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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM 10-Q

(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 2002

or

[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period ______ to ______

Commission File Number 333-32518

Better Minerals & Aggregates Company
(Exact Name of Registrant As Specified in its Charter)

Delaware 55-0749125
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)

Route 522 North, P.O. Box 187
Berkeley Springs, West Virginia 25411
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code (304) 258-2500

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:

Class Outstanding as of November 1, 2002
----- ----------------------------------

Common Stock 100 shares





Better Minerals & Aggregates Company
Form 10-Q Index


Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2002
(unaudited) and December 31, 2001......................... 1
Condensed Consolidated Statements of Operations for the quarter
and nine months ended September 30, 2002 and September 30, 2001 (unaudited).. 3
Condensed Consolidated Statements of Stockholder's Equity for the quarter
and nine months ended September 30, 2002 and September 30, 2001 (unaudited).. 4
Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 2002 and September 30, 2001 (unaudited)........................ 5
Notes to Condensed Consolidated Financial Statements......................... 6

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 11

Item 3. Quantitative and Qualitative Disclosures About Market Risk... 19

Item 4. Controls and Procedures...................................... 19

PART II. OTHER INFORMATION

Item 1. Legal Proceedings............................................ 20

Item 3. Defaults Upon Senior Securities.............................. 20

Item 5. Other Events................................................. 20


Signatures

Certifications

Exhibits









PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)




September 30, December 31,
2002 2001
(Unaudited)


Assets

Current:
Cash and cash equivalents $ 646 $ 2,493
Accounts receivable:
Trade, less allowance for doubtful accounts of $1,610 and $1,824 56,870 45,241
Other 3,413 2,338
Inventories 30,370 30,780
Prepaid expenses and other current assets 4,657 2,979
Deferred income taxes 4,276 4,276
Income tax deposits
935 --
------- -------
Total current assets 101,167 88,107

Property, plant and equipment:
Mining property 264,740
264,611
Mine development 11,381
11,350
Land 27,059 26,691
Land improvements 5,822
6,018
Buildings 36,781 36,878
Machinery and equipment 175,528 169,122
Furniture and fixtures 1,923 1,923
Construction-in-progress
11,047 6,871
------- -------
534,446 523,299
Accumulated depletion, depreciation and amortization (143,866) (121,944)
------- -------
Property, plant and equipment, net 390,580 401,355

Other noncurrent:
Goodwill and non compete agreements, net 46 14,857
Debt issuance costs 9,233 10,566
Other noncurrent assets 2,486 759
------- -------
Total other noncurrent 11,765 26,182
------- -------
Total assets $ 503,512 $ 515,644
======= =======





1




BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)




September 30, December 31,
2002 2001
(Unaudited)
Liabilities

Current:
Book overdraft $ 2,812 $ 7,142
Accounts payable 16,742 13,012
Accrued liabilities 15,257 11,872
Due to parent
2,347 2,405
Accrued interest 2,431 7,391
Current portion of capital leases 1,019 813
Current portion of long-term debt 10,841 10,745
Income taxes -- 439
------- -------
Total current liabilities 51,449 53,819

Noncurrent liabilities:
Deferred income taxes 79,869 92,720
Obligations under capital leases 2,666 2,583
Long-term debt, net of current portion 291,380 277,341
Other noncurrent liabilities 42,411 40,355
------- -------
Total noncurrent liabilities 416,326 412,999

Commitments and contingencies (see notes 7 and 9)

Stockholder's Equity

Common stock, par value $.01, authorized 5,000 shares, issued 100 shares -- --
Additional paid-in capital 81,377 81,377
Loan to related party (1,402) (1,434)
Retained deficit (43,063) (30,604)
Accumulated other comprehensive (loss) (1,175) (513)
Total stockholder's equity 35,737 48,826
------- -------
Total liabilities and stockholder's equity $ 503,512 $ 515,644
======= =======




The accompanying notes are an integral part of these statements.





2




BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands)
(Unaudited)


For the Quarter Ended For the Nine Months Ended
September 30, September 30,
------------- -------------
2002 2001 2002 2001
---- ---- ---- ----


Net sales $ 89,720 $ 90,957 $ 230,111 $ 234,683
Cost of goods sold 66,669 64,794 176,610 176,267
Depreciation, depletion and amortization 8,107 8,358 22,491 24,713
Selling, general & administrative 6,104 5,755 18,212 16,850
------- ------- ------- -------
Operating income 8,840 12,050 12,798 16,853
Interest expense 7,923 8,628 24,171 27,544
Other income, net of interest income (40) (215) (970) (809)
------- ------- ------- -------
Income (loss) before income taxes 957 3,637 (10,403) (9,882)
Benefit for income taxes (1,495) (1,394) (6,565) (8,085)
------- ------- ------- -------
Net income (loss) before cumulative effect of
change in accounting for goodwill $ 2,452 $ 5,031 $ (3,838) $ (1,797)
------- ------- ------- -------
Cumulative effect of change in accounting for goodwill,
less applicable income taxes of $6,117 -- -- 8,621 --
------- ------- ------- -------
Net income (loss) $ 2,452 $ 5,031 $ (12,459) $ (1,797)
======= ======= ======= =======

The accompanying notes are an integral part of these statements.






3




BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(Dollars in Thousands)
(Unaudited)



Accumulated Other
Comprehensive Loss
Additional Loans to Unrealized Minimum Total
Common Paid-In Retained Related Loss on Pension Stockholder's
Stock Capital Deficit Party Derivatives Liability Total Equity
------ ------- ------- ----- ----------- --------- ----- ------

Balance December 31, 2000 $ $81,377 $ (26,560) $(1,507) $ $ (94) $ (94) $ 53,216

Comprehensive income, net of income taxes:
Net loss (1,797) (1,797)
Unrealized holding loss on derivatives (565) (565) (565)
-------
Total comprehensive loss (2,362)
Loans to related party 229 229
------- ------- ------- ------ ------ ----- ------- -------
Balance September 30, 2001 $ -- $81,377 $(28,357) $(1,278) $ (565) $ (94) $ (659) $ 51,083
======= ======= ======= ====== ====== ===== ======= =======


Balance December 31, 2001 $ $81,377 $(30,604) $(1,434) $ (499) $ (14) $ (513) $ 48,826


Comprehensive income, net of income taxes:
Net loss (12,459) (12,459)
Unrealized holding loss on derivatives (662) (662) (662)
Total comprehensive loss (13,121)
Loans to related party 32 32
------- ------- ------- ------ ------ ----- ------- -------
Balance September 30, 2002 $ -- $81,377 $(43,063) $(1,402) $(1,161) $ (14) $ (1,175) $ 35,737
======= ======= ======= ====== ====== ===== ======= =======


The accompanying notes are an integral part of these statements.





4




BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)


For the Nine Months Ended
September 30,
2002 2001
---- ----

Cash flows from operating activities:
Net loss $(12,459) $ (1,797)
Adjustments to reconcile net (loss) to cash flows from operations:
Depreciation, depletion and amortization 22,223 23,654
Debt issuance amortization 1,333 1,937
Cumulative effect of change in accounting for goodwill 14,738 --
Deferred income taxes (12,851) (8,908)
Disposal of property, plant and equipment gain (94) (150)
Other 1,003 1,758
Changes in assets and liabilities, net of the effects from disposed company:
Trade receivables (11,629) (16,895)
Non-trade receivables (1,075) (1,348)
Receivable from/payable to parent (58) 49
Inventories 410 844
Prepaid expenses and other current assets (1,678) (296)
Accounts payable and accrued liabilities 7,115 2,111
Accrued interest (4,960) (5,759)
Income taxes (1,374) 2,155
------ ------
Net cash provided by (used for) operating activities 644 (2,645)

Cash flows from investing activities:
Capital expenditures (12,048) (10,911)
Proceeds from sale of property, plant and equipment 386 589
Loans to related party 32 229
------ ------
Net cash used for investing activities (11,630) (10,093)

Cash flows from financing activities:
Increase (decrease) in book overdraft (4,330) 3,092
Repayment of long-term debt (7,815) (6,352)
Net revolver credit agreement facility 21,950 16,350
Principal payments on capital lease obligations (666) (218)
------ ------
Net cash provided by financing activities 9,139 12,872

Net decrease in cash and cash equivalents (1,847) 134

Cash and cash equivalents, beginning of period 2,493 860
------ ------
Cash and cash equivalents, ending of period $ 646 $ 994
====== ======
Schedule of noncash financing activities:
Assets acquired by entering into capital lease obligations $ 955 $ 3,136

The accompanying notes are an integral part of these statements.




5




BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Accounting Policies

The unaudited interim condensed consolidated financial statements of Better
Minerals & Aggregates Company (the "Company") have been prepared in accordance
with the rules and regulations of the Securities and Exchange Commission. As a
result, certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. In the opinion of management, the
statements reflect all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the results of the reported interim
periods. The statements should be read in conjunction with the summary
accounting policies and notes to the audited financial statements of the Company
included in the Company's 2001 Annual Report on Form 10-K for the year ended
December 31, 2001 (the "Form 10-K").

Operating results are not necessarily indicative of the results to be expected
for the full year or any other interim period, due to the seasonal,
weather-related conditions in certain aspects of the Company's business.

2. Inventories

At September 30, 2002 and December 31, 2001, inventory consisted of the
following:

September 30, December 31,
(In thousands) 2002 2001
---- ----
Supplies (net of $178 and $266 obsolescence reserve) $12,144 $ 11,783
Raw materials and work in process 5,042 4,707
Finished goods 13,184 14,290
------ ------
$30,370 $ 30,780
====== ======
3. Acquisitions

On March 14, 2002, Better Materials Corporation, a wholly-owned subsidiary of
the Company, entered into a Lease and Option Agreement with A&R Limited
Partnership for a three-year period. Under this agreement, Better Materials
Corporation obtained all rights, title and interest under property owned by A&R
Limited Partnership to an aggregates operation in Latrobe, Pennsylvania. The
agreement requires Better Materials to pay a monthly amount for equipment rental
and royalties plus a one-time option payment made at the time of closing.
Furthermore, the agreement grants Better Materials the right to purchase all of
the assets of the operation at any time during the three-year period for a
predetermined price less the option payment. The Company expenses all lease
payments related to the operation of the facility. The option payment is
recorded as an other noncurrent asset on the balance sheet. As of September 30,
2002 the amount included in other noncurrent assets for this option payment
totaled $1 million. If the Company decides not to exercise its option by the end
of the three-year period, this amount will be expensed at that time.



6





4. Segment Information

The Company operates in the industrial minerals and aggregates business segments
which are more fully described in the Form 10-K. On October 1, 2002, as part of
a change in management reporting responsibilities, certain New Jersey operating
assets of the Company's aggregates business unit were transferred to the
Company's industrial minerals business unit. The following reportable segment
information does not reflect this change. Reportable segment information for the
three and nine months ended September 30, 2002 and 2001 was as follows:


Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands) 2002 2001 2002 2001
---- ---- ---- ----

Net sales:
Aggregates $ 46,532 $ 46,700 $ 104,033 $ 103,328
Industrial Minerals 47,388 48,580 138,529 145,077
Eliminations (4,200) (4,323) (12,451) (13,722)
------ ------ ------- -------
Total net sales $ 89,720 $ 90,957 $ 230,111 $ 234,683
Operating company income (loss):
Aggregates $ 2,831 $ 5,760 $ (2,388) $ 2,425
Industrial Minerals 6,146 6,530 15,639 15,370
------ ------ ------- -------
Total operating company
income $ 8,977 $ 12,290 $ 13,251 $ 17,795
General corporate expense (137) (240) (453) (942)
------ ------ ------- -------
Total operating income $ 8,840 $ 12,050 $ 12,798 $ 16,853
====== ====== ======= =======
Depreciation, depletion
and amortization expense:
Aggregates $ 4,648 $ 4,848 $ 12,088 $ 13,687
Industrial Minerals 3,416 3,468 10,273 10,952
Corporate 43 42 130 74
------ ------ ------- -------
Total depreciation, depletion, and
amortization expense $ 8,107 $ 8,358 $ 22,491 $ 24,713
====== ====== ======= =======
Capital expenditures:
Aggregates $ 4,254 $ 1,678 $ 9,131 $ 7,492
Industrial Minerals 800 797 2,917 3,417
Corporate 2 2
------ ------ ------- -------
Total capital expenditures $ 5,054 $ 2,477 $ 12,048 $ 10,911
====== ====== ======= =======


Asset segment information at September 30, 2002 and December 31, 2001 was as
follows:

September 30, December 31,
(In thousands) 2002 2001
---- ----
Assets:
Aggregates $346,011 $352,424
Industrial Minerals 186,468 173,396
Corporate 14,916 21,823
Intersegment Eliminations (43,883) (31,999)
------- -------
Total assets $503,512 $515,644
======= =======



7




5. Goodwill and Intangible Assets

Effective January 1, 2002 the Company adopted Statement of Financial Accounting
Standards No. 142 (FAS 142), Goodwill and Other Intangible Assets. FAS 142
eliminates goodwill amortization and requires an evaluation of potential
goodwill impairment upon adoption, as well as subsequent annual valuations, or
more frequently if circumstances indicate a possible impairment. Adoption of FAS
142 eliminated annual goodwill amortization expense of approximately $1.2
million.

The Company completed its assessment of goodwill during its second quarter,
which resulted in goodwill impairment of $8,621,000, net of income taxes of
$6,117,000, and represents the elimination of the entire amount of goodwill
previously reported on the balance sheet. In accordance with FAS 142, this
amount has been recorded as a cumulative effect of accounting change as of the
beginning of the current fiscal year. The Company has performed its assessment
of goodwill and other intangible assets by comparing the fair value of the
aggregates segment, which has been determined to be the only reporting unit that
had goodwill, to its net book value in accordance with the provisions of FAS
142. The goodwill was the result of the acquisitions of the Morie Assets and
Commercial Stone completed in 1999. The Company has estimated the fair value of
the reporting unit based upon a combination of several valuation methods
including residual income, replacement cost and market approaches, giving
appropriate weighting to such methods in arriving at an estimate of fair value.
The Company's equity is not subject to market quotations.

The following tables reflect the gross carrying value and accumulated
amortization of the Company's goodwill and amortizable intangible assets (in
thousands) for the periods presented.

September 30, 2002 September 30, 2002
Gross Carrying Value Accumulated Amortization
Non-compete agreements 442 396
----- -----
Total $ 442 $ 396
===== =====

December 31, 2001 December 31, 2001
Gross Carrying Value Accumulated Amortization
Goodwill $17,321 $2,583
Non-compete agreements 442 323
------- ------
Total $17,763 $2,906
======= ======

For the three months For the nine months
ended September 30, ended September 30,
------------------- -------------------
2002 2001 2002 2001
---- ---- ---- ----
Reported net income (loss)
before cumulative effect of change
in accounting for goodwill $2,452 $5,031 $(3,838) $(1,797)
Add back: Goodwill Amortization -- 169 -- 507
------ ------ ------- -------
Adjusted net income (loss) $2,452 $5,200 $(3,838) $(1,290)
====== ====== ======= =======

6. Impact of Recent Accounting Standards

Statement of Financial Accounting Standards No. 143 (FAS 143), Accounting for
Asset Retirement Obligations, was issued in June 2001. FAS 143 establishes
accounting and reporting standards for obligations associated with the
retirement of tangible long-lived assets. FAS 143 is effective for the Company
beginning January 1, 2003 and the Company is evaluating the impact of adopting
this Standard.

Statement of Financial Accounting Standards No. 144 (FAS 144), Accounting for
the Impairment or Disposal of Long-Lived Assets, was issued in August 2001. FAS
144 establishes accounting and reporting standards for impairment of long-lived
assets to be disposed of. FAS 144 is effective for fiscal years beginning after


8


December 15, 2001, and, accordingly, the Company adopted the standard effective
January 1, 2002. The adoption of FAS 144 did not have a material impact on the
consolidated financial statements.

7. Contingencies

The Company's subsidiary, U.S. Silica Company, has been named as a defendant in
an estimated 1,705 product liability claims alleging silica exposure in the
period January 1, 2002 to September 30, 2002. U.S. Silica was named as a
defendant in 1,021 similar claims filed in the period of January 1, 2001 to
September 30, 2001. U.S. Silica was also named as defendant in 154 similar
claims filed in calendar year 1998, 497 filed in 1999, 610 filed in 2000 and
1,320 filed in 2001. U.S. Silica has been named as a defendant in similar suits
since 1975; in each of the years 1983, 1987, 1995, 1996, 1998, 1999, 2000 and
2001 more than 100 claims were filed against U.S. Silica. The plaintiffs, who
allege that they are employees or former employees of U.S. Silica's customers,
claim that its silica products were defective or that it acted negligently in
selling its silica products without a warning, or with an inadequate warning.
The plaintiffs further claim that these alleged defects or negligent actions
caused them to suffer injuries and sustain damages as a result of exposure to
its products. In almost all cases, the injuries alleged by the plaintiffs are
silicosis or "mixed dust disease," a claim that allows the plaintiffs to pursue
litigation against the sellers of both crystalline silica and other minerals.
There are no pending claims of this nature against any of the Company's other
subsidiaries.

As of September 30, 2002, there were estimated 3,674 silica-related products
liability claims pending in which U.S. Silica is a defendant. Almost all of the
claims pending against U.S. Silica arise out of the alleged use of U.S. Silica
products in foundries or as an abrasive blast media and have been filed in the
states of Texas and Mississippi.

ITT Industries, Inc., successor to a former owner of U.S. Silica, has agreed to
indemnify U.S. Silica for third party silicosis claims (including litigation
expenses) filed against it prior to September 12, 2005 alleging exposure to U.S.
Silica products for the period prior to September 12, 1985, to the extent of the
alleged exposure prior to that date. This indemnity is subject to an annual
deductible of $275,000, which is cumulative and subject to carry-forward
adjustments. The Company fully accrued this deductible on a present value basis
when it acquired U.S. Silica. As of September 30, 2002 and December 31, 2001,
this accrual amounted to $1.9 million and $1.8 million, respectively.
Pennsylvania Glass Sand Corporation, predecessor to U.S. Silica, was a named
insured on insurance policies issued to ITT Industries for the period April 1,
1974 to September 12, 1985 and to U.S. Borax (another former owner) for the
period September 12, 1985 to December 31, 1985. To date, we have not sought
coverage under these policies. Although we cannot provide any assurance,
coverage under these policies may be available to us. Ottawa Silica Company (a
predecessor that merged into U.S. Silica in 1987) had insurance coverage on an
occurrence basis prior to July 1, 1985.

On April 20, 2001, in an action pending in Beaumont, Texas (Donald Tompkins et
al v. American Optical Corporation et al), a jury rendered a verdict against
Ottawa Silica Company and Pennsylvania Glass Sand Corporation, predecessors to
U.S. Silica, in the amount of $7.5 million in actual damages. On June 1, 2001,
the trial judge entered judgment on the verdict against U.S. Silica in the
amount of $5,928,000 in actual damages (the verdict of $7.5 million, less
credits for other settlements), approximately $464,000 in prejudgment interest
and $40,000 in court costs. In addition, punitive damages were settled for
$600,000.

In light of the facts entered into evidence relating to the timing of the
exposure, the Company believes that the entire judgment and settlements of the
Tompkins action are covered by a combination of Ottawa Silica Company's
insurance coverage and the current indemnity agreement of ITT Industries, in
each case, discussed above. After the judgment was entered by the trial judge
and upon the posting of a bond, U.S. Silica filed an immediate appeal to the
appropriate appellate court in Texas. Based on advice of counsel, it is believed
that there were meritorious grounds to file the appeal and that a reversal and
remand of the case is probable.

It is likely that there will continue to be silica-related product liability
claims filed against U.S. Silica, including claims that allege silica exposure
for periods after January 1, 1986. The Company cannot guarantee that our current
indemnity agreement with ITT Industries (which currently expires in 2005 and in


9


any event only covers alleged exposure to U.S. Silica products for the period
prior to September 12, 1985), or potential insurance coverage (which, in any
event, only covers periods prior to January 1, 1986) will be adequate to cover
any amount for which U.S. Silica may be found liable in such suits. Any such
claims or inadequacies of the ITT Industries indemnity or insurance coverage
could have a material adverse effect in future periods on the consolidated
financial position, results of operations or cash flows of the Company, if such
developments occur.

U.S. Silica records amounts for product liability claims based on estimates of
its portion of the cost to be incurred for all pending product liability claims
and estimates based on the present value of an incurred but not reported
liability for unknown claims for exposures that occurred before 1976, when it
began warning its customers and their employees of the health effects of
crystalline silica. Estimated amounts recorded are net of any expected
recoveries from insurance policies or the ITT Industries indemnity. The amounts
recorded for product liability claims are estimates, which are reviewed
periodically by management and legal counsel and adjusted to reflect additional
information when available. The process of estimating and recording amounts for
product liability claims is imprecise and based on a variety of assumptions some
of which, while reasonable at the time, may prove to be inaccurate. As of
September 30, 2002 and December 31, 2001, the Company had recorded as an other
noncurrent liability $6.1 million and $4.6 million, respectively, for product
liability claims.

8. Senior Subordinated Notes Subsidiary Guarantees

Except for the Company's Canadian subsidiary, which is an inactive company with
an immaterial amount of assets and liabilities, each of the Company's
subsidiaries has fully and unconditionally guaranteed the Senior Subordinated
Notes on a joint and several basis. The separate financial statements of the
subsidiary guarantors are not included in this report because (a) the Company is
a holding company with no assets or operations other than its investments in its
subsidiaries, (b) the subsidiary guarantors each are wholly owned by the
Company, comprise all of the direct and indirect subsidiaries of the Company
(other than inconsequential subsidiaries) and have jointly and severally
guaranteed the Company's obligations under the Senior Subordinated Notes on a
full and unconditional basis, (c) the aggregate assets, liabilities, earnings
and equity of the subsidiary guarantors are substantially equivalent to the
assets, liabilities, earnings and equity of the Company on a consolidated basis
and (d) management has determined that separate financial statements and other
disclosures concerning the subsidiary guarantors are not material to investors.

9. Debt Covenants

On November 8, 2002, the lenders under the Senior Secured Credit Facilities
approved an amendment effective September 30, 2002 that waived the default under
the required leverage ratio and interest coverage ratio covenants as of
September 30, 2002. In connection with this amendment, the Company agreed to a
50 basis point increase when the leverage ratio is greater than 5.0. When
combined with two earlier amendments, this results in a 100 basis point increase
in interest rates over the original Credit Agreement for any quarter in which
the leverage ratio is greater than 5.0. As of September 30, 2002 the leverage
ratio was 6.1 compared to the applicable covenant of 5.5. The interest coverage
ratio at September 30, 2002 was 1.68 compared to a 1.70 covenant. The interest
rates at September 30, 2002 ranged from 5.3125% to 7.75% prior to the November
8, 2002 amendment. A one-time amendment fee of approximately $424,000 was paid
to the lenders as part of the amendment.

The Company believes, based on its calendar year 2002 forecast, that it will not
be in compliance with the leverage ratio and interest coverage ratio covenants
as of December 31, 2002. If this occurs, it will be necessary to seek further
amendments to the Senior Secured Credit Facilities covenants at that time,
covering both the period ended December 31, 2002 and calendar year 2003. While
the Company obtained amendments and waivers under this agreement in the past,
there can be no assurance that future amendments or waivers will be granted or
that such amendments or waivers, if granted, would be on terms satisfactory to
the Company. In the event that the Company is not in compliance with its
leverage ratio and interest ratio covenants and it does not receive a waiver and
amendment under the Senior Secured Credit Facilities, it would be in default
under the Senior Secured Credit Facilities and the lenders could declare all of
the funds borrowed thereunder, together with accrued interest, immediately due
and payable. In the event the debt becomes due and payable it is unlikely that
the Company will be able to repay amounts due and it could be required to sell
assets to generate cash or the lenders could foreclose on the pledged stock of


10


the Company's subsidiaries and on the assets in which they have been granted a
security interest. The accompanying financial statements do not reflect any
adjustments which may be required in the event of such actions.

10. Income Taxes

In accordance with generally accepted accounting principles, it is the Company's
practice at the end of each interim reporting period to make its best estimate
of the effective tax rate expected to be applicable for the full fiscal year.
Estimates are revised as additional information becomes available.


Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following information should be read in conjunction with the
accompanying unaudited condensed consolidated financial statements and the notes
thereto included in Item 1 of this Quarterly Report on Form 10-Q, and the
audited consolidated financial statements and the notes thereto and management's
discussion and analysis of financial condition and results of operations
contained in our Annual Report on Form 10-K for the year ended December 31,
2001. Unless otherwise indicated or the context otherwise requires, all
references in this quarterly report to "we," "us," "our" or similar terms refer
to Better Minerals & Aggregates Company and its direct and indirect
subsidiaries.

Overview

We mine, process and market industrial minerals, principally industrial
silica, in the eastern and midwestern United States. We also mine, process and
market aggregates and produce and market hot mixed asphalt in certain parts of
Pennsylvania and New Jersey. We are a holding company that conducts
substantially all our operations through our subsidiaries. Our end use markets
for our silica products include container glass, fiberglass, specialty glass,
flat glass, fillers and extenders, chemicals and ceramics. We also supply our
silica products to the foundry, building materials and other end use markets.
Our customers use our aggregates, which consist of high quality crushed stone,
construction sand and gravel, for road construction and maintenance, other
infrastructure projects and residential and commercial construction and to
produce hot mixed asphalt and concrete products. We also use our aggregates to
produce hot mixed asphalt. We operate a network of 27 production facilities in
14 states. Our industrial minerals business (substantially all the sales of
which consist of silica products) and our aggregates business accounted for 60%
and 40% of our sales, respectively, for the nine months ended September 30,
2002.

Our aggregates business is seasonal, due primarily to the effect of
weather conditions in winter months on construction activity in our Pennsylvania
and New Jersey markets. As a result, peak sales of aggregates occur primarily in
the months of April through November. Accordingly, our results of operations in
any individual quarter may not be indicative of our results of operations for
the full year.

Critical Accounting Policies

In our opinion, we do not have any individual accounting policy that is
critical to the preparation of our financial statements. Also, in many
instances, we must use an accounting policy or method because it is the only
policy or method permitted under accounting principles generally accepted in the
United States. However, certain accounting policies are more important to the
reporting of the Company's financial position and results of operations. These
policies are discussed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Critical Accounting Policies" in our
Annual Report on Form 10-K for the year ended December 31, 2001.

Three Months Ended September 30, 2002 Compared with Three Months Ended September
30, 2001

Sales. Sales decreased $1.3 million, or 1.4%, to $89.7 million in the
three months ended September 30, 2002 from $91.0 million in the three months
ended September 30, 2001.

11


Sales of industrial minerals decreased $1.2 million, or 2.5% to $47.4
million in the three months ended September 30, 2002 from $48.6 million in the
three months ended September 30, 2001. The primary reason behind the decrease in
industrial minerals sales was a $2.2 million decrease in transportation sales as
several customers have changed their terms with us and now pay these charges
directly to the transportation companies. Excluding all transportation sales,
industrial minerals product sales increased $1.0 million, or 2.6%, to $39.9
million in the three months ended September 30, 2002 from $38.9 million in the
three months ended September 30, 2001. The primary reasons behind the increase
in product sales was a 4.7% increase in average selling prices due to improved
product mix on increased sales of calcined kaolin, aplite and our ground and
fine ground silica, offset by a 1.9% decline in overall volume shipped,
primarily in the recreational, oil & gas extraction and flat glass market
segments.

Sales of aggregates decreased $0.2 million, or 0.4% to $46.5 million in
the three months ended September 30, 2002 from $46.7 million in the three months
ended September 30, 2001. Included in aggregates sales are intercompany
shipments to our industrial minerals business that are then resold to customers.
These intercompany shipments are eliminated in consolidation and totaled $4.2
million in the three months ended September 30, 2002 and $4.3 million in the
three months ended September 30, 2001. Excluding the intercompany shipments, net
sales of aggregates decreased $0.1 million to $42.3 million in the three months
ended September 30, 2002 from $42.4 million in the three months ended September
30, 2001. The decrease in aggregates sales was primarily due to a 10.2% decrease
in asphalt sales from preexisting asphalt operations, partially offset by a $2.4
million increase in customer sales from new sites acquired in 2002, and a $1.0
million increase in transportation revenue.

Cost of Goods Sold. Cost of goods sold increased $1.9 million, or 2.9%, to
$66.7 million in the three months ended September 30, 2002 from $64.8 million in
the three months ended September 30, 2001.

Cost of goods sold for our industrial minerals business decreased $1.2
million, or 3.5% to $33.5 million in the three months ended September 30, 2002
from $34.7 million in the three months ended September 30, 2001. Included in
cost of goods sold, are the costs of the intercompany shipments from our
aggregates business as noted earlier. The cost of these intercompany shipments
are eliminated in consolidation and decreased $0.1 million to $4.2 million in
the three months ended September 30, 2002 from $4.3 million in the three months
ended September 30, 2001. Excluding the intercompany elimination, the remaining
decrease in cost of goods sold was primarily due to the $2.2 million decrease in
transportation sales noted earlier, and a $0.4 million decrease in the cost of
drier fuel, partially offset by a $0.5 million increase in scheduled plant
repairs and maintenance, a $0.3 million decrease in production and the related
overhead inventory absorption and inflationary increases primarily in labor
benefits, insurance and electrical power.

Cost of goods sold for aggregates increased $3.0 million, or 8.9% to $36.7
million in the three months ended September 30, 2002 from $33.7 million in the
three months ended September 30, 2001. The primary reason behind the increase in
aggregates cost of goods sold was the increased operating costs from our new
leased and temporary operations totaling $4.1 million and increased
transportation costs from the increase in transportation revenue noted earlier,
partially offset by reduced operating costs at our asphalt plants as a result of
the decline in revenue also noted earlier.

Depreciation, Depletion and Amortization. Depreciation, depletion and
amortization decreased $0.3 million, or 3.7%, to $8.1 million in the three
months ended September 30, 2002 from $8.4 million in the three months ended
September 30, 2001. This decrease was primarily due to a $0.3 million reduction
in goodwill amortization from the adoption of Statement of Financial Accounting
Standards No. 142.

Selling, General and Administrative. Selling, general and administrative
expenses increased $0.3 million, or 5.2%, to $6.1 million in the three months
ended September 30, 2002 from $5.8 million in the three months ended September
30, 2001. This increase was primarily due to a $0.7 million increase in the
amounts provided for product liability claims relating to occupational health
claims, partially offset by a $0.2 million decrease in management fees to D.
George Harris & Associates.

12


Operating Income. Operating income was $8.8 million in the three months
ended September 30, 2002 as compared to $12.0 million in the three months ended
September 30, 2001, due to the factors noted earlier.

Interest Expense. Interest expense decreased $0.7 million, or 8.1%, to $7.9
million in the three months ended September 30, 2002 from $8.6 million in the
three months ended September 30, 2001 due primarily to decreased interest rates.

Benefit for Income Taxes. The benefit for income taxes for the three months
ended September 30, 2002 has been adjusted to reflect the estimated benefit for
the first nine months of the year using an annual effective tax rate of 63%. The
rate varies from the statutory Federal rate of 35% primarily due to the impact
of percentage depletion.

Net Income. Net income decreased $2.5 million to $2.5 million in the three
months ended September 30, 2002 from $5.0 million in the three months ended
September 30, 2001 primarily as a result of the factors noted earlier.

Nine Months Ended September 30, 2002 Compared with Nine Months Ended September
30, 2001

Sales. Sales decreased $4.6 million, or 2.0%, to $230.1 million in the
nine months ended September 30, 2002 from $234.7 million in the nine months
ended September 30, 2001.

Sales of industrial minerals decreased $6.6 million, or 4.5% to $138.5
million in the nine months ended September 30, 2002 from $145.1 million in the
nine months ended September 30, 2001. The primary reason behind the decrease in
industrial minerals sales was a $5.6 million decrease in transportation sales as
several customers have changed their terms with us and now pay these charges
directly to the transportation companies. Excluding all transportation sales,
industrial minerals product sales decreased $1.0 million to $116.1 million in
the nine months ended September 30, 2002 from $117.1 million in the nine months
ended September 30, 2001. The primary reasons behind the decrease in product
sales was a 4.2% or 211,000 ton decrease in volume, primarily in the oil & gas
extraction and recreational market segments partially offset by a 3.5% increase
in average selling prices due to improved product mix on increased sales of
calcined kaolin, and aplite.

Sales of aggregates increased $0.7 million, or 0.7% to $104.0 million in
the nine months ended September 30, 2002 from $103.3 million in the nine months
ended September 30, 2001. Included in aggregates sales are intercompany
shipments to our industrial minerals business that are then resold to customers.
These intercompany shipments are eliminated in consolidation and totaled $12.5
million in the nine months ended September 30, 2002 and $13.7 million in the
nine months ended September 30, 2001. Excluding the intercompany shipments, net
sales of aggregates increased $1.9 million, or 2.1% to $91.5 million in the nine
months ended September 30, 2002 from $89.6 million in the nine months ended
September 30, 2001. The increase in aggregates sales was primarily due to a $4.1
million increase in stone and asphalt sales to customers from new sites acquired
in 2002 and a $2.0 million increase in transportation revenue partially offset
by an 10.3% decrease in asphalt sales to customers from our preexisting asphalt
operations.

Cost of Goods Sold. Cost of goods sold increased $0.3 million, or 0.2%, to
$176.6 million in the nine months ended September 30, 2002 from $176.3 million
in the nine months ended September 30, 2001.

Cost of goods sold for our industrial minerals business decreased $7.7
million, or 7.1% to $100.3 million in the nine months ended September 30, 2002
from $108.0 million in the nine months ended September 30, 2001. Included in
cost of goods sold, are the costs of the intercompany shipments from our
aggregates business as noted earlier. The cost of these intercompany shipments
are eliminated in consolidation and decreased $1.2 million to $12.5 million in
the nine months ended September 30, 2002 from $13.7 million in the nine months
ended September 30, 2001. Excluding the intercompany elimination, the remaining
decrease in cost of goods sold was primarily due to the $5.6 million decrease in
transportation sales noted earlier, and a $2.6 million decrease in the cost of
drier fuel, partially offset by increased plant repair and maintenance expenses,
general insurance costs, and other inflationary increases.

13


Cost of goods sold for aggregates increased $6.7 million, or 8.4% to $86.8
million in the nine months ended September 30, 2002 from $80.1 million in the
nine months ended September 30, 2001. The primary reasons behind the increase in
aggregates cost of goods sold was increased operating costs from our new
operations totaling $4.9 million, and increased transportation costs, repairs
and maintenance costs at pre-existing operations.

Depreciation, Depletion and Amortization. Depreciation, depletion and
amortization decreased $2.2 million, or 8.9%, to $22.5 million in the nine
months ended September 30, 2002 from $24.7 million in the nine months ended
September 30, 2001. This decrease was primarily due to a $0.9 million reduction
in goodwill amortization from the adoption of Statement of Financial Accounting
Standards No. 142, a $0.5 million reduction in amortization from the completion
in 2001 of the amortization period of a five year non-compete agreement with our
former parent, and a $0.6 million reduction in depreciation expense as several
plant assets were fully depreciated in 2001.

Selling, General and Administrative. Selling, general and administrative
expenses increased $1.3 million, or 7.7%, to $18.2 million in the nine months
ended September 30, 2002 from $16.9 million in the nine months ended September
30, 2001. This increase was primarily due to a $1.4 million increase in the
amounts provided for product liability claims relating to occupational health
claims and normal inflationary factors, partially offset by a $0.3 million
decrease in management fees to D. George Harris & Associates.

Operating Income. Operating income was $12.8 million in the nine months
ended September 30, 2002 as compared to $16.9 million in the nine months ended
September 30, 2001, due to the factors noted earlier.

Interest Expense. Interest expense decreased $3.3 million, or 12.0%, to
$24.2 million in the nine months ended September 30, 2002 from $27.5 million in
the nine months ended September 30, 2001 due primarily to decreased interest
rates.

Benefit for Income Taxes. The benefit for income taxes for the nine months
ended September 30, 2002 is based on the effective tax rate expected to be
realizable for the year of approximately 63%. The benefit for income taxes for
the nine-month period ended September 30, 2001 was based on an effective tax
rate of 82%. The rates vary from the statutory Federal rate of 35% primarily due
to the impact of percentage depletion.

Net Loss Before Accounting Changes. Net loss before the cumulative change
in accounting for goodwill increased $2.0 million to $3.8 million in the nine
months ended September 30, 2002 from $1.8 million in the nine months ended
September 30, 2001.

Cumulative Effect of Change in Accounting for Goodwill. Under Statement of
Financial Accounting Standards No. 142, we were required to perform an asset
impairment test on all goodwill recorded on our books as of January 1, 2002. The
result of the impairment test was a complete write-down of the $14.7 million of
goodwill recorded as an asset as of January 1, 2002. The goodwill was the result
of the acquisitions of the Morie Assets and Commercial Stone completed in 1999
by the aggregates segment. Adoption of this standard eliminated annual goodwill
amortization expense of approximately $1.2 million. The $8.6 million expense
recorded in the nine months ended September 30, 2002 is net of applicable income
taxes of $6.1 million.

Net Loss. Net loss for the nine months ended September 30, 2002 was $12.5
million as compared to a net loss of $1.8 million in the nine months ended
September 30, 2001 due to the factors noted earlier.


Liquidity and Capital Resources

Our principal liquidity requirements have historically been to service
our debt, meet our working capital, capital expenditures and mine development
expenditure needs and finance acquisitions. We are a holding company and as such
we conduct substantially all our operations through our subsidiaries. As a
holding company, we are dependent upon dividends or other intercompany transfers
of funds from our subsidiaries to meet our debt service and other obligations,
and have historically met our liquidity and capital investment needs with


14


internally generated funds, supplemented from time to time by borrowings under
our revolving credit facility. Conversely, we have funded our acquisitions
through borrowings and equity investments. Our total debt as of September 30,
2002 was $302.2 million and our total stockholder's equity as of that date was
$35.7 million, giving us total debt representing approximately 89% of total
capitalization. Our debt level makes us more vulnerable to economic downturns
and adverse developments in our business.

Net cash provided by operating activities was $0.6 million for the nine
months ended September 30, 2002 compared to $2.6 million used for the nine
months ended September 30, 2001. Cash provided by operating activities increased
$3.2 million in the first nine months of 2002 due primarily to a $5.0 million
improvement in the timing of accounts payable, which was partially offset by
$1.4 million increase in prepaid expenses and other current assets. Cash
interest paid in the nine months ended September 30, 2002 was $27.5 million, a
decrease of $3.6 million from the $31.1 million paid in the nine months ended
September 30, 2001, primarily as a result of decreased interest rates.

Net cash used for investing activities increased $1.5 million to $11.6
million for the nine month period ended September 30, 2002 from $10.1 million
for the nine month period ended September 30, 2001. This increase primarily
resulted from a $1.1 million increase in capital expenditures, plus a $0.2
million decrease in proceeds from excess land and property sales.

Cash flow provided by financing activities was $9.1 million for the nine
months ended September 30, 2002 as compared to $12.9 million for the nine months
ended September 30, 2001. Principal payments on long-term debt and capital
leases were $1.5 million and $0.4 million respectively greater in the first nine
months of 2002 than in the same period in 2001. Checks outstanding in excess of
cash decreased $7.4 million in the period, and were partially offset by $5.6
million of additional borrowings under the working capital facility.

Interest payments on our 13% senior subordinated notes due 2009 ($150
million outstanding as of June 30, 2002) which are unconditionally and
irrevocably guaranteed, jointly and severally, by each of our subsidiaries, debt
service under our senior secured credit agreement described below, working
capital, capital expenditures and mine development expenditures, incurred in the
normal course of business as current deposits are depleted, represent our
significant liquidity requirements.

Under our senior secured credit agreement, as of September 30, 2002, we
had $25.8 million outstanding under the tranche A term loan facility (which
matures in September 2005) and $90.0 million outstanding under the tranche B
term loan facility (which matures in September 2007). In addition, this credit
agreement provides us with a $50.0 million revolving credit facility. The
revolving credit facility was partially drawn for $35.3 million as of September
30, 2002, and $8.9 million was allocated for letters of credit, leaving $5.8
million available for our use. The revolving credit facility is available for
general corporate purposes, including working capital and capital expenditures,
but excluding acquisitions, and includes sublimits of $12.0 million and $3.0
million, respectively, for letters of credit and swingline loans. Debt under the
senior secured credit agreement is secured by substantially all of our assets,
including our real and personal property, inventory, accounts receivable and
other intangibles. For a further description of our senior secured credit
agreement, including certain restrictions that it imposes upon us and certain
quarterly and annual financial covenants that it requires us to maintain, please
see note 6 to our audited consolidated financial statements included in our
Annual Report on Form 10-K for the year ended December 31, 2001.



15




As of September 30, 2002, the total of our future contractual cash
commitments, including the repayment of our debt obligations under our senior
secured credit agreement and our senior subordinated notes, is summarized as
follows:

Contractual Cash Obligations Payments Due by Period
(In millions)
Less than After
Total 1 year 1-3 years 4-5 years 5 years
Senior Long-Term Debt (1).............$151.1 $10.6 $21.2 $119.3 -
Subordinated Long-Term Debt........... 150.0 - - - 150.0
Capital Lease Obligations (2)......... 4.1 1.3 2.2 0.6 -
Operating Lease Obligations (2)(3)(4). 5.9 2.5 2.9 0.4 0.1
Other Long-Term Obligations (3)(4).... 5.0 1.8 2.3 0.8 0.1
Total Contractual Cash Obligations $316.1 $16.2 $28.6 $121.1 $150.2
----------------------------------

(1) For a further description of the annual payment terms for the debt incurred
under our senior secured credit agreement, please see note 6 to our audited
consolidated financial statements included in our Annual Report on Form
10-K for the year ended December 31, 2001.
(2) We are obligated under certain capital and operating leases for railroad
cars, mining properties, mining and processing equipment, office space,
transportation and other equipment. Certain of our operating lease
arrangements include options to purchase the equipment for fair market
value at the end of the original lease term. Ownership of the equipment
under a capital lease transfers to us at the end of the original lease
term. Annual operating and capital lease commitments are presented in more
detail in note 5 to our audited consolidated financial statements included
in our Annual Report on Form 10-K for the year ended December 31, 2001.
(3) In March 2001, we entered into a sublease and option agreement for all
rights, title and interest under leases held, and property owned, of a
Pennsylvania aggregates operation known as the Jim Mountain Quarry. The
original term of this agreement expires in March 2004. Included in our
operating lease obligations is $0.4 million for our annual rental expense,
and included in other long-term obligations is $0.8 million in annual
payments covering an option to purchase the quarry and minimum annual
royalty payments. For a further description of this agreement, please see
note 3 to our audited consolidated financial statements included in our
Annual Report on Form 10-K for the year ended December 31, 2001.
(4) In March 2002, we entered into a lease and option agreement for all rights,
title and interest under property owned of an aggregates operation located
in Latrobe, Pennsylvania. The original term of this agreement expires in
March 2005. Included in our operating lease obligations is $0.7 million in
annual rental and operating expenses and included in other long-term
obligations is $0.5 million in minimum royalties. For a further description
of this agreement, please see the footnotes to the unaudited interim
condensed consolidated financial statements included in this Quarterly
Report on Form 10-Q.


On November 8, 2002, the lenders under our senior secured credit
agreement approved an amendment effective September 30, 2002 that waived the
default under the required leverage ratio and interest coverage ratio covenants
as of September 30, 2002. In connection with this amendment, we agreed to a 50
basis point increase when the leverage ratio is greater than 5.0. When combined
with two earlier amendments, this results in a 100 basis point increase in
interest rates over the original Credit Agreement for any quarter in which the
leverage ratio is greater than 5.0. As of September 30, 2002 the leverage ratio
was 6.1 compared to the applicable covenant of 5.5. The interest coverage ratio
at September 30, 2002 was 1.68 compared to a 1.70 covenant. The interest rates
at September 30, 2002 ranged from 5.3125% to 7.75% prior to the November 8, 2002
amendment. A one-time amendment fee of approximately $424,000 was paid to the
lenders as part of the amendment.

16


We believe that based on our current forecast for calendar year 2002
that we will not be in compliance with the required leverage ratio and interest
coverage ratio covenants as of December 31, 2002. If this occurs, it will be
necessary to seek further amendments to the senior secured credit agreement
covenants at that time, covering both the period ended December 31, 2002 and
calendar year 2003. While we obtained amendments and waivers under the senior
secured credit agreement in the past, there can be no assurance that future
amendments or waivers will be granted or that such amendments or waivers, if
granted, would be on terms satisfactory to us. In the event that we are not in
compliance with our leverage ratio and interest ratio covenants and we do not
receive a waiver and amendment under the senior secured credit agreement, we
would be in default under the senior secured credit agreement and the lenders
could declare all of the funds borrowed thereunder, together with accrued
interest, immediately due and payable. In the event the debt becomes due and
payable it is unlikely that we will be able to repay amounts due and we could be
required to sell assets to generate cash or the lenders could foreclose on the
pledged stock of our subsidiaries and on the assets in which they have been
granted a security interest. The financial statements included elsewhere in this
Quarterly Report on Form 10-Q do not reflect any adjustments which may be
required in the event of such actions.

Capital expenditures totaled $12.0 million in the nine months ended
September 30, 2002 compared with $10.9 million in the nine months ended
September 30, 2001. Our expected capital expenditure requirements for the
remainder of 2002 and 2003 are $2.5 million and $15.0 million, respectively.

Our ability to satisfy our debt obligations and to pay principal and
interest on our debt, fund working capital, mine development and acquisition
requirements and make anticipated capital expenditures will depend on the future
performance of our subsidiaries, which is subject to general economic, financial
and other factors, some of which are beyond our control. We cannot be certain
that the cash earned by our subsidiaries will be sufficient to allow us to pay
principal and interest on our debt and meet out other obligations. We believe,
however, that based on current levels of operations and anticipated growth, cash
flow from operations, together with borrowings under the revolving credit
facility, will be adequate for at least the next twelve months to make required
payments of principal and interest on our debt and fund working capital, mine
development and capital expenditure requirements. There can be no assurance,
however, that our business will generate sufficient cash flow from operations or
that future borrowings will be available under the revolving credit facility in
an amount sufficient to enable us to service our debt or to fund our other
liquidity needs. If we do not have enough cash, we may be required to refinance
all or part of our existing debt, sell assets, borrow more money or raise
equity. We cannot guarantee that we will be able to refinance our debt, sell
assets, borrow more money or raise equity on terms acceptable to us, if at all.

Significant Factors Affecting Our Business

Our Annual Report on Form 10-K contains a description of some of the
more significant factors affecting our business under "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Significant
Factors Affecting Our Business". The following is an update to these significant
factors.

Silica Health Risks and Litigation May Have a Material Adverse Effect
on Our Business. One of our subsidiaries, U.S. Silica, has been named as a
defendant in an estimated 1,705 product liability claims alleging silica
exposure in the period January 1, 2002 to September 30, 2002. U.S. Silica was
named as a defendant in 1,021 similar claims filed in the period of January 1,
2001 to September 30, 2001. U.S. Silica was also named as defendant in 154
similar claims filed in calendar year 1998, 497 filed in 1999, 610 filed in 2000
and 1,320 filed in 2001. U.S. Silica has been named as a defendant in similar
suits since 1975; in each of the years 1983, 1987, 1995, 1996, 1998, 1999, 2000
and 2001 more than 100 claims were filed against U.S. Silica. The plaintiffs,
who allege that they are employees or former employees of our customers, claim
that our silica products were defective or that we acted negligently in selling
our silica products without a warning, or with an inadequate warning. The
plaintiffs further claim that these alleged defects or negligent actions caused
them to suffer injuries and sustain damages as a result of exposure to our
products. In almost all cases, the injuries alleged by the plaintiffs are
silicosis or "mixed dust disease," a claim that allows the plaintiffs to pursue
litigation against the sellers of both crystalline silica and other minerals.
There are no pending claims of this nature against any of our other
subsidiaries.

17


As of September 30, 2002, there were estimated 3,674 silica-related
products liability claims pending in which U.S. Silica is a defendant. Almost
all of the claims pending against U.S. Silica arise out of the alleged use of
U.S. Silica products in foundries or as an abrasive blast media and have been
filed in the states of Texas and Mississippi.

ITT Industries, Inc., successor to a former owner of U.S. Silica, has
agreed to indemnify U.S. Silica for third party silicosis claims (including
litigation expenses) filed against it prior to September 12, 2005 alleging
exposure to U.S. Silica products for the period prior to September 12, 1985, to
the extent of the alleged exposure prior to that date. This indemnity is subject
to an annual deductible of $275,000, which is cumulative and subject to
carry-forward adjustments. The Company fully accrued this deductible on a
present value basis when it acquired U.S. Silica. As of December 31, 2001 and
2000, this accrual amounted to $1.8 million and $1.7 million, respectively.
Pennsylvania Glass Sand Corporation, predecessor to U.S. Silica, was a named
insured on insurance policies issued to ITT Industries for the period April 1,
1974 to September 12, 1985 and to U.S. Borax (another former owner) for the
period September 12, 1985 to December 31, 1985. To date, we have not sought
coverage under these policies. Although we cannot provide any assurance,
coverage under these policies may be available to us. Ottawa Silica Company (a
predecessor that merged into U.S. Silica in 1987) had insurance coverage on an
occurrence basis prior to July 1, 1985.

On April 20, 2001, in an action pending in Beaumont, Texas (Donald
Tompkins et al v. American Optical Corporation et al), a jury rendered a verdict
against Ottawa Silica Company and Pennsylvania Glass Sand Corporation,
predecessors to U.S. Silica, in the amount of $7.5 million in actual damages. On
June 1, 2001, the trial judge entered judgment on the verdict against U.S.
Silica in the amount of $5,928,000 in actual damages (the verdict of $7.5
million, less credits for other settlements), approximately $464,000 in
prejudgment interest and $40,000 in court costs. In addition, punitive damages
were settled for $600,000.

In light of the facts entered into evidence relating to the timing of
the exposure, we believe that the entire judgment and settlements of the
Tompkins action are covered by a combination of Ottawa Silica Company's
insurance coverage and the current indemnity agreement of ITT Industries, in
each case, discussed above. After the judgment was entered by the trial judge
and upon the posting of a bond, we filed an immediate appeal to the appropriate
appellate court in Texas. Based on advice of counsel, we believe that there were
meritorious grounds to file the appeal and that a reversal and remand of the
case is probable.

It is likely that we will continue to have silica-related product
liability claims filed against us, including claims that allege silica exposure
for periods after January 1, 1986. We cannot guarantee that our current
indemnity agreement with ITT Industries (which currently expires in 2005 and in
any event only covers alleged exposure to U.S. Silica products for the period
prior to September 12, 1985), or potential insurance coverage (which, in any
event, only covers periods prior to January 1, 1986) will be adequate to cover
any amount for which we may be found liable in such suits. Any such claims or
inadequacies of the ITT Industries indemnity or insurance coverage could have a
material adverse effect in future periods on our consolidated financial
position, results of operations or cash flows, if such developments occur.

We record amounts for product liability claims based on estimates of
our portion of the cost to be incurred for all pending product liability claims
and estimates based on the present value of an incurred but not reported
liability for unknown claims for exposures that occurred before 1976, when we
began warning our customers and their employees of the health effects of
crystalline silica. Estimated amounts recorded are net of any expected
recoveries from insurance policies or the ITT Industries indemnity. The amounts
recorded for product liability claims are estimates, which are reviewed
periodically by management and legal counsel and adjusted to reflect additional
information when available. The process of estimating and recording amounts for
product liability claims is imprecise and based on a variety of assumptions some
of which, while reasonable at the time, may prove to be inaccurate. As of
September 30, 2002 and December 31, 2001, we had recorded as an other noncurrent
liability $6.1 million and $4.6 million, respectively, for product liability
claims.



18


Recent Accounting Pronouncements

Statement of Financial Accounting Standards No. 143 (FAS 143), Accounting for
Asset Retirement Obligations, was issued in June 2001. FAS 143 establishes
accounting and reporting standards for obligations associated with the
retirement of tangible long-lived assets. FAS 143 is effective for us beginning
January 1, 2003 and we are evaluating the impact of adopting this Standard.

Statement of Financial Accounting Standards No. 144 (FAS 144), Accounting for
the Impairment or Disposal of Long-Lived Assets, was issued in August 2001. FAS
144 establishes accounting and reporting standards for impairment of long-lived
assets to be disposed of. FAS 144 is effective for fiscal years beginning after
December 15, 2001, and, accordingly, we adopted the standard effective January
1, 2002. The adoption of FAS 144 did not have a material impact on our
consolidated financial statements.

Sarbanes-Oxley Act of 2002

The certification by our chief executive officer and chief financial officer of
this Quarterly Report Form 10-Q, as required by Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), has been submitted to the
Securities and Exchange Commission as Correspondence accompanying this Quarterly
Report.

Forward-Looking Statements

This quarterly report, including this management's discussion and analysis
of financial condition and results of operations section, includes "forward-
looking statements." We have based these forward-looking statements on our
current expectations and projections about future events. Although we believe
that our plans, intentions and expectations reflected in or suggested by those
forward-looking statements are reasonable, we can give no assurance that our
plans, intentions or expectations will be achieved. We believe that the
following factors, among others, could affect our future performance and cause
actual results to differ materially from those expressed or implied by these
forward-looking statements: (1) general and regional economic conditions,
including the economy in the states in which we have production facilities and
in which we sell our products; (2) demand for residential and commercial
construction; (3) demand for automobiles and other vehicles; (4) levels of
government spending on road and other infrastructure construction; (5) the
competitive nature of the industrial minerals and aggregates industries; (6)
operating risks typical of the industrial minerals and aggregates industries;
(7) difficulties in, and unanticipated expense of, assimilating newly-acquired
businesses; (8) fluctuations in prices for, and availability of, transportation,
power, petroleum based products and other energy products; (9) unfavorable
weather conditions; (10) regulatory compliance, including compliance with
environmental and silica exposure regulations, by us and our customers; (11)
litigation affecting our customers; (12) product liability litigation by our
customers' employees affecting us; (13) changes in the demand for our products
due to the availability of substitutes for products of our customers; (14) labor
unrest; and (15) interest rate changes and changes in financial markets
generally.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information regarding the Company's financial instruments that are
sensitive to changes in interest rates is contained in our Annual Report on Form
10-K for the year ended December 31, 2001. This information has not changed
materially in the interim period since December 31, 2001.

Item 4. Controls and Procedures

Based on their evaluation, as of a date within 90 days of the filing of
this Quarterly Report on Form 10-Q, our principal executive officer and
principal financial officer have concluded that our disclosure controls and
procedures (as defined in Rule 15d-14(c) under the Securities Exchange Act of
1934) were effective. There have been no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of our evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

19


PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are a defendant in various lawsuits related to our businesses. These
matters include lawsuits relating to the exposure of persons to crystalline
silica as discussed in detail in "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Significant Factors Affecting
Our Business - Silica Health Risks and Litigation May Have a Material Adverse
Effect on Our Business" in our Annual Report on Form 10-K for the year ended
December, 31, 2001 and in this Quarterly Report on Form 10-Q. Although we do not
believe that these lawsuits are likely to have a material adverse effect upon
our business, we cannot predict what the full effect of these or other lawsuits
will be. We currently believe, however, that these claims and proceedings in the
aggregate are unlikely to have a material adverse effect on us.

Item 3. Defaults Upon Senior Securities

The disclosure contained in the eighth paragraph under "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources" is incorporated by reference into this Item 3
of this Quarterly Report on Form 10-Q.

Item 5. Other Events

We are currently undertaking a review of options available to us to
reduce our outstanding debt and improve ourliquidity. We have retained JP
Morgan Securities, Inc. to assist us in this evaluation.

Item 6: Exhibits

Amendment No. 5 and Waiver to the Credit Agreement


20




Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

November 13, 2002 Better Minerals & Aggregates Company

By: /s/ Gary E. Bockrath
Name: Gary E. Bockrath
Title: Vice President and Chief Financial Officer




21




Sarbanes-Oxley Section 302(a) Certification


I, Roy D. Reeves, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Better Minerals &
Aggregates Company;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date: November 13, 2002 /s/Roy D. Reeves
Roy D. Reeves
President and Chief Executive Officer




22




Sarbanes-Oxley Section 302(a) Certification


I, Gary E. Bockrath, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Better Minerals &
Aggregates Company;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date: November 13, 2002 /s/Gary E. Bockrath
Gary E. Bockrath
Vice President and Chief Financial Officer



23






AMENDMENT NO. 5 AND WAIVER
TO THE CREDIT AGREEMENT


Dated as of November 8, 2002

AMENDMENT NO. 5 AND WAIVER TO THE CREDIT AGREEMENT (this
"Amendment") among BMAC Holdings, Inc., a Delaware corporation (the "Parent
Guarantor"), Better Minerals & Aggregates Company, a Delaware corporation (the
"Borrower"), George F. Pettinos (Canada) Limited, a corporation organized and
existing under the laws of Ontario, Canada (the "Canadian Borrower"), the banks,
financial institutions and other institutional lenders party to the Credit
Agreement referred to below (collectively, the "Lenders"), and BNP Paribas
(formerly Banque Nationale de Paris), as the issuing bank (the "Issuing Bank"),
as the swing line bank (the "Swing Line Bank"), and as agent (together with any
successors appointed pursuant to Article VII of the Credit Agreement referred to
below, the "Agent") for the Lender Parties.

PRELIMINARY STATEMENTS:

(1) The Parent Guarantor, the Borrower, the Canadian Borrower, the Lenders, the
Issuing Bank, the Swing Line Bank, the Agent, and Chase Securities Inc., as
Lead Arranger, Book Manager, Syndication Agent and Documentation Agent,
have entered into a Credit Agreement dated as of September 30, 1999 (as
amended, supplemented and otherwise modified by Amendment and Waiver No. 1
to the Credit Agreement and Security Agreement dated as of December 31,
1999, Amendment No. 2 to the Credit Agreement dated as of March 15, 2000,
Amendment No. 3 to the Credit Agreement dated as of December 31, 2000, and
Amendment No. 4 and Waiver to the Credit Agreement dated as of January 31,
2002, the "Credit Agreement"). Capitalized terms not otherwise defined in
this Amendment have the same meanings as specified therefor in the Credit
Agreement.

(2) The Borrower has requested that the Lender Parties agree to amend the
Credit Agreement in order, among other things, (a) to modify the definition
of "Applicable Margin" set forth in Section 1.01, (b) to modify the
reinvestment provision set forth in Section 2.07(b), and (c) to add an
additional affirmative covenant to Section 5.01. The Borrower has further
requested that the Lender Parties agree to waive any and all Defaults under
Section 6.01(c) of the Credit Agreement that have occurred and are
continuing as a result of the failure of the Borrower (i) to maintain a
Leverage Ratio of not more than 5.50:1 for the Rolling Period ended on or
about September 30, 2002 as required under the terms of Section 5.04(a) of
the Credit Agreement, and (ii) to maintain an Interest Coverage Ratio of
not less than 1.70:1 for the Rolling Period ended on or about September 30,


1


2002 as required under the terms of Section 5.04(b) of the Credit
Agreement.

(3) The Lender Parties have indicated their willingness to agree to so amend
the Credit Agreement, to so waive the requirements of Sections 5.04(a) and
5.04(b) of the Credit Agreement and to make the other amendments set forth
herein, all on the terms and subject to the satisfaction of the conditions
set forth herein.

Amendments to Credit Agreement. The Credit Agreement is, on the Effective Date
(as defined in Section 3 hereof), hereby amended as follows:

Section 1.01 of the Credit Agreement is hereby amended to amend and restate in
its entirety the definition of "Applicable Margin" to read as follows:

"Applicable Margin", with respect to Advances under the Term A
Facility and the Working Capital Facility or commitment fees under the
Working Capital Facility, as the case may be, means the applicable
percentage per annum determined by reference to the ratio of (i) Funded
Debt of the Borrower and its Consolidated Subsidiaries as of the last
day of the most recently ended fiscal quarter to (ii) Consolidated
EBITDA of the Borrower and its Subsidiaries for the four fiscal
quarters most recently ended prior to the start of such period, as
determined pursuant to the financial statements most recently delivered
to the Agent at the end of each fiscal quarter, as the case may be, as
set forth below:


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

Base Rate Eurodollar Rate Advances Working
Advances under the Term A under the Term A Facility Capital Facility
Funded Debt to EBITDA Facility and the Working Capital and the Working Capital Commitment
Ratio Facility Facility Fees
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------

Level I(A)
greater than 5.00

to 1.00 3.00% 4.00% 0.75%
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
Level I(B)
less than or equal
to 5.00 to 1.00
but greater than 2.50% 3.50% 0.50%
4.50 to 1.00
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------

Level II
less than or
equal to 4.50 to 2.25% 3.25% 0.50%
1.00 but greater
than 4.25 to 1.00
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------

Level III
less than or
equal to 4.25 to 2.00% 3.00% 0.50%
1.00 but greater
than 4.00 to 1.00
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------

Level IV
less than or
equal to 4.00 to 1.75% 2.75% 0.375%
1.00 but greater
than 3.75 to 1.00
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
1.50% 2.50% 0.375%
Level V
less than or
equal to 3.75 to
1.00
-----------------------------------------------------------------------------------------------------------------


2


provided that (a) no change in the Applicable Margin shall be effective
until five Business Days after the date on which the Agent receives
financial statements at the end of each fiscal quarter, and (b) if the
Borrower has not submitted to the Agent the information described in
clause (a) of this proviso as and when required, the Applicable Margin
shall be the Level I(A) Applicable Margin for so long as such
information described in clause (a) of this proviso has not been
received by the Agent.

Section 2.07(b)(ii)(x) of the Credit Agreement is hereby amended to delete the
first proviso thereto in its entirety.

Section 2.08(b) is hereby amended to amend and restate in their entirety clauses
(i) and (ii) thereof to read as follows:

Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at all
times to the sum of (A) the Base Rate in effect from time to
time plus (B) (1) in the case of any Term B Advance, 3.00%,
provided, that, for so long as the ratio of (x) Funded Debt of
the Borrower and its Consolidated Subsidiaries as of the last
day of the most recently ended fiscal quarter to (y)
Consolidated EBITDA of the Borrower and its Subsidiaries for
the four fiscal quarters most recently ended prior to the
start of such period, as determined pursuant to the financial
statements most recently delivered to the Agent at the end of
each fiscal quarter, as the case may be, is greater than 5.00
to 1.00, such rate shall be 3.50%, or (2) in the case of any
other Advance, the Applicable Margin in effect from time to
time, payable in arrears quarterly on the last Business Day of
each March, June, September and December during such periods,
on the date such Base Rate Advance shall be Converted, on the
date of any repayment thereof pursuant to Section 2.05, on the
date of any prepayment thereof to the extent required under
Section 2.07 and on the Termination Date.

(ii) Eurodollar Rate Advances. During such periods as
such Advance is a Eurodollar Rate Advance, a rate per annum
equal at all times during each Interest Period for such
Advance to the sum of (A) the Eurodollar Rate for such
Interest Period for such Advance plus (B) (1) in the case of


3


any Term B Advance, 4.00%, provided, that, for so long as the
ratio of (x) Funded Debt of the Borrower and its Consolidated
Subsidiaries as of the last day of the most recently ended
fiscal quarter to (y) Consolidated EBITDA of the Borrower and
its Subsidiaries for the four fiscal quarters most recently
ended prior to the start of such period, as determined
pursuant to the financial statements most recently delivered
to the Agent at the end of each fiscal quarter, as the case
may be, is greater than 5.00 to 1.00, such rate shall be
4.50%, or (2) in the case of any other Advance, the Applicable
Margin in effect on the first day of such Interest Period,
payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period,
on the date such Eurodollar Rate Advance shall be Converted,
on the date of any repayment thereof pursuant to Section 2.05,
on the date of any prepayment thereof to the extent required
under Section 2.07 and on the Termination Date.

Section 5.01 of the Credit Agreement is hereby amended to add at the end thereof
a new subsection (q) to read as follows:

(q) Business Updates. On or prior to January 9, 2003,
(a) deliver to the Agent and the Lenders a preliminary budget
for fiscal year 2003 in form and substance satisfactory to the
Agent, and (b) hold a meeting (by telephone or otherwise) with
the Lender Parties as a group to discuss the business,
condition (financial or otherwise), operations, performance,
properties and prospects of the Borrower and its Subsidiaries
and such other matters as the Lender Parties or the Agent may
reasonably request, and hold similar meetings from time to
time thereafter as the Agent may reasonably request.

Section 5.03 of the Credit Agreement is hereby amended (i) to reletter cause (r)
thereof as clause (s) and (ii) to insert a new clause (r) thereof to read as
follows:

(r) Forecast. Promptly, and in any event no later
than November 15, 2002, a forecast for the fourth fiscal
quarter of the Borrower, prepared by management of the
Borrower and in form and substance satisfactory to the Agent.

Waiver. Upon the occurrence of the Effective Date, the Lender Parties hereby
waive any Default under Section 6.01(c) of the Credit Agreement as a result of
the failure of the Borrower to perform all of its obligations under Sections
5.04(a) and 5.04(b) of the Credit Agreement for the Rolling Period ended on or
about September 30, 2002.

Conditions of Effectiveness. This Amendment (other than Sections 1 and 2) shall
become effective as of the first date on which the Agent shall have received
counterparts of this Amendment executed by the Borrower and the Required Lenders
or, as to any of the Lenders, advice satisfactory to the Agent that such Lender
has executed this Amendment. Sections 1 and 2 of this Amendment shall become
effective on the first date (the "Effective Date") on which, and only if, each
of the following conditions precedent shall have been satisfied:

The Agent shall have received counterparts of this Amendment executed by the
Borrower and the Required Lenders or, as to any of the Lenders, advice
satisfactory to the Agent that such Lender has executed this Amendment.

4


The Agent shall have received the Consent attached hereto executed by the
Borrower and each of the other Loan Parties.

The representations and warranties contained in each of the Loan Documents shall
be correct in all material respects on and as of the Effective Date, after
giving effect to this Amendment, as though made on and as of such date (except
(i) for any such representation and warranty that, by its terms, refers to a
specific date other than the Effective Date, in which case as of such specific
date, and (ii) that the financial statements of the Borrower referred to in
Section 4.01(f) of the Credit Agreement shall be deemed to refer to the
financial statements most recently delivered to the Agent and the Lender Parties
pursuant to Sections 5.03(b), 5.03(c) and 5.03(d), respectively, on or prior to
the Effective Date).

No event shall have occurred and be continuing or shall result from the
effectiveness of this Amendment that constitutes a Default (other than as
specifically waived pursuant to Section 2 hereof).

The Borrower shall have paid to the Agent, for the account of each of the
Lenders that has executed and delivered a counterpart of this Amendment to the
Agent prior to 5:00 p.m. (New York City time) on November __, 2002 an amendment
fee of 0.25% on the aggregate Commitments of such Lender in effect immediately
prior to the Effective Date, it being understood, that no amendment fee shall be
payable by the Borrower for the account of any Lender if this Amendment has not
been approved prior to 5:00 p.m. (New York City time) on November __, 2002 by
the Required Lenders.

The effectiveness of this Amendment is further conditioned upon the accuracy of
all of the factual matters described herein. This Amendment is subject to the
provisions of Section 8.01 of the Credit Agreement.

Reference to and Effect on the Loan Documents. i. On and after the Effective
Date, each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Credit Agreement, and each
reference in the Notes and each of the other Loan Documents to "the Credit
Agreement", "thereunder", "thereof" or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement, as
amended and otherwise modified by this Amendment.

The Credit Agreement and each of the other Loan Documents, as
specifically amended and otherwise modified by this Amendment, are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed. Without limiting the generality of the foregoing, the Collateral
Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Loan Parties under the Loan
Documents, in each case as amended and otherwise modified by this Amendment.

The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.

Costs, Expenses. The Borrower agrees to pay on demand all reasonable costs and
expenses of the Agent in connection with the preparation, execution, delivery
and administration, modification and amendment of this Amendment and the other
instruments and documents to be delivered hereunder (including, without
limitation, the reasonable fees and expenses of counsel for the Agent) in
accordance with the terms of Section 8.04 of the Credit Agreement.

Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken


5


together shall constitute but one and the same agreement. Delivery of an
executed counterpart of a signature page to this Amendment by telecopier shall
be effective as delivery of a manually executed counterpart of this Amendment.
Governing Law. This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York.


[remainder of page left intentionally blank]





6







IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.


BMAC HOLDINGS, INC.,
as Parent Guarantor

By:
Name:
Title:


BETTER MINERALS & AGGREGATES COMPANY, as Borrower

By:
Name:
Title:


GEORGE F. PETTINOS (CANADA) LIMITED, as Canadian Borrower

By:
Name:
Title:




7




BNP PARIBAS (formerly Banque Nationale de Paris), as Agent,
Lender, Swing Line Bank and Issuing Bank

By:
Name:
Title:

By:
Name:
Title:








[Type or print name of Lender]



By
Name:
Title:





4

CONSENT

Reference is made to (a) Amendment No. 5 and Waiver to the
Credit Agreement dated as of November __, 2002 (the "Amendment"; capitalized
terms not otherwise defined herein being used herein as defined in the Amendment
and in the Credit Agreement referred to below), (b) the Credit Agreement dated
as of September 30, 1999 (as amended, supplemented and otherwise modified by
Amendment and Waiver No. 1 to the Credit Agreement and Security Agreement dated
as of December 31, 1999, Amendment No. 2 to the Credit Agreement dated as of
March 15, 2000, Amendment No. 3 to the Credit Agreement dated as of December 31,
2000, and Amendment No. 4 and Waiver to the Credit Agreement dated as of January
31, 2002, the "Credit Agreement") among BMAC Holdings, Inc., a Delaware
corporation, Better Minerals & Aggregates Company, a Delaware corporation,
George F. Pettinos (Canada) Limited, a corporation organized and existing under
the laws of Ontario, Canada, the Lenders party thereto, BNP Paribas (formerly
Banque Nationale de Paris), as the Issuing Bank, as the Swing Line Bank, and as
Agent for the Lender Parties, and Chase Securities Inc., as Lead Arranger, Book
Manager, Syndication Agent and Documentation Agent, and (c) the other Loan
Documents referred to therein.

The undersigned as parties to one or more of the Loan
Documents, each hereby consents to the execution, delivery and the performance
of the Amendment and agrees that:

(A) each of the Loan Documents to which it is a party is, and
shall continue to be, in full force and effect and is hereby in all
respects ratified and confirmed on the Effective Date, except that, on
and after the Effective Date, each reference to "the Credit Agreement",
"thereunder", "thereof", "therein" or words of like import referring to
the Credit Agreement shall mean and be a reference to the Credit
Agreement, as amended and otherwise modified by the Amendment; and

(B) as of the Effective Date, each Collateral Document to
which it is a party and all of the Collateral of such Person described
therein do, and shall continue to, secure the payment of all of the
Secured Obligations.

This Consent shall be governed by, and construed in accordance with, the laws of
the State of New York.




1




Delivery of an executed counterpart of a signature page of this Consent by
telecopier shall be effective as the delivery of a manually executed counterpart
of this Consent.


BMAC HOLDINGS, INC.

By:
Name:
Title:


BETTER MINERALS & AGGREGATES COMPANY

By:
Name:
Title:


PENNSYLVANIA GLASS SAND CORPORATION

By:
Name:
Title:


THE FULTON LAND AND TIMBER COMPANY

By:
Title:


OTTAWA SILICA COMPANY

By:
Title:


GEORGE F. PETTINOS, INC.

By:
Title:



BMAC SERVICES CO., INC.

By:
Title:




2




ELLEN JAY, INC.

By:
Title:


U.S. SILICA COMPANY (a/k/a
U.S. Silica Company, Inc.)

By:
Title:


BETTER MATERIALS CORPORATION

By:
Title:


BMC TRUCKING, INC.

By:
Title:


BUCKS COUNTY CRUSHED STONE COMPANY

By:
Title:


CHIPPEWA FARMS CORPORATION

By:
Title:


SHORE STONE COMPANY, INC.

By:
Title:


COMMERCIAL STONE CO., INC.

By:
Title:





3




STONE MATERIALS COMPANY, LLC

By: Better Minerals & Aggregates Company,
as Manager

By:
Title:


COMMERCIAL AGGREGATES TRANSPORTATION AND SALES, LLC

By: Stone Materials Company, LLC,
as Manager

By:
Title:




4