April __, 1999
U.S. Aggregates, Inc.
000 Xxxxx Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Re: Waiver under Note Agreement
Ladies and Gentlemen:
Please refer to the Amended and Restated Note and Warrant Purchase
Agreement dated as of June 5, 1998 (the "Note Agreement") by and between U.S.
Aggregates, Inc. (the "Company") and The Prudential Insurance Company of America
("Prudential"). Capitalized terms used but not otherwise defined herein have the
meanings assigned thereto in the Note Agreement.
The Company intends to borrow $7,500,000 for working capital and other
general corporate purposes and $8,201,313.82 to repay borrowings under that
certain $9,000,000 Unsecured Note dated March 12, 1998 of the Company payable to
Xxxxxx Trust and Savings Bank ("Xxxxxx") under a demand note (the "Demand Note")
from Xxxxxx and that the Company may borrow additional amounts under the Demand
Note to fund the payment of accrued interest thereon. Xxxxxx, Xxxxx, Xxxxxxx,
Xxxxxx Fund IV, L.P. ("GTCR") will unconditionally agree (its "Note Funding
Agreement") for the benefit of Xxxxxx, Prudential and the Banks (as defined in
the Bank Credit Agreement) to contribute, upon request from Xxxxxx, to the
capital of the Company an amount sufficient to pay in full all principal of, and
accrued interest on, the Demand Note when Xxxxxx demands the same or when the
Demand Note otherwise matures, which capital contribution shall be applied to
pay such principal and interest on the Demand Note. Copies of the Demand Note,
the Note Funding Agreement and related documentation are attached hereto as
Exhibit A.
Pursuant to the Company's request and provided that no Event of Default or
Default shall exist under the Note Agreement at the time the transaction
contemplated by the Demand Note is consummated (other than as waived hereby),
Prudential hereby waives any Event of Default caused by the Interest Payment
Transactions or the Note Repayment Transaction (each as defined in the Note
Funding Agreement) (provided, that the waivers in this sentence shall cease to
be effective if the Note Funding Agreement ever ceases to be in full force and
effect). Prudential further agrees that principal and accrued interest on the
Demand Note shall be disregarded for purposes of calculating compliance with the
financial tests set forth in Section 8 of the Note Agreement. The Company agrees
that it shall be an Event of Default in the event that the Demand Note is ever
paid otherwise than with the proceeds of a capital contribution from GTCR
pursuant to the Note Funding Agreement.
The foregoing waiver is limited strictly to its terms and shall not apply
to non-compliance with any other term of the Note Agreement.
This waiver letter may be executed in any number of counterparts and by
the parties hereto 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 waiver letter.
This waiver letter shall be governed by the internal laws of the State of
New York.
Very truly yours,
U.S. AGGREGATES, INC.
By: /s/ Xxxxxxx Xxxxx
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Its:
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THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Vice President
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