
<PAGE>   1
                                                                   EXHIBIT 10.11



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- --------------------------------------------------------------------------------




                                   CALMAT CO.

                                  $35,000,000





                            -----------------------
                            NOTE PURCHASE AGREEMENT
                            -----------------------





                           DATED AS OF JULY 23, 1993





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<PAGE>   2
                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                       Page
                                                                                                       ----
<S>         <C>                                                                                         <C>
SECTION 1.  ISSUE OF NOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1
                                                                                                      
     1.1    Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1
     1.2    Sale of Notes; Closing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1
                                                                                                      
SECTION 2.  CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2
                                                                                                      
     2.1    Opinion of Purchaser's Special Counsel  . . . . . . . . . . . . . . . . . . . . . . . .     2
     2.2    Opinion of Company's Counsel  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2
     2.3    Representations and Warranties; No                                                        
            Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2
     2.4    Purchase Permitted By Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . .     2
     2.5    Legality  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2
     2.6    Documents and Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3
     2.7    Completion of Audit and Investigation . . . . . . . . . . . . . . . . . . . . . . . . .     4
     2.8    Liens   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4
     2.9    Payment of Fees and Expenses of Your                                                      
            Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4
     2.10   Delivery of Letter Regarding ERISA                                                        
            Affiliates  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4
     2.11   Other Corporate Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4
                                                                                                      
SECTION 3.  PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5
                                                                                                      
     3.1    Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5
     3.2    Optional Prepayments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5
     3.3    Change of Control Prepayment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     6
     3.4    Notice of Prepayment and Other Notices  . . . . . . . . . . . . . . . . . . . . . . . .     6
     3.5    General Provisions Concerning Prepayments . . . . . . . . . . . . . . . . . . . . . . .     7
     3.6    Surrender of Notes; Notation Thereon  . . . . . . . . . . . . . . . . . . . . . . . . .     7
     3.7    Interest After Date Fixed for Prepayment  . . . . . . . . . . . . . . . . . . . . . . .     7
                                                                                                      
SECTION 4.  REPRESENTATIONS AND WARRANTIES OF THE                                                     
            COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7
                                                                                                      
     4.1    Organization, Authority and Good                                                          
            Standing; Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7
     4.2    Authorization of Agreement, Etc.  . . . . . . . . . . . . . . . . . . . . . . . . . . .     8
            A.  Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     8
            B.  No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     8
            C.  Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     8
            D.  Binding Obligation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     9
     4.3    Financial Statements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     9
     4.4    No Material Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     9
     4.5    Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     9
     4.6    Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     9
</TABLE>






                                       i
<PAGE>   3
<TABLE>
<CAPTION> 
                                                                                                       Page
                                                                                                       ----
<S>         <C>                                                                                        <C>
     4.7    Leases and Liens  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    10
     4.8    Outstanding Indebtedness  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    10
     4.9    Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    10
     4.10   No Burdensome Provisions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    10
     4.11   Compliance with Other Instruments; Laws . . . . . . . . . . . . . . . . . . . . . . . .    11
     4.12   Trading with the Enemy Act, etc.  . . . . . . . . . . . . . . . . . . . . . . . . . . .    11
     4.13   ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    11
     4.14   Environmental Protection  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    12
     4.15   Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    14
     4.16   Regulation G; Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    14
     4.17   Investment Company Act  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    14
     4.18   Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    14
     4.19   Patents, Trademarks and Licenses  . . . . . . . . . . . . . . . . . . . . . . . . . . .    14
     4.20   Disclosure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15
     4.21   Offering of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15
                                                                                                      
SECTION 5.  REPRESENTATIONS AND WARRANTIES OF EACH                                                    
            NOTE PURCHASER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15
                                                                                                      
     5.1    Nature of Purchase  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15
     5.2    Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    16
                                                                                                      
SECTION 6.  AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    16
                                                                                                      
     6.1    Financial Statements and Other Reports  . . . . . . . . . . . . . . . . . . . . . . . .    16
     6.2    Information Required by Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . .    19
     6.3    Preservation of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20
     6.4    Payment of Taxes and Other Potential                                                      
            Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20
     6.5    Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20
     6.6    Maintenance of Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20
     6.7    Equal Security for Notes; No Further                                                      
            Negative Pledges  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21
     6.8    Inspection of Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21
     6.9    Compliance With Laws  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21
     6.10   Compliance With Agreements, Duties and                                                    
            Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    22
     6.11   Environmental Notice and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . .    22
     6.12   Further Assurances  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    24
                                                                                                      
SECTION 7.  NEGATIVE COVENANTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    24
                                                                                                      
     7.1    Limitations on Consolidated Total                                                         
            Liabilities and Indebtedness of                                                           
            Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    24
     7.2    Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    25
     7.3    Dividends; Stock Retirements; and                                                         
            Restricted Investments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    25
     7.4    Contingent Obligations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    26
</TABLE>






                                       ii
<PAGE>   4
<TABLE> 
<CAPTION>
                                                                                                       Page
                                                                                                       ----
<S>         <C>                                                                                        <C>
     7.5    Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    26
            A.  Minimum Consolidated Tangible Net                                                     
                Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    26
            B.  Minimum Consolidated Fixed Charge                                                     
                Coverage Ratio  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    26
     7.6    Restriction on Fundamental Changes  . . . . . . . . . . . . . . . . . . . . . . . . . .    27
     7.7    Restriction on Asset Sales  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    27
     7.8    Sales and Lease-Backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    28
     7.9    Transactions with Stockholders and                                                        
            Affiliates  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    28
     7.10   Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    29
     7.11   Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    29
     7.12   Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    29
     7.13   Purchase of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    29
                                                                                                      
SECTION 8.  DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    29
                                                                                                      
     8.1    Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    29
                                                                                                      
SECTION 9.  CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    33
                                                                                                      
     9.1    Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    33
     9.2    Accounting Terms; Financial Covenant                                                      
            Calculations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    47
     9.3    Miscellaneous Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    47
                                                                                                      
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    47
                                                                                                      
    10.1    Note Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    47
    10.2    Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    47
    10.3    Consent to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    48
    10.4    Form, Registration, Transfer and Exchange                                                 
            of Notes; Lost Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    48
    10.5    Persons Deemed Owners; Participations . . . . . . . . . . . . . . . . . . . . . . . . .    49
    10.6    Survival of Representations and                                                           
            Warranties; Entire Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    49
    10.7    Successors and Assigns  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    50
    10.8    Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    50
    10.9    Payments Due on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . .    50
    10.10   Satisfaction Requirement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    51
    10.11   Governing Law; Choice of Forum; Waiver of                                                 
            Jury Trial  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    51
    10.12   Severability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    51
    10.13   Descriptive Headings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    51
    10.14   Counterparts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    51
</TABLE> 





                                      iii
<PAGE>   5
                             EXHIBITS AND SCHEDULES


Exhibits

       A      Form of Promissory Note
       B      Compliance Certificate
       C      Form of Opinion of Company's Counsel
       D      Form of ERISA Letter
       E      Legality Under Delaware State Insurance
              Law
       F      Officer's Certificate Relating to
              Contingent Obligations

Schedules

       1      Subsidiaries
       2      Liens
       3      Environmental Protection
       4      Indebtedness
       5      Net Assets Held for Sale
       6      Pending Litigation
       7      Unpaid Taxes





                                       iv
<PAGE>   6
                                   CALMAT CO.


                            NOTE PURCHASE AGREEMENT

                                                                 July 23, 1993

To The Purchasers Named
On Annex I Hereto

Ladies and Gentlemen:

          CALMAT CO., a Delaware corporation (the "Company"), and the
undersigned purchasers of the Notes ("you" or the "Purchasers") hereby agree as
follows:

SECTION 1.  ISSUE OF NOTES.

     1.1  Authorization.  The Company has duly authorized an issue of
$35,000,000 aggregate principal amount of its 6.70% Senior Unsecured Notes due
July 23, 2000 (the "Notes"), such Notes to have terms and provisions
substantially as set forth in Exhibit A hereto.  The term "Notes" as used
herein shall include all promissory notes delivered pursuant to the provisions
of this Agreement and all promissory notes delivered in substitution or
exchange therefor or in lieu thereof, and, where applicable, shall include the
singular number as well as the plural.  The term "Note" shall mean one of the
Notes.

     1.2  Sale of Notes; Closing.  The Company hereby agrees to sell to each of
you, and each of you, subject to the terms and conditions herein set forth,
hereby severally agrees to purchase from the Company, Notes in the aggregate
principal amount set forth opposite your respective name in Annex I hereto.

          Delivery of the Notes so to be purchased by each of you hereunder 
shall be made at the offices of Morrison & Foerster, 555 West Fifth Street, 
Suite 3500, Los Angeles, California 90013 at 10:00 a.m. Los Angeles time on 
July 23, 1993 (the "Closing Date"), by the Company's delivery to each of you of
one or more Notes (as specified by each of you prior to the Closing Date) 
payable to each of you (or your respective nominees) or registered assigns, 
dated the Closing Date, in the aggregate principal amount set forth opposite 
your respective name in Annex I hereto and duly executed by the Company.  
Delivery of the Notes hereunder shall be made against your payment to the 
Company by wire transfer of immediately available funds to Bank of America, 
Concord, California, ABA No. 1210 00358, Re:  CalMat Co.,





                                       1
<PAGE>   7
Account No. 12577 00731 in the aggregate principal amount of such Notes to be
purchased by you on the Closing Date.

SECTION 2.  CONDITIONS OF CLOSING.

          Your obligation to purchase and pay for the Notes to be purchased by
you hereunder is subject to the satisfaction, on or before the Closing Date, of
the following conditions:

     2.1  Opinion of Purchaser's Special Counsel.  You shall have received from
Morrison & Foerster, special counsel for you in connection with this
transaction, a favorable opinion satisfactory to you as to such matters
incident to the matters herein contemplated as you may reasonably request.

     2.2  Opinion of Company's Counsel.  You shall have received from Paul
Stanford, general counsel for the Company, a favorable opinion satisfactory to
you and substantially in the form of Exhibit C attached hereto.

     2.3  Representations and Warranties; No Default.  The representations and
warranties contained in Section 4 shall be true on and as of the Closing Date,
except to the extent of changes caused by the transactions herein contemplated;
there shall exist on the Closing Date no Default or Event of Default; and the
Company shall have delivered to you an Officer's Certificate, dated the Closing
Date, to both such effects.

     2.4  Purchase Permitted By Applicable Laws.  The purchase of and payment
for the Notes to be purchased by you on the Closing Date on the terms and
conditions herein provided (including the use of the proceeds of such Notes by
the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, section 5 of the Securities Act or Regulation
G, T or X of the Board of Governors of the Federal Reserve System) and shall
not subject you to any tax, penalty, liability or other onerous condition under
or pursuant to any applicable law or governmental regulation, and you shall
have received such certificates or other evidence as you may request to
establish compliance with this condition.

     2.5  Legality.  Each Purchaser shall have satisfied itself that (a) the
Notes being purchased by such Purchaser on the Closing Date shall qualify on
such Closing Date as a legal investment for life insurance companies under the
(x) New York Insurance Law (without resort to any provision of such law, such
as Section 1405(a)(8)), (y) Delaware Insurance Law (without resort to any
provision of such law, such as Section 1320) or (z) Texas Insurance Code
(without resort to any provision of such law, such as Section 4(o) of





                                       2
<PAGE>   8
Article 3.3 thereof), permitting limited investments by each such Purchaser
without restriction as to the character of the particular investment and (b)
such purchase shall not subject such Purchaser or any Holder to any penalty or
other onerous condition under or pursuant to any applicable law or governmental
regulation.  The Company shall complete Exhibit E hereto with respect to legal
investments under Delaware law.

     2.6  Documents and Proceedings.  The Company shall deliver each of the
following instruments, agreements and documents to you, in each case in form
and substance satisfactory to you and your special counsel:

          (i)  Certified copies of the Certificate of Incorporation of the
     Company, together with good standing certificates (including verification
     of tax status) and telegrams, if available, from the Secretary of State of
     Delaware, and good standing certificates (including verification of tax
     status) from each State in which the Company is required to be qualified
     to transact business as a foreign corporation, each to be dated a recent
     date prior to the Closing Date and, in the case of the Certificate of
     Incorporation, to be certified as of the Closing Date by the Company's
     corporate secretary or an assistant secretary;

         (ii)  Copies of the Company's Bylaws certified by its corporate
     secretary or an assistant secretary;

        (iii)  Resolutions of the Company's Board of Directors approving and
     authorizing the execution, delivery and performance of this Agreement, the
     Notes and any other documents, instruments and certificates required to be
     executed by the Company in connection herewith or therewith, each
     certified by its corporate secretary or an assistant secretary;

         (iv)  Signature and incumbency certificates of the Company's officers
     executing this Agreement, the Notes and any other documents, instruments
     and certificates required to be executed by the Company in connection
     herewith or therewith;

          (v)  Executed originals of this Agreement and an executed original of
     your Note;

         (vi)  A copy of the Credit Agreement and each other agreement
     evidencing the indebtedness identified with an asterisk (*) on Schedule 4
     and





                                       3
<PAGE>   9
     all agreements, instruments or other documents creating any lien relating
     thereto, together in each case with all amendments, and in each case
     certified as a true, correct and complete copy of such agreement,
     instrument or document by an Authorized Officer; and

        (vii)  Such other documents as you may reasonably request, including,
     without limitation an Officer's Certificate describing the agreements
     relating to the contingent obligations of the Company which are
     indemnified by Onoda Cement Co., Ltd.

     2.7  Completion of Audit and Investigation.  You shall have completed such
legal and business due diligence, including, without limitation, such
investigations, reviews of financial controls and reporting, review of
appraisals or summaries thereof, and audits of the Company and its operations,
assets, litigation (pending or threatened) and loss contingencies, legal,
regulatory and environmental matters, insurance coverage and reserves, and
other matters as you may deem appropriate, and these investigations, reviews
and audits shall have provided you with results and information which, in your
sole opinion but in good faith, are satisfactory to warrant you purchasing a
Note.

     2.8  Liens.  You shall have received evidence, in form and substance
satisfactory to you, that (i) the property of the Company (including all of the
Company's real, personal and mixed property) is free and clear of all Liens
other than Liens permitted by Section 7.2 and (ii) the Company has no
agreement, contract or other obligation (written or otherwise) to create or
grant any Lien, other than a Lien permitted by Section 7.2, in such property.

     2.9  Payment of Fees and Expenses of Your Counsel.  The fees of Morrison &
Foerster, and costs and expenses incurred by Morrison & Foerster or you in
connection with the transactions contemplated herein, shall be paid by the
Company to the extent such costs and expenses have been billed.

     2.10  Delivery of Letter Regarding ERISA Affiliates.  Each of the Company
and Metropolitan Life Insurance Company shall execute the letter regarding
purchases of the Notes by the Purchasers for separate accounts, the form of
which is attached hereto as Exhibit D.

     2.11  Other Corporate Actions.  On or before the Closing Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by you and your counsel shall be reasonably
satisfactory in form and substance to you and your counsel,





                                       4
<PAGE>   10
and you and your counsel shall have received all such counterpart originals or
certified copies of such documents as you may reasonably request.

SECTION 3.  PREPAYMENTS.

     3.1  Mandatory Prepayments.  The Company covenants and agrees that it will
prepay on the following dates, subject to the last paragraph of this Section
3.1, the aggregate principal amount of Notes (or such lesser amount of Notes as
shall then be unpaid) set forth opposite such date, and such principal amount
shall become due and payable on such dates:

<TABLE>
<CAPTION>
                                  Principal Amount to
    Prepayment Date                   be Prepaid     
    ---------------               -------------------
    <S>                                <C>
    July 23, 1997                      $8,750,000
    July 23, 1998                      $8,750,000
    July 23, 1999                      $8,750,000
</TABLE>

          Each prepayment pursuant to this Section 3.1 shall be made at the
principal amount so to be prepaid, together with accrued interest thereon to
the date fixed for such prepayment, without premium.  The Company shall pay the
outstanding principal balance of each Note, together with accrued interest
thereon, on July 23, 2000.

          The mandatory prepayments of principal on the Notes set forth in this
Section 3.1 shall be reduced pro rata by the amount of each such optional
prepayment pursuant to Section 3.2 and by the amount of any prepayment upon a
Change of Control pursuant to Section 3.3.

     3.2  Optional Prepayments.  Upon notice given as provided in Section 3.4,
the Company at its option may prepay the Notes as a whole or in part from time
to time (in multiples of $500,000 principal amount) at the Yield Maintenance
Price.  Each such notice shall specify the date on which such prepayment is to
be made (an "Optional Prepayment Date"), the principal amount of the Notes of
each Holder so to be prepaid and the interest accrued thereon to the Optional
Prepayment Date.

          On the Calculation Date, the Computing Holder shall give written
notice to the Company of the amount of the Yield Maintenance Price of the
principal amount of the Notes so to be prepaid, which notice shall set forth in
reasonable detail the computation thereof; provided, however, that the failure
of the Computing Holder to make such determination shall not affect the
obligation of the Company to pay such Yield Maintenance Price when due in
accordance with the terms of the Notes and the Computing Holder shall have no





                                       5
<PAGE>   11
liability to the Company or any other Holder for its failure to make such
determination.  The Yield Maintenance Price set forth in such notice shall be
binding on the Company and all of the Holders, absent manifest error.

          Promptly after each such Calculation Date, the Company shall deliver
to each Holder of Notes on or before such Optional Prepayment Date a
certificate signed by a principal financial officer of the Company setting
forth the Yield Maintenance Price of the principal amount of the Notes held by
such Holder so to be prepaid, accompanied by a copy of the written notice by
the Computing Holder referred to above (which sets forth the computation of the
Yield Maintenance Price of the Notes held by the Computing Holder).

     3.3  Change of Control Prepayment.  The Company covenants and agrees to
give written notice to each Holder of Notes promptly after the occurrence of a
Change of Control, but in any event within 5 days thereafter.  Such notice
shall (a) describe in reasonable detail the facts and circumstances giving rise
to such Change of Control and the effect thereof on the Company, (b) offer to
prepay, on a date (the "Change of Control Prepayment Date") which shall be not
less than 30 days nor more than 60 days after the date of such notice, all the
Notes held by such Holder, (c) request such Holder to notify the Company in
writing, not less than 10 days prior to the Change of Control Prepayment Date,
of its acceptance or rejection of such offer and (d) inform the Holder that,
upon its receipt of such notice by the Company, failure to accept such offer in
writing on or before the 10th day prior to the Change of Control Prepayment
Date shall be deemed rejection of such offer.

          On the Calculation Date, the Computing Holder shall give written
notice to the Company of the amount of the Yield Maintenance Price of the
principal amount of the Notes so to be prepaid, which notice shall set forth in
reasonable detail the computation thereof; provided, however, that the failure
of the Computing Holder to make such determination shall not affect the
obligation of the Company to pay such Yield Maintenance Price when due in
accordance with the terms of the Notes and the Computing Holder shall have no
liability to the Company or any other Holder for its failure to make such
determination.  The Yield Maintenance Price set forth in such notice shall be
binding on the Company and the Computing Holder, absent manifest error.

          Promptly after each such Calculation Date, the Company shall deliver
to each Holder on or before such Change of Control Prepayment Date a
certificate signed by a principal financial officer of the Company setting
forth the Yield Maintenance Price of the principal amount of the Notes





                                       6
<PAGE>   12
held by such Holder so to be prepaid, accompanied by a copy of the written
notice by the Computing Holder referred to above (which sets forth the
computation of the Yield Maintenance Price of the Notes held by the Computing
Holder).

     3.4  Notice of Prepayment and Other Notices.  The Company shall give
written notice of any prepayment of the Notes or any portion thereof pursuant
to Section 3.2  not less than 30 nor more than 60 days prior to the date fixed
for such prepayment in such notice, which notice shall specify the amount so to
be prepaid, together with the interest to be paid thereon and the date fixed
for such prepayment.  Any notice of prepayment, Change of Control and all other
notices to be given to any Holder of the Notes shall be given by registered or
certified mail or by telecopy (and if by telecopy followed by overnight
delivery of an original notice by a nationally recognized courier service) to
such Holder at its address designated on the date of such notice on the
register or other record maintained by the Company.

          Upon notice of any prepayment pursuant to Section 3.2 being given as
provided in this Section 3.4, the Company covenants and agrees that it will
prepay on the date therein fixed for prepayment the principal amount of the
Notes so to be prepaid as specified in such notice at the Yield Maintenance
Price together with interest accrued thereon to such date fixed for prepayment
and the amounts so to be paid shall become due on such date fixed for
prepayment.

     3.5  General Provisions Concerning Prepayments.  In the event of any
optional prepayment of less than all the outstanding Notes pursuant to Section
3.2 the Company will allocate the principal amount so to be prepaid (but only
in units of $1,000) among the Holders of Notes in proportion, as nearly as may
be, to the respective principal amounts of such Notes not theretofore called
for prepayment, of which they shall be Holders.

     3.6  Surrender of Notes; Notation Thereon.  The Company may, as a
condition of payment of all or any of the principal of, premium, if any, or
interest on the Notes, require the Holder to present its Note for notation of
such payment and, if the Notes be paid in full, require the surrender thereof.

     3.7  Interest After Date Fixed for Prepayment.  The Notes or any portion
thereof to be prepaid pursuant to Sections 3.1, 3.2 or 3.3 shall cease to bear
interest on and after the date fixed for such prepayment, unless, upon
presentation for such purpose, the Company shall fail to pay any such Note or
such portion, as the case may be, on or





                                       7
<PAGE>   13
before the date fixed for such prepayment, in which event any such Note or such
portion, as the case may be, shall bear interest on the principal amount
thereof or the Yield Maintenance Price, as the case may be, at the Overdue
Interest Rate from and after such date until paid and, so far as may be lawful,
any overdue installment of interest shall bear interest at the Overdue Interest
Rate.

SECTION 4.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

          The Company represents and warrants to each of you that:

     4.1  Organization, Authority and Good Standing; Subsidiaries.  Schedule 1
hereto correctly sets forth (i) the name and jurisdiction of incorporation of
each Subsidiary of the Company, and (ii) a statement of the capitalization of
each such Subsidiary and the ownership of its stock.  The shares of stock
listed in Schedule 1 as owned by the Company or any of the Subsidiaries are so
owned as of the date of this Agreement, free and clear of all Liens, and all
such shares of stock have been duly issued and are fully paid and
non-assessable.  Each of the Company and its Subsidiaries is a duly organized
and validly existing corporation in good standing under the laws of its
respective jurisdiction of incorporation and has full power and authority to
own the properties and assets and to carry on the business which it now owns
and carries on.  Each of the Company and its Subsidiaries is duly qualified and
in good standing as a foreign corporation in each jurisdiction wherein the
nature of the property owned or leased by it or the nature of the business
transacted by it makes such qualification necessary, except where the failure
to so qualify would not have a Material Adverse Effect.

     4.2  Authorization of Agreement, Etc.

          A.   Authorization.  The execution, delivery and performance by the
Company of this Agreement, the Notes and each of the other Documents are within
the Company's corporate powers and have been authorized by all necessary
corporate action.

          B.   No Conflict.  The execution, delivery and performance by the
Company of this Agreement, the Notes and each of the other Documents, the
application of the proceeds of the Notes and the consummation of any other
transactions contemplated by this Agreement, the Notes and each of the other
Documents do not and will not (i) violate any provision of law applicable to
the Company, the Certificate of Incorporation or Bylaws (or other charter
documents) of, or any order, judgment or decree of any court or other agency of
government binding on the Company, (ii) conflict with, result in a breach of or
constitute (with due notice





                                       8
<PAGE>   14
or lapse of time or both) a default under any contractual obligation of the
Company, (iii) result in or require the creation or imposition of any Lien,
charge or encumbrance of any nature whatsoever upon any of the properties or
assets of the Company or (iv) require any approval of stockholders or any
approval or consent of any Person under any contractual obligation of the
Company.

          C.   Governmental Consents.  The execution, delivery and performance
by the Company of this Agreement, the Notes and each of the other Documents,
and the application of the proceeds of the Notes and the consummation of any
other transactions contemplated by this Agreement, the Notes and each of the
other Documents do not and will not require any registration with, consent or
approval of, or notice to, or other action with or by, any federal, state or
other governmental authority or regulatory body or other Person.

          D.   Binding Obligation.  This Agreement, the Notes and each of the
other Documents are the legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally and subject
to the availability of equitable remedies.

     4.3  Financial Statements.  You have been furnished with copies of
consolidated balance sheets of the Company and its Subsidiaries as at December
31 in the years 1988 to 1992, inclusive, the related consolidated statements of
income, stockholders' equity and cash flows of the Company and its Subsidiaries
for the fiscal periods ended on said dates, accompanied in each case by the
opinion of its independent certified public accountants.  You have also been
furnished with copies of such unaudited reports as at March 31, 1993.

          Said financial statements, including the related schedules and notes,
are complete and correct and fairly present (i) the Consolidated financial
condition of the Company and its Subsidiaries as at the respective dates of
said balance sheets and (ii) the Consolidated results of the operations of the
Company and its Subsidiaries for the fiscal periods ended on said dates, all in
conformity with GAAP applied on a consistent basis (except as otherwise stated
therein or in the notes thereto) throughout the period involved.  As of the
date of such financial statements the Company and its Subsidiaries had no
material Contingent Obligation, contingent liability or liability for taxes,
long term lease or unusual forward or long term commitments, which is not
reflected in the foregoing financial statements or the notes thereto.





                                       9
<PAGE>   15
     4.4  No Material Changes.  There has been no material adverse change in
the business, operations, properties, prospects, assets or condition, financial
or other, of the Company and its Subsidiaries, taken as a whole, subsequent to
December 31, 1992.

     4.5  Liens.  Schedule 2 hereto correctly sets forth all Liens securing
Indebtedness for money borrowed of the Company or its Subsidiaries existing on
the date hereof.

     4.6  Title to Properties.  Except for such defects of title or Liens which
are immaterial in the aggregate to the Company and its Subsidiaries, taken as a
whole, the Company and its Subsidiaries have good and marketable fee title to
all the real properties and good and marketable title to all other property
reflected on the Consolidated balance sheet of the Company and its Subsidiaries
as at December 31, 1992 referred to in Section 4.3, or purported to have been
acquired by the Company or any of its Subsidiaries after said date, excepting,
however, property sold or otherwise disposed of subsequent to said date in the
ordinary course of business.

     4.7  Leases and Liens.  None of the properties or assets reflected in the
consolidated balance sheet of the Company and its Subsidiaries as at December
31, 1992 referred to in Section 4.3, or acquired by the Company or its
Subsidiaries after said date, is held by the Company or any of its Subsidiaries
subject to any Lien which would not be permitted by Section 7.2.  The Company
and its Subsidiaries enjoy peaceful and undisturbed possession under all of the
material leases under which they are operating and all such leases are valid
and subsisting and in full force and effect.

     4.8  Outstanding Indebtedness.  The Company and its Subsidiaries have no
outstanding Indebtedness except as set forth on Schedule 4.  There exists no
default or event of default under the provisions of any instrument evidencing
such Indebtedness or of any agreement relating thereto.

     4.9  Litigation.  Except as described on Schedule 6, there are no actions,
suits or proceedings (whether or not purportedly on behalf of the Company or
any Subsidiary) pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of its Subsidiaries at law or in equity or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind, which involve any of the transactions herein
contemplated or is reasonably likely to result in a Material Adverse Effect;
and neither the Company nor any Subsidiary is in default or violation of





                                       10
<PAGE>   16
any judgment, order, writ, injunction, decree or award or in violation in any
way which would have a Material Adverse Effect of any statute, rule or
regulation of any court, arbitrator or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign.

     4.10  No Burdensome Provisions.  Neither the Company nor any Subsidiary is
a party to any agreement or instrument or subject to any charter or other
corporate or legislative restriction or any judgment, order, writ, injunction,
decree, award, rule or regulation which materially and adversely affects or in
the future may (so far as the Company can now foresee) materially and adversely
affect the business, operations, properties, prospects, assets or condition,
financial or other, of the Company and its Subsidiaries, taken as a whole.

     4.11  Compliance with Other Instruments; Laws.  Neither the Company nor any
Subsidiary is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any bond, debenture,
note or other evidence of Indebtedness of the Company or such Subsidiary or
contained in any instrument under or pursuant to which any thereof has been
issued or made and delivered.  Neither the execution and delivery of this
Agreement by the Company, the consummation by the Company of the transactions
herein contemplated nor compliance by the Company with the terms, conditions
and provisions hereof and of the Notes will violate any provision of law or
rule or regulation thereunder or any order, injunction or decree of any court
or other governmental body to which the Company or any Subsidiary is a party or
by which any thereof is bound or conflict with or result in a breach of any of
the terms, conditions or provisions of the corporate charter or by-laws of the
Company or any Subsidiary or of any agreement or instrument to which the
Company or any Subsidiary is a party or by which the Company or any such
Subsidiary is bound, or constitute a default thereunder, or result in the
creation or imposition of any Lien of any nature whatsoever upon any of the
properties or assets of the Company or any Subsidiary.  The Company and each
Subsidiary is in compliance in all material respects with all applicable laws,
statutes, rules and regulations, if non-compliance therewith could have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.

     4.12  Trading with the Enemy Act, etc.  Neither this Agreement nor any of
the transactions contemplated hereby will result in a violation of any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended), or any ruling





                                       11
<PAGE>   17
issued thereunder or any enabling legislation or Presidential Executive Order
granting authority therefor. The proceeds from issuance of the Notes will not
be used by the Company in a manner which will violate any such regulations,
rulings or legislation.

     4.13  ERISA.  The Company and its Subsidiaries are in compliance in all
material respects with all applicable provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA") and the regulations and published
interpretations thereunder.  No Reportable Event, for which the 30 day notice
requirement under 29 CFR Part 2615 is not waived, has occurred and is
continuing with respect to any Plan and neither the Company nor any Subsidiary
has incurred any liability to the Pension Benefit Guaranty Corporation under
Section 4062 of ERISA.  As used in this Section 4.13, the term "Reportable
Event" means any of the events set forth in Section 4043(b) of ERISA, and the
term "Plan" means any plan defined in Section 4021(a) of ERISA in respect of
which the Company or any Subsidiary is an "employer" or a "substantial
employer" as said terms are defined in Sections 3(5) and 4001(a)(2),
respectively, of ERISA.  The Company has not incurred any material accumulated
funding deficiency within the meaning of ERISA.  Based on the representations
set forth in Section 5, the execution and delivery to each Holder by the
Company of the Notes and the consummation of the transactions contemplated by
this Agreement will not involve any "prohibited transaction" within the meaning
of ERISA or of Section 4975 of the Internal Revenue Code of 1986, as amended.

     4.14  Environmental Protection.  Except as disclosed on Schedule 3 annexed
hereto:

          (i)  the operations of the Company and its Subsidiaries comply in all
     material respects with all Hazardous Materials Laws;

         (ii)  the Company and its Subsidiaries have obtained all material
     permits, licenses and approvals under all Hazardous Materials Laws
     necessary for their respective operations, and all such permits, licenses
     and approvals are in good standing and the Company and its Subsidiaries
     are in compliance with all material terms and conditions of such permits,
     licenses and approvals;

        (iii)  the Company and its Subsidiaries and all of their present
     property or operations, and to the best of the Company's knowledge, their
     past property or operations, are not subject to any outstanding written
     order from or agreement with





                                       12
<PAGE>   18
     any governmental authority or other Person and are not subject to any
     judicial or docketed administrative proceeding or investigation,
     respecting (a) any Hazardous Materials Laws, (b) any Remedial Action or
     (c) any material Environmental Liabilities and Costs;

         (iv)  none of the Company or any of its Subsidiaries has ever been or
     is now a treatment, storage or disposal facility requiring a permit under
     the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.,
     related regulations or any other state equivalent;

          (v)  none of the Company or any of its Subsidiaries has filed or
     should have filed any notice required under any Hazardous Materials Laws
     reporting a Release into the environment which Release has or would have
     any reasonable likelihood of having a Material Adverse Effect and none of
     the Company or any of its Subsidiaries has filed or should have filed any
     notice pursuant to Section 103(a) or (c) of the Comprehensive
     Environmental Response, Compensation, and Liability Act ("CERCLA");

         (vi)  there is not now on or in any property of the Company or any of
     its Subsidiaries;

               (a)  any underground storage tanks or surface impoundments,

               (b)  any Hazardous Materials, or

               (c)  any polychlorinated biphenyls (PCBs) used in electrical or
          other equipment,

     the presence of which has any reasonable likelihood of having a Material
     Adverse Effect;

        (vii)  none of the Company or any of its Subsidiaries has received
     (a) any notice or claim to the effect that it is or may be liable to any
     Person as a result of a Release or threatened Release which Release or
     threatened Release has any reasonable likelihood of having a Material
     Adverse Effect, or (b) any letter or request for information under Section
     104 of CERCLA or comparable State laws;

       (viii)  there are no past or present conditions or circumstances which 
     may give rise to any Environmental Liabilities or Costs arising from the





                                       13
<PAGE>   19
     operations of the Company or any of its Subsidiaries, including but not
     limited to off-site disposal of any Hazardous Materials by or on behalf of
     the Company or any of its Subsidiaries, which in the aggregate is
     reasonably likely to have a Material Adverse Effect;

         (ix)  no Environmental Lien (whether recorded or unrecorded) has
     attached to any real or personal property owned, used or operated by the
     Company or any of its Subsidiaries; and

          (x)  the Company and each of its Subsidiaries is in material
     compliance with any applicable financial responsibility requirements of
     all Hazardous Materials Laws, including without limitation those contained
     in 40 C.F.R., parts 264 and 265, subpart H, and any state equivalents.

     4.15  Tax Liability.  Except as disclosed on Schedule 7, the Company and
its Subsidiaries have filed all tax returns which are required to be filed (or
have been granted an extension of time to file such returns) and have paid all
taxes which have become due pursuant to such returns and all other taxes,
assessments, fees and other governmental charges upon the Company and its
Subsidiaries and upon their respective properties, assets, income and
franchises which have become due and payable by the Company or any of its
Subsidiaries, except those wherein the amount, applicability or validity are
being contested by the Company or any such Subsidiary by appropriate
proceedings in good faith and in respect of which adequate reserves have been
established. In the opinion of the Company, all tax liabilities of the Company
and its Subsidiaries were adequately provided for as of March 31, 1993 and are
now so provided for on the books of the Company and its Subsidiaries.

     4.16  Regulation G; Use of Proceeds.  The proceeds from the sale of the
Notes will be applied by the Company to repay short term indebtedness.  None of
the proceeds of the issuance of the Notes will be used, directly or indirectly,
for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation G (12 C.F.R., Chapter II, Part 207) of the Board of Governors of the
Federal Reserve System (herein called "margin stock") or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute any such
extension of credit a "purpose credit" within the meaning of said Regulation G.
Neither the Company nor any agent acting on its behalf has taken or will take
any action which might cause the transactions contemplated herein to violate
said Regulation





                                       14
<PAGE>   20
G, Regulation T (12 C.F.R., Chapter II, Part 220) or Regulation X (12 C.F.R.,
Chapter II, Part 224) or any other regulation of the Board of Governors of the
Federal Reserve System or to violate the Securities Exchange Act of 1934, in
each case as now in effect or as the same may hereafter be in effect.

     4.17  Investment Company Act.  Neither the Company nor any Subsidiary is an
"investment company," or a Person "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
           
     4.18  Labor Matters.  There are no strikes or other labor disputes or
grievances pending or, to the knowledge of the Company, threatened against the
Company or its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.

     4.19  Patents, Trademarks and Licenses.  The Company possesses all of the
licenses, patents, patent applications, copyrights, service marks, trademarks
and trade names necessary to continue to conduct its business as heretofore
conducted by it.

     4.20  Disclosure.  Neither this Agreement, nor any of the exhibits or
schedules hereto, nor any certificate or other data furnished to the Holders in
writing by or on behalf of the Company in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits a material fact necessary to make the statements contained herein or
therein not misleading.  There is no fact which materially and adversely
affects or in the future may (so far the Company can now foresee) materially
and adversely affect the business, operations, properties, prospects, assets or
condition, financial or other, of the Company and its Subsidiaries, taken as a
whole, which has not been disclosed to the Holders in writing.

     4.21  Offering of Notes.  Neither the Company nor any agent acting in its
behalf has, either directly or indirectly, sold or offered for sale or disposed
of, or attempted or offered to dispose of, the Notes or any part thereof, or
any similar obligation of the Company, to, or has solicited any offers to buy
any thereof from, or has otherwise approached or negotiated in respect thereof
with, any Person or Persons other than the Holders and not more than ten other
Persons, all of whom were institutional investors; and the Company agrees that
neither it nor any agent acting on its behalf will sell or offer for sale or
dispose of, or attempt or offer to dispose of, any thereof to, or solicit any
offers to buy any thereof from, or





                                       15
<PAGE>   21
otherwise approach or negotiate in respect thereof with, any Persons or Persons
so as thereby to bring the issuance or delivery of the Notes within the
provisions of Section 5 of the Securities Act of 1933, as amended.

SECTION 5.  REPRESENTATIONS AND WARRANTIES OF EACH NOTE
            PURCHASER.

          Each of you severally represents and warrants that:

     5.1  Nature of Purchase.  You are not acquiring the Notes to be purchased
by you hereunder with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act, provided that the disposition
of your property shall at all times be and remain within your control.  You
understand that the Notes, unless agreed by the Company and the Holder thereof,
shall bear a legend substantially to the following effect:

     "THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
     EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933,
     AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
     ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM."

     5.2  Source of Funds.  No part of the funds being used by you to pay the
purchase price of the Notes being purchased by you hereunder constitute assets
allocated to any separate account maintained by you in which any employee
benefit plan, other than employee benefit plans identified on Exhibit D,
participates (or will, while any of the Notes remain outstanding, participate)
to the extent of 10% or more, and you will, with respect to your purchase of
the Notes, comply with the conditions of Section III of Prohibited Transactions
Class Exemption 90-1 issued by the United States Department of Labor.  For the
purpose of this Section 5.2, the terms "separate account" and "employee benefit
plan" shall have the respective meanings specified in section 3 of ERISA.

SECTION 6.  AFFIRMATIVE COVENANTS.

     6.1  Financial Statements and Other Reports.  The Company will maintain a
system of accounting established and administered in accordance with sound
business practices to permit the preparation of financial statements in
conformity with GAAP applied on a consistent basis.  The Company covenants that
it will deliver to each Holder of the Notes:





                                       16
<PAGE>   22
          (i)  as soon as practicable and in any event within fifty (50) days
     after the end of the first three fiscal quarters in each fiscal year of
     the Company, the Consolidated balance sheet of the Company as at the end
     of such period and the related Consolidated statements of income and
     retained earnings of the Company for such fiscal quarter and the related
     statement of cash flows for the period from the beginning of the then
     current fiscal year to the end of such fiscal quarter, setting forth in
     comparative form the corresponding figures for the corresponding periods
     of the previous fiscal year, all in reasonable detail (including, without
     limitation on divisional operations) and certified by the chief financial
     officer, the controller or the treasurer of the Company, that they fairly
     present the financial condition of the Company and its Subsidiaries, as at
     the dates indicated and the results of their operations and cash flows for
     the periods indicated, subject only to changes resulting from audit and
     normal year-end adjustment;

         (ii)  as soon as practicable and in any event within one hundred
     (100) days after the end of each fiscal year of the Company, the
     Consolidated balance sheet of the Company as at the end of such fiscal
     year and the related Consolidated statements of income, retained earnings
     and cash flows of the Company for such fiscal year, setting forth in
     comparative form the corresponding figures from the audited financial
     statements from the previous fiscal year, all in reasonable detail,
     accompanied by a report thereon of an independent certified public
     accounting firm of recognized national standing selected by the Company,
     which report shall be unqualified as to going concern and scope of audit
     and shall state that such Consolidated financial statements present fairly
     the financial position of the Company and its Subsidiaries as at the dates
     indicated and the results of their operations and cash flows for the
     periods indicated in conformity with GAAP applied on a basis consistent
     with prior years (except as otherwise stated therein) and that the
     examination by such accountants in connection with such Consolidated
     financial statements has been made in accordance with generally accepted
     auditing standards;

        (iii)  together with each delivery of financial statements of the
     Company and its Subsidiaries





                                       17
<PAGE>   23
     pursuant to paragraphs (i) and (ii) above, (a) an Officer's Certificate of
     the Company stating that the signers have reviewed the terms of this
     Agreement and have made, or caused to be made under their supervision, a
     review in reasonable detail of the transactions and condition of the
     Company and its Subsidiaries during the accounting period covered by such
     financial statements and that such review has not disclosed the existence
     during or at the end of such accounting period, and that the signers do
     not have knowledge of the existence as at the date of the Officers'
     Certificate, of any condition or event that constitutes a Default or Event
     of Default, or, if any such condition or event existed or exists,
     specifying the nature and period of existence thereof and what action the
     Company has taken, is taking and proposes to take with respect thereto;
     and (b) a Compliance Certificate demonstrating in reasonable detail
     compliance by the Company at the end of such accounting periods with the
     covenants contained in Sections 7.1 through 7.7, inclusive.

         (iv)  together with each delivery of audited financial statements of
     the Company and its Subsidiaries, pursuant to paragraph (ii) above, an
     Officer's Certificate certifying that the auditors have reviewed the terms
     of this Agreement as they relate to accounting matters and tested
     compliance with the covenants during the course of their audit and that
     they are not aware of any condition or event that constitutes a Default or
     Event of Default; provided that nothing in this paragraph (iv) shall
     require the auditors to expand or otherwise change the scope of their
     audit examination;

          (v)  promptly upon receipt thereof, copies of all significant reports
     submitted to any of the Company and its Subsidiaries by independent public
     accountants in connection with each annual, interim or special audit or
     review of the financial statements or practices of the Company and its
     Subsidiaries, made by such accountants, including, without limitation, the
     comment letter submitted by such accountants to management in connection
     with their annual audit;

         (vi)  promptly upon their becoming available, copies of (a) all
     financial statements, reports, notices and proxy statements sent or made
     available generally by any of the Company and its Subsidiaries to their
     security holders (excluding





                                       18
<PAGE>   24
     internal reports from any Subsidiary to the Company), (b) all regular and
     periodic reports and all registration statements and prospectuses, if any,
     filed by any of the Company and its Subsidiaries with any securities
     exchange or with the SEC or any governmental or private regulatory
     authority and (c) all press releases and other statements regarding
     management or financial matters made available generally by any of the
     Company and its Subsidiaries to the public concerning material
     developments in the business of the Company and its Subsidiaries taken as
     a whole;

        (vii)  promptly upon any officer of the Company obtaining knowledge
     (a) that a condition or event has occurred and is continuing that
     constitutes a Default or Event of Default, or becoming aware that any
     Holder has given any notice or taken any other action with respect to a
     claimed Default or Event of Default under this Agreement, (b) that any
     Person has given any notice to the Company or any of its Subsidiaries or
     taken any other action with respect to a claimed default or event or
     condition of the type referred to in Section 8.1(v), or (c) of a material
     adverse change in the business, operations, properties, prospects, assets
     or condition, financial or other, of the Company and its Subsidiaries
     taken as whole, an Officer's Certificate specifying the nature and period
     of existence of such condition or event, or specifying the notice given or
     action taken by such Holder or Person and the nature of such claimed
     default, Default or Event of Default, event or condition, and what action
     the Company has taken, is taking and proposes to take with respect
     thereto;

       (viii)  promptly upon any officer of the Company obtaining knowledge
     of (a) the institution of, or nonfrivolous threat of, any action, suit,
     proceeding, governmental investigation or arbitration against or affecting
     the Company or any of its Subsidiaries or any property of the Company or
     any of its Subsidiaries not previously disclosed by the Company to the
     Holders, or (b) any material development in any such action, suit,
     proceeding, governmental investigation or arbitration, that, in either
     case:

               (y)  creates a reasonable possibility of a Material Adverse
          Effect; or





                                       19
<PAGE>   25
               (z)  seeks to enjoin or otherwise prevent the consummation of,
          or to recover any damages in excess of $1,000,000 or obtain relief as
          a result of, the issuance of the Notes;

     the Company shall promptly give notice thereof to each Holder and provide
     such other information as may be reasonably available to it to enable each
     Holder and its counsel to evaluate such matters;

         (ix)  promptly upon becoming aware of the occurrence of or
     forthcoming occurrence of any ERISA Event, a written notice specifying the
     nature thereof, what action the Company or any of its ERISA Affiliates has
     taken, is taking or proposes to take with respect thereto, and when known,
     any action taken or threatened by the Internal Revenue Service, the
     Department of Labor or the PBGC with respect thereto;

          (x)  to the extent provided to the lenders under the Credit
     Agreement, as soon as practicable and in any event within forty-five (45)
     days after the beginning of each fiscal year, a consolidated financial
     budget with reasonable detail on divisional operations for the then
     current fiscal year and within seventy-five (75) days after the beginning
     of each fiscal year, a Consolidated long range plan and financial forecast
     for the Company and its Subsidiaries for the then current fiscal year and
     each subsequent fiscal year through the end of the fifth fiscal year,
     including, without limitation, a forecasted Consolidated balance sheet and
     Consolidated statements of income and cash flow for each such fiscal year;
     and

         (xi)  with reasonable promptness, such other information and data
     with respect to any of the Company and its Subsidiaries as from time to
     time may be reasonably requested by any Holder.

With respect to the reporting obligations described in clauses (viii) and (ix),
the Company and each of you agree that the Company shall not be required to
deliver any such notice unless (a) the Company is required to disclose such
information to the public pursuant to the Securities Act or the Exchange Act
(as long as the Company is subject to the reporting obligations of Section 13
of the Exchange Act as an issuer of a security), or (b) the Company provides
notice of any such threat, action, suit, proceeding, governmental
investigation, arbitration, ERISA Event or action threatened





                                       20
<PAGE>   26
or taken by the Internal Revenue Service, Department of Labor or PBGC to any
other holder of Indebtedness of the Company or any of its Subsidiaries.

     6.2  Information Required by Rule 144A.  The Company covenants that it
will, upon the request of the Holder of any Note, provide such Holder, and any
qualified institutional buyer designated by such Holder, such financial and
other information as such Holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes.  For the purpose of
this Section 6.2, the term "qualified institutional buyer" shall have the
meaning specified in Rule 144A under the Securities Act.

     6.3  Preservation of Existence.  The Company covenants that it will, and
will cause each of its Subsidiaries to, preserve and maintain its existence,
and all material licenses, rights, franchises and privileges in the
jurisdiction of its formation and all authorizations, consents, approvals,
orders, licenses, permits, or exemptions from, or registrations with, any
governmental agency that are necessary for the transaction of its business,
including, without limitation, all notices, permits or licenses, if any, filed
or obtained with regard to compliance with environmental laws, and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of its business or the ownership or leasing
of its properties, except where the failure to do any of the foregoing would
not have a Material Adverse Effect and except that the Company may dispose of
Subsidiaries, if not prohibited by any other provision of this Agreement, and
may merge Subsidiaries with other Subsidiaries or into the Company.

     6.4  Payment of Taxes and Other Potential Liens.  The Company covenants
that it will, and will cause each of its Subsidiaries to, pay and discharge
promptly or cause to be paid and discharged promptly all taxes, assessments and
governmental charges or levies imposed upon it or its property or any part
thereof, upon its income or profits or any part thereof or upon any right or
interest of any party under this Agreement, any Note, or any Document, except
that (i) the Company shall not be required to pay or cause to be paid any tax,
assessment, charge or levy that is not yet delinquent if such items are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made therefor
and (ii) any failure by the Company to pay or cause to be paid any tax,
assessment, charge or levy that is immaterial in amount and is a state or local
tax, assessment, charge or levy





                                       21
<PAGE>   27
which the Authorized Officers of the Company were not aware was due shall not
constitute a default under this Section 6.4.

     6.5  Maintenance of Properties.  The Company will maintain or cause to be
maintained in good repair, working order and condition all material properties
used or useful in the business of the Company and its Subsidiaries and from
time to time will make or cause to be made all appropriate repairs, renewals
and replacements thereof consistent with past practices.

     6.6  Maintenance of Insurance.  The Company will maintain or cause to be
maintained, with financially sound and reputable insurers (or self-insurance
consistent with the Company's past practices), insurance with respect to its
properties and business and the properties and business of its Subsidiaries
against loss or damage of the kinds customarily insured against by corporations
of established reputation engaged in the same or similar businesses and
similarly situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other corporations.

     6.7  Equal Security for Notes; No Further Negative Pledges.

          A.   If the Company or any of its Subsidiaries shall create or assume
or suffer to exist any Lien upon any of its property or assets, whether now
owned or hereafter acquired, other than Liens excepted by the provisions of
Section 7.2, it shall make or cause to be made effective provision whereby the
Notes will be secured by such Lien equally and ratably with any and all other
Indebtedness thereby secured as long as any such Indebtedness shall be secured;
provided that, notwithstanding the foregoing, this covenant shall not be
construed as a consent by any Holder to any creation or assumption of any such
Lien not permitted by the provisions of Section 7.2.

          B.   The Company shall not, and shall not permit any of its
Subsidiaries to, enter into any agreement prohibiting the creation or
assumption of any Lien in favor of any Holder upon its properties or assets,
whether now owned or hereafter acquired; provided, however, that the Company
may incur Indebtedness otherwise permitted under this Agreement which provides
that if the Notes are at any time secured by a Lien on the property or assets
of the Company or any of its Subsidiaries, such Indebtedness shall be secured
by such Lien equally and ratably with the Notes.

     6.8  Inspection of Property.  The Company covenants that it will permit
any Person designated by any Holder in writing at such Holder's expense or, if
following any Event





                                       22
<PAGE>   28
of Default or Default which is continuing, at the expense of the Company, to
visit and inspect any of the properties of the Company or any of its
Subsidiaries, to examine the corporate books and financial records of the
Company and its Subsidiaries and make copies thereof or extracts therefrom and
to discuss the affairs, finances and accounts of any of such corporations with
the principal officers of the Company and its independent public accountants,
all at such reasonable times and as often as any such Holder may reasonably
request.

     6.9  Compliance With Laws.  The Company covenants that it will, and will
cause each of its Subsidiaries to, comply with the requirements of all
applicable laws and orders of any governmental agency, noncompliance with which
could reasonably be expected to have a Material Adverse Effect.

     6.10  Compliance With Agreements, Duties and Obligations.  The Company
covenants that it will, and will cause each of its Subsidiaries to, promptly
and fully comply with all of its agreements, duties and obligations under this
Agreement, the Notes, and the Documents, and under any other material
agreements, indentures, leases and/or instruments to which it is a party,
whether such other agreements, indentures, leases or instruments are with you
or any other Person, except that the Company and its Subsidiaries need not
comply with any such other agreements, indentures, leases or instruments then
being contested by it in good faith by appropriate proceedings or if the
failure to comply with such other agreements, indentures, leases or instruments
would not have a Material Adverse Effect in either case so long as no material
interest of any Holder would be materially impaired thereby.

     6.11  Environmental Notice and Inspection.  The Company shall:

          (i)  comply and shall cause each of its Subsidiaries to comply, and
     shall use its best efforts in order to cause (a) all tenants under any
     lease or occupancy agreement affecting any portion of any property owned,
     used, leased or operated by the Company or any of its Subsidiaries and (b)
     all other Persons on or occupying such property to comply, with all
     Hazardous Materials Laws;

         (ii)  notify each Holder in writing and in reasonable detail,
     promptly, and in any event within thirty days of the Company or any of its
     Subsidiaries receiving any of the following:





                                       23
<PAGE>   29
               (a)  written notice or claim to the effect that the Company or
          any of its Subsidiaries is or may be liable to any Person as a result
          of the Release or threatened Release or has or is in violation of any
          Hazardous Materials Laws, in each case if the same has any reasonable
          likelihood of having a Material Adverse Effect;

               (b)  written notice that any real or personal property of the
          Company or any of its Subsidiaries is subject to an Environmental
          Lien; and

               (c)  written notice of the commencement of any judicial or
          administrative proceeding or investigation alleging a violation of
          any Hazardous Materials Laws or subjecting the Company or any of its
          Subsidiaries to Environmental Liabilities and Costs, in each case if
          the same has any reasonable likelihood of having a Material Adverse
          Effect;

        (iii)  notify each Holder promptly and in any event within thirty
     days, of:

               (a)  any Release which has any reasonable likelihood of having
          a Material Adverse Effect and which is required to be reported to any
          federal, state or local governmental or regulatory agency under any
          applicable Hazardous Materials Laws;

               (b)  any and all written communications with respect to any
          Environmental Liabilities and Costs that are reasonably likely to
          have a Material Adverse Effect or any Release required to be reported
          to any federal, state or local governmental or regulatory agency;

               (c)  any Remedial Action taken by the Company, any of its
          Subsidiaries or any other Person in response to (1) any Hazardous
          Materials on, under or about any property owned, used or operated by
          the Company or any of its Subsidiaries, the existence of which is
          reasonably likely to result in a Material Adverse Effect or (2) any
          Environmental Liabilities and Costs that are reasonably likely to
          result in a Material Adverse Effect;

               (d)  the Company's or any of its Subsidiary's discovery of any
          occurrence or





                                       24
<PAGE>   30
          condition on any real property adjoining or in the vicinity of any
          material facility owned, used or operated by the Company or any of
          its Subsidiaries that could reasonably be expected to cause such
          property to be subject to any restrictions on the ownership,
          occupancy, transferability or use thereof under any Hazardous
          Materials Laws;

               (e)  any request for information from any governmental agency
          that suggests that such agency is investigating whether the Company
          or any of its Subsidiaries may be potentially responsible for a
          Release which Release has any reasonable likelihood of having a
          Material Adverse Effect;

               (f)  any proposed acquisition of stock, assets, real estate, or
          leasing of property by the Company or any of its Subsidiaries that
          could reasonably be expected to subject the Company or any of its
          Subsidiaries to a Material Adverse Effect resulting from
          Environmental Liabilities and Costs; and

               (g)  any proposed action taken by the Company or any of its
          Subsidiaries to commence manufacturing, industrial, or other
          operations that could reasonably be expected to subject the Company
          or any of its Subsidiaries to additional laws, rules or regulations,
          including but not limited to the obtaining of environmental, health
          or safety permits, licenses or approvals or Environmental Liabilities
          and Costs, that could reasonably be expected to have a Material
          Adverse Effect; and

         (iv)  submit, upon written request by any Holder, a report providing
     an update of the status of any environmental, health or safety compliance,
     hazard or liability issue identified in any notice or report required
     pursuant to this Section 6.11 and any other environmental, health or
     safety compliance obligation, remedial obligation or liability that could
     have a Material Adverse Effect.

     6.12  Further Assurances.  At any time or from time to time upon the
request of any Holder, the Company shall, and shall cause its Subsidiaries to,
execute and deliver such





                                       25
<PAGE>   31
further documents and do such other acts and things as any Holder may
reasonably request in order to effect fully the purposes of this Agreement and
each of the other Documents and to provide for payment of the Notes and
interest thereon, in accordance with the terms of this Agreement.

SECTION 7.  NEGATIVE COVENANTS.

     7.1  Limitations on Consolidated Total Liabilities and Indebtedness of
Subsidiaries.

          A.   The Company will not permit the ratio of Consolidated Total
Liabilities to Consolidated Tangible Net Worth on the last day of each fiscal
quarter of the Company to exceed 1.00 to 1.00; provided, however, that for
purposes of this Section 7.1A, until the date on which the Company sells the
Rio Vista Tower (as more fully described on Schedule 5) (i) the Indebtedness of
the Company relating to the Rio Vista Tower in an amount not in excess of
$15,000,000 shall be excluded from the definition of Indebtedness, and (ii) a
corresponding amount shall be excluded from Consolidated Tangible Assets; and,
provided, further, that for purposes of this Section 7.1A, on and after the
date that the Company sells the Rio Vista Tower an amount (but not less than 0)
equal to the Indebtedness of the Company (but not in excess of $15,000,000)
relating to the Rio Vista Tower on the date of such sale minus the aggregate
cash proceeds received by the Company (whether in a lump sum or installments,
and including any interest received thereon) from such sale (x) shall be
excluded from the definition of Indebtedness, and (y) a corresponding amount
shall be excluded from Consolidated Tangible Assets.

          B.   The Company will not permit any Subsidiary, and the Subsidiaries
as a whole, to have, at any one time, Indebtedness in an amount in excess of
5.0% of Consolidated Tangible Net Worth, excluding for purposes of this Section
7.1B Indebtedness of Subsidiaries on the Closing Date and identified on
Schedule 4.

          C.   Any Indebtedness owed by the Company to any of its Subsidiaries
shall be subordinated in right of payment to the payment in full of the Notes
by the Company.

     7.2  Liens.  The Company will not, and will not permit any of its 
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of the Company or
any of its Subsidiaries, whether now owned or hereafter acquired, or any income
or profits therefrom, except:





                                       26
<PAGE>   32
          (i)  Permitted Liens;

         (ii)  Liens in existence on the Closing Date and set forth on
     Schedule 2; and

        (iii)  Liens on property used in the conduct of the Company's
     business to secure Indebtedness permitted pursuant to Section 7.1 which
     was incurred to purchase, or to finance or refinance the purchase price
     of, the property encumbered by such Lien;

provided, however, that the aggregate value of the property encumbered by the
Liens permitted pursuant to this Section 7.2 shall at no time exceed 10% of
Consolidated Tangible Net Worth.

     7.3  Dividends; Stock Retirements; and Restricted Investments.  The
Company will not declare or pay any dividends (other than dividends payable
solely in capital stock of the Company) on any shares of any class of its
capital stock or apply any of its property or assets to the purchase,
redemption or other retirement of, or set apart any sum for the payment of any
dividends on, or for the purchase, redemption or other retirement of, or make
any other distribution, by reduction of capital or otherwise, in respect of, or
permit any Subsidiary to purchase any shares of any class of stock of the
Company, or make, or permit any Subsidiary to make, any Restricted Investment,
unless, immediately after giving effect to such action, there exists no Default
or Event of Default, and the sum of

          (i) the amounts declared and paid or payable as, or set apart for,
     dividends (other than dividends paid or payable in capital stock of the
     Company) on all shares of stock of all classes of the Company or
     distributed in respect of such shares of stock subsequent to December 31,
     1992, and

         (ii) the amounts applied to, or set apart for, the purchase
     (including purchases by Subsidiaries), redemption or retirement of shares
     of stock of all classes of the Company subsequent to December 31, 1992,
     and

        (iii) the Aggregate Amount of Restricted Investments

will not exceed the sum of $20,000,000 plus 50% of cumulative Consolidated Net
Income (or, in the case of a negative cumulative Consolidated Net Income, minus
50% of such deficit) accrued for each fiscal year subsequent to December 31,
1992 plus the net cash proceeds received by the





                                       27
<PAGE>   33
Company from the sale of its common stock after the Closing Date, excluding
common stock sold to any Subsidiary of the Company.

         Except as provided herein, the Company will not and will not permit
any of its Subsidiaries to create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to: (a) pay dividends or make any other
distribution on any of such Subsidiary's capital stock owned by the Company or
any Subsidiary of the Company; (b) make loans or advances to the Company or any
other Subsidiary; or (c) transfer any of its property or assets to the Company
or any other Subsidiary.

    7.4  Contingent Obligations.  The Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create or become or be liable
with respect to any Contingent Obligation, except:

         (i)  the Company may become and remain liable with respect to
    guaranties resulting from endorsement of negotiable instruments for
    collection in the ordinary course of business; and

        (ii)  the Company may become and remain liable with respect to
    Contingent Obligations; provided that the maximum aggregate liability of
    the Company in respect of all such Contingent Obligations shall not exceed
    $40,000,000 at any time.

    7.5  Financial Covenants.

         A.   Minimum Consolidated Tangible Net Worth.  The Company will not
permit Consolidated Tangible Net Worth on the last day of any fiscal quarter to
be less than the sum of (i) $250,000,000 plus (ii) an amount equal to fifty
percent (50%) of the Company's Consolidated Net Income (or 0% should
Consolidated Net Income be negative) for each fiscal year, measured on a
cumulative basis for each fiscal year ending on or after the date of this
Agreement.

         B.   Minimum Consolidated Fixed Charge Coverage Ratio.  The Company
will not permit the ratio of Consolidated Income Available For Consolidated
Fixed Charges to Consolidated Fixed Charges for the four consecutive fiscal
quarters ending on the last day of any fiscal quarter of the Company to be less
than the ratio for each period indicated below:





                                      28
<PAGE>   34
<TABLE>
<CAPTION>
              Four Fiscal                    Minimum
              Quarters Ending                 Ratio
              ---------------                 -----
              <S>                            <C>
              June 30, 1993                  0.75:1.00
              September 30, 1993             0.65:1.00
              December 31, 1993              1.35:1.00
              March 31, 1994                 1.35:1.00
              June 30, 1994                  1.85:1.00
              September 30, 1994             1.85:1.00
              December 31, 1994 and
                each quarter thereafter      2.25:1.00
</TABLE>

    7.6  Restriction on Fundamental Changes.  The Company will not, and will
not permit any of its Subsidiaries to, enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or acquire by purchase or otherwise a division,
business unit or all or substantially all of the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any Person,
except:

         (i)  the Company may acquire by purchase or otherwise a division,
    business unit or all or substantially all of the business, property or
    fixed assets of, or acquire stock or other evidence of beneficial ownership
    of, any Person; provided that: (a) no Default or Event of Default has
    occurred and is continuing, or would occur as a result of such acquisition,
    and (b) the acquisition is of a Person engaged in, or assets utilized in, a
    similar, or vertically integrated, line of business as that of the Company;
    and

        (ii)  a wholly-owned Subsidiary of the Company or a Subsidiary of the
    Company acquired pursuant to Section 7.6(i) may be merged or consolidated
    with the Company or any other wholly-owned Subsidiary; provided, that (a)
    if the merger or consolidation involves the Company, the Company shall be
    the continuing or surviving corporation, and (b) no Default or Event of
    Default has occurred and is continuing, or would occur as a result of such
    merger or consolidation.

    7.7  Restriction on Asset Sales.  Neither the Company nor any of its
Subsidiaries will convey, sell, lease, sublease, transfer or otherwise dispose
of, any of its assets, whether now owned or hereafter acquired, except that the
Company and its Subsidiaries may:





                                       29
<PAGE>   35
         (i)  sell or dispose of inventory and worn-out or obsolete equipment
    in the ordinary course of business; and

        (ii)  in addition to Asset Sales permitted pursuant to Section 7.7(i),
    convey, sell, transfer or otherwise dispose of their respective assets if
    the aggregate Book Value of Assets Sold of all such Asset Sales (excluding
    sales of any Net Assets Held For Sale listed on Schedule 5 as of the date
    hereof) in any consecutive twelve-month period of the Company does not
    exceed fifteen percent (15%) of Consolidated Tangible Net Worth as
    determined as of the last day of the immediately preceding fiscal year;
    provided, however, that the Company and its Subsidiaries shall not make any
    such Asset Sales if the aggregate Book Value of Assets Sold of all such
    Asset Sales (excluding sales of any Net Assets Held For Sale listed on
    Schedule 5 as of the date hereof), measured on a cumulative basis from the
    Closing Date, exceeds forty percent (40%) of Consolidated Tangible Net
    Worth as determined as of the last day of the immediately preceding fiscal
    year.

    7.8  Sales and Lease-Backs.  The Company will not, and will not permit any
of its Subsidiaries, directly or indirectly, to become or remain liable as
lessee or as guarantor or other surety with respect to any lease with any
Person, whether an operating lease or a capital lease, of any property (whether
real or personal or mixed) whether now owned or hereafter acquired, (i) which
the Company or any of its Subsidiaries has sold or transferred or is to sell or
transfer to such Person or such Person's Affiliate, or (ii) which the Company
or any such Subsidiary intends to use for substantially the same purpose as any
other property which has been or is to be sold or transferred by the Company or
any such Subsidiary to such Person or such Person's Affiliate in connection
with such lease.

    7.9  Transactions with Stockholders and Affiliates.  The Company will not,
and will not permit any of its Subsidiaries to, enter into any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity securities of the Company or with any Affiliate of the Company
or any such holder on terms that are less favorable to the Company or any such
Subsidiary than those which might be obtained at the time from Persons who are
not such a holder or Affiliate; provided, however, that the Company may engage
in transactions with its wholly-owned Subsidiaries on a basis





                                       30
<PAGE>   36
consistent with past practices; provided, further, that the Company may enter
into such transactions with non-wholly-owned Subsidiaries as long as the
transactions are not, either individually or in the aggregate, material to the
Company.

    7.10  Conduct of Business.  The Company will not, and will not permit any
of its Subsidiaries to, engage in any business other than the business engaged
in by it on the date hereof and any businesses or activities substantially
similar to, vertically integrated with, or related thereto.

    7.11  Use of Proceeds.  The Company will not use all or any portion of the
Proceeds from the issuance of any Note for any purpose other than as set forth
in Section 4.16.

    7.12  Independence of Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or Event of Default if such action is taken or
condition exists.

    7.13  Purchase of Notes.  The Company will not, and will not permit any of
its Subsidiaries or Affiliates to, purchase, redeem or otherwise acquire any
Note, directly or indirectly, except upon the payment or prepayment thereof in
accordance with the terms of this Agreement and such Note or pursuant to an
offer made pro rata and on the same terms to the Holders of all Notes.  In case
the Company, any Subsidiary or any Affiliate acquires any Note or Notes
pursuant to any such offer, such Note or Notes shall thereafter be cancelled
and shall not be reissued, and no Note shall be issued in substitution
therefor.

SECTION 8.  DEFAULTS AND REMEDIES.

    8.1  Events of Default.  If one or more of the following events (herein
called "Events of Default") shall occur for any reason whatsoever (and whether
such occurrence shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):

         (i)  default in the payment of any interest upon any Note when such
    interest becomes due and payable, and such default shall have continued for
    a period of five (5) days; or





                                       31
<PAGE>   37
        (ii)  default in the payment of principal of (or premium, if any, on)
    any Note when and as the same shall become due and payable, whether at
    maturity or at a date fixed for prepayment (including, without limitation,
    a prepayment as provided in Section 3.1) or by acceleration or otherwise;
    or

       (iii)  default in the performance or observance of any covenant,
    agreement or condition contained in Section 7; or

        (iv)  default in the performance or observance of any other covenant,
    agreement or condition contained in the Notes or in this Agreement and
    continuance of such default for a period of 30 days after any Authorized
    Officer has obtained knowledge of such default; or

         (v)  the Company or a Subsidiary shall not pay when due, whether by
    acceleration or otherwise, any evidence of indebtedness of the Company or
    such Subsidiary (other than the Notes) or any condition or default shall
    exist under any such evidence of indebtedness or under any agreement under
    which the same may have been issued permitting (or, with the giving of
    notice or lapse of time or both, would permit) such evidence of
    indebtedness to become or be declared due prior to the stated maturity
    thereof or by which the holder thereof may cause or require the Company or
    any Subsidiary to purchase such indebtedness prior to the stated maturity
    thereof; provided that the aggregate outstanding principal amount of all
    such indebtedness (including any indebtedness that may be or is declared
    due by reason of the same nonpayment, condition or default) is in excess of
    $5,000,000;

        (vi)  the Company or any Subsidiary shall file a petition seeking
    relief for itself under Title 11 of the United States Code, as now
    constituted or hereafter amended, or an answer consenting to, admitting the
    material allegations of or otherwise not controverting, or shall fail to
    timely controvert, a petition filed against the Company or such Subsidiary
    seeking relief under Title 11 of the United States Code, as now constituted
    or hereafter amended; or the Company or any Subsidiary shall file such a
    petition or answer with respect to relief under the provisions of any other
    now





                                       32
<PAGE>   38
    existing or future bankruptcy, insolvency or other similar law of the
    United States of America or any State thereof or of any other country or
    jurisdiction providing for the reorganization, winding-up or liquidation of
    corporations or an arrangement, composition, extension or adjustment with
    creditors; or

       (vii)  a court of competent jurisdiction shall enter an order for relief
    which is not stayed within 60 days from the date of entry thereof against
    the Company or any Subsidiary under Title 11 of the United States Code, as
    now constituted or hereafter amended; or there shall be entered an order,
    judgment or decree by operation of law or by a court having jurisdiction in
    the premises which is not stayed within 60 days from the date of entry
    thereof adjudging the Company or any Subsidiary a bankrupt or insolvent, or
    ordering relief against the Company or any Subsidiary, or approving as
    properly filed a petition seeking relief against the Company or any
    Subsidiary, under the provisions of any other now existing or future
    bankruptcy, insolvency or other similar law of the United States of America
    or any State thereof or of any other country or jurisdiction providing for
    the reorganization, winding-up or liquidation of corporations or an
    arrangement, composition, extension or adjustment with creditors, or
    appointing a receiver, liquidator, assignee, sequestrator, trustee,
    custodian or similar official of the Company or any Subsidiary or of any
    substantial part of its property, or ordering the reorganization,
    winding-up or liquidation of its affairs; or any involuntary petition
    against the Company or any Subsidiary seeking any of the relief specified
    in this clause shall not be dismissed within 60 days of its filing; or

      (viii)  the Company or any Subsidiary shall make a general assignment for
    the benefit of its creditors; or the Company or any Subsidiary shall
    consent to the appointment of or taking possession by a receiver,
    liquidator, assignee, sequestrator, trustee, custodian or similar official
    of the Company or such Subsidiary or of all or any substantial part of its
    property; or the Company or any Subsidiaries shall have admitted to its
    insolvency or inability to pay, or shall have failed to pay, its debts
    generally as such debts become due; or the Company or any Subsidiary or its





                                       33
<PAGE>   39
    directors or majority stockholders shall take any action looking to the
    dissolution or liquidation of the Company or such Subsidiary (other than as
    contemplated by Sections 7.6 and 7.7); or

        (ix)  the rendering against the Company or a Subsidiary of a final
    judgment, decree or order for the payment of money in excess of $500,000
    and the continuance of such judgment, decree or order unsatisfied and in
    effect for any period of 60 consecutive days without a stay of execution;
    or

         (x)  the Company or any Subsidiary shall (1) engage in any nonexempted
    "prohibited transaction," as defined in Sections 406 and 408 of ERISA and
    Section 4975 of the Internal Revenue Code of 1986, as amended, (2) incur
    any "accumulated funding deficiency," as defined in Section 302 of ERISA,
    whether or not waived, or (3) terminate or permit the termination of any
    "employee pension benefit plan," as defined in Section 3 of ERISA, in a
    manner which could result in the imposition of a Lien on the property of
    the Company or such Subsidiary pursuant to Section 4068 of ERISA; or

        (xi)  any representation by or on behalf of the Company in this
    Agreement or any certificate or instrument furnished in connection herewith
    or with the Notes proves to have been false or misleading in any material
    respect as of the date given or made;

then (a) upon the occurrence of any Event of Default described in Sections
8.1(vi), 8.1(vii) or 8.1(viii) with respect to the Company (each a "Bankruptcy
Default"), all of the Notes shall automatically become immediately due and
payable, (b) upon the occurrence of any Event of Default described in Section
8.1(i) or Section 8.1(ii), the Holder of any Note may at any time during its
continuance, by written notice to the Company, declare such Note to be due and
payable, whereupon such Note shall forthwith mature and become due and payable
or (c) upon the occurrence of any Event of Default other than a Bankruptcy
Default, the Holder or Holders of at least a majority in principal amount of
the Notes then outstanding (exclusive of any Notes held by the Company, any
Subsidiary or any Affiliate of the Company) may at any time during its
continuance, by written notice to the Company, declare all of the Notes to be
due and payable, whereupon in each case all of the Notes shall forthwith mature
and become due and payable.





                                       34
<PAGE>   40
         Notwithstanding anything contained in the preceding paragraph, at any
time within 60 days after an acceleration of the Notes pursuant to such
paragraph, the Requisite Holders by notice to the Company may rescind the
acceleration and its consequences if all existing Events of Default have been
cured or waived (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) and such rescission would not
conflict with any judgment or decree entered by any court of competent
jurisdiction.

         The amount payable upon the occurrence of a Bankruptcy Default shall
be the entire unpaid principal amount of the Notes, together with interest
accrued thereon, to the extent permitted by law, to the date of payment, and
such amount shall be payable without presentment, demand, protest or other
requirement of any kind, all of which are expressly waived by the Company.  The
amount payable upon an acceleration based on any other Event of Default shall
be, to the extent permitted by law, the Yield Maintenance Price of the Notes so
accelerated, together with interest accrued on the unpaid principal amount of
the Notes so accelerated to the date of payment, and such amount shall be
payable without presentment, demand, protest or further notice, all of which
are expressly waived by the Company.

         On the Calculation Date, the Computing Holder shall give written
notice to the Company and all the Holders of the amount of the Yield
Maintenance Price of the Notes so accelerated, which notice shall set forth in
reasonable detail the computation thereof; provided, however, that the failure
of the Computing Holder to make such determination shall not affect the
obligation of the Company to pay such Yield Maintenance Price when due in
accordance with the terms of the Notes and the Computing Holder shall have no
liability to the Company or any other Holder for its failure to make such
determination.  The Yield Maintenance Price set forth in such notice shall be
binding on the Company and all of the Holders of the Notes, absent manifest
error.

SECTION 9.

    9.1  CERTAIN DEFINITIONS.

         "Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under control with, that Person.
For the purposes of this definition, "control" (including with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or indirectly,
of the power





                                       35
<PAGE>   41
to direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.

         "Aggregate Amount" when used with respect to Restricted Investments at
any particular time means and shall be calculated by adding together the amount
of each such Restricted Investment, determined, with respect to each such
Restricted Investment, at the greater of:

         (a)  with respect to each Restricted Investment (other than guarantees
    of Indebtedness), the amount originally entered on the books of the Company
    or any Subsidiary with respect thereto or the cost thereof to the Company
    or such Subsidiary, whichever shall be greater, minus in each case any net
    return of capital (after income taxes applicable thereto) upon such
    Restricted Investment through the sale or liquidation of such Restricted
    Investment or any part thereof, or otherwise; and

         (b)  with respect to guarantees of Indebtedness, the amount of such
    Indebtedness at the time outstanding.

         "Asset Sale" means the sale, transfer or other disposition by the
Company or any of its Subsidiaries to any Person of any asset of the Company or
any such Subsidiary.

         "Authorized Officer" means the Chief Executive Officer, Chief
Financial Officer, General Counsel, Controller or Treasurer of the Company.

         "Book Value of Assets Sold" means, with respect to any Asset Sale, the
net book value of the assets sold pursuant to such Asset Sale calculated in
conformity with GAAP.

         "Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of California and the
State of New York or is a day on which banking institutions located in such
states are authorized by law or other governmental action to close.

         "Calculation Date" means the date on which the Yield Maintenance Price
on the Notes being prepaid pursuant to Section 3.2 or Section 3.3 hereof or
accelerated pursuant to Section 8 hereof, as the case may be, is to be
determined by the Computing Holder with respect to such Notes.  If the Notes
are being prepaid pursuant to Section 3.2, the Calculation Date shall be the
fifth Business Day prior to





                                       36
<PAGE>   42
the Optional Prepayment Date established pursuant to Section 3.2.  If the Notes
are being prepaid pursuant to Section 3.3, the Calculation Date shall be the
fifth Business Day prior to the Change of Control Prepayment Date.  If the
Notes are being accelerated pursuant to Section 8 hereof, the Calculation Date
shall be the date of acceleration of such Notes.

         "Change of Control" shall occur when any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of the Company (or other
securities convertible into such securities) representing 20% or more of the
combined voting power of all securities of the Company entitled to vote in the
election of directors, other than securities having such power only by reason
of the happening of a contingency; provided, however, that The Dan Murphy
Foundation may acquire an aggregate beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended), directly or indirectly, of the Company (or
other securities convertible into such securities) representing up to 49% of
the combined voting power of all securities of the Company entitled to vote in
the election of directors, other than securities having such power only by
reason of the happening of a contingency.

         "Change of Control Prepayment Date" shall have the meaning assigned to
such term in Section 3.3.

         "Compliance Certificate" means a certificate substantially in the form
of Exhibit B hereto, delivered to each Holder by the Company pursuant to
Section 6.1(iii).

         "Computing Holder" means as of a Calculation Date with respect to (i)
the prepayment of Notes pursuant to Section 3.2 or acceleration of the Notes
pursuant to clause (c) of the first paragraph of Section 8.1, as the case may
be, the Holder at such date of the largest aggregate principal amount of the
outstanding Notes or (ii) the prepayment of the Notes pursuant to Section 3.3
or acceleration pursuant to clause (b) of the first paragraph of Section 8.1,
as the case may be, the Holder of the Notes at such date so being prepaid or
accelerated.  For purposes of such determination, the Holder of any Note and
any of its Affiliates or Subsidiaries that are Holders of any Notes shall be
treated as one Holder.





                                       37
<PAGE>   43
         "Consolidated", when used with respect to any of the terms defined
herein, refers to such terms as reflected in a consolidation of the accounts of
the Company and its Subsidiaries in conformity with GAAP (including giving
effect to the elimination of all intercompany items in conformity with GAAP).

         "Consolidated Assets" means, as at any date of determination, the
total assets of the Company and its Subsidiaries on a Consolidated basis
determined in conformity with GAAP.

         "Consolidated EBIT" means, for any period, the sum (without
duplication) of (i) Consolidated Net Income for such period (ii) provision for
taxes in respect of, or measured by, income or excess profits, calculated on a
Consolidated basis for such period; and (iii) Consolidated Interest Expense for
such period.

         "Consolidated Fixed Charges" means, for any period and without
duplication, the sum of (i) Consolidated Interest Expense for such period, and
(ii) Consolidated Rent Payments paid or payable during such period.

         "Consolidated Income Available For Consolidated Fixed Charges" means,
for any period, the sum (without duplication) of (i) Consolidated EBIT for such
period, and (ii) Consolidated Rent Payments for such period.

         "Consolidated Interest Expense" means, for any period, the sum,
without duplication, of (i) total interest expense (including that portion
attributable to capital leases and interest capitalized in conformity with
GAAP) of the Company and its Subsidiaries for such period on a Consolidated
basis, including, without limitation, fees payable to the agent and the banks
in connection with the Credit Agreement and (ii) the aggregate amount of all
interest and finance charges on Consolidated Off Balance Sheet Obligations for
such period.

         "Consolidated Net Income" means, for any period, the net income (or
loss) of the Company and its Subsidiaries on a Consolidated basis determined in
conformity with GAAP for such period taken as a single accounting period;
provided that there shall be excluded (i) the income (or loss) of any Person
(other than a Subsidiary of the Company) in which any other Person (other than
the Company or any of its Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to the
Company or any of its Subsidiaries by such Person during such period, but net
of any additional





                                       38
<PAGE>   44
Investment made by the Company or any of its Subsidiaries in such Person during
such period, (ii) the income (or loss) of any Person accrued prior to the date
it becomes a Subsidiary of the Company or is merged into or Consolidated with
the Company or any of its Subsidiaries or that Person's assets are acquired by
the Company or any of its Subsidiaries, and (iii) the income of any Subsidiary
of the Company to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary.

         "Consolidated Off Balance Sheet Obligations" means, as at any date of
determination, the sum (without duplication) of (i) any indebtedness or
obligation of an Affiliate or a Subsidiary of the Company or any of their
respective Subsidiaries or any partnership in which the Company or any of its
Subsidiaries or any of their respective Affiliates is a general or limited
partner, (ii) any outstanding amount of accounts receivable or notes sold by
the Company or any of its Subsidiaries, (iii) any non-recourse financing of
real property, equipment or other asset by the Company or any of its
Subsidiaries or Affiliates, (iv) any liabilities, whether recourse or
non-recourse, associated with or secured by "assets held for sale" of the
Company or any of its Subsidiaries, (v) any obligations under a sale and lease
back transaction entered into by the Company or any of its Subsidiaries as
lessee, and (vi) any other transaction, regardless of form, which is the
functional equivalent of borrowing by the Company or any of its Subsidiaries;
provided that (a) such indebtedness or obligation shall be included only to the
extent that it does not appear on the Consolidated financial statements of the
Company and (b) if such indebtedness or other obligation is owed by an entity
other than the Company or one of its wholly-owned Subsidiaries, it shall be
reduced by the amount attributable to other ownership interests.

         "Consolidated Rent Payments" means, for any period, the aggregate
amount of the rental payments and other amounts incurred by the Company and its
Subsidiaries as lessees under all leases of the Company or its Subsidiaries
during such period, including, without limitation, minimum royalty payments,
and excluding any amounts incurred in connection with capital leases to the
extent such amounts are included in the calculation of Consolidated Interest
Expense.





                                       39
<PAGE>   45
         "Consolidated Tangible Assets" means, at any date of determination,
(i) Consolidated Assets minus (ii) goodwill, patents, trademarks and other
intellectual property, organizational expenses, deferred research and
developments costs, deferred marketing expenses and other intangible assets of
the Company and its Subsidiaries (determined on a Consolidated basis in
conformity with GAAP).

         "Consolidated Tangible Net Worth" means, at any date of determination,
Consolidated Tangible Assets minus Consolidated Total Liabilities.

         "Consolidated Total Liabilities" means, as at any date of
determination, the total liabilities of the Company and its Subsidiaries on a
Consolidated basis which may properly be classified as liabilities in
conformity with GAAP (including, without limitation, (i) any balance sheet
liability with respect to any pension plan recognized pursuant to Financial
Accounting Standards Board Statements 87 or 88, and (ii) any withdrawal
liability under Section 4201 of ERISA with respect to a withdrawal from a
"multiemployer plan" (as defined in Section 3(37) of ERISA) as such liability
may be set forth in a notice of withdrawal liability under Section 4219 of
ERISA, and as adjusted from time to time subsequent to the date of such
notice).

         "Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation and without duplication, any such obligation
directly or indirectly guarantied, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made, or discounted or sold
with recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including, without limitation, any such
obligation for which that Person is in effect liable through any agreement
(contingent or otherwise) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet item, level of income or other financial condition of the
obligor of such obligation, or to make payment for any products, materials or
supplies or for any transportation, services or lease regardless of the
non-delivery or non-furnishing thereof, in any case if the purpose or intent of
such agreement is to provide assurance that such obligation





                                       40
<PAGE>   46
will be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such obligation will be protected (in
whole or in part) against loss in respect thereof; provided, however, that
excluded from this definition shall be contingent obligations to the extent
such obligations are indemnified by Onoda Cement Co., Ltd. ("Onoda") pursuant
to the agreement among the Company, California Portland Cement Co., and Onoda
U.S.A., Inc., dated July 19, 1988, in an aggregate amount not in excess of
$47,500,000, on the Closing Date, minus an amount equal to each reduction of
such contingent obligations after the Closing Date with each such reduction
made on the earlier of (i) the date the applicable payment (or reduction in the
contingent obligation) is made by the principal obligor, Onoda or the Company,
or (ii) the due date of such payment, but in no event shall the aggregate
amount of such reductions be less than $6,170,000 per annum.  The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guarantied or otherwise supported.

         "Credit Agreement" means that certain Credit Agreement dated as of
June 30, 1992, among the Company, Bank of America National Trust and Savings
Association, as agent, and the lenders party thereto, as it has been and may be
amended, supplemented, restated or otherwise modified from time to time.

         "Default" means a condition or event which, after notice or lapse of
time or both, would constitute an Event of Default if that condition or event
were not cured or waived within any applicable grace or cure period.

         "Documents" shall mean this Agreement, including all exhibits and
schedules hereto, the Notes, and all other documents executed in connection
with the consummation of the transactions contemplated herein and therein.

         "Employee Benefit Plan" means any "employee benefit plan" which is
defined in Section 3(3) of ERISA and which is or was maintained or contributed
to by the Company or any ERISA Affiliate of the Company.

         "Environmental Liabilities and Costs" means all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including
all reasonable fees, disbursements and expenses of counsel, expert and
consulting fees and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest, incurred as a result of any claim or demand,
by any Person, whether based in contract, tort, implied or





                                       41
<PAGE>   47
express warranty, strict liability, criminal or civil statute, including any
Hazardous Materials Law, permit, law, rule, regulation, order or agreement with
a governmental authority or other Person, arising from environmental, health or
safety conditions related to, or the Release or threatened Release by reason
of, the past, present or future operations of the Company or any of its
Subsidiaries.

         "Environmental Lien" means any Lien in favor of any governmental
authority for Environmental Liabilities and Costs.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.

         "ERISA Affiliate" as applied to any Person, means (i) any corporation
which is or was a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is
or was a member; (ii) any trade or business (whether or not incorporated) which
is or was a member of a group of trades or businesses under common control
within the meaning of Section 414(c) of the Internal Revenue Code for which
that Person is or was a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Internal Revenue Code
of which that Person, any corporation described in clause (i) above or any
trade or business described in clause (ii) above is or was a member.

         "ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to
any Pension Plan (whether or not waived in accordance with Section 412(d) of
the Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by the Company or any of its ERISA Affiliates from any Pension
Plan with two or more contributing sponsors or the termination of any such
Pension Plan resulting in liability pursuant to Sections 4063 or 4064 of ERISA;





                                       42
<PAGE>   48
(v) the institution by the PBGC of proceedings to terminate any Pension Plan,
or the occurrence of any event or condition which might constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on the Company
or any of its ERISA Affiliates pursuant to Sections 4062(e) or 4069 of ERISA or
by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal
of the Company or any of its ERISA Affiliates in a complete or partial
withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor, or the receipt
by the Company or any of its ERISA Affiliates of notice from any Multiemployer
Plan that it is in reorganization or insolvency pursuant to Sections 4241 or
4245 of ERISA, or that it intends to terminate or has terminated under Sections
4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could
give rise to the imposition on the Company or any of its ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Sections 409, 502(c), (i) or (1) or 4071 of ERISA in
respect of any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan
other than a Multiemployer Plan or the assets thereof, or against the Company
or any of its ERISA Affiliates in connection with any such plan; or (x) receipt
from the Internal Revenue Service or any successor thereto of notice of the
failure of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 401(a) of the Internal Revenue Code; or (xi) the imposition of a lien
pursuant to Sections 401(A)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession.





                                       43
<PAGE>   49
         "Hazardous Materials" means (i) any chemical, material or substance
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous waste," "restricted
hazardous waste," or "toxic substances" or words of similar import under any
applicable local, state or federal law or under the regulations adopted or
promulgated pursuant thereto, including, without limitation, Hazardous
Materials Laws, (ii) any oil, petroleum or petroleum derived substance, any
drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, any flammable substances
or explosives, any radioactive materials, (iii) asbestos in any form which is
or could become friable, urea formaldehyde foam insulation, electrical
equipment which contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty parts per million, and (iv) any
other chemical, material or substance, exposure to which may or could pose a
hazard to the health and safety of the owners or occupants or any Persons
surrounding any of the properties owned or occupied by the Company or any of
its Subsidiaries.

         "Hazardous Materials Laws" means all statutes, ordinances, orders,
rules, regulations, plans or decrees and the like relating to health or welfare
or protection of the environment, including, without limitation, those relating
to fines, orders, injunctions, penalties, damages, contribution, costs recovery
compensation, losses or injuries resulting from the Release or threatened
Release of Hazardous Materials and to the generation, use, storage,
transportation, or disposal of Hazardous Materials, in any manner applicable to
the Company or any of its Subsidiaries or any of their respective properties,
each as in effect as of the date of determination.

         "Holders" means the holders of the Notes from time to time, and shall
include the Purchasers and the Transferees.

         "Indebtedness", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to capital
leases which is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred purchase
price of property or services which purchase price is due more than six months
from the date of incurrence of the obligation in respect thereof or evidenced
by a note or





                                       44
<PAGE>   50
similar written instrument and (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtednesses secured thereby shall have been assumed by that Person or is
non-recourse to the credit of that Person.

         "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.

         "Investments" means and includes all investments made, whether by
acquisition of stock or Indebtedness, or by loan, guaranty, advance (other than
an advance to an employee and other than endorsements for purposes of
collection, in each case in the ordinary course of business), transfer of
property, capital contribution, or otherwise, by the Company in any Person
which at the time is not a Subsidiary (or a Person which by reason of such
investment becomes a Subsidiary) or by any Subsidiary in any Person other than
the Company or another Subsidiary (or a Person which by reason of such
investment becomes a Subsidiary).

         "Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).

         "Material Adverse Effect" means a material and adverse effect on the
business, operations, properties, prospects, assets or condition, financial or
other, of the Company and its Subsidiaries, taken as a whole.

         "Multiemployer Plan" means a "multiemployer plan" as defined in
Section 3(37) of ERISA to which the Company or any of its ERISA Affiliates is
contributing or ever has contributed or to which the Company or any of its
ERISA Affiliates has, or ever has had, an obligation to contribute.

         "Net Assets Held For Sale" means the assets and corresponding
liabilities listed on Schedule 5 hereto as of the date hereof and held for sale
by the Company, as such schedule may be amended from time to time with the
consent of the Requisite Holders; provided that the aggregate amount of assets
(without giving effect to any reductions based on corresponding liabilities)
added to Schedule 5 as a result of amendments subsequent to the date hereof
shall not exceed five million dollars ($5,000,000).





                                       45
<PAGE>   51
         "Officer's Certificate" means a certificate signed in the name of the
Company by an Authorized Officer.

         "Overdue Interest Rate" means the greater of (i) 8.70 percent (8.70%)
per annum and (ii) two percent (2%) over the rate of interest publicly
announced by The Chase Manhattan Bank, N.A., from time to time as its corporate
base rate of interest.

         "PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.

         "Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.

         "Permitted Liens" means the following types of Liens (other than any
Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue
Code or by ERISA):

         (i)  Liens for taxes, assessments or governmental charges or claims
    the payment of which is not at the time required by Section 6.4;

        (ii)  statutory Liens of landlords and Liens of carriers, warehousemen,
    mechanics, materialmen and other similar Persons and other Liens imposed by
    law incurred in the ordinary course of business for sums not yet delinquent
    or being contested in good faith, if such reserve or other appropriate
    provisions, if any, as shall be required by GAAP shall have been made
    therefor;

       (iii)  Liens (other than any Lien imposed by ERISA) incurred or deposits
    made in the ordinary course of business in connection with workers'
    compensation, unemployment insurance and other types of social security, or
    to secure the performance of tenders, statutory obligations, surety and
    appeal bonds, bids, leases, government contracts, performance and
    return-of-money bonds and other similar obligations (exclusive of
    obligations for the payment of borrowed money);

        (iv)  any attachment or judgment Lien, unless the judgment it secures
    (a) shall not, within thirty days after the entry thereof, have been 
    discharged or execution thereof stayed pending appeal, or shall not have 
    been discharged within





                                       46
<PAGE>   52
    thirty days after the expiration of any such stay or (b) shall be in effect
    and a period of ten days or less remains prior to any proposed sale
    thereunder; and

         (v)  easements, rights of way, servitudes or zoning or building
    restrictions and other minor encumbrances on real property which do not in
    the aggregate materially interfere with or impair the operation of such
    property for the purposes for which it is or may reasonably be expected to
    be used.

         "Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.

         "Release" means any release, spill, emission, leaking, pumping,
injection, deposit, unlawful disposal, discharge, dispersal, leaching or
migration of any Hazardous Materials into the indoor or outdoor environment
(including, without limitation, the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials) or
into or out of any property owned, used or operated by the Company or any of
its Subsidiaries, including the movement of any Hazardous Materials through or
in the air, soil, surface water, groundwater or property.

         "Remedial Action" means all actions required to (i) clean up, remove,
treat or in any other way address Hazardous Materials in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Hazardous Materials so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; or (iii) perform preremedial studies and investigations and
post-remedial monitoring and care.

         "Requisite Holders" means Persons holding at any time more than
sixty-six and two-thirds percent (66 2/3%) of the aggregate outstanding
principal amount of the Notes.

         "Restricted Investments" shall mean Investments other than





                                       47
<PAGE>   53
         (i)  in any direct obligations of the United States or fully
    guaranteed by the United States;

        (ii)  deposit accounts to the extent insured by the Federal Deposit
    Insurance Corporation (the "FDIC", including any successor to the functions
    of the FDIC) up to $2,500,000 in the aggregate at any time;

       (iii)  in any commercial paper, maturing within 270 days, having a
    rating of A-1 or P-1 by Moody's Investors Services, Inc. ("Moody's") or
    Standard & Poor's Corporation ("S&P"), respectively;

        (iv)  in certificates of deposit, savings or time deposits, capital
    notes or other evidences of indebtedness of, or guaranteed by, any member
    bank of the Federal Reserve System (a) having maturities of one year or
    less and (b) which bank (x) has a combined capital and surplus of at least
    $500,000,000 as shown on its most recent published balance sheet
    immediately prior to the date of the making of such investment and (y) is
    rated (or the senior debt securities of the holding company of such bank
    are rated) A3 or better or A- or better by Moody's or S&P, respectively;

         (v)  in money market preferred stocks rated in one of the top two
    rating classifications by Moody's or S&P;

        (vi)  in repurchase agreements and similar commercial undertakings for
    terms of less than one year, provided that such repurchase agreements or
    undertakings are secured and collateralized by obligations of the United
    States of America or any agency thereof in an aggregate face amount equal
    to or greater than the obligations so secured; and

       (vii)  money market funds, rated in one of the top two rating
    classifications by Moody's or S&P, substantially all of the assets of which
    are comprised of securities of the types described in clauses (i), (iii),
    (iv), or (v) immediately above.

         "SEC" means the Securities and Exchange Commission, and any successor
thereto.

         "Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.





                                       48
<PAGE>   54
         "Subsidiary", with respect to any person, means any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of stock entitled to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.

         "Transferee" shall mean any Person who shall acquire an interest in
any Note as a result of an assignment, sale or other transfer by the Holder of
such Note.

         "Weighted Average Life to Final Maturity" of any Indebtedness
(including the Notes) as of the time of determination thereof means the number
of years (rounded to the nearest one-twelfth) obtained by dividing the then
Remaining Dollar-Years of such Indebtedness by the then outstanding principal
amount of such Indebtedness.  For the purposes of this definition, "Remaining
Dollar-Years" means the sum of the amounts obtained by multiplying the amount
of each then remaining sinking fund, serial maturity or other required
repayment, including repayment at final maturity, by the number of years
(calculated to the nearest one-twelfth) which will elapse between the time of
such determination and the date such repayment is scheduled to be made.

         "Yield Maintenance Price" means, with respect to any principal amount
of Notes being prepaid pursuant to Section 3.2 or Section 3.3 or accelerated
pursuant to Section 8.1, as the case may be, the greater of (1) the sum of the
respective Payment Values of each prospective interest payment (excluding from
the first prospective interest payment any amount of interest accrued to the
applicable date of prepayment or acceleration), prospective mandatory principal
prepayment and the principal payment at maturity in respect of such Notes (the
amount of each such payment being herein referred to as a "Payment"), or (2)
the unpaid principal amount of such Notes.  The "Payment Value" of each Payment
shall be determined by discounting such Payment at the Reinvestment Rate for
the period from the scheduled date of such Payment (such scheduled date or
dates of Payments of principal, in the case of Notes being partially prepaid,
to be the date or dates as of which the principal amount being prepaid is to be
applied against payment at maturity or mandatory prepayments under the relevant
provisions of the Notes) to the applicable date of prepayment or acceleration,
as the case may be.  The "Reinvestment Rate" is the sum of (a) .50% and (b) the
yield to maturity implied by (i) the yields reported on the





                                       49
<PAGE>   55
display designated as "Page 7677" on the Telerate Service (or such other
display as may replace Page 7677 on the Telerate Service) for actively traded
"On The Run" United States Treasury securities having a maturity equal (or as
close as practicable) to the Weighted Average Life To Final Maturity of the
principal amount of the Notes so to be prepaid or accelerated, as the case may
be, or if such yields shall not be reported as of such time or the yields
reported as of such time shall not be ascertainable, (ii) the Treasury Constant
Maturity Series yields reported as of the Calculation Date with respect to such
prepayment or acceleration, as the case may be, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for actively
traded "On The Run" United States Treasury Securities having a constant
maturity equal (or as close as practicable) to the Weighted Average Life To
Final Maturity of the principal amount of the Notes so to be prepaid or
accelerated, as the case may be.  Such implied yield shall be determined, if
necessary, by (a) converting United States Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities.  The
yields of such United States  Treasury securities shall be determined as of 10
A.M. Eastern Time, on the applicable Calculation Date.

    9.2  Accounting Terms; Financial Covenant Calculations. All accounting
terms not specifically defined in this Agreement shall be construed, and all
financial data required to be submitted by this Agreement shall be prepared, in
conformity with GAAP, except as otherwise specifically provided herein.
Compliance with financial covenants and other covenants compliance with which
requires reference to the Company's financial statements shall be determined in
accordance with GAAP as in effect on the Closing Date.

    9.3  Miscellaneous Terms.  All terms defined in this Agreement shall be
applicable to both the singular and plural forms thereof, as the context
requires.  The term "or" is disjunctive; the term "and" is conjunctive.  The
term "shall" is mandatory; the term "may" is permissive.  The term "including"
is by way of example and not a limitation.

SECTION 10.  MISCELLANEOUS.

    10.1  Note Payments.  The Company agrees that it will make payments of
principal of and interest on each Note in accordance with the terms of this
Agreement, by wire transfer of immediately available funds for credit to the





                                       50
<PAGE>   56
account numbers and Holders as set forth in Annex I hereto, or such other
account or accounts in the United States as you or any Transferee may designate
in writing, notwithstanding any contrary provision herein or in any Note with
respect to the place of payment.  You agree that, before disposing of any Note,
you will make a notation thereon (or on a schedule attached thereto) of all
principal payments previously made thereon and of the date to which interest
thereon has been paid.  The Company agrees to afford the benefits of this
Section 10.1 to any Transferee which shall have made the same agreement as you
have made in this Section 10.1.

    10.2  Expenses.  The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save you, each Holder and
any Transferee harmless against liability for the payment of, all out-of-pocket
expenses arising in connection with such transactions, including (i) all
document production and duplication charges and the fees and expenses of any
special counsel engaged by you in connection with this Agreement and the
related documents and the transactions contemplated hereby, (ii) all document
production and duplication charges and the fees and expenses of any special
counsel engaged by you or any Transferee in connection with any subsequent
proposed modification of, or proposed consent under, this Agreement and the
Documents, whether or not such proposed modification shall be effected or
proposed consent granted, and (iii) the costs and expenses, including
attorneys' fees, incurred by you, each Holder or such Transferee in enforcing
(or determining whether or how to enforce) any rights under this Agreement and
the Documents or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement or any
Document or the transactions contemplated hereby or by reason of your, such
Holder's or such Transferee's having acquired any Note, including without
limitation, costs and expenses incurred in any bankruptcy case, provided, that
the Company shall only be obligated to pay the attorneys' fees of one counsel
representing the Holders unless there is a conflict of interest which results
in any Holder engaging separate counsel.  The obligations of the Company under
this Section 10.2 shall survive the transfer of any Note or portion thereof or
interest therein by you, any Holder or any Transferee and the payment of any
Note.

    10.3  Consent to Amendments.  This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the written
consent to such amendment, action or omission to act, of the





                                       51
<PAGE>   57
Requisite Holders of all Notes except that, without the written consent of the
Holder or Holders of all Notes at the time outstanding, no amendment to this
Agreement shall change the maturity of any Note (except with the written
consent of all Holders of all of the Notes), or change the principal of, or the
rate or time of payment of interest on any Note (except with the written
consent of all Holders of all of the Notes), or affect the time, amount or
allocation of any prepayments, or change the proportion of the principal amount
of the Notes required with respect to any consent, amendment, waiver or
declaration.  Each Holder of any Note at the time or thereafter outstanding
shall be bound by any consent authorized by this Section 10.3, whether or not
such Note shall have been marked to indicate such consent, but any Notes issued
thereafter may bear a notation referring to any such consent.  No course of
dealing between the Company and the Holder of any Note nor any delay in
exercising any rights hereunder or under any Note shall operate as a waiver of
any rights of any Holder of such Note.  As used herein and in the Notes, the
term "Agreement" and references thereto shall mean this Agreement as it may
from time to time be amended or supplemented.

    10.4  Form, Registration, Transfer and Exchange of Notes; Lost Notes.  The
Notes are issuable as registered notes without coupons in denominations of at
least $500,000, except as may be necessary to reflect any principal amount not
evenly divisible by $500,000.  The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and
of transfers of Notes.  Upon surrender for registration of transfer of any Note
at the principal office of the Company, the Company shall, at its expense,
execute and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees.  At
the option of the Holder of any Note, such Note may be exchanged for other
Notes of like tenor and of any authorized denominations, of a like aggregate
principal amount, upon surrender of the Note to be exchanged at the principal
office of the Company.  Whenever any Notes are so surrendered for exchange, the
Company shall, at its expense, execute and deliver the Notes which the Holder
making the exchange is entitled to receive.  Every Note surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer duly executed, by the Holder of such Note
or such Holder's attorney duly authorized in writing.  Any Note or Notes issued
in exchange for any Note or upon transfer thereof shall carry the rights to
unpaid interest and interest to accrue which were carried by the Note so
exchanged or transferred, so that neither gain nor loss of interest shall





                                       52
<PAGE>   58
result from any such transfer or exchange.  Upon receipt of written notice from
the Holder of any Note of the loss, theft or destruction of such Note or, in
the case of any mutilation, upon surrender and cancellation of such Note, the
Company will make and deliver a new Note, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Note, and upon receipt of such Holder's
indemnity agreement in the case of stolen, lost or destroyed Notes, which shall
be an unsecured indemnity if the indemnitor is a domestic bank, insurance
company, financial institution, pension fund, mutual fund or similar fund.

          Any new Note issued pursuant to the preceding paragraph shall bear a
legend substantially similar to the legend described in Section 5.1.

    10.5  Persons Deemed Owners; Participations.  Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and Holder of such Note for the purpose of
receiving payment of principal of, premium, if any, and interest on such Note
and for all other purposes whatsoever, whether or not such Note shall be
overdue, and the Company shall not be affected by notice to the contrary.
Subject to the preceding sentence, the Holder of any Note may from time to time
grant participations in such Note to any Person on such terms and conditions as
may be determined by such Holder in its sole and absolute discretion, provided
that any such participation shall be in a principal amount of at least
$500,000.

    10.6  Survival of Representations and Warranties; Entire Agreement.  All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement, the Notes and the other Documents, the transfer by
you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any Transferee, regardless of any investigation
made at any time by or on behalf of you or any Transferee.  Subject to the
preceding sentence, this Agreement, the Notes and the other Documents embody
the entire agreement and understanding between each of you and the Company and
supersede all prior agreements and understandings relating to the subject
matter hereof, including without limitation, the term sheet dated May 24, 1993
and any correspondence and oral discussions relating thereto.

    10.7  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





                                       53
<PAGE>   59
benefit of the respective successors and assigns of the parties hereto
(including, without limitation, any Transferee) whether so expressed or not.

    10.8  Notices.  All written communications provided for hereunder must be
in writing and shall be effectively served upon receipt or delivery, or if
mailed, upon the first to occur of receipt or the expiration of forty-eight
hours after being deposited in certified United States mail, postage prepaid,
and (i) if to the Holders addressed to each of you at your respective addresses
on Annex I to this Agreement or at such other address as each of you shall have
specified to the Company in writing (or at such telefacsimile number as you
shall from time to time designate in writing), (ii) if to any other Holder of
any Note, addressed to such other Holder at such address (or at such
telefacsimile number) as such other Holder shall have specified to the Company
in writing or, if any such other Holder shall not have so specified an address
(or telefacsimile number) to the Company, then addressed to such other Holder
in care of the last Holder of such Note which shall have so specified an
address to the Company, and (iii) if to the Company, addressed to it at 3200
San Fernando Road, Los Angeles, California 90065, Attention: Frederick Sauer,
Treasurer, or at such other address as the Company shall have specified to the
Holder of each Note in writing (or at such telefacsimile number as the Company
shall from time to time designate in writing); provided, however, that any such
communication to the Company may also, at the option of the Holder of any Note,
be delivered by any other means either to the Company at its address specified
above or to any officer of the Company.

    10.9  Payments Due on Non-Business Days.  Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment in respect of any Note that
is due on a date other than a Business Day shall be made on the next succeeding
Business Day.  If the date for any payment is extended to the next succeeding
Business Day by reason of the preceding sentence, the period of such extension
shall be included in the computation of the interest payable on such Business
Day.

    10.10  Satisfaction Requirement.  If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to you or to the Requisite Holders, the
determination of such satisfaction shall be made by you or the Requisite
Holders, as the case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.





                                       54
<PAGE>   60
    10.11  Governing Law; Choice of Forum; Waiver of Jury Trial.  This
Agreement shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the State of California, without
regard to principles of conflicts of laws.  The Company hereby submits to the
nonexclusive jurisdiction of the United States District Courts for the Central
District of California and of any California State Court sitting in Los Angeles
for purposes of all legal proceedings arising out of or relating to the
Documents or the transactions contemplated hereby or thereby.  The Company
irrevocably waives to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.  THE COMPANY AND EACH OF YOU
HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THE DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY.

    10.12  Severability.  Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

    10.13  Descriptive Headings.  The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

    10.14  Counterparts.  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.

    10.15  Confidentiality.  Each of you agree that you will not, and will not
permit your respective officers, directors, employees or agents to, disclose to
any other Person any non-public information furnished to you by the Company or
any Subsidiary of the Company which has been identified as confidential or
non-public, except (i) as required by law or legal process or by any
governmental authority, (ii) such information that has become or is generally
available to the public other than as a result of a disclosure prohibited
hereby, (iii) such information that is or becomes available to you on a
nonconfidential basis from a source not bound by this or another
confidentiality





                                       55
<PAGE>   61
agreement with the Company or any Subsidiary of the Company, or (iv) such
information that you disclose to a Person who is a prospective transferee of
some or all Notes, provided that (x) such Person has first signed a
confidentiality agreement substantially identical to that set forth in this
Section 10.15, and (y) if such Person or any Affiliate of such Person is a
competitor of the Company, including for purposes of this clause (y) only any
Affiliate of a competitor which is a pension fund, the Company has consented
thereto.  For purposes of this Section 10.15, in no event shall any bank,
insurance company, financial institution, pension fund, mutual fund or similar
fund be interpreted to be a competitor of the Company except as otherwise
provided in clause (y) above.

           If you are in agreement with the foregoing, please sign the
acceptance on the enclosed counterpart of this





                                       56
<PAGE>   62
letter and return the same to the Company, whereupon this letter shall become a
binding agreement between the Company and you.

                           Very truly yours,

                           CALMAT CO.,
                           a Delaware corporation



                           By: /s/ Frederick T. Sauer             
                              ------------------------------------
                           Name:  Frederick T. Sauer              
                                ----------------------------------
                           Title: Vice President, Treasurer       
                                 ---------------------------------




                           By: /s/ Paul Stanford
                              ------------------------------------
                           Name:  Paul Stanford
                                ----------------------------------
                           Title: Senior Vice President-
                                 ---------------------------------
                                  Administration,
                                  General Counsel and Secretary


The foregoing Agreement is
hereby accepted as of the
date first above written.

METROPOLITAN LIFE INSURANCE COMPANY



By: /s/ Thomas R. Lenihan          
    -------------------------------
Name: Thomas R. Lenihan            
      -----------------------------
Title: Vice-President              
       ----------------------------


By: /s/ Leland C. Launer           
    -------------------------------
Name: Leland C. Launer             
      -----------------------------
Title: Vice-President              
       ----------------------------


METROPOLITAN INSURANCE AND
ANNUITY COMPANY



By: /s/ Andrew T. Aoyama           
    -------------------------------
Name: ANDREW T. AOYAMA             
      -----------------------------
Title: ASSISTANT VICE PRESIDENT    
       ----------------------------






                                       57
<PAGE>   63
METROPOLITAN PROPERTY AND CASUALTY
INSURANCE COMPANY


By:   /s/ Anthony J. Williamson      
    -------------------------------
Name: Anthony J. Williamson        
      -----------------------------
Title: Vice-President and Treasurer
      -----------------------------

TEXAS LIFE INSURANCE COMPANY
[Registered as TNB STOCK COMPANY]


By:   /s/ Leland C. Launer           
    -------------------------------
Name: Leland C. Launer             
      -----------------------------
Title: Authorized Signatory        
       ----------------------------






                                       58
<PAGE>   64
                                    ANNEX I

<TABLE>
<CAPTION>
                                                Aggregate Principal
                                                Amount of Notes To
Purchaser                                       Be Purchased       
- ---------                                       -------------------
<S>                                             <C>
METROPOLITAN LIFE INSURANCE COMPANY             $25,000,000 (to be broken
                                                up into the following
                                                denominations):

                                                $18,000,000
                                                $ 5,000,000  (SA #137)
                                                $ 2,000,000  (SA #50)
</TABLE>

All payments on account of the Notes
held by such purchaser shall be made
by wire transfer of immediately available
funds not later than 12:00 noon New York
time on the date payment is due for credit to:

Metropolitan Life Insurance Company -
Corporate Investments
Account No. 002-2-410591
The Chase Manhattan Bank, N.A.
Metropolitan Branch
33 East 23rd Street
New York, New York  10010
ABA # 021000021

Each such wire transfer shall set forth
the name of the Company, the coupon rate
of the Notes, a reference to "PPN 131271B#4"
and shall request the bank to send a credit
advice to Metropolitan Life Insurance Company.

Addresses for all communications
and notices:

Metropolitan Life Insurance Company
One Madison Avenue
New York, New York  10010

Attention:  Treasurer
Facsimile: (714) 474-1630




                                    ANNEX I
                                     Page 1
<PAGE>   65
with a copy to:

Metropolitan Life Insurance Company
Corporate Investments-Western Territory
2601 Main Street, Suite 1210
Irvine, California  92714

Attention:  Vice President
Facsimile: (714) 474-1630




                                    ANNEX I
                                     Page 2
<PAGE>   66
                                    ANNEX I

<TABLE>
<CAPTION>
                                                Aggregate Principal
                                                Amount of Notes To
Purchaser                                       Be Purchased       
- ---------                                       -------------------
<S>                                             <C>
METROPOLITAN INSURANCE
AND ANNUITY COMPANY                             $5,000,000
</TABLE>

All payments on account of the Notes
held by such purchaser shall be made
by wire transfer of immediately available
funds not later than 12:00 noon New York
time on the date payment is due for credit to:

Metropolitan Insurance and Annuity Company
Account No. 002-1-072301
The Chase Manhattan Bank, N.A.
Metropolitan Branch
33 East 23rd Street
New York, New York  10010
ABA # 021000021

Each such wire transfer shall set forth
the name of the Company, the coupon rate
of the Notes, a reference to "PPN 131271B#4"
and shall request the bank to send a credit
advice to Metropolitan Insurance and Annuity Company.

Addresses for all communications
and notices:

Metropolitan Insurance and Annuity Company
c/o Metropolitan Life Insurance Company
One Madison Avenue
New York, New York  10010

Attention:  Treasurer
Facsimile: (714) 474-1630

with a copy to:

Metropolitan Insurance and Annuity Company
c/o Metropolitan Life Insurance Company
Corporate Investments-Western Territory
2601 Main Street, Suite 1210
Irvine, California  92714

Attention:  Vice President
Facsimile: (714) 474-1630




                                    ANNEX I
                                     Page 3
<PAGE>   67
                                    ANNEX I

<TABLE>
<CAPTION>
                                                Aggregate Principal
                                                Amount of Notes To
Purchaser                                       Be Purchased       
- ---------                                       -------------------
<S>                                             <C>
METROPOLITAN PROPERTY AND
CASUALTY INSURANCE COMPANY                      $4,000,000
</TABLE>

All payments on account of the Notes
held by such purchaser shall be made
by wire transfer of immediately available
funds not later than 12:00 noon New York
time on the date payment is due for credit to:

Metropolitan Property and Casualty Insurance Company
Account No. 002-1-025432
The Chase Manhattan Bank, N.A.
Metropolitan Branch
33 East 23rd Street
New York, New York  10010
ABA # 021000021

Each such wire transfer shall set forth
the name of the Company, the coupon rate
of the Notes, a reference to "PPN 131271B#4"
and shall request the bank to send a credit
advice to Metropolitan Property and Casualty
Insurance Company.

Addresses for all communications
and notices:

Metropolitan Property and Casualty Insurance Company
c/o Metropolitan Life Insurance Company
One Madison Avenue
New York, New York  10010

Attention:  Treasurer
Facsimile: (714) 474-1630

with a copy to:

Metropolitan Property and Casualty Insurance Company
c/o Metropolitan Life Insurance Company
Corporate Investments-Western Territory
2601 Main Street, Suite 1210
Irvine, California  92714

Attention:  Vice President
Facsimile: (714) 474-1630




                                    ANNEX I
                                     Page 4
<PAGE>   68
                                    ANNEX I

<TABLE>
<CAPTION>
                                                Aggregate Principal
                                                Amount of Notes To
Purchaser                                       Be Purchased       
- ---------                                       -------------------
<S>                                             <C>
TEXAS LIFE INSURANCE COMPANY                    $1,000,000
(Registered in the following manner:
TNB STOCK COMPANY)
</TABLE>

All payments on account of the Notes held by such
purchaser shall be made by wire transfer of
immediately available funds not later than
12:00 noon, Waco, Texas time on
the date payment is due for credit to

Texas Life Insurance Company
Account No. 80022, at the
Texas National Bank
900 Washington Avenue
Waco, Texas 76701
ABA # 111900523
Attn:  Sarah Marten, Trust Dept

Each such wire transfer shall set forth
the name of the Company, the coupon rate
of the Notes, a reference to "PPN 131271B#4"
and shall request the bank to send a credit advice
to Texas Life Insurance Company

Address for all communications and notices:

Texas Life Insurance Company
c/o Metropolitan Life Insurance
  Company
One Madison Avenue
New York, New York  10010

Attention:  Treasurer
Facsimile: (714) 474-1630

with a copy to:

Texas Life Insurance Company
c/o Metropolitan Life Insurance
  Company
Metropolitan Life Insurance Company
Corporate Investments-Western Territory
2601 Main Street, Suite 1210
Irvine, California  92714

Attention:  Vice President
Facsimile: (714) 474-1630




                                    ANNEX I
                                     Page 5
<PAGE>   69
                                                                    

                                   SCHEDULE 1




ACTIVE SUBSIDIARIES OF CALMAT CO.
(100% owned and California corporation, unless otherwise indicated)


<TABLE>
<CAPTION>
                                                                      Total Assets at
                                                                        5/31/93
                                                                          (000's)    
                                                                      ---------------
<S>                                                                      <C>
Allied Concrete & Materials Co. (Arizona)                                    (2)
     Allied Concrete, Inc. (Arizona)                                         (2)
CalMat Co. of Arizona (Arizona)                                              (2)
CalMat Co. of New Mexico (New Mexico)                                      8,393
CalMat Land Co.                                                              (2)
CalMat of Central California                                              27,780
CalMat Properties Co.                                                    136,138 (1)
     CC Plaza Co.                                                            (2)
     Mission Valley Development Co.                                          (2)
     River Vista Development Co.                                             (2)
Coast Asphalt, Inc. (Delaware)                                           120,691 (1)
Hidden Valley Coal Company (Utah)                                            (2)
Huntmix, Inc.                                                             70,009 (1)
Kirst Construction Co., Inc. (50% owned through Crystal partnership)         (2)
     Azusa Rock, Inc. (50% owned through Crystal partnership)             28,159
Moreno Valley Sand & Gravel, Inc.                                          2,567
Palomar Transit Mix Co.                                                    3,485
Reliance Transport Co.                                                       394
Rio Norte Este Co.                                                           (2)
River Bend Corp.                                                          11,688 (1)
Sanger Rock and Sand                                                       2,427 (1)
Sloan Canyon Sand Co.                                                        432
Western Thermal Soils Co.                                                  1,600
</TABLE>


(1)      For financial reporting purposes these subsidiaries do not have
         separate accounting records.  These amounts represent the tax basis
         per the 12/31/91 tax return.

(2)      Separate accounting records are not maintained for these companies.





LWLA3\22509.1
<PAGE>   70
                             SCHEDULE 1 (continued)



INACTIVE SUBSIDIARIES OF CALMAT CO.
(California corporation unless otherwise indicated)



Albuquerque Gravel Products Co. (New Mexico)
Bakersfield Ready Mix, Inc.
California Materials Company
Carroll Canyon Centre Co. (CalMat Properties Co.'s Subsidiary)
Coast Asphalt, Inc.
Conrock Co.
Conrock Co. (Delaware)
Conrock Property Development Corp.
Consolidated Rock Products Co.
Consolidated Rock Products Co. (Delaware)
Corona Ready Mix Co.
Industrial Asphalt, Inc. (Coast Asphalt, Inc.'s Subsidiary)
Oceanside Ready Mix Co.
Reliance Land Co.
Rio Vista Hotel Co. (CalMat Properties Co.'s Subsidiary)
San Diego Consolidated Co.
San Diego Rock Products Co.
San Diego Transit Mixed Concrete Co.
Sweetwater Aggregates Co.
Triangle Rock Products, Inc.





LWLA3\22509.1                          2
<PAGE>   71
                                   SCHEDULE 2
                 CalMat Co. -- Existing Liens and Encumbrances
                              as of June 30, 1993



<TABLE>
<CAPTION>
                                              PRINCIPAL
                                              BALANCE                                                               PARENT
MORTGAGE NOTES:                               OUTSTANDING                RATE         COLLATERAL                    GUARANTEE?
<S>                                            <C>                     <C>           <C>                                <C>
Principal Mutual Life:

  1.  Durbin Business Park -- lot 10             2,400,149             13.25%        12901, 12921, 12941, 12961         No
      Date -- June 3, 1981                                                           12981, 13001 Ramona Blvd.
      Original amount -- $2,600,000

Metmor Financial:

  1.  La Cantera -- North                        1,927,587              9.25%        16011, 16037, 16057 Foothill       No
      Date -- April 1, 1987                                                          Blvd.
      Original amount -- $6,440,000

Aetna Life Ins. Co.:

  1.  Rio Vista Building -- San Diego           10,997,467             10.07%        8885 Rio San Diego Dr.             No
      Date -- October 20, 1987
      Original amount -- $11,300,000

      Total Mortgage Notes                     $15,305,203


MUNICIPAL IMPROVEMENT BONDS:

City of San Diego:

  1.  Carroll Canyon -- Lots 3-5                        $0         5.5 - 7.7%         Lien on property
      Date -- Sept 25, 1981                                                           whentax bill issued-              No
      Original amount -- $1,875,061                                                   amount of taxes only

  2.  Rio Vista -- Lots 2 - 7                                      5.5 - 7.7%         Same as above                     No
      Date -- May 1, 1982
      Original amount -- $2,580,000
      Lots 2-4 and 7                               189,796
      Lot 6 (RVT Consolidated)                      39,369

  3.  Rio Vista West (FSDRIP)                    2,354,955         6.5 - 7.7%         Same as above                     No
      Date -- Aug 3, 1987
      Original amount -- $4,235,675

  4.  Rio Vista ASMT 14 (FSDRIP)
      Date -- 1988
      Original amount -- $174,728.58               148,292         5.5 - 7.7%         Same as above                     No

      Total Bonds                               $2,732,412
</TABLE>





LWLA3\22509.1
<PAGE>   72
                                   SCHEDULE 3

                           CalMat CO. & Subsidiaries

                      Disclosure of Environmental Matters



None other than those disclosed in Securities and Exchange Commission - Form
10K for the year ended December 31, 1993, Item 3, Pages 3 & 4 (incorporated by
reference).


As of the Closing Date, the Authorized Officers do not believe that any such
environmental problems is reasonably likely to result in any Material Adverse
Effect.



(a)      Underground Tanks

CalMat maintains underground tanks for fuel storage and for storage of waste
oil at numerous facilities in California, Arizona and New Mexico.  Tanks are
monitored to detect any leakage.

(b)      Hazardous material used by CalMat are mostly petroleum products such
as diesel fuel, gasoline, grease and solvents used for company vehicles and
machinery.  Hazardous waste generated is mostly confined to waste oil
(hazardous waste in California only) and waste solvents.  These are removed for
recycling under state and federal procedures.





LWLA3\22509.1
<PAGE>   73
                                   SCHEDULE 3
                                     Page 2

                            CALMAT CO & SUBSIDIARIES
                      DISCLOSURE OF ENVIRONMENTAL MATTERS

                                  CONFIDENTIAL


The EPA has named the Company and approximately 15 other entities as
"Potentially Responsible Parties" ("PRP's") under CERCLA in connection with
alleged groundwater contamination at a site designated as the North Hollywood
Operable Unit of the San Fernando Valley Area 1 Superfund Site.  The EPA has
advised the Company and the other PRP's that they may be jointly and severally
liable for releases of hazardous substances, not only from properties they
owned or operated, but also for area-wide groundwater contamination.  One of
the Company's corporate predecessors is in the chain of title of a property
operated in the past as a landfill and alleged to be connected with the
contamination.  The property was sold to a third party in 1988.  That party has
also been named as a PRP.

No legal proceedings have been initiated by the EPA at this time, although
proceedings are threatened at an early date unless settlement is reached.  The
EPA has demanded payment of $17,213,355 for costs incurred in evaluation and
containment of the contamination.  Because of uncertainty regarding the scope
and source of the contamination and the likelihood of varying degrees of
responsibility among various PRP's, the Company has not determined what portion
of this amount it may be liable for should a settlement and allocation among
the PRP's be negotiated.  The Company has, at this time, no detailed factual
information concerning actual contributions to the contamination, if any, from
the site in question, has not yet had an opportunity to investigate possible
defenses or insurance coverage which may be available to it, and has not
investigated the possibility of recovery from other PRP's or third parties not
named by the EPA as PRP's.





LWLA3\22509.1
<PAGE>   74
                                                                        DETNEEDS

                                   SCHEDULE 4
                 CalMat Co. & Subsidiaries Outside Indebtedness
                                   30-Jun-93



BANK CREDIT FACILITIES:----CalMat Co. Obligations

<TABLE>
<CAPTION>
                                                                                                                         Final
                                TYPE OF                  AMOUNT               AMOUNT               CONVERSION            Maturity
                                FACILITY                 COMMITTED            OUTSTANDING          DATE                  DATE
<S>                             <C>                      <C>                  <C>                  <C>                   <C>
Bank of America (as Agent)      Revolver                 $100,000,000         $77,000,000          N/A                   30-Jun-97
Morgan Bank**                   Revolver -- (Term Out)     10,000,000          10,000,000          30-Apr-93             30-Apr-96
First Chicago                   Revolver                   35,000,000          30,000,000          20-Aug-94             20-Aug-96
Sanwa Bank, Ltd. of CAQ.        L/C Facility               25,000,000          12,431,800
Bank of America                 L/C Facility                1,000,000             251,127
Valley Bank -- Arizona          L/C Facility                2,000,000           1,967,042

                                TOTAL:                   $173,000,000         TOTAL:               $131,649,969
</TABLE>

MORTGAGES:--Cal Matt Properties Co. Obligations

<TABLE>
<CAPTION>
                                                                                                            OUTSTANDING
                               MATURITY              RATE          PROPERTY                                 BALANCE
<S>                            <C>                   <C>           <C>                                      <C>
Aetna                          11/01/2002            10.07%        Rio Vista Bldg -- San Diego              $10,977.467
Principal Mutual               09/01/1999            13.25%        Durbin Business Park -- Lot 10             2,400,149
Metmor Financial               04/01/1994             9.25%        La Cantera North                          1,0927,587

                                                                   TOTAL:                                   $15,305,203
</TABLE>

IMPROVEMENTS BONDS:(Liens on property payments part of tax bill) -- CalMat
Properties Co. Obligations

<TABLE>
<CAPTION>
                                                                                                            OUTSTANDING
                               MATURITY              RATE          PROPERTY                                 BALANCE
<S>                            <C>                   <C>           <C>                                      <C>
City of San Diego              N/A                   Various       Carroll Canyon -- Lots 3 -- 5            $        0
City of San Diego              N/A                   Various       Rio Vista -- Lots 2 -- 7                    189,796
City of San Diego              N/A                   Various       Rio Vista -- Lots 6 (RVTConsolidated)        39,369
FSDRIP                         N/A                   Various       Rio Vista West (FSDRIP)                   2,354,955
FSDRIP                         N/A                   Various       Rio Vista ASMT14 (FSDRIP)                   148,292

                                                                   TOTAL:                                   $2,732,412
</TABLE>

MISCELLANEOUS NOTES PAYABLES:--CalMat Co. Obligations

<TABLE>
<CAPTION>
                                                                                                            OUTSTANDING
                               MATURITY              RATE          PROPERTY                                 BALANCE
<S>                            <C>                   <C>           <C>                                      <C>
Chase Property                 08/01/1994            10.00%        N/A                                      $      0
Peterson Note                  12/01/1995            13.25%        N/A                                        42,320
Padre Buy-Out Note             Due on Call           Prime         N/A                                       250,000

                                                                   TOTAL:                                   $292,320
</TABLE>

** The Morgan Bank Revolver is in its "Term Out" period.  Principal 
   amortization of $333.000 per quarter.





LWLA3\22509.1
<PAGE>   75
                                  SCHEDULE 5


 NET ASSETS HELD FOR SALE -- MAJOR PROPERTIES AND ASSOCIATED DEBT AS OF 6/30/93


<TABLE>
<CAPTION>
                                           SQ FT OR                          NET BOOK         CASH FLOW        ASSOCIATED
                          TYPE             ACREAGE          % OCCUPIED       VALUE            1992 BUDGET      DEBT
<S>                       <C>              <C>              <C>              <C>              <C>              <C>
RIO VISTA TOWER           Office           192,147          70.8%            $24,406,000 (A)  $2,967,000       $15,000,000 *

CARROLL CANYON PLAZA      Office            47,230          52.9%            $ 3,501,000 (B)  $  134,000            $0

BEYER PACIFIC             Industrial        41,940          74.6%            $ 1,925,000 (C)  $   18,000            $0
                                           -------                           -----------      ----------                        
                                           281,317                           $29,832,000      $3,119,000
                                           =======                           ===========      ==========
</TABLE>

(A) -- A write-down reserve of $9,406,000 has not been subtracted.

(B) -- A write-down reserve of $1,501,000 has not been subtracted.

(C) -- A write-down reserve of $125,000 has not been subtracted.

 *  -- This is an allocation of corporate debt, not a mortgage.





LWLA3\22509.1
<PAGE>   76
                                   SCHEDULE 6

                           CalMat CO. & Subsidiaries

                        Disclosure of Pending Litigation



None other than that disclosed in Securities and Exchange Commission - Form
10K, dated December 31, 1992, Item 3, Pages 3 & 4, (incorporated here by
reference).


As of the Closing Date, the Authorized Officers do not believe that any such
actions, suits or proceedings is reasonably likely to result in any Material
Adverse Effect.





LWLA3\22509.1
<PAGE>   77
                                   SCHEDULE 7

                           CalMat CO. & Subsidiaries

                           Disclosure of Unpaid Taxes



ARIZONA:

         1.      Proposed income tax assessment for CalMat Co. and Subsidiary
Companies in the amount of $270,488 for the period January 1, 1984 through
December 31, 1988.

CalMat Co. has appealed this proposed assessment, and expects that a refund
will be due as a result of the review process.

         2.      Arizona consolidated income tax return for CalMat Co. and
Subsidiary Companies for the tax year ended December 31, 1992.

The 1992 Arizona income tax return is on extension, and will be filed by the
extended due date of September 15, 1993.  All taxes expected to be due for the
year were paid with the "Application for Extension of Time to File", Form
120EXT.



NEW MEXICO:

         1.      New Mexico state income tax returns for CalMat Co. for the
period January 1, 1989 through December 31, 1992.

CalMat Co. qualified to do business in New Mexico during 1989, and is required
to file separate company returns for this period.  The combined tax liability
for these separate company returns is less than $500.



UTAH:

         1.      Utah Corporation Franchise Tax Liability for the tax period
1991 through 1992.

The expected tax liability is less than $500.





LWLA3\22509.1
<PAGE>   78
                                                              


                                                                       EXHIBIT A

                           [FORM OF PROMISSORY NOTE]

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AND THIS NOTE
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.

                                   CALMAT CO.

                 6.70% SENIOR UNSECURED NOTE DUE JULY 23, 2000

No. __________                                                  July 23, 1993
$ ____________                                        Los Angeles, California


                 FOR VALUE RECEIVED, the undersigned, CALMAT CO., a Delaware
corporation (the "Company"), hereby promises to pay to _____________________
_________________________________________________, or registered assigns, the
principal sum of __________________________________________________ DOLLARS 
on July 23, 2000, with interest (computed on the basis of a 360-day
year consisting of twelve 30-day months) (a) on the unpaid balance thereof at
the rate of 6.70% per annum from the date hereof, payable semiannually on the
23rd day of January and July in each year, commencing with the January 23 or
July 23 next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of premium, payable as aforesaid (or, at the option of the Holder
hereof, on demand) at a rate per annum from time to time equal to the Overdue
Interest Rate (as such term and all other capitalized terms used but not
defined herein are defined in the Agreement defined more fully below).

                 Payments of principal of, interest on and any premium payable
with respect to this Note are to be made at the main office of The Chase
Manhattan Bank, N.A. in New York City or at such other place as the Holder
shall designate to the Company in writing, in lawful money of the United States
of America.

                 This Note is one of the senior promissory notes (the "Notes")
issued pursuant to a Note Purchase Agreement, dated as of July 23, 1993 (the
"Agreement"), among the Company, Metropolitan Life Insurance Company,
Metropolitan Insurance and Annuity Company, Metropolitan Property and Casualty
Insurance Company and Texas Life Insurance Company and is entitled to the
benefits thereof.

                 This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of





LWLA3\22509.1
<PAGE>   79
transfer, duly endorsed, or accompanied by a written instrument of transfer
duly executed, by the 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.

                 This Note is subject to (i) mandatory prepayments of principal
by the Company as specified in Section 3.1 of the Agreement, (ii) optional
prepayments by the Company, in whole or in part, at the Yield Maintenance Price
as specified in Section 3.2 of the Agreement and (iii) prepayment at the option
of the Holder upon a Change of Control at the Yield Maintenance Price as
specified in Section 3.3 of the Agreement.

                 In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.

                 This Note shall be governed by, and construed in accordance
with, the laws of the State of California.

                                       CALMAT CO.



                                        By: ________________________________
                                        Title: _____________________________





LWLA3\22509.1                            2
<PAGE>   80

                                                                       EXHIBIT B

                             COMPLIANCE CERTIFICATE

[Pursuant to Section 9.3 of the Note Purchase Agreement, compliance with
financial covenants and other covenants compliance with which requires
reference to the Company's financial statements shall be determined in
accordance with GAAP as in effect on the Closing Date.  Any and all differences
between amounts included in the financial statements delivered pursuant to
Section 6.1 of the Note Purchase Agreement and amounts reflected in this
Compliance Certificate shall be identified in a separate line item identified
as "Increase (Decrease) Due to Change In GAAP".]

<TABLE>
<S>      <C>                                                 <C>
7.1      Indebtedness                                        
         ------------                                        
                                                             
1.       Ratio of Consolidated Total Liabilities to          
         ------------------------------------------          
         Consolidated Tangible Net Worth                     
         -------------------------------                     
                                                             
         (a)     Consolidated Total Liabilities on the       
                 last day of the current fiscal quarter      $__________
                                                             
         (b)     Adjustment for Rio Vista Tower              $__________
                                                             
         (c)     Consolidated Total Liabilities for          
                 purposes of Section 7.1A                    $__________
                                                             
         (d)     Consolidated Total Assets on the last       
                 day of the current fiscal quarter           $__________
                                                             
         (e)     Adjustment for Rio Vista Tower              $__________
                                                             
         (f)     Consolidated Total Assets for purposes      
                 of Section 7.1A                             $__________
                                                             
         (g)     Consolidated Tangible Net Worth, as         
                 adjusted on the last day of the current     
                 fiscal quarter                              $__________
                                                             
         (h)     Ratio of Consolidated Total Liabilities     
                 to Consolidated Tangible Net Worth, each    
                 as adjusted (item 1(c) divided by           
                                        ------- --           
                 item 1(g))                                  ____ to 1.00
                                                             
         (i)     Maximum ratio of adjusted Consolidated      
                 Total Liabilities to adjusted               
                 Consolidated Tangible Net Worth             
                 permitted by Section 7.1B                   1.00 to 1.00
</TABLE>                                                     





LWLA3\22509.1                            1
<PAGE>   81
<TABLE>
<S>      <C>                                                    <C>
         (j)     Indebtedness of Subsidiaries on the last       
                 day of the current fiscal quarter,             
                 excluding Indebtedness of Subsidiaries         
                 as of July 23, 1993 and identified on          
                 Schedule 4 to the Note Purchase                
                 Agreement                                      $__________
                                                                
         (k)     Consolidated Tangible Net Worth (without       
                 adjustment) on the last day of the             
                 current fiscal quarter                         $__________
                                                                
         (l)     Maximum Indebtedness of Subsidiaries           
                 permitted by Section 7.1C (item 1(k)           
                 multiplied by 5%)                              $__________
                 ---------- --                                             
                                                                
7.2      Liens                                                  
         -----                                                  
                                                                
1.       (a)     Aggregate value of property encumbered         
                 by Liens pursuant to Section 7.2 on the        
                 last day of the fiscal quarter                 $__________
                                                                
         (b)     Consolidated Tangible Net Worth on the         
                 last day of the fiscal quarter                 
                                                                
         (c)     Maximum aggregate value of property            
                 permitted to be encumbered by Liens            
                 pursuant to Section 7.2 (10% multiplied        
                                              ----------        
                 by item 1(b))                                  $__________
                 --                                                        
                                                                
7.3      Restricted Investments, Dividends, Etc.                
         --------------------------------------                 
                                                                
1.       (a)     Aggregate amount of dividends paid or          
                 payable subsequent to December 31, 1992        
                 pursuant to Section 7.3(i)                     $__________
                                                                
         (b)     Aggregate amount applied to purchase,          
                 redemption or retirement of stock since        
                 December 31, 1992 pursuant to                  
                 Section 7.3(ii)                                $___________
                                                                
         (c)     Aggregate Amount of Restricted                 
                 Investments on the last day of the             
                 fiscal quarter                                 $___________
                                                                
         (d)     Total of (a), (b) and (c)                      $___________
                                                                
         (e)     Maximum aggregate amount of Restricted         
                 Investments and distributions permitted        
                 pursuant to Section 7.3 ($20,000,000           
                 plus 50% of positive cumulative                
                 ----                                           
                 Consolidated Net Income or minus 50% of        
                                            -----               
                 negative cumulative Consolidated Net           
                 Income plus the net cash proceeds              
                        ----                                    
                 received by the Company from the sale of       
</TABLE>                                                        





LWLA3\22509.1                              2
<PAGE>   82
<TABLE>
<S>     <C>                                                   <C>
                 its common stock after the Closing Date,     
                 other than for common stock sold to a        
                 Subsidiary)                                  $__________
                                                              
7.4      Contingent Obligations                               
         ----------------------                               
                                                              
1.       (a)     Aggregate amount of Contingent               
                 Obligations of the Company outstanding       
                 on the last day of the fiscal quarter        
                 pursuant to Section 7.4                      $__________
                                                              
         (b)     Maximum aggregate amount of Contingent       
                 Obligations permitted pursuant to            
                 Section 7.4                                  $40,000,000
                                                              
7.5      Financial Covenants                                  
         -------------------                                  
                                                              
1.       Minimum Consolidated Tangible Net Worth              
         ---------------------------------------              
                                                              
         (a)     Consolidated Tangible Assets on the last     
                 day of the fiscal quarter                    $__________
                                                              
         (b)     Consolidated Total Liabilities on the        
                 last day of the fiscal quarter               $__________
                                                              
         (c)     Cumulative Consolidated Tangible Net         
                 Worth on the last day of the fiscal          
                 quarter (item 1(a) minus item 1(b))          $__________
                                    -----                                
                                                              
         (d)     Cumulative Consolidated Net Income for       
                 each fiscal year ending on December 31,      
                 1993 and thereafter (without reduction       
                 for any negative Consolidated Net Income     
                 in any fiscal year)                          $__________
                                                              
         (e)     Minimum Consolidated Tangible Net Worth      
                 ($250,000,000 plus an amount equal to        
                               ----                           
                 50% of item 1(d))                            $__________
                                                              
2.       Minimum Consolidated Fixed Charge Coverage           
         ------------------------------------------           
         Ratio                                                
         -----                                                
                                                              
         (a)     Consolidated EBIT for the current and 3      
                 preceding fiscal quarters                    $__________
                                                              
         (b)     Consolidated Rent Payments for the           
                 current and 3 preceding fiscal quarters      $__________
                                                              
         (c)     Aggregate amount of all interest and         
                 finance charges on Consolidated Off          
                 Balance Sheet Obligations for the            
                 current and 3 preceding fiscal quarters      $__________
</TABLE>                                                      





LWLA3\22509.1                            3
<PAGE>   83
<TABLE>
<S>      <C>                                                   <C>
         (d)     Consolidated Income Available For             
                 Consolidated Fixed Charges for the            
                 current and 3 preceding fiscal quarters       
                 (item 2(a) plus item 2(b) plus                
                            ----           ----                
                 item 2(c))                                    $__________
                                                               
         (e)     Consolidated Interest Expense for the         
                 current and 3 preceding fiscal quarters       $__________
                                                               
         (f)     Consolidated Fixed Charges for the            
                 current and 3 preceding fiscal quarters       
                 (item 2(e) plus item 2(b))                    $__________
                            ----                                          
                                                               
         (g)     Consolidated Fixed Charge Coverage Ratio      
                 for the current and 3 preceding fiscal        
                 quarters (item 2(d) divided by                
                                     ------- --                
                 item 2(f))                                    ____ to 1.00
                                                               
         (h)     Minimum Fixed Charge Coverage Ratio           
                 required pursuant to Section 7.5B             ____ to 1.00
                                                               
7.7      Asset Sales                                           
         -----------                                           
                                                               
1.       (a)     Aggregate Book Value of Assets Sold in        
                 the current and preceding eleven              
                 calendar months                               $__________
                                                               
         (b)     Aggregate Book Value of Assets Sold from      
                 sales in the current and preceding            
                 eleven calendar months of Net Assets          
                 Held for Sale listed on Schedule 5 on         
                 the Closing Date                              $__________
                                                               
         (c)     Aggregate amount of Asset Sales pursuant      
                 to Section 7.7(ii) (item 1(a) minus           
                                               -----           
                 item 1(b))                                    $__________
                                                               
         (d)     Consolidated Tangible Net Worth as of         
                 the last day of the immediately               
                 preceding fiscal year                         $__________
                                                               
         (e)     Maximum aggregate amount of Asset Sales       
                 permitted pursuant to Section 7.7(ii)         
                 (15% multiplied by item 1(d))                 $__________
                      ---------- --                                       
                                                               
         (f)     Book Value of Assets Sold since the           
                 Closing Date                                  $__________
                                                               
         (g)     Maximum aggregate Book Value of Assets        
                 Sold since the Closing Date (40% of           
                 Consolidated Tangible Net Worth as of         
                 the last day of the immediately               
                 preceding fiscal year)                        $__________
</TABLE>                                                       





LWLA3\22509.1                           4
<PAGE>   84
                                                                       EXHIBIT C

                   FORM OF COMPANY COUNSEL'S CLOSING OPINION

                                                                   July 23, 1993

To the Persons Listed on
Annex 1 hereto

                 Re:      CalMat Co. (the "Company") Issuance of 6.70%
                          Senior Unsecured Notes Due July 23, 2000    
                          --------------------------------------------
Ladies and Gentlemen:

                 Reference is made to the Note Purchase Agreement, dated as of
July 23, 1993 (the "Note Purchase Agreement"), among the Company, and each of
the purchasers listed on Annex 1 attached thereto (the "Purchasers"), which
provide, inter alia, for the issuance and sale by the Company of its 6.70%
Senior Unsecured Notes due July 23, 2000, in the aggregate principal amount of
Thirty-Five Million Dollars ($35,000,000).  The capitalized terms used herein
and not defined have the meanings specified in the Note Purchase Agreement.

                 I am General Counsel to the Company and have acted in such
capacity in connection with the transactions contemplated by the Note Purchase
Agreement.  This opinion is delivered to you pursuant to Section 2.2 of the
Note Purchase Agreement.  In acting as such counsel, I have examined:

                          (a)     the Note Purchase Agreement;

                          (b)     the Company's 6.70% Senior Unsecured Notes
         due July 23, 2000, dated the date hereof, in the form, principal
         amount, and with the registration numbers set forth on Annex 1 to the
         Note Purchase Agreement (the "Notes");

                          (c)     the documents executed and delivered by the
         Company in connection with the transactions contemplated by the Note
         Purchase Agreement;

                          (d)     the bylaws and records of proceedings of the
         Board of Directors of the Company, and a certified copy of the
         Certificate of Incorporation of the Company, as in effect on the date
         hereof;

                          (e)     a long-form good standing certificate from
         the Secretary of State of Delaware, good standing certificates from
         the states of incorporation of each of its Subsidiaries, and foreign
         good standing certificates for each of such corporations from each of
         the states set forth on Annex 2 hereto; and





LWLA3\22509.1                             
<PAGE>   85
                          (f)     originals, or copies certified or otherwise
         identified to my satisfaction, of such other documents, records,
         instruments and certificates of public officials as I have deemed
         necessary or appropriate to enable me to render this opinion.

In rendering this opinion, I have relied, to the extent I deem necessary and
proper, on warranties and representations as to factual matters not requiring
legal conclusions contained in the Note Purchase Agreement.

                 This opinion is based upon the laws of the State of
California, the Delaware General Corporation Law and federal law.

                 Based on the foregoing, I am of the following opinions:

                 1.       Each of the Company and the Subsidiaries is a
corporation duly incorporated, validly existing and in good standing under the
laws of its state of incorporation and has all requisite corporate power and
authority to carry on its business and own its property.

                 2.       Each of the Company and the Subsidiaries is duly
qualified and is in good standing as a foreign corporation in each jurisdiction
where the character of its properties or the nature of its activities makes
such qualification necessary, except where the failure to so qualify and be in
good standing would not have a material adverse effect on the ability of the
Company to perform its obligations under the Note Purchase Agreement and the
Notes.

                 3.       I am aware of no judgment, order, writ, injunction,
decree, award, action, suit, proceeding, inquiry or investigation, at law or in
equity, before any court or governmental authority, arbitration board or
tribunal, pending or threatened against the Company or any Subsidiary, except
for any such judgment, order, writ, injunction, decree, award, action, suit,
proceeding, inquiry or investigation that would not have a material adverse
effect on the ability of the Company to perform its obligations under the Note
Purchase Agreement and the Notes.

                 4.       The Company has the requisite corporate power and
authority to execute and deliver the Note Purchase Agreement, to issue and sell
the Notes, and to perform its obligations set forth in each of the Note
Purchase Agreement and the Notes.

                 5.       Each of the Note Purchase Agreement and the Notes has
been duly authorized by all necessary corporate action on the part of the
Company (no action on the part of the stockholders of the Company being
required in respect thereto), has been executed and delivered by duly
authorized officers of the Company, and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.





LWLA3\22509.1                            2
<PAGE>   86
                 6.       The execution and delivery of the Note Purchase
Agreement and the Notes by the Company, and the performance by the Company of
its obligations thereunder, and the issue and sale of the Notes by the Company,
will not conflict with, constitute a violation of, result in a breach of any
provision of, constitute a default under, or result in the creation or
imposition of any Lien or encumbrances upon any of the property of the Company
or any Subsidiary, respectively, pursuant to the certificate of incorporation
or bylaws of the Company or any Subsidiary, any applicable law, statute, rule
or regulation to which the Company or any Subsidiary is subject, or any
agreement or instrument to which the Company or any Subsidiary is a party or by
which its respective properties may be bound.

                 7.       All consents, approvals and authorizations of, and
all designations, declarations, filings, registrations, qualifications and
recordations with, governmental authorities required on the party of the
Company and the Subsidiaries have been obtained in connection with the
execution and delivery of each of the Note Purchase Agreement and the Notes and
the issue and sale of the Notes and the use of the proceeds thereof.

                 8.       Under existing law, the offering, issuance, sale and
delivery of the Notes under the circumstances contemplated by the Note Purchase
Agreement and the Notes are exempted transactions under the Securities Act of
1933, as amended, and neither the registration of the Notes under said
Securities Act, the registration of the Notes under the "Blue Sky" laws of the
State of California, nor the qualification of an indenture with respect thereto
under the Trust Indenture Act of 1939, as amended, is required in connection
with such transactions.

                 9.       Neither the issuance of the Notes nor the intended
use of the proceeds of the Notes (as set forth in Section 4.16 of the Note
Purchase Agreement) will violate Regulations G, T or X of the Federal Reserve
Board.

                 10.      The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.

                 11.      Each of the Company and the Subsidiaries is the owner
of record of all of the shares it purports to own of the capital stock of each
of its Subsidiaries, free and clear in each case of any perfected security
interest, and any other Lien.  All such shares have been duly issued and are
fully paid and nonassessable.

                 My opinion herein as to the enforceability of documents and
instruments referred to herein are subject to:

                 (a)      applicable bankruptcy, reorganization, arrangement,
insolvency, moratorium or similar laws affecting the enforcement of creditors'
rights generally,





LWLA3\22509.1                             3
<PAGE>   87
                 (b)      general principles of equity, including (without
limitation) concepts of materiality, reasonableness, good faith and fair
dealing and the discretion of a court in granting equitable remedies
(regardless of whether enforceability is considered in a proceeding at law or
in equity), and

                 (c)      the unenforceability under certain circumstances of
any provisions which impose penalties or forfeiture.

                 In rendering my opinions above, I have assumed the accuracy
of, and have relied upon, the representations contained in Section 5.1 of the
Note Purchase Agreement and have further assumed that each of the Purchasers is
knowledgeable, sophisticated and experienced in business and financial matters,
has previously invested in securities similar to the Notes in transactions not
registered under the Securities Act, is able to bear the economic risk of its
investment in the Notes and is a "qualified institutional buyer," as defined in
Rule 144A under the Securities Act, and/or an "accredited investor," as defined
in Regulation D under the Securities Act.

                 I am admitted to the Bar of the State of California.  In
addition, I am generally familiar with the General Corporation Law as in effect
in the State of Delaware and have made such investigation thereof as I deemed
necessary for the purpose of rendering the opinions expressed herein.  This
opinion is limited to the present laws of the aforementioned jurisdictions and
the United States of America, to present judicial interpretations thereof and
to the facts as they exist at the date hereof.  I assume no obligation to
revise or supplement this opinion should the present laws of such jurisdictions
be changed by legislative action, judicial decision or otherwise.  This opinion
is rendered as of the date hereof, and I express no opinion as to, and disclaim
any undertaking or obligation to update this opinion in respect of, changes or
circumstances or events which occur subsequent to this date.

                 This opinion is rendered solely for your benefit in connection
with the execution and delivery of the Note Purchase Agreement and the Notes
and may not be relied upon by any other person or by you in any other context
or for any other purpose without my prior written consent.  At your request, I
hereby consent to reliance hereon by any future participants or transferees of
all or any part of your interest in the Note Purchase Agreement or the Notes;
provided that you have notified such participant or transferee that this
opinion speaks only as of the date hereof and that I have no responsibility or
obligation to update this opinion, to consider its applicability or correctness
to other than its addressee, or to take into account changes in law, facts or
any other development of which I may later become aware.

                                       Very truly yours,





LWLA3\22509.1                            4
<PAGE>   88
                                                                       EXHIBIT D

                                                                   July 23, 1993

CalMat Co.
3200 San Fernando Road
Los Angeles, CA 90065

Attention:  Chief Financial Officer

Ladies and Gentlemen:

                 In connection with the sale to us today of $35,000,000
aggregate principal amount of your 6.70% Senior Unsecured Notes due July 23,
2000 (the "Notes") issued pursuant to the Note Purchase Agreement among CalMat
Co., Metropolitan Life Insurance Company, Metropolitan Insurance and Annuity
Company, Metropolitan Property and Casualty Insurance Company and Texas Life
Insurance Company, dated as of July 23, 1993, (the "Note Agreement"), we hereby
advise you pursuant to Section 2.10 of the Note Agreement that $7,000,000
aggregate principal amount of the Notes to be purchased by us are being
acquired for two separate accounts (as defined in ERISA (as defined in the Note
Agreement)) maintained by us.  These separate accounts are identified on
Schedule A hereto.  Also set forth on Schedule A hereto are the employee
benefit plans (as defined in ERISA) whose assets in such separate accounts
constitute more than 10% of the total assets of such separate accounts on the
date hereof.

                 Please verify and confirm to us by your signature at the foot
hereof that neither you nor any corporation, trade or business that is, along
with you, a member of a controlled group of corporations or a controlled group
of trades or businesses, as defined in sections 414(b) and 414(c),
respectively, of the Internal Revenue Code of 1986, as amended (an "ERISA
Affiliate") is a party in interest (as defined in ERISA) with respect to such
employee benefit plans.

                                       Very truly yours,

                                       METROPOLITAN LIFE INSURANCE COMPANY

                                       By ________________________________

CALMAT CO.  hereby verifies and confirms to
Metropolitan Life Insurance Company that
neither CALMAT CO. nor any Erisa Affiliate
(as above defined) is a party in interest
(as above defined) with respect to the
employee benefit plans (as above defined)
set forth on Schedule A hereto.

CALMAT CO.

By _____________________________________





LWLA3\22509.1                           1
<PAGE>   89
                            SCHEDULE A TO EXHIBIT D


<TABLE>
<CAPTION>
                                     
 Metropolitan                        Employee Benefit Plan Having              Amount of Notes
 Separate Account                    Greater Than 10% Interest                 Purchased by
 Acquiring Notes                     in the Separate Account                   Separate Account
 ----------------                    ----------------------------              ----------------
 <S>                                 <C>                                       <C>
 Separate Acct.                      American Home Products                    $2,000,000
 No. 50
 Separate Acct.                      General Dynamics                          $5,000,000
 No. 137                             Retirement Plan
</TABLE>





LWLA3\22509.1                          1
<PAGE>   90
                                   EXHIBIT E
                           CalMat Co. -- Consolidated
                  LEGALITY UNDER DELAWARE STATE INSURANCE LAW
                               Bond of Note Issue
                             (Amounts in Thousands)



<TABLE>
<CAPTION>
                                                                    Fiscal Year Ending
                                                                    ------------------
<S>                                                                 <C>
Net Income Available for Dividends
Add:
         Federal & State Income Taxes
         Extraordinary Non-Recurring Expenses                        _______________
                                  Total:

Deduct:
         Extraordinary Non-Recurring Income                          _______________
A.  Balance
Add:
         B.  Interest on Funded & Unfunded Debt
             (1).  Consolidated Interest Expense
             (2).  Interest Expense on Net Assets Held For Sale
         C.  Amortization of Debt Discount
         D.  Preferred Dividends of Subsidiaries Payable to Others
         E.  Gross Rentals for Leased Land, Bldgs & Equip.
         F.  Gross Rentals for all Leased Machinery & Equip.         _______________

         G.  TOTAL FIXED CHARGES (B TO F)                            _______________

H.  Total Net Earnings Available for Fixed Charges (A plus G)        _______________
I.  Times Earned (H divided by G)                                    _______________
</TABLE>

** Lease and Rental Expense not tracked separately prior to 1991 -- not 
   material.



Prepared by               Frederick T. Sauer
Title                     Vice President & Treasurer - CalMat Co.
Date                      July 15, 1993





LWLA3\22509.1                          1
<PAGE>   91
                                   EXHIBIT F

                               FORM OF CALMAT CO.
                             OFFICER'S CERTIFICATE
                       RELATING TO CONTINGENT OBLIGATIONS



                 Reference is made to that certain Note Purchase Agreement
dated as of July 23, 1993 (the "Note Purchase Agreement") among Metropolitan
Life Insurance Company, certain of its affiliates and CalMat Co. (the
"Company"). Capitalized terms used herein without definition have the meanings
assigned thereto in the Note Purchase Agreement. This Officer's Certificate is
delivered pursuant to Section 2.6(vii) of the Note Purchase Agreement.

         The undersigned hereby certifies as follows:

                 1.       The Company guaranteed certain obligations of
California Portland Cement Company ("CPC") under a certain sale-leaseback
arrangement by and between Mercantile Safe Deposit and Trust Company, as
Owner-Trustee, Trust Company Bank, as Owner-Participant, CPC, as Lessee, and
four insurance companies, as Lenders, dated as of June 1, 1985, relating to the
Colton cogeneration facility.  The Company guaranteed annual lease payments on
the facility of approximately $5,300,000 until January, 2000.  As of the date
hereof, the aggregate contingent obligation of the Company with respect thereto
is approximately $37,100,000.

                 2.       The Company guaranteed the obligations of Allied
Cement Company ("ACC") pursuant to that certain Guaranty dated December 10,
1987 in favor of Wilmington Liquid Bulk Terminals, Inc.  The Company guaranteed
annual lease payments of approximately $870,000 until December, 2005.  As of
the date hereof, the aggregate contingent obligation of the Company with
respect thereto is approximately $10,400,000.

                 3.       Such guarantees were entered into by the Company
prior to the transfer of CPC and ACC by the Company.

                 4.       Pursuant to an agreement dated July 19, 1988 (the
"Indemnity") among the Company, CPC and Onoda U.S.A., Inc. ("Onoda") by which
the Company transferred its cement division and other related assets to Onoda,
Onoda indemnified the Company in full with respect to the Company's guarantees
of the obligations of CPC and ACC described in paragraphs 1 and 2 above.





                                      F-1





LWLA3\22509.1                          
<PAGE>   92
                 5.       The Indemnity is in full force and effect as of the
date hereof, there are no pending disputes between the parties thereto and
Onoda has not challenged the validly, binding effect or enforceability of the
Indemnity.


                 IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day
of July, 1993.


                                       ______________________________
                                       Frederick T. Sauer
                                       Vice President & Treasurer


                                      F-2

