) the Closing Date, (b) the last day of each fiscal quarter of the Company, or (c) the date of any Acquisition Loan, as the case may be." "8E. Restricted Payments The Company will not, and will not permit any Restricted Subsidiary to, (i) declare or pay any dividend (other than stock dividends) or distribution on any of its capital stock, (ii) purchase or redeem any capital stock of the Company or any Restricted Subsidiary (or any warrants, options or other rights in respect thereof), (iii) make any other distribution to shareholders of the Company or any Restricted Subsidiary, (iv) prepay, purchase, defease or redeem any Debt subordinate to the Notes, or (v) set aside funds for any of the foregoing; provided that (i) any Restricted Subsidiary may declare dividends, or make other distributions, to the Company or to another Restricted Subsidiary of the Company (but not to any other Person) and (ii) so long as no Event of Default or Default exists or would result therefrom and, if both immediately prior and immediately after giving effect thereto, the Leverage Ratio is equal to or less than 3.0:1, the Company may declare and pay dividends on its common stock in any fiscal year of the Company in an amount not to exceed 15% of Consolidated Net Income for the immediately preceding fiscal year of the Company (provided, that the Company may only pay any dividend pursuant to this clause (ii) if, after giving effect thereto, the Company shall be in compliance with paragraph 8A, paragraph 8B and paragraph 8C on a pro forma basis for the twelve consecutive month period ending on the date of payment, as determined by the Company in good faith in a certificate provided to the holders of Notes on or prior to the date of declaration of such dividend), it being understood that, unless an Event of Default under clause (i) or clause (ii) of paragraph 9A exists, dividends may be paid within 60 days after the date of declaration thereof if at such date of declaration such dividend complied with this clause (ii) even if at the time of payment thereof the Company is not in compliance with this clause (ii)." 3. Section 8 of the Existing Note Purchase Agreement is hereby amended by the addition on the following Paragraph 8N and Paragraph 8M immediately following the existing Paragraph 8M: "8N. Capital Expenditures. The Company will not and will not permit any Restricted Subsidiary to, make or commit to make any capital expenditure in any fiscal year of the Company, except capital expenditures which do not in the aggregate exceed (i) $35,000,000 in the fiscal year of the Company ended December 31, 2000 and (ii) $10,000,000 in each fiscal year of the Company thereafter. 8M. Minimum EBITDA. (a) The Company will not permit EBITDA for the period January 1. 2001 through any date set forth below to be less than the amount set forth below opposite such date: Date EBITDA Amount March 31, 2001 $1,307,085 April 30, 2001 $2,780,985 May 31, 2001 $6,976,834 June 30, 2001 $11,867,436 July 31, 2001 $15,971,515 August 31, 2001 $20,249,990 September 30, 2001 $24,274,490 October 31, 2001 $27,028,462 November 30, 2001 $28,108,365 December 31, 2001 $28,364,812. (b) The Company will not permit EBITDA for any period ending during any fiscal year of the Company ending on or after December 31, 2002 to be less than the amount equal to 80% of the amount required by the Bank Credit Agreement for such period (EBITDA to be determined for such period on the same basis as EBITDA is determined under the Bank Credit Agreement). 4. The definition of "Remaining Scheduled Payments" in Section 13A of the Existing Note Purchase Agreement shall be amended and restated respectively to read as follows: "Remaining Scheduled Payments" shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon (interest thereon being determined assuming for the purposes of this definition that interest shall accrue from the Settlement Date at the rate of (x) 10.34% per annum in the case of the 1996 Notes and (y) 10.09% in the case of the 1998 Notes) that would be due on or after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date." 5. The definitions of "EBITDA", "Consolidated Capital Expenditures" and "Consolidated Fixed Charges" in Section 13B of the Existing Note Purchase Agreement shall be amended and restated respectively to read as follows: ""EBITDA" means, in respect of any period, Consolidated Net Income (exclusive of, to the extent deducted in determining such Consolidated Net Income (and without duplication), income that is both non-operating and non-recurring) for such period plus to the extent deducted in the computation of such Consolidated Net Income, each of the following: (i) Consolidated Interest Expense, (ii) taxes imposed on or measured by income or excess profits of the Company and its Restricted Subsidiaries, (iii) the amount of all depreciation, amortization and depletion allowances of the Company and its Restricted Subsidiaries, (iv) the amount of any loss realized upon the sale or other disposition of property of the Company or any Restricted Subsidiary that is not sold or otherwise disposed of in the ordinary course of business; (v) expense that is both non-operating and non-recurring; and (vi) restructuring charges incurred in connection with business closures; provided that the consolidated net income (plus, to the extent deducted in calculating such consolidated net income, interest expense, income tax expense, depreciation and amortization) of any Person, or attributable to any division or similar business unit, in each case set forth on the Designated Asset Schedule (as defined in the Bank Credit Agreement (as in effect on the Effective Date)), disposed of by the Company or any Subsidiary to an unaffiliated third party in an Asset Sale (as defined herein) during such period (a "Sold Business") will be included on a pro forma basis for the portion of such period after such Sold Business was sold or otherwise disposed of in an amount equal to the amount forecasted in good faith by the Company for such Sold Business as what such Sold Business would have earned during the remainder of such period until the time of sale or disposition (as such time was anticipated by the Company in the estimates referred to below) had it not been sold or otherwise disposed of, which forecast is set forth in estimates delivered by the Company to the holders of Notes prior to the Effective Date; but subtracting therefrom, to the extent reflected in the determination of Consolidated Net Income, any gain realized upon the sale or other disposition of property of the Company or any Restricted Subsidiary that is not sold or otherwise disposed of in the ordinary course of business; provided that for purposes of determining compliance with paragraph 8C hereof only, EBITDA with respect to any such period shall be adjusted to include the historical EBITDA of any Restricted Subsidiary that was acquired (a) during such period, and (b) if the Calculation Date is the date of any Acquisition Loan, on the Calculation Date, as if such Restricted Subsidiary had been acquired on the first day of such period." "Consolidated Capital Expenditures" means, for any period, all expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance sheet of the Company, but excluding (a) payments on the Lohja Note and Investments in preferred stock issued by Dekalb Stone (to the extent such payments or Investments constitute capital expenditures) and (b) expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed (i) from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored or (ii) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced. As used in this definition, "Lohja Note" means the Promissory Note dated July 13, 1994 issued by the Company to the order of Lohja, Inc. in the original principal amount of Three Million Seven Hundred Fifty-Nine Thousand Five Hundred Dollars ($3,759,500). "Consolidated Fixed Charges" means, in respect of any period of four (4) consecutive fiscal quarters of the Company, the sum of (i) Consolidated Interest Expense in respect of such period, plus (ii) Maintenance Capital Spending made during such period, plus (iii) taxes paid in cash by the Company and its Restricted Subsidiaries (other than taxes that are directly attributable to Asset Sales) during such period, plus (iv) all scheduled principal payments due on any Consolidated Debt during such period, other than any principal payments to be made as a result of any mandatory reduction of commitments under the Bank Credit Agreement. As used in this definition, "Asset Sale" means the sale, lease, assignment or other transfer for value by the Company or any Restricted Subsidiary to any Person (other than the Company or any Restricted Subsidiary) of any asset or right of the Company or such Restricted Subsidiary (including any sale or other transfer of stock of any Restricted Subsidiary, whether by merger, consolidation or otherwise); for purposes of greater clarity, it is understood that a sale by the Company or any Restricted Subsidiary of its own capital stock is not an "Asset Sale" hereunder. "Maintenance Capital Spending" means, for any period, the aggregate amount of Consolidated Capital Expenditures for such period necessary to maintain the then existing properties of the Company and its Restricted Subsidiaries in good working order and condition; provided that Maintenance Capital Spending shall not exceed (1) $17,200,000 for each of the fiscal periods ending September 30, 2000 and December 31, 2000 and (b) $10,000,000 for each fiscal period ending during the fiscal year of the Company ending December 31, 2001. 6. Clause (xi) of the definition of "Restricted Investment" in Section 13B of the Existing Note Purchase Agreement is amended and restated respectively to read as follows: "(xi) Permitted Acquisitions so long as the total consideration for all Permitted Acquisitions (including cash and noncash purchase price, liabilities assumed, deferred or financed purchase price, purchase price characterized as noncompetition payments and the like) does not exceed (x) $0 during the fiscal year of the Company ended December 31, 2001 or (y) $10,000,000 in any fiscal year of the Company ended thereafter and both before and after giving effect to such acquisition, the Leverage Ratio (as defined in paragraph 8C hereof) shall be less than 3.0 to 1.0 on a pro forma basis." 7. The definitions of "Effective Date", "Interest Rate Change Date" and "Leverage Ratio" shall be added to Section 13B of the Existing Note Purchase Agreement in the respective alphabetical order thereof to read as follows: ""Effective Date" means the "Effective Date" as defined in the Amendment No. 3 to this Agreement dated as of September 29, 2000. "Interest Rate Change Date" means the earlier to occur of (a) the date upon which the Company shall have applied to the prepayment of the Notes, in accordance with paragraph 6A or paragraph 6B, the sum of Ten Million Dollars ($10,000,000), together with interest thereon to the prepayment dates and the Yield-Maintenance Amounts, if any, with respect to the Notes, and (b) the date the Leverage Ratio is less than 3.0 to 1.0. "Leverage Ratio" has the meaning assigned to it in paragraph 8C." 8. The Existing Note Purchase Agreement is amended by deleting therefrom the current forms of Exhibit A1 and Exhibit A2 thereto and replacing them with Exhibit A3 and Exhibit A4, respectively, attached hereto. Any reference in the Existing Note Purchase Agreement to the "10.34% Senior Subordinated Notes Due November 22, 2006" shall be deemed a reference to the "Senior Subordinated Notes Due November 22, 2006" and any reference in the Existing Note Purchase Agreement to the "10.09% Senior Subordinated Notes Due November 22, 2008" shall be deemed a reference to the "Senior Subordinated Notes Due November 22, 2008" EXHIBIT A2 AMENDMENTS TO EXISTING NOTES 1. The 1996 Notes outstanding on the Effective Date of this First Amendment are hereby, without any further action required on the part of any other Person, deemed to be automatically amended to conform to and have the terms provided in Exhibit A3 attached hereto (except that the principal amount and the payee of each Note shall remain unchanged). Any 1996 Note issued on or after the Effective Date of this First Amendment shall be in the form of Exhibit A3 attached hereto. 2. The 1998 Notes outstanding on the Effective Date of this First Amendment are hereby, without any further action required on the part of any other Person, deemed to be automatically amended to conform to and have the terms provided in Exhibit A4 attached hereto (except that the principal amount and the payee of each Note shall remain unchanged). Any 1998 Note issued on or after the Effective Date of this First Amendment shall be in the form of Exhibit A4 attached hereto. EXHIBIT A3 FORM OF SENIOR SUBORDINATED NOTE - 1996 NOTE U.S. AGGREGATES, INC. Senior Subordinated Note Due November 22, 2006 No. S-___ PPN: [90345@ AA 1] $_________ [Date] U.S. AGGREGATES, INC., a Delaware corporation (together with its successors, the "Company"), for value received, hereby promises to pay to ___________ or registered assigns the principal sum of ____________ DOLLARS ($________), together with all Capitalized Interest Amounts (as hereinafter defined), or, if less, the unpaid principal amount of this Note, on November 22, 2006, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance hereof from the date of this Note until the principal amount hereof shall become due and payable, at the rate of (i) at all times prior to but excluding the Effective Date (as defined in the Note Agreement (as defined below)), ten and thirty-four one- hundredths percent (10.34%) per annum, (ii) at all time from and including the Effective Date but prior to the Interest Rate Change Date (as defined in the Note Agreement), fourteen percent (14%) per annum and all times from and including the Interest Rate Change Date twelve percent (12%) per annum, payable quarterly on the twenty-second (22nd) day of February, May, August and November (each an "Interest Payment Date") in each year, commencing on the later of February 22, 1997 and the first Interest Payment Date occurring after the date of this Note, and to pay on demand interest on any overdue principal (including any overdue prepayment), any overdue payment of Yield-Maintenance Amount, if any, or (to the extent permitted by applicable law) any overdue installment of interest (the due date of such payments to be determined without giving effect to any grace period) or if an Event of Default under the Note Agreement shall have occurred and be continuing, at the rate per annum equal to the lesser of (a) the highest rate allowed by applicable law or (b) the greater of (i) sixteen percent (16%), or (ii) two percent (2%) over the rate of interest publicly announced by Morgan Guaranty Trust Company in New York City from time to time as its prime rate. If at such time the interest rate in effect under this Note is greater than twelve percent (12%) per annum, on any Interest Payment Date during such time, in lieu of making the entire interest payment on this Note in cash, the Company may: (a) pay on such Interest Payment Date, in cash, that portion of the interest accrued on the outstanding principal amount of such Note to such Interest Payment Date as would have accrued at the rate of twelve percent (12.00%) per annum; and (b) both: (i) pay on such Interest Payment Date, in cash, none, any part or all of the interest accrued on such principal to such Interest Payment Date as would have accrued at the rate of two percent (2%) per annum; and (ii) add to the outstanding principal amount of such Notes on such Interest Payment Date the portion of such interest as would have accrued at the rate of two percent (2%) per annum which is not paid in cash pursuant to the immediately preceding clause (i) (each such addition with respect to this Note, a "Capitalized Interest Amount"). Interest shall begin to accrue on each Capitalized Interest Amount beginning on and including the Interest Payment Date on which such Capitalized Interest Amount is added to the principal amount of this Note, and such interest shall accrue and be paid, together with the interest on the remaining principal amount of this Note, in accordance with this Note. Notwithstanding anything herein to the contrary, all interest due and payable on the date that the entire then outstanding principal amount of this Note becomes due and payable, whether on the maturity date hereof, by acceleration or otherwise, shall be due and payable in full in cash on such date. All Capitalized Interest Amounts will for all purposes of this Note and the Note Agreement constitute outstanding principal on this Note. Payments of principal, Yield-Maintenance Amount, if any, and interest shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts to the registered holder hereof at the address shown in the register maintained by the Company for such purpose, in the manner provided in the Note Agreement. This Note is one of an issue of Senior Subordinated Notes due November 22, 2006 issued in an aggregate principal amount of Thirty Million Dollars ($30,000,000) (which amount may be increased by any Capitalized Interest Amounts) pursuant to the Amended and Restated Note and Warrant Purchase Agreement (as amended and as may be further amended from time to time, the "Note Agreement"), dated as of June 5, 1998, between the Company and The Prudential Insurance Company of America. Capitalized terms used herein and not defined herein have the meanings specified in the Note Agreement. As provided in the Note Agreement, this Note is subject to prepayment, in whole or from time to time in part, in certain cases without premium and in other cases with a premium as specified in the Note Agreement. This Note is a registered note and, as provided in the Note Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company shall not be affected by any notice to the contrary. The obligations evidenced by this Note are subordinated to the Senior Debt on the terms provided in the Note Agreement and the holder hereof, by acceptance hereof, agrees to be bound by the subordination provisions in the Note Agreement. THIS NOTE IS GIVEN IN SUBSTITUTION AND WITHOUT NOVATION OF A PROMISSORY NOTE DATED NOVEMBER 21, 1996 AND ISSUED BY U.S. AGGREGATES, INC. THIS NOTE AND THE NOTE AGREEMENT ARE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. U.S. AGGREGATES, INC. By: /s/ Michael J. Stone Name: Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary EXHIBIT A4 FORM OF SENIOR SUBORDINATED NOTE - 1998 NOTE U.S. AGGREGATES, INC. Senior Subordinated Note Due November 22, 2008 No. S-___ PPN: [90345@ AB 9] $_________ [Date] U.S. AGGREGATES, INC., a Delaware corporation (together with its successors, the "Company"), for value received, hereby promises to pay to ___________ or registered assigns the principal sum of ____________ DOLLARS ($________), together with all Capitalized Interest Amounts (as hereinafter defined), or, if less, the unpaid principal amount of this Note, on November 22, 2008, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance hereof from the date of this Note until the principal amount hereof shall become due and payable, at the rate of (i) at all times prior to but excluding the Effective Date (as defined in the Note Agreement (as defined below), ten and nine hundredths percent (10.09%) per annum, (ii) at all time from and including the Effective Date but prior to the Interest Rate Change Date (as defined in the Note Agreement), fourteen percent (14%) per annum and all times from and including the Interest Rate Change Date twelve percent (12%) per annum, payable quarterly on the twenty-second (22nd) day of February, May, August and November (each an "Interest Payment Date") in each year, commencing on the later of August 22, 1998 and the first Interest Payment Date occurring after the date of this Note, and to pay on demand interest on any overdue principal (including any overdue prepayment), any overdue payment of Yield-Maintenance Amount, if any, and (to the extent permitted by applicable law) any overdue installment of interest (the due date of such payments to be determined without giving effect to any grace period) or if an Event of Default under the Note Agreement shall have occurred and be continuing, at the rate per annum equal to the lesser of (a) the highest rate allowed by applicable law or (b) the greater of (i) sixteen percent (16%), or (ii) two percent (2%) over the rate of interest publicly announced by Morgan Guaranty Trust Company in New York City from time to time as its prime rate. If at such time the interest rate in effect under this Note is greater than twelve percent (12%) per annum, on any Interest Payment Date during such time, in lieu of making the entire interest payment on this Note in cash, the Company may: (c) pay on such Interest Payment Date, in cash, that portion of the interest accrued on the outstanding principal amount of such Note to such Interest Payment Date as would have accrued at the rate of twelve percent (12.00%) per annum; and (d) both: (i) pay on such Interest Payment Date, in cash, none, any part or all of the interest accrued on such principal to such Interest Payment Date as would have accrued at the rate of two percent (2%) per annum; and (ii) add to the outstanding principal amount of such Notes on such Interest Payment Date the portion of such interest as would have accrued at the rate of two percent (2%) per annum which is not paid in cash pursuant to the immediately preceding clause (i) (each such addition with respect to this Note, a "Capitalized Interest Amount"). Interest shall begin to accrue on each Capitalized Interest Amount beginning on and including the Interest Payment Date on which such Capitalized Interest Amount is added to the principal amount of this Note, and such interest shall accrue and be paid, together with the interest on the remaining principal amount of this Note, in accordance with this Note. Notwithstanding anything herein to the contrary, all interest due and payable on the date that the entire then outstanding principal amount of this Note becomes due and payable, whether on the maturity date hereof, by acceleration or otherwise, shall be due and payable in full in cash on such date. All Capitalized Interest Amounts will for all purposes of this Note and the Note Agreement referred to below constitute outstanding principal on this Note. Payments of principal, Yield-Maintenance Amount, if any, and interest shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts to the registered holder hereof at the address shown in the register maintained by the Company for such purpose, in the manner provided in the Note Agreement. This Note is one of an issue of Senior Subordinated Notes due November 22, 2006 issued in an aggregate principal amount of Fifteen Million Dollars ($15,000,000) (which amount may be increased by any Capitalized Interest Amounts) pursuant to the Amended and Restated Note and Warrant Purchase Agreement (as amended and as may be further amended from time to time, the "Note Agreement"), dated as of June 5, 1998, between the Company and The Prudential Insurance Company of America. Capitalized terms used herein and not defined herein have the meanings specified in the Note Agreement. As provided in the Note Agreement, this Note is subject to prepayment, in whole or from time to time in part, in certain cases without premium and in other cases with a premium as specified in the Note Agreement. This Note is a registered note and, as provided in the Note Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company shall not be affected by any notice to the contrary. The obligations evidenced by this Note are subordinated to the Senior Debt on the terms provided in the Note Agreement and the holder hereof, by acceptance hereof, agrees to be bound by the subordination provisions in the Note Agreement. THIS NOTE IS GIVEN IN SUBSTITUTION AND WITHOUT NOVATION OF A PROMISSORY NOTE DATED JUNE 5, 1998 AND ISSUED BY U.S. AGGREGATES, INC. THIS NOTE AND THE NOTE AGREEMENT ARE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. U.S. AGGREGATES, INC. By: /s/ Michael J. Stone Name: Michael J. Stone Title: Chief Financial Officer, Treasurer and Secretary EXHIBIT B [FORM OF GUARANTOR CONSENT] Reference is made to that certain Amended and Restated Note and Warrant Purchase Agreement, dated as of June 5, 1998 (the "Note Purchase Agreement"), between U.S. Aggregates, Inc. (the "Company") and The Prudential Insurance Company of America (the "Noteholder"), pursuant to which $30,000,000 principal amount of 10.34% Senior Subordinated Notes due November 22, 2006 and $15,000,000 principal amount of 10.09% Senior Subordinated Notes due November 22, 2008 (the "Notes") of the Company have been issued to the Noteholder and are currently outstanding. Capitalized terms used herein and defined in the Note Purchase Agreement are used herein with the meanings ascribed to them in the Note Purchase Agreement. The Note Purchase Agreement was amended pursuant to the terms of (i) an Amendment No. 1 to the Amended and Restated Note and Warrant Purchase Agreement dated as of April 14, 1999 and (ii) an Amendment No. 2 to the Amended and Restated Note and Warrant Purchase Agreement dated as of August 12, 1999 (as in effect immediately prior to giving effect to the amendments provided for in Amendment No. 3 to the Amended and Restated Note and Warrant Purchase Agreement, the "Existing Note Purchase Agreement" and, as amended pursuant to Amendment No. 3 to the Amended and Restated Note and Warrant Purchase Agreement and as may be further amended, restated or otherwise modified from time to time, the "Amended Note Purchase Agreement"). The Existing Note Purchase Agreement and the Notes are being amended pursuant to the terms of Amendment No. 3 to the Note Purchase Agreement dated as of September 29, 2000 (the "Third Amendment Agreement"). Each of the undersigned Restricted Subsidiaries (each, a "Guarantor") is a party to the Subsidiary Guaranty entered into in connection with the execution and delivery of the Note Purchase Agreement and the issuance and sale of the Notes. Each Guarantor hereby consents to the Third Amendment Agreement and acknowledges and affirms all of its obligations under the terms of the Subsidiary Guaranty. Dated: As of September 29, 2000 [Remainder of page intentionally left blank. Next page is signature page.] IN WITNESS WHEREOF, each Guarantor has caused this Guarantor Consent to be executed on its behalf, as of the date first above written, by one of its duly authorized officers. SRM HOLDINGS CORP. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer SOUTHERN READY MIX, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer WESTERN AGGREGATES HOLDING CORP. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer WESTERN ROCK PRODUCTS CORPORATION By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer COX ROCK PRODUCTS, INCORPORATED By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer COX TRANSPORT CORPORATION By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer JENSEN CONSTRUCTION & DEVELOPMENT, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer SANDIA CONSTRUCTION, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer SOUTHERN NEVADA AGGREGATES, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer MOHAVE CONCRETE AND MATERIALS, INC. (NEVADA) By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer MOHAVE CONCRETE AND MATERIALS, INC. (ARIZONA) By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer A-BLOCK COMPANY, INC. (ARIZONA) By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer A-BLOCK COMPANY, INC. (CALIFORNIA) By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer VALLEY ASPHALT, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer DEKALB STONE, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer GEODYNE TRANSPORT, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer FALCON RIDGE CONSTRUCTION, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer BECK PAVING, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer MULBERRY ROCK CORPORATION By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer BHY READY MIX, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer BRADLEY STONE & SAND, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer TRI-STATE TESTING LABORATORIES, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer BIG HORN REDI MIX, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer TREASURE VALLEY CONCRETE, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer MONROC, INC. By /s/ Theresa Pajes Name: Theresa Pajes Title: Assistant Treasurer EXHIBIT C [COPY OF EXECUTED FOURTH BANK AMENDMENT] -----END PRIVACY-ENHANCED MESSAGE-----