GIANT CEMENT HOLDING INC, POS AM, 1998-04-01

GIANT CEMENT HOLDING INC
POS AM, 1998-04-01
CEMENT, HYDRAULIC

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As filed with the Securities and Exchange Commission on March 31, 1998

Registration No. 333-36783
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

---------------
Post-Effective
Amendment No. 1

to
Form S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

---------------
Giant Cement Holding, Inc.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
Delaware 3241, 4953 57-0997411
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

<TABLE>
<S> <C>
Gary L. Pechota John W. Roberts
Chief Executive Officer and President President
Giant Cement Holding, Inc. Solite Corporation
320-D Midland Parkway 2508 Chamberlayne Avenue
Summerville, SC 29484 Richmond, VA 23222
(803) 851-9898 (804) 321-6761
(Address, including zip code, and telephone (Name, address, including zip code, and
number, including area code, of telephone number, including area code, of
registrant's principal executive offices) agent for service)

Copies to:

Robert A. Cantone, Esq. David W. Robertson, Esq.
Proskauer Rose LLP McGuire Woods Battle & Boothe LLP
1585 Broadway 901 East Cary Street
New York, New York 10036-8299 Richmond, VA 23219
(212) 969-3235 (804) 775-1031
</TABLE>

Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
---------

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
---------

---------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

================================================================================

<PAGE>

SOLITE CORPORATION
2508 Chamberlayne Avenue
Richmond, Virginia 23222

Dear Shareholder:

The Special Meeting of Shareholders of Solite Corporation ("Solite")
called for December 30, 1997 to consider a merger transaction with Giant Cement
Holding, Inc. ("Giant") was adjourned without taking action because of the
continuing review of the proposed transaction under the federal antitrust laws
by the U.S. Department of Justice. As a result of adverse economic developments
with respect to Solite since last fall, Solite and Giant have negotiated an
amendment to the proposed Agreement and Plan of Merger which reduces the
aggregate consideration to be received from 650,000 shares of Common Stock of
Giant ("Giant Common Stock") to 325,000 shares of Giant Common Stock, and
certain other changes. The revised transaction and the reasons for the
reduction in consideration are more fully discussed in the accompanying Proxy
Statement/Prospectus.

A new Special Meeting of Shareholders of Solite to consider the revised
transaction will be held at 9:00 a.m. on Tuesday, April 28, 1998, at the
offices of McGuire Woods Battle & Boothe LLP, fourth floor, 901 East Cary
Street, Richmond, Virginia.

At the Special Meeting, you will be asked to consider and vote on the
following proposals:

1. To approve an amendment to the Solite Articles of Incorporation
pursuant to which all the outstanding shares of preferred stock of Solite
will be converted into shares of common stock, par value $2.00 per share of
Solite ("Solite Common Stock") in accordance with the formula represented
by the Schedule set forth on Annex I to the accompanying Proxy
Statement/Prospectus.

2. To approve the Agreement and Plan of Merger providing for the merger
(the "Merger") of a wholly owned subsidiary of Giant with and into Solite.

3. To transact such other business as may properly come before the Special
Meeting or any adjournment or postponement thereof.

The Board of Directors of Solite, after careful consideration, determined
that the Merger is in the best interests of Solite shareholders. Accordingly,
the Board unanimously approved the Agreement and Plan of Merger providing for
the merger and recommends that you vote in favor of the Agreement and Plan of
Merger at the Special Meeting.

The conversion of all outstanding shares of Preferred Stock of Solite is a
condition to the Merger and, if approved, the conversion would be effected
immediately prior to the Merger only if all other conditions to the Merger have
been satisfied.

Under the terms of the Agreement and Plan of Merger, upon consummation of
the merger, (i) Solite will become a wholly owned subsidiary of Giant, (ii)
each share of common stock, par value $2.00 per share of Solite outstanding at
the effective time of the merger (including all shares of Preferred Stock of
Solite converted into Solite Common Stock) will be converted into the right to
receive the number of shares of common stock, par value $.01 per share, of
Giant ("Giant Common Stock") equal to the quotient derived by dividing (A)
175,000 shares of Giant Common Stock by (B) the total number of shares of
Solite Common Stock outstanding as of the effective time, including all shares
of Solite Common Stock issuable upon conversion of the Preferred Stock of
Solite, and (iii) cash payments will be made to holders of Solite Common Stock
in lieu of issuing fractional shares of Giant Common Stock.

Pursuant to the Agreement and Plan of Merger, an additional 150,000 shares
of Giant Common Stock will be placed in escrow upon consummation of the Merger.
All, part, or none of 75,000 of such shares shall be distributed to the persons
who were holders of Solite Common Stock immediately prior to the Merger
(including holders of Preferred Stock of Solite that was converted into Solite
Common Stock), depending upon whether, and the extent by which, as of the
effective time, Solite's consolidated net book value exceeds $2.8 million and
its net current assets exceed $3.3 million. The other 75,000 shares of Giant
Common Stock shall be held in escrow to satisfy the indemnification claims, if
any, of Giant under the Agreement and Plan of Merger.

Following the conversion of Preferred Stock of Solite and before the
Merger, Solite will distribute to each holder of Solite Common Stock (including
holders of Solite Common Stock as a result of the preferred stock conversion) a
fully paid and nonassessable share of Northeast Solite Corporation, currently a
subsidiary of Solite, for each share of Solite Common Stock. Northeast Solite
Corporation will hold certain assets as described in the accompanying Proxy
Statement/Prospectus including Solite's lightweight aggregate plants located in
New York and Kentucky and the masonry block plant in Chesapeake, Virginia.

The proposed amendment to the Solite Articles of Incorporation and the
proposed merger are described in the accompanying Proxy Statement/Prospectus,
the forepart of which includes a summary of the terms of the Merger

<PAGE>

and certain other information relating to it, and the conversion of Solite
Preferred Stock. Additional information related to Giant is discussed in the
accompanying Annual Report on Form 10-K for the year ended December 31, 1997 of
Giant and Annual Report to Shareholders of Giant. I urge you to review carefully
the Proxy Statement/Prospectus and the Annexes thereto, as well as the Annual
Report on Form 10-K for the year ended December 31, 1997 of Giant and Annual
Report to Shareholders of Giant.

I hope you will attend the Special Meeting. However, whether or not you
plan to attend, please complete, sign and date the accompanying proxy card
promptly and return it in the enclosed prepaid envelope. A proxy card for the
December 30, 1997 meeting is not valid for this Special Meeting. Consequently,
you should complete, sign and date the accompanying proxy card even if you
executed and returned a proxy card for the December 30, 1997 meeting. If you
are present at the meeting you may, if you wish, withdraw your proxy.

Richmond, Virginia John W. Roberts
April , 1998 President

<PAGE>

SOLITE CORPORATION
2508 Chamberlayne Avenue
Richmond, Virginia 23222
----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

April 28, 1998

----------------
To the Shareholders of
Solite Corporation:

NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Special Meeting") of Solite Corporation, a Virginia corporation ("Solite"),
will be held on April 28, 1998, at the offices of McGuire Woods Battle & Boothe
LLP, fourth floor, 901 East Cary Street, Richmond, Virginia, commencing at 9:00
a.m. local time, for the following purposes:

1. To consider and vote upon a proposed amendment to the Solite Articles
of Incorporation pursuant to which all the outstanding shares of preferred
stock of Solite will be converted into shares of common stock, par value
$2.00 per share of Solite ("Solite Common Stock") in accordance with the
formula represented by the Schedule set forth on Annex I to the
accompanying Proxy Statement/Prospectus.

2. To consider and vote upon a proposal to approve and adopt the Agreement
and Plan of Merger dated as of September 10, 1997, as amended, including
the plan of merger attached thereto as Schedule A-1 (the "Merger
Agreement") among Giant Cement Holding, Inc., a Delaware corporation
("Giant"), GCHI Acquisition Corp., a Virginia corporation and a wholly
owned subsidiary of Giant ("Merger Sub"), and Solite, providing for the
merger of Merger Sub with and into Solite (the "Merger"). Pursuant to the
Merger, Solite will become a wholly owned subsidiary of Giant, and each
outstanding share of Solite Common Stock, including all shares of Preferred
Stock of Solite converted into Solite Common Stock, will be converted into
the right to receive the number of shares of the common stock, par value
$0.01 per share, of Giant (the "Giant Common Stock") equal to the quotient
derived by dividing (i) 175,000 shares of Giant Common Stock by (ii) the
total number of shares of Solite Common Stock outstanding as of the
effective time of the Merger, including all shares of Solite Common Stock
issuable upon conversion of the Preferred Stock of Solite. Pursuant to the
Merger Agreement, an additional 150,000 shares of Giant Common Stock will
be placed in escrow upon consummation of the Merger. All, part, or none of
75,000 of such shares shall be distributed to the persons who were holders
of Solite Common Stock immediately prior to the Merger (including holders
of Preferred Stock of Solite that was converted into Solite Common Stock),
depending upon whether, and the extent by which, as of the effective time,
Solite's consolidated net book value exceeds $2.8 million and its net
current assets exceeds $3.3 million. The other 75,000 shares of Giant
Common Stock shall be held in escrow to satisfy the indemnification claims,
if any, of Giant under the Merger Agreement. A copy of the Merger Agreement
is attached as Annex IV to the accompanying Proxy Statement/Prospectus.

3. To transact such other business as may properly come before the Special
Meeting or any adjournment or postponement thereof.

The Board of Directors has fixed the close of business on March 1, 1998 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Special Meeting and any adjournment or postponement thereof.

Whether or not you plan to attend the Special Meeting, please fill in,
sign, date and return the enclosed form of proxy card promptly. A return
envelope is enclosed for your convenience and requires no postage for mailing
in the United States.

By Order of the Board of Directors

Richmond, Virginia J. J. Jewett, III
April , 1998 Secretary

<PAGE>

SOLITE CORPORATION

PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS

To be held on April 28, 1998

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

Giant Cement Holding, Inc.
PROSPECTUS
for up to

325,000 Shares of Common Stock, par value $0.01 per share

This Proxy Statement/Prospectus relates to the proposed merger (the
"Merger") of Solite Corporation, a Virginia corporation ("Solite"), with GCHI
Acquisition Corp., a Virginia corporation ("Merger Sub") and a wholly owned
subsidiary of Giant Cement Holding, Inc., a Delaware corporation ("Giant"),
pursuant to an Agreement and Plan of Merger dated as of September 10, 1997, as
amended, including the plan of merger attached thereto (the "Merger
Agreement"). As a result of the Merger, Solite will become a wholly owned
subsidiary of Giant. At the effective time of the Merger (the "Effective
Time"), each outstanding share of the common stock, par value $2.00 per share,
of Solite ("Solite Common Stock"), including shares of Solite Preferred Stock
(as defined) converted into Solite Common Stock, but excluding shares held by
Solite shareholders who perfect their dissenters' rights under the Virginia
Stock Corporation Act (the "VSCA"), will be converted into the right to receive
the number of shares of common stock, par value $0.01 per share, of Giant
("Giant Common Stock") equal to the quotient derived by dividing (i) 175,000
shares of Giant Common Stock by (ii) the total number of shares of Solite
Common Stock outstanding as of the Effective Time, including all shares of
Solite Common Stock issuable upon conversion of the Solite Preferred Stock.
Pursuant to the Merger Agreement, an additional 150,000 shares of Giant Common
Stock will be placed in escrow upon consummation of the Merger. All, part, or
none of 75,000 of such 150,000 shares shall be distributed to the persons who
were holders of Solite Common Stock immediately prior to the Merger (including
holders of Solite Preferred Stock that was converted into Solite Common Stock),
depending upon whether, and the extent by which, as of the Effective Time,
Solite's consolidated net book value (as defined in the Merger Agreement)
exceeds $2.8 million and its net current assets (as defined in the Merger
Agreement) exceeds $3.3 million. The other 75,000 shares of Giant Common Stock
shall be held in escrow to satisfy the indemnification claims, if any, of Giant
under the Merger Agreement. Solite is soliciting proxies from its shareholders
for use at the Special Meeting of shareholders of Solite scheduled to be held
on April 28, 1998 (the "Special Meeting") to consider the approval of (i) an
amendment to the Solite Articles of Incorporation pursuant to which each
outstanding share of the Series A Preferred Stock, par value $50 per share, of
Solite (the "Solite Series A Preferred Stock"), the Series B Preferred Stock,
par value $50 per share, of Solite (the "Solite Series B Preferred Stock"), and
the Series C Preferred Stock, par value $200 per share, of Solite (the "Solite
Series C Preferred Stock" and collectively with the Solite Series A Preferred
Stock and the Solite Series B Preferred Stock, the "Solite Preferred Stock"),
will be converted into Solite Common Stock in accordance with the formula
represented by the Schedule set forth on Annex I hereto and (ii) the Merger
Agreement. The formula for conversion of the Solite Preferred Stock is designed
to result in the holders of Solite Preferred Stock receiving Solite Common
Stock with a value equal, after giving effect to rounding, to the par value of
the Solite Preferred Stock based upon certain estimated equity valuations. The
estimated equity valuations are in part determined by reference to the Giant
Common Stock to be issued in the Merger. Consequently, the ratios for
conversion of the Solite Preferred Stock fluctuate with the market price for
Giant Common Stock. The number of shares of Giant Common Stock received in the
Merger by former holders of Solite Preferred Stock increases and the number of
shares of Giant Common Stock received in the Merger by other holders of Solite
Common Stock decreases as the price per share of Giant Common Stock decreases.
Conversely, the number of shares of Giant Common Stock received in the Merger
by former holders of Solite Preferred Stock decreases, and the number of shares
of Giant Common Stock received by other holders of Solite Common Stock
increases, as the price per share of Giant Common Stock increases. The Merger
is expected to be consummated promptly after approval of the Merger Agreement
by the shareholders of Solite.

Assuming the conversion of all shares of Solite Preferred Stock on the
basis proposed in this Proxy Statement/Prospectus and assuming the issuance of
175,000 shares of Giant Common Stock, and based upon the average closing bid
and ask prices of shares of Giant Common Stock for the twenty trading days
ended March 11, 1998 reported on the Nasdaq National Market, each such
outstanding share of Solite Common Stock would have been converted into .2221
shares of Giant Common Stock with a then-current market value of $5.66 had the
Merger been consummated on that date, and the aggregate then-current market
value of the shares of Giant Common Stock issued in the Merger would have been
$4,462,500 in exchange for all of the 787,972 shares of Solite Common Stock
which would be outstanding. Assuming the 150,000 shares of Giant Common Stock
placed in escrow are released and based upon the average closing bid and ask
prices of shares of Giant Common Stock for the twenty trading days ended March
11, 1998 reported on the Nasdaq National Market, the holder of each outstanding
share of Solite Common Stock would also have received .1904 shares of Giant
Common Stock with a then current market value of $4.86 if the escrow shares had
been released on that date and the aggregate then current market value of the
shares of Giant Common Stock released from escrow would have been $3,825,000.
There can be no assurance that the shares of Giant Common Stock placed in
escrow upon consummation of the Merger will be released and that holders of
Solite Common Stock will receive such shares as consideration in the Merger.
The formula for conversion of the Solite Preferred Stock is based in part on
the average of the closing bid and asked price of Giant Common Stock for the 20
trading days before the Effective Time. Since the Effective Time is expected to
be after the date of the Special Meeting, holders of Solite Preferred Stock and
Solite Common Stock will not know at the time of the Special Meeting the number
of shares of Giant Common Stock they will receive in the Merger or the value of
such Giant Common Stock. Notwithstanding the foregoing, the obligation of
Solite to complete the Merger is not subject to the Giant Common Stock having
to exceed a certain minimum value at the Effective Time.

This Proxy Statement/Prospectus constitutes both the proxy statement of
Solite relating to the solicitation of proxies by its Board of Directors for
use at the Special Meeting and the prospectus of Giant with respect to the
shares of Giant Common Stock to be issued in the Merger upon the conversion of
the outstanding shares of Solite Common Stock. This Proxy Statement/Prospectus
and the enclosed forms of proxy are first being sent to Solite shareholders on
or about April , 1998.

See "RISK FACTORS" on page 15 for a description of certain factors
concerning Giant and its operations following the Merger.

THE SECURITIES TO WHICH THIS PROXY STATEMENT/PROSPECTUS RELATES HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

The date of this Proxy Statement/Prospectus is April , 1998.
<PAGE>

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

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS,
IN CONNECTION WITH THE SOLICITATION AND THE OFFERING MADE BY THIS PROXY
STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY OR AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, ANY SECURITIES IN ANY
JURISDICTION IN WHICH SUCH SOLICITATION OR OFFERING MAY NOT LAWFULLY BE MADE.

NEITHER THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF
SECURITIES MADE HEREUNDER SHALL IMPLY THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF GIANT OR SOLITE SINCE THE
DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO ITS DATE.

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

AVAILABLE INFORMATION

Giant is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the
Exchange Act, Giant files reports, proxy statements and other information with
the Securities and Exchange Commission (the "SEC").

Giant has filed, through the Electronic Data Gathering, Analysis and
Retrieval System ("EDGAR"), a Registration Statement on Form S-4 (the
"Registration Statement") with the SEC under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the shares of Giant Common Stock
to be issued upon consummation of the Merger. This Proxy Statement/Prospectus
does not contain all the information set forth in the Registration Statement
and the exhibits thereto, certain portions of which have been omitted as
permitted by the rules and regulations of the SEC. Copies of the Registration
Statement (including such omitted portions) are available from the SEC upon
payment of prescribed rates. For further information, reference is made to the
Registration Statement and the exhibits filed therewith. Statements contained
in this Proxy Statement/Prospectus relating to the contents of any contract or
other document referred to herein or therein are not necessarily complete, and
in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement or such other
document, each such statement being qualified in all respects by such
reference.

This filed material can be inspected and copied at the public reference
facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the SEC:
Chicago Regional Office (Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661) and New York Regional Office (Seven World Trade
Center, New York, New York 10048). Copies of such material may be obtained by
mail from the public reference facilities maintained by the SEC at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Giant
Common Stock is traded on the Nasdaq National Market. Reports, proxies and
information statements are available for inspection at the offices of the
National Association of Securities Dealers, Inc. (the "NASD"), 1735 K Street,
N.W., Washington, D.C. 20006. Material filed electronically through EDGAR may
also be accessed through the SEC's home page on the World Wide Web at http://
www.sec.gov.

FORWARD-LOOKING STATEMENTS

This Proxy Statement/Prospectus includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act. All of the statements
contained in this Prospectus, other than statements of historical fact, should
be considered forward-looking statements, including, but not limited to, those
concerning combined operations of Giant and Solite after the Merger. Although
the Company believes the expectations reflected in those forward-looking
statements are reasonable, it can give no assurance that those expectations
will prove to have been correct. Important factors that could cause actual
results to differ materially from the Company's expectations ("Cautionary
Statements") are disclosed in this Prospectus, including, without limitation,
under "Risk Factors" beginning on page 15. All subsequent written and oral
forward-looking statements by or attributable to the Company or persons acting
on its behalf are expressly qualified in their entirety by such Cautionary
Statements. Prospective investors are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof and
are not intended to give any assurance as to future results. The Company
undertakes no obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.

ii
<PAGE>

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following document is incorporated by reference in this Proxy
Statement/Prospectus: Giant's Annual Report on Form 10-K for the year ended
December 31, 1997.

A copy of Giant's Annual Report on Form 10-K for the year ended December
31, 1997 and Annual Report to Shareholders will be delivered with this Proxy
Statement/Prospectus.

All reports and definitive proxy or information statements filed by Giant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent
to the date of this Proxy Statement/Prospectus and prior to the date of the
Special Meeting shall be deemed to be incorporated by reference into this Proxy
Statement/Prospectus from the dates of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated in this Proxy
Statement/Prospectus to the extent that a statement contained herein or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Proxy Statement/Prospectus. All
information appearing in this Proxy Statement/Prospectus or in any document
incorporated herein by reference is not necessarily complete and is qualified
in its entirety by the information and financial statements (including notes
thereto) appearing in the documents incorporated by reference herein and should
be read together with such information and documents.

All information contained in this Proxy Statement/Prospectus relating to
Giant or Merger Sub has been supplied by Giant, and all information relating to
Solite and Northeast Solite (as defined) has been supplied by Solite.

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (EXCLUDING
EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO THE INFORMATION INCORPORATED HEREIN) ARE AVAILABLE WITHOUT
CHARGE TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER OF SOLITE STOCK TO WHOM
THIS PROXY STATEMENT/PROSPECTUS IS DELIVERED UPON REQUEST. WITH RESPECT TO
GIANT'S DOCUMENTS, REQUESTS SHOULD BE DIRECTED TO GIANT AT 320-D MIDLAND
PARKWAY, SUMMERVILLE, SC 29485, ATTN: TERRY L. KINDER (TELEPHONE: (803)
851-9898). WITH RESPECT TO SOLITE'S DOCUMENTS, REQUESTS SHOULD BE DIRECTED TO
SOLITE AT 2508 CHAMBERLAYNE AVENUE, RICHMOND, VA 23222, ATTN: JEREMIAH J.
JEWETT, III (TELEPHONE: (804) 321-0409). IN ORDER TO ENSURE TIMELY DELIVERY OF
SUCH DOCUMENTS, ANY REQUEST SHOULD BE MADE BY APRIL 15, 1998.

iii
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<TABLE>
<CAPTION>
TABLE OF CONTENTS

<S> <C>
SUMMARY ................................................................................. 1
Giant .................................................................................. 2
Solite ................................................................................. 2
Special Meeting ........................................................................ 2
Required Vote .......................................................................... 3
Proxies ................................................................................ 3
Certain Significant Considerations ..................................................... 4
The Spin-Off ........................................................................... 4
Conversion of Solite Preferred Stock ................................................... 4
The Merger ............................................................................. 5
Proxy Agreement ........................................................................ 9
Regulatory Matters ..................................................................... 9
Certain Federal Income Tax Consequences ................................................ 10
Accounting Treatment ................................................................... 11
Dissenters' Rights ..................................................................... 11
Differences in Shareholder Rights ...................................................... 11
Market Price Data ...................................................................... 11
Summary Consolidated Historical and Pro Forma Financial Information .................... 11
Giant Summary Consolidated Historical Financial Information ............................ 12
Solite Corporation and Subsidiaries Summary Consolidated Historical Financial
Information .......................................................................... 13
Historical and Pro Forma Unaudited Per Share Data ...................................... 14

RISK FACTORS ............................................................................ 15
Exchange Ratio ......................................................................... 15
Difficulty of Integration of Operations Following the Merger ........................... 15
Dependence on the Construction Industry; Economic Conditions ........................... 15
Highly Competitive and Price Sensitive Industry ........................................ 16
Cement Imports ......................................................................... 16
High Fixed Costs and Capital Intensive Industry ........................................ 17
Impact of Environmental Laws ........................................................... 17
Potential Volatility of Giant Common Stock Prices ...................................... 20
Shares Eligible for Future Sales ....................................................... 20

THE SPECIAL MEETING ..................................................................... 21

BACKGROUND OF THE SPIN-OFF AND THE MERGER ............................................... 22
Reasons for the Merger; Recommendation of the Solite Board ............................. 24
Opinion of CoView Capital, Inc. ........................................................ 26
Certain Assumptions .................................................................... 29
Giant's Reasons for the Merger ......................................................... 29

THE SPIN-OFF ............................................................................ 30

CONVERSION OF THE SOLITE PREFERRED STOCK ................................................ 30
Voting Requirements for Approval of Preferred Stock Amendment .......................... 33
Recommendation of the Solite Board ..................................................... 33
Opinion of Ferris, Baker Watts ......................................................... 33

THE MERGER .............................................................................. 36
Effective Time ......................................................................... 36
Exchange Ratio ......................................................................... 36
Shares of Giant Common Stock to be Held in Escrow ...................................... 36
</TABLE>

iv
<PAGE>

<TABLE>
<S> <C>
Cancellation of Solite Common Stock Shares .............................................. 36
Exchange Procedures; Distributions with Respect to Unexchanged Shares; No Further
Ownership Rights in Solite Common Stock; No Fractional Shares of Giant Common Stock ... 37
Admission for Trading on Nasdaq National Market ......................................... 38
Certain Significant Considerations ...................................................... 38
Certain Federal Income Tax Consequences ................................................. 38
Backup Withholding ...................................................................... 40
Dissenters' Rights ...................................................................... 40
Proxy Agreement ......................................................................... 42
Interests of Certain Persons in the Merger and the Conversion ........................... 42
Operations After the Merger ............................................................. 43
Dividends ............................................................................... 43
Right of the Solite Board to Withdraw Recommendation .................................... 43
Regulatory Filings and Approvals ........................................................ 43
Resale of Giant Common Stock Received in the Merger ..................................... 43

DESCRIPTION OF GIANT ..................................................................... 44
General ................................................................................. 44
Competition ............................................................................. 46
Resource Recovery ....................................................................... 47
Management of Giant ..................................................................... 48

DESCRIPTION OF SOLITE .................................................................... 49
General ................................................................................. 49
Environmental Matters ................................................................... 50
Legal Matters ........................................................................... 51
Security Ownership of Directors, Executive Officers and Owners of five percent or more of
Solite Stock. .......................................................................... 52

COMPARATIVE STOCK PRICES AND DIVIDENDS ................................................... 53

UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS ....................................... 54

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS .............................. 56

GIANT CONSOLIDATED SELECTED HISTORICAL FINANCIAL INFORMATION AND OTHER
DATA .................................................................................... 60

GIANT MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS ................................................................... 61

SOLITE CORPORATION AND SUBSIDIARIES SELECTED HISTORICAL FINANCIAL
INFORMATION ............................................................................. 65

SOLITE CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ........................................ 66

TERMS OF THE MERGER AGREEMENT ............................................................ 69
The Merger; Exchange and Conversion of Shares ........................................... 69
Shares of Giant Common Stock to be Held in Escrow ....................................... 69
Exchange of Share Certificates .......................................................... 70
Effective Time .......................................................................... 70
Termination Rights ...................................................................... 70
</TABLE>

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<TABLE>
<S> <C>
Certain Fees and Expenses ............................................................... 71
Conditions to the Merger ................................................................ 71
Representations and Warranties .......................................................... 72
Certain Covenants of Solite ............................................................. 73
Certain Covenants of Solite and Giant ................................................... 73
Indemnity Provisions .................................................................... 73
No Solicitation of Other Offers ......................................................... 73
Amendments .............................................................................. 74
Ancillary Agreements .................................................................... 74

CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS OF SOLITE, GIANT, AND
NORTHEAST SOLITE ........................................................................ 78
Authorized Capital Stock ................................................................ 78
Shareholder Voting Requirements ......................................................... 78
Shareholder Action Without a Meeting .................................................... 78
Dissenters' Rights ...................................................................... 79
Amendment of the Certificate or Articles of Incorporation ............................... 79
Amendment of Bylaws ..................................................................... 79
Directors ............................................................................... 80
Limitations on Director Liability ....................................................... 80
Indemnification ......................................................................... 80
Business Combination Statutes ........................................................... 80

EXPERTS .................................................................................. 81

LEGAL MATTERS ............................................................................ 81

SOLITE FINANCIAL STATEMENTS .............................................................. F-1
Financial Statements (Unaudited) of Solite Corporation and Subsidiaries for the interim
periods ended December 31, 1997 and 1996 ............................................... F-1
Financial Statements of Solite Corporation and Subsidiaries for the years ended
March 31, 1997 and 1996 ................................................................ F-9
Financial Statements of Solite Corporation for the years ended
March 31, 1997 and 1996 ................................................................ F-27

ANNEX I -- Conversion Schedule ....................................................... I-1
ANNEX II -- Preferred Stock Amendment ................................................... II-1
ANNEX III -- Opinion of Ferris, Baker Watts, Incorporated ................................ III-1
ANNEX IV -- Agreement and Plan of Merger ................................................ IV-1
ANNEX V -- Opinion of CoView Capital, Inc. ............................................. V-1
ANNEX VI -- Article 15 of the Virginia Stock Corporation Act ............................ VI-1
</TABLE>

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SUMMARY

The following is a summary of certain information contained elsewhere in
this Proxy Statement/Prospectus. Reference is made to, and this summary is
qualified in its entirety by, the more detailed information contained elsewhere
in this Proxy Statement/Prospectus, in the attached Annexes and in the
documents incorporated herein by reference. Shareholders are urged to read
carefully this Proxy Statement/Prospectus and the attached Annexes in their
entirety.

Important Notice Concerning Proxy Statement/Prospectus

On December 5, 1997, a Notice of Special Meeting of Shareholders and
accompanying Proxy Statement/Prospectus was mailed to shareholders of Solite
Corporation, a Virginia corporation ("Solite"), concerning a proposed amendment
of the Solite Articles of Incorporation and a proposed merger with a wholly
owned subsidiary of Giant Cement Holding, Inc., a Delaware corporation
("Giant"). The completion of such proposed merger was subject to, among other
things, the expiration of the statutory waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended the ("HSR
Act"). As a result of a request for additional information from Solite and Giant
made by the Antitrust Division of the U.S. Justice Department, such waiting
period did not expire by the date scheduled for such special meeting of
shareholders or the subsequent dates to which such special meeting was
adjourned.

In early February 1998, at Giant's request, an agreement in principle was
reached by Giant and Solite to modify the terms of the proposed merger by,
among other things, reducing the amount of consideration to the shareholders of
Solite. Accordingly, the Board of Directors of Solite has directed the call of
a new meeting and the mailing of this new Proxy Statement/Prospectus
describing, among other things, the terms of the proposed merger, as modified.

THIS PROXY STATEMENT/PROSPECTUS SUPERSEDES IN ITS ENTIRETY THE PROXY STATEMENT/
PROSPECTUS DATED DECEMBER 5, 1997 THAT WAS EARLIER MAILED TO SHAREHOLDERS OF
SOLITE. YOU ARE URGED TO READ THIS PROXY STATEMENT/PROSPECTUS CAREFULLY IN
LIGHT OF IMPORTANT DIFFERENCES FROM THE DECEMBER 5, 1997 PROXY
STATEMENT/PROSPECTUS.

Introduction
This Proxy Statement/Prospectus relates to the proposed merger (the
"Merger") of Solite Corporation, a Virginia corporation ("Solite"), with GCHI
Acquisition Corp., a Virginia corporation ("Merger Sub") and a wholly owned
subsidiary of Giant, pursuant to an Agreement and Plan of Merger dated as of
September 10, 1997, as amended, including the plan of merger attached thereto
as Schedule A-1 (the "Merger Agreement"). As a result of the Merger, Solite
will become a wholly owned subsidiary of Giant. At the effective time of the
Merger (the "Effective Time"), each outstanding share of common stock, par
value $2.00 per share, of Solite (the "Solite Common Stock"), including shares
of Solite Preferred Stock (as defined) converted into Solite Common Stock, but
excluding shares held by Solite shareholders who perfect their dissenters'
rights under the Virginia Stock Corporation Act (the "VSCA"), will be converted
into the right to receive the number of shares of common stock, par value $0.01
per share, of Giant (the "Giant Common Stock") equal to the quotient derived by
dividing (i) 175,000 shares of Giant Common Stock by (ii) the total number of
shares of Solite Common Stock outstanding as of the Effective Time, including
all shares of Solite Common Stock issuable upon conversion of the Solite
Preferred Stock. Pursuant to the Merger Agreement, an additional 150,000 shares
of Giant Common Stock will be placed in escrow upon consummation of the Merger.
All, part, or none of 75,000 of such 150,000 shares shall be distributed to the
persons who were holders of Solite Common Stock immediately prior to the Merger
(including holders of Solite Preferred Stock that was converted into Solite
Common Stock), depending upon whether, and the extent by which, as of the
Effective Time, Solite's consolidated net book value (as defined in the Merger
Agreement) exceeds $2.8 million and its net current assets (as defined in the
Merger Agreement) exceeds $3.3 million. The other 75,000 shares of Giant Common
Stock shall be held in escrow to satisfy the indemnification claims, if any, of
Giant under the Merger Agreement. Unless a claim or claims by Giant are then
pending in amounts in excess of the then value of 37,500 shares of Giant Common
Stock, 37,500 shares of Giant Common Stock held in escrow shall be released on
the second anniversary of the Effective Time, and unless any claim or claims by
Giant are then pending, the balance of the shares of Giant Common Stock held in
escrow shall be released on the third anniversary of the Effective Time.

This Proxy Statement/Prospectus also relates to an amendment to the Solite
Articles of Incorporation (the "Preferred Stock Amendment") pursuant to which
each outstanding share of Series A Preferred Stock, par value $50 per share
(the

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"Solite Series A Preferred Stock"), of Solite, the Series B Preferred Stock,
par value $50 per share (the "Solite Series B Preferred Stock") of Solite, and
the Series C Preferred Stock, par value $200 per share, of Solite, (the "Solite
Series C Preferred Stock" and, together with the Solite Series A Preferred
Stock and Solite Series B Preferred Stock, the "Solite Preferred Stock") will
be converted (the "Conversion") into Solite Common Stock in accordance with the
formula represented by the Schedule set forth on Annex I hereto. Immediately
following the Conversion, and immediately before the Merger, Solite will
distribute (the "Spin-Off") to each holder of Solite Common Stock (including
holders of Solite Common Stock as a result of the Conversion) a fully paid and
nonassessable share of Northeast Solite Corporation, a New York corporation and
a wholly-owned subsidiary of Solite ("Northeast Solite" or "Northeast"), for
each share of Solite Common Stock held after the Conversion.

Assuming the conversion of all shares of Solite Preferred Stock on the
basis proposed in this Proxy Statement/Prospectus and assuming the issuance of
175,000 shares of Giant Common Stock, based upon the average closing bid and ask
prices of shares of Giant Common Stock for the twenty trading days ended March
11, 1998, as reported on the Nasdaq National Market, each such outstanding share
of Solite Common Stock would have been converted into .2221 shares of Giant
Common Stock with a then-current market value of $5.66 had the Merger been
consummated on that date, and the aggregate then-current market value of the
shares of Giant Common Stock issued in the Merger would have been $4,462,500 in
exchange for all of the 787,972 shares of Solite Common Stock which would be
outstanding. Assuming the 150,000 shares of Giant Common Stock placed in escrow
are released and based upon the average closing bid and ask prices of shares of
Giant Common Stock for the twenty trading days ended March 11, 1998 reported on
the Nasdaq National Market, the holder of each outstanding share of Solite
Common Stock would also have received .1904 shares of Giant Common Stock with a
then-current market value of $4.86 if the escrow shares had been released on
that date and the aggregate then-current market value of the shares of Giant
Common Stock released from escrow would have been $3,825,000. There can be no
assurance that the shares of Giant Common Stock placed in escrow upon
consummation of the Merger will be released and that holders of Solite Common
Stock will receive such shares as consideration in the Merger. The formula for
conversion of the Solite Preferred Stock is based in part on the average of the
closing bid and ask prices of Giant Common Stock for the 20 trading days before
the Effective Time. Since the Effective Time is expected to be after the date of
the Special Meeting, holders of Solite Preferred Stock and Solite Common Stock
will not know at the time of the Special Meeting the number of shares of Giant
Common Stock to be received for each share of Solite Common Stock in the Merger
or the value of such Giant Common Stock. Notwithstanding the foregoing, the
obligation of Solite to complete the Merger is not subject to the Giant Common
Stock having exceeded a certain minimum value at the Effective Time.

Giant
Giant manufactures a complete line of portland and masonry cements used in
residential, commercial, and infrastructure construction applications. Giant's
manufacturing facilities have an aggregate rated annual clinker capacity of
approximately 1.4 million tons, ranking it as the 17th largest producer of
cement in the United States. Its two manufacturing facilities are fully
integrated from limestone mining through cement production to serve the
South-Atlantic and Middle-Atlantic regions of the United States. Giant
pioneered resource recovery techniques for use in the manufacturing of cement
and is one of the largest users of waste-derived fuels in the cement industry.

Giant Common Stock (symbol: GCHI) is admitted for trading on the Nasdaq
National Market.

Solite
Solite and its subsidiaries produce and sell construction materials to the
commercial, industrial, governmental and residential construction markets,
including building, bridge and road markets. Solite's primary geographic market
is the eastern United States. Solite's principal product is "Solite[RegTM]," a
lightweight aggregate primarily used in concrete and masonry blocks. Solite's
operations also include sand, gravel, masonry block, hazardous waste fuels,
coal and transportation.

Special Meeting

A Special Meeting of the shareholders of Solite will be held at 9:00 a.m.,
local time, on Tuesday, April 28, 1998 (the "Special Meeting"), at the offices
of McGuire Woods Battle & Boothe LLP, fourth floor, 901 East Cary Street,
Richmond, Virginia. Only holders of record of Solite Common Stock and holders
of Solite Preferred Stock

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<PAGE>

at the close of business on March 1, 1998 (the "Record Date"), will be entitled
to notice of, and to vote at, the Special Meeting. The Solite Common Stock and
the Solite Preferred Stock are sometimes hereinafter referred to collectively as
the "Solite Stock." At the Special Meeting, the holders of Solite Stock will be
asked to consider and vote upon the approval of the Preferred Stock Amendment
and the Merger Agreement, copies of which are attached as Annexes II and IV,
respectively, to this Proxy Statement/Prospectus. Solite will be the surviving
corporation in the Merger (the "Surviving Corporation") and will become a wholly
owned subsidiary of Giant. The holders of Solite Stock will not be asked to
consider and vote on the approval of the Spin-Off. The holders of Solite Stock
will also transact such other business as may properly come before the Special
Meeting.

At the Special Meeting, holders of Solite Stock will be advised of (i) the
Giant Conversion Price as it would be determined if the Effective Time occurred
on the date of the Special Meeting, (ii) the number of shares of Solite Common
Stock into which each series of Solite Preferred Stock would be converted based
on such price, and (iii) the number of shares of Giant Common Stock to be
received for each share of Solite Common Stock in the Merger based on such
price. Holders of Solite Stock not attending the meeting may obtain this
information beginning at 8:00 a.m. on the day of the Special Meeting by calling
(804) 775-1031. Holders of Solite Stock outside the Richmond, Virginia calling
area may call collect. If, after obtaining such information, holders of Solite
Stock not attending the Special Meeting who have previously voted by proxy
desire to revoke their proxy or change their vote, they may fax signed
instructions to such effect to J.J. Jewett, III at (804) 698-2152. To be valid,
any such instructions must be received prior to 9:30 a.m. on the date of the
Special Meeting, which is the time when polls for voting on all matters at the
Special Meeting will be closed. Holders of Solite Stock attending the Special
Meeting may revoke any previously delivered proxies at the Special Meeting, if
they so desire.

Giant and Solite intend to consummate the Merger immediately following the
Special Meeting. However, the consummation of the Merger is subject, among
other things, to the expiration of the statutory waiting period under the HSR
Act. On October 10, 1997, Giant and Solite received a second request for
information from the Department of Justice (the "Antitrust Division") in
connection with their filing of certain required information under the HSR Act.
As part of this process, at the request of the Antitrust Division, Solite has
agreed to determine by April 20, 1998 whether there are any alternative
purchasers for certain of its assets. The Antitrust Division has indicated it
will advise Solite and Giant by April 27, 1998 whether it will permit the
transaction to proceed without challenge. See "SUMMARY--Regulatory Matters" and
"THE MERGER--Regulatory Filings and Approvals."

Required Vote
Approval of the Merger Agreement and the Preferred Stock Amendment requires
(i) the affirmative vote of more than two-thirds of the votes that holders of
the outstanding Solite Common Stock and Solite Preferred Stock, voting as one
voting group, are entitled to cast and (ii) the affirmative vote of more than
two-thirds of the votes that the holders of the outstanding Solite Common Stock,
Solite Series A Preferred Stock, Solite Series B Preferred Stock and Solite
Series C Preferred Stock, each voting as a separate voting group, are entitled
to cast. Approval of the Preferred Stock Amendment also requires the affirmative
vote of a majority of the votes that holders of the outstanding Solite Common
Stock and Solite Preferred Stock, other than John W. Roberts and his family, are
entitled to cast.

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<PAGE>

Although no other affirmative vote is required to approve the Merger
Agreement, the consummation of the Merger is conditioned upon adoption of the
Preferred Stock Amendment, which must be approved by the holders of a majority
of the votes that the holders of the outstanding Solite Preferred Stock and
Solite Common Stock, other than John W. Roberts and his family, are entitled to
cast. Such holders hold 1,575 shares (or 11.2%) of the outstanding Solite
Preferred Series B Stock and 263,165 shares (or 49.4%) of the outstanding
Solite Common Stock. The Proxy Agreement granted to Giant in connection with
the Merger Agreement does not direct the vote of any shares of Solite Stock on
the Preferred Stock Amendment. Directors and officers of Solite (other than
John W. Roberts and members of his family) holding 517 shares (3.67%) of the
outstanding Solite Preferred Series B Stock and 8,805 shares (1.65%) of the
outstanding Solite Common Stock have indicated their intention to vote in favor
of the Preferred Stock Amendment.

The approval of Giant's shareholders is not required to effect the Merger.

Proxies
Solite shareholders are requested to complete, sign, date and return
promptly the enclosed proxy card in the postage-paid envelope provided for this
purpose to ensure that their shares are voted. A holder of shares of Solite
Stock may revoke a proxy by submitting a later dated proxy with respect to the
same shares at any time prior to 9:30 a.m. on the date of the Special Meeting
by delivering written notice of revocation to the Secretary of Solite at any
time prior to 9:30 a.m. on the date of the Special Meeting or by attending the
Special Meeting and voting in person. Mere attendance at the Special Meeting
will not in and of itself revoke a proxy.

Certain Significant Considerations
In considering whether to approve the Merger, the shareholders of Solite
should carefully consider the factors described under "RISK FACTORS" as well as
the fact that (i) the total number of shares of Giant Common Stock issuable
pursuant to the Merger will not be adjusted based upon changes in the market
price of the shares of Giant Common Stock, which at the Effective Time may vary
significantly from the most recent market price set forth in this Proxy
Statement/Prospectus or the market price on the date of the opinion of CoView
Capital, Inc. or on the date of the Special Meeting and (ii) certain members of
Solite's management and Solite's financial advisors have interests in the
Merger, which interests may be viewed as giving rise to potential conflicts of
interest. For certain information about these factors, see "--The
Merger--Interests of Certain Persons in the Merger" in this Summary, "RISK
FACTORS--Potential Volatility of Giant Common Stock Prices", "BACKGROUND OF THE
SPIN-OFF AND THE MERGER--General", "--Reasons for the Merger; Recommendation of
the Solite Board", "--Opinion of CoView Capital" and "THE MERGER--Interests of
Certain Persons in the Merger."

The Spin-Off
Immediately following the Conversion, and immediately before the Merger,
Solite will distribute (the "Spin- Off") to each holder of Solite Common Stock
(including holders of Solite Common Stock as a result of the Conversion) a
fully paid and nonassessable share of common stock, par value $.20 per share of
Northeast Solite ("Northeast Solite Common Stock") for each share of Solite
Common Stock held after the Conversion. The Spin-Off is conditioned upon
approval of the Merger Agreement and the Preferred Stock Amendment and will not
occur unless all conditions of the Merger have been satisfied.

Before the Merger and the Spin-Off, Solite will contribute to Northeast
Solite certain assets, as well as stock of certain subsidiaries, in
transactions intended to qualify for tax-free treatment under the Internal
Revenue Code of 1986, as amended (the "Code"). As a result, at the time of the
Spin-Off, Northeast Solite will hold the following: (i) two lightweight
aggregate plants (one located in New York and one located in Kentucky), as well
as hazardous waste fuels facilities associated with the Kentucky plant; (ii)
one masonry block manufacturing and sales facility in Chesapeake, Virginia;
(iii) the coal mining properties owned and leased by Solite in Kentucky and
West Virginia; (iv) a Florida tank farm storage facility and related assets,
(v) a closed Florida lightweight aggregate plant facility and related assets;
(vi) a sand and gravel plant in Hanover County, Virginia; (vii) certain lease
and royalty (income) agreements, a leasehold interest in 365 acres in Wilcox
County, Alabama, an option agreement to acquire 655 acres of real property in
Fluvanna County, Virginia and a 69-acre parcel of real property in Spotsylvania
County, Virginia; and (viii) the stock of Solite's inactive subsidiaries.

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<PAGE>

For financial reporting purposes herein, the term Solite Corporation and
Subsidiaries is used to describe Solite as a whole prior to the Spin-Off, and
Solite Corporation is used to describe Solite on a "carve out" basis as if the
Spin-Off were completed.

The holders of Solite Stock will not be asked to consider and vote on the
approval of the Spin-Off.

Conversion of Solite Preferred Stock
In order to simplify Solite's capital structure and to facilitate the
Spin-Off and the Merger, Solite proposes to convert all outstanding shares of
Solite Preferred Stock to Solite Common Stock. The Conversion will be
effectuated by the adoption of the Preferred Stock Amendment, attached hereto
as Annex II. The Merger and the Spin-Off are conditioned upon approval of the
Preferred Stock Amendment and completion of the Conversion. The Conversion will
be effected immediately before the Spin-Off and the Merger, and will occur only
if all other conditions to the Merger have been satisfied.

The Board of Directors of Solite (the "Solite Board") has unanimously
approved the Preferred Stock Amendment. Ferris, Baker Watts, Incorporated
("FBW") has delivered a written opinion to the Solite Board that the
consideration to be received by the holders of Solite Preferred Stock in
exchange for the conversion of their shares of Solite Preferred Stock to Solite
Common Stock is fair to the holders of Solite Preferred Stock and Solite Common
Stock. The full text of FBW's written opinion which sets forth, among other
things, assumptions made, procedures followed, matters considered and
limitations on the scope of the review undertaken by FBW in rendering its
opinion, is attached hereto as Annex III. Holders of Solite Common Stock and
holders of Solite Preferred Stock are strongly urged to read such opinion in
its entirety. See "Conversion of the Solite Preferred Stock--Opinion of Ferris,
Baker Watts."

The Preferred Stock Amendment will convert, without further action by the
holders of the Solite Preferred Stock, each issued and outstanding share of
Solite Preferred Stock into Solite Common Stock in accordance with the formula
represented by the Schedule set forth on Annex I hereto (collectively, the
"Preferred Stock Conversion Formula"). Upon the issuance of a certificate of
amendment by the Office of the Clerk of the State Corporation Commission of the
Commonwealth of Virginia evidencing the adoption of the Preferred Stock
Amendment, each issued and outstanding preferred stock certificate which
previously evidenced ownership of shares of Solite Preferred Stock will
evidence the ownership of the number of shares of Solite Common Stock
determined in accordance with the Preferred Stock Conversion Formula. Each
holder of shares of Solite Preferred Stock converted into Solite Common Stock
who would otherwise be entitled to receive a fraction of a share of Solite
Common Stock in the Conversion will receive, in lieu thereof, cash (without
interest) in an amount determined as set forth on Annex I.

As a result of the reduction in the aggregate number of shares to be
issued in the Merger, the Preferred Stock Conversion Formula will result in the
percentage of shares received by former holders of Solite Preferred Stock being
greater than the percentage that would have been received under the conversion
formula proposed in connection with the Merger Agreement as executed in
September 1997.

The Merger
The Parties
Giant Cement Holding, Inc. Giant's principal executive offices are located
at 320-D Midland Parkway, Summerville, SC 29485, telephone number (803)
851-9898. As used in this Proxy Statement/Prospectus, "Giant" refers to Giant
Cement Holding, Inc., its subsidiaries and 50% owned companies, and its
predecessor, unless otherwise indicated.

GCHI Acquisition Corp. Merger Sub is a Virginia corporation and is a wholly
owned subsidiary of Giant, formed solely for the purpose of effecting the
Merger.

Solite Corporation. Solite's principal executive offices are located at
2508 Chamberlayne Avenue, Richmond, VA 23222, telephone number (804) 321-6761.
As used in this Proxy Statement/Prospectus, unless otherwise indicated, "Solite"
refers to Solite and its subsidiaries following the Spin-Off.

Exchange Ratio. At the Effective Time, each outstanding share of Solite
Common Stock, other than shares as to which the holders have perfected their
dissenters' rights under the VSCA, will be converted into the right

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<PAGE>

to receive the number of shares of Giant Common Stock equal to the quotient
derived by dividing (i) 175,000 shares of Giant Common Stock by (ii) the total
number of shares of Solite Common Stock outstanding as of the Effective Time,
including all shares of Solite Common Stock issuable upon conversion of the
Solite Preferred Stock. No fractional shares of Giant Common Stock will be
issued in the Merger and the holders of shares of Solite Common Stock will be
entitled to a cash payment in lieu of any such fractional shares of Giant Common
Stock that would otherwise be issued in the Merger.

Shares of Giant Common Stock to be Held in Escrow. Pursuant to the Merger
Agreement, an additional 150,000 shares of Giant Common Stock will be placed in
escrow upon consummation of the Merger.

75,000 of such shares would be returned to Giant and cancelled if, as of
the Effective Time, the consolidated net book value of Solite is $2.8 million
or less or the net current assets of Solite are $3.3 million or less. If such
consolidated net book value is more than $4.5 million and such net current
assets are more than $5 million, all such 75,000 shares would be distributed to
the persons who were holders of Solite Common Stock immediately prior to the
Merger (including holders of Solite Preferred Stock that was converted into
Solite Common Stock, but excluding holders who have perfected their dissenters'
rights under the VSCA) on the basis of each such share of Solite Common Stock
entitling such former holder to the number of shares of Giant Common Stock
equal to the quotient derived by dividing 75,000 by the total number of
outstanding shares of Solite Common Stock as of the Effective Time. If such
consolidated net book value is more than $2.8 million but less than $4.5
million, or such net current assets are more than $3.3 million but less than $5
million, the shares of Giant Common Stock held pursuant to such escrow shall be
returned, in part, to Giant for cancellation and distributed, in part, to such
holders of Solite Common Stock on a formula basis with the Giant Common Stock
returned valued at $22 per share. The $22 per share valuation was determined by
Giant and Solite based upon the approximate market price per share of Giant
Common Stock on the date Giant and Solite negotiated the terms of the escrow,
the effect of which is to prevent Solite shareholders from benefitting from an
increase in the price of the Giant Common Stock or detrimenting from a decrease
in the price of Giant Common Stock, on shares that ultimately are returned to
Giant pursuant to the terms of the Merger Agreement.

The other 75,000 shares of Giant Common Stock shall be held in escrow and
shall be available to satisfy the indemnification claims, if any, of Giant under
the Merger Agreement. Unless a claim or claims by Giant are then pending in
amounts in excess of the then value of 37,500 shares of Giant Common Stock,
37,500 shares of Giant Common Stock held in escrow shall be released on the
second anniversary of the Effective Time, and unless any claim or claims by
Giant are then pending, the balance of the shares of Giant Common Stock held in
escrow shall be released on the third anniversary of the Effective Time. See
"TERMS OF THE MERGER AGREEMENT--Indemnification Provisions."

Review and Recommendation of the Merger by the Board of Directors of
Solite. The Board of Directors of Solite (the "Solite Board") has unanimously
approved the Merger Agreement, determined that the Merger is in the best
interests of Solite's shareholders, and recommends that the shareholders of
Solite vote FOR the approval of the Merger Agreement. In reaching its decision
to approve the Merger Agreement and recommend approval of the Merger Agreement,
the Solite Board considered, without assigning any relative or specific
weights, a number of factors including, among other things, (i) the Solite
Board's familiarity with the history, financial condition and results of
operations of Solite, the financial condition and results of operations of
Giant, the prospects of Solite both as an independent entity and as an
affiliated entity of Giant and the value of the assets and liabilities to be
held by Northeast Solite after the Spin-Off, (ii) the greater liquidity for
Solite shareholders as a result of exchanging Solite Common Stock, which is not
publicly traded, for Giant Common Stock, which trades on the Nasdaq National
Market; (iii) the opportunity for improved operating performance by Solite as a
result of merging with a strong geographically complementary company in a
closely-related business, with the expectation that lower costs could be
achieved as a result of the Merger; (iv) the opinions of Solite's financial
advisors to the effect that the consideration to be received by the Solite
shareholders in the Merger is fair, from a financial point of view, to such
shareholders; and (v) the structure of the Merger, Spin-Off and Conversion as
transactions intended to qualify for tax-free treatment under the Code. There
can be no assurance, however, that any or all of the potential results
described above will be achieved if the Merger is consummated. In considering
the recommendation of the Solite Board, holders of Solite Preferred Stock and
holders of Solite Common Stock should be aware that certain members of the
Solite Board and management (particularly John W. Roberts) have interests which
may present them with potential conflicts of interest. The Solite Board was
aware of these potential conflicts and considered them in making its
recommendation and approving the Merger Agreement and the Preferred Stock
Amendment. See

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"BACKGROUND OF THE SPIN-OFF AND THE MERGER--General" and "--Reasons for the
Merger; Recommendation of the Solite Board."

Opinion of CoView Capital. CoView Capital, Inc. ("CoView Capital"),
delivered an oral opinion on February 9, 1998 that the consideration to be
received in the Merger by the holders of Solite Common Stock is fair to such
holders from a financial point of view. CoView Capital confirmed such opinion in
writing on March 16, 1998. The full text of CoView Capital's written opinion,
which sets forth assumptions made, matters considered and limitations on the
review undertaken in connection with the opinion, is attached as Annex V hereto
and is incorporated herein by reference. Holders of Solite Common Stock are
strongly urged to read such opinion in its entirety. See "BACKGROUND OF THE
SPIN-OFF AND THE MERGER--Opinion of CoView Capital."

Interests of Certain Persons in the Merger. As of the Record Date, the
directors and executive officers of Solite beneficially owned an aggregate of
251,055, 8,700, 12,195 and 15,429 shares of Solite Common Stock, Solite Series A
Preferred Stock, Solite Series B Preferred Stock and Solite Series C Preferred
Stock, respectively. Pursuant to the Merger Agreement, Solite's directors and
executive officers will receive the same consideration for their shares of
Solite Common Stock, including shares of Solite Preferred Stock converted into
Solite Common Stock, as the other Solite shareholders.

Pursuant to the CoView Capital engagement letter, CoView Capital provided
advisory services and a financial opinion in connection with the Merger and
Solite has agreed to pay a fee of 1% to CoView Capital based on the aggregate
value of the transaction, including debt assumed, if the Merger is consummated.

Mr. John W. Roberts has personally guaranteed $2 million of the obligations
of Solite for borrowings under its bank line of credit. In connection with
Merger, Giant intends to refinance such indebtedness with proceeds from Giant's
credit facilities. As a result of such refinancing, Mr. Roberts will be relieved
of any further obligations under such guarantees. See "THE MERGER--Interests of
Certain Persons in the Merger."

As of the record date, John W. Roberts and his family beneficially own
8,700 shares (or 100%) of the outstanding Solite Series A Preferred Stock,
12,518 shares (or 88.8%) of the outstanding Solite Series B Preferred Stock, and
15,429 shares (or 100%) of the outstanding Series C Preferred Stock. In
addition, members of the Solite Board and officers of Solite own an additional
517 shares (or 3.67%) of the outstanding Solite Series B Preferred Stock. As a
result of the reduction in the aggregate number of shares to be issued in the
Merger, the percentage of such shares received by former holders of Solite
Preferred Stock will be greater than the percentage that would have been
received under the Merger Agreement executed in September 1997. As a result of
the Conversion, John W. Roberts will beneficially own a majority of the
outstanding Northeast Solite Common Stock after the Spin-Off, and consequently
will be able to elect the entire Board of Directors of Northeast Solite and may
be able to amend the Articles of Incorporation of Northeast Solite, without the
vote of any other shareholder. Mr. Roberts is expected to be a director of both
Northeast Solite and Giant after the Merger.

Security Ownership of Certain Persons. As of the Record Date, there were
532,750 shares of Solite Common Stock, 8,700 shares of Solite Series A
Preferred Stock, 14,093 shares of Solite Series B Preferred Stock, and 15,429
shares of Solite Series C Preferred Stock outstanding, of which an aggregate
380,055 shares of Solite Common Stock (71.3%), 8,700 shares of Solite Series A
Preferred Stock (100%), 12,195 shares of Solite Series B Preferred Stock
(86.5%), and 15,429 shares of Solite Series C Preferred Stock (100%) were owned
of record by the directors, officers and persons holding 5% or more of the
outstanding shares of Solite Common Stock, Solite Series A Preferred Stock,
Solite Series B Preferred Stock or Solite Series C Preferred Stock. Certain
Solite shareholders have entered into a Proxy Agreement. See "--Proxy
Agreement."

Conditions to the Merger. The obligations of Giant, Merger Sub and Solite
to consummate the Merger are subject to the satisfaction or waiver of various
conditions, including, without limitation, Solite shareholder approval of the
Merger Agreement and the Preferred Stock Amendment. It is also a condition,
among others, to completion of the Merger, that (i) holders of 1% or more,
owning in the aggregate at least 50%, of the total outstanding capital stock of
Northeast Solite enter into a Northeast Shareholder Agreement restricting his or
her ability to transfer shares of Northeast Solite Common Stock (it is
anticipated that Mrs. Clay H. Barr, Joan R. Cates, Davenport & Co., Harry W.
Hahn, Jr. (revocable trust), H. C. Hofheimer II, Kaufman Americana Foundation,
Carolyn L. Kaufman, Charles L. Kaufman, Jr., David L. Kaufman, George M.
Kaufman, Linda M. Kaufman, Jane Martin Roberts, John Martin Roberts, John W.
Roberts, John W. Roberts, as trustee and Elise H. Wright may enter into the
Northeast Shareholder

7
<PAGE>

Agreement), and (ii) holders of 1% or more, owning in the aggregate at least
70%, of the total outstanding shares of Giant Common Stock to be issued in
connection with the Merger enter in a Giant Shareholder Agreement restricting
his or her ability to transfer shares of Giant Common Stock (it is anticipated
that Mrs. Clay H. Barr, Joan R. Cates, Davenport & Co., Harry W. Hahn, Jr.
(revocable trust), H. C. Hofheimer II, Kaufman Americana Foundation, Carolyn L.
Kaufman, Charles L. Kaufman, Jr., David L. Kaufman, George M. Kaufman, Linda M.
Kaufman, Jane Martin Roberts, John Martin Roberts, John W. Roberts, John W.
Roberts, as trustee and Elise H. Wright may enter into the Giant Shareholder
Agreement). See "TERMS OF THE MERGER AGREEMENT--Conditions to the Merger."

No Solicitation. The Merger Agreement provides that neither Solite, its
subsidiaries or affiliates, nor any of their respective directors, officers,
employees, agents or representatives shall, directly or indirectly, solicit,
initiate, facilitate or encourage any inquiries or the making of any proposal
with respect to any merger, consolidation or other business combination
involving the Core Business (as defined in the Merger Agreement) or the
acquisition of capital stock of Solite or any subsidiary constituting part of
the Core Business or all or any significant assets of the Core Business (an
"Acquisition Transaction") or negotiate, explore or otherwise engage in
discussions with any person (other than Giant and its representatives) with
respect to any Acquisition Transaction, or enter into any agreement, arrangement
or understanding with respect to any such Acquisition Transaction or which would
require it to abandon, terminate or fail to consummate the Merger or any other
transaction contemplated by the Merger Agreement; provided, however, that Solite
may, in response to an unsolicited written proposal from a third party, furnish
information to and engage in discussions with such third party, in each case
only if the Solite Board determines in good faith, by majority vote after
consultation with its financial advisor and based upon the advice of outside
counsel, that failing to take such action would result in a breach of the
fiduciary duties of the Solite Board and prior to taking such action, Solite (x)
provides reasonable notice to Giant to the effect that it is taking such action
and (y) receives from such corporation, partnership, person or other entity or
group (and delivers to Giant) an executed confidentiality agreement in customary
form. In the Merger Agreement, Solite agrees to immediately advise Giant in
writing of any inquiries or proposals (or desire to make a proposal) received by
(or indicated to), any such information from, or any such negotiations or
discussions sought to be initiated or continued with, any of it, its
subsidiaries or affiliates, or any of the respective directors, officers,
employees, agents or representatives of the foregoing in each case from a person
(other than Giant and its representatives) with respect to an Acquisition
Transaction, and the terms thereof, including the identity of such third party,
and to update on an ongoing basis or upon Giant's request, the status thereof,
as well as any actions taken or other developments. Giant has waived the no
solicitation provisions of the Merger Agreement in connection with Solite's
efforts to determine whether there are alternative purchasers for certain of its
assets pursuant to procedures specified by the Antitrust Division. See
"SUMMARY--Regulatory Matters" and "TERMS OF THE MERGER AGREEMENT-- No
Solicitation of Other Offers."

Right of the Solite Board to Withdraw Recommendation. Under the Merger
Agreement, the Solite Board may not (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Giant or Merger Sub, the Solite
Board's approval or recommendation of the Merger Agreement, (ii) approve or
recommend, or propose to approve or recommend, any Acquisition Transaction, or
(iii) cause Solite to enter into any agreement with respect to any Acquisition
Transaction. Notwithstanding the foregoing, in the event that prior to the
Effective Time the Solite Board determines in its good faith reasonable
judgment, by majority vote, after consultation with its financial advisors that
the Acquisition Transaction is more favorable to the shareholders of Solite than
the Merger and, based upon the advice of outside counsel to Solite, that such
action is required by the fiduciary duties of the Solite Board, the Solite Board
may withdraw or modify its approval or recommendation of the Merger Agreement
and the Merger, approve or recommend such Acquisition Transaction, or cause
Solite to enter into an agreement with respect to an Acquisition Transaction,
but only if Solite gives Giant at least five business days prior written notice,
during which time Giant may make, and in such event, Solite shall in good faith
consider, a counter proposal to such Acquisition Transaction.

Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether before or after the shareholders of Solite shall
have approved the Merger Agreement (i) by mutual written consent of Giant and
Solite or (ii) by either Giant or Solite if the Merger shall not have been
consummated before April 30, 1998, (iii) by Giant, if (a) there has been a
breach of any representations or warranties of Solite set forth in the Merger
Agreement, the effect of which, individually or together with all other such
breaches, is a material adverse effect

8
<PAGE>

on the financial condition, results of operations, business, assets,
liabilities, prospects or properties of Solite and its subsidiaries, taken as a
whole, or the ability of Solite to consummate the Merger and the other
transactions contemplated by the Merger Agreement, (b) there has been a breach
in any material respect of any of the covenants or agreements set forth in the
Merger Agreement on the part of Solite, which breach is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by Giant to Solite, (c) the Solite Board (1) withdraws or amends or
modifies in a manner adverse to Giant or Merger Sub its recommendation or
approval to shareholders in respect of this Agreement or the Merger, (2) makes
any recommendation with respect to an Acquisition Transaction (including making
no recommendation or stating an inability to make a recommendation), other than
a recommendation to reject such Acquisition Transaction, or (3) takes any action
that violates the non-solicitation provisions of the Merger Agreement, (d)
subject to certain exceptions, any person or group ("Acquiring Person") other
than Giant, or any affiliate or subsidiary of Giant, shall have become the
beneficial owner of more than 331/3% of the outstanding voting equity of Solite
(either on a primary or a fully diluted basis), or (f) any other Acquisition
Transaction shall have occurred with any Acquiring Person other than Giant, or
any affiliate or subsidiary of Giant, or (iv) by Solite, if (a) there has been a
breach of any representations or warranties of Giant or the Merger Sub set forth
in the Merger Agreement the effect of which, individually or together with all
other such breaches, is a material adverse effect on the financial condition,
results of operations, business, assets, liabilities, prospects or properties of
Giant and its subsidiaries taken as a whole, or the ability of Giant to
consummate the Merger and the other transactions contemplated by the Merger
Agreement, (b) there has been a breach in any material respect of any of the
covenants or agreements set forth in the Merger Agreement on the part of Giant,
which breach is not curable or, if curable, is not cured within 30 days after
written notice of such breach is given by Solite to Giant or (c) such
termination is necessary to allow Solite to enter into an Acquisition
Transaction permitted under the Merger Agreement. See "TERMS OF THE MERGER
AGREEMENT--Termination Rights."

Certain Fees. If the Merger Agreement is terminated as provided above (i)
by Giant due to the Solite Board having withdrawn or modified its recommendation
or approval with respect to the Merger Agreement or the Merger or having made a
recommendation to shareholders with respect to an Acquisition Transaction or
having taken any actions that violate the non-solicitation provisions of the
Merger Agreement, or an Acquiring Person having become the beneficial owner of
331/3% or more of Solite's outstanding voting equity or any other Acquisition
Event occurs, (ii) by Solite, in order to enter into an Acquisition Agreement
permitted by the Merger Agreement, (iii) by either Giant or Solite due to the
Merger not being consummated before April 30, 1998 or (iv) by Giant due to a
material breach or misrepresentation by Solite and, in the case of a termination
described in these clauses (iii) and (iv), within six months of such termination
Solite or any of its subsidiaries shall have consummated an Acquisition
Transaction or have entered into a definitive agreement with respect thereto;
then Solite shall pay to Giant a termination fee of $1,750,000 (the "Termination
Fee"). Giant has waived the Termination Fee in connection with Solite's efforts
to determine whether there are alternative purchasers for certain of its assets
pursuant to procedures specified by the Antitrust Division. See
"SUMMARY--Regulatory Matters."

Proxy Agreement
Giant and certain shareholders of Solite (Jane M. Roberts, John M. Roberts,
John W. Roberts, John W. Roberts, as Trustee, Don K. Burris, Lee A. Facetti, A.
Cabell Ford, Jr., J. J. Jewett, III, Linwood F. Perkins, Jr., and J. Wayne
Thornton, Clay H. Barr, Joan R. Cates, Willard Cates, Jr., H. C. Hofheimer II,
Kaufman Americana Foundation, Carolyn L. Kaufman, George M. Kaufman, Linda H.
Kaufman and Elise H. Wright) have entered into a Proxy Agreement (the "Proxy
Agreement"), pursuant to which such shareholders have granted to Giant an
irrevocable proxy to vote all of their shares of Solite Stock in favor of the
Merger Agreement and against any other Acquisition Transaction. As of the date
of this Proxy Statement/Prospectus, such shareholders owned of record an
aggregate of 409,470, 8,700, 12,287, and 15,429 shares of Solite Common Stock
(76.9%), Solite Series A Preferred Stock (100%), Solite Series B Preferred Stock
(87.2%) and Solite Series C Preferred Stock (100%) outstanding, respectively.
See "THE SPECIAL MEETING" and "THE MERGER--Proxy Agreement." Consequently, no
other affirmative vote is required to approve the Merger Agreement. However, you
are urged to review this Proxy Statement/Prospectus carefully with respect to
the Preferred Stock Amendment and to decide whether to exercise dissenters'
rights. See " CONVERSION OF THE SOLITE PREFERRED STOCK" and "THE
MERGER--Dissenters' Rights."

9
<PAGE>

Although no other affirmative vote is required to approve the Merger
Agreement, the consummation of the Merger is conditioned upon adoption of the
Preferred Stock Amendment, which must be approved by the holders of a majority
of the votes that the holders of the outstanding Solite Preferred Stock and
Solite Common Stock, other than John W. Roberts and his family, are entitled to
cast. Such holders hold 1,575 shares (or 11.2%) of the outstanding Solite
Preferred Series B Stock and 263,165 shares (or 49.4%) of the outstanding Solite
Common Stock. The Proxy Agreement granted to Giant in connection with the Merger
Agreement does not direct the vote of any shares of Solite Stock on the
Preferred Stock Amendment. Directors and officers of Solite (other than John W.
Roberts and members of his family) holding 517 shares (3.67%) of the outstanding
Solite Preferred Series B Stock and 8,805 shares (1.65%) of the outstanding
Solite Common Stock have indicated their intention to vote in favor of the
Preferred Stock Amendment.

Regulatory Matters
The Merger is subject to the requirements of the HSR Act, and the rules
and regulations thereunder, which provide that certain transactions may not be
consummated until required information and material have been furnished to the
Antitrust Division and the Federal Trade Commission (the "FTC") and certain
waiting periods have expired or been terminated. Solite and Giant filed the
required information and material with the Antitrust Division and the FTC on
September 12, 1997. On October 10, 1997, Giant and Solite received a second
request for information from the Antitrust Division in connection with their
filing of certain required information under the HSR Act.

As part of this process, at the request of the Antitrust Division, Solite
has agreed to determine by April 20, 1998 in accordance with specified
procedures whether there are any alternative purchasers for the following
assets: three of Solite's lightweight aggregate facilities (the two facilities
located in Virginia and the one facility located in North Carolina) and one of
Solite's subsidiaries, Oldover Corporation (collectively, the "Hazardous Waste
Fuels Assets").

Pursuant to the procedures specified by the Antitrust Division, Solite
expects to engage by April 3, 1998 an investment banking firm (the "Special
Investment Banker") with no prior relationship with Solite, Giant, or the law
firms representing them in connection with the Merger. The Special Investment
Banker will offer the Hazardous Waste Fuels Assets both as a package and as
separate plants and is required to complete its efforts to find an alternative
purchaser by April 20, 1998. The Special Investment Banker is then required to
provide certain specified information with respect to its efforts to the
Antitrust Division. The Antitrust Division has indicated it will advise Solite
and Giant by April 27, 1998 whether it will permit the transaction to proceed
without challenge.

As required by the procedures specified by the Antitrust Division, Giant
has agreed to waive certain provisions of the Merger Agreement, including the
no solicitation and termination fee provisions, in connection with Solite's
efforts to find alternative purchasers for the Hazardous Waste Fuels Assets.
See "TERMS OF THE MERGER AGREEMENT--No Solicitation of Other Offers" and "TERMS
OF THE MERGER--Termination Rights."

Certain Federal Income Tax Consequences
The Conversion. McGuire Woods Battle and Boothe LLP, counsel to Solite, is
of the opinion that the Conversion will qualify as a reorganization and,
accordingly, (except with respect to any Solite Common Stock deemed received
with respect to unpaid dividends on the Solite Preferred Stock) no gain or loss
will be recognized by (and no amount will be included in the income of) holders
of Solite Preferred Stock on the Conversion of such stock into Solite Common
Stock. The receipt of cash, however, by holders of Solite Preferred Stock in
lieu of fractional shares of Solite Common Stock may give rise to taxable gain
or loss.

The Spin-Off. Solite has obtained a private letter ruling from the Internal
Revenue Service (the "IRS") that, provided that the Merger constitutes a
tax-free reorganization under Section 368(a)(1)(B) of the Code, the Spin-Off
will qualify as a reorganization and, accordingly, no gain or loss will be
recognized by (and no amount will be included in the income of) Solite
shareholders on the receipt of the Northeast Solite Common Stock.

The Merger. McGuire Woods Battle & Boothe LLP and Proskauer Rose LLP are of
the opinion that the Merger will qualify as a reorganization and accordingly, no
gain or loss will be recognized by the Solite shareholders as a result of the
exchange of shares of Solite Common Stock for shares of Giant Common Stock.
However, the receipt

10
<PAGE>

of cash by Solite shareholders in lieu of fractional shares of Giant Common
Stock (and the receipt of cash by Solite shareholders who exercise dissenters'
rights) may give rise to taxable gain or loss.

Each shareholder of Solite is urged to consult his, her or its tax advisor
to determine the specific tax consequences of the Conversion, Spin-Off and the
Merger to such shareholder. The obligation of Solite to consummate the Merger is
subject to receipt of the opinion of Solite's and Giant's counsel to the effect
that the Merger qualifies as a reorganization and to not receiving an opinion of
counsel that as a result of changes in law the Spin-Off will no longer qualify
as a tax-free reorganization. For a further discussion of the tax consequences
of the Conversion, the Spin-Off and the Merger, see "THE MERGER--Certain Federal
Income Tax Consequences."

Accounting Treatment
Giant will account for the Merger using the purchase method of accounting.
See "UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS."

Dissenters' Rights
Holders of Solite Stock entitled to vote on the approval of the Merger
Agreement will be entitled to have the fair value of each such holder's shares
of Solite Common Stock immediately prior to consummation of the Merger paid to
such holder in cash, together with interest, if any, by complying with the
provisions of Article 15 of the VSCA ("Article 15"). A written notice of such
holder's intent to demand payment for such holder's Solite Common Stock must be
delivered to Solite before the taking of the vote on the approval of the Merger
Agreement. This written notice must be in addition to and separate from voting
against, abstaining from voting, or failing to vote on approval of the Merger
Agreement. Voting against, abstaining from voting or failing to vote on the
approval of the Merger Agreement will not constitute written notice of an
intent to demand payment within the meaning of Article 15. See "THE
MERGER--Dissenters' Rights" and the complete text of Article 15, which is
attached as Annex VI hereto.

Differences in Shareholder Rights

If the Merger is consummated, shareholders of Solite will become
shareholders of Giant, a Delaware corporation, which will result in their
rights as shareholders being governed by Delaware law and Giant's Certificate
of Incorporation and By-Laws, rather than Virginia law (Solite is a Virginia
corporation) and Solite's Articles of Incorporation, as amended, and By-Laws,
as amended. In addition, as a result of the Spin-Off, shareholders of Solite
will become shareholders of Northeast Solite which will result in their rights
as shareholders being governed by Northeast Solite's Articles of Incorporation
and Bylaws, rather than Solite's Articles and Bylaws, as amended. It is not
practical to describe all the differences between Delaware and Virginia law and
between Solite's governing documents and those of Giant and Northeast Solite. A
summary of all material differences is set forth in "CERTAIN DIFFERENCES IN
RIGHTS OF SHAREHOLDERS OF SOLITE, GIANT AND NORTHEAST SOLITE."

Market Price Data

The Giant Common Stock (symbol: GCHI) is admitted for trading on the
Nasdaq National Market. The following table sets forth the high and low sales
price per share of the Giant Common Stock and the Solite Common Stock (on an
equivalent per share basis) on the Nasdaq National Market on March 11, 1998.

High Low
----------- -----------
Giant Common Stock ................. $ 26.75 $ 26.25
Equivalent share basis(1) .......... $ 11.18 $ 10.92

- ------------
(1) Equivalent share basis is determined by multiplying the applicable Giant
Common Stock price by an Exchange Ratio, which assumes the issuance of
325,000 shares of Giant Common Stock in exchange for 776,734 and 781,108
shares of Solite Common Stock in the case of the high and low selling
prices, respectively, in accordance with the formula for the conversion of
the Solite Preferred Stock (assumes that the price of the Giant Common Stock
is the high or low sales price of the Giant Common Stock on the Nasdaq
National Market on March 11, 1998). The price of Giant Common Stock is
subject to fluctuation due to changes in the business, operations or
prospects of Giant, market assessments of the likelihood that the Merger
will be consummated and the timing thereof, general market and economic
conditions, and other factors.

Summary Consolidated Historical and Pro Forma Financial Information
The following tables present summary consolidated selected historical
financial information of Giant and Solite Corporation and Subsidiaries. Giant
and Solite Corporation and Subsidiaries consolidated historical financial
information for each of the annual periods presented have been derived from
their respective audited consolidated

11
<PAGE>

financial statements, and in the case of Giant, previously filed with the SEC.
Solite Corporation and Subsidiaries historical consolidated financial
information for the nine months ended December 31, 1997 and December 31, 1996,
have been derived from Solite's unaudited consolidated financial statements for
such periods. The summary consolidated selected historical financial information
should be read in conjunction with the consolidated selected historical
financial information presented elsewhere in this Proxy Statement/Prospectus.
See "GIANT CONSOLIDATED SELECTED HISTORICAL FINANCIAL INFORMATION" and "SOLITE
CORPORATION AND SUBSIDIARIES CONSOLIDATED SELECTED HISTORICAL FINANCIAL
INFORMATION."

Additionally, the following table presents summary unaudited pro forma
combined financial information after giving effect to the Merger under the
purchase method of accounting as if the Merger had been consummated as of the
beginning of the periods presented. The tables have been derived from, or
prepared on a basis consistent with, the unaudited pro forma combined
information included in this Proxy Statement/Prospectus. The selected pro forma
combined financial information should be read in conjunction with, and is
qualified in its entirety by reference to, the unaudited pro forma combined
condensed financial statements and the notes thereto. See "UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS." The following data are presented for
illustrative purposes only and are not necessarily indicative of the operating
results or financial position that would have occurred or that will occur after
consummation of the Merger.

Giant Summary Consolidated Financial Information
(in thousands, except per share data)

<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Historical Income Statement Data:
Total revenues ........................ $ 116,888 $ 110,198 $ 100,185 $ 90,802 $ 81,900
Gross profit .......................... 35,132 32,380 27,314 20,443 14,845
Operating income ...................... 26,409 24,539 19,767 13,752 8,725
Net income ............................ $ 16,085 $ 15,421 $ 12,715 $ 9,195 $ 5,148
Net income per common share:
Basic ................................ $ 1.70 $ 1.57 $ 1.27 $ .92 $ .51
Diluted .............................. $ 1.69 $ 1.57 $ 1.27 $ .92 $ .51
Cash dividends ........................ -- -- -- -- --
Weighted average common shares
outstanding ......................... 9,459 9,833 9,990 10,000 10,000
Pro Forma Income
Statement Data:
Pro forma revenues .................... $ 169,274
Pro forma operating income ............ 30,165
Pro forma net income .................. $ 17,410
Pro forma basic net income per
common share(1) ..................... $ 1.78
Pro forma average shares
outstanding ......................... 9,784
Historical Balance Sheet and Other Data:
Working capital ....................... $ 29,778 $ 26,706 $ 17,539 $ 20,513 $ 12,228
Total assets .......................... 128,600 118,616 111,714 90,525 80,944
Total debt ............................ 10,549 11,751 17,804 8,403 9,312
Shareholders' equity .................. 87,645 77,128 64,614 54,203 42,394
</TABLE>

(1) See Notes to Unaudited Pro Forma Combined Condensed Financial Statements.

12
<PAGE>

Solite Corporation and Subsidiaries Summary Consolidated Historical Financial
Information (in thousands)

<TABLE>
<CAPTION>
Nine Months Ended
December 31, Years Ended March 31,
------------------------- ------------------------------------------------------------
1997 1996 1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data: (Unaudited)
Total revenues ................... $ 49,672 $ 50,872 $ 66,779 $ 61,956 $ 68,062 $ 66,475 $61,160
Gross profit ..................... 11,872 11,680 17,193 18,171 19,849 17,668 22,822
Operating income (loss) .......... (158) (724) (2,183) (2,452) (3,311) (5,997) 2,158
Net income (loss)(1) ............. $ 435 $ (1,428) $ (3,390) $ (6,891) $ (772) $ (5,120) 575

Balance Sheet Data (at period end):
Working capital (deficit) ........ $ (9,052) $ (12,914) $ (13,851) $ (12,617) $ 16,119 $ 17,269 $17,525
Total assets ..................... 47,717 54,779 54,054 57,290 66,400 71,893 73,893
Total debt ....................... 20,662 25,903 27,001 28,053 33,267 38,927 36,751
Shareholders' equity ............. 15,181 16,531 14,692 18,048 21,914 22,553 26,732
</TABLE>

- ------------
(1) Gains on the sale of assets of $2.8 million and $812,000 were recorded for
the nine months ended December 31, 1997 and 1996, respectively. Gains on
the sale of assets recorded for the years ended March 31 were $810,000 in
1997, $246,000 in 1996, $6.2 million in 1995, $209,000 in 1994 and $1.2
million in 1993. Charges of $166,000, $2.0 million and $904,000 were
recorded in the years ended March 31, 1997, 1996 and 1995, respectively,
for the impairment of long-lived assets.

13
<PAGE>

Historical and Pro Forma Unaudited Per Share Data

The following table summarizes certain unaudited per share data for Giant
on a pro forma combined basis, and on a historical basis giving effect to the
Merger as a "purchase" for accounting purposes. Such information is derived
from and should be read in conjunction with the Unaudited Pro Forma Combined
Condensed Financial Information, including the notes thereto, contained
elsewhere in this Proxy Statement/Prospectus. The unaudited pro forma
statements are presented for comparative purposes only and are not necessarily
indicative of future combined earnings or financial position or combined
earnings or financial position that would have been reported had the Merger
been completed at the beginning of the respective periods or as of the dates
for which such unaudited pro forma information is presented.

<TABLE>
<CAPTION>
Year Year
Ended Ended
December 31 December 31
------------- ------------
1997 1996
------------- ------------
<S> <C> <C>
PRO FORMA COMBINED
Net income per common share--Basic ............ $1.78(1)
Net income per common share--Diluted ......... 1.76
Book value per common share--Basic ............ 9.82

GIANT--HISTORICAL
Net income per common share--Basic ............ 1.70 $1.57
Net income per common share--Diluted ......... 1.69 1.57
Book value per common share--Basic ............ 9.27 7.84
</TABLE>

Giant has never paid a cash dividend on its common stock and Solite has
not paid a cash dividend on its common stock in more than five years.

(1) See Notes to Unaudited Pro Forma Combined Condensed Financial Statements.

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RISK FACTORS

In addition to other information in this Proxy Statement/Prospectus, the
following factors should be considered carefully by the holders of shares of
Solite Stock in evaluating whether to approve the Merger Agreement and the
Preferred Stock Amendment.

Exchange Ratio
In considering whether to approve the Merger Agreement providing for the
Merger, holders of shares of Solite Stock should carefully consider that the
total number of shares of Giant Common Stock to be issued pursuant to the
Merger is fixed and will not be adjusted based on changes in the market price
of the Giant Common Stock, and that the market price of the Giant Common Stock
at the Effective Time may vary from the price as of the date of this Proxy
Statement/Prospectus or the date on which holders of shares of Solite Stock
vote on the Merger due to changes in the business, operations or prospects of
Giant, market assessments of the likelihood that the Merger will be consummated
and the timing thereof, general market and economic conditions, and other
factors.

Because the formula for conversion of the Solite Preferred Stock under the
Preferred Stock Amendment fluctuates with the market price for Giant Common
Stock, the number of shares of Solite Common Stock to be received on conversion
of the Solite Preferred Stock as well as the number of shares of Giant Common
Stock to be received for each share of Solite Common Stock in the Merger, will
not be known at the time of the Special Meeting. In addition, the effect of this
fluctuation is to increase the number of shares of Giant Common Stock received
in the Merger by former holders of Solite Preferred Stock and decrease the
number of shares of Giant Common Stock received in the Merger by other holders
of Solite Common Stock, if the price per share of Giant Common Stock decreases.
As a result of the reduction in the aggregate number of shares to be issued in
the Merger, the percentage of such shares received by former holders of Solite
Preferred Stock will be greater than the percentage that would have been
received under the Merger Agreement executed in September 1997. Holders of
Solite Stock should also consider that, as of the Record Date, John W. Roberts
and his family beneficially own 100% of the outstanding Solite Series A
Preferred Stock, 88.8% of the outstanding Solite Series B Preferred Stock and
100% of the outstanding Solite Series C Preferred Stock.

Difficulty of Integration of Operations Following the Merger
The Board of Directors of Giant (the "Giant Board") and the Solite Board
have each given careful consideration to the Merger and believe it to be in the
best interests of their respective shareholders. However, the Merger involves
the combination of two companies that have operated independently. Accordingly,
there can be no assurance that Solite can be successfully integrated into Giant
or that Giant and its shareholders (including the shareholders of Solite who
become shareholders of Giant) will ultimately realize any benefits from the
Merger. The success of the combined company following the Merger will require
the dedication of management resources which may temporarily detract from
attention to the day to day business of Giant and Solite. There can be no
assurance that such diversion of management resources will not adversely affect
revenues or that other material adverse effects will not result from such
activities.

Dependence on the Construction Industry; Economic Conditions
General and Regional Conditions. Demand for Giant's products is directly
related to activity in the construction industry and general economic
conditions. Various economic factors beyond Giant's control affect cement
consumption, including the level of new residential, commercial and
infrastructure construction activity, which are in turn affected by movement in
interest rates, the availability of short- and long-term financing and the
availability of public funds for infrastructure projects. Accordingly, adverse
economic conditions in Giant's markets or a worsening of general or local
economic conditions could adversely affect Giant's operating results. There can
be no assurance that cement demand will remain at current levels. Giant's
resource recovery operations are dependent on general and regional economic
conditions; federal, state and local environmental policies; and competition
from other waste disposal alternatives. There can be no assurance that Giant's
resource recovery services revenues will remain at current levels. See "GIANT
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS."

Highly Cyclical and Seasonal Industry. Regional cement markets are highly
cyclical, experiencing volatility corresponding to regional construction
cycles. While the impact on Giant of regional downturns in the construction
industry may be mitigated to some degree by Giant's presence in both the
Middle-Atlantic and South-Atlantic

15
<PAGE>

markets, profitability is significantly affected by such construction cycles.
In addition, the cement industry is seasonal in nature primarily due to the
effect of weather conditions on construction activity. Giant has historically
experienced lower operating income during the months of December, January and
February, particularly with respect to its Pennsylvania operations where
construction activity is more significantly affected by inclement weather. See
"GIANT MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS."

Highly Competitive and Price Sensitive Industry
Due to the lack of product differentiation and the commodity nature of
cement, the cement industry is highly competitive. Competition is based largely
on price and, to a lesser extent, quality and service. Giant competes with
national and regional cement producers in its markets. Many of Giant's
competitors are larger and have significantly greater resources than Giant. The
prices that Giant charges its customer are not likely to be materially
different from the prices charged by other producers in the same markets.
Accordingly, profitability in the cement industry is generally dependent on the
level of cement demand and on a cement producer's ability to contain operating
costs. Prices are subject to material changes in response to relatively minor
fluctuations in supply and demand, general economic conditions and other market
conditions beyond Giant's control. There can be no assurance that prices will
not decline in the future or that such declines will not have a material
adverse effect on the Company's financial condition or results of operations.
See "GIANT MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS--General," "DESCRIPTION OF GIANT--Competition."

Cement Imports
During the latter part of the 1980s, an influx of low-priced cement
imports caused prices to deteriorate in many domestic markets, including
portions of the markets served by Giant. Responding to anti-dumping petitions
filed by a group of domestic cement producers, the Department of Commerce
imposed significant anti-dumping duties on cement and clinker imported from
Mexico since 1990 and from Japan since 1991. Upon request by an interested
party, the Department of Commerce will review these duties and an interested
party may appeal the results of such review to the U.S. Court of International
Trade. Such a review could result in a change in the duties now imposed on
Mexican and Japanese imports. In addition, in February 1992 the Department of
Commerce signed a five-year agreement with Venezuelan cement producers designed
to eliminate the dumping of portland cement into Florida and other regions of
the United States.

Legislation was submitted to the Congress in September 1994 to approve and
implement the "Uruguay Round" of multilateral trade negotiations completed under
the auspices of the General Agreement on Tariffs and Trade ("GATT") in December
1993. The Uruguay Round agreements include modifications to the GATT
Anti-dumping Code (the internationally approved rules concerning anti-dumping
actions) that will require corresponding change in the U.S. anti-dumping laws.
Such legislation may make it more difficult to obtain and maintain U.S.
anti-dumping orders against foreign cement producers exporting to the United
States. While the existing anti-dumping orders imposed on Mexican and Japanese
cement and clinker imports and the agreement with Venezuelan cement producers
will remain in force, "sunset" provisions in the GATT Anti-dumping Code and such
legislation will provide for a review after five years to determine whether the
orders should be terminated, modified, or remain in effect. Current U.S. legal
provisions providing for review and termination of anti-dumping orders under
certain circumstances have resulted in termination of anti-dumping orders in
very few cases.

The North American Free Trade Agreement ("NAFTA"), which entered into force
for Mexico, Canada and the United States on January 1, 1994, does not modify the
substantive anti-dumping rules of the GATT Code or U.S. law. However, NAFTA
provides that appeals from the final results of U.S. anti-dumping investigations
and administrative reviews involving Mexico or Canada may be taken to
bi-national arbitral panels in lieu of the U.S. Court of International Trade and
the Court of Appeals for the Federal Circuit. In such proceedings, U.S. laws,
regulations and administrative practices, as well as decisional law, will
continue to apply.

Portions of the markets served by Giant can be directly or indirectly
impacted by imports of foreign cement. In 1997, a customer of Giant's in the
South-Atlantic region opened a captive import terminal to supply the majority of
its own cement requirements. While Giant does not believe imports have had a
significant impact on its market areas in 1997, there can be no assurance that
importation of lower-priced cement in the future will not have a material

16
<PAGE>

adverse effect on the Company's operations. A substantial reduction or
elimination of the existing anti-dumping duties could have a material adverse
effect on Giant's financial condition or results of operations.

High Fixed Costs and Capital Intensive Industry
The cement industry is highly dependent upon the level of cement demand as
a result of the high fixed costs associated with production. Giant's cost per
ton of production is directly related to the number of tons of cement
manufactured; decreases in production increase Giant's fixed cost per ton.
Equipment utilization percentages or uptime can vary from year to year based
upon demand for Giant's products or as a result of equipment failure. Much of
Giant's significant manufacturing equipment requires long lead-times to replace
and is very costly to replace or repair. Giant attempts to maintain sufficient
spare parts inventories to avoid long periods of shutdown in the event of
equipment failure, but there can be no assurance such shutdowns can be avoided.

Impact of Environmental Laws
Giant's operations and properties are subject to extensive and changing
federal, state, and local environmental laws relating to air and water quality,
as well as to the handling, treatment, storage and disposal of wastes. In
connection with Giant's utilization of hazardous waste-derived fuels,
environmental laws require certain permits and other authorizations mandating
procedures under which Giant shall operate. Environmental laws also provide
significant penalties for violators, as well as liabilities and costs of
cleaning up releases of hazardous wastes into the environment. In addition,
Giant could be subject to claims by employees or others alleging exposure to
toxic or hazardous substances as a result of the failure to observe
environmental laws. Violations of mandated procedures under operating permits,
even if immaterial or unintentional, may result in fines, shutdowns, remedial
actions, or revocation of such permits.

Giant has been performing industrial operations at its properties for many
years. Various materials from these operations have been disposed of in on-site
landfills and may have been disposed of in off-site landfills and other
facilities. As a result, Giant from time to time may be involved in
administrative and other proceedings involving compliance matters and alleged
violations of environmental laws at its operations and facilities.

Giant estimates that annual expenditures for environmental compliance
exceed $3.5 million per year, which includes dust collection and control systems
and compliance expenditures related to Giant's resource recovery operations.
Capital expenditures relative to environmental compliance totaled $1.6 million
in 1995, $2.8 million in 1996 and $3.2 million in 1997. In 1997, Giant committed
to construct a residual waste landfill at its Pennsylvania plant for the future
management of cement kiln dust ("CKD"), the total capital cost of which is
expected to be $2.5 million over the landfill's estimated 15 year life. Giant
does not believe compliance expenditures impair its competitive position because
its competitors are subject to the same laws and regulations, with the exception
of those regulations specifically relating to resource recovery operations for
which Giant currently receives revenues that more than offset the related
compliance costs. However, Giant has no knowledge of its competitors'
environmental compliance costs and such costs could vary depending upon the
characteristics of a competitor's facilities.

Giant's operations are subject to the Resource Conservation and Recovery
Act of 1976, as amended ("RCRA"), and two delegated state programs, which
together provide a comprehensive regulatory framework for the management of
hazardous wastes at active facilities. RCRA sets up a "cradle to grave" system
for the management of hazardous wastes, imposing upon all parties who generate,
transport, treat, store, or dispose of waste above certain minimum quantities,
requirements, including permitting requirements, for performance, testing, and
record keeping. The boiler and industrial furnaces ("BIF") regulations,
promulgated in 1991 under RCRA, also require, among other things, that cement
kilns utilizing waste-derived fuels obtain operating permits. The BIF
regulations are extremely complex and certain provisions are subject to
different interpretations.

In October 1991, the South Carolina Department of Health and Environmental
Control issued to Giant a RCRA Part B Permit for the storage and management of
hazardous waste. Giant was issued a similar RCRA Part B Permit by the
Commonwealth of Pennsylvania in December 1991. In addition, Giant operates under
BIF "interim status" permits which allow it to substitute approximately 100% and
75% of its respective fuel requirements, at its South Carolina and Pennsylvania
plants, with hazardous waste-derived fuels. However, Giant is currently limited
to approximately 50% waste fuel substitution by its Pennsylvania Department of
Environmental Protection ("PADEP") air quality plan approval at its Pennsylvania
plant. During this interim status period, Giant's plants must

17
<PAGE>

comply with BIF standards regarding emissions of particulate matter and other
parameters. Giant is currently pursuing RCRA Part B permits for the burning of
such fuels pursuant to the BIF regulations, which the Company believes may take
one or more years to obtain.

Pursuant to the BIF regulations, in order to maintain interim status
permits for the burning of waste-derived fuels, Giant was required to perform
BIF Compliance Tests ("BIF Tests") and submit Certificates of Compliance
("COCs") in 1995 and is required to perform BIF Tests and submit COCs every
three years thereafter. Giant will be required to perform BIF tests in 1998. The
BIF Tests results and COCs set various operating parameters within which Giant
must operate, including volumes of waste-derived fuel, qualitative aspects of
waste-derived fuel and various other parameters. The BIF Tests are monitored by
the EPA or its representative, and the BIF Tests results and COCs are
subsequently reviewed by the EPA for compliance with the BIF regulations. Giant
believes its COCs are substantially in compliance with the BIF regulations.
However, there can be no assurance that upon EPA's review of the submissions,
the EPA will concur with Giant and not require a new BIF Test or levy fines for
non-compliance. There can be no assurance that the results of future BIF Tests
will be successful or that future COCs will provide favorable operating
parameters for burning waste-derived fuels. The two BIF Tests conducted in 1995
cost Giant approximately $800,000. Should Giant fail a BIF Test, it can continue
to utilize waste-derived fuels for a total of 720 hours including hours spent
conducting a new BIF Test.

Various aspects of Giant's operations are also subject to regulation under
the federal Clean Air Act, as amended (the "CAA"). The CAA amendments of 1990
(the "Amendments") resulted in numerous changes to the CAA, including a new
federal operating permit (Title V permit) and fee program for virtually all
manufacturing operations. The Amendments will likely result in significantly
increased capital and operational expenses for all manufacturers in Giant's
industry in the future, the amounts of which are not presently determinable. In
1996, Giant's plants submitted detailed Title V permit applications for air
emissions. In addition, the EPA is developing regulations for certain air
pollutants under the Amendments for a broad spectrum of industrial sectors,
including portland cement manufacturing and commercial waste combustion
facilities. The EPA has indicated that the new maximum available control
technology standard ("MACT") for these pollutants under these Amendments could
require significant reduction of air pollutants below existing levels prevalent
in the industry, which could have a material adverse effect on Giant's financial
condition or results of operations. The EPA issued draft regulations for MACT in
1996 for public comment and requested additional public comment on alternative
approaches in April 1997, with final promulgation expected in late 1998.

Many of the raw materials, products, by-products, and wastes associated
with Giant's facilities and operations contain chemical elements or compounds
that are regulated under the environmental laws. Some examples of such materials
are CKD and general purpose solvents, which in some instances may contain
hazardous constituents including trace metals, organics or exhibit other
hazardous waste characteristics. Giant has from time to time transported or
delivered certain of these materials to various on-site and off-site disposal
sites. Treatment and disposal of hazardous wastes generated from operations at
on-site and off-site locations is additionally subject to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"). CERCLA
imposes joint and several liability (without regard to fault) on certain
categories of persons for clean-up costs related to releases of certain
materials at facility sites, and for damage to natural resources. Giant has been
identified as a potentially responsible party at a site in Southington,
Connecticut under CERCLA. According to the EPA, it initially notified over 1,000
parties, and subsequently notified hundreds of additional parties including
Giant, of their potential liabilities. The final volumetric ranking for the
site, dated July 1993, indicates Giant contributed only .03206% (3.2 one
hundredths of a percent). The agent for the PRP group has estimated the cleanup
cost could range from $30 million to $100 million over the course of ten to
twelve years. Unless a substantial number of larger PRP's are released from
liability, Giant's liability at .03206 percent is not expected to be material.
In addition to CERCLA, similar state or other Environmental Laws may impose the
same or even broader liability for the discharge, release, or the mere presence
of certain substances into and in the environment.

CKD, a by-product of cement manufacturing, is currently excluded from
regulation as a hazardous waste under the "Bevill Amendment" to RCRA. However,
CKD that comes in contact with water might produce a leachate with an elevated
pH. In December 1993, the EPA issued a Report to Congress on CKD in which the
EPA concluded that risks associated with CKD management are generally low, but
that there is potential under certain circumstances for CKD to pose a danger to
human health and the environment, or that it may do so in the future. On January
31, 1995 the EPA issued a Regulatory Determination on CKD. The EPA reported that
CKD would retain its status as a "Bevill Waste" and remain exempt from
regulation as a hazardous waste until such time as the EPA promulgates

18
<PAGE>

new regulatory controls. The EPA intends to take a "common sense" approach in
developing a highly tailored set of standards that will "prevent damage to
ground and potable water and reduce health risks associated with breathing and
ingesting dust from cement kilns." The EPA further made it clear that it has no
problems with recycling or reuse of CKD, and that it has not limited beneficial
uses of CKD; however, the EPA does not encourage the use of CKD as an
agricultural lime additive. Though the EPA originally intended to conduct a
typical rule-making process which would involve information gathering,
eventually followed by the development of a proposed rule and the promulgation
of a final rule, the EPA is now considering two alternatives to the full
rule-making process. Under the first alternative, a state with a federally
approved hazardous waste program would be able to oversee the management of CKD
on a site-by-site basis, either through regulation, permit, or enforceable
agreement. The second alternative would be to create federal rules that would
set contingent management standards for cement kiln dust to meet before being
exempt from Subtitle C of the Resource Conservation and Recovery Act. Key
components of management conditions would be based on the design of the waste
management unit, dust control practices, and other factors. The EPA is expected
to issue a proposed rule in late 1998, with a final rule anticipated in late
1999.

The cement industry will be vigorously pursuing a range of regulatory,
legislative and judicial remedies because the industry continues to believe that
CKD is not a hazardous waste, should never be classified as a hazardous waste
and, therefore, does not warrant RCRA Subtitle C regulation. The industry
believes its voluntary enforceable agreement that was submitted to the Agency in
1995 offers a responsible and valid approach for managing CKD outside the realm
of RCRA Subtitle C. These standards address all possible exposure pathways and
are fully protective of human health and the environment. The industry is fully
committed to avoiding regulation of CKD as a hazardous waste while at the same
time acknowledging the need to generally improve CKD management.

Accepted industry practice has been to store CKD on-site. Giant collects
and stores CKD at its plants and recycles CKD related to its operations.
Additionally, Giant markets CKD and, occasionally, a customized blend of CKD and
cement under the registered trade name "StableSorb." StableSorb is utilized by
construction, remediation, and other contractors for the purpose of solidifying
soil, wastes, and other materials. Although the potential costs and impact of
repeal of the Bevill Amendment exemption with respect to CKD or adoption of
particular EPA or State management standards for CKD in the future cannot be
estimated at this time, such costs and impact could have a material adverse
effect on Giant's financial condition or results of operations.

Another RCRA concern in the cement industry involves the disposal of
refractory brick containing chromium. Refractory brick containing chromium was
formerly widely used in the cement industry to line cement kilns and has been
utilized and disposed of on-site by Giant in the past. Giant's facilities
conduct tests on all brick removed from its kilns to determine whether or not it
is a hazardous waste, and these tests have confirmed such brick to be
non-hazardous under the applicable RCRA standards. Giant conducts these tests in
accordance with EPA standards and believes that the EPA would reach the same
conclusions.

Giant's quarry sites must comply with noise and dust suppression
regulations, zoning, and special use permitting requirements, applicable mining
regulations and federal health and safety requirements administered by the Mine
Safety and Health Administration. Giant is also obligated under certain of its
mining permits and certain regulations to engage in reclamation of land within
the quarries upon completion of extraction and mining.

The burning of hazardous waste-derived fuels is a key factor to the
profitability of Giant. A substantial reduction in Giant's ability to substitute
hazardous waste-derived fuels for traditional fossil fuels could have a material
adverse effect on Giant's financial condition or results of operations. Giant
regularly monitors and reviews its operations, procedures, and policies for
compliance with these environmental laws and Giant's operating permits. Giant
believes that its current procedures and practices in its operations, including
those for handling hazardous wastes, are substantially in compliance with all
environmental laws and its material operating permits. There can be no
assurance, however, that a review of Giant's past, present, or future operations
by courts or federal, state, or local regulatory authorities will not result in
determinations that could have a material adverse effect on Giant's financial
condition or results of operations. In addition, the revocation of any of
Giant's operating permits, the denial of any application by Giant for a permit
or the failure to renew any interim permit could have a material adverse effect
on Giant's financial condition or results of operations. Giant cannot predict
what environmental laws will be enacted or adopted in the future or how such
future environmental laws will be administered or interpreted. The trend has
been toward more stringent environmental standards. Compliance with more
stringent environmental laws or more vigorous enforcement policies or stricter
interpretation of current environmental laws could have a material adverse
effect on Giant's financial condition or results of operation.

19
<PAGE>

On December 8, 1997, Giant experienced a fire at its hazardous waste
storage tank farm in Bath, Pennsylvania. There were no injuries and no known
environmental releases. As a result of the fire, the Company suspended its
utilization of hazardous wastes as fuel and burned 100% coal in its kilns for
the last three weeks of December and is continuing to do so while system repairs
and engineering certification work is ongoing. The Company and the PADEP have
entered a consent agreement which requires the Company to submit certain
information and certificates before commencing waste fuel operations. Counsel
has informed the Company that Keystone has complied fully with the consent
agreement. The Company believes that the interruption of its hazardous waste
fuels business as a result of the fire is covered by insurance; however, there
can be no assurance the Company will recover its losses. The Company expects to
incur a fine in addition to the legal, consulting and other costs associated
with this incident. See "GIANT MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS."

Potential Volatility of Giant Common Stock Prices
The market price of the Giant Common Stock may be subject to fluctuations
in response to quarter-to-quarter variations in operating results, changes in
earnings estimates by investment analysts or changes in business or regulatory
conditions affecting Giant, its customers, or its competitors. The stock market
historically has experienced volatility which has particularly affected the
market prices of securities of many companies in the construction related
industries and which sometimes has been unrelated to the operating performances
of such companies. These market fluctuations may adversely affect the market
price of the Giant Common Stock.

Since December 31, 1996, the closing market price of the Giant Common Stock
as reported on the Nasdaq National Market has ranged from a high of $30.00 to a
low of $15.25.

Shares Eligible for Future Sales
Future sales of substantial amounts of Giant Common Stock (including shares
issued upon the exercise of stock options) by Giant's current shareholders
(including certain executive officers, employees and affiliates of Giant) after
the Merger, or the perception that such sales could occur, could adversely
affect the market price for Giant Common Stock.

In addition, all of the shares of Giant Common Stock received by holders of
Solite Common Stock in the Merger will have been registered under the Securities
Act and will be freely transferable, except that (i) persons who are deemed to
be affiliated to Solite prior to the Effective Time may sell the shares of Giant
Common Stock received in the Merger only in transactions permitted by the resale
provisions of Rule 145 promulgated under the Securities Act (or Rule 144 in the
case of such persons who become affiliates of Giant) or as otherwise permitted
by the Securities Act; persons who may be deemed to be affiliates of Solite or
Giant generally include individuals or entities that control, are controlled by,
or are under common control with, such party and may include certain officers
and directors of such party as well as principal shareholders of such party; and
(ii) pursuant to the terms of the Giant Shareholder Agreement, holders of 1% or
more, owning in the aggregate at least 70%, of the total outstanding shares of
Giant Common Stock to be issued in connection with the Merger will agree to
certain restrictions on the sale or other disposition of such shares. See "TERMS
OF THE MERGER AGREEMENT--Ancillary Agreements." It is anticipated that Clay H.
Barr, Joan R. Cates, Davenport & Co., Harry W. Hahn, Jr. (revocable trust), H.C.
Hofheimer II, Kaufman Americana Foundation, Carolyn L. Kaufman, Charles L.
Kaufman, Jr., David L. Kaufman, George M. Kaufman, Linda H. Kaufman, Jane Martin
Roberts, John Martin Roberts, John W. Roberts, John W. Roberts, as trustee and
Elise H. Wright may enter into the Giant Shareholder Agreement.

20
<PAGE>

THE SPECIAL MEETING

The Special Meeting will be held at 9:00 a.m. at the offices of McGuire
Woods Battle & Boothe LLP, fourth floor, 901 East Cary Street, Richmond,
Virginia on April 28, 1998.

At the Special Meeting, the Solite Shareholders will be asked to vote upon
proposals to (i) approve the Preferred Stock Amendment and (ii) approve the
Merger Agreement, and such other business as may properly come before the
Special Meeting. Promptly following the Effective Time of the Merger, Solite
shareholders will be furnished transmittal letters to surrender their
certificates to Giant for prompt issuance of certificates representing shares of
Giant Common Stock.

The accompanying proxy is solicited by and on behalf of the Solite Board
for use at the Special Meeting or any adjournments thereof, for the purpose set
forth in this Proxy Statement/Prospectus and the attached Notice of Special
Meeting. Costs of solicitation of proxies will be borne by Solite. In addition
to the use of the mails, proxies may be solicited by personal interview,
telephone and telegram by the directors, officers and employees of Solite
without additional compensation to them. Solite may reimburse brokerage houses
and other custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred in forwarding proxy materials to the beneficial owners of
shares held of record by such persons.

The shares of Solite Stock represented by all properly executed proxies
received by the Secretary of Solite and not revoked as herein provided will be
voted as set forth therein unless the shareholder directs otherwise in the
proxy, in which event such Solite Stock will be voted in accordance with such
directions. If no instructions are indicated, such proxies will be voted "FOR"
approval of the Merger Agreement and the Preferred Stock Amendment, and in the
discretion of the persons named in the enclosed form of proxy, as to any other
matter that may come before the Special Meeting or any adjournment or
postponement thereof including, among other things, a motion to adjourn or
postpone the Special Meeting to another time and/or place, for the purpose of
soliciting additional proxies or otherwise; provided, however, that no proxy
which is voted against the proposal to approve the Merger Agreement or the
Preferred Stock Amendment will be voted in favor of any such adjournment or
postponement. Any proxy may be revoked at any time before the shares of Solite
Stock to which it relates are voted either by written notice (which may be in
the form of a substitute proxy delivered to the Secretary of the meeting at any
time prior to 9:30 a.m. on the date of the Special Meeting, which is the time
for the closing of the polls at the Special Meeting) or by attending the meeting
and voting in person.

The Solite Board has unanimously approved the Merger Agreement, determined
that the Merger is in the best interests of Solite shareholders, and recommends
that the shareholders of Solite vote for the approval of the Merger Agreement.

The Solite Board has established the close of business on March 1, 1998
(the "Record Date") as the record date for the determination of Solite
shareholders entitled to receive notice of and to vote at the Special Meeting
and any adjournments thereof. With respect to each matter to be considered at
the Special Meeting, each holder of record of Solite Stock on the Record Date
will be entitled to one quarter vote for each share of Solite Series A Preferred
Stock or Solite Series B Preferred Stock then registered in his name and to one
vote for each share of Solite Series C Preferred Stock or Solite Common Stock
then registered in his name. As of the close of business on the Record Date, the
following shares were outstanding and entitled to vote at the Special Meeting:
8,700 shares of Solite Series A Preferred Stock, 14,093 shares of Solite Series
B Preferred Stock, 15,429 shares of Solite Series C Preferred Stock and 532,750
shares of Solite Common Stock. Approval of the Merger Agreement and the
Preferred Stock Amendment requires (i) the affirmative vote of more than
two-thirds of the votes that holders of the outstanding Solite Common Stock and
Solite Preferred Stock, voting as one voting group, are entitled to cast and
(ii) the affirmative vote of more than two-thirds of the votes that the holders
of the outstanding Solite Common Stock, Solite Series A Preferred Stock, Solite
Series B Preferred Stock and Solite Series C Preferred Stock, each voting as a
separate voting group, are entitled to cast. Approval of the Preferred Stock
Amendment also requires the affirmative vote of a majority of the votes that
holders of outstanding Solite Common Stock and Solite Preferred Stock, other
than John W. Roberts and his family, are entitled to cast.

Approval of the Merger Agreement and Preferred Stock Amendment by the
holders of Solite Stock may be raised as a defense in the event that any suit or
other legal action is instituted opposing the Merger or the Conversion. However,
there are no legal actions pending, or to the knowledge of Giant or Solite,
threatened with respect to the Merger or the Conversion.

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John W. Roberts, members of his family, officers, directors and certain
other shareholders of Solite, holding an aggregate of more than two thirds of
the Solite Common Stock and each class of Solite Preferred Stock have granted
Giant irrevocable proxies to vote in favor of the Merger Agreement.
Consequently, no other affirmative vote is required to approve the Merger
Agreement. These irrevocable proxies do not include the vote on the Preferred
Stock Amendment. Consequently, in order for the Conversion to be approved and
for the Merger to occur, the Preferred Stock Amendment must be approved by the
requisite vote of Solite shareholders, including approval by the affirmative
vote of a majority of the votes that holders of Solite Common Stock and Solite
Preferred Stock, other than John W. Roberts and members of his family, are
entitled to cast.

BACKGROUND OF THE SPIN-OFF AND THE MERGER

In June 1994, Solite engaged CoView Capital to assist it in the sale of
certain specified assets. This engagement was part of a strategy to reduce the
high level of long-term debt of Solite and improve operating results through
the sale of certain assets. These assets included (i) two concrete block
plants, which were sold in 1994, (ii) a ready-mix concrete subsidiary, which
was sold in 1995, (iii) the sand and gravel operations, most of which were sold
in August 1997, (iv) the Kentucky Solite subsidiary which consists primarily of
the lightweight aggregate plant in Kentucky which is currently not operating
and (v) the lightweight aggregate plant in Florida which was permanently shut
down in 1995. Giant was one of the companies contacted by CoView Capital to
determine whether there was interest in acquiring the Kentucky Solite
subsidiary. While Giant indicated it was not interested in acquiring the
Kentucky Solite subsidiary, Solite did pursue discussions with other companies
with respect to the Kentucky Solite subsidiary, although no definitive sales
agreement resulted. As part of its engagement, CoView Capital was also asked to
explore the possibility of new equity investors as another method of reducing
Solite's leverage. These efforts were unsuccessful; however, Solite did obtain
additional capital during 1994, 1995 and 1996 through the sale of Solite
Preferred Stock to John W. Roberts, President, and Chairman of the Board of
Solite and other stockholders.

In April 1995, Gary Pechota, President, CEO and Chairman of the Board of
Giant, called Mr. John Roberts, President and Chairman of the Board of Solite
and asked if it made strategic sense for the two companies to consider merging.
Mr. Pechota explained that, since Giant went public in October 1994, it had
improved its plant operations, strengthened its balance sheet and was
interested in growing through acquisitions in the construction products
industry and particularly in a geographic area between Giant's two existing
operations in South Carolina and Pennsylvania. In addition, Giant was involved
in resource recovery and this was an important part of Solite's business. Mr.
Roberts indicated an interest and Mr. Pechota and Mr. Roberts had an initial
meeting on April 19, 1995.

At the April 19, 1995 meeting, Mr. Roberts and Mr. Pechota described to
each other in general terms the companies' business operations, operating
philosophies and growth objectives. No specific merger terms were discussed,
but they agreed that it made sense to have further discussions regarding a
proposed merger at a later date.

As Solite's strategy of selling assets had not been fully successful and
the continued high debt level was resulting in a deterioration of operating
results, the Solite Board decided to explore a possible transaction with Giant.

A second meeting was held on April 17, 1996. Both Mr. Roberts and Mr.
Pechota had additional or follow-up questions from the initial meeting. Mr.
Roberts expressed that it was important to the employees and shareholders of
Solite that Giant use stock as payment. Mr. Roberts explained that any
transaction would need to be nontaxable. It was agreed that representatives of
the Company would set up a further meeting.

On May 18, 1996, Mr. Roberts and Lee Facetti, Vice President and Chief
Financial Officer of Solite met Mr. Pechota and Terry Kinder, Vice President
and Chief Financial Officer of Giant. The Giant and Solite representatives
exchanged additional general information about their respective businesses,
their strategies and the industries in which they operate. A confidentiality
agreement was executed in anticipation of such exchange of information. It was
decided at the May 18 meeting that a stock-for-stock merger should be further
explored. The merger transaction contemplated would include Solite's
lightweight aggregate and block operations strategically located between
Giant's cement manufacturing operations and Solite's related resource recovery
facilities including M&M Chemical. It was determined that Solite should
spin-off the assets that either did not fit Giant strategically or
geographically, including but not limited to the New York, Kentucky and Florida
lightweight aggregate facilities, the coal operations and the sand and gravel
operations.

After the May 1996 meeting between Mr. Roberts and Mr. Pechota, CoView
Capital contacted two other companies which CoView Capital believed to be the
most logical other buyers of Solite to determine whether there

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was any interest in pursing a possible transaction with Solite. These companies
indicated they were not interested in considering such a transaction. Solite
and CoView Capital did not contact other companies because (i) Giant was
considered the most logical transaction partner in view of the geographic fit
of the two companies' operations and the use by both of waste-derived fuels and
(ii) the indication from Giant that it was willing to pursue a stock
transaction, at levels which Solite considered attractive, which would enable
the Solite shareholders to continue their equity participation in the combined
entity.

On June 11, 1996, Mr. Kinder met with Mr. Roberts, Mr. Facetti and Linwood
F. Perkins, Jr., a director of Solite. They discussed Solite's internal
financial statements and the accounting methods Solite uses for intercompany
transactions and other matters with respect to Solite's business.

On July 10, 1996, Mr. Pechota and Mr. Kinder met with Mr. Roberts and Mr.
Facetti to discuss the strengths, weaknesses, opportunities and threats of and
to their respective businesses, the structure of any proposed merger, what
entities within Solite should be included in a transaction and valuation
methodologies.

On August 12, 1996, Mr. Pechota and Mr. Kinder met with Mr. Roberts, Mr.
Facetti and Sam Yellin, Managing Director of CoView Capital. The parties
discussed the potential structure for a transaction, valuation methodologies
and possible performance-based contingent consideration.

On October 11, 1996, Mr. Kinder met with Mr. Yellin to continue
discussions regarding Solite's projections, synergies of the transaction,
Solite's potential overhead cost reductions and valuation methodologies.

During October, November and December of 1996, numerous conference calls
took place between Messrs. Pechota and Mr. Kinder, on the one hand, and Messrs.
Roberts, Facetti and Yellin, on the other, in which the parties negotiated the
structure and pricing of a proposed merger, subject to the completion of due
diligence by both parties.

At a regular meeting of the Giant Board held on October 11, 1996, Mr.
Pechota and Mr. Kinder gave a presentation for the Giant Board regarding Solite
and the potential merger, which presentation included, among other things,
financial and strategic analyses and reports. It was the consensus of the Giant
Board at this meeting that the negotiations with Solite should continue. At a
special meeting of the Giant Board on December 17, 1996, Mr. Pechota and Mr.
Kinder were authorized to enter into a non-binding letter of intent to acquire
Solite subject to satisfactory completion of due diligence and approval of a
definitive agreement by the Giant Board. A letter of intent was executed on
December 20, 1996 contemplating a stock-for-stock merger providing for the
issuance to Solite shareholders of an aggregate 1,300,000 shares of Giant
Common Stock and, potentially, additional shares of Giant Common Stock in the
event certain post-merger financial benchmarks were achieved.

During the first two quarters of 1997, Giant and Solite conducted their
respective due diligence. In May and June 1997, Giant's due diligence included
Coopers & Lybrand, L.L.P.'s audit of the "carve out" financial statements of
the businesses within Solite Corporation to be included in the proposed merger
transaction.

Subsequent to the completion of due diligence, negotiations were reopened
and numerous conference calls took place between June and September of 1997,
between Messrs. Pechota and Kinder, on the one hand, and Messrs. Roberts and
Facetti and Mr. J.J. Jewett, III, Vice President, Legal and Regulatory Affairs
of Solite, on the other.

Subsequent to completion of due diligence, Giant proposed a reduction in
the consideration to be paid in the Merger due to lower than expected operating
results for Solite's 1997 fiscal year, reductions in the value of Solite's
current assets and a need for larger than anticipated capital expenditures on
plant and equipment. Following further negotiations, Solite and Giant agreed to
a reduction in the number of shares of Giant Common Stock to be issued in the
Merger to 750,000 and the elimination of the contingent earnout. Giant also
agreed to increase the maximum amount of debt to be assumed in the Merger from
$18 million to $20 million.

Following amendment of the letter of intent, there were numerous
discussions between Messrs. Pechota and Kinder, on the one hand, and Messrs.
Roberts, Facetti and Jewett, on the other, including meetings on August 20, 21,
and 22 of 1997, concerning the terms of the definitive agreement for the
Merger.

In September 1997, Giant proposed to further reduce the consideration
received in the Merger to 650,000 shares of Giant Common Stock due to lower
than anticipated operating results for Solite's quarter ended June 30, 1997.
After several additional conference calls and phone conversations in late
August and early September of 1997 between Messrs. Pechota, Kinder, Roberts,
Jewett, Facetti and Yellin, the definitive terms of the Merger were agreed

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upon. Solite's Board of Directors met on August 29 and September 9, 1997 to
consider the Merger Agreement and the terms of the Merger. The Merger Agreement
was signed on September 10, 1997.

On December 5, 1997, a notice of special meeting of shareholders to be
held on December 30, 1997 and accompanying proxy statement/prospectus was
mailed to shareholders of Solite concerning the Merger and the Preferred Stock
Amendment. Such special meeting was adjourned to subsequent dates and then
adjourned without action being taken with respect to either proposal as a
result of the Antitrust Division's continuing review of the transaction (see
"THE MERGER--Regulatory Filings and Approvals").

In February 1998, Giant proposed a further reduction in the consideration
to be received in the Merger to 325,000 shares of Giant Common Stock due to
Giant's lower expectations for Solite's operating results, the increase in
Giant's stock price and the increased transaction costs associated with the
Antitrust Division's review of the Merger. After several conference calls and
phone conversations between February 3, 1998 and February 9, 1998, between
Messrs. Pechota, Kinder, Roberts, Jewett, Facetti, Yellin and Jeffrey T. Beaver
of CoView Capital, the terms of the amendment to the Merger Agreement were
agreed upon. On February 9, 1998, the Solite Board met, approved in principle
the proposed reduction in consideration subject to receiving a fairness opinion
from FBW on a revised formula for converting Solite Preferred Stock based on
the reduced consideration to be received in the Merger. On February 26, 1998,
the Solite Board met, received oral confirmation of the fairness opinion of
CoView Capital, received the oral fairness opinion of FBW with respect to the
Preferred Stock Amendment, approved the amendment to the Merger Agreement
reflecting the reduced consideration, and approved the Preferred Stock
Amendment with a conversion formula reflecting the reduced consideration to be
received in the Merger. The Amendment to the Merger Agreement was signed on
March 2, 1998.

Reasons for the Merger; Recommendation of the Solite Board
The Solite Board unanimously approved the Merger and recommends that
Solite shareholders vote for approval of the Merger Agreement. In reaching this
determination, the Board considered, without assigning any relative or specific
weights, the following material factors:

(i) the Solite Board's familiarity with the history, financial condition
and results of operations of Solite, the financial condition and results of
operations of Giant (including the potential effects of the interruption in use
of hazardous waste fuels at Giant's Pennsylvania facility), the prospects of
Solite both as an independent entity and as an affiliated entity of Giant and
the value of the assets and liabilities to be held by Northeast Solite after the
Spin-off;

(ii) the greater liquidity for Solite shareholders as a result of
exchanging Solite Common Stock, which is not publicly traded, for Giant Common
Stock, which trades on the Nasdaq National Market;

(iii) the need to provide Solite with access to sufficient financial
resources to make needed capital expenditures;

(iv) the reduction in debt level for Northeast Solite as a result of the
Merger.

(v) the opportunity for improved operating performance by Solite as a
result of merging with a strong geographically complementary company in a
closely related business, with the expectation that lower costs could be
achieved as a result of the Merger;

(vi) the opinions of Solite's financial advisors, to the effect that the
consideration to be received by the Solite shareholders in the Merger is fair,
from a financial point of view, to the shareholders;

(vii) the terms and conditions of the Merger Agreement;

(viii) the structure of the Merger, Spin-off and Conversion as transactions
intended to qualify for tax-free treatment under the Code;

(ix) the lower than anticipated earnings performance of the assets to be
retained by Solite after the Spin-Off since September 10, 1997, the date the
Merger Agreement was originally executed; and

(x) the increase in the trading range of the Giant Common Stock since
September 10, 1997.

Because the Solite Board felt there was a commonality of interest between
Mr. Roberts and the other holders of Solite Common Stock with respect to the
Merger, the Solite Board did not consider it necessary to form a committee of
disinterested directors to negotiate the Merger. In view of the ownership
interest of Mr. Roberts and his family in Solite Preferred Stock, the Solite
Board determined to engage a financial adviser which had not

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<PAGE>

previously rendered advice to Solite to assist the Solite Board in determining
conversion ratios for the Solite Preferred Stock and to provide a fairness
opinion that the consideration received by the holders of Solite Preferred
Stock in exchange for the conversion of their shares of Solite Preferred Stock
to Solite Common Stock is fair to the holders of Solite Preferred Stock and the
holders of Solite Common Stock. In addition, in view of the ownership
percentage of Mr. Roberts and his family in the Solite Preferred Stock and
Solite Common Stock, the Solite Board conditioned approval of the Preferred
Stock Amendment on the affirmative vote of a majority of the votes that holders
of outstanding Solite Common Stock and Solite Preferred Stock, other than Mr.
Roberts and his family, are entitled to cast.

In approving the Merger Agreement, the Solite Board was aware that (i) the
Merger Agreement contains certain provisions restricting Solite's ability to
solicit, initiate, encourage or negotiate with respect to other offers or
agreements to acquire Solite (see "TERMS OF THE MERGER AGREEMENT--No
Solicitation of Other Offers"), and (ii) Giant would be entitled to receive a
termination fee from Solite under certain circumstances generally relating to a
failure by Solite to consummate the Merger because of another offer for Solite
(see "TERMS OF THE MERGER AGREEMENT--Termination Rights"). However, the Solite
Board of Directors was also aware that such terms were specifically bargained
for as inducements for Giant to enter into the Merger Agreement and that the
Solite Board's obligation under the Merger Agreement to recommend approval of
the Merger Agreement by its shareholders was explicitly made subject to the
Solite Board's fiduciary duties under applicable law. Accordingly, the Merger
Agreement expressly permits the Solite Board, if required by the exercise of
its fiduciary duties under applicable law, to withdraw, modify or change such
recommendations (see "THE MERGER--Right of the Solite Board to Withdraw
Recommendation").

The Solite Board has determined that the Merger, the Conversion and
related transactions are in the best interests of the Solite shareholders and
unanimously recommends that Solite shareholders vote "For" approval of the
Merger Agreement and the Preferred Stock Amendment.

In considering the recommendation of the Solite Board, holders of Solite
Preferred Stock and holders of Solite Common Stock should be aware that certain
members of the Board and management (particularly John W. Roberts) have
interests which may present them with potential conflicts of interest (see "The
Merger--Interests of Certain Persons in the Merger"). These potential conflicts
include the fact that, as a result of the reduction in the aggregate number of
shares to be issued in the Merger, the percentage of such shares received by
former holders of Solite Preferred Stock will be greater than the percentage
that would have been received under the Merger Agreement executed in September
1997. The Solite Board was aware of these potential conflicts and considered
them in making its recommendation and approving the Merger Agreement and the
Preferred Stock Amendment.

The Solite Board believes that the Merger is fair to the holders of Solite
Preferred Stock and Solite Common Stock even though approval of the Merger
Agreement is not conditioned on the affirmative vote of a majority of the
holders of such outstanding stock other than John W. Roberts and his family,
because all holders of Solite Common Stock, after the Conversion, will receive
the same consideration in the Merger. In view of the ownership by Mr. Roberts
and his family of all the outstanding Series A Solite Preferred Stock and
Series C Solite Preferred Stock and ownership of approximately 88.8% of the
outstanding Series B Solite Preferred Stock, the Solite Board conditioned
approval of the Preferred Stock Amendment, which approval is also a condition
to the Merger, upon the receipt of the affirmative vote of a majority of the
votes that holders of outstanding Solite Common Stock and Solite Preferred
Stock, other than Mr. Roberts and his family, are entitled to cast.

The Merger Agreement does not require that the Giant Common Stock received
in the Merger have any minimum market value at the time the Merger is
consummated. The Board approved the Merger Agreement without such a
requirement, and determined that, notwithstanding the lack of such requirement,
the Merger was in the best interests of the holders of Solite Stock, in view of
the conditions to closing contained in the Merger Agreement that (i) the
fairness opinions of CoView Capital and FBW be confirmed in writing at the
Effective Time and (ii) since the date of the Merger Agreement, there has been
no change, circumstance or occurrence in the business, results of operations or
financial condition of Giant that has or is reasonably likely to have a
material adverse effect on Giant.

The Solite Board believes that the Preferred Stock Amendment and the
Merger are in the best interests of the holders of Solite Common Stock (other
than Mr. Roberts) in view of (i) the material factors considered by the Board
in approving the Merger and (ii) the existing provisions of the Solite Articles
of Incorporation which require payment of cash consideration per share to
redeem the Solite Preferred Stock greater than the aggregate value per share
proposed in the Conversion (based upon the assumed equity valuations).

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Opinion of CoView Capital, Inc.

Pursuant to a letter agreement dated February 19, 1997 (the "CoView
Capital Engagement Letter"), CoView Capital provided a financial fairness
opinion in connection with the Merger. CoView Capital was selected by the
Solite Board to act as Solite's financial advisor based on CoView Capital's
qualifications, expertise and reputation and its knowledge of the business and
affairs of Solite. On February 9, 1998, CoView Capital rendered its oral
opinion, subsequently confirmed orally as of February 26, 1998 and in writing
as of March 16, 1998, that as of such date, based upon and subject to the
various considerations set forth in the opinion, the consideration to be
received pursuant to the Merger Agreement was fair from a financial point of
view to the holders of shares of Solite Common Stock. In view of CoView
Capital's relationship with the Company, which included working closely with
Mr. Roberts in connection with the possible sale of certain Solite assets, the
Solite Board felt it would be preferable to engage a financial adviser which
had not previously rendered advice to Solite to assist the Solite Board in
determining the conversion ratio for the Solite Preferred Stock. In view of the
CoView Capital opinion with respect to the fairness of the Merger, the Solite
Board did not believe it was necessary to incur the additional expense that
would be involved in obtaining a second fairness opinion on the Merger from
FBW.

The full text of the written opinion of CoView Capital dated March 16,
1998 which sets forth, among other things, assumptions made, procedures
followed, matters considered and limitations on the scope of the review
undertaken by CoView Capital in rendering its opinion, is attached as Annex V
hereto. Solite shareholders are urged to, and should, read the opinion
carefully and in its entirety in conjunction with this Proxy
Statement/Prospectus. CoView Capital's opinion was prepared at the request of
the Solite Board and addresses only the fairness of the consideration to be
received pursuant to the Merger from a financial point of view as of the date
of the opinion, and does not constitute a recommendation to any holder of
Solite Stock as to how to vote at the Special Meeting. The summary of all of
the material portions of the opinion of CoView Capital set forth in this Proxy
Statement/ Prospectus is qualified in its entirety by reference to the full
text of such opinion.

In connection with rendering its opinion, CoView Capital, among other
things, reviewed and analyzed: (i) trends in the building, aggregate, cement
and hazardous waste management and treatment industries, including demand,
pricing and competitive factors; (ii) significant developments in Solite's and
Giant's markets; (iii) certain publicly available information with respect to
Solite and Giant competitors; (iv) historical Solite and Giant financial
statements; (v) internal financial statements and other financial and operating
data provided by Solite and Giant managements, including historical, pro forma
statements reflecting the spin-off of certain Solite assets; (vi) Solite
projections for the fiscal years 1998 through 2000; (vii) Giant projections for
the fiscal years 1997 through 2000; (viii) certain analyst projections for
Giant's fiscal years 1997 and 1998; (ix) securities research analysts' reports
regarding Giant; (x) information and market valuations pertaining to
publicly-traded companies which are engaged in activities relatively similar
and comparable to Solite; (xi) publicly-available information pertaining to the
financial terms of generally comparable acquisition transactions; and (xii) the
Merger Agreement. In addition, CoView Capital: (i) participated in discussions
among the representatives of Solite and Giant; (ii) discussed with the
managements of Solite and of Giant the strategic logic for the Merger; (iii)
performed a Discounted Cash Flow (DCF) analysis on future Solite projections
using various discount rates to determine Solite's net present value; and (iv)
discussed with Solite's and Giant's senior management their respective
financial statements, operations, future prospects and financial projections,
as well as the pro forma impact of the Merger.

CoView Capital assumed and relied upon, without independent verification,
the accuracy and completeness of the information reviewed by it for the
purposes of its opinion. With respect to the internal financial statements and
other financial and operating data including estimates of the strategic,
financial and operational benefits anticipated from the Merger provided by
Solite and Giant, CoView Capital has been advised by the management of Solite
and Giant, respectively, that such financial statements and other financial and
operating data were reasonably prepared on bases reflecting the best then
currently available estimates and judgments of the prospects of Giant and
Solite, respectively. CoView Capital also relied upon, without independent
verification, the assessment by the managements of Solite and Giant of the
strategic and other benefits expected to result from the Merger. CoView Capital
did not make any independent valuation or appraisal of the assets or
liabilities of Solite or Giant. CoView Capital assumed that the Merger would be
treated as a tax-free reorganization and/or exchange pursuant to the Code and
would be consummated in accordance with the terms set forth in the Merger
Agreement. CoView Capital's opinion is necessarily based on economic, market
and other conditions as in effect on, and the information made available to it
as of, the date of the opinion.

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<PAGE>

The following is a brief summary of the analysis performed by CoView
Capital in connection with the preparation of its opinion rendered February 9,
1998.

[bullet] Peer Group Comparison. Six building products companies were compared to
Solite: Florida Rock Industries, Giant Cement Holding, Lafarge, Lone
Star Industries, Medusa and Southdown. These Building Products
Companies were chosen, in the absence of any directly comparable
companies, as representing the closest similarities in terms of sector
focus. CoView Capital did not consider Solite's business to be as well
situated as that of the cement companies because substitutes for
lightweight aggregate are more readily available and competitive than
those for cement. No company used in the peer group comparison is
identical to Solite and considerable differences were noted between the
positive financial performance of the peer group in recent years and,
prospectively, in 1997 and the declining trend of Solite's earnings
over this same period. CoView Capital compared the following financial
information of the Solite transaction with that of Building Products
Companies: stock price as a multiple of earnings per share, enterprise
value as a multiple of earnings before interest and taxes (EBIT), and
stock price as a multiple of book value. This comparison was based on
the latest available financial results and the relevant statistics for
Solite (assuming the closing stock price for Giant on February 9, 1998
and reflecting the terms of the exchange of Giant stock for Solite
stock). The consideration represents a price/earnings multiple of 10.4x
(which is below the range compared to the Building Products Companies,
whose multiples ranged from 10.6x to 17.2x and averaged 13.2x), an
enterprise value/EBIT multiple of 9.1x (which is below the middle of
the range compared to the Building Products Companies, whose multiples
ranged from 7.5x to 11.6x and averaged 9.0x), and a price/book multiple
of 1.6x (which is below the range compared to the Building Products
Companies, whose multiples ranged from 1.7x to 3.3x and averaged 2.3x).

[bullet] Analysis of Selected Comparable Transactions. CoView Capital compared
two building products transactions to the Solite transaction: (i)
Hanson's acquisition of Concrete Pipe & Products Co. and (ii)
Stonebridge Partners' acquisition of Joelson Concrete Pipe. These
transactions were chosen because they were in related industries and
information concerning the terms of each deal was available. Martin
Marietta Materials' acquisition of American Aggregates Corp. was
excluded from the analysis as it was determined to be a purchase based
primarily on asset values, and not a transaction based on the earning
power of the entity. CoView Capital computed the equity value of Solite
implied by the following statistics of the selected transactions and
compared it to the $7.1 million market value of Giant Common Stock to
be received by Solite shareholders for their equity (assuming the
closing stock price for Giant Common Stock on February 9, 1998 and
reflecting the terms of the exchange of Giant Common Stock for Solite
Stock). For the comparable transactions, the price/earnings ratio
implied a value of $7.9 million (the consideration received is below
the range) the enterprise value/EBIT ratio implied values ranging from
$0.5 million to $3.3 million (the consideration received is above the
range); and the price/book value ratio implied values ranging from
$10.0 million to $10.3 million (the consideration received is below the
range). No transaction used in the Analysis of Selected Comparable
Transactions is identical to the Merger.

[bullet] Discounted Cash Flow Value. CoView Capital performed an analysis of the
present value of Solite's equity based on the Solite's financial
projections for the calendar years 1998 and 1999. Available cash was
assumed to be used to repay debt at the end of each fiscal year, in
order to maintain bank facilities. As a result, projected cash
available of $0.6 million and $0.7 million, respectively, was used to
pay down debt, and the cash flow evaluated consisted solely of the
terminal value. CoView Capital applied an EBIT exit multiple range of 7
times to 11 times and a range of discount rates of 15% to 20%. Based on
this analysis, CoView Capital estimated Solite's equity value, based on
the present value of future cash flows, to range between $2.0 million
and $11.4 million. The consideration is above the middle of this range.

[bullet] Relative Contribution Analysis. CoView Capital analyzed historical and
projected financial results of Giant Cement and Solite based on
respective management estimates. This analysis showed that in terms of
net income of a combined company, exclusive of any projected benefit of
such a combination, Solite would contribute 8% in 1996; 4% in 1997; 3%
in 1998; and 3% in 1999. This analysis also showed that, at closing,
the Solite debt assumed by Giant would account for about 67% of the
combined company's debt and that Solite would account for approximately
7% of the tangible net worth of the combined company. These figures
were compared to a pro forma ownership of the combined company by
Solite shareholders of 3% (reflecting the terms of the exchange of
Giant stock for Solite stock).

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<PAGE>

Although most of the foregoing quantitative analyses showed that the
consideration is below or on the low end of the applicable range of value,
other analyses showed that the consideration ($7.1 million based on the closing
price of Giant Common Stock on February 9, 1998) is at the middle of the
applicable range of value, and CoView Capital considered the results of the
quantitative comparison to be acceptable, in view of Solite's uncertain
financial position and prospects.

In connection with its written opinion dated as of March 16, 1998, CoView
Capital confirmed the appropriateness of its reliance on the analyses used to
render its oral opinion of February 9, 1998, by performing procedures to update
certain of the Peer Group Comparison and the Analysis of Selected Comparable
Transactions and by reviewing the assumptions upon which such analyses were
based and the factors considered in connection therewith. CoView Capital
updated its analysis on March 16, 1998. As of that date, CoView Capital valued
the transaction at $7.9 million. The updated analysis showed that all
comparisons for the Peer Group Comparison were at least as favorable as those
on February 9, 1998; the consideration represented a price earnings multiple of
11.4x; an enterprise/EBIT multiple of 9.4x; and a price/book multiple of 1.7x.
With respect to the Comparable Transaction Analysis, the relative value of the
consideration improved with respect to each implied valuation as a result of
the increase in market value of Giant Common Stock to be received in the Merger
from $7.1 million (based on the closing price of Giant Common Stock on February
9, 1998) to $7.9 million (based on the closing price of Giant Common Stock on
March 16, 1998).

In addition in connection with its written opinion dated as of March 16,
1998, CoView Capital analyzed the pro forma impact of the Merger on the
earnings attributable to Solite shareholders. Such analysis was based on a
comparison of managements' earnings estimates for Solite assuming the Merger
did not take place and for the merged company assuming the realization of
synergies. Earnings estimates for the merged company were based on Giant
management's forecasts, and for the years ending December 31, 1998 and 1999,
respectively, including certain synergies expected to result from the Merger
but excluding any one-time integration charges, indicate consolidated earnings
per share of $2.25 and $2.50. Earnings estimates for Solite, assuming the
Merger did not take place, were based on Solite management's forecasts, and for
the years ending December 31, 1998 and 1999, respectively, indicate projected
net income of $0.56 million and $0.61 million. The comparable earnings
attributed to Solite shareholders based upon the projected earnings of the
merged companies on a consolidated basis are $0.67 million and $0.74 million
for the years ending December 31, 1998 and 1999, respectively. The comparison
reflects the terms of the Merger, and CoView Capital observed that the Merger
would result in earnings accretion for Solite shareholders of 18% and 22% for
1998 and 1999, respectively, based on the consideration to be received
(reflecting the terms of the exchange of Giant Common Stock for Solite Common
Stock).

CoView Capital performed a variety of financial and comparative analyses
for purposes of its opinion given in connection herewith. In arriving at its
opinion, CoView Capital considered the results of all of its analyses as a
whole and did not attribute any particular weight to any quantitative analysis
or factor considered by it. In addition, CoView Capital considered the
following qualitative factors: in the absence of the Merger (i) extended
waivers of defaults by Solite lenders would likely be required and are hardly
assured and (ii) Solite would need to make additional capital expenditures, the
financing for which could be problematic. There have been repeated events of
default, most recently Solite's failure to retire $19.2 million principal
amount of bank and insurance company debt at December 31, 1997 and January 31,
1998. Management anticipates that waivers will be extended to permit the
proposed merger to proceed.

The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description.
Furthermore, selecting any portion of its analyses, without considering all
analyses, would create an incomplete view of the process underlying its
opinion. In performing its analyses, CoView Capital made assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of Solite or Giant. Any
estimates contained herein are not necessarily indicative of future results or
actual values, which may be significantly more or less favorable than those
suggested by such estimates. The analyses performed were prepared solely as
part of CoView Capital's analysis of the fairness of the consideration to be
received in the Merger to the holders of shares of Solite Common Stock and were
conducted in connection with the delivery of CoView Capital's opinion. The
analyses do not purport to be appraisals or to reflect the prices at which
Solite might actually be sold. The consideration to be received by the
shareholders of Solite pursuant to the Merger was determined through
arm's-length negotiations between Solite and Giant and was approved by the
Solite Board. CoView Capital did not recommend that any specific consideration
constituted the only appropriate consideration for the Merger.

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The Solite Board retained CoView Capital based upon CoView Capital's
qualifications, experience and expertise. CoView Capital is an investment
banking and advisory firm focused on middle market companies. CoView Capital,
as part of its investment banking business, is regularly engaged in the
valuation of businesses in connection with mergers and acquisitions, private
placements and valuations for corporate and other purposes.

Pursuant to the CoView Capital Engagement Letter, CoView Capital provided
advisory services and a financial opinion in connection with the Merger and
Solite has agreed to pay a fee of 1% to CoView Capital based on the aggregate
value of the transaction, including debt assumed, if the Merger is consummated
and to reimburse CoView Capital for reasonable expenses as incurred. Solite has
also agreed to indemnify CoView Capital, its directors, officers, agents and
employees against certain liabilities and expenses, including certain
liabilities under the federal securities laws, related to CoView Capital's
engagement.

Certain Assumptions

The internal financial analyses of Giant reviewed by CoView Capital were
derived from internal forecasts prepared by Giant's management for internal use
only. The material assumptions underlying these projections include the
following: Giant's cement revenues will increase 4% annually; cement
manufacturing capacity will be fully utilized during the three-year period;
costs will increase 3% annually, at a slower rate than revenue growth; resource
recovery revenues will increase modestly each year, primarily as a result of
higher volumes of solids processed; Solite's revenues will increase 2%
annually, primarily as a result of higher volumes of lightweight aggregate and
block produced and sold; Solite's cost of sales will decline 2% in 1998 and
remain level thereafter as a result of cost reduction and containment measures;
Solite's depreciation will increase 5% annually as a result of increased
capital expenditures; and Solite's selling, general and administrative expenses
will decrease 3% annually as a result of cost reduction and containment
measures. Other assumptions include continuing economic growth, annual
inflation at or lower than 3%, stable interest rates, continuing strong
construction spending nationally and regionally, continuing favorable
regulatory environments, and wage increases in line with general inflation. The
internal financial analyses of Solite reviewed by CoView Capital were derived
from forecasts prepared by Solite's management for internal use only. The
material assumptions underlying these projections include the following:
Solite's revenues and costs remain constant for the two year period; available
cash is used to repay debt at the end of each fiscal year, the interest rate on
debt increases to 11% in 1998 and 1999; and the effective tax rate is equal to
35%. THE ASSUMPTIONS SET FORTH ABOVE INVOLVE INHERENT UNCERTAINTIES AND ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM PROJECTED RESULTS. SEE CAUTIONARY STATEMENT
CONCERNING FORWARD-LOOKING STATEMENTS.

Giant's Reasons for the Merger
Giant's business strategy includes three primary uses for excess cash
flow; first to reinvest in its cement manufacturing and resource recovery plant
and equipment, second to repurchase its common stock, and third to acquire
companies whose businesses are complementary to Giant's. The cement industry is
dominated by large multinational companies that own more than 65% of United
States capacity. Of the actively traded U.S. public cement companies, Giant's
revenues are less than half of the next largest public company. The capital
intensive nature of the industry could result in larger more well financed
competitors gaining advantages over Giant unless Giant can grow through
acquisitions.

Solite was identified by Giant as an attractive candidate for a business
acquisition. Giant believes that the Merger will broaden its presence on the
east coast, broaden its construction materials product lines, broaden its
resource recovery services capabilities and allow it to compete more
effectively in both of these businesses.

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THE SPIN-OFF

Before the Merger and the Spin-Off, Solite will contribute to Northeast
Solite certain assets, as well as stock of certain subsidiaries, in
transactions intended to qualify for tax-free treatment under the Code. As a
result, at the time of the Spin-Off, Northeast Solite will hold the following:
(i) two lightweight aggregate plants (one located in New York and one located
in Kentucky), as well as hazardous waste fuels facilities associated with the
Kentucky plant; (ii) one masonry block manufacturing and sales facility in
Chesapeake, Virginia; (iii) the coal mining properties owned and leased by
Solite in Kentucky and West Virginia; (iv) a Florida tank farm storage facility
and related assets; (v) a closed Florida lightweight aggregate plant facility
and related assets; (vi) a sand and gravel plant in Hanover County, Virginia;
(vii) certain lease and royalty (income) agreements, a leasehold interest in
365 acres in Wilcox County, Alabama, an option agreement to acquire 655 acres
of real property in Fluvanna County, Virginia, and a 69-acre parcel of real
property in Spotsylvania County, Virginia; and (viii) the stock of Solite's
inactive subsidiaries.

On February 19, 1997, Solite filed a private letter ruling request with
the IRS requesting rulings on the Spin-Off. On September 8, 1997, the IRS
issued a letter ruling to Solite holding that the Spin-Off will not be taxable
to either Solite or Northeast Solite or their respective shareholders.

Immediately following the Conversion, and immediately before the Merger,
Solite will distribute to each holder of Solite Common Stock a fully paid and
non-assessable share of Northeast Solite Common Stock for each share of Solite
Common Stock held after the Conversion. The Spin-Off is conditioned upon
approval of the Merger Agreement and the Preferred Stock Amendment and will not
occur unless all conditions to the Merger have been satisfied. See "TERMS OF
THE MERGER AGREEMENT--Conditions to the Merger." The Articles of Incorporation
and By-laws of Northeast Solite will be amended to conform as nearly as
practicable to the Articles of Incorporation and By-laws of Solite. See
"CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS OF SOLITE, GIANT AND NORTHEAST
SOLITE."

In connection with the Merger, Northeast Solite will enter into the
Northeast Agreement, the Tax Provisions Agreement, the Indemnity Agreement, the
License Agreement, the Services Agreement, and the Non-Competition Agreement.
See "TERMS OF THE MERGER AGREEMENT--Ancillary Agreements." In addition to the
obligations under the foregoing agreements, Northeast Solite will be
responsible for the liabilities and obligations associated with the assets
transferred to it in connection with, and held by it after, the Spin-Off.

Solite currently provides administrative, management, accounting, legal
and human resources services to the operations that will constitute Northeast
Solite after the Spin-Off. Pursuant to the Services Agreement to be entered
into in connection with the Merger, Solite will agree to provide these services
to Northeast Solite, as needed, for terms varying in length from six months to
three years, six months. See "Terms of the Merger--Ancillary Agreements."
During this period, Northeast Solite plans to retain personnel, or enter into
outsourcing arrangements, to provide these functions upon termination of the
services provided pursuant to the Services Agreement.

The shares of Northeast Solite Common Stock distributed in the Spin-Off,
like the outstanding shares of Solite Stock, will not be registered under the
Securities Act, and accordingly, may not be sold or transferred unless
registered under the Securities Act or an applicable exemption from such
registration requirements is available.

John W. Roberts will beneficially own a majority of the outstanding
Northeast Solite Common Stock after the Spin-Off, and consequently will be able
to elect the entire board of directors of Northeast Solite and, may be able to
amend the articles of incorporation of Northeast Solite, without the vote of
any other shareholder. Mr. Roberts is expected to be a director of both
Northeast Solite and Giant after the Merger.

CONVERSION OF THE SOLITE PREFERRED STOCK
In order to simplify Solite's capital structure and to facilitate the
Spin-Off and the Merger, Solite proposes to convert all outstanding shares of
Solite Preferred Stock to Solite Common Stock. The Conversion will be
effectuated by the adoption of the Preferred Stock Amendment, attached hereto
as Annex II. The Merger and the Spin-Off are conditioned upon approval of the
Preferred Stock Amendment and completion of the Conversion. The Conversion will
be effected immediately before the Spin-Off and the Merger, and will occur only
if all other conditions to the Merger have been satisfied. See "TERMS OF THE
MERGER AGREEMENT--Conditions to the Merger."

The following summarizes all of the material provisions of the Preferred
Stock Amendment which is attached hereto in its entirety. The following does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all of the provisions of the Preferred Stock Amendment.

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Authorized and Outstanding Solite Preferred Stock. As of the date hereof,
the Solite Articles of Incorporation authorize the issuance of 100,000 shares
of Solite Preferred Stock, issuable in series, of which Solite has designated
25,000 shares as Solite Series A Preferred Stock, 16,300 shares as Solite
Series B Preferred Stock, and 16,807 shares as Solite Series C Preferred Stock.
As of the Record Date, 8,700 shares of Solite Series A Preferred Stock, 14,093
shares of Solite Series B Preferred Stock and 15,429 shares of Solite Series C
Preferred Stock, were outstanding.

As of the Record Date, John W. Roberts and his family beneficially own
8,700 shares (or 100%) of the outstanding Solite Series A Preferred Stock,
12,518 shares (or 88.8%) of the outstanding Solite Series B Preferred Stock,
and 15,429 shares (or 100%) of the outstanding Solite Series C Preferred Stock.

Effects of the Conversion. The Preferred Stock Amendment will convert,
without further action by the holders of the Solite Preferred Stock, each
issued and outstanding share of Solite Preferred Stock in accordance with the
formula represented by the Schedule set forth on Annex I hereto (collectively,
the "Preferred Stock Conversion Formula"). Upon the issuance of a certificate
of amendment by the Office of the Clerk of the State Corporation Commission of
the Commonwealth of Virginia (the "Virginia SCC") evidencing the adoption of
the Preferred Stock Amendment, each issued and outstanding preferred stock
certificate which previously evidenced ownership of shares of Solite Preferred
Stock will evidence the ownership of the number of shares of Solite Common
Stock determined in accordance with the Preferred Stock Conversion Formula.
Each holder of shares of Solite Preferred Stock converted into Solite Common
Stock who would otherwise be entitled to receive a fraction of a share of
Solite Common Stock in the Conversion will receive, in lieu thereof, cash
(without interest) in an amount determined as set forth on Annex I.

The Preferred Stock Conversion Formula is designed to result in the
holders of Solite Preferred Stock receiving Solite Common Stock with a value
equal, after giving effect to rounding, to the par value of the Solite
Preferred Stock converted based upon certain estimated equity valuations of the
Northeast Solite assets and the Solite assets after the Spin-Off. See
"--Opinion of Ferris Baker Watts." The Solite Board selected par value as the
value to be given to the holders of Solite Preferred Stock in designing the
Preferred Stock Conversion Formula based on the advice of FBW that such
valuation was fair to the holders of Solite Preferred Stock and Solite Common
Stock as it equaled the liquidation preference of the Solite Preferred Stock
(less accrued dividends). The par value for the Solite Series A Preferred Stock
is $50 per share, the par value for the Solite Series B Preferred Stock is $50
per share, and the par value for the Solite Series C Preferred Stock is $240
per share. The estimated equity value of the Solite assets after the Spin-Off
is determined by reference to the Giant Common Stock to be issued in the Merger
(valued at the average of the closing bid and asked price per share of Giant
Common Stock for the 20 trading days before the Effective Date, rounded to the
nearest eighth, referred to herein as the "Giant Conversion Price").
Consequently, the ratios for the conversion of the Solite Preferred Stock
fluctuate with the market price for Giant Common Stock. The effect of such
fluctuation is to increase the number of shares of Giant Common Stock received
in the Merger by former holders of Solite Preferred Stock and decrease the
number of shares of Giant Common Stock received in the Merger by other holders
of Solite Common Stock as the price per share of Giant Common Stock decreases.
Conversely, the number of shares of Giant Stock received in the Merger by
former holders of Solite Preferred Stock decreases and the number of shares of
Giant Common Stock received in the Merger by other holders of Solite Common
Stock increases as the price per share of Giant Common Stock increases. As a
result of the reduction in the aggregate number of shares to be issued in the
Merger, the Preferred Stock Conversion Formula will result in the percentage of
shares received by former holders of Solite Preferred Stock being greater than
the percentage that would have been received under the conversion formula
proposed in connection with the Merger Agreement as executed in September 1997.

Solite shareholders may refer to the schedule on Annex I to determine the
number of shares of Giant Common Stock and Northeast Solite Common Stock they
will receive in the Merger and Spin-Off depending on the price per share of
Giant Common Stock. For example, if the Giant Conversion Price were $22.50, a
holder of 100 shares of Solite Series B Preferred Stock and 100 shares of
Solite Common would (i) multiply the number of shares of Solite Series B
Preferred Stock by the Conversion Ratio for Solite Series B Preferred Stock
appearing under the Giant Conversion Price of $22.50 (100 x 3.3961 = 339.61);
(ii) add that number (less any fraction which will be paid in cash as set forth
in Annex I) to the number of shares of Solite Common Stock (339 + 100 = 439);
and (iii) multiply the total by the Common Exchange Ratio appearing under the
Giant Conversion Price of $22.50 (439 x 0.2135 = 93.7265). In this case, the
shareholder would receive 439 shares of Northeast Solite Common Stock in the
Spin-Off, 93 shares of Giant Common Stock in the Merger (173 if the escrow
shares are released in full) with a cash payment for the fractional share
(0.7265 x $22.50 = $16.35 ).

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The following example illustrates how the Preferred Stock Conversion
Formula results in holders of Solite Preferred Stock receiving Solite Common
Stock with a value equal, after giving effect to rounding, to the par value of
the Solite Preferred Stock converted. This example assumes a Giant Conversion
Price of $22.50. The par value of 100 shares of Solite Series B Preferred Stock
is $5,000. A holder of 100 shares of Solite Series B Preferred Stock would
receive 339 shares of Northeast Solite Stock, with an assumed value of
$1,967.83; 72 shares of Giant Common Stock, with a value of $1,620 at a Giant
Conversion Price of $22.50; and an additional 62 shares, if the Escrow Shares
are released in full, with a value of $1,395 at a Giant Conversion Price of
$22.50, or an aggregate consideration in Northeast Solite Common Stock and
Giant Common Stock of $4,982.83 with cash payments in lieu of fractional shares
accounting for the balance of the $5,000 par value.

The Preferred Stock Conversion Formula contemplates a Giant Conversion
Price from $15.00 through $35.00. In the event the Giant Conversion Price was
greater than $35.00 per share or less than $15.00 per share, the Preferred
Stock Amendment would not be implemented, the Conversion and Merger would be
delayed and the Merger Agreement may be subject to termination. Based on
historical trading ranges for the Giant Common Stock, Solite and Giant believe
it is unlikely that the Giant Conversion Price will be outside the range
contemplated by the Preferred Stock Conversion Formula. However, in such event,
rather than delaying until a change in the market price sufficient for the
Giant Conversion Price to return to the $15 through $35 range, Solite
anticipates the Solite Board would approve a conversion formula with a revised
range of Giant Conversion Prices. Any such revision would be submitted to
shareholders for approval at a rescheduled special meeting and new proxies
would be solicited pursuant to a supplement to this Proxy Statement/Prospectus
or a new Proxy Statement/Prospectus. In view of the notice requirements under
Virginia law, it is likely that a special meeting to consider such a revised
conversion formula would occur after April 30, 1998, in which event the Merger
Agreement would be subject to termination by either Solite or Giant. See "Terms
of the Merger Agreement--Termination Rights."

Rights of Solite Preferred Stock.
The following summarizes all of the material terms of the Solite Preferred
Stock under the Solite Articles of Incorporation currently in effect and prior
to the adoption of the Preferred Stock Amendment.

Solite Series A Preferred Stock. The holders of outstanding shares of
Solite Series A Preferred Stock are entitled to receive, if, when and as
declared by the Solite Board, cash dividends at the rate of $4 per share per
annum which, after the first year following their issuance, are cumulative and
are payable annually. Each share is entitled to one quarter vote for all
purposes for which the holders of Solite Common Stock are entitled to vote.
Solite may redeem all or any portion of the outstanding Solite Series A
Preferred Stock for $60 per share, plus accrued dividends, but may not require
the conversion of the Series A Preferred Stock into Solite Common Stock.
Holders have the option, subject to certain conditions, of converting shares of
Solite Series A Preferred Stock called for redemption by Solite into shares of
Solite Common Stock at the rate of one share of Solite Common Stock for every
four shares of Solite Series A Preferred Stock converted. The liquidation value
of the Solite Series A Preferred Stock is $50 per share, plus accrued
dividends, to be paid before any distribution to holders of Solite Series B
Preferred Stock, Solite Series C Preferred Stock and Solite Common Stock.
Solite Series A Preferred Stock ranks senior to Solite Series B Preferred Stock
and Solite Series C Preferred Stock.

Solite Series B Preferred Stock. The holders of outstanding shares of
Solite Series B Preferred Stock are entitled to receive, if, when and as
declared by the Solite Board, cash dividends at the rate of $4 per share per
annum which, after the first year following their issuance, are cumulative and
are payable annually. Each share is entitled to one quarter vote for all
purposes for which the holders of Solite Common Stock are entitled to vote.
Solite may redeem all or any portion of the outstanding Solite Series B
Preferred Stock for $60 per share, plus accrued dividends, but may not require
the conversion of the Series B Preferred Stock into Solite Common Stock.
Holders have the option, subject to certain conditions, of converting shares of
Solite Series B Preferred Stock called for redemption by Solite into shares of
Solite Common Stock at the rate of one share of Solite Common Stock for every
four shares of Solite Series B Preferred Stock converted. The liquidation value
of the Solite Series B Preferred Stock is $50 per share, plus accrued
dividends, to be paid before any distribution to holders of Solite Series C
Preferred Stock and Solite Series B Preferred Stock ranks junior to Solite
Series A Preferred Stock and senior to Solite Series C Preferred Stock.

Solite Series C Preferred Stock. The holders of outstanding shares of
Solite Series C Preferred Stock are entitled to receive, if, when and as
declared by the Solite Board, cash dividends at the rate of $21.50 per share
per annum

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which, after the first year following their issuance, are cumulative and are
payable annually. Each share is entitled to one vote for all purposes for which
the holders of Solite Common Stock are entitled to vote. Solite may redeem all
or any portion of the outstanding Solite Series C Preferred Stock for $240 per
share, plus accrued dividends, but may not require the conversion of the Series
C Preferred Stock into Solite Common Stock. Holders have the option, subject to
certain conditions, of converting shares of Solite Series C Preferred Stock
called for redemption by Solite into shares of Solite Common Stock at the rate
of one share of Solite Common Stock for each share of Solite Series C Preferred
Stock converted. The liquidation value of the Solite Series C Preferred Stock is
$200 per share, plus accrued dividends, to be paid before any distribution to
holders of Solite Common Stock. Solite Series C Preferred Stock ranks junior to
Solite Series A Preferred Stock and Solite Series B Preferred Stock.

Voting Requirements for Approval of Preferred Stock Amendment
Approval of the Preferred Stock Amendment requires (i) the affirmative
vote of more than two-thirds of the votes that holders of the outstanding
Solite Common Stock and Solite Preferred Stock, voting as one voting group, are
entitled to cast and (ii) the affirmative vote of more than two-thirds of the
votes that the holders of the outstanding Solite Common Stock, Solite Series A
Preferred Stock, Solite Series B Preferred Stock and Solite Series C Preferred
Stock, each voting as a separate voting group, are entitled to cast. Approval
of the Preferred Stock Amendment also requires the affirmative vote of a
majority of the votes that holders of outstanding Solite Common Stock and
Solite Preferred Stock, other than John W. Roberts and his family, are entitled
to cast.

Recommendation of the Solite Board
The Solite Board has unanimously approved the Preferred Stock Amendment
and believes the Conversion is in the best interests of the holders of Solite
Preferred Stock and of Solite Common Stock. THE SOLITE BOARD RECOMMENDS THAT
THE HOLDERS OF SOLITE PREFERRED STOCK AND SOLITE COMMON STOCK VOTE FOR THE
APPROVAL OF THE PREFERRED STOCK AMENDMENT.

The Solite Board believes that the Preferred Stock Amendment and the
Merger are in the best interests of the holders of Solite Common Stock (other
than Mr. Roberts) in view of (i) the material factors considered by the Solite
Board in approving the Merger and (ii) the existing provisions of the Solite
Articles of Incorporation requiring payment of cash consideration per share to
redeem the Solite Preferred Stock greater than the aggregate value per share
proposed in the Conversion (based upon the assumed equity valuations).

In considering the recommendation of the Solite Board, holders of Solite
Preferred Stock and holders of Solite Common Stock should be aware that certain
members of the Solite Board and management (particularly John W. Roberts) have
interests which may present them with potential conflicts of interest. See "The
Merger--Interests of Certain Persons in the Merger." These potential conflicts
include the fact that, as a result of the reduction in the aggregate number of
shares to be issued in the Merger, the percentage of such shares received by
former holders of Solite Preferred Stock will be greater than the percentage
that would have been received under the Merger Agreement executed in September
1997.The Solite Board was aware of these potential conflicts and considered
them in making its recommendation and approving the Merger Agreement and the
Preferred Stock Amendment.

Opinion of Ferris, Baker Watts
Pursuant to a letter agreement dated January 17, 1997, Ferris, Baker
Watts, Incorporated ("FBW") was retained by the Solite Board to assist the
Solite Board in determining conversion ratios for the Solite Series A Preferred
Stock, Solite Series B Preferred Stock and Solite Series C Preferred Stock and
to provide a fairness opinion that the consideration received by the holders of
Solite Preferred Stock in exchange for their conversion to Solite Common Stock
is fair to the holders of Solite Preferred Stock and to the holders of Solite
Common Stock.

At the meeting of Solite's Board on February 26, 1998, FBW provided: (i)
an oral presentation describing its analysis in determining the appropriate
conversion ratios for the Solite Preferred Stock; and (ii) rendered its oral
opinion and delivered an opinion in writing as of such date, based upon and
subject to the various assumptions, qualifications and limitations set forth in
the opinion, that the consideration received by the holders of Solite Preferred
Stock in exchange for their conversion to Solite Common Stock (as set forth on
Exhibit A to such opinion for Giant Conversion Prices from $15 through $35 per
share) was fair to the holders of Solite Preferred Stock and the holders of
Solite Common Stock.

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The full text of the written opinion of FBW dated as of February 26, 1998
which sets forth, among other things, assumptions made, procedures followed,
matters considered and limitations on the scope of the review undertaken by FBW
in rendering its opinion, is attached as Annex III hereto. Solite shareholders
are urged to, and should, read the opinion carefully and in its entirety in
conjunction with this Proxy Statement/Prospectus. FBW's OPINION WAS PREPARED AT
THE REQUEST OF THE SOLITE BOARD AND DOES NOT CONSTITUTE A RECOMMENDATION AS TO
HOW A SHAREHOLDER SHOULD VOTE ON MATTERS ASSOCIATED WITH THE SOLITE PREFERRED
STOCK. The following summarizes all of the material provisions of the opinion
of FBW which is attached hereto in its entirety. The following does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to the full text of such opinion.

In connection with the opinion, FBW reviewed, among other things, (i) the
financial structure of the proposed transaction with Giant, (ii) the Merger
Agreement, (iii) internally prepared, unaudited, historical operating results
of Solite's operations that will constitute Northeast Solite upon consummation
of the Spin-Off, (iv) internally prepared projections for Northeast Solite, (v)
the Series B Preferred Shares Offering Memorandum, (vi) draft of the request
for the private letter ruling submitted to the IRS, (vii) Asset Purchase
Agreement between Solite Corporation, Southern Materials Corporation,
Rappahannock Farm Enterprises, Inc., Rockville Nurseries Corporation, John W.
Roberts, and Mid-Atlantic Materials, Inc., dated August 29, 1997, (viii) third
party appraisals for certain Kentucky and Florida operations, dated August 31,
1992, which were not updated to the present, (ix) Golder Associates, Inc.
Preliminary Remediation Cost Evaluation for the Florida Solite Company Facility
in Green Cove Springs, Florida, dated April 23, 1997, (x) Amendment Number 1
and Amendment Number 2 to Form S-4 for Giant Cement Holding, Inc. dated
November 12, 1997 and December 4, 1997, respectively, and (xi) the redemption
and conversion provisions for the Solite Preferred Stock in the Solite Articles
of Incorporation as currently in effect. FBW also held discussions with the
members of the management of Solite regarding its past and current business
operations, financial condition and future prospects. FBW also held discussions
with the Solite's accountants and performed such other investigations as it
deemed necessary.

FBW assumed and relied upon the accuracy and completeness of all financial
and other information reviewed by it for the purposes of the opinion whether
publicly available or provided to FBW by Solite, and FBW has not assumed, and
does not assume, any responsibility for independent verification of such
information.

FBW's opinion is based on economic, market and other considerations as in
effect on, and the information made available to FBW as of, February 26, 1998.
Subsequent events may affect the conclusions reached in the opinion, and FBW
neither has, nor does it assume any obligation to update, revise or reaffirm
the opinion which speaks solely as of February 26, 1998 and with respect to
matters contained therein.

As a condition of the Merger Agreement, the holders of Solite Preferred
Stock are required to convert their shares of Solite Preferred Stock into
shares of Solite Common Stock. FBW determined that a conversion ratio that
resulted in holders of Solite Preferred Stock receiving shares of Solite Common
Stock equal, after giving effect to rounding, in value to the par value of the
Solite Preferred Stock was fair to the holders of Solite Preferred Stock and
the holders of Solite Common Stock. To determine the appropriate conversion
ratios for the Solite Preferred Stock, FBW utilized various valuation
methodologies to estimate the equity value of Solite's assets prior to the
Merger and the Spin-Off. The following is a brief summary of the analysis
performed by FBW in connection with determining the appropriate conversion
ratios for the Solite Preferred Stock and with the preparation of the opinion
letter dated February 26, 1998.

Valuation of Merged Assets. For the assets which will pass to Giant in
connection with the Merger (the "Merged Assets"), FBW used the Giant offer as
described in the Merger Agreement as a proxy for equity valuation, stipulating
that equity value for these assets was determined by good faith negotiations
between a willing buyer and a willing seller. For the purpose of determining
the conversion ratios, the equity value of Merged Assets will equal the sum of
325,000 shares of Giant Common Stock times the average of the closing bid and
asked prices per share for Giant Common Stock for the twenty trading days
immediately preceding closing.

Valuation of Independent Assets

Discounted Free Cash Flow Analysis. FBW performed an analysis of the
present value of the equity value of the assets that will be spun-off to
Northeast Solite ("Northeast Solite Assets") based on the Solite's financial
projections for the fiscal years 1998 through 2001. FBW analyzed both a base
case scenario and a best case scenario. Based on this discounted free cash flow
analysis, FBW estimated Northeast Solite Asset's equity value to range between
$1.1 million under the base case scenario to $6.3 million under the best case
scenario. The equity value

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for Northeast Solite Assets used to determine the conversion ratios is $4.8
million, which is greater than the mid-point of this range.

Liquidation Analysis. Using appraisals conducted in August 1992 (but not
updated) on certain operations, recent sale transactions and offers for
operations that represent a portion of the Northeast Solite Assets, senior
management of Solite provided FBW its estimate of $5.2 million as the orderly
liquidation value of Northeast Solite Assets. One of Northeast Solite Asset's
operations (the lightweight aggregate plant in New York), which cannot be
liquidated for a period of one year following the Effective Time pursuant to
the Northeast Agreement to be entered into as condition to the Merger (see
"Terms of the Merger Agreement--Ancillary Agreements--Northeast Agreement"),
was valued on a stand-alone basis, using a discounted free cash flow analysis.
The discounted free cash flow analysis for the stand-alone entity was performed
using both base case and best case scenarios. FBW analyzed the liquidation
estimates provided by senior management and held various discussions with
management not involved with compiling the estimates. Based on this liquidation
and discounted free cash flow analysis, FBW estimated Northeast Solite Asset's
equity value to range between $2.4 million under the base case scenario to $9.3
million under the best case scenario. The equity value for Northeast Solite
Assets used to determine the conversion ratios is $4.8 million, which is lower
than the mid-point of this range.

FBW performed a variety of financial and comparative analyses for purposes
of determining an equity value of Northeast Solite Assets. In performing its
analysis, FBW made assumptions with respect to industry performance, general
business and economic conditions and other matters, many of which are beyond
the control of Solite. Any estimates contained herein are not necessarily
indicative of future results or actual values, which may be significantly more
or less favorable than those suggested by such estimates. The analyses
performed were prepared solely as part of FBW's analysis of the fairness of the
consideration to be received by the holders of Solite Preferred Stock in
exchange for their conversion to Solite Common Stock and were conducted in
connection with the delivery of FBW's opinion. The analyses do not purport to
be appraisals or to reflect the prices at which Northeast Solite Assets might
actually be sold.

For the purposes of determining the conversion ratio, FBW gave equal
weight to the high and low estimates of equity value for the Northeast Solite
Assets, resulting in an estimated equity value of the Northeast Solite Assets
of $4,758,150.

Preferred Conversion Ratios. For purposes of determining what percentage
of ownership the Solite Preferred Stock will hold in Solite upon conversion of
its shares, FBW developed a matrix (the "Conversion Matrix") which divides the
par value of the Solite Preferred Stock by the estimated equity value of the
Northeast Solite Assets plus the equity value of Merged Assets. The Conversion
Matrix, which is included as Exhibit A to Annex III, accounts for the average
closing bid and asked prices per share for Giant Common Stock for the twenty
trading days immediately preceding closing to be from $15 through $35 per
share. The Conversion Matrix further indicates, for a given price for Giant
Common Stock, what the corresponding conversion ratios would be for each of the
three series of Solite Preferred Stock.

The Solite Board retained FBW based upon FBW's qualifications, experience
and expertise. FBW, as part of its investment banking business, is regularly
engaged in the valuation of businesses in connection with mergers and
acquisitions, public offerings and private placements, and valuations for
corporate and other purposes.

Pursuant to the FBW Engagement Letter, FBW provided advisory services and
a financial opinion in connection with the consideration to be received by the
holders of Solite Preferred Stock in exchange for their conversion to Solite
Common Stock. Solite has paid FBW $30,000 for the advisory services and
financial opinion and has agreed to pay FBW an additional $30,000 if the Merger
is consummated as well as reimburse FBW for reasonable expenses incurred. In
addition, Solite has also agreed to indemnify FBW, its directors, officers,
agents and employees against certain liabilities and expenses, including
certain liabilities under the federal securities laws, related to FBW's
engagement.

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THE MERGER

Effective Time
The Merger will become effective at such time as a Certificate of Merger
is issued by the Virginia SCC or at such latter time as specified in the
Articles of Merger filed with the Virginia SCC. The Merger Agreement provides
that Merger Sub and Solite will execute and file such articles or other
appropriate documents as soon as practicable after the conditions to the Merger
are satisfied. See "TERMS OF THE MERGER--Conditions to the Merger."

Exchange Ratio

At the Effective Time, each share of Solite Common Stock issued and
outstanding immediately prior to the Effective Time, other than shares of
Solite Common Stock held by Solite shareholders who perfect their dissenter's
rights under the VSCA, will be converted into the right to receive the number
of shares of Giant Common Stock equal to the quotient derived by dividing (i)
175,000 shares of Giant Common Stock by (ii) the total number of shares of
Solite Common Stock outstanding as of the Effective Time, including all shares
of Solite Common Stock issuable upon conversion of the Solite Preferred Stock.

Shares of Giant Common Stock to be Held in Escrow

Pursuant to the Merger Agreement, an additional 150,000 shares of Giant
Common Stock will be placed in escrow upon consummation of the Merger.

75,000 of such shares would be returned to Giant and cancelled if, as of
the Effective Time, the consolidated net book value (as defined in the Merger
Agreement) of Solite is $2.8 million or less or the net current assets (as
defined in the Merger Agreement) of Solite is $3.3 million or less. If such
consolidated net book value is more than $4.5 million and such net current
assets are more than $5 million, all such 75,000 shares would be distributed to
the persons who were holders of Solite Common Stock immediately prior to the
Merger (including holders of Solite Preferred Stock that was converted into
Solite Common Stock, but excluding holders who have perfected their dissenters'
rights under the VSCA) on the basis of each such share of Solite Common Stock
entitling such former holder to the number of shares of Giant Common Stock
equal to the quotient derived by dividing 75,000 by the total number of shares
of Solite Common Stock outstanding as of the Effective Time. If such
consolidated net book value is more than $2.8 million but less than $4.5
million, or such net current assets are more than $3.3 million but less than $5
million, the shares of Giant Common Stock held pursuant to such escrow shall be
returned, in part, to Giant for cancellation and distributed, in part, to such
holders of Solite Common Stock on a formula basis with the Giant Common Stock
returned valued at $22 per share. The $22 per share valuation was determined by
Giant and Solite based upon the approximate market price per share of Giant
Common Stock on the date Giant and Solite negotiated the terms of the escrow,
the effect of which is to prevent Solite shareholders from benefiting from an
increase in the price of the Giant Common Stock or detrimenting from a decrease
in the price of Giant Common Stock, on shares that ultimately are returned to
Giant pursuant to the terms of the Merger Agreement.

The other 75,000 shares of Giant Common Stock shall be held in escrow and
shall be available to satisfy the indemnification claims, if any, of Giant
under the Merger Agreement. Unless a claim or claims by Giant are then pending
in amounts in excess of the then value of 37,500 shares of Giant Common Stock,
37,500 shares of Giant Common Stock held in escrow shall be released on the
second anniversary of the Effective Time, and unless any claim or claims by
Giant are then pending, the balance of the shares of Giant Common Stock held in
escrow shall be released on the third anniversary of the Effective Time.

Upon release of the Giant Common Stock from escrow, Solite shareholders
will be entitled to receive for each share of Solite Common Stock held by them
at the Effective Time the number of shares of Giant Common Stock equal to the
quotient derived by dividing (i) the number of shares of Giant Common Stock
released from escrow by (ii) the total number of shares of Solite Common Stock
outstanding as of the Effective Time, including all shares of Solite Common
Stock outstanding as a result of the Conversion.

Cancellation of Solite Common Stock Shares
As of the Effective Time, all shares of Solite Common Stock shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate representing any such shares
of Solite Common Stock shall cease to have any rights with respect thereto,
except the right to receive shares of Giant Common Stock and any cash in lieu
of fractional shares of Giant Common Stock to be issued or paid in
consideration therefor upon surrender of such certificate, in each case without
interest.

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Exchange Procedures; Distributions with Respect to Unexchanged Shares; No
Further Ownership Rights in Solite Common Stock; No Fractional Shares of Giant
Common Stock

Exchange Procedures. As soon as reasonably practicable after the Effective
Time, Giant shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Solite Common Stock (the "Solite Certificates"), whose
shares were converted into the right to receive shares of Giant Common Stock
pursuant to the Merger, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
shall pass, only upon delivery of the Solite Certificates to Giant, and shall
be in such form and have such other provisions as Giant may reasonably specify)
and (ii) instructions for use in effecting the surrender of the Solite
Certificates in exchange for certificates representing shares of Giant Common
Stock. Upon surrender of a Solite Certificate for cancellation to Giant,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by Giant, the holder of such Solite
Certificate shall be entitled to receive in exchange therefor certificates
representing shares of Giant Common Stock (rounded down to the nearest whole
share) which such holder has the right to receive after taking into account all
the shares of Solite Common Stock then held by such holder under all such
Solite Certificates so surrendered, cash in lieu of fractional shares of Giant
Common Stock, and the Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of Solite Common Stock that is not
registered in the transfer records of Solite, a certificate representing shares
of Giant Common Stock may be issued to a person other than the person in whose
name the Solite Certificate so surrendered is registered, if, upon presentation
to Giant, such Solite Certificate is properly endorsed or otherwise is in
proper form for transfer and the person requesting such payment pays any
transfer or other taxes required by reason of the transfer of Giant Common
Stock to a person other than the registered holder of such Solite Certificate
or establishes to the satisfaction of Giant that such tax has been paid or is
not applicable. Until so surrendered, each Solite Certificate shall be deemed
at any time after the Effective Time to represent only the right to receive
upon such surrender a certificate representing shares of Giant Common Stock,
cash in lieu of any fractional shares of Giant Common Stock and any dividends
or other distributions to which such holder is entitled pursuant to the Merger
Agreement. No interest will be paid or will accrue on any cash payable pursuant
to the Merger Agreement.

Solite shareholders should not forward Solite certificates to Giant until
they have received transmittal forms. Solite shareholders should not return
stock certificates with the enclosed proxy.

Distributions with Respect to Unexchanged Shares. No dividends or other
distributions with respect to shares of Giant Common Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Solite Certificate with respect to the shares of Giant Common Stock represented
thereby and no cash payment in lieu of fractional shares of Giant Common Stock
shall be paid to any such holder until the holder of record of such Solite
Certificate shall surrender such Solite Certificate. Following surrender of any
such Solite Certificate, there shall be paid to the record holder of the shares
of Giant Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of any cash payable in lieu of a fractional
share of Giant Common Stock and the amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with respect to
such whole shares of Giant Common Stock, and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record date after
the Effective Time, but prior to such surrender, and a payment date subsequent
to such surrender payable with respect to such whole shares of Giant Common
Stock.

No Further Ownership Rights in Solite Common Stock. All shares of Giant
Common Stock issued upon the surrender for exchange of shares of Solite Common
Stock in accordance with the terms of the Merger Agreement (including any cash
paid) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Solite Common Stock, and there shall be no further
registration of transfers on the stock transfer books of the surviving
corporation of the shares of Solite Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time, Solite
Certificates are presented to the surviving corporation or Giant for any
reason, they shall be canceled and exchanged as provided in the Merger
Agreement.

No Fractional Shares of Giant Common Stock. To avoid the expense and
inconvenience of issuing fractional shares no certificates representing
fractional shares of Giant Common Stock shall be issued upon the surrender for
exchange of Solite Certificates. Each holder of shares of Solite Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Giant Common Stock (after taking into account
all Solite Certificates delivered by such holder) will receive, in lieu
thereof, cash (without interest) in an amount determined by multiplying (i) the
fractional interest to which such holder would otherwise be entitled and (ii)
the average of the closing bid and asked prices per share for Giant Common
Stock on the Nasdaq National Market for the twenty trading days immediately
preceding the Effective Time.

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Admission for Trading on Nasdaq National Market
The outstanding shares of Giant Common Stock are presently admitted for
trading on the Nasdaq National Market. The shares of Giant Common Stock
issuable to Solite's shareholders pursuant to the Merger Agreement shall be
admitted for trading on the Nasdaq National Market, subject to official notice
of issuance.

Certain Significant Considerations
In considering whether to approve the Merger Agreement providing for the
Merger, shareholders of Solite should carefully consider those factors
described under "RISK FACTORS" as well as the fact that the total number of
shares of Giant Common Stock to be issued in connection with the Merger is
fixed and will not be adjusted based on changes in the price of Giant Common
Stock, and the price of the shares of Giant Common Stock at the Effective Time
may vary from the price as of the date of this Proxy Statement/Prospectus or
the date on which shareholders of Solite vote on the Merger due to changes in
the business, operations or prospects of Giant, market assessments of the
likelihood that the Merger will be consummated and the timing thereof, general
market and economic conditions, and other factors.

Certain Federal Income Tax Consequences
The following is a discussion of the material federal income tax
consequences to the Solite shareholders of the Conversion, the Spin-Off and the
Merger, without regard to the particular facts and circumstances of each
shareholder. The tax treatment of shareholders may vary depending upon their
particular situations, and certain shareholders (for example, insurance
companies, tax-exempt organizations, financial institutions or broker-dealers,
and persons who are neither citizens nor residents of the United States, or who
are foreign corporations, foreign partnerships or foreign estates or trusts as
to the United States) may be subject to special rules not discussed below.

SOLITE SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS, AS TO THE
PARTICULAR TAX CONSEQUENCES TO THEM OF THE TRANSACTIONS DESCRIBED HEREIN,
INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX
LAWS, AND OF CHANGES IN APPLICABLE TAX LAWS.

Consummation of the Conversion, the Spin-Off and the Merger are
conditioned upon (a) the receipt of a favorable private letter ruling from the
IRS as to the qualification of the Spin-Off as a reorganization, (b) no opinion
having been received from counsel to Giant, Merger Sub or Solite to the effect
that as a result of a change in law the Spin-Off will no longer qualify as a
reorganization, and (c) the receipt of opinions of McGuire Woods Battle &
Boothe LLP, counsel to Solite, and Proskauer Rose LLP, counsel to Giant, as to
the qualification of the Merger as a tax-free reorganization.

The IRS issued a private letter ruling to Solite dated September 8, 1997
which provides that:

(i) No gain or loss will be recognized by Solite or Northeast Solite upon
the Spin-Off.

(ii) No gain or loss will be recognized by (and no amount will be included
in the income of) the Solite shareholders upon the Spin-Off.

(iii) A Solite shareholder will apportion the tax basis of the Solite
Common Stock held immediately before the Spin-Off between the Solite Common
Stock held immediately after the Spin-Off and the Northeast Solite Common Stock
distributed to the shareholder in the Spin-Off, in proportion to the fair
market value of each at the time of the distribution.

(iv) The holding period of the Northeast Solite Common Stock will include
the holding period of the Solite Common Stock with respect to which the
Northeast Solite Common Stock is received, provided that the Solite Common
Stock is held as a capital asset at the time of the distribution.

A ruling from the IRS, while generally binding on the IRS, may under
certain circumstances be revoked or modified by the IRS retroactively. Neither
Giant nor Solite is currently aware of any facts or circumstances that would
cause the IRS to revoke or modify the ruling it issued to Solite as to the
federal income tax consequences described above.

The Taxpayer Relief Act of 1997 amended the tax-free spin-off provisions
of the Code, effective with respect to distributions occurring after April 16,
1997, to exclude from the coverage of those provisions spin-offs followed by
acquisitions of the distributing or distributed corporation, like the
acquisition of Solite by Giant (so-called

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"Morris Trust" transactions). The amendment provides, however, that it shall
not be applicable if the transaction is described in a ruling request submitted
to the IRS on or before April 16, 1997. The ruling request with respect to the
Spin-Off, which described the Merger, was submitted to the IRS on February 19,
1997.

The ruling obtained from the IRS is based on the Merger qualifying as a
reorganization within the meaning of section 368(a)(1)(B) of the Code. Solite
has not sought a ruling from the IRS as to the qualification of the Merger (or
the Conversion) as a reorganization because the IRS takes the position that the
tax consequences of a transaction such as the Merger (or the Conversion) is
adequately established in the law, and it therefore will not issue a "comfort"
ruling as to whether such transaction qualifies as a reorganization.

Solite has also received the opinions of McGuire Woods Battle & Boothe LLP
and Proskauer Rose LLP that:

(i) The Merger will qualify as a reorganization under section 368(a)(1)(B)
of the Code.

(ii) Except for any cash received in lieu of fractional shares (or in
connection with the exercise of dissenters' rights), a Solite shareholder will
not recognize any income, gain or loss as a result of the receipt of Giant
Common Stock in exchange for the shareholder's Solite Common Stock.

(iii) A Solite shareholder's tax basis for shares of Giant Common Stock
received in exchange for Solite Common Stock, including fractional share
interests for which cash is received, will equal the shareholder's aggregate
tax basis immediately before the Merger in the Solite Common Stock.

(iv) A Solite shareholder's holding period for the Giant Common Stock
(received in exchange for Solite Common Stock,) including any fractional share
interests for which cash is received, will include the period during which the
shares of Solite Common Stock were held, provided such shares were held as
capital assets at the Effective Time.

(v) Cash received by a Solite shareholder in lieu of a fractional share
interest in Giant Common Stock will be treated as having been received as a
distribution in full payment in exchange for the fractional share interests in
Giant Common Stock which that shareholder would otherwise be entitled to
receive. This receipt of cash will result in gain or loss measured by the
difference between the tax basis of such fractional share interest and the cash
received. Such gain or loss will be capital gain or loss to the shareholder,
provided the Solite Common Stock was a capital asset in that shareholder's
hands.

(vi) Where cash is received by a dissenting Solite shareholder, and that
dissenting shareholder's constructive ownership interest in Solite (through
that shareholder's ownership interest in Giant) after the transaction is such
that the cash payment is not essentially equivalent to a dividend, that cash
payment will be treated as a redemption and that shareholder will recognize
gain measured by the difference between the amount of cash received and the
shareholder's tax basis immediately before the Merger in the Solite Common
Stock.

Solite has also received the opinion of McGuire Woods Battle & Boothe LLP
that:

(i) The Conversion will qualify as a reorganization under section
368(a)(1)(E) of the Code and (except for any Solite Common Stock deemed
received with respect to unpaid dividends on the Solite Preferred Stock) no
income, gain or loss will be a recognized by a holder of Solite Preferred Stock
on its conversion into Solite Common Stock.

(ii) A Solite shareholder's tax basis for shares of Solite Common Stock
received in exchange for Solite Preferred Stock will equal the shareholder's
aggregate tax basis in the Solite Preferred Stock.

(iii) A Solite shareholder's holding period of the Solite Common Stock
received in exchange for Solite Preferred Stock will include the holding period
of the Solite Preferred Stock, provided that the Solite Preferred Stock was
held as a capital asset at the time of the Conversion.

Copies of the opinions issued by McGuire Woods Battle & Boothe LLP and
Proskauer Rose LLP have been filed as exhibits to the Registration Statement of
which this Proxy Statement/Prospectus is a part.

Opinions of counsel represent such counsel's best legal judgment and are
not binding on the IRS or the courts. There can be no assurance that the IRS or
the courts would not take one or more contrary positions to those expressed in
opinions of counsel. Also, the opinions of McGuire Woods Battle & Boothe LLP
and Proskauer Rose LLP are based on, among other things, current law and
certain representations as to factual matters made by Solite and Giant

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<PAGE>

which, if incorrect in certain material respects, would jeopardize the
conclusions reached by counsel in their opinions. Neither Solite nor Giant is
currently aware of any facts and circumstances which would cause any such
representations made by it to be untrue or incorrect in any material respect.
In addition, Northeast Solite, the holders of the shares of Northeast Solite
Common Stock and certain holders of Giant Common Stock received in exchange for
Solite Common Stock have agreed to certain restrictions on their future actions
to provide further assurances that the Spin-Off and the Merger will be
tax-free. See "TERMS OF THE MERGER AGREEMENT--Conditions to the Merger."

If the Merger does not qualify as a reorganization, the Spin-Off will also
not qualify as a reorganization. As a result, Solite will recognize gain equal
to the excess of the value of the Northeast Solite shares distributed over
Solite's tax basis in those shares, and the Solite shareholders will each
recognize gain or loss equal to the excess of the value of the Northeast Solite
stock received in the Spin-Off and the Giant Common Stock received in the
Merger over the Shareholder's tax basis in the Solite Common Stock immediately
before the Spin-Off and the Merger.

Backup Withholding
Under the backup withholding rules, a Solite shareholder that receives
Giant Common Stock may be subject to backup withholding at the rate of 31% with
respect to dividends and proceeds of redemption, unless the shareholder (i) is
a corporation or comes within certain other exempt categories and, when
required, demonstrates this fact or (ii) provides a correct taxpayer
identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable requirements of the backup
withholding rules. Any amount withheld under these rules will be credited
against the Solite shareholder's federal income tax liability. A Solite
shareholder who does not provide Giant with his or her current taxpayer
identification number also may be subject to penalties imposed by the IRS.

Dissenters' Rights
Holders of Solite Stock entitled to vote on approval of the Merger
Agreement will be entitled to have the fair value of each such holder's shares
of Solite Common Stock immediately prior to consummation of the Merger paid to
such holder in cash, together with interest, if any, by complying with the
provisions of Article 15. Under Article 15, the determination of the fair value
of a dissenter's shares would exclude any appreciation or depreciation in the
value of such shares in anticipation of the Merger, unless such exclusion would
be inequitable.

A holder of Solite Stock who desires to exercise such holder's dissenters'
rights must satisfy all of the following conditions. A written notice of such
holder's intent to demand payment for such holder's Solite Common Stock must be
delivered to Solite before the taking of the vote on approval of the Merger
Agreement. This written notice must be in addition to and separate from voting
against, abstaining from voting, or failing to vote on approval of the Merger
Agreement. Voting against, abstaining from voting or failing to vote on
approval of the Merger Agreement will not constitute written notice of an
intent to demand payment within the meaning of Article 15.

A holder of Solite Stock electing to exercise such holder's dissenters'
rights under Article 15 must not vote for approval of the Merger Agreement.
Voting for approval of the Merger Agreement or delivering a proxy in connection
with the Solite Special Meeting (unless the proxy specifies a vote against, or
affirmatively abstaining from voting on, approval of the Merger Agreement),
will constitute a waiver of such holder's dissenters' rights and will nullify
any written notice of an intent to demand payment submitted by such holder.

A holder of record of Solite Stock may assert dissenters' rights as to
less than all of the shares registered in such holder's name only if such
holder dissents with respect to all shares beneficially owned by any one person
and notifies Solite in writing of the name and address of each person on whose
behalf such holder is asserting dissenters' rights. The rights of a partial
dissenter under Article 15 are determined as if the shares as to which the
holder dissents and the holder's other shares were registered in the names of
different shareholders.

A beneficial holder of Solite Stock may assert dissenters' rights as to
shares held on such holder's behalf only if such holder: (i) submits to Solite
the record holder's written consent to the dissent not later than the time the
beneficial holder asserts dissenters' rights; and (ii) does so with respect to
all shares of which such holder is the beneficial holder or over which such
holder has the power to direct the vote.

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If the Merger is consummated, Solite will, within ten days after the date
of the Effective Time of the Merger, deliver a dissenters' notice to all
holders who satisfied the foregoing requirements. The dissenters' notice will:
(i) state where payment demand is to be sent and where and when certificates
for Dissenting Shares are to be deposited; (ii) supply a form for demanding
payment that includes the date of the first announcement to news media of the
terms of the Merger, and requires that the person asserting dissenters' rights
certify whether or not such person acquired beneficial ownership of such
person's Dissenting Shares before or after such date; (iii) set a date by which
Solite must receive the payment demand, which date may not be less than 30 nor
more than 60 days after the date of delivery of the dissenters' notice; and
(iv) be accompanied by a copy of Article 15.

Except as provided below with respect to after-acquired shares, within 30
days after receipt of a payment demand, Solite shall pay the dissenter the
amount that Solite estimates to be the fair value of the dissenter's shares,
plus accrued interest. The obligation of Solite to make such payment may be
enforced: (i) by the Circuit Court for the City of Richmond, Virginia; or (ii)
at the election of any dissenter residing or having its principal office in
Virginia, by the circuit court in the city or county where the dissenter
resides or has such office. The payment by Solite will be accompanied by: (i)
Solite's balance sheet as of the end of a fiscal year ended not more than 16
months before the date of the Effective Time of the Merger, an income statement
for that year, a statement of changes in shareholders' equity for that year and
the latest available interim financial statements, if any; (ii) an explanation
of how Solite estimated the fair value of the Dissenting Shares and of how the
interest was calculated; (iii) a statement of the dissenter's right to demand
payment as described below; and (iv) a copy of Article 15.

Solite may elect to withhold payment from a dissenter unless the dissenter
was the beneficial owner of the Dissenting Shares on the date of the first
publication by news media or the first announcement to shareholders generally,
whichever is earlier, of the terms of the proposed corporate action, as set
forth in the dissenters' notice, in which case Solite will estimate the fair
value of such after-acquired shares, plus accrued interest, and will offer to
pay such amount to each dissenter who agrees to accept it in full satisfaction
of such dissenter's demand. Solite will send with such offer an explanation of
how it estimated the fair value of the shares and of how the interest was
calculated, and a statement of the dissenter's right to demand payment as
described below.

Within 30 days after Solite makes or offers payment as described above, a
dissenter may notify Solite in writing of the dissenter's own estimate of the
fair value of the Dissenting Shares and the amount of interest due, and demand
payment of such estimate (less any payment by Solite) or reject Solite's offer
and demand payment of such estimate.

If any such demand for payment remains unsettled, within 60 days after
receiving the payment demand Solite will petition the Circuit Court for the
City of Richmond, Virginia to determine the fair value of the shares and the
accrued interest and make all dissenters whose demands remain unsettled parties
to such proceeding, or pay each dissenter whose demand remains unsettled the
amount demanded. Each dissenter made a party to such proceeding is entitled to
a judgment for: (i) the amount, if any, by which the court finds that the fair
value of the Dissenting Shares, plus interest, exceeds the amount paid by
Solite; or (ii) the fair value, plus accrued interest, of the dissenter's
after-acquired shares for which Solite elected to withhold payment. The court
will determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court and assess the
costs against Solite, or against all or some of the dissenters to the extent
the court finds the dissenters did not act in good faith in demanding payment.

The foregoing is only a summary of all of the material rights of a
dissenting holder of Solite Stock. Any holder of Solite Stock who intends to
dissent from the Merger should carefully review the text of Article 15 and
should also consult with such holder's attorney. The failure of a holder of
Solite Stock to follow precisely the procedures summarized above may result in
loss of dissenters' rights. No further notice of the events giving rise to
dissenters' rights or any steps associated therewith will be furnished to
holders of Solite Stock, except as indicated above or otherwise required by
law.

In general, any dissenting shareholder who perfects such holder's right to
be paid the fair value of such holder's Solite Common Stock in cash will
recognize taxable gain or loss for federal income tax purposes upon receipt of
such cash. See "--Certain Federal Income Tax Consequences."

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Proxy Agreement

As an inducement for Giant to enter into the Merger Agreement, certain
shareholders of Solite (Jane M. Roberts, John M. Roberts, John W. Roberts, John
W. Roberts, as Trustee, Don K. Burris, Lee A. Facetti, A. Cabell Ford, Jr., J.
J. Jewett, III, Linwood F. Perkins, Jr., J. Wayne Thornton, Clay H. Barr, Joan
R. Cates, Willard Cates, Jr., H.C. Hofheimer II, Kaufman Americana Foundation,
Carolyn L. Kaufman, George M. Kaufman, Linda H. Kaufman and Elise H. Wright)
have entered into a Proxy Agreement with Giant pursuant to which such
shareholders have, among other things, irrevocably appointed Giant their lawful
agent, attorney and proxy to vote all of their shares of Solite Stock
(approximately 76.9%, 100%, 87.2% and 100% of the outstanding shares of Solite
Common Stock, Solite Series A Preferred Stock, Solite Series B Preferred Stock
and Solite Series C Preferred Stock, respectively) in favor of the Merger
Agreement and the Merger. Consequently, no other affirmative vote is required
to approve the Merger Agreement. However, you are urged to review this Proxy
Statement/Prospectus carefully with respect to the Preferred Stock Amendment
and to decide whether to exercise dissenter's rights. See "CONVERSION OF THE
SOLITE PREFERRED STOCK" and "THE MERGER--Dissenters Rights." Pursuant to the
Proxy Agreement, each Solite shareholder who is a party to such agreement (a
"Contracting Shareholder") has irrevocably agreed to constitute and appoint
Giant or any designee of Giant as the lawful agent, attorney and proxy of such
Contracting Shareholder to vote all of his or her shares of Solite Stock
(including additional shares as to which one such Contracting Shareholder has
an irrevocable proxy to vote) at any meeting or in connection with any written
consent of Solite's shareholders (i) in favor of the Merger, (ii) in favor of
the Merger Agreement, as it may be modified or amended from time to time, (iii)
against any Acquisition Transaction (other than the Merger) or other merger,
sale or other business combination between Solite and any other person or
entity or any other action which would make it impractical for Giant to effect
a merger or other business combination of Solite with Giant or Merger Sub, and
(iv) against any other action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or agreement of
Solite under the Merger Agreement or which would result in any of Solite's
obligations under the Merger Agreement not being fulfilled. An "Acquisition
Transaction" means any merger, consolidation or other business combination
involving the Core Business (as defined in the Merger Agreement) or the
acquisition of capital stock of Solite or any Solite subsidiary constituting
part of the Core Business or all or any significant assets of the Core
Business.

The Proxy Agreement terminates on the earlier of (i) the Effective Time or
(ii) the termination of the Merger Agreement.

Although no other affirmative vote is required to approve the Merger
Agreement, the consummation of the Merger is conditioned upon adoption of the
Preferred Stock Amendment, which must be approved by the holders of a majority
of the votes that the holders of the outstanding Solite Preferred Stock and
Solite Common Stock, other than John W. Roberts and his family, are entitled to
cast. Such holders hold 1,575 shares (or 11.2%) of the outstanding Solite
Preferred Series B Stock and 263,165 shares (or 49.4%) of the outstanding
Solite Common Stock. The Proxy Agreement granted to Giant in connection with
the Merger Agreement does not direct the vote of such shares on the Preferred
Stock Amendment. Directors and officers of Solite (other than John W. Roberts
and members of his family) holding 517 shares (3.67%) of the outstanding Solite
Preferred Series B Stock and 8,805 shares (1.65%) of the outstanding Solite
Common Stock have indicated their intention to vote in favor of the Preferred
Stock Amendment.

Interests of Certain Persons in the Merger and the Conversion
As of the Record Date, the directors and executive officers of Solite
beneficially owned an aggregate of 251,055, 8,700, 12,195 and 15,429 shares of
Solite Common Stock, Solite Series A Preferred Stock, Solite Series B Preferred
Stock and Solite Series C Preferred Stock, respectively. Pursuant to the Merger
Agreement, Solite's directors and executive officers will receive the same
consideration for their shares of Solite Common Stock, including shares of
Solite Preferred Stock converted into Solite Common Stock, as the other Solite
shareholders.

Mr. John W. Roberts has personally guaranteed $2 million of the
obligations of Solite for borrowings under its bank line of credit. In
connection with Merger, Giant intends to refinance such indebtedness with
proceeds from Giant's credit facilities. As a result of such refinancing, Mr.
Roberts will be relieved of any further obligations under such guarantees.

As of the record date, John W. Roberts and his family beneficially own
8,700 shares (or 100%) of the outstanding Solite Series A Preferred Stock,
12,518 shares or (88.8%) of the outstanding Solite Series B Preferred

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Stock, and 15,429 shares (or 100%) of the outstanding Series C Preferred Stock.
In addition, members of the Solite Board and officers of Solite own an
additional 517 shares (or 3.67%) of the outstanding Series B Preferred Stock.
As a result of the reduction in the aggregate number of shares to be issued in
the Merger, the percentage of such shares received by former holders of Solite
Preferred Stock will be greater than the percentage that would have been
received under the Merger Agreement executed in September 1997. As a result of
the Conversion, John W. Roberts will beneficially own a majority of the
outstanding Northeast Solite Common Stock after the Spin-Off, and consequently
will be able to elect the entire Board of Directors of Northeast Solite and,
may be able to amend the Articles of Incorporation of Northeast Solite, without
the vote of any other shareholder. Mr. Roberts is expected to be a director of
both Northeast Solite and Giant after the Merger.

Operations After the Merger
At the Effective Time, Merger Sub will be merged with and into Solite, and
Solite, as the surviving corporation in the Merger, will become a wholly owned
subsidiary of Giant. Giant plans to cause Solite to become part of the same
consolidated federal income tax return group as Giant.

Dividends
Giant has never paid a cash dividend and Solite has not paid a cash
dividend in at least the last five years. Giant does not anticipate paying any
cash dividends on the Giant Common Stock in the foreseeable future; it intends
to retain its earnings to finance the expansion of its business and for general
corporate purposes. Any payment of dividends will be at the discretion of
Giant's Board and will depend upon the earnings, financial condition, capital
requirements, level of indebtedness, contractual restrictions with respect to
payment of dividends and other factors. Giant's revolving credit agreement
contains financial covenants that could have the effect of limiting the
distribution of dividends without the prior written consent of the lenders who
are parties to such agreement.

Right of the Solite Board to Withdraw Recommendation
Under the Merger Agreement, the Solite Board may not, among other things,
(i) withdraw or modify, or propose to withdraw or modify, in a manner adverse
to Giant or Merger Sub, the Solite Board's approval or recommendation of the
Merger Agreement or the Merger, (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Transaction, or (iii) cause Solite to
enter into any agreement with respect to any Acquisition Transaction.
Notwithstanding the foregoing, if the Solite Board determines in good faith by
majority vote, after consultation with Solite's financial advisor that the
Acquisition Transaction is more favorable to the Shareholders of Solite than
the Merger and, based upon the advice of outside counsel to Solite, that such
action is required by the fiduciary duties of the Board of Directors, the
Solite Board may withdraw or modify its approval or recommendation of the
Merger Agreement or the Merger, approve or recommend an Acquisition
Transaction, or cause Solite to enter into an agreement with respect to an
Acquisition Transaction, provided, in each case that Solite provides at least
five business days prior notice to Giant or Merger Sub to the effect that it is
taking such action.

Regulatory Filings and Approvals

The Merger is subject to the requirements of the HSR Act and the rules and
regulations thereunder, which provide that certain transactions may not be
consummated until required information and materials have been furnished to the
Antitrust Division and the FTC and certain waiting periods have expired or been
terminated. Giant and Solite filed the required information and materials with
the Antitrust Division and the FTC on September 12, 1997. On October 10, 1997,
Giant and Solite received a second request for information from the Antitrust
Division in connection with their filing of certain required information under
the HSR Act.

As part of this process, at the request of the Antitrust Division, Solite
has agreed to determine by April 20, 1998 in accordance with specified
procedures whether there are any alternative purchasers for the Hazardous Waste
Fuels Assets, which consist of the following: three of Solite's lightweight
aggregate facilities (the two facilities located in Virginia and the one
facility located in North Carolina) and one of Solite's subsidiaries, Oldover
Corporation.

Pursuant to the procedures specified by the Antitrust Division, Solite
expects to engage by April 3, 1998 the Special Investment Banker, which is an
investment banking firm with no prior relationship with Solite, Giant, or the
law firms representing them in connection with the Merger. The Special
Investment Banker is then required to provide certain specified information
with respect to its efforts to the Antitrust Division. The Antitrust Division

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has indicated it will advise Solite and Giant by April 27, 1998 whether it will
permit the transaction to proceed without challenge.

The Antitrust Division and the FTC frequently scrutinize the legality
under the antitrust laws of transactions such as the Merger. At any time before
or after the Effective Time, either the Antitrust Division or the FTC could
take such action under the antitrust laws as it deems necessary or desirable in
the public interest, or certain other persons could take action under the
antitrust laws, including seeking to enjoin the Merger.

Resale of Giant Common Stock Received in the Merger
All Giant Common Stock received by holders of Solite Common Stock in the
Merger will have been registered under the Securities Act and will be freely
transferable, except as described herein. Giant Common Stock received by
persons who are deemed to be affiliated to Solite (for purposes of Rule 145
under the Securities Act) prior to the Merger may be resold by them only in
transactions permitted by the resale provisions of Rule 145 promulgated under
the Securities Act (or Rule 144 in the case of such persons who become
affiliates of Giant) or as otherwise permitted by the Securities Act. Persons
who may be deemed to be affiliates of Solite or Giant generally include
individuals or entities that control, are controlled by, or are under common
control with, such party and may include certain officers and directors of such
party as well as principal shareholders of such party. The rights of affiliates
of Solite to receive Giant Common Stock in the Merger are conditioned upon the
execution by each of such affiliates of a written agreement to the effect that
such person will not offer or sell or otherwise dispose of any of the Giant
Common Stock issued to such person in the Merger in violation of Securities Act
or the rules and regulations promulgated thereunder. The Giant Common Stock
received in the Merger by such affiliates will bear a restrictive legend to
such effect.

Additionally, pursuant to the terms of the Giant Shareholder Agreement,
holders of 1% or more, owning in the aggregate at least 70%, of the total
outstanding shares of Giant Common Stock to be issued in connection with the
Merger will agree to certain restrictions on the sale or other disposition of
such shares. See "TERMS OF THE MERGER AGREEMENT--Ancillary Agreements--Giant
Shareholder Agreement." It is anticipated that Mrs. Clay H. Barr, Joan R.
Cates, Davenport & Co., Harry W. Hahn, Jr. (revocable trust), H.C. Hofheimer
II, Kaufman Americana Foundation, Carolyn L. Kaufman, Charles L. Kaufman, Jr.,
David L. Kaufman, George M. Kaufman, Linda H. Kaufman, Jane Martin Roberts,
John Martin Roberts, John W. Roberts, John W. Roberts, as trustee and Elise H.
Wright may enter into the Giant Shareholder Agreement.

DESCRIPTION OF GIANT

General
Giant Cement Holding, Inc. (herein referred to as "Giant" on a
consolidated basis or "GCHI" on a separate company basis) was incorporated
under the laws of the state of Delaware in April 1994. Giant manufactures a
complete line of portland and masonry cements used in residential, commercial,
and infrastructure construction applications. Giant's manufacturing facilities
have an aggregate rated annual clinker capacity of approximately 1.4 million
tons, ranking it as the 17th largest producer of cement in the United States.

In September 1994, 10,000,000 shares of common stock of GCHI were sold to
the public in an initial public offering. The offering resulted in GCHI and its
subsidiaries being spun-off from its predecessor parent. GCHI's primary
subsidiaries have been in operation since 1883 and 1928.

GCHI and its subsidiaries are involved in a single business segment which
includes the domestic manufacture and sale of portland and masonry cements and
related aggregates. Giant derives revenues from the sales of products,
primarily cement and to a much lesser extent construction aggregates, as well
as from the provision of resource recovery services. Resource recovery services
revenue is primarily derived from third parties that pay Giant to utilize their
waste as fuel, which additionally reduces the cost of traditional fossil fuels
used in the manufacture of cement. Due to the nature of Giant's operations and
the fact that the burning of waste-derived fuels is inseparable from the
manufacture of cement, it is impractical to disaggregate the costs of sales and
services by revenue classification.

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Information concerning Giant's net sales, operating income and assets for
each of the years in the three-year period ended December 31, 1997 is included
under "Giant Consoliated Selected Historical Financial Information and Other
Data" included herein.

Giant owns and operates two limestone quarries and cement manufacturing
facilities through its wholly-owned subsidiaries Giant Cement Company ("Giant
Cement") and Keystone Cement Company ("Keystone"). Giant Cement, located in
Harleyville, South Carolina, serves the South-Atlantic region of the United
States and Keystone, located in Bath, Pennsylvania, serves the Middle-Atlantic
region. Giant pioneered resource recovery techniques for use in the
manufacturing of cement in the late 1970's and is one of the largest users of
waste-derived fuels in the cement industry.

Operations. Giant Cement was founded in 1883 and commenced operations in
Harleyville, South Carolina in 1947. Giant Cement owns approximately 2,100
acres of land in Harleyville, where its cement production facilities and
230-acre limestone quarry are located. Giant Cement presently estimates that
Giant Cement's limestone reserves are adequate to meet its plant requirements
for in excess of 50 years. Giant Cement has four wet process kilns with a
combined rated annual clinker capacity of approximately 840,000 tons and a
manufacturing plant with an annual finish grinding capacity of approximately
950,000 tons.

Keystone, founded in 1928, owns approximately 1,000 acres of land in Bath,
Pennsylvania, in the Lehigh Valley region approximately 60 miles north of
Philadelphia. Keystone obtains the cement rock used in its production from its
200-acre limestone quarry located adjacent to its plant. Giant presently
estimates that Keystone's limestone reserves are adequate to meet its plant
requirements for in excess of 50 years. The two wet process kilns used in
Keystone's operations have a combined rated annual clinker capacity of
approximately 600,000 tons and its manufacturing plant has an annual finish
grinding capacity of approximately 750,000 tons.

Rated annual clinker capacity is based upon the cement kiln manufacturer's
specifications. Giant's historical annual clinker production has not exceeded
1.3 million tons.

In addition to limestone, the other principal raw materials used in the
manufacturing of cement are silica, alumina, iron oxide, and gypsum, which are
purchased from various suppliers. Management believes that the supply of these
raw materials will be adequate to permit production at planned capacities for
the foreseeable future.

Products. Giant principally manufactures a full line of portland cement,
which is the fundamental binding agent in concrete. Giant Cement's portland
cement has a low alkali content, a characteristic favored for use by federal
and state governments on certain projects due to its minimal reaction with soil
and other aggregates. Keystone also produces limited quantities of low alkali
cement. Giant believes that Keystone is the only cement manufacturer currently
producing a low alkali cement within a 100 mile radius of the Keystone plant.
In addition to portland cement, Giant manufactures masonry cement, which is
used in the preparation of mortar used in block and brick masonry. Giant also
mines, crushes, screens, and sells various sizes of stone and gravel, known as
aggregates, to the construction industry for use in paving, road base material,
and assorted small volume applications. Additionally, Giant markets cement kiln
dust ("CKD") and, occasionally, a customized blend of CKD and cement under the
registered trade name "StableSorb." StableSorb is utilized by construction,
remediation, and other contractors for the purpose of solidifying soil, wastes,
and other materials.

Cement is made in a multi-stage process that begins with the crushing,
grinding, and mixing of calcium (usually in the form of quarried limestone or
"cement rock"), silica, alumina, iron oxide, and other materials. This raw
material is then processed in a rotary kiln at extremely high temperatures,
causing it to undergo a chemical reaction. The resulting marble-sized,
pellet-like material (known as "clinker") is then cooled and ground with a
small quantity of gypsum to produce cement.

Marketing and Distribution. Giant markets its products to ready-mix
concrete plants, concrete product manufacturers, building material dealers,
construction contractors, and state and local government agencies through its
experienced sales force. Approximately 85% of Giant's cement is sold in bulk,
primarily to ready-mix and concrete products manufacturers, with the remainder
sold in individually packed bags, primarily to building materials dealers.

South-Atlantic Region. Giant Cement's market area covers most of the
South-Atlantic region of the United States, from southern Virginia to southern
Georgia. The South-Atlantic region is one of the largest cement markets

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in the United States in terms of cement consumption. Giant Cement's sales are
most heavily concentrated in North and South Carolina, with the remainder of
its sales in Georgia and southern Virginia.

Middle-Atlantic Region. Keystone's market area, which covers most of the
Middle-Atlantic region of the United States, includes eastern Pennsylvania,
southeastern New York, New Jersey, western Connecticut, and portions of
Delaware and Maryland. Keystone's sales are most heavily concentrated in
eastern Pennsylvania, southeastern New York, and New Jersey, with the remainder
of its sales in Connecticut, Delaware, and Maryland.

Sales Practices and Distribution. Giant has more than 500 customers, the
majority of which have been doing business with Giant for more than five years.
No single customer accounted for 10% or more of Giant's cement sales during
1997, and Giant believes that the loss of any single customer would not have a
material adverse effect on Giant's financial condition or results of
operations.

Giant, following the sales practices characteristic of its industry, does
not provide the right to return nonfaulty product or extended payment terms to
customers in the ordinary course of business. As is customary in the industry,
Giant does not typically enter into long-term sales contracts, except with
respect to major construction projects. Because the needs of its customers are
generally short term in nature, backlog orders are not significant in the
cement industry.

The production facilities of both Keystone and Giant Cement are located
near, and served by, major rail transportation lines, which provide ready
access for transporting cement to Giant's customers or terminals. Giant Cement
delivers a substantial portion of its product by rail either directly to its
customers or to its terminals where the product is picked up by customers. At
Keystone, almost all product is shipped via truck, with a substantial amount
being picked up by customer-owned trucks. Both Giant Cement and Keystone have
good relations with contract carriers which operate fleets of trucks to provide
quick delivery, on demand, to Giant's customers requesting truck deliveries.

To meet the needs of its customers in the South-Atlantic market area,
Giant Cement operates one terminal and three distribution warehouses, with
annual throughput capacity of approximately 165,000 finished tons, and 25,000
square feet of storage capacity for bagged product.

General and Regional Economic Conditions. Demand for Giant's products is
directly related to activity in the construction industry and general economic
conditions. Various economic factors beyond Giant's control affect cement
consumption, including the level of new residential, commercial and
infrastructure construction activity, which are in turn affected by movement in
interest rates, the availability of short and long-term financing and the
availability of public funds for infrastructure projects. Accordingly, adverse
economic conditions in Giant's markets or a worsening of general or local
economic conditions could adversely affect Giant's operating results. Cement
demand reached a cyclical low in 1991, and, as a consequence, Giant experienced
a decline in sales in 1991. Demand was flat to slightly higher in most regions
of the country during 1992 and increased in 1993 through 1996 to record levels
for U.S. cement consumption. While U.S. cement consumption was at or near
record levels again in 1997 and exceeded U.S. supply, there can be no assurance
that increased cement demand will continue or that demand will remain at
current levels.

Competition
Due to the lack of product differentiation and the commodity nature of
cement, the cement industry is highly competitive. Competition is based largely
on price and, to a lesser extent, quality and service. Giant competes with
national and regional cement producers in its markets. Many of Giant's
competitors are larger and have significantly greater resources than Giant. The
prices that Giant charges its customers are not likely to be materially
different from the prices charged by other producers in the same markets.
Accordingly, profitability in the cement industry is generally dependent on the
level of cement demand and on a cement producer's ability to contain operating
costs. Prices are subject to material changes in response to relatively minor
fluctuations in supply and demand, general economic conditions and other market
conditions beyond Giant's control. Prior to 1993, cement prices in the United
States, including Giant's markets, had fallen and remained depressed for
several years, primarily due to the economic recession and competition from
lower priced foreign imports. Although Giant has been able to increase its
cement prices during 1994, 1995, 1996 and 1997, there can be no assurance that
prices will not decline in the future.

There are 11 companies in the South-Atlantic region which compete with
Giant Cement in some portion of its market, including three direct competitors,
two of which compete throughout its market area. There are 15

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companies in the Middle-Atlantic region which compete with Keystone in some
portion of its market, including five direct primary competitors. Giant
believes that Keystone is the only cement plant currently producing low alkali
cement in its immediate market area. Additionally, none of Keystone's direct
competitors are currently permitted to utilize waste-derived fuel as an
alternative source of fuel.

During the latter part of the 1980's, an influx of low-price cement
imports caused prices to deteriorate in many domestic markets. A portion of the
market served by Keystone may be directly subject to imports of foreign cement
which can affect pricing in all of its market areas. The market areas served by
Giant Cement are also impacted indirectly by imports of foreign cement. Imports
declined significantly from 1987 to 1992. Giant believes the decline was the
result of increased foreign consumption, increased ocean transportation costs
and the imposition of anti-dumping duties, among other things. From 1993 to
1997, imports into the United States increased significantly as a result of the
US demand and consumption exceeding the domestic supply. Through 1997, the
increase in the cement imports has had little effect on current prices. While
Giant does not believe imports had a significant impact on its market areas in
1997, nationally, imports increased significantly and there can be no assurance
that importation of lower-priced cement in the future will not increase.

Resource Recovery
The cost of energy represents a significant percentage of total cement
manufacturing costs. Giant's plants utilize the "wet kiln" process. While the
"wet kiln" process requires more thermal energy than the alternative "dry kiln"
process, Giant has implemented technology which utilizes liquid and solid
industrial wastes with high BTU values ("waste-derived fuels") as fuel
substitutes ("resource recovery") in the process of manufacturing cement.

In the late 1970's, Keystone pioneered resource recovery techniques in the
U.S. cement industry. Giant Cement also began the limited use of waste as a
fuel substitute in 1987 and has since expanded its use of industrial solvents
and other hazardous waste-derived fuels, including waste solids. These resource
recovery efforts have significantly reduced Giant's traditional fossil fuel
consumption and production costs, while providing it with an additional source
of revenue as industrial companies pay Giant to utilize these waste-derived
fuels. In 1997, waste-derived fuels comprised about 45% of Keystone's total
fuel usage and 55% of Giant Cement's. These percentages have grown
significantly since such programs were initiated, allowing fuel costs to be
substantially reduced.

Although Giant was among the first in the cement industry to utilize
resource recovery as a substitute for fossil fuels, this technique has since
been adopted by a number of other U. S. cement producers and is utilized at 18
cement plants. Six of the ten largest cement companies in the United States
utilize resource recovery at one or more of their production facilities.
Keystone is, however, one of only two Pennsylvania plants which are presently
permitted to commercially burn hazardous waste, and the only facility in the
Lehigh Valley area which is permitted to utilize this economically beneficial
process. Keystone is currently permitted to burn such waste at rates of up to
approximately 50% of its fuel requirements. While Giant Cement is one of two
plants in its immediate market area that is presently permitted to burn
numerous categories of hazardous and non-hazardous liquids and solids, it is
the only one in such area that is presently permitted to burn such wastes at
rates of up to approximately 100% of its fuel requirements. Additionally, Giant
Cement has developed techniques to increase the proportion of higher revenue
waste solids used in its resource recovery activities. Giant's subsidiaries,
Keystone, Giant Cement and Giant Resource Recovery Company, Inc. ("GRR"),
utilize a network of brokers, fuel blenders, and treatment, storage, and
disposal facilities to obtain waste-derived fuels. The sources for such waste
products range from Fortune 500 companies to small independent waste treatment,
storage, and disposal facilities. Giant's resource recovery operations are
dependent on general and regional economic conditions; federal, state and local
environmental laws, regulations and policies; and Giant's cement kiln
utilization. Giant competes with numerous other companies for the supply of
waste-derived fuels primarily on the basis of service and price.

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Management of Giant
Directors and Executive Officers.

The following table sets forth certain information regarding the directors
and executive officers of Giant. Mr. Roberts will become a director of Giant
upon the consummation of the Merger.

<TABLE>
<CAPTION>
Name Age Position
- ----------------------------- ----- ----------------------------------------------------
<S> <C> <C>
Gary L. Pechota ............. 48 Chairman, President, Chief Executive Officer and
Director
Terry L. Kinder ............. 39 Vice President, Chief Financial Officer, Secretary,
Treasurer and Director
Richard A. Familia .......... 44 Vice President, Environmental Affairs
Dean M. Boylan .............. 71 Director
Edward Brodsky .............. 68 Director
Robert L. Jones ............. 61 Director
</TABLE>

Background of Directors and Executive Officers.

Gary L. Pechota has served as Chairman, President, Chief Executive Officer
and a director of Giant since its inception in April 1994. Mr. Pechota also has
served as Chairman of Giant Cement and GRR since January 1993, as Chairman of
Keystone since September 1992 and as President of Keystone Cement Company since
May 1992. Prior to joining Keystone Cement Company, Mr. Pechota served as
President and Chief Executive Officer of Dacotah Cement Company, a state-owned
cement company, from January 1982 to May 1992. Mr. Pechota has been employed in
the cement industry for over 16 years.

Terry L. Kinder has served as Vice President, Chief Financial Officer,
Secretary, Treasurer and a director of Giant since April 1994 and a director of
Giant Cement, Keystone and GRR since June 1989. Mr. Kinder has also served as
Vice President, Secretary and Treasurer of Giant Group Ltd. from June 1986 to
September 1994. From June 1989 to December 1992, Mr. Kinder also served as
Chairman of Giant Cement and GRR, and from June 1989 to August 1992, he served
as Chairman of Keystone. Prior to joining Giant Group Ltd., Mr. Kinder was a
Certified Public Accountant with Coopers & Lybrand L.L.P. from January 1980 to
June 1986.

Richard A. Familia has served as Vice President, Environmental Affairs of
Giant since April 1994. Mr. Familia has also served as President and Chief
Operating Officer of GRR since February 1992. From 1987 to February 1992, he
served as Director of Operations for various environmental and other
businesses. Mr. Familia has been employed in the environmental industry for
over 20 years.

Dean M. Boylan has been a director of Giant since April 1994. He served as
a director of Giant Group Ltd. from 1985 to September 1994 and was a director
of Keystone Cement Company from 1976 until January 1985 when it was acquired by
Giant Group Ltd. Mr. Boylan has been an employee and director of Boston Sand &
Gravel Company, Inc., a publicly-held company since prior to 1985 and is
presently Vice Chairman.

Edward Brodsky has been a director of Giant since April 1994. He served as
a director of Giant Group Ltd. from 1986 to September 1994. Mr. Brodsky has
been a partner at the law firm Proskauer Rose LLP, New York, New York, which
renders legal services to Giant since August 1992. Prior thereto, he was a
partner at the law firm of Spenglar Carlson Gubar Brodsky & Frischling, New
York, New York, from 1977 to August 1992.

Robert L. Jones has been a director of Giant since April 1994. He served
as a director of Giant Group Ltd. from 1984 to September 1994. Mr. Jones has
been the Chairman of Davidson-Jones-Beers since February 1995 and prior thereto
was the President of Davidson & Jones Corporation--a predecessor holding
company located in Raleigh, North Carolina, engaged in general contracting and
real estate activities--since prior to 1986. Since 1990, he has been a director
of Carolina Power & Light Company (New York Stock Exchange).

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DESCRIPTION OF SOLITE

Solite and its subsidiaries produce and sell construction materials to the
commercial, industrial, governmental and residential construction markets,
including building, bridge and road markets. Solite's primary geographic market
is the eastern United States. Solite's principal product is "Solite[RegTM]," a
lightweight aggregate primarily used in concrete and masonry blocks. Solite's
operations also include sand, gravel, masonry block, hazardous waste fuels,
coal and transportation.

General
For operational and management purposes, Solite is organized into six
"groups." Of Solite's six groups, three produce and sell various building
materials. These are the Lightweight Aggregate Group ("LWA Group"), the
Concrete Aggregates Group ("ConAgg Group") and the Block Group. Two other
groups, the Coal Group and the Fuels Group, historically have supplied fuel to
the LWA Group and to other companies. The Transportation Group manages trucking
(other than fuels trucking) and ancillary services either directly by operating
trucking units, or indirectly by out-sourcing or brokering trucking services
for the LWA Group, the ConAgg Group and the Block Group, as well as unrelated
customers.

Lightweight Aggregate Group. Solite and three subsidiaries--Northeast
Solite, Kentucky Solite Corporation ("Kentucky Solite") and Carolina Solite
Corporation ("Carolina Solite")--constitute the LWA Group. At five active
sites, the LWA Group historically has mined shale or slate and processed this
raw material in rotary kilns to produce the lightweight aggregate
Solite[RegTM]. Solite directly operates two quarries and associated processing
plants located in Virginia. Northeast operates a quarry and processing plant
located in New York. The quarry and processing plant located in Kentucky are
owned by Kentucky Solite. While the Kentucky plant is not currently mining
shale or manufacturing unfinished lightweight aggregate ("clinker"), it is
processing stockpiles of clinker to produce finished Solite[RegTM] and selling
Solite[RegTM] manufactured at other plants. The fifth quarry and processing
plant is located in North Carolina and is owned by Carolina Solite. In
addition, Carolina Solite owns a Florida plant for the production of
lightweight aggregate, which was permanently shut down in 1995. This plant
site, outside of Jacksonville, Florida, is now being utilized as a dispersal
site for lightweight aggregate railed in from the Virginia or North Carolina
plants.

The LWA Group plants are located on 200 to 1,000 acre sites and each has
over a 50-year supply of raw materials. The plants are readily accessible by
highway, railway and/or navigable waterway. As a general rule, plants ship
Solite[RegTM] to customers within an approximately 200-mile radius. The plants
enable Solite to reach the northeastern, mid-Atlantic, and southeastern United
States markets, as well as other major markets east of the Mississippi.
Solite[RegTM] lightweight aggregate is shipped via rail, water or highway
directly to customers or to dispersal sites for stockpiling and subsequent
distribution. In addition to Carolina Solite's Florida site, Northeast has a
dispersal site in New Jersey, Kentucky Solite has dispersal sites in Kentucky
and Tennessee, and Solite has dispersal sites located in Virginia and Maryland.

The LWA Group operations also include (i) a facility which designs and
fabricates parts and equipment, the majority of which are for Solite, (ii) a
facility which repairs and rebuilds off-road equipment such as front-end
loaders, and (iii) constructing or managing the construction of plant
facilities.

Concrete Aggregates Group. The ConAgg Group operates a pit and processing
plant for the extraction and processing of sand and gravel in Hanover County,
Virginia. The material is mined with front-end loaders, hauled to the
processing plant, placed on conveyor belts, washed, crushed in the case of some
gravel, and screened into gradations of sand and gravel. Customers include
ready mix concrete producers, asphalt producers, masonry block producers,
highway construction contractors, general contractors, and the Commonwealth of
Virginia (for road maintenance).

Block Group. The Block Group is composed of six masonry block
manufacturing and dispersal facilities, three of which are located in North
Carolina and three of which are located in Virginia, and one sales and
dispersal facility located in Virginia. The Block Group manufacturers and sells
concrete masonry blocks, including lightweight blocks made from Solite[RegTM].
The Block Group produces about 19 million block equivalents per year. Blocks
are sold to general contractors, commercial builders and home builders. Due to
the expense of transporting block, plants are located within a one hundred mile
radius of the market being served. The Block Group provides a presence for
Solite in certain geographic markets where a competitor might otherwise
dominate, and serves as a significant outlet for the sale of Solite[RegTM]
lightweight aggregate. To position themselves as full-service block companies,
the plants also sell merchandise such as coatings, mortar mix, and reinforcing
wire.

49
<PAGE>

Coal Group. The Coal Group owns and leases coal mining properties in
Kentucky and West Virginia. Currently the Kentucky properties generate a small
amount of royalty income. The West Virginia properties are not currently being
mined.

Only the lightweight aggregate plants in New York and North Carolina use
significant amounts of coal for kiln fuel, but they purchase coal from third
parties due to lower transportation costs. Therefore, the Coal Group's coal
reserves are not being used by Solite. However, the Coal Group's reserves of
coal are available to Solite in the event it becomes economically feasible in
the future to extract coal for the use of the LWA Group.

Fuels Group. Producing Solite[RegTM] lightweight aggregate is an energy
intensive process which uses about one million gallons of liquid fuel per
month. The Fuels Group provides waste-derived fuels, such as waste solvents and
used-petroleum products, as fuels for the LWA Group's kilns. Currently, four of
the five lightweight aggregate plants are capable of using these waste-derived
fuels (only the Northeast plant is not). The Fuels Group gives Solite a
competitive advantage by providing an inexpensive source of energy to produce
lightweight aggregate. The Fuels Group collects waste solvents, inks, oils and
other high BTU wastes from a wide variety of sources including paint
manufacturers, solvent recyclers, industrial plants, automotive maintenance
shops and trucking terminals. Tanker trucks then transport the waste fuels to
tank farm facilities located at the lightweight aggregate plants.

The Fuels Group also recycles used solvents and transports, blends and
stores hazardous waste fuel. It receives waste from chemical plants, recyclers
and other industrial plants in bulk and in 55 gallon drums. Waste fuel is
supplied to cement kilns in addition to Solite kilns. In connection with these
operations, the Fuel Group reconditions and resells empty 55 gallon drums. The
Fuels Group's operating subsidiaries include the following: Oldover
Corporation, Environmental Conservation Systems Inc. and the M&M Chemical and
Equipment Company, Inc.

Transportation Group. Because transportation is an integral part of its
business, Solite operates, for internal and external customers, a specialized
fleet of over-the-road tractors and dump trailers, and tanker units. The
Transportation Group also hauls non-Solite[RegTM] products.

Environmental Matters

Solite's facilities, particularly the lightweight aggregate plants, the
facilities and trucking operations of Oldover Corporation and Environmental
Conservation Systems, Inc., and the M&M Chemical and Equipment Company, Inc.
facilities and trucking operations, are heavily regulated by the EPA and state
environmental agencies, and are subject to numerous permit requirements. Solite
believes that its level of compliance with such requirements is generally good,
but as with any company subject to such a complex system of environmental
regulation, there is a significant potential for future fines and penalties
associated with enforcement actions.

Solite's lightweight aggregate plants which burn hazardous waste as fuel
are in the process of obtaining final hazardous waste management permits. These
permits, when obtained, may impose additional operating limitations and
compliance costs on the facilities.

As new hazardous waste management permits are obtained (or, in the case of
the Florida facilities, relinquished), corrective action may be required for
existing environmental conditions at the facilities subject to such permits.
Carolina Solite has entered into administrative orders on consent concerning
corrective action with EPA for its Florida facility (which will be transferred
to Northeast Solite in connection with the Spin-Off) and with the State of
North Carolina for its North Carolina facility. The full cost of compliance
with the EPA administrative order at the Florida facility also cannot be
reliably predicted, but the environmental consulting firm responsible for
implementing the order has estimated, on a preliminary basis, that remedial
costs will fall within a range of $500,000 to $1,150,000 over a period of up to
15 years. The North Carolina order requires Solite to investigate areas of the
plant site where activities took place that could be associated with
environmental contamination. If contaminated areas are identified, Solite could
be required to undertake remedial action. Although corrective action costs may
be required, it is not possible at this time to reasonably estimate the amount
of any obligation for remediation at these locations that may be material
because the extent of environmental impact, remediation alternatives (which
could involve no or minimal action), and concurrence of the regulatory
authorities have not yet advanced to the stage where a reasonable estimate of
any loss can be made. However, at December 31, 1997, Solite had accrued
$55,000, which represents amounts Solite expects to incur to prepare reports
which would then be used to determine the need for further investigative or
remedial activities.

EPA is in the process of promulgating new regulations for Hazardous Waste
Combustors, including lightweight aggregate kilns. These regulations are
expected to be issued in 1998, with a compliance date three years after

50
<PAGE>

issuance. The precise requirements that will be included in the new regulations
are uncertain, and the ultimate costs of compliance could be substantial.

The Carolina Solite facility in Aquadale, North Carolina was issued a new
state permit for the construction and operation of air emission sources,
including new limitations relating to toxic air pollutants (the "Air Permit"),
on July 10, 1996. The Air Permit was appealed in the North Carolina Office of
Administrative Hearings by both Carolina Solite and a citizens group, the
Stanly Citizens Opposed to Toxic Chemical Hazards ("SCOTCH"). The Carolina
Solite appeal, after lengthy negotiations, was settled and a revised Air Permit
was issued on June 13, 1997. The revised Air Permit was also appealed by SCOTCH
and the North Carolina Waste Awareness and Reduction Network ("N.C. WARN"). It
was discovered in July, 1997 that the revised Air Permit was based on erroneous
air quality modeling assumptions. As a result of this discovery, on July 22,
1997, the North Carolina Division of Air Quality issued a Notice to Terminate
Carolina Solite's revised Air Permit. Carolina Solite has filed a timely appeal
of this Notice and has submitted to the Division corrected air quality modeling
data. Carolina Solite believes it is likely that another revised Air Permit
will be issued containing limitations that will be more stringent than those
contained in previous Air Permits. Solite expects that if such Air Permit
requires the installation of additional pollution control equipment, Carolina
Solite will be allowed to operate substantially as it has in the past pending
installation of such equipment, but there can be no assurance that Solite will
be allowed to operate in such manner. A hearing of Carolina Solite's appeal is
scheduled for May 11, 1998.

After SCOTCH filed its first appeal of the Air Permit, Carolina Solite
brought a civil action against SCOTCH and its president, Joann Almond, in
Stanly County Superior Court seeking an injunction and damages for breach of a
1993 Settlement Agreement pursuant to which SCOTCH and Mrs. Almond agreed to
support the modification of Carolina Solite's Air Permit. Carolina Solite's
Motion for Summary Judgment on the issue of liability was granted on August 6,
1997 and a motion for reconsideration of the Order granting summary judgment
has been denied.

On December 20, 1996 Martin Marietta Materials, Inc. ("MMM") notified the
Company of a claim for waste and debris removal and remediation costs,
estimated at $355,725, under an Asset Purchase Agreement between Solite and MMM
dated June 10, 1994. The MMM claim relates to conditions at a stone quarry in
Caroline County, Virginia sold to MMM by Solite. Solite has evaluated the MMM
claim and has concluded that it should have little if any liability for the
removal and remedial costs alleged by MMM under the indemnification provisions
of the Asset Purchase Agreement, because the environmental conditions alleged
to require remediation by MMM are largely or entirely the result of activities
occurring after the date of the sale, for which Solite is not liable.

Legal Matters

In addition to the environmental matters discussed herein, Solite is
involved in various other legal proceedings, including litigation in the
ordinary course of its business. These proceedings are not expected to have a
material adverse effect on Solite or Northeast Solite.

51
<PAGE>

Security Ownership of Directors, Executive Officers and Owners of five percent
or more of Solite Stock

The following table sets forth certain information with respect to the
beneficial ownership of Solite Stock as of March 1, 1998, by each shareholder
known by Solite to be the beneficial owner of more than 5% of the outstanding
Solite Common Stock and each class of Solite Preferred Stock, by each director,
by each of the executive officers and by all directors and executive officers
as a group:

<TABLE>
<CAPTION>
Solite Solite Solite
Solite Percent Series A Percent Series B Percent Series C Percent
Common of Preferred of Preferred of Preferred of
Name Stock Class Stock Class Stock Class Stock Class
- ------------------------------ ---------------- --------- ----------- --------- --------------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John W. Roberts .............. 227,475(a) 42.7% 8,700 100% 11,375(a) 80.7% 15,429 100%
Joan R. Cates ................ 13,150 2.5% -- -- -- -- -- --
Arthur W. Helwig ............. -- -- -- -- -- -- -- --
Linwood F. Perkins ........... 100 * -- -- 60 * -- --
A. Cabell Ford, Jr. .......... 1,775 * -- -- 60 * -- --
Jeremiah J. Jewett, III ...... 425 * -- -- 60 * -- --
Don K. Burris ................ 3,055(b) * -- -- 426(b) 3% -- --
J. Wayne Thornton ............ 1,400 * -- -- 65 * -- --
Lee A. Facetti ............... 850 * -- -- 23 * -- --
William T. Johnson ........... 1,800 * -- -- 51 * -- --
Kenneth R. Armistead ......... 325 * -- -- 25 * -- --
William E. Saunders, Jr. ..... 700 * -- -- 50 * -- --
Mrs. Clay H. Barr ............ 37,467(c) 7.0% -- -- -- -- -- --
George M. Kaufman ............ 28,000(d) 5.2% -- -- -- -- -- --
Linda H. Kaufman ............. 31,466(e) 5.9% -- -- -- -- -- --
Mrs. Elise H. Wright ......... 32,067(f) 6.0% -- -- -- -- -- --
All Executive Officers and
Directors as a group ........ 251,055(g) 47.1% 8,700 100% 12,195 86.5% 15,429 100%
</TABLE>

- ------------
* Less than 1%.

(a) Includes 150,000 shares of Solite Common Stock held as trustee, 12,625
shares of Solite Common Stock and 5,940 shares of Solite Series B
Preferred Stock held by his wife. Excludes 1,143 shares of Solite Series B
Preferred Stock held by Mr. Roberts' adult children and grandchildren.

(b) Includes 100 shares of Solite Common Stock and 213 shares of Solite Series
B Preferred Stock held by his wife.

(c) Includes 3,000 shares of Solite Common Stock held as custodian. Includes
1,967 shares held as co-trustee for the benefit of her husband and
excludes 1,967 shares held as co-trustee for the benefit of Linda H.
Kaufman and 1,967 shares held as co-trustee for the benefit of Elise H.
Wright.

(d) Includes 3,000 shares of Solite Common Stock held as custodian. Excludes
27,500 shares of Solite Common Stock held by his wife, Linda H. Kaufman,
2,000 shares of Solite Common Stock held by her as custodian, and 5,900
shares held by her as co-trustee.

(e) Includes 2,000 shares of Solite Common Stock held as custodian. Excludes
25,000 shares of Solite Common Stock held by her husband George M. Kaufman
and 3,000 shares of Solite Common Stock held by him as custodian. Includes
1,966 held as co-trustee for her benefit and excludes 1,967 shares held as
co-trustee for the benefit of Elise H. Wright and 1,967 shares held as
co-trustee for the benefit of Clay H. Barr.

(f) Includes 400 shares of Solite Common Stock held by her husband as trustee.
Includes 1,967 held as co-trustee for her benefit and excludes 1,967
shares held as co-trustee for the benefit of Clay H. Barr and 1,966 shares
held as co-trustee for the benefit of Linda H. Kaufman.

(g) See Notes (a) and (b)

52
<PAGE>

COMPARATIVE STOCK PRICES AND DIVIDENDS

Giant Common Stock is traded on the Nasdaq National Stock Market (symbol:
GCHI).

The high, low and last reported sales prices per share of the Giant Common
Stock on the Nasdaq National Market on September 9, 1997, the last trading day
prior to the date of the public announcement of the signing of the Merger
Agreement were $23.00, $22.50 and $22.50, respectively.

The following table sets forth for the periods indicated the high and low
reported sales prices of the Common Stock on the Nasdaq National Market.

High Low
----------- ------------
Year ended December 31, 1996:
First Quarter .................................. $ 12.75 $ 10.4375
Second Quarter ................................. $ 14.625 $ 12.325
Third Quarter .................................. $ 16.325 $ 12.625
Fourth Quarter ................................. $ 16.125 $ 14.75
Year ended December 31, 1997:
First Quarter .................................. $ 17.125 $ 15.25
Second Quarter ................................. $ 18.75 $ 15.5
Third Quarter .................................. $ 24.625 $ 18.125
Fourth Quarter ................................. $ 25.75 $ 22.00
Year ending December 31, 1998:
First Quarter (through March 29, 1998) ......... $ 30.00 $ 18.50

On March 5, 1998, there were approximately 113 holders of record of Giant
Common Stock and Giant estimates that there were a total of approximately 3,000
beneficial holders on such date.

Giant does not anticipate paying any cash dividends on the Giant Common
Stock in the foreseeable future; it intends to retain its earnings to finance
the expansion of its business and for general corporate purposes. Any payment
of dividends will be at the discretion of the Giant Board and will depend upon
the earnings, financial condition, capital requirements, level of indebtedness,
and contractual restrictions with respect to payment of dividends and other
factors. In addition, Giant's revolving credit agreement contains financial
covenants that could have the effect of limiting the distribution of dividends
without the prior written consent of the lenders who are parties to such
agreement. See "GIANT MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS."

53
<PAGE>

UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma condensed financial statements give
effect to the Spin-Off of Northeast Solite as described elsewhere herein. The
pro forma adjustments reflect the elimination of the assets, liabilities,
equity, revenues and expenses of Northeast Solite from Solite Corporation and
Subsidiaries to arrive at Solite including only those businesses that will be
included in the merger. These unaudited pro forma condensed consolidated
financial statements have been prepared from and should be read in conjunction
with, the historical consolidated financial statements and notes thereto of
Solite Corporation and Subsidiaries, which are included herein.

The unaudited pro forma statements are presented for illustrative purposes
only and are not necessarily indicative of the operating results or financial
position that would have occurred had the Spin-Off been consummated at the
dates indicated, nor is it necessarily indicative of future operating results
or financial position of Solite. Pro forma adjustments to income and expense
for Solite Corporation and Subsidiaries for the twelve months ended ended
December 31, 1997 are based on management's estimate of the financial effects
of the Spin-Off and for the period and as of the date presented.

The Unaudited Pro Forma Condensed Balance Sheet gives effect to the
Spin-Off as if it had occurred December 31, 1997. The Unaudited Pro Forma
Condensed Statement of Operations give effect to the Spin-Off as if it had
occurred at the beginning of the earliest period presented, disaggregating the
results of Northeast for the twelve months ended December 31, 1997 with those
of Solite Corporation and Subsidiaries for the same period.

Unaudited Pro Forma Condensed Balance Sheet
December 31, 1997
(in thousands)

<TABLE>
<CAPTION>
Solite Corporation Pro Forma Pro Forma
and Subsidiaries Adjustments Solite
-------------------- ------------- ----------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ....................... $ 2,844 $ (1,546) $ 1,298
Accounts receivable, net ........................ 8,037 (2,076) 5,961
Inventories ..................................... 10,460 (2,838) 7,622
Other ........................................... 2,143 (1,095) 1,048
------- --------- --------
Total current assets ........................... 23,484 (7,555) 15,929
Property and equipment, net ...................... 20,677 (6,868) 13,809
Deferred income taxes ............................ 1,860 (834) 1,026
Deferred charges and other ....................... 1,696 (363) 1,333
------- --------- --------
Total assets ................................... $47,717 $ (15,620) $ 32,097
======= ========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable ................................ $ 8,144 $ (1,462) $ 6,682
Accrued expenses ................................ 3,730 (1,034) 2,696
Current maturities of long-term debt ............ 20,662 (1,500) 19,162
------- --------- --------
Total current liabilities ...................... 32,536 (3,996) 28,540
Long-term debt ................................... -- -- --
------- --------- --------
Total liabilities .............................. 32,536 (3,996) 28,540
Shareholders' equity:
Preferred stock ................................. 4,225 -- 4,225
Common stock .................................... 1,066 -- 1,066
Capital in excess of par value .................. 1,204 -- 1,204
Retained earnings (accumulated deficit) ......... 8,686 (11,624) (2,938)
------- --------- --------
Total Shareholders' equity ..................... 15,181 (11,624) 3,557
------- --------- --------
$47,717 $ (15,620) $ 32,097
======= ========= ========
</TABLE>

54
<PAGE>

Unaudited Pro Forma Condensed Statement of Operations
For the twelve months ended December 31, 1997
(in thousands)

<TABLE>
<CAPTION>
Solite Corporation Pro Forma Pro Forma
and Subsidiaries Adjustments Solite
-------------------- ------------- ----------
<S> <C> <C> <C>
Total revenues ....................................... $ 65,579 $ (11,877) $ 53,702
Cost of sales ........................................ 48,195 (8,767) 39,428
-------- --------- --------
Gross Profit ......................................... 17,384 (3,110) 14,274
Selling, general and administrative expenses ......... 19,002 (7,855) 11,147
-------- --------- --------
Operating income (loss) .............................. (1,618) 4,745 3,127
Interest expenses .................................... (2,558) 857 (1,701)
Other, net ........................................... 2,511 (2,454) 57
-------- --------- --------
Income (loss) before taxes ........................... (1,665) 3,148 1,483
Provisions for income taxes .......................... (137) 656 519
-------- --------- --------
Net income (loss) .................................... $ (1,528) $ 2,492 $ 964
======== ========= ========
</TABLE>

Notes to Unaudited Pro Forma Condensed Financial Statements

1) Interest costs allocated to the businesses included in the Spin-Off for the
twelve months ended December 31, 1997 are not indicative of these
businesses' $1.5 million outstanding debt at December 31, 1997. As a
result of the sale of the sand and gravel assets, Solite Corporation and
Subsidiaries repaid $6.6 million of its debt in August 1997, the majority
of which was previously allocated (based upon the historical allocation
method) to the businesses to be spun-off. Pursuant to the terms of the
Definitive Merger Agreement, Giant will assume up to $20.0 million of
Solite's long-term debt. At December 31, 1997, Solite's long-term debt had
been reduced to $19.2 million, excluding the $1.5 million payable to John
Roberts by Northeast; accordingly, all of $19.2 million has been allocated
to Solite.

55
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma combined condensed financial statements
give effect to the Merger using the "purchase" method of accounting, after
giving effect to the pro forma adjustments described in the accompanying notes.
These unaudited pro forma combined condensed consolidated financial statements
have been prepared from and should be read in conjunction with, the historical
consolidated financial statements and notes thereto of Giant, which are
incorporated by reference in the Proxy Statement/Prospectus, and Solite which
are included herein.

The unaudited pro forma statements are presented for illustrative purposes
only and are not necessarily indicative of the operating results or financial
position that would have occurred had the Merger been consummated at the dates
indicated, nor is it necessarily indicative of future operating results or
financial position of the merged companies. Pro forma adjustments include
estimates for fair value adjustments required under purchase accounting for the
Solite assets and liabilities and are subject to revision when final analyses
of such values are completed. Pro forma adjustments to income and expense for
Solite's twelve months ended December 31, 1997 are based on management's
estimate of the financial effects of the Merger and for the period and as of
the date presented.

Giant has a fiscal year which ends December 31 whereas Solite has a fiscal
year which ends March 31. The Unaudited Pro Forma Combined Condensed Balance
Sheet gives effect to the Merger as if it had occurred December 31, 1997,
combining the balance sheet of Solite at December 31, 1997 with that of Giant
as of December 31, 1997. The Unaudited Pro Forma Combined Condensed Statement
of Operations gives effect to the Merger as if it had occurred at the beginning
of the earliest period presented, combining the results of Solite for the
twelve months ended December 31, 1997 with those of Giant for the year ended
December 31, 1997.

As a result of the Merger, the merged companies expect to incur certain
acquisition and transition related costs in connection with consummating the
transaction and integrating the operations of Giant and Solite. The acquisition
and transition related costs consist principally of professional and
registration fees, employment contract termination costs, systems modification
costs and other costs associated with the integration of the two businesses
resulting from the Merger. The exact timing, nature and amount of these
acquisition and transition related costs are subject to change and cannot be
reasonably determined and accordingly have not been reflected in the
accompanying unaudited pro forma combined condensed financial statements.

56
<PAGE>

Unaudited Pro Forma Combined Condensed Balance Sheet
December 31, 1997
(in thousands)

<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma Pro Forma
Giant Solite Adjustments Combined
------------ ----------- -------------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents .......................... $ 12,674 $ 1,298 $ -- $ 13,972
Accounts receivable, net ........................... 14,927 5,961 -- 20,888
Inventories ........................................ 19,238 7,622 262 (4) 27,122
Other .............................................. 3,652 1,048 -- 4,700
--------- -------- ----------- ---------
Total current assets ............................. 50,491 15,929 262 66,682
Property and equipment, net ......................... 75,631 13,809 4,631 (4) 94,071
Deferred income taxes ............................... -- 1,026 (1,026)(5) --
Deferred charges and other .......................... 2,478 1,333 3,811
Goodwill ............................................ -- -- 1,713 (6) 1,713
--------- -------- ----------- ---------
Total assets ..................................... $ 128,600 $ 32,097 $ 5,580 $ 166,277
========= ======== =========== =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable ................................... $ 11,567 $ 6,682 $ -- $ 18,249
Accrued expenses ................................... 8,258 2,696 10,954
Current maturities of long-term debt ............... 888 19,162 (16,762) (3) 3,288
--------- -------- ----------- ---------
Total current liabilities ........................ 20,713 28,540 (16,762) 32,491
Long-term debt ...................................... 9,661 -- 16,762 (3) 26,423
Accrued pension and postretirement benefits ......... 2,907 -- -- 2,907
Deferred income taxes and other ..................... 7,674 -- 1,713 (6) 8,361
(1,026)(5)
--------- -------- ----------- ---------
Total liabilities ................................ 40,955 28,540 687 70,182
--------- -------- ----------- ---------
Shareholders' equity:
Preferred stock .................................... 4,225 (4,225)(4)
Common stock ....................................... 100 1,066 (1,063)(4) 103
Capital in excess of par value ..................... 41,317 1,204 (1,204)(4) 49,764
8,447 (4)
Retained earnings .................................. 58,120 (2,938) 2,938 58,120
Treasury stock ..................................... (11,247) -- -- (11,247)
Reduction for addl. pension liability .............. (645) -- -- (645)
--------- -------- ----------- ---------
Total Shareholders' equity ....................... 87,645 3,557 4,893 96,095
--------- -------- ----------- ---------
$ 128,600 $ 32,097 $ 5,580 $ 166,277
========= ======== =========== =========
</TABLE>

57
<PAGE>

Unaudited Pro Forma Combined Condensed Statement of Operations
For the Twelve Months Ended December 31, 1997
(in thousands, except per share data)

<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma Pro Forma
Giant Solite Adjustments Combined
------------ ------------ ------------------ ------------
<S> <C> <C> <C> <C>
Total revenues ...................................... $116,888 $ 53,702 $ (1,316)(1) $169,274
Cost of sales ....................................... 81,756 39,428 (1,316)(1) 120,439
571 (2)
-------- -------- --------- --------
Gross profit ........................................ 35,132 14,274 (571) 48,835
Selling, general and administrative expense ......... 7,523 11,147 -- 18,670
Acquisition related expenses ........................ 1,200 -- (1,200)(8) --
-------- -------- --------- --------
Operating income .................................... 26,409 3,127 629 30,165
Interest expenses ................................... (966) (1,701) 261 (3) (2,406)
Other, net .......................................... (1,031) 57 -- (974)
-------- -------- --------- --------
Income before taxes ................................. 24,412 1,483 890 26,785
Provisions for income taxes ......................... 8,327 519 529 (7) 9,375
-------- -------- --------- --------
Net income .......................................... $ 16,085 $ 964 $ 361 $ 17,410
======== ======== ========= ========
Net income per share--Basic ......................... $ 1.70 N/A N/A $ 1.78
Net income per share--Diluted ....................... 1.69 N/A N/A 1.76
Weighted average shares outstanding ................. 9,459 N/A N/A 9,784
</TABLE>

58
<PAGE>

Notes to Unaudited Pro Forma Combined Condensed Financial Statements

1) Represents an adjustment to eliminate Giant's sales of cement and resource
recovery services to Solite of $750,000 and $566,000 in 1997,
respectively.

2) Represents amortization of $309,000 of excess purchase price over the
underlying value of the net assets acquired over an average period of 15
years, which is the average life for property, plant and equipment, and
the $262,000 additional cost of sales resulting from the write up of
inventories to fair value in accordance with purchase accounting
treatment.

3) Simultaneous with the closing, Solite will become a borrower under, and
borrow from, Giant's Revolving Credit and Letter of Credit Facilities.
Giant has executed a commitment letter to extend the Credit Facility to
$44.0 million from $32.0 million. The addition to the Credit Facility
amortizes at a rate of $200,000 per month for sixty months, or $2.4
million per annum, which amount has been classified as current at December
31, 1997 in addition to the $888,000 current portion of Giant's existing
indebtedness.

As a result of the refinancing, Solite's borrowing cost will be reduced to
Giant's, which is LIBOR plus 1.75% or prime minus 1%, whichever is lower.
Proforma interest expense reflects the cost that would have been incurred
had Solite had $19.2 million of debt outstanding for the entire period
presented at Giant's borrowing cost, which averaged 7.5% for the periods
presented. A 50 basis point change in the interest rate would change
interest cost $96,000 per annum.

4) The adjustments reflect the issuance of 325,000 shares of Giant Common
Stock, which represents a purchase price of approximately $8.5 million,
together with the conversion and elimination of all outstanding Solite
Preferred Stock and Solite Common Stock.

The cost in excess of assets acquired represents the purchase price of
approximately $8.5 million less the net assets acquired less amounts
allocated to the write-up of inventories as required by purchase
accounting.

The Merger of Solite and Giant results in a new basis of accounting for
Solite. Accordingly, the tangible and intangible assets and the liabilities
of Solite will be reported at their fair values, determined by independent
appraisals, at the date of the Merger. At the date of this Proxy
Statement/Prospectus, such independent appraisals have not been performed.
For purposes of this presentation, based upon historical independent
appraisals previously prepared for Solite's lenders and Giant's management
estimates, amortization expense shown on the pro forma combined statements
of income data was determined as though the net assets acquired were equal
to the net book value of Solite as of December 31, 1997 and were stated at
estimated fair market value except inventory and property, plant and
equipment, which would be increased by 100% of the excess cost of
approximately $4.6 million, and be amortized over a 15-year period. In
arriving at the allocation described, among the factors considered by Giant
management were the prior appraisals, nature, age and condition of the
assets being acquired, carrying value of assets and the estimated
replacement cost of similar assets. Giant believes, pending the outcome of
the updated independent appraisals, that the information utilized and
management's estimates provide a reasonable basis for allocation as
reflected in this pro forma information.

5) Represents the reclassification of long-term deferred income tax assets to
reduce long-term deferred income liabilities.

6) Represents the combined tax effect of the adjustments to write-up property
and equipment and inventories ($4.6 million and $262,000) at an effective
tax rate of 35 percent.

7) Represents the pro forma tax expense at an effective tax rate of 35 percent.

8) Represents the elimination of acquisition related expenses charged against
1997 historical income by Giant as a result of the uncertainty as to its
ability to consummate the merger. See "SUMMARY--Regulatory Matters."
Excluding the acquisition related expenses, Giant's historical net income
per basic common share would have been $1.78, compared with $1.78 pro
forma net income per basic common share.

59
<PAGE>

GIANT CONSOLIDATED SELECTED HISTORICAL FINANCIAL
INFORMATION AND OTHER DATA

The following consolidated selected financial data with respect to Giant's
financial position and its results of operations for each of the five years in
the period ended December 31, 1997 set forth below has been derived from
Giant's audited consolidated financial statements, which have previously been
filed with the SEC. The consolidated selected financial data presented below
should be read in conjunction with such audited consolidated financial
statements and related notes and the other information set forth in this Proxy
Statement/Prospectus or incorporated by reference herein. See "GIANT
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS."

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- ---------- ----------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Total revenues ......................... $116,888 $110,198 $100,185 $90,802 $81,900
Cost of sales .......................... 81,756 77,818 72,871 70,359 67,055
-------- -------- -------- ------- -------
Gross profit ........................... 35,132 32,380 27,314 20,443 14,845
Selling, general and
administrative expenses ............... 7,523 7,841 7,547 6,691 6,120
Acquisition related expenses............ 1,200 -- -- -- --
-------- -------- -------- ------- -------
Operating income ....................... 26,409 24,539 19,767 13,752 8,725
Interest expense ....................... (966) (1,141) (181) (761) (804)
Other income (expense), net (1,031) 298 (24) (219) (450)
-------- -------- -------- ------- -------
Income before income taxes 24,412 23,696 19,562 12,772 7,471
Provision for income taxes ............. 8,327 8,275 6,847 3,577 2,323
-------- -------- -------- ------- -------
Net income ............................. $ 16,085 $ 15,421 $ 12,715 $ 9,195 $ 5,148
======== ======== ======== ======= =======
Net income per
common share:
Basic ................................ $ 1.70 $ 1.57 $ 1.27 $ 0.92 $ 0.51
Diluted .............................. 1.69 1.57 1.27 0.92 0.51
Weighted avg common
shares outstanding .................... 9,459 9,833 9,990 10,000 10,000
Other Data:
Depreciation and
amortization .......................... $ 10,674 $ 9,462 $ 8,347 $ 7,773 $ 7,444
Capital expenditures ................... 15,362 9,819 23,898 7,527 5,471
Balance Sheet Data:
Working capital ........................ $ 29,778 $ 26,706 $ 17,539 $20,513 $12,228
Total assets ........................... 128,600 118,616 111,714 90,525 80,944
Total debt ............................. 10,549 11,751 17,804 8,403 9,312
Shareholders' equity ................... 87,645 77,128 64,614 54,203 42,394
</TABLE>

60
<PAGE>

GIANT MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of Giant's consolidated financial
condition and consolidated results of operations should be read in conjunction
with Giant's consolidated historical financial statements and notes thereto.
See "GIANT CONSOLIDATED SELECTED HISTORICAL FINANCIAL INFORMATION AND OTHER
DATA."

General
Giant's cement operations are directly related to the construction
industry. The regional markets in which Giant operates, the Middle-Atlantic and
South-Atlantic regions, are highly cyclical, experiencing peaks and valleys in
demand corresponding to regional and national construction cycles.
Additionally, the demand for cement is seasonal because construction activity
diminishes during the winter months of December, January, and February. The
seasonal impact can be particularly acute in Giant's Middle-Atlantic market. In
addition, Giant performs a substantial portion of its routine annual major
maintenance projects during the period of low plant utilization, typically the
first quarter of its fiscal year, which results in significant additional
expense during this period. Giant believes that the routine annual maintenance
performed in the first quarter results in lower maintenance costs throughout
the remainder of the year. Accordingly, Giant has historically experienced its
lowest levels of revenue and gross profit during the first quarter.

Giant derives revenues from the sales of products, primarily cement and
construction aggregates, as well as from the provision of resource recovery
services. Resource recovery services revenue is primarily derived from third
parties that pay Giant to utilize their waste as fuel, which additionally
reduces the cost of traditional fossil fuels used in the manufacture of cement.
Due to the nature of Giant's operations and the fact that the burning of
waste-derived fuels is inseparable from the manufacture of cement, it is
impractical to disaggregate the costs of sales and services by revenue
classification. Giant's resource recovery operations are dependent on general
and regional economic conditions; federal, state, and local environmental
policies; and competition from other waste disposal alternatives.

Cement is a commodity product sold primarily on the basis of price. The
price of cement tends to rise in periods of high demand and can fall if supply
exceeds demand. The economic recovery that began in 1993 resulted in improved
demand and increased pricing for Giant's products. Demand for cement has
exceeded available supplies in Giant's South-Atlantic market at various times
since 1993, causing cement shortages. Demand in Giant's Middle-Atlantic market
has been good for most of the past three years. In 1995, Giant realized a price
increase of $6 per ton in its Middle-Atlantic market and a price increase of $8
per ton in its South-Atlantic market. In 1996, Giant realized a $4 per ton
price increase in its South-Atlantic market. In 1997, Giant realized a $4 per
ton increase in its Middle-Atlantic market. Effective for April 1, 1998, Giant
has announced a $4 per ton increase in its Middle-Atlantic market; and a $3 per
ton increase in its South-Atlantic market, although there can be no assurance
that these price increases will be realized or that current price levels will
not decline should cement demand decline in relation to supply.

Giant's cement-manufacturing, hourly employees are represented by the
United Paperworkers International Union ("UPIU"). During 1997, Giant reached a
new three-year labor agreement with the hourly employees at Giant Cement,
granting annual wage increases averaging 3.2% over the three year period. The
Agreement between Keystone Cement Company and the UPIU Local expires April 30,
1998. While Giant will endeavor to negotiate a new agreement with the UPIU,
there can be no assurance that an agreement will be reached on terms favorable
to Giant, nor can there be assurance that Giant will not incur work stoppages,
slowdowns or a strike.

Results of Operations

1997 Versus 1996
Total operating revenues increased $6.7 million or 6.1% to $116.9 million
in 1997, compared with $110.2 million in 1996. Product sales increased $4.8
million or 5.0% to $101.0 million in 1997, compared with $96.2 million in 1996.
The increase resulted primarily from an increase in the average selling price
of cement and increased aggregate sales. Cement shipping volumes increased .6%
in 1997 compared with 1996 volumes. The Company's average selling price per ton
of cement increased 3.4% in 1997, as a result of price increases implemented in
April 1996 and 1997. The Company realized a price increase of $4 per ton in
April 1997 in its Middle-Atlantic market. Resource recovery revenues increased
$1.9 million or 13.5% to $15.9 million in 1997, compared with $14.0 million

61
<PAGE>

in 1996, as a result of higher volumes and pricing of both liquid and solid
fuels. Liquid fuels utilized increased 6.7%, while liquids pricing improved
5.9%. The Company's solid fuels volume increased 17.6%, while solid fuels
pricing improved 5.7%.

Improved cement pricing and resource recovery revenues resulted in a $2.7
million or 8.5% increase in gross profit from $32.4 million in 1996 to $35.1
million in 1997. The Company's gross margin percentage increased from 29.4% in
1996 to 30.1% in 1997. The total cost of sales and services increased $4.0
million to $81.8 million, compared with $77.8 million in 1996. The largest
component of the increase in cost was increased depreciation expense from
recent capital improvements. Cement costs per ton increased 1.1% in 1997.
Clinker and cement manufactured increased 1.2% and 3.3%, respectively, compared
with 1996, as a result of capital and operating improvements made in 1996 and
1997. Both of the Company's plants have operated at effective capacity
throughout 1997.

Selling, general and administrative expenses decreased $318,000 to $7.5
million, and decreased to 6.4% of operating revenues. The expense decrease
primarily related to lower administrative costs.

Acquisition related expenses of $1.2 million were charged to expense in
1997 as a result of the uncertainty of the Company's ability to obtain
clearance from the Department of Justice to consummate the Solite acquisition.

Prior to acquisition related expenses, operating income improved $3.1
million or 12.5% to $27.6 million in 1997, compared with $24.5 million in 1996,
primarily as the result of the increase in operating revenues. Prior to
acquisition related expenses, operating income margins improved from 22.3% in
1996 to 23.6% in 1997. The 1997 results of operations were impacted by the
Company's suspension of the utilization of waste fuels at Keystone for most of
the month of December as a result of a fire at Keystone's waste fuel storage
tank farm. Keystone's inability to utilize waste fuels resulted in lost
revenues and additional costs of approximately $450,000 in the quarter or $.03
per share after tax.

Interest expense decreased $175,000 as a result of lower average
borrowings outstanding. Other expense in 1997 includes pretax charges of $1.4
million, relating to Keystone's tank farm fire and its resulting suspension of
the utilization of waste fuel. (See Environmental Matters).

Federal and state income tax expenses resulted in an effective tax rate of
34.9% in 1996 and 34.1% in 1997. The Company's effective tax rate of 34.1% in
1997 is not expected to change materially under current tax law.

Net income increased $700,000 or 4.3% to $16.1 million in 1997, compared
with $15.4 million in 1996.

1996 Versus 1995
Total operating revenues increased $10.0 million or 10.0% to $110.2
million in 1996, compared with $100.2 million in 1995. Product sales increased
$9.6 million or 11.0% to $96.2 million in 1996, compared with $86.6 million in
1995, as a result of increased shipping volumes and higher average selling
prices of cement. Cement shipping volumes increased 6.7% in 1996, as a result
of volume increases in both of Giant's market areas. Giant's average selling
price per ton of cement increased 4.1% in 1996, as a result of price increases
in its South-Atlantic market. No price increases were realized in Giant's
Middle-Atlantic market in 1996. Resource recovery revenues increased $462,000
or 3.4% to $14.0 million in 1996, compared with $13.6 million in 1995,
primarily as a result of a 124.2% increase in the volume of solid waste fuels
utilized, partially offset by lower liquid fuels pricing. Liquid fuel volumes
increased 3.8%; however, average liquid fuel pricing decreased 16.1% in 1996
compared with 1995.

Improved shipping volumes and cement pricing resulted in a $5.1 million or
18.5% increase in gross profit from $27.3 million in 1995 to $32.4 million in
1996. Giant's gross margin percentage increased from 27.3% in 1995 to 29.4% in
1996. The total cost of sales and services increased $4.9 million to $77.8
million primarily as a result of higher shipping volumes and increased
depreciation expense. Cement costs per ton increased less than one percent in
1996. Clinker and cement manufactured increased 1.5% and 2.5%, respectively,
compared with 1995, as a result of capital and operating improvements made in
1995 and 1996. Both of Giant's plants operated at effective capacity throughout
1996.

Selling, general and administrative expenses increased $294,000 to $7.8
million, but decreased to 7.1% of operating revenues as a result of higher
revenues. The increase related primarily to higher selling and promotional
expenses.

62
<PAGE>

Operating income improved $4.8 million or 24.1% to $24.5 million in 1996,
compared with $19.8 million in 1995, primarily as the result of the increase in
operating revenues. Operating income margins improved from 19.7% in 1995 to
22.3% in 1996, as a result of higher cement selling prices with only minimal
per unit cost increases.

Interest expense increased $1.0 million as a result of higher average
borrowings outstanding and the capitalization of $733,000 of interest cost in
1995.

Federal and state income tax expenses resulted in an effective tax rate of
35.0% in 1995 and 34.9% in 1996. Giant's effective tax rate of 34.9% in 1996 is
not expected to change materially under current tax law.

Net income increased $2.7 million or 21.3% to $15.4 million in 1996,
compared with $12.7 million in 1995. Net income as a percentage of net sales
increased from 12.7% in 1995 to 14.0% in 1996.

Liquidity and Capital Resources

The Company's liquidity requirements arise primarily from the funding of
capital expenditures, debt service obligations and working capital needs. The
Company has historically met these needs through internal generation of cash
and borrowings on revolving credit facilities. The Company's borrowings have
historically increased during the first half of the year because of the
seasonality of its business and the annual plant maintenance performed in the
first quarter.

Cash and cash equivalents totaled $12.7 million at December 31, 1997,
compared with $10.4 million at December 31, 1996. At December 31, 1997 and
1996, the Company had working capital of $29.8 million and $26.7 million with a
current ratio of 2.4 and 2.5, respectively. Accounts receivable increased
$30,000 or less than 1% to remain at $14.9 million, compared with 1996.
Inventories increased $1.6 million or 9.0% to $19.2 million at December 31,
1997, primarily as a result of an increase in finished cement and repair parts
inventories. Total current liabilities increased $2.4 million or 12.9% to $20.7
million in 1997, primarily as a result of higher trade accounts payable and
accrued expenses.

Net cash provided by operations increased $3.3 million or 14.7% to $25.6
million in 1997, compared with $22.3 million in 1996, primarily as a result of
the Company's improved earnings, increased depreciation and a lesser increase
in accounts receivable. Net cash used by investing increased to $15.4 million
in 1997, compared with $9.8 million in 1996, as a result of increased capital
expenditures. Net cash used by financing activities decreased to $8.0 million
in 1997, compared with $10.1 million in 1996, primarily as a result of less
debt repayment, partially offset by greater treasury share repurchases.

The Company has entered into a three-year, annually renewable, $32 million
Revolving Credit Facility and Letter of Credit Agreement. Advances under the
Credit Facility bear interest at the lesser of LIBOR plus 1.75% or the bank's
base rate minus 1.0%. Borrowings under the Credit Facility are partially
collateralized by eligible accounts receivable and inventories (as defined).
The Company is required to reduce outstanding borrowings under the Credit
Facility to $22.0 million for a period of 30 days annually. At December 31,
1997, amounts outstanding and available under the Credit Facility totaled $8.2
million and $21.8 million, respectively.

The Company anticipates that its capital expenditures for plant and
equipment, including certain environmental compliance capital expenditures,
will be $13.0 to $15.0 million in 1998. In addition to the Company's capital
expenditure programs, the Company expends substantial resources on maintenance
annually. These costs are expensed as incurred and were $12.2 million, $13.9
million and $14.9 million for 1995, 1996 and 1997, respectively. While a
portion of these costs is discretionary, the Company anticipates that
maintenance expenditures will continue at or near these levels.

If the Merger, which will be accounted for as a purchase, is completed, it
will require approximately $28 million to be financed through the issuance of
approximately 325,000 common shares and bank borrowings of approximately $20
million. The Company intends to utilize a combination of new term financing and
its existing Credit Facility to finance the $20 million.

At December 31, 1997, three of the Company's defined benefit pension plans
had projected benefit obligations of $3.2 million in excess of plan assets,
while one of the Company's plans had assets in excess of projected benefit
obligations of $2.2 million. The Company intends to fund the excess benefit
obligations from time to time as funds are available. Additionally, under the
provisions of Statement of Financial Accounting Standards No. 106, "Employer's
Accounting for Postretirement Benefits Other Than Pensions," the Company's
projected accumulated

63
<PAGE>

postretirement benefit obligation totaled $14.2 million at December 31, 1997,
of which $4.4 million was accrued. The Company funds postretirement benefits as
the claims are incurred and anticipates continuing to do so.

Year 2000
The Company is in the initial stages of addressing year 2000 computer
software and operating system issues. The Company is using a combination of
internal and external resources to assess the needed changes to its various
information systems. At present, Giant does not have an estimate of the total
costs of evaluating and correcting any potential problems and is unable to
determine if such expenses will be material. The costs associated with
addressing these issues will be expensed as incurred.

New Accounting Standard
Financial Accounting Standards Board Statement No. 131, "Disclosure About
Segments Of an Enterprise and Related Information" ("SFAS No. 131"), is
effective for the year ended December 31, 1998. The implementation of this
standard will not have a material impact on the Company's financial statements.
In accordance with SFAS No. 131, the Company will continue to report a single
business segment.

Environmental Matters
The Company's operations and properties are subject to extensive and
changing federal, state and local laws (including common law), regulations and
ordinances relating to noise and dust suppression, air and water quality, as
well as to the handling, treatment, storage and disposal of wastes
("Environmental Laws"). In connection with the Company's quarry sites and
utilization of hazardous waste-derived fuel, Environmental Laws require certain
permits and other authorizations mandating procedures under which the Company
shall operate. Environmental Laws also provide significant penalties for
violators, as well as liabilities and costs of cleaning up releases of
hazardous wastes into the environment. Violations of the permit conditions or
of the regulations, even if immaterial or unintentional, may result in fines,
shutdowns, remedial actions or revocation of the permits, the loss of any one
of which could have a material adverse effect on the Company's financial
condition or results of operations. In 1997, resource recovery services
revenues totaled $15.9 million or 13.6% of consolidated revenues.

While the Company endeavors to maintain full compliance with the
environmental laws and regulations at all times, violations have occurred in
the past and there is no assurance violations will not occur in the future, due
to the inherent complexity and differing interpretations of the laws and
regulations. The Company maintains environmental liability insurance with
limits of $5.0 million per occurrence and $10.0 million annual aggregate at
each of its cement manufacturing facilities. These policies cover certain
off-site environmental damage. The policies do not cover liabilities arising
under CERCLA, fines or penalties, and thus the Company has no claims for
recovery of these items.

On December 8, 1997, the resource recovery operation at Keystone Cement
Company, a wholly-owned subsidiary of Giant Cement Holding, Inc., experienced a
fire at its waste fuel storage tank farm. There were no injuries and no known
environmental damage. Only very minimal damage to equipment at the plant
occurred.

Immediately after the incident, Keystone ceased utilization of waste fuels
and later entered into a negotiated consent agreement with the Department of
Environmental Protection (DEP) of the State of Pennsylvania to halt the use of
waste fuels at its plant pending an investigation of the cause and
determination of the appropriate corrective actions to ensure that a similar
incident does not occur in the future. A report on the findings and recommended
corrective actions was submitted to the DEP on December 31, 1997. Management
has estimated that costs relating to this matter will total $1.4 million, which
costs were fully accrued at December 31, 1997. Keystone and the DEP are
negotiating to resolve all outstanding alleged violations of environmental
statutes. The Company believes the interruption of its waste fuel business is
covered by insurance; however, no amounts have been recorded for this recovery
pending further evaluation of the claim and the ability to estimate the
amounts, if any, that may be recovered.

64
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES' SELECTED
HISTORICAL FINANCIAL INFORMATION

The following consolidated selected financial data with respect to Solite
Corporation and Subsidiaries' financial position and its results of operations
for each of the five years in the period ended March 31, 1997 set forth below
has been derived from Solite Corporation and Subsidiaries' audited consolidated
financial statements. The selected financial data as of and for the nine months
ended December 31, 1997 and 1996 have been derived from unaudited financial
statements included herein. The consolidated selected financial data presented
below should be read in conjunction with such audited consolidated financial
statements and related notes and the other information set forth in this Proxy
Statement/Prospectus. See "SOLITE MANAGEMENT'S DISCUSSION AND ANLAYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS."

<TABLE>
<CAPTION>
Nine Months Ended Years Ended March 31,
---------------------------- ------------------------------------------------------------
December 31, December 31,
1997 1996 1997 1996 1995 1994 1993
-------------- ------------- ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data: (Unaudited) (In thousands)
Total revenues ........................ $ 49,672 $ 50,872 $ 66,779 $ 61,956 $ 68,062 $ 66,475 $ 61,160
Cost of sales ......................... 37,800 39,192 49,586 43,785 48,213 48,807 38,338
-------- -------- -------- --------- -------- -------- --------
Gross Profit .......................... 11,872 11,680 17,193 18,171 19,849 17,668 22,822
Selling, general and
administrative expenses .............. 12,030 12,404 19,376 20,623 23,160 23,665 20,664
-------- -------- -------- --------- -------- -------- --------
Operating income (loss) ............... (158) (724) (2,183) (2,452) (3,311) (5,997) 2,158
Interest expense ...................... (1,908) (1,961) (2,611) (2,978) (3,312) (2,990) (2,699)
ther, net (1) ........................ 2,768 965 708 (1,973) 5,618 927 1,435
-------- -------- -------- --------- -------- -------- --------
Income (loss) before taxes ............ 702 (1,720) (4,086) (7,403) (1,005) (8,060) 894

Provision (benefit) for income
taxes ................................ 267 (292) (696) (512) (233) (2,940) 319
-------- -------- -------- --------- -------- -------- --------

Net income (loss) ..................... $ 435 $ (1,428) $ (3,390) $ (6,891) $ (772) $ (5,120) $ 575

======== ======== ======== ========= ======== ======== ========

Depreciation and amortization ......... $ 2,879 $ 3,299 $ 4,095 $ 4,325 $ 5,059 $ 5,151 $ 4,867
Capital expenditures .................. 1,494 1,433 1,384 774 2,168 5,162 3,208

Balance Sheet Data (at period
end):
Working capital (deficit) ............. $ (9,052) $(12,914) $ (13,851) $ (12,617) $ 16,119 $ 17,269 $ 17,525
Total assets .......................... 47,717 54,779 54,054 57,290 66,400 71,893 73,893
Total debt ............................ 20,662 25,903 27,001 28,053 33,267 38,927 36,751
Shareholders' equity .................. 15,181 16,531 14,692 18,048 21,914 22,553 26,732

</TABLE>

65
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Nine month period ended December 31, 1997 versus nine month period ended
December 31, 1996
For the nine months ended December 31, 1997 revenues were $49.7 million,
as compared to $50.9 million in the comparable 1996 period, which represents a
decrease of $1.2 million or 2.4%. The decline was due primarily to the sand and
gravel operations which, prior to the sale of the bulk of the operations in
August 1997, shipped 26% less than the comparable period of the prior year.

Gross profit increased to $11.9 million or 23.9% of revenue for the nine
months ended December 31, 1997 from $11.7 million or 23.0% of revenue for the
nine months ended December 31, 1996. The increase, totaling $190,000, is due
primarily to reduced costs of sales of lightweight aggregate offset by
increased costs in the resource recovery operations compared with the prior
year period.

Selling, general and administrative costs decreased $374,000 or 3.0% to
$12.0 million for the nine months ended December 31, 1997, from $12.4 million
through December 31, 1996, as a result of various cost cutting measures in the
corporate overhead department, including lower compensation costs compared to
the prior year period. Selling, general and administrative costs as a
percentage of revenues were 24.2% compared to 24.4% in the comparable prior
year period.

Interest expense decreased $53,000 due to the reduction of debt as a
result of the sale of the bulk of the sand and gravel assets. Other income of
$2.8 million in the 1997 period includes a $2.8 million gain on the sale of
substantially all of Solite Corporation and Subsidiaries' sand and gravel
business. Other income of $1.0 million in the 1996 period included gains on the
sale of assets of $812,000.

Net income of $435,000 through December 31, 1997, increased $1.9 million,
compared with a loss of $1.4 million during the same period of last year,
primarily as a result of the $2.8 million pretax gain on the sale of the sand
and gravel business.

Fiscal year ended March 31, 1997 versus Fiscal year ended March 31, 1996
Operating revenue increased 7.8% to $66.8 million in fiscal year ended
March 31, 1997 compared to $62.0 million in fiscal year ended March 31, 1996.
Revenues from the lightweight aggregate operations increased $1.2 million
compared to the prior year as a result of higher average selling prices.
Masonry Block operating revenue increased $2.1 million, or 13.7% due to higher
average selling prices combined with a 9% increase in sales units. Resource
recovery operating revenue increased 3% over the prior year as a result of
higher average prices.

Higher operating costs in the lightweight aggregate and resource recovery
operations resulted in a decline in gross profit from $18.2 million in 1997 to
$17.2 million in 1996, a decrease of 5.4%. The gross margin percentage declined
from 29% to 26% primarily as a result of higher operating and repair costs in
1997 in the lightweight aggregate operations, and increased waste disposal
costs.

Selling, general and administrative costs declined $1.2 million to $19.4
million in 1997 from $20.6 million in the prior year, a decrease of 6.0%,
primarily due to reductions in permit acquisition costs in the lightweight
aggregate operations, reduced corporate overhead and a decline in health
insurance costs of $181,000.

Operating loss decreased to $2.2 million in 1997 from $2.5 million in
1996, primarily as a result of lower selling, general and administrative costs.
Interest expense declined by $367,000 due to lower average outstanding debt.

Other income in 1997 includes gains on the sale of assets of $810,000.
Other expense in 1996 includes charges of $2.0 million to recognize impairment
in the value of the long-lived assets associated with the Florida lightweight
aggregate manufacturing facility.

Federal and state income tax benefits were recorded to the extent that
deferred tax assets are expected to be realized. Net loss declined by $3.5
million or 51% to $3.4 million in 1997 from $6.9 million in 1996 primarily as a
result of lower charges for the impairment of asset values and higher gains on
the sale of assets.

66
<PAGE>

Liquidity and Capital Resources
Solite Corporation and Subsidiaries' lightweight aggregate and block
operations are directly related to the construction industry. Sales of
construction related products have historically been highly cyclical,
experiencing peaks and valleys in demand corresponding to regional and national
construction cycles. Additionally, the demand for Solite's construction related
products is seasonal because construction activity diminishes in the winter
months.

Solite Corporation and Subsidiaries' liquidity requirements arise
primarily from the funding of capital expenditures, debt service obligations
and working capital needs. In 1993 and 1994 Solite Corporation and Subsidiaries
increased its debt for general working capital needs as well as for capital
expenditures, particularly for improved emission control and monitoring
equipment. Losses incurred over the past several years, primarily in the
non-core businesses to be included in the Spin-Off, combined with increased
debt service requirements, have negatively affected Solite Corporation and
Subsidiaries' liquidity and resulted in repeated events of default due to
failure to meet several lender financial covenants requirements. Solite
Corporation and Subsidiaries has received waivers and amendments to cure these
events of default and has received several extensions of final debt maturities.
As a result of the defaults and extensions all revolving credit lines, lines of
credit and senior notes have been classified as current at each balance sheet
date. For the past five years, Solite Corporation and Subsidiaries has met its
capital needs through sales of assets, borrowing and the sales of preferred
stock. As of December 31, 1997 Solite Corporation and Subsidiaries are in
default of their Credit Agreements and Note Agreements. Two of Solite
Corporation and Subsidiaries' lenders have agreed, and the third lender is
expected to agree, to grant forebearance through April 30, 1998, subject to the
merger transaction with Giant proceeding.

Cash and cash equivalents totaled $2.8 million at December 31, 1997
compared with $1.5 million at March 31, 1997. At December 31, 1997 and March
31, 1997, Solite Corporation and Subsidiaries had a deficit in working capital
of $9.1 million and $13.9 million, respectively, with current ratios of 0.72
and 0.65, respectively. Inventories decreased $2.6 million or 20.0% to $10.5
million at December 31, 1997. The decrease is primarily due to inventories of
$1.5 million which were sold in conjunction with the sale of the sand and
gravel business. Accounts payable decreased $347,000 or 4.1%, from $8.5 million
at March 31, 1997 to $8.1 million at December 31, 1997. Current maturities of
debt decreased $6.3 million to $20.7 million at December 31, 1997, compared
with $26.9 million at March 31, 1997, as a result of the sale of the sand and
gravel assets. Total current liabilities decreased $6.7 million, or 17.2% to
$32.5 million at December 31, 1997, as compared with $39.3 million at March 31,
1997.

Cash provided by operations for the nine month period ended December 31,
1997 was $1.6 million compared with $3.2 million for the nine months ended
December 31, 1996. The decrease in cash provided by operations was primarily
due to the lower operating results exclusive of the $2.8 million gain on the
sale of assets. Net cash provided by investing activities was $6.1 million for
the nine months ended December 31, 1997 compared with net cash used of $773,000
in the nine months ended December 31, 1996, primarily as a result of $7.7
million of proceeds from the sale of assets. Net cash used by financing
activities increased to $6.3 million for the 1997 period compared with $2.3
million for the nine months ended December 31, 1996. Solite repaid $6.6 million
of its debt in the 1997 period as compared with $2.2 million in the 1996
period.

Solite Corporation and Subsidiaries has had recurring operating losses,
primarily as a result of losses in the businesses to be included in the
Spin-Off prior to the Merger. The consolidated net loss for the fiscal year
ended March 31, 1997 was $3.4 million. As a result of the continuing losses,
Solite Corporation and Subsidiaries is dependent on external financing or asset
sales to continue as a going concern. Solite Corporation and Subsidiaries has
repeatedly defaulted on various terms of its financing arrangements, all of
which defaults have previously been waived by Solite Corporation and
Subsidiaries' lenders. The maturity dates of Solite Corporation and
Subsidiaries' debt have been extended numerous times over the past five years,
most recently to between December 31, 1997 and January 31, 1998 in
contemplation of the merger of Solite and Giant. Two of Solite Corporation and
Subsidiaries' lenders have agreed, and the third lender is expected to agree,
to grant forbearance through April 30, 1998, subject to the merger transaction
with Giant proceeding. During the fiscal quarter ended September 30, 1997,
Solite Corporation and Subsidiaries sold substantially all of the assets of its
sand and gravel business. The proceeds from the sale were used primarily to
retire debt. Solite Corporation and Subsidiaries has entered into a definitive
agreement to merge with Giant as discussed in Note 1 of the Solite Corporation
and Subsidiaries' Notes to Financial Statements. Solite Corporation and
Subsidiaries' ability to continue its operations as a going concern is
dependent upon its plans to merge with Giant or upon its lenders for continued
financing. There can be no assurance that Solite Corporation and Subsidiaries'
lenders will continue to grant waivers of defaults, extensions of maturity
dates or allow Solite Corporation and Subsidiaries to borrow additional funds.

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As a result of the Spin-Off, Solite Corporation and Subsidiaries'
shareholders will receive stock in Northeast Solite. On a historical basis,
Northeast Solite has incurred substantial operating losses including $4.7
million for the twelve-months ended December 31, 1997 and $5.7 million for the
fiscal year ended March 31, 1997. Northeast Solite's ability to continue as a
going concern may require additional external financing, which has yet to be
secured. At December 31, 1997, Northeast Solite's only source of financing was
a $1.9 million credit facility provided by John Roberts, who will be Northeast
Solite's controlling stockholder, with $1.5 million outstanding.

Northeast Solite's operating losses were due primarily to losses at the
Florida and Kentucky lightweight aggregate operations, coal and sand and gravel
operations. In response to these losses, management has permanently
discontinued operations at its Florida lightweight aggregate facility, and
significantly reduced operations at its Kentucky lightweight aggregate facility
and its coal operations. In addition, the company has completed the sale of the
bulk of its sand and gravel operations, the proceeds from which were utilized
to substantially reduce Northeast's debt and interest costs. It is Northeast's
intent that most, if not all, of the Florida property will be sold within the
next three years. In addition, if profitable operations cannot be resumed
within the next year, Northeast may sell its coal properties, its remaining
sand and gravel assets, and its Kentucky lightweight aggregate facility.

Northeast is currently discussing financing alternatives with several
banks. It is management's intent that Northeast will enter into a credit
agreement providing for a working capital line of credit and a revolver or term
loan, however, there can be no assurance that Northeast will be able to obtain
external financing.

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TERMS OF THE MERGER AGREEMENT

The following is a summary of the material provisions of the Merger
Agreement. This summary is qualified in its entirety by reference to the
complete text of the Merger Agreement, which is attached hereto as Annex IV and
incorporated by reference herein.

The Merger; Exchange and Conversion of Shares

Pursuant to and subject to the terms and conditions of the Merger
Agreement, at the Effective Time, Merger Sub will be merged with and into
Solite. Solite will be the surviving corporation in the Merger. At the
Effective Time, each outstanding share of Solite Common Stock, other than
shares as to which the holders have perfected their dissenters' rights under
the VSCA, will be converted into the right to receive the number of shares of
Giant Common Stock equal to the quotient derived by dividing (i) 175,000 shares
of Giant Common Stock by (ii) the total number of shares of Solite Common Stock
outstanding as of the Effective Time, including all shares of Solite Common
Stock issuable upon conversion of the Solite Preferred Stock.

The holders of shares of Solite Stock as to which dissenter's rights shall
have been duly demanded under applicable law shall be entitled to payment by
Solite only of the fair value of such shares plus accrued interest to the
extent permitted by and in accordance with the provisions of applicable law;
provided, however, that if any holder fails to establish such holder's
entitlement to rights to payment as provided under applicable law, such holder
or holders (as the case may be) shall forfeit such right to payment for such
shares and such shares shall thereupon be deemed to have been converted into
Giant Common Stock as of the Effective Time. See "THE MERGER-- Dissenters'
Rights."

No fractional shares of Giant Common Stock will be issued in connection
with the Merger. If a holder of shares of Solite Common Stock would otherwise
be entitled at the Effective Time to a fraction of a share of Giant Common
Stock, such holder will be entitled to receive from Giant an amount in cash in
lieu of such fractional share of Solite Common Stock, determined by multiplying
(i) the fractional interest to which such holder would otherwise be entitled
and (ii) the average of the closing bid and ask prices of Giant Common Stock on
the Nasdaq National Market for the twenty trading days immediately preceding
the Closing. The payment of cash in lieu of fractional shares is solely for the
purpose of avoiding the expense and inconvenience to Giant of issuing
fractional shares and does not represent separately bargained-for
consideration.

Shares of Giant Common Stock to be Held in Escrow

Pursuant to the Merger Agreement, an additional 150,000 shares of Giant
Common Stock will be placed in escrow upon consummation of the Merger.

75,000 of such shares would be returned to Giant and cancelled if, as of
the Effective Time, the consolidated net book value (as defined in the Merger
Agreement) of Solite is $2.8 million or less or the net current assets (as
defined in the Merger Agreement) of Solite are $3.3 million or less. If such
consolidated net book value is more than $4.5 million and such net current
assets are more than $5 million, all such 75,000 shares would be distributed to
the persons who were holders of Solite Common Stock immediately prior to the
Merger (including holders of Solite Preferred Stock that were converted into
Solite Common Stock, but excluding holders who have perfected their dissenters'
rights under the VSCA) on the basis of each such share of Solite Common Stock
entitling such former holder to the number of shares of Giant Common Stock
equal to the quotient derived by dividing 75,000 by the total number of shares
of Solite Common Stock outstanding as of the Effective Time. If such
consolidated net book value is more than $2.8 million but less than $4.5
million, or such net current assets are more than $3.3 million but less than $5
million, the shares of Giant Common Stock held pursuant to such escrow shall be
returned, in part, to Giant for cancellation and distributed, in part, to such
holders of Solite Common Stock on a formula basis with the Giant Common Stock
returned valued at $22 per share. The $22 per share valuation was determined by
Giant and Solite based upon the approximate market price per share of Giant
Common Stock on the date Giant and Solite negotiated the terms of the escrow,
the effect of which is to prevent Solite shareholders from benefiting from an
increase in the price of Giant Common Stock or detrimenting from a decrease in
the price of Giant Common Stock, on shares that ultimately are returned to
Giant pursuant to the terms of the Merger Agreement.

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Common Stock held in escrow shall be released on the second anniversary of the
Effective Time, and unless any claim or claims by Giant are then pending, the
balance of the shares of Giant Common Stock held in escrow shall be released on
the third anniversary of the Effective Time.

Exchange of Share Certificates
At the Effective Time, certificates representing shares of Solite Common
Stock ("Solite Certificates") will be deemed to represent solely the right to
receive the number of shares of Giant Common Stock, and the amount of cash, if
any, in lieu of any fractional shares of Giant Common Stock, determined as
described above. Until shares of Solite Common Stock are converted into shares
of Giant Common Stock, such shares of Solite Common Stock will have no voting
rights with respect to matters considered by Giant's shareholders.

Effective Time
The Effective Time of the Merger, at which time the Merger will become
effective, will be the time a Certificate of Merger is issued by the Virginia
SCC or such later time as specified in the Articles of Merger. The Effective
Time is expected to occur as soon as practicable following the closing of the
transactions contemplated by the Merger Agreement. See "--Termination Rights"
and "--Conditions to the Merger."

Termination Rights
The Merger Agreement may be terminated at any time prior to the Effective
Time, whether before or after the approval by the shareholders of Solite:

(a) by mutual consent of Giant and Solite; or

(b) by either Giant or Solite, if (i) the Merger shall not have been
consummated on or before April 30, 1998; or

(c) by Giant, if (i) there has been a breach in any material respect of
any representations or warranties of Solite, (ii) there has been a
breach in any material respect of any of the covenants or agreements
set forth in the Merger Agreement on the part of Solite, which breach
is not curable or, if curable, is not cured within 30 days after
written notice of such breach is given by Giant to Solite, (iii) the
Board of Directors of Solite (x) withdraws or amends or modifies in a
manner adverse to Giant or Merger Sub its recommendation or approval
in respect of the Merger Agreement or the Merger, (y) makes any
recommendation with respect to an Acquisition Transaction (including
making no recommendation or stating an inability to make a
recommendation), other than a recommendation to reject such
Acquisition Transaction, or (z) breaches the No Solicitation
Agreement in any material respect, (iv) any Acquiring Person other
than John W. Roberts, any member of Mr. Roberts' family, any trust
for the benefit of Mr. Roberts and/or any member or members of his
family, any legal representatives of any of the foregoing, Giant, or
any affiliate or Subsidiary of Giant, shall have become the
beneficial owner of 331/3% or more of the outstanding voting equity
of Solite (either on a primary or a fully diluted basis), or (v) any
other Acquisition Transaction shall have occurred with any Acquiring
Person other than the Giant, or any affiliate or Subsidiary of Giant;
or

(d) by Solite, if (i) there has been a breach in any material respect of
any representations or warranties of Giant or the Merger Sub, (ii)
there has been a breach in any material respect of any of the
covenants or agreements set forth in the Merger Agreement on the part
of Giant or Merger Sub, which breach is not curable or, if curable,
is not cured within 30 days after written notice of such breach is
given by Solite to Giant, or (iii) such termination is necessary to
allow Solite to enter into an Acquisition Transaction (provided that
such termination shall not be effective unless and until Solite shall
have paid to Giant in full the termination fee).

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Upon termination, the Merger Agreement shall become void and have no
effect, and there shall be no liability thereunder on the part of Giant, Merger
Sub or Solite, except as provided below:

(a) the provisions governing costs and expenses shall survive any
termination of the Merger Agreement; and

(b) If (x) Giant shall have terminated the Merger Agreement under the
circumstances described in paragraph 1(c)(iii),(iv) or (v) or (y)
either (1) Solite shall have terminated the Merger Agreement under
the circumstances described in paragraphs 1(b) or (2) Giant shall
have terminated the Merger Agreement under the circumstances
described in paragraph 1(c)(i) or (ii) and, prior to or within six
(6) months after any termination described in this clause (y), Solite
(or any of its Subsidiaries) shall have directly or indirectly
entered into a definitive agreement for, or shall have consummated,
an Acquisition Transaction, or (z) Solite shall have terminated the
Merger Agreement under the circumstances described in paragraph 1(f),
then, in any of such cases, Solite shall pay Giant a termination fee
of one million seven hundred fifty thousand dollars ($1,750,000).

Giant has waived the Termination Fee in connection with Solite's efforts
to determine whether there are alternative purchasers for certain of its assets
pursuant to procedures specified by the Antitrust Division. See "THE
MERGER--Regulatory Filings and Approvals."

Certain Fees and Expenses
Except as provided in "Termination Rights" above, whether or not the
Merger is consummated, all costs and expenses incurred in connection with the
Merger Agreement (including the exhibits and schedules thereto) and the
transactions contemplated thereby shall be paid by the party incurring such
expenses, except that all costs and expenses incurred in connection with the
Spin-Off shall be paid by Northeast Solite.

Conditions to the Merger
The parties' obligations to effect the Merger are subject to the
satisfaction or waiver at or prior to the Effective Time of various conditions,
including: (i) approval of the Merger Agreement, the Merger and related
transactions by the requisite holders of the Solite Common Stock in accordance
with applicable law and Solite's articles of incorporation and by-laws; (ii)
the effectiveness of the Registration Statement and the absence of stop order
or proceeding for a stop order; (iii) any waiting period (and any extension
thereof) under the HSR Act applicable to the Merger having expired or been
terminated and any action by the Department of Justice or FTC challenging or
seeking to enjoin the Merger having been withdrawn or terminated; (iv) no
preliminary or permanent injunction, statute, rule, regulation, executive
order, decree, or other order having been issued or enacted by any court or by
any governmental or regulatory agency, body or authority which enjoins,
restrains or prohibits the consummation of the Merger; (v) no opinion from
counsel to Giant, Merger Sub or Solite having been obtained to the effect that
as a result of a change in law the Spin-Off will no longer qualify as a
reorganization within the meaning of Section 368(a) of the Code and (vi) Solite
having obtained a ruling from the Internal Revenue Service, in form and
substance satisfactory to counsel for Solite and Giant, to the effect that the
Spin-Off will qualify as nontaxable to Solite and its shareholders under
Section 368(a)(1)(D) and Section 355 of the Code (except to the extent of any
gain recognized under Section 357(c) of the Code).

Further conditions precedent to the obligations of Giant and Merger Sub to
effect the Merger are: (i) the representations and warranties of Solite being
true and correct in all material respects; (ii) the performance in all material
respects of all obligations of Solite contained in the Merger Agreement to be
performed by it prior to the Effective Time; (iii) all material consents,
waivers, approvals, authorizations required to be obtained, and all filings
required to be made by Solite, having been obtained or made by Solite; (iv) no
action or proceeding by any governmental authority or administrative agency
having been instituted, pending, threatened seeking to limit Giant from
exercising all material rights and privileges pertaining to its ownership of
the surviving entity or the ownership or operation by Giant or its subsidiaries
of all or a portion of the business or assets of Giant or any of its
subsidiaries as a result of the Merger or the transactions contemplated by the
Merger Agreement; (v) Giant having received the opinion of McGuire Woods Battle
& Boothe LLP; (vi) all persons who are "affiliates" of Solite for purposes of
Rule 145 under the Securities Act having delivered an Affiliate Agreement in
the form attached as an exhibit to the Merger Agreement with respect to Rule
145 of the Securities Act requirements; (vii) Giant having received from the
persons who each hold 1% or more, and who hold at least 70% of the outstanding
shares of Giant Common

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Stock to be issued in connection with the Merger a Giant Shareholder Agreement
in the form attached as an exhibit to the Merger Agreement; (viii) Giant having
received from persons who each hold 1% or more, and who hold in the aggregate
at least 50% of the total outstanding shares of capital stock of Northeast
Solite to be issued in connection with the Spin-Off a Northeast Shareholder
Agreement in the form attached as an exhibit to the Merger Agreement; (ix)
Solite and Northeast Solite having executed and delivered the Escrow Agreement
in the form attached as an exhibit to the Merger Agreement; (x) Solite having
executed and delivered the Indemnity Escrow Agreement in the form attached as
an exhibit to the Merger Agreement; (xi) Giant having received from Northeast
Solite the Northeast Agreement in the form attached as an exhibit to the Merger
Agreement; (xii) there having been no change, circumstance or occurrence in the
business, properties, results of operations or financial condition of Solite or
any of its Subsidiaries which had or is reasonably likely to have a material
adverse effect on the business, properties or results of operations of Solite
or its Subsidiaries, taken as a whole; (xiii) John W. Roberts having entered
into the Market Stand-Off Agreement in the form attached as an exhibit to the
Merger Agreement; (xiv) there having been no Phase II assessment report(s)
which disclose any environmental conditions with respect to Solite's business,
assets or the Real Property that present or is reasonably likely to give rise
to any material Environmental Liabilities not reflected in Solite's March 31,
1997 audited financial statements; (xv) Giant having received from Northeast
Solite a Tax Provisions Agreement in the form attached as an exhibit to the
Merger Agreement; (xvi) Giant having received from Northeast Solite the
Indemnity Agreement in the form attached as an exhibit to the Merger Agreement;
(xvii) Giant having received a letter of resignation and the Noncompetition
Agreement from John W. Roberts in the form attached as an exhibit to the Merger
Agreement; (xviii) Solite having caused the Solite Preferred Stock to be
converted into Solite Common Stock; (xix) Giant having received the statement
that Solite was not a U.S. real property holding corporation during the
previous five years; (xx) there having been no redemption or other acquisition
of Solite capital stock by Solite for cash or other consideration in excess of
$10,000 in the aggregate; (xxi) Northeast Solite having executed and delivered
the Services Agreement in the form attached as an exhibit to the Merger
Agreement; (xxii) Northeast Solite having executed and delivered the
Non-Competition Agreement in the form attached as an exhibit to the Merger
Agreement; and (xxiii) Solite having been released from (x) its guaranty of any
and all obligations of Northeast Solite and/or its Subsidiaries to John W.
Roberts and (y) any and all past or prospective obligations under the Lease
Agreement dated July 1994 between Solite and John W. Roberts for sand and
gravel property, mineral extraction and plant site rent.

Further conditions precedent to the obligations of Solite to effect the
Merger are: (i) the representations and warranties of Giant and Merger Sub
being true and correct in all material respects; (ii) the performance in all
material respects of all obligations of Giant and Merger Sub contained in the
Merger Agreement to be performed or complied with prior to the Effective Time;
(iii) all material consents, waivers, approvals, authorizations required to be
obtained, and all filings required to be made by Giant, having been obtained or
made by Giant; (iv) Solite having received (x) the opinion of CoView Capital to
the effect that consideration to be paid pursuant to the Merger Agreement is
fair, from a financial point of view, to Solite and its Shareholders, and (y)
the opinion of FBW that the conversion of Solite Preferred Stock is fair, from
a financial point of view, to Solite and its Shareholders; (v) Solite having
received the opinions of McGuire Woods Battle & Boothe LLP and Proskauer Rose
LLP to the effect that the Merger qualifies as a reorganization within the
meaning of Section 368(a) of the Code; (vi) Giant having executed and delivered
the License Agreement in the form attached as an exhibit to the Merger
Agreement; (vii) there having been no change, circumstance or occurrence in the
business, results of operations or financial condition of Giant or any of its
Subsidiaries which had or is reasonably likely to have a material adverse
effect on the business, properties or results of operations of Giant or its
subsidiaries, taken as a whole; (viii) Solite having received the opinions of
Proskauer Rose LLP and Hunton & Williams; (ix) Northeast Solite having received
from Giant the Tax Provisions Agreement in the form attached as an exhibit to
the Merger Agreement; (x) Giant having executed and delivered the Services
Agreement in the form attached as an exhibit to the Merger Agreement; (xi)
Giant having executed and delivered the Non-Competition Agreement in the form
attached as an exhibit to the Merger Agreement; and (xii) Giant having executed
and delivered the Northeast Agreement in the form attached as an exhibit to the
Merger Agreement.

Representations and Warranties
The Merger Agreement contains various customary representations and
warranties relating to, among other things, (i) each of Solite's and Giant's
organization, capital structure and similar corporate matters, (ii) the
financial statements of each of Solite and Giant, (iii) the authorization of
the Merger Agreement by each of Solite and Giant and related matters, (iv) the
absence of any conflicts under charters or by-laws, receipt of required
consents or

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approvals, and absence of violations of any instruments or law, (v) documents
filed by Solite and Giant with the SEC and the accuracy of information
contained therein, (vi) the absence of a material adverse change in the
business, properties, assets, liabilities, operations, results of operations or
condition (financial or otherwise) of Solite and its subsidiaries taken as a
whole and Giant and its subsidiaries taken as a whole, each since certain
specified dates, (vii) in the case of Solite, Employee Benefit Plans (as
defined in the Merger Agreement) and ERISA matters, (viii) in the case of
Solite, certain environmental matters, (x) litigation, (xi) compliance with
law, (xii) in the case of Solite, the shareholders' vote required and (xiii)
broker's or finder's fees. The representations and warranties in the Merger
Agreement shall survive the Effective Time.

Certain Covenants of Solite
Solite has agreed, among other things, to use its reasonable best efforts
to (i) terminate as of the Effective Time the agreements with each of the
persons specified in a schedule to the Merger Agreement; (ii) cause each
"affiliate" of Solite for purposes of Rule 145 under the Securities Act to
deliver to Giant an Affiliate Agreement in the form attached as an exhibit to
the Merger Agreement; (iii) cause Northeast Solite to deliver to Solite the
Northeast Agreement in the form attached as an exhibit to the Merger Agreement;
and (iv) cause all outstanding shares of Solite Preferred Stock to be converted
into Solite Common Stock.

Certain Covenants of Solite and Giant
Prior to the Effective Time, each of Solite and Giant and their respective
subsidiaries have agreed that they will afford to the other and to the other's
representatives reasonable access to its properties, books and records during
normal business hours. Unless otherwise required by law, each of Solite and
Giant agrees that it (and its respective subsidiaries and representatives)
shall hold in confidence all non-public information so acquired. Giant has the
right to retain an environmental consultant reasonably acceptable to Solite to
undertake further environmental assessment of the Real Property, and Solite's
business and assets, including a Phase II assessment. In addition, both Solite
and Giant have agreed to cooperate in filing the Registration Statement of
which this Proxy Statement/Prospectus is a part and to use their best efforts
to procure its effectiveness.

Indemnity Provisions
The Merger Agreement provides that from and after the Closing, Northeast
Solite and, to the extent solely of shares of Giant Common Stock deposited in
escrow, the Solite shareholders shall indemnify Giant, Merger Sub and Solite
and their respective affiliates, directors, officers, employees, agents and
representatives and all of their successors and assigns (collectively, the
"Claimants") from all Losses (as defined in the Merger Agreement) asserted
against, imposed upon or incurred by the Claimants resulting from or arising
out of (i) any inaccuracy or breach of any representation or warranty of Solite
contained in the Merger Agreement; (ii) any breach of any covenant or
obligation of Solite in the Merger Agreement; (iii) any breach of any covenant
or obligation of Northeast Solite in the Indemnity Agreement; (iv) certain
Losses resulting from the ownership, use, lease, occupancy or operation of any
Real Property (as defined in the Merger Agreement); (v) any breach of any
covenant or obligation of Northeast Solite contained in the Tax Provisions
Agreement; or (vi) any liability or obligation of Northeast Solite, whether
incurred prior to or after the Effective Time. The indemnity obligation will
arise only if the aggregate claims are in excess of $250,000, and with respect
to the first $250,000 of aggregate claims, be limited to $125,000.

No Solicitation of Other Offers
Prior to the Effective Time, Solite agrees that neither it, any of its
subsidiaries or its affiliates, nor any of the respective directors, officers,
employees, agents or representatives of the foregoing will, directly or
indirectly, solicit, initiate, facilitate or encourage any inquiries or the
making of any proposal with respect to any merger, consolidation or other
business combination involving the Core Business or the acquisition of capital
stock of Solite or any Subsidiary constituting part of the Core Business or all
or any significant assets of the Core Business (an "Acquisition Transaction")
or negotiate, explore or otherwise engage in discussions with any person (other
than Giant and its representatives) with respect to any Acquisition
Transaction, or enter into any agreement, arrangement or understanding with
respect to any such Acquisition Transaction or which would require it to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by the Merger Agreement; provided, however, that Solite may, in
response to an unsolicited written proposal from a third party, furnish
information to and engage in discussions with such third party, in each case
only if the Board of Directors of Solite determines in good faith, by majority
vote after consultation with its financial advisor and based upon the advice of
outside

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counsel, that failing to take such action would result in a breach of the
fiduciary duties of the Board of Directors and, prior to taking such action,
Solite (x) provides reasonable notice to Giant to the effect that it is taking
such action and (y) receives from such corporation, partnership, person or
other entity or group (and delivers to Giant) a confidentiality agreement in a
customary form.

Solite agrees that it, its Subsidiaries and affiliates, and respective
directors, officers, employees, agents and representatives of the foregoing,
shall immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any third party with respect to any
Acquisition Transaction. Solite will immediately advise Giant in writing of any
inquiries or proposals (or desire to make a proposal) received by, (or
indicated to), any such information requested from, or any such negotiations or
discussions sought to be initiated or continued with, any of it, its
Subsidiaries or affiliates, or any of the respective directors, officers,
employees, agents or representatives of the foregoing, in each case from a
person (other than Giant and its representatives) with respect to an
Acquisition Transaction, and the terms thereof, including the identity of such
third party, and to update on an ongoing basis or upon Giant's request any
actions taken or other developments.

The Solite Board shall not (i) withdraw or modify, or propose to withdraw
or modify, in a manner adverse to Giant or Merger Sub, the approval or
recommendation by the Solite Board of the Merger Agreement, (ii) approve or
recommend, or propose to approve or recommend, any Acquisition Transaction, or
(iii) cause Solite to enter into any agreement with respect to any Acquisition
Transaction. Notwithstanding the foregoing, in the event that prior to the
Effective Time the Solite Board determines in its good faith reasonable
judgment, by a majority vote, after consultation with its financial advisors,
that the Acquisition Transaction is more favorable to the shareholders of
Solite than the Merger and, based upon the advice of outside counsel to Solite,
that such action is required by the fiduciary duties of the Solite Board, the
Solite Board may withdraw or modify its approval or recommendation of the
Merger Agreement and the Merger, approve or recommend such Acquisition
Transaction or cause Solite to enter into an agreement with respect to such
Acquisition Transaction, but only if Solite gives Giant at least five business
days' prior written notice thereof, during which time Giant may make, and, in
such event, Solite shall in good faith consider, a counter proposal to such
Acquisition Transaction.

Giant has waived the no solicitation provisions of the Merger Agreement in
connection with Solite's efforts to determine whether there are alternative
purchasers for certain of its assets pursuant to procedures specified by the
Antitrust Division. See "THE MERGER--Regulatory Filings and Approvals."

Amendments
At any time prior to the Effective Time, the Merger Agreement may be
amended in writing by the appropriate parties thereto with respect to any of
the terms of the Merger Agreement.

Ancillary Agreements
The obligations of Giant and Merger Sub to effect the Merger are subject
to the satisfaction at or prior to the Effective Time of the following
conditions, among others: (i) the receipt by Giant from all persons who are
"affiliates" of Solite for purposes of Rule 145 under the Securities Act of an
Affiliate Agreement in the form attached as an exhibit to the Merger Agreement;
(ii) the receipt by Giant from the persons who each hold 1% or more, and who
hold in the aggregate at least 50%, of the total outstanding shares of capital
stock of Northeast Solite of a Northeast Shareholder Agreement in the form
attached as an exhibit to the Merger Agreement; (iii) the receipt by Giant from
the persons who each hold 1% or more, and who hold in the aggregate at least
70%, of the total outstanding shares of Giant Common Stock to be issued in
connection with the Merger of a Giant Shareholder Agreement in the form
attached as an exhibit to the Merger Agreement; (iv) Solite and Northeast
Solite shall have executed and delivered the Escrow Agreement in the form
attached as an exhibit to the Merger Agreement; (v) Solite and Northeast Solite
shall have executed and delivered the Indemnity Escrow Agreement in the form
attached as an exhibit to the Merger Agreement; (vi) the receipt by Giant from
Northeast Solite of the Northeast Agreement in the form attached as an exhibit
to the Merger Agreement; (vii) the execution by John W. Roberts of the Market
Stand-Off Agreement in the form attached as an exhibit to the Merger Agreement;
(viii) the receipt by Giant from Northeast Solite of the Tax Provisions
Agreement in the form attached as an exhibit to the Merger Agreement; (ix) the
receipt by Giant from Northeast Solite of the Indemnity Agreement in the form
attached as an exhibit to the Merger Agreement; (x) the execution by John W.
Roberts of the Non-Competition Agreement in the form attached as an exhibit to
the Merger Agreement; (xi) the execution and delivery by Northeast Solite of
the Services Agreement in the form attached as an exhibit to the Merger
Agreement; and (xii) the execution and delivery by Northeast Solite

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of the Non-Competition Agreement in the form attached as an exhibit to the
Merger Agreement. The obligation of Solite to effect the Merger is subject to
the satisfaction at or prior to the Effective Time of the following conditions
among others: (i) the execution and delivery by Giant of the License Agreement
in the form attached as an exhibit to the Merger Agreement; (ii) the receipt by
Northeast Solite from Giant of the Tax Provisions Agreement in the form
attached as an exhibit to the Merger Agreement; (iii) the execution and
delivery by Giant of the Services Agreement in the form attached as an exhibit
to the Merger Agreement; (iv) the execution and delivery by Giant of the
Non-Competition Agreement in the form attached as an exhibit to the Merger
Agreement; and (v) the execution and delivery by Giant of the Northeast
Agreement in the form attached as an exhibit to the Merger Agreement.

Escrow Agreement. Contemporaneously with the execution and delivery of the
Escrow Agreement, Giant will deliver to the escrow agent a certificate
representing 75,000 shares of Giant Common Stock. Such shares will be held by
the escrow agent until it receives a written notice from Giant and Northeast
Solite directing the disposition of such shares. Under the terms of the Merger
Agreement, all, part, or none of 75,000 of such shares shall be distributed to
the persons who were holders of Solite Common Stock immediately prior to the
Merger (including holders of Solite Preferred Stock which was converted into
Solite Common Stock), depending upon whether, and the extent by which, as of
the effective time, Solite's consolidated net book value exceeds $2.8 million
and its net current assets exceed $3.3 million.

Indemnity Escrow Agreement. Contemporaneously with the execution and
delivery of the Indemnity Escrow Agreement, Giant will deliver to the escrow
agent a certificate representing 75,000 shares of Giant Common Stock. Such
shares will be held by the escrow agent until it receives a written notice from
Giant and Northeast Solite directing the disposition of such shares. Under the
terms of the Merger Agreement, such 75,000 shares are to be available to
satisfy the indemnification claims, if any, of Giant under the Merger
Agreement. Unless a claim or claims are then pending, in amounts in excess of
the then value of 37,500 shares of Giant Common Stock, 37,500 shares of Giant
Common Stock held in escrow shall be released on the second anniversary of the
Closing Date, and unless any claim or claims are then pending, the balance of
the shares of Giant Common Stock held in escrow shall be released on the third
anniversary of the Closing Date.

Affiliate Agreement. Pursuant to the Affiliate Agreement, each affiliate
of Solite that receives Giant Common Stock in the Merger, will agree not to
transfer such Giant Common Stock unless (i) the transfer is made in accordance
with Rule 145 and such affiliate shall have delivered a written notice to Giant
in the form attached as an exhibit to the Merger Agreement; (ii) Giant shall
have been furnished an opinion of counsel that registration under the
Securities Act is not required in respect of such transfer or (iii) a
registration statement covering the shares of Giant Common Stock proposed to be
transferred and the proposed transfer has been filed by Giant with the SEC and
has become effective under the Securities Act.

Northeast Shareholder Agreement. Pursuant to the Northeast Shareholder
Agreement, each holder of 1% or more, and who hold in the aggregate at least
50%, of the total outstanding capital stock of Northeast Solite will agree not
to sell, assign, transfer, pledge or otherwise encumber or dispose of for a
period of one year after the Effective Time (other than transfers to such
holder's estate or gifts) any shares of common stock of Northeast Solite held
by such holder. Any attempted transfer in violation of the terms and conditions
of the Northeast Shareholder Agreement shall be void ab initio.

Giant Shareholder Agreement. Pursuant to the Giant Shareholder Agreement,
each person that becomes the holder of 1% or more, and who hold in the
aggregate at least 70% of the total outstanding shares of Giant Common Stock to
be issued in connection with the Merger (a "One Percent Holder") will agree
that such holder does not and will not have any plan or intention to pledge,
sell, contract to sell, grant an option for the sale of, or otherwise dispose
of any shares of Giant Common Stock that such holder receives in connection
with the Merger. Notwithstanding the foregoing, a One Percent Holder, unless it
is the opinion of counsel for Giant that to do so would adversely affect the
tax-free nature of the Merger, may dispose of (i) during the one year period
after the Effective Time, a number of shares which together with all shares of
Solite Common Stock and Solite Preferred Stock disposed of by such One Percent
Holder prior to the Effective Time equal to not more than 50% of such One
Percent Holder's shares or (ii) before the Effective Time of a number of shares
of Solite Common Stock and/or Solite Preferred Stock, or a combination of the
two, equal in value to not more than 50% of the aggregate value of such One
Percent Holder's shares of Solite Common Stock and Solite Preferred Stock.

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Northeast Agreement. Pursuant to the Northeast Agreement, Giant and
Northeast Solite will agree that following the Spin-Off and the Merger they
will not take any action inconsistent with the private letter ruling request
made to the IRS and the private letter ruling issued in response thereto,
including but not limited to, for a period of one year from and after the
Effective Time discontinuing or substantially reducing certain of their
operations. In addition, Giant and Northeast Solite will agree that for a
period of five years from and after the Effective Time, it will not, directly
or indirectly, solicit any employee, or induce or attempt to induce any
employee to leave his or her employment with the other.

Market Stand-Off Agreement. Pursuant to the Market Stand-Off Agreement,
John W. Roberts will agree for a period of five years from the Effective Time
not to (i) make, or in any way participate in, directly or indirectly, any
solicitation of proxies to vote or consents; (ii) initiate or support, directly
or indirectly, any shareholder's proposal with respect to Giant; and (iii)
directly or indirectly make any public announcement with respect to, or submit
a proposal for any extraordinary transactions involving Giant or its securities
or assets. In addition, Mr. Roberts will agree to grant Giant a right of first
refusal while he is a director of Giant with respect to any sale of any shares
of Giant Common Stock held by Mr. Roberts.

Tax Provisions Agreement. The Tax Provisions Agreement provides for the
allocation of the responsibility for the payment of taxes of Solite and all of
its subsidiaries for the periods prior to and after the Merger.

Indemnity Agreement. The Idemnity Agreement provides that from and after
the Closing, Northeast shall indemnify Giant, Merger Sub and Solite and their
respective affiliates, directors, officers, employees, agents and
representatives and all of their successors and assigns (collectively, the
"Claimants") from all Losses (as defined in the Merger Agreement) asserted
against, imposed upon or incurred by the Claimants resulting from or arising
out of (i) any inaccuracy or breach of any representation or warranty of Solite
contained in the Merger Agreement; (ii) any breach of any covenant or
obligation of Solite in the Merger Agreement; (iii) any breach of any covenant
or obligation of Northeast in the Indemnity Agreement; (iv) certain Losses
resulting from the ownership, use, lease, occupancy or operation of any Real
Property (as defined in the Merger Agreement); (v) any breach of any covenant
or obligation of Northeast contained in the Tax Provisions Agreement; or (vi)
any liability or obligation of Northeast, whether incurred prior to or after
the Effective Time. In addition, from and after the Closiniates, directors,
officers, employees, agents and representatives, successors and assigns
(collectively, "Northeast Claimants") from and against any Losses asserted
against, imposed upon or incurred by Northeast Claimants resulting from or
arising out of any liability or obligation of Solite, whether incurred prior to
or after the Effective Time, provided any such Loss does not relate to any
matter as to which the Claimants may assert a claim. The liability of Northeast
will (i) arise only if the aggregate claims are in excess of $250,000, and with
respect to the first $250,000 of aggregate claims, be limited to $125,000 and
(ii) be limited to the amount of Claimants' Losses in excess of the value of
the shares of Giant Common Stock then held pursuant to the Escrow Agreement and
the Indemnity Escrow Account. The Indemnity Agreement will terminate with
respect to any claims not asserted prior to the fifth anniversary of the
Effective Time.

Roberts' Non-Competition Agreement. The Non-Competition Agreement provides
that John W. Roberts, for a period of five years from the Effective Time, will
not (i) compete with Giant in, or otherwise participate in, the lightweight
aggregate or lightweight block business in the states of Maryland, Virginia,
North Carolina, South Carolina, Georgia or Florida, (ii) directly or
indirectly, induce or attempt to induce, any employee to leave his or her
employment with Giant and (iii) solicit, divert, take away or attempt to take
away any of Giant's customers or suppliers or the business or patronage of any
such customers or suppliers or in any way interfere with Giant's relationships
with its customers and suppliers. The Non-Competition Agreement will not
restrict Northeast Solite or restrict Mr. Roberts from acting in his capacity
as a director or officer of Northeast Solite.

License Agreement. Pursuant to the License Agreement, Solite will grant
Northeast Solite the royalty-free right to use certain names and marks owned by
Solite in connection with the businesses of Northeast Solite and its sale of
certain products manufactured at Northeast Solite's New York and Kentucky
plants. The License Agreement shall continue for a term of 99 years unless
sooner terminated in accordance with its provisions.

Services Agreement. Pursuant to the Services Agreement, Solite will agree
to provide Northeast Solite with certain services and Northeast Solite will
agree to provide Solite with certain services. The services to be provided have
terms varying in length from six months to three years, six months.

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<PAGE>

Non-Competition Agreement. The Non-Competition Agreement provides that for
a period of five years (i) Giant and Solite will not sell lightweight aggregate
in inventory or manufactured at Solite's existing lightweight aggregate plants
within certain specified areas (generally, portions of New Jersey, Pennsylvania
and New York, all of the New England States, the Chicago primary metropolitan
statistical area, and within a 250 mile radius of Northeast Solite's Kentucky
plant (except where such radius conflicts with the states specified in clause
(ii)) and (ii) Northeast Solite will not sell lightweight aggregate in
inventory or manufactured at Northeast Solite's New York and Kentucky plants
within the states of Maryland, Virginia, West Virginia, North Carolina, South
Carolina, Georgia, Florida and the District of Columbia. The Noncompetition
Agreement does not restrict competition outside the specified territories or
within the specified territories for products manufactured at facilities other
than the existing Solite or Northeast Solite lightweight aggregate plants.

Requirements Contract. In connection with the Merger, Solite and a
subsidiary of Northeast Solite expect to enter into a Requirements Contract
pursuant to which for a period of five years Solite will supply, at competitive
prices, the requirements for specified lightweight aggregate for Northeast
Solite's masonry block plant in Chesapeake, Virginia.

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CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS OF SOLITE,
GIANT AND NORTHEAST SOLITE

Solite is incorporated under the laws of the Commonwealth of Virginia and
the rights of Solite shareholders are governed by the VSCA, the Solite Articles
of Incorporation ("Solite Articles") and the Solite Bylaws. Giant is
incorporated under the laws of the State of Delaware and the rights of Giant
shareholders are governed by the Delaware General Corporation Law ("DGCL"), the
Giant Certificate of Incorporation ("Giant Certificate") and the Giant Bylaws.
Upon consummation of the Merger, Solite shareholders will become Giant
shareholders and their rights will be governed by the DGCL, the Giant
Certificate and the Giant Bylaws. As a result of the Spin-Off, Solite
shareholders will also become shareholders of Northeast Solite, which is
currently incorporated under the laws of the State of New York. Northeast
Solite expects to redomesticate to Virginia before the Spin-Off. Consequently,
the rights of Northeast Solite shareholders will be governed by the VSCA, and
Northeast Solite's articles and bylaws as a Virginia corporation. The following
is a summary of the material differences between the rights of Solite
shareholders, the rights of Giant shareholders, and the rights of Northeast
Solite shareholders. This summary is qualified in its entirety by reference to
the relevant portions of the VSCA, the DGCL, the Solite Articles and the Solite
Bylaws, the Giant Certificate and the Giant Bylaws, and the Northeast Solite
Articles of Incorporation and the Northeast Solite Bylaws. At the time of the
Spin-off, the provisions of the Northeast Solite Articles of Incorporation and
Northeast Solite Bylaws will be the same as the provisions of the Solite
Articles and Solite Bylaws discussed below, except as otherwise noted.

Authorized Capital Stock
The authorized capital stock of Solite consists of 1,000,000 shares of
Solite Common Stock, par value $2.00 per share, and 100,000 shares of Solite
Preferred Stock. With respect to the Solite Preferred Stock, the Solite Board
is authorized, without shareholder approval, to designate classes or series of
such shares and to determine the relative rights, preferences and limitations
of any such class or series. As of the date of this Proxy Statement/Prospectus,
the Solite Board has designated 25,000 shares as Solite Series A Preferred
Stock, 16,300 shares as Solite Series B Preferred Stock, and 16,807 shares as
Solite Series C Preferred Stock.

The authorized capital stock of Giant consists of 20,000,000 shares of
Giant Common Stock and 2,000,000 shares of Giant Preferred Stock, par value
$.01 per share ("Giant Preferred Stock"). With respect to the Giant Preferred
Stock, the Giant Board is authorized, without shareholder approval, to
designate classes or series of such shares and to determine the relative
rights, preferences and limitations of any such class or series. As of the date
of this Proxy Statement/Prospectus, no shares of Giant Preferred Stock have
been designated.

The authorized capital stock of Northeast Solite will consist of 5,000,000
shares of Northeast Solite Common Stock and 100,000 shares of Northeast Solite
Preferred Stock, par value $.01 per share ("Northeast Solite Preferred Stock").
With respect to the Northeast Solite Preferred Stock, the Northeast Solite
Board will be authorized, without shareholder approval, to designate classes or
series of such shares and to determine the relative rights, preferences and
limitations of any such class or series.

Shareholder Voting Requirements
The VSCA generally requires approval of certain mergers, consolidations,
dissolutions or sales of all or substantially all of a corporation's assets by
a vote of two-thirds of the outstanding shares entitled to vote on such a
matter unless the articles of incorporation provide for a greater or lesser
vote, which vote may not be less than a majority of all votes cast on such
matter by each voting group entitled to vote thereon at a meeting at which a
quorum of the voting group exists. As of the date of this Proxy
Statement/Prospectus, the Solite Articles do not provide for a greater or
lesser vote.

The DGCL generally requires approval of certain mergers, consolidations,
dissolutions or sales of all or substantially all of a corporation's assets by
a vote of a majority of the outstanding shares entitled to vote thereon.

Shareholder Action Without a Meeting
In accordance with the VSCA, the Solite Bylaws provide that any action may
be taken by the shareholders without a meeting if a consent in writing, setting
forth the action to be taken, is signed by all the shareholders entitled to
vote thereon.

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Under the DGCL, unless the corporation's certificate of incorporation
provides otherwise, any action that could be taken at an annual or special
meeting of shareholders may be taken without prior notice and without a vote if
a consent in writing setting forth the action to be taken is signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. The Giant
Certificate does not contain a provision which prohibits shareholder action
without a meeting. Therefore, Giant's shareholders may act by written consent.

Dissenters' Rights
Under the VSCA, a shareholder is entitled to dissent from (1) the
consummation of a plan of merger if shareholder approval is required for the
merger, the articles of incorporation entitle the shareholder to vote on the
merger, or the corporation is a subsidiary that is merged with its parent, (2)
the consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan, and (3) the consummation of a sale or exchange of
all, or substantially all, of the property of the corporation if the
shareholder was entitled to vote on the sale or exchange. However, with respect
to a plan of merger or share exchange or a sale or exchange of property, the
VSCA does not provide dissenters' rights to the holders of shares which are
listed on a national securities exchange or Nasdaq or held by at least 2,000
record shareholders unless (i) the articles of incorporation provide otherwise
or, (ii) in the case of a plan of merger or share exchange, the holders of the
class or series are required under the plan of merger or share exchange to
accept for such shares anything except: (a) cash, (b) shares or membership
interests of the surviving or acquiring corporation, or any other corporation
listed on a national securities exchange or Nasdaq or held of record by at
least 2,000 record shareholder or members, or (c) a combination of cash and
such shares or, (iii) the transaction is an "affiliated transaction," under
Virginia's Affiliated Transactions statute and was not approved by
"disinterested directors" as provided thereby.

Under the DGCL, a shareholder of a corporation who does not vote in favor
of certain merger transactions and who demands appraisal of his shares in
connection therewith may be entitled to dissenters' rights under varying
circumstances. Unless the corporation's certificate of incorporation provides
otherwise, such dissenters' rights are not available in certain circumstances,
including without limitation (1) the sale, lease, or exchange of all or
substantially all of ther or consolidation by a corporation, the shares of
which are either listed on a national securities exchange or the Nasdaq or are
held of record by more than 2,000 holders if such shareholders receive only
shares of the surviving corporation or shares of any other corporation which
are either listed on a national securities exchange or the Nasdaq or held of
record by more than 2,000 holders, plus cash in lieu of fractional shares or
(2) to shareholders of a corporation surviving a merger if no vote of the
shareholders of the surviving corporation is required to approve the merger
because certain conditions are met.

Amendment of the Certificate or Articles of Incorporation
Generally, the VSCA requires that amendments to the articles of
incorporation be approved by a shareholder vote of more than two-thirds of all
votes entitled to be cast.

Under the DGCL, the affirmative vote of a majority of the outstanding
shares entitled to vote is required to amend the certificate of incorporation.

Amendment of Bylaws
The VSCA provides that a corporation's board of directors may adopt,
amend, or repeal bylaws, unless the corporation's articles of incorporation
reserve such powers exclusively to the shareholders. The Solite Articles do not
reserve such powers exclusively to the Solite shareholders. Instead, the Solite
Bylaws provide for bylaw amendments by either the Solite Board or the Solite
shareholders. In addition, the shareholders may specify that a
shareholder-adopted bylaw may not be amended or repealed by the Solite Board.

Under the DGCL, the power to adopt, amend, or repeal bylaws is vested
exclusively in the shareholders entitled to vote, unless the corporation's
certificate of incorporation confers such power on the board of directors as
well. The Giant Certificate does confer such power on the Giant Board and
authorizes the Giant Board to make, alter or repeal bylaws by a majority of the
whole board of directors.

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Directors
Number and Election. The Solite Bylaws currently provide for a board of
not less than eight nor more than ten directors.

The Giant Certificate and Giant Bylaws provide for a board of directors of
not less than two nor more than eleven. The exact number of directors is set by
resolution of the Giant Board, which currently provides for a five-member board
of directors.

The VSCA and the DGCL permit a board of directors to be classified if
provided for in the corporation's charter or bylaws. The Solite Articles do not
provide for a classified board of directors, and each Solite Board member is
elected annually. The Giant Certificate provides for directors to be elected
annually.

Removal. Directors of Solite may be removed by the shareholders with or
without cause. Giant shareholders may remove members of the Giant Board with or
without cause.

Limitations on Director Liability
Under the VSCA, the damages assessed against an officer and director may
be eliminated or limited in any proceeding brought by or in the right of a
corporation, or by or on behalf of shareholders, if specified in the articles
of incorporation or in the bylaws. As of the date of this Proxy
Statement/Prospectus, neither the Solite Articles nor the Solite Bylaws limit
the liability of directors. Therefore, Solite is subject to the VSCA which
limits the liability of an officer or director for damages arising out of a
single transaction or occurrence to the greater of $100,000 or the amount of
cash compensation received by the officer or director from the corporation
during the twelve months immediately preceding the act or omission for which
liability was imposed.

The Giant Certificate contains a provision, permitted by the DGCL, that
eliminates the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of fiduciary duties as a director,
except for liability of a director (1) for breach of the duty of loyalty, (2)
for actions or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (3) for payment of improper dividends
or redemptions, or (4) for any transaction from which the director derived an
improper personal benefit.

Indemnification
Under the VSCA, a corporation may indemnify an individual made a party to
a proceeding because he is or was a director against liability incurred in the
proceeding if he conducted himself in good faith and believed, in the case of
conduct in his official capacity with the corporation that his conduct was in
its best interests and, in all other cases, that his conduct was at least not
opposed to its best interests and further, in the case of any criminal
proceeding, that he had no reasonable cause to believe that his conduct was
unlawful. The Solite Articles make such indemnification mandatory for directors
and officers and permits the corporation to indemnify other individuals to the
same extent.

The Giant Certificate contains provisions under which Giant will
indemnify, to the fullest extent permitted by law, individuals who are made a
party to an action or proceeding by virtue of the fact that such individual is
or was a director, officer, employee or agent of Giant or, at Giant's request,
of another corporation. The DGCL generally permits such indemnification to the
extent that the individual acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal proceeding, had reasonable cause
to believe his conduct was lawful.

Business Combination Statutes
The VSCA does not contain a business combination statute. Instead, the
VSCA contains an Affiliated Transactions statute and "control share
acquisition" provisions which regulate the process by which a person may
acquire control of certain Virginia corporations without the consent or
cooperation of the corporation's board of directors. The Affiliated
Transactions statute and the control share acquisition provisions do not apply
to the Merger or the Spin-Off.

Giant is subject to Section 203 of the DGCL, which provides that any
person who has acquired 15% or more of a corporation's voting stock (thereby
becoming an "interested shareholder") may not engage in certain "business
combinations" with the corporation for a period of three years following the
date the person became an interested shareholder unless (1) the board of
directors has approved, prior to the date that person became an interested
shareholder,

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either the business combination or the transaction that resulted in the person
becoming an interested shareholder, (2) upon consummation of the transaction
that resulted in the person becoming an interested shareholder, that person
owns at least 85% of the corporation's voting stock outstanding at the time the
transaction is commenced (excluding shares owned by persons who are both
directors and officers and shares owned by employee stock plans in which
participants do not have the right to determine whether shares will be tendered
in a tender or exchange offer) or (3) the business combination is approved by
the board of directors and authorized by the affirmative vote of at least
two-thirds of the outstanding voting stock not owned by the interested
shareholder.

EXPERTS

The consolidated financial statements included in Giant's Annual Report on
Form 10-K for the year ended December 31, 1997, which are incorporated by
reference in this Proxy Statement/Prospectus, have been audited by Coopers &
Lybrand L.L.P., independent certified public accountants, as of and for the
periods indicated in their report with respect thereto and are incorporated
herein in reliance upon such report given the authority of said firm as experts
in accounting and auditing.

The financial statements of Solite Corporation included herein for the
fiscal years ended March 31, 1997 and 1996 have been audited by Coopers &
Lybrand L.L.P., independent certified public accountants, as of and for the
periods indicated in their report with respect thereto and are incorporated
herein in reliance upon such report given the authority of said firm as experts
in accounting and auditing.

The consolidated financial statements of Solite Corporation and
Subsidiaries as of March 31, 1997 and 1996, and for the years then ended have
been audited by McPhillips, Lieland & Deans, P.C., as of and for the periods
indicated in their report with respect thereto and included herein in reliance
upon such report given the authority of said firm as experts in accounting and
auditing.

LEGAL MATTERS

The legality of the shares of Giant Common Stock to be issued pursuant to
this Proxy Statement/Prospectus will be passed upon for Giant by Proskauer Rose
LLP, counsel to Giant. Certain U.S. tax matters will be passed upon for Solite
by McGuire Woods Battle & Boothe LLP, counsel to Solite.

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FINANCIAL STATEMENTS (UNAUDITED) OF

SOLITE CORPORATION AND SUBSIDIARIES

for the interim periods ended December 31, 1997 and 1996

F-1
<PAGE>

CONTENTS

<TABLE>
<CAPTION>
Pages
--------
<S> <C>
Financial Statements (unaudited):
Condensed Consolidated Balance Sheets--December 31, 1997 and 1996 ............. F-3
Condensed Consolidated Statements of Operations--Nine Months Ended
December 31, 1997 and 1996 .................................................... F-4
Condensed Consolidated Statement of Shareholders' Equity--Nine Months Ended
December 31, 1997 ............................................................. F-5
Condensed Consolidated Statements of Cash Flows--Nine Months Ended
December 31, 1997 and 1996 .................................................... F-6
Notes to Condensed Consolidated Financial Statements .......................... F-7-F-8
</TABLE>

F-2
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
December 31, December 31, March 31,
1997 1996 1997
-------------- -------------- ----------
(In thousands, except share
data)
(unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ........................... $ 2,844 $ 572 $ 1,488
Accounts receivable, less allowances of $509, $538
and $445, respectively ............................. 8,037 7,728 8,811
Inventories ......................................... 10,460 14,695 13,090
Deferred income taxes ............................... 1,655 1,808 1,656
Other current assets ................................ 488 531 378
------- ------- -------
Total current assets ............................ 23,484 25,334 25,423
Property, plant and equipment, net .................... 20,677 25,668 24,797
Deferred income taxes ................................. 1,860 1,222 1,914
Other assets .......................................... 1,696 2,555 1,920
------- ------- -------
$47,717 $54,779 $54,054
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of debt .......................... $20,662 $25,903 $26,913
Accounts payable .................................... 8,144 8,506 8,491
Accrued expenses and other .......................... 3,730 3,839 3,870
------- ------- -------
Total current liabilites ........................ 32,536 38,248 39,274
------- ------- -------
Long term debt, less current maturities ............... -- -- 88
------- ------- -------
Commitments and contingencies (Notes 5 and 6)
Shareholders' equity:
Preferred stock, $50 par value; redeemable at $60 per
share (cumulative dividend of $4 per share);
100,000 shares authorized:
Series A preferred, issued 8,700 shares ........... 435 435 435
Series B preferred, issued 14,093 shares .......... 704 704 704
Preferred stock, series C, $200 par value; redeemable
at $240 per share (cumulative dividend of $21.50
per share); 16,807 shares authorized; issued 15,429
shares ............................................. 3,086 3,086 3,086
Common stock, $2 par value; authorized 1,000,000
shares; issued 532,750 shares in 1997 and 527,850
shares in 1996 ..................................... 1,066 1,056 1,062
Capital in excess of par value ...................... 1,204 1,037 1,154
Retained earnings ................................... 8,686 10,213 8,251
------- ------- -------
15,181 16,531 14,692
------- ------- -------
$47,717 $54,779 $54,054
======= ======= =======
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-3
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

for the nine months ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
---------- ------------
(In thousands)
<S> <C> <C>
Sales $ 49,672 $ 50,872
Costs and expenses:
Costs of sales and services ................. 37,800 39,192
Selling, general and administrative ......... 12,030 12,404
-------- --------
Operating loss ............................ (158) (724)
Other income (expenses):
Interest expense ............................ (1,908) (1,961)
Other, net .................................. 2,768 965
-------- --------
Income (loss) before income taxes ......... 702 (1,720)
Provision (benefit) for income taxes .......... 267 (292)
-------- --------
Net income (loss) ......................... $ 435 $ (1,428)
======== ========
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-4
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(Unaudited)

for the nine months ended December 31, 1997

<TABLE>
<CAPTION>
Preferred Stock Capital in
------------------------------------ Common Excess of Retained
Series A Series B Series C Stock Par Value Earnings Total
---------- ---------- ---------- -------- ----------- ---------- ----------
(In thousands, except share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, March 31, 1997 ............ $435 $704 $3,086 $1,062 $1,154 $8,251 $14,692
Stock issued as employee
bonuses, 1,800 shares .............. 4 50 54
Net income .......................... 435 435
------ -------
Balances, December 31, 1997 ......... $435 $704 $3,086 $1,066 $1,204 $8,686 $15,181
==== ==== ====== ====== ====== ====== =======
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-5
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

for the nine months ended December 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
----------- ------------
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) .............................................. $ 435 $ (1,428)
Depreciation, depletion and amortization ....................... 2,879 3,299
Gain on disposition of assets .................................. (2,681) (812)
Deferred tax benefit ........................................... 54 (413)
Stock bonuses .................................................. 54 34
Changes in operating assets and liabilities:
Receivables .................................................. 774 352
Inventories .................................................. 1,175 1,025
Other current assets ......................................... (267) 69
Deposits ..................................................... 67 (82)
Accounts payable ............................................. (346) 999
Accrued expenses and other current liabilities ............... (539) 157
-------- --------
Net cash provided by operating activities ................ 1,605 3,200
-------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment ..................... (1,494) (1,433)
Proceeds from sale of assets ................................... 7,686 966
Cost of environmental permits .................................. (102) (306)
-------- --------
Net cash provided (used) by investing activities ......... 6,090 (773)
-------- --------
Cash flows from financing activities:
Proceeds from short-term borrowings ............................ 300 --
Principal payments on notes payable ............................ (6,639) (2,150)
Net purchases of common stock .................................. -- (122)
-------- --------
Net cash used by financing activities .................... (6,339) (2,272)
-------- --------
Increase in cash and cash equivalents .................... 1,356 155
Cash and cash equivalents:
Beginning of period ............................................ 1,488 417
-------- --------
End of period .................................................. $ 2,844 $ 572
======== ========
Supplemental information, cash paid during the period for:
Interest (net of amounts capitalized) .......................... $ 1,752 $ 1,870
Income taxes ................................................... 309 211
Noncash investing and financing activities, common stock issued as
employee bonuses ................................................. 54 34
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-6
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION:

The accompanying condensed financial statements of Solite Corporation and
Subsidiaries (the "Company") have been prepared in accordance with the
requirements for interim financial statements and, accordingly, they are
condensed and omit disclosures which would substantially duplicate those
contained in the audited financial statements for the years ended March 31,
1997 and 1996. The financial statements as of and for the periods ended
December 31, 1997 and 1996 are unaudited and, in the opinion of management,
include all necessary adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation. Due to the seasonal nature of the
Company's business, operating results for the interim periods are not
necessarily indicative of the results that may be expected for the full year.

2. ORGANIZATION:

These financial statements of the Company consist of Solite Corporation
and all of its subsidiaries, including those subsidiaries and businesses
subject to the Spin-Off described in the audited financial statements for the
year ended March 31, 1997. Significant intercompany transactions and balances
have been eliminated.

On September 10, 1997, Giant Cement Holding, Inc. ("Giant") signed a
definitive agreement with the Company to purchase certain assets and assume
certain liabilities of the Company. These financial statements present the
assets, liabilities and results of operations of Solite Corporation and
Subsidiaries, not the businesses to be acquired pursuant to the agreement as of
and for the periods indicated. The sale is subject to certain conditions. These
financial statements do not include any adjustments to the carrying value of
the Company's net assets that might result from this proposed transaction.

The Company is involved in the manufacture and sale of masonry blocks and
lightweight aggregate construction materials. The Company also has sand,
gravel, stone, coal mining and fuel operations. The Company is also involved in
waste recycling and resource recovery, utilizing industrial waste as fuel in
its kilns. The Company sells primarily to customers in the eastern United
States.

3. INVENTORIES (in thousands):

<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
-------------- -------------
<S> <C> <C>
Finished goods .......................... $ 5,181 $ 9,154
In process .............................. 3,489 3,795
Raw materials ........................... 186 161
Supplies, repair parts and fuel ......... 1,604 1,585
------- -------
$10,460 $14,695
======= =======
</TABLE>

F-7
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued

(Unaudited)

4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (in thousands):

<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
-------------- -------------
<S> <C> <C>
Accrued payroll and benefits ......................... $ 732 $ 981
Accrued health and casualty claims insurance ......... 1,412 1,270
Other ................................................ 1,586 1,588
------ ------
$3,730 $3,839
====== ======
</TABLE>

5. COMMITMENTS AND CONTINGENCIES:

The Company's policy is to partially self-insure group medical benefits
for its employees and the employees of its subsidiaries. The Company is
self-insured to certain maximum limits. At December 31, 1997 and 1996,
approximately $274,000 and $386,000, respectively, in medical claims were
accrued. In addition, the Company is self-insured to certain maximum limits for
general liability, business auto and workmen's compensation benefits. At
December 31, 1997 and 1996, approximately $1,138,000 and $884,000,
respectively, in claims were accrued.

The Company and its Subsidiaries have posted letters of credit pursuant to
environmental regulations. At December 31, 1997, these letters of credit total
$2,942,000. The Company would be obligated together with the non-core
businesses for repayment of any commitments under these letters of credit.

The Company guarantees the payment of certain debt owed by Northeast
Solite to the president of the Company. The balance of the debt at December 31,
1997 totaled $1,500,000.

6. ENVIRONMENTAL:

The Company has entered into an administrative order on consent with the
North Carolina Division of Solid Waste Management at its North Carolina
lightweight aggregate plant. This "Corrective Action" order requires the
Company to investigate areas of the plant site where activities took place that
could be associated with environmental contamination. If contaminated areas are
identified, the Company could be required to undertake remedial action.

Although corrective action costs may be required, it is not possible at
this time to reasonably estimate the amount of any obligation for remediation
at these locations that may be material to the Company's financial statements
because the extent of environmental impact, remediation alternatives (which
could involve no or minimal action), and concurrence of the regulatory
authorities have not yet advanced to the stage where a reasonable estimate of
any loss can be made. However, at December 31, 1997, the Company has accrued
$55,000, which represents amounts the Company expects to incur to prepare
reports to the Division of Solid Waste Management which would then be used to
determine the need for further investigative or remedial activities.

For the years ended March 31, 1997 and 1996, costs were accrued
representing amounts which the Company expects to incur at its Florida facility
to prepare reports to the EPA and to conduct a Resource Conservation and
Recovery Act (RCRA) Facility Investigation (RFI). Management believes that it
is probable a loss has been incurred and that at March 31, 1997, the loss could
range from a minimum of $268,000, which represents the aforementioned RFI and
reporting costs, to a maximum of $1.1 million. Until the Company completes the
RFI, it is not possible to estimate the probability that corrective action will
be required, nor where the potential cost thereof, if any, will fall within the
above range. Therefore, the Company has accrued $268,000 and $168,000 at
December 31, 1997 and 1996, respectively.

F-8
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

------------
FINANCIAL STATEMENTS

for the years ended March 31, 1997 and 1996

F-9
<PAGE>

CONTENTS

<TABLE>
<CAPTION>
Pages
--------
<S> <C>
Independent Auditors' Report ................ 11
Consolidated Financial Statements:
Balance Sheet .............................. 12
Statement of Operations .................... 14
Statement of Stockholders' Equity .......... 15
Statement of Cash Flows .................... 16
Notes to Financial Statements .............. 18-26
</TABLE>

F-10
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
of Solite Corporation:

We have audited the accompanying consolidated balance sheets of Solite
Corporation and subsidiaries as of March 31, 1997 and 1996, and the related
statements of operations, stockholders' equity, and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Solite Corporation and
subsidiaries as of March 31, 1997 and 1996, and the results of their operations
and cash flows for the years then ended in conformity with generally accepted
accounting principles.

As more fully discussed in Note 17, prior years financial statements have
been restated.

As more fully discussed in Notes 4 and 18, the Company has suffered
recurring losses from operations and was in default under certain provisions of
its loan agreements, which have been waived and their maturity dates extended
to December 31, 1997 and January 31, 1998. This has raised substantial doubt
about the Company's ability to continue as a going concern at March 31, 1997.
Management's plans in this regard are also discussed in Note 18. These
financial statements do not include any adjustments that might result from this
uncertainty.

Norfolk, Virginia
August 6, 1997, except Note 16, for which
the date is September 10, 1997 and Note 4
with respect to waivers and extensions of maturity
dates of which the date is November 6, 1997

/s/ McPhillips, Lieland & Deans P.C.
------------------------------------

F-11
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET, March 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash ...................................................... $ 1,488,339 $ 416,520
Accounts receivable:
Trade, less reserve for doubtful accounts of $444,745
and $432,000 in 1997 and 1996, respectively............. 8,563,553 7,847,218
Employees, loans and advances ............................ 22,386 25,382
Other .................................................... 119,982 92,413
Income taxes receivable ................................... 104,709 115,135
Inventories:
Finished goods ........................................... 7,464,609 9,000,452
Work in process .......................................... 3,871,497 5,052,855
Fuel, repair parts and supplies .......................... 1,753,821 1,667,260
Prepaid expenses .......................................... 378,215 599,665
Deferred income taxes ..................................... 1,655,473 1,808,263
----------- -----------
Total current assets .................................... 25,422,584 26,625,163
----------- -----------
Property, plant and equipment:
Buildings and equipment ................................... 52,615,872 51,515,005
Less accumulated depreciation ........................... 33,734,160 29,955,487
----------- -----------
18,881,712 21,559,518
Land and mineral resources, net of cost depletion ......... 4,734,403 4,962,669
Construction in progress .................................. 1,181,346 876,255
----------- -----------
24,797,461 27,398,442
----------- -----------
Other assets:
Cash value of life insurance .............................. 67,200 65,200
Deposits and other ........................................ 1,703,143 2,220,054
Intangible assets of purchased subsidiaries,
net of amortization ..................................... 150,000 172,265
Deferred income taxes ..................................... 1,913,882 808,777
----------- -----------
3,834,225 3,266,296
----------- -----------
$54,054,270 $57,289,901
=========== ===========
</TABLE>

F-12
<PAGE>

<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable, bank ....................................... $ 2,000,000 $ 2,000,000
Current maturities of long-term debt ..................... 23,713,319 26,053,282
Note payable, stockholder ................................ 1,200,000 --
Accounts payable ......................................... 8,490,472 7,506,993
Accrued expenses ......................................... 3,869,991 3,681,386
----------- -----------
Total current liabilities .............................. 39,273,782 39,241,661
----------- -----------
Long-term debt, less current maturities ................... 88,259 --
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, 100,000 shares authorized, $4 cumulative,
$50 par value, redeemable at $60 per share: .............
Series A preferred, issued 8,700 shares ................. 435,000 435,000
Series B preferred, issued 14,093 shares ................ 704,650 704,650
Preferred stock, series C, 16,807 shares authorized,
$21.50 cumulative, $200 par value, redeemable at
$240 per share, issued 15,429 shares..................... 3,085,800 3,085,800
Common stock, par value $2 per share; authorized
1,000,000 shares; issued 530,950 shares (1997) and
530,050 shares (1996) ................................... 1,061,900 1,060,100
Capital in excess of par value ........................... 1,153,620 1,121,457
Retained earnings ........................................ 8,251,259 11,641,233
----------- -----------
14,692,229 18,048,240
----------- -----------
$54,054,270 $57,289,901
=========== ===========
</TABLE>

See accompanying notes which are an integral part of the
consolidated financial statements.

F-13
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

for the years ended March 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Sales ......................................... $ 75,436,089 $ 71,539,750
------------ ------------
Less:
Sales discounts and allowances .............. 2,262,104 3,251,015
Freight and trucking ........................ 5,759,348 5,564,664
Distribution expenses ....................... 635,445 768,343
------------ ------------
8,656,897 9,584,022
------------ ------------
Net sales ................................. 66,779,192 61,955,728
Cost of goods sold ............................ 49,585,847 43,785,137
------------ ------------
Gross profit .............................. 17,193,345 18,170,591
Operating expenses ............................ 19,376,665 20,622,487
------------ ------------
Operating loss ............................ (2,183,320) (2,451,896)
------------ ------------
Non-operating income (expense):
Interest income .............................. 113,075 123,208
Interest expense ............................. (2,610,592) (2,977,940)
Gain on sale of assets ....................... 809,862 246,071
Other--net ................................... (48,707) (364,333)
Impairment loss .............................. (166,488) (1,977,689)
------------ ------------
(1,902,850) (4,950,683)
------------ ------------
Loss before income taxes .................. (4,086,170) (7,402,579)
Federal and state income tax benefit .......... 696,196 511,108
------------ ------------
Net loss .................................. $ (3,389,974) $ (6,891,471)
============ ============
</TABLE>

See accompanying notes which are an integral part of the
consolidated financial statements.

F-14
<PAGE>

CONSOLIDATED STATMENT OF STOCKHOLDERS' EQUITY

for the years ended March 31, 1997 and 1996

<TABLE>
<CAPTION>
Preferred Stock Capital in
---------------------------------- Common Excess of Retained
Series A Series B Series C Stock Par Value Earnings Total
---------- ---------- ------------ ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, April 1, 1995
(as restated) ................... $435,000 $704,650 $ - $1,062,730 $1,178,892 $18,532,704 $21,913,976
Stock issued as employee
bonuses, 700 shares ............. - - - 1,400 29,620 - 31,020
Stock repurchased from
employees, 2,015 shares ......... - - - (4,030) (87,055) - (91,085)
Series C preferred stock
issued to officer,
15,429 shares ................... - - 3,085,800 - - - 3,085,800
Net loss ......................... - - - - - (6,891,471) (6,891,471)
-------- -------- ---------- ---------- ---------- ------------ -----------
Balances, March 31, 1996 ......... 435,000 704,650 3,085,800 1,060,100 1,121,457 11,641,233 18,048,240
Stock issued as employee
bonuses, 1,000 shares ........... - - - 2,000 36,095 - 38,095
Stock repurchased from
employees, 3,000 shares ......... - - - (6,000) (109,212) - (115,212)
Stock sold to Solite Corp.
Salaried Pension Plan,
2,900 shares .................... - - - 5,800 105,280 - 111,080
Net loss ......................... - - - - - (3,389,974) (3,389,974)
-------- -------- ---------- ---------- ---------- ------------ -----------
Balances, March 31, 1997 ......... $435,000 $704,650 $3,085,800 $1,061,900 $1,153,620 $ 8,251,259 $14,692,229
======== ======== ========== ========== ========== ============ ===========
</TABLE>

See accompanying notes which are an integral part of the
consolidated financial statements.

F-15
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

for the years ended March 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ..................................................... $ (3,389,974) $ (6,891,471)
Adjustments to reconcile to net cash provided by operating
activities: ..................................................
Depreciation, depletion and amortization .................... 4,095,000 4,325,390
Gain on disposition of assets ............................... (809,862) (246,071)
Stock bonuses ............................................... 38,095 31,020
Discount on stock issuance treated as compensation .......... -- 331,723
Impairment loss ............................................. 166,488 1,977,689
Uncollectible accounts written off .......................... 72,328 67,698
Increase in reserve for loss on accounts receivable ......... 12,745 90,000
Increase in inventory reserve ............................... 298,529 415,317
Deferred taxes .............................................. (952,315) (662,817)
Changes in operating assets and liabilities:
Accounts receivable ........................................ (828,977) 3,372,264
Income taxes receivable .................................... 10,426 (115,135)
Inventory .................................................. 2,318,641 (188,809)
Prepaid expenses ........................................... 221,450 (8,825)
Cash value of life insurance ............................... (2,000) (1,500)
Deposits and other assets .................................. 443,584 (66,028)
Accounts payable and accrued expenses ...................... 1,172,084 880,885
Income taxes payable ....................................... -- (296,626)
------------ ------------
Net cash provided by operating activities ................ 2,866,242 3,014,704
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment ........................... (1,383,761) (773,773)
Collections from employees ................................... 2,996 40,030
Proceeds from sale of assets ................................. 1,089,276 264,613
Cost of environmental permits ................................ (318,646) (525,562)
------------ ------------
Net cash used in investing activities .................... (610,135) (994,692)
------------ ------------
Cash flows from financing activities:
Proceeds from preferred stock issued ........................ $ -- $ 2,754,077
Net advances on line of credit .............................. -- 800,000
Proceeds from stockholder loan .............................. 1,200,000 --
Principal payments on notes payable ......................... (2,380,156) (6,013,718)
Net purchases of common stock ............................... (4,132) (91,085)
------------ ------------
Net cash used in financing activities ................... (1,184,288) (2,550,726)
------------ ------------
Net increase (decrease) in cash and cash equivalents ......... 1,071,819 (530,714)
Cash and cash equivalents, beginning of year ................. 416,520 947,234
------------ ------------
Cash and cash equivalents, end of year ....................... $ 1,488,339 $ 416,520
============ ============
</TABLE>

See accompanying notes which are an integral part of the
consolidated financial statements.

F-16
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS, Continued

for the years ended March 31, 1997 and 1996

<TABLE>
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid during the year for:
1997 1996
---------- ----------
Interest (net of amounts capitalized) ......... $2,669,665 $3,038,595
Income taxes .................................. 288,129 506,669
</TABLE>

Supplemental schedule of noncash investing and financing activities:

Additional common stock was issued to employees for bonuses as follows:

1997 $38,095
1996 31,020

In 1997, the Company purchased equipment totaling $128,452 with long-term
debt financing.

In 1996, preferred stock was purchased by an officer of the Company at a
discount totaling $331,723 which was treated as compensation to the
officer.

See accompanying notes which are an integral part of the consolidated financial
statements.

F-17
<PAGE>

SOLITE CORPORATION AND SUBSIDIARES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:
The Company and its subsidiaries are engaged in the manufacture and sale
of masonary blocks and lightweight aggregate construction materials. The
Company also has sand, gravel, stone, coal mining and fuel operations. The
Company is involved in waste recycling and resource recovery, utilizing
industrial waste as fuel in its kilns. The Company sells primarily to customers
in the eastern United States.

Significant accounting policies relative to the business are:

Principles of Consolidation:--The consolidated financial statements
include the accounts of Solite Corporation and its subsidiaries. All
significant intercompany accounts and transactions have been eliminated.

Revenue Recognition:-- The Company derives revenue from product sales and
resource recovery services. Revenue for product sales is recognized in the
period in which the product is shipped to customers. Revenue for resource
recovery services is recognized in the period in which the service is provided.
Inventories of waste-derived fuel are immaterial.

Inventories:

Inventories are stated as follows:

Finished goods, work in process and fuel: lower of cost (annual average)
or market.

Repair parts and supplies: lower of cost (first-in, first-out) or market.

Property and Equipment:--Buildings and equipment are stated at cost which
includes interest on funds borrowed to finance the acquisition or construction
of major capital additions. Such interest amounted to $42,454 in fiscal 1997.
Depreciation is provided over the following estimated useful lives:

Buildings--10 to 33 years
Equipment--5 to 15 years

Depreciation expense of $3,660,655 and $3,643,991 for the years ended
March 31, 1997 and 1996 was computed using the declining balance method on
assets acquired prior to fiscal 1982 and the straight-line method for assets
acquired after fiscal 1981.

Mineral properties are recorded at cost and depleted on a units extracted
basis.

Amortization:--Amortization expense on intangible assets of purchased
subsidiaries was $22,265 in 1997 and $44,530 in 1996. Amortization of loan
costs amounted to $135,651 in 1997 and $139,609 in 1996. Amortization of
environmental related operating permits amounted to $256,322 in 1997 and
$480,472 in 1996.

Environmental Expenditures:--Environmental expenditures related to current
operations are expensed or capitalized as appropriate. Expenditures that relate
to an existing condition caused by past operations, and which do not contribute
to current or future revenue generation, are expensed. Liabilities are recorded
when environmental assessments and/or remedial efforts are probable, and the
cost can be reasonably estimated. The Company maintains insurance to cover
amounts greater than $250,000 up to $15,000,000 for certain pollution hazards.

Income Taxes:--The Company and its subsidiaries file a consolidated
federal income tax return and where permissible, consolidated state income tax
returns.

Deferred income taxes are provided for the tax effects of differences in
the timing of reporting certain types of expenses, primarily depreciation,
inventory capitalization, spare parts and various accrued expenses for income
tax and financial reporting purposes.

Cash and Cash Equivalents:--The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents.

F-18
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLDATED FINANCIAL STATEMENTS, Continued

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, continued:

Use of Estimates:--Management uses estimates and assumptions in preparing
financial statements in accordance with generally accepted accounting
principles. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities and
the reported revenues and expenses. Actual results could vary from the
estimates that were used.

Concentration of Credit Risk:--Accounts receivable are principally from
customers dependent upon the construction industry. However, concentrations of
credit risk with respect to trade receivables are partially mitigated due to
the large number of customers comprising the Company's customer base and their
geographic dispersion. The trade receivables are short-term, and all probable
bad debt losses have been appropriately considered in establishing the
allowance for doubtful accounts. In general, the Company does not require
collateral in relation to these receivables. The Company had $2,798,118 and
$1,774,217 on deposit with banks in excess of the federal deposit insurance
limits at March 31, 1997 and 1996, respectively.

2. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment at March 31, 1997 and 1996 included the
following:

<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Buildings and improvements .......... $ 4,015,425 $ 3,986,254
Furniture and fixtures .............. 991,087 982,090
Equipment ........................... 47,425,079 46,458,734
Automotive equipment ................ 184,281 87,927
----------- -----------
$52,615,872 $51,515,005
=========== ===========
</TABLE>

3. NOTE PAYABLE, BANK:

The Company has an aggregate of $2,000,000 in short-term lines of credit
with two banks due December 31, 1997. Interest is at prime plus 1.5%. The lines
are guaranteed by an officer/stockholder. The outstanding balance at March 31,
1997 and 1996 was $2,000,000. (See Note 4)

4. LONG-TERM DEBT AND LINES OF CREDIT:

Long-term debt consists of the following:

<TABLE>
<CAPTION>
1997 1996
-------------- --------------
<S> <C> <C>
Revolving credit lines with banks ................................... $16,244,588 $17,547,620
10.32%senior notes payable (amended) dated October 1, 1988 .......... 3,033,333 3,900,000
10.32%senior notes payable (amended) dated August 1, 1990 ........... 4,408,494 4,605,662
Equipment notes payable ............................................. 115,163 --
----------- -----------
23,801,578 26,053,282
Less current maturities ............................................. 23,713,319 26,053,282
----------- -----------
$ 88,259 $ --
=========== ===========
</TABLE>

F-19
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLDATED FINANCIAL STATEMENTS, Continued
4. LONG-TERM DEBT AND LINES OF CREDIT, continued:

The Company's long-term obligations mature as follows:

Fiscal Year
-----------

1998 ......... $23,713,319
1999 ......... 28,776
2000 ......... 30,804
2001 ......... 21,661
2002 ......... 7,018
-----------
$23,801,578
===========

On February 25, 1993, the Company entered into $28,500,000 revolving
credit lines with two banks with interest at the banks' prime rate plus 1%. On
February 28, 1994 the Company entered into the first amendment of the credit
agreement granting a security interest in all accounts and inventory. The
Company then entered into a series of amendments, the last of which was dated
November 6, 1997, which extended the commitment to December 31, 1997.
Performance fees based upon provisions in the amendments have been accrued in
the amount of $564,927 and $544,927 at March 31, 1997 and 1996, respectively.
The banks have the right to file financing statements at their sole discretion.

On August 1, 1990, the Company entered into a $5,000,000 senior note
agreement with United of Omaha Life Insurance Company. The note, as amended, is
due January 31, 1998 and calls for interest payable semi-annually at a fixed
rate of 10.32%per annum through November 1, 1996. Effective November 1, 1996,
interest is payable monthly at 12.32%per annum until maturity.

The Company entered into a senior note agreement (Senior Notes) dated
October 1, 1988 with Mutual of Omaha Insurance Company, United of Omaha Life
Insurance Company, United World Life Insurance Company, and Companion Life
Insurance Company with respect to borrowings of $13,000,000. The notes, as
amended, are due in semi-annual installments of $650,000 through April 15, 1996
with interest payable semi-annually through December 1996 and monthly
thereafter at 10.32%. Subsequent to April 15, 1996, note installments are due
in the following amounts on the following dates:

1/15/97 ......... $ 216,667
7/31/97 ......... $ 150,000
8/15/97 ......... $ 150,000
9/30/97 ......... $ 150,000
1/31/98 ......... $2,583,333

Costs associated with the loan are being amortized over the term of the
loan.

As part of the February 25, 1993 revolving credit agreements, the banks
and insurance companies entered into an intercreditors agreement. The agreement
allows each party a pro-rata interest in certain collateral which includes a
first priority security interest in substantially all fixed assets and permits
located at four of the Company's lightweight aggregate plant sites and Oldover
Corporation, a security interest in certain real estate located at four of the
Company's Lightweight aggregate plants and certain other real estate located in
Newington, Virginia and King George County, Virginia, a security interest in
all accounts and inventory, plus the pledge of the Company's stock in M & M
Chemical and Equipment Company, Inc., Big Ugly Coal Corporation, JTN Land
Corporation and Terry Glenn Coal Company and the guarantees of Solite
Corporation and its subsidiaries.

Each agreement, including the lines of credit, contain certain
restrictions with respect to maintenance of minimum consolidated working
capital and consolidated tangible net worth, the encumbering of assets, stock

F-20
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLDATED FINANCIAL STATEMENTS, Continued

4. LONG-TERM DEBT AND LINES OF CREDIT, continued:

repurchases, payment of dividends, borrowing of money, disposal of assets and
mergers with other companies. At March 31, 1997 and 1996, the Company had
received waivers for certain covenants from the lenders involved.

In 1997, the Company entered into seven truck financing agreements with
Ford Motor Credit. The agreements call for equal monthly payments including
principal and interest at varying rates and range from 48 to 60 months in
length.

5. NOTE PAYABLE, STOCKHOLDER:

In 1997, Northeast Solite Corporation (Northeast), a wholly-owned
subsidiary entered into a subordinated loan agreement with an
officer/stockholder. The agreement allows Northeast to borrow up to $1,900,000
from the officer/ stockholder with interest payable monthly at a rate of prime
plus 2%. The note is due on demand, but is subordinated to all other bank and
insurance company debt. The loan is guaranteed by Solite Corporation. At March
31, 1997, Northeast had borrowed $1,200,000 under this loan agreement.

6. INCOME TAXES:
Income tax expense (benefit) computed under the provisions of FASB
109--Accounting for Income Taxes consists of:

1997 1996
------------- -------------
Current:
State ........... $ 269,283 $ 158,519
Federal ......... (13,164) (6,809)
Deferred: .........
State ........... (160,941) (112,016)
Federal ......... (791,374) (550,802)
---------- ----------
$ (696,196) $ (511,108)
========== ==========

Deferred tax assets are included in the consolidated balance sheet at
March 31, as follows:

1997 1996
------------- -------------
Net current assets:
State .......................... $ 395,105 $ 403,727
Federal ........................ 1,932,368 1,974,536
Net noncurrent assets: ...........
State .......................... 476,817 170,727
Federal ........................ 3,565,065 2,068,050
---------- ----------
6,369,355 4,617,040
Less valuation allowance ......... 2,800,000 2,000,000
---------- ----------
$3,569,355 $2,617,040
========== ==========

The Company recorded $104,709 and $115,135 for income taxes receivable in
1997 and 1996, respectively, related to the overpayment of estimated income
taxes.

The Company has recorded tax carryforward benefits of $6,992,000 which
will expire in the year 2012, by utilizing $18,261,000 in net operating losses.
Additionally, $1,233,000 in alternative minimum tax credits have been
recognized. The net operating losses were used to offset deferred tax
liabilities, the majority of which came from temporary differences totaling
$10,462,000 related to the recognition of depreciation for income tax versus
financial reporting purposes. A valuation allowance of $2,800,000 has been
recorded to reduce deferred tax assets as of March 31, 1997. This is an
increase of $800,000 over the valuation allowance recorded at March 31, 1996.
Due to the

F-21
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLDATED FINANCIAL STATEMENTS, Continued

6. INCOME TAXES, continued:

valuation allowance increase, the income tax provision differs from the expense
that would result from applying statutory rates to income before income taxes.

7. PENSION PLAN:

The Company and its subsidiaries have two noncontributory pension plans
covering substantially all employees not covered by union sponsored plans. The
plans provide retirement benefits of 1% of the highest average earnings during
120 consecutive calendar months times years of service up to 30 years. The
Company's funding policy for these plans is to fund pension cost as determined
by its actuaries.

Net periodic pension cost for fiscal 1997 and 1996 included the following
components:

<TABLE>
<CAPTION>
1997 1996
--------------- ---------------
<S> <C> <C>
Service cost--benefits earned during the period .......... $ 459,453 $ 365,580
Interest cost on projected benefit obligation ............ 731,976 698,511
Actual return on assets .................................. (1,579,337) (2,441,492)
Net amortization and deferral ............................ 482,229 1,512,924
Net periodic pension cost ................................ $ 94,321 $ 135,523
Assumptions used in the accounting were:
Discount rates .......................................... 7.5% 7.0%
Rates of increase in compensation levels ................ 5.0% 5.0%
Expected long-term rate of return on assets ............. 8.0% 8.0%
</TABLE>

The following table sets forth the funded status and amounts recognized in
the Company's balance sheet at March 31, 1997 and 1996, respectively, for its
pension plans:

<TABLE>
<CAPTION>
1997 1996
---------------- ----------------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation ............................................. $ 9,517,584 $ 8,822,536
============= =============
Accumulated vested benefit and nonvested obligation ................... $ 9,666,379 $ 9,027,761
============= =============
Projected benefit obligation .......................................... $ 11,244,064 $ 10,735,351
Plan assets at fair value (substantially mutual funds
and common stocks) ................................................... (13,530,361) (12,465,280)
------------- -------------
Plan assets less projected benefit obligation ......................... (2,286,297) (1,729,929)
Unrecognized net gain ................................................. 2,447,481 1,712,132
Prior service cost not yet recognized in periodic pension cost ........ (225,265) (258,240)
Unrecognized net asset at January 1, 1987 ............................. 550,719 668,354
------------- -------------
Accrued pension cost recognized in the balance sheet .................. $ 486,638 $ 392,317
============= =============
</TABLE>

At December 31, 1996, salaried plan assets included 7,800 shares of the
Company's common stock valued at $288,834. At December 31, 1995, salaried plan
assets included 4,900 shares of the Company's common stock valued at $211,925.

8. COMMITMENTS AND CONTINGENCIES:
The Company has letters of credit issued pursuant to environmental
regulations. At March 31, 1997, the Company's letters of credit totaled
$2,942,064.

The Company's policy is to partially self-insure group medical benefits
for its employees and the employees of its subsidiaries not covered by union
sponsored plans. The Company is self-insured to the extent of $100,000

F-22
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLDATED FINANCIAL STATEMENTS, Continued

8. COMMITMENTS AND CONTINGENCIES, continued:

per employee with a lifetime benefit of $375,000 per employee with an aggregate
annual stop loss as of August 6, 1997 of $2,114,000. Employees covered under
the Company's HMO health plan do not have a limit on their lifetime benefit.
Medical claims totaling $271,000 and $356,000 were accrued at March 31, 1997
and 1996, respectively. In addition, the Company is self-insured for general
liability, business auto and workmens compensation insurance to the extent of
$250,000 per incident with an aggregate annual stop loss of $1,403,000. Claims
in these categories totaling $1,068,000 and $971,000 were accrued at March 31,
1997 and 1996, respectively.

The Company's operations and properties are subject to extensive and
changing federal, state and local laws (including common law), regulations and
ordinances relating to noise and dust suppression, air and water quality, as
well as to the handling, treatment, storage and disposal of wastes
("Environmental Laws"). In connection with the Company's quarry sites and
utilization of hazardous waste-deprived fuel, Environmental Laws also provide
significant penalties for violators, as well as liabilities and costs of
cleaning up releases of hazardous wastes into the environment. Violation of
mandated procedures under operating permits, even if immaterial or
unintentional, may result in fines, shutdowns, remedial actions or revocation
of such permits. (See Note 11)

The Company is involved in various administrative matters or litigation.
While the final resolution of any matter may have an impact on the Company's
financial results for a particular reporting period, management believes that
the ultimate disposition of these matters will not have a materially adverse
effect upon the financial position of the Company.

9. OPERATING LEASES:

The Company leases various equipment and surface rights to mineral land
under operating leases (see Notes 12 and 14). Rent expense was $3,825,102 in
1997 and $3,433,657 in 1996. Minimum future rental commitments under all
noncancelable operating leases at March 31, 1997 for the next five years are as
follows:

1998 ......... $2,087,546
1999 ......... 1,296,272
2000 ......... 686,433
2001 ......... 397,510
2002 ......... 260,997
----------
$4,728,758
==========

10. INTANGIBLE ASSETS:

Intangible assets include the unamortized excess of the purchase price
over the fair value of tangible net assets of subsidiaries acquired in prior
years. Amortization of these amounts is being charged against income for a
period of 10 years. Amortization amounted to $22,265 and $44,350 in 1997 and
1996, respectively.

11. ENVIRONMENTAL:

The Company is subject to laws and regulations relating to the protection
of the environment. The Company has capitalized costs associated with obtaining
environmentally related operating permits and is amortizing these costs over
periods of 3--5 years. Permit related costs of $318,646 and $532,459 were
capitalized in 1997 and 1996, respectively. Amortization amounted to $256,322
and $480,472 in 1997 and 1996.

The Company has entered into administrative orders on consent with the
North Carolina Division of Solid Waste Management for its North Carolina
lightweight aggregate plant and with the U.S. Environmental Protection Agency
(EPA) for its Florida facility. These corrective action orders require the
Company to investigate areas of the plant sites where activities took place
that could be associated with environmental contamination. If contaminated
areas are identified, the Company could be required to take remedial action.

F-23
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLDATED FINANCIAL STATEMENTS, Continued

11. ENVIRONMENTAL, continued:

For the years ended March 31, 1997 and 1996, the Company accrued $55,000
and $98,000, respectively, which represents amounts the Company expects to
incur to prepare reports to the Division of Solid Waste Management which would
then be used to determine the need for further investigative or remedial
activities at its North Carolina facility. Although it is reasonably possible
that the Company will incur additional corrective action costs at this
facility, it is not possible at this time to reasonably estimate the amount of
any obligation for remediation at this location that may be material to the
Company's financial statements because the extent of environmental impact,
remediation alternatives (which could involve no or minimal action) and
concurrence of the regulatory authorities have not yet advanced to the stage
where a reasonable estimate of any loss can be made.

Management also feels it is reasonably possible that the Company will
incur future corrective action costs at its Kentucky facility. If incurred,
management estimates confirmatory sampling to cost approximately $68,000 at
this facility. This potential future cost has not been accrued.

As part of a consent order executed in September 1996 with the Alabama
Department of Environmental Management, the Company agreed to pay a $150,000
settlement. This amount was accrued at March 31, 1996 of which $60,000 remained
outstanding at March 31, 1997.

12. RELATED PARTY:

The Company leased certain property from an officer/stockholder. In August
1997, as part of the sale of the Company's Sand and Gravel operations (See Note
17), the Company was relieved of all obligations under the lease agreement.
(See Note 14)

In 1996, the Company sold 15,429 shares of Series C preferred stock, $200
par value, for $178.50 per share to an officer/stockholder. The discount of
$331,723 on the sale was treated as compensation.

In 1997 and 1996, the Company issued 1,000 and 700 shares respectively, of
common stock to key employees as bonuses. The bonuses were charged to operating
expenses and additional paid in capital has been increased by $36,095 in 1997
and $29,620 in 1996 representing the excess of the amount of the bonuses over
the par value of the common stock. The Company also purchased 3,000 and 2,015
shares of common stock from employees for $115,212 and $91,085 in 1997 and
1996, respectively.

In 1997, the Company sold 2,900 shares of its common stock to its salaried
employee pension plan. The pension plan paid $111,080 for the stock.

In 1997, the Company entered into a note agreement with an
officer/stockholder. The officer/stockholder had advanced the Company
$1,200,000 at March 31, 1997. (See Note 5)

F-24
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLDATED FINANCIAL STATEMENTS, Continued

13. PREFERRED STOCK:

The Company has three series of outstanding preferred stock. Series A and
Series B preferred stock have a $50 par value and do not accrue dividends for
the first year following their issuance. Thereafter, dividends are cumulative
and if and when declared accrue at $4 per share payable annually. Each of these
shares is entitled to one-quarter of one vote for all purposes for which the
holders of common shares are entitled to vote. They are redeemable for cash at
any time at the option of the Company, in whole or in part, at $60 per share
plus accrued dividends, except that the preferred stockholder has the option of
converting the redeemed shares into common stock at a rate of one common share
for four preferred shares. Series A and B preferred shares have a liquidation
value of $50 per share plus accrued dividends.

Series C preferred stock has a $200 par value and does not accrue
dividends for the first year following issuance. Thereafter, dividends are
cumulative and if and when declared accrue at $21.50 per share payable
annually. Each share is entitled to one vote for all purposes for which the
holders of common shares are entitled to vote. They are redeemable for cash at
any time at the option of the Company, in whole or in part, at $240 per share
plus accrued dividends, except that the preferred stockholder has the option of
converting the redeemed shares into common stock at a rate of one common share
for one preferred share. This series of preferred stock has a liquidation value
of $200 per share plus accrued dividends. In 1996, the Company sold 15,429
shares of Series C preferred stock to an officer/stockholder for $178.50 per
share. The discount of $331,723 on the sale was treated as compensation.

At March 31, 1997, dividends in arrears which have not been paid, declared
or accrued are as follows:

Preferred Preferred Preferred
A B C Total
-- --- -- -----
3/31/95 ......... $17,400 $ 14,093 $ -- $ 31,493
3/31/96 ......... 34,800 56,372 -- 91,172
3/31/97 ......... 34,800 56,372 82,931 174,103
------- -------- ------- --------
$87,000 $126,837 $82,931 $296,768
======= ======== ======= ========

14. SALE--LEASEBACK:

In 1995 through a series of transactions, the Company sold certain
property and subsequently leased the property from an officer/stockholder.
There were no amounts paid to the officer/stockholder pertaining to the lease
agreement. In August 1997, as part of the sale of the Company's Sand and Gravel
operations, the Company was relieved of all obligations calculated under the
lease agreement. Therefore, no expense was recognized in 1996 or 1997
pertaining to this agreement.

15. IMPAIRMENT OF LONG-LIVED ASSETS:

In 1996, the Company ceased production at its Florida lightweight
aggregate facility and recognized an impairment loss totaling $1,977,689 due to
the write-down of assets used directly in the production process to their
estimated net realizable value. The loss was computed as required under
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The fair market value of the impaired assets was obtained from third parties
whenever it was feasible; otherwise, it was based on management's best
estimate.

In 1997, the Company decided to sell one of its coal facilities. The
facility was not sold during 1997, but the Company recognized an impairment
loss totaling $166,304 using the procedures required under SFAS 121. The fair
market value of the impaired assets was obtained from third parties whenever it
was feasible; otherwise, it was based on management's best estimate.

F-25
<PAGE>

SOLITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLDATED FINANCIAL STATEMENTS, Continued

16. MERGER/SPIN-OFF:

On September 10, 1997, the Company and Giant Cement Holding, Inc. (Giant)
entered into an Agreement and Plan of Merger to merge Solite Corporation and
certain of its divisions and subsidiaries into Giant immediately following a
spin-off of certain subsidiaries. The spin-off and merger process is summarized
as follows:

A. The Company will effect a recapitalization under which it will convert
it's outstanding preferred stock to common.

B. Certain subsidiaries and divisions which are not to be included in the
merger will be spun-off. This is expected to qualify as a tax free spin-off
under Section 355 of the Internal Revenue Code.

C. Solite shareholders will receive up to 650,000 shares of Giant's common
stock for all of Solite's outstanding common stock. Giant will also assume up
to $20 million of Solite's long-term and short-term debt. The Giant stock will
be released as follows:

450,000 shares at closing; up to 100,000 shares, subject to offset
dependent upon meeting certain financial benchmarks at closing, available 90
days after closing; up to 100,000 shares, subject to offset to satisfy certain
indemnification obligations of Solite, with up to 50,000 shares available if
certain conditions are satisfied at the second anniversary of the closing, and
the remainder available at the third anniversary.

The merger is expected to occur in December, 1997.

17. PRIOR PERIOD ADJUSTMENT:

During 1997 management realized that the value of some inventory was
overstated as a result of incomplete elimination of certain intercompany
profits, that the values of certain fixed assets had also been overstated and
that an asset which had been placed in service in a previous year had not been
depreciated. The effect on income for 1995 was to increase expenses by
$2,009,494, net of a $1,246,857 tax benefit, thus changing net income
previously reported of $1,236,577 to a net loss in 1995 of $772,917. The
overall effect on retained earnings at March 31, 1995 was a decrease from
$21,321,315 as previously reported to $18,532,704, which is net of a $1,707,551
tax benefit.

18. MANAGEMENT'S PLANS:

Over the past four years, the Company has had recurring losses from
operations. The Company has requested and received amendments to various debt
instruments postponing scheduled curtailments; however, management does not
project sufficient cash from operations to be able to meet debt obligations due
during the next fiscal year. These factors raise substantial doubt about the
Company's ability to continue as a going concern.

Management has taken the following actions in order to mitigate the
conditions described above:

A. As mentioned above (See Note 16), Giant Cement Holding, Inc. (Giant)
has entered into an Agreement and Plan of Merger to merge Solite Corporation
and certain subsidiaries into Giant. As part of the merger, Giant will assume
up to $20 million of Solite's long-term and short-term debt.

B. In August 1997, the Company sold substantially all the assets of its
Sand and Gravel operation. The Company curtailed $5.87 million of debt as a
result of this transaction.

The Company has maintained good working relationships with the various
lenders over the years and management believes these relationships will
continue throughout the upcoming negotiations. However, there is no assurance
that the lenders will continue to provide financing to the Company in the
future. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

F-26
<PAGE>

FINANCIAL STATEMENTS OF

SOLITE CORPORATION

for the years ended March 31, 1997 and 1996

F-27
<PAGE>

CONTENTS

Page
----
Report of Independent Accountants ........... F-29
Balance Sheets .............................. F-30
Statements of Operations .................... F-31
Statements of Shareholders' Equity .......... F-32
Statements of Cash Flows .................... F-33
Notes to Financial Statements ............... F-34-F-41

F-28
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

Board of Directors
Giant Cement Holding, Inc. and Solite Corporation:

We have audited the accompanying balance sheets of Solite Corporation (the
"Company") as of March 31, 1997 and 1996, and the related statements of
operations, shareholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

As discussed in Note 1 to the accompanying financial statements, on September
10, 1997, Giant Cement Holding, Inc. signed an agreement to purchase
substantially all of the assets and assume certain liabilities of Solite
Corporation. These financial statements do not include any adjustments arising
from the sale transaction.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Solite Corporation as of March
31, 1997 and 1996, and the results of its operations and its cash flows for the
years then ended, in conformity with generally accepted accounting principles.

As more fully discussed in Notes 1, 6 and 13, the Company was in default under
certain provisions of its loan agreements, which have been waived and their
maturity dates have been extended to between October 31, 1997 and December 31,
1997, and non-core businesses (as defined in Note 1) have suffered recurring
losses from operations that raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in this regard are also
discussed in Note 13. These financial statements do not include any adjustments
that might result from this uncertainty.

Charlotte, North Carolina
August 11, 1997, except as to the information presented in the second
paragraph of Note 1, for which the date is September 10, 1997
and Note 6 with respect to the extensions of maturity
dates, for which the date is November 6, 1997

/s/ Coopers & Lybrand L.L.P.
---------------------------

F-29
<PAGE>

SOLITE CORPORATION

BALANCE SHEETS

March 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ......................................... $ 1,441,339 $ 357,046
Accounts receivable, less allowances of $343,000 in 1997 and
$328,000 in 1996 ................................................. 6,323,448 5,576,998
Inventories ....................................................... 7,706,450 8,351,244
Deferred income taxes ............................................. 918,000 875,000
Other current assets .............................................. 207,287 362,174
----------- -----------
Total current assets .......................................... 16,596,524 15,522,462
Property, plant and equipment, net ................................ 14,436,188 15,184,880
Deferred income taxes ............................................. 1,026,000 888,000
Other assets ...................................................... 1,529,058 1,996,533
----------- -----------
$33,587,770 $33,591,875
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of debt (Note 6) ............................... $17,038,223 $18,525,735
Accounts payable .................................................. 6,630,566 5,610,243
Accrued payroll and benefits ...................................... 611,702 555,976
Accrued health and casualty insurance claims ...................... 1,015,194 789,239
Other current liabilities ......................................... 1,183,883 699,426
----------- -----------
Total current liabilities ..................................... 26,479,568 26,180,619
----------- -----------
Commitments and contingencies (Notes 1, 8, 10 and 13)
Shareholders' equity:
Preferred stock, $50 par value; redeemable at $60 per share
(cumulative dividend of $4 per share); 100,000 shares
authorized:
Series A preferred, issued 8,700 shares ......................... 435,000 435,000
Series B preferred, issued 14,093 shares ........................ 704,650 704,650
Preferred stock, series C, $200 par value; redeemable at $240
per share (cumulative dividend of $21.50 per share); 16,807
shares authorized; issued 15,429 shares .......................... 3,085,800 3,085,800
Common stock, $2 par value; authorized 1,000,000 shares;
issued 530,950 shares in 1997 and 530,050 shares in 1996 ......... 1,061,900 1,060,100
Capital in excess of par value .................................... 1,153,620 1,121,457
Retained earnings ................................................. 667,232 1,004,249
----------- -----------
7,108,202 7,411,256
----------- -----------
$33,587,770 $33,591,875
=========== ===========
</TABLE>

The accompanying notes are an integral part of the financial statements

F-30
<PAGE>

SOLITE CORPORATION

STATEMENTS OF OPERATIONS

for the years March 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
-------------- --------------
<S> <C> <C>
Sales $ 52,612,860 $ 49,442,632
Costs and expenses:
Cost of sales and services .................. 38,329,081 33,734,747
Selling, general and administrative ......... 10,807,766 11,680,681
------------ ------------
Operating income ........................ 3,476,013 4,027,204
Other income (expenses):
Interest expense ............................ (1,731,735) (1,835,441)
Other, net .................................. 312,593 263,612
------------ ------------
Income before income taxes .............. 2,056,871 2,455,375
------------ ------------
Provision for income taxes (benefit):
Current ..................................... 891,000 1,551,000
Deferred .................................... (181,000) (576,000)
------------ ------------
710,000 975,000
------------ ------------
Net income .............................. $ 1,346,871 $ 1,480,375
============ ============
</TABLE>

The accompanying notes are an integral part of the financial statements

F-31
<PAGE>

SOLITE CORPORATION

STATEMENTS OF SHAREHOLDERS' EQUITY

for the years ended March 31, 1997 and 1996

<TABLE>
<CAPTION>
Preferred Stock Capital in
---------------------------------- Common Excess of Retained
Series A Series B Series C Stock Par Value Earnings Total
---------- ---------- ------------ ------------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, March 31, 1995 ......... $435,000 $704,650 $ -- $1,062,730 $1,178,892 $7,853,508 $11,234,780
Stock issued as employee
bonuses, 700 shares ............. 1,400 29,620 31,020
Stock repurchased from
employees, 2,015 shares ......... (4,030) (87,055) (91,085)
Series C preferred stock
issued to officer, 15,429
shares (Note 12) ................ 3,085,800 3,085,800
Net income ....................... 1,480,375 1,480,375
Distributions to non-core
businesses, net ................. (8,329,634) (8,329,634)
---------- -----------
Balances, March 31, 1996 ......... 435,000 704,650 3,085,800 1,060,100 1,121,457 1,004,249 7,411,256
Stock issued as employee
bonuses, 1,000 shares ........... 2,000 36,095 38,095
Stock repurchased from
employees, 3,000 shares ......... (6,000) (109,212) (115,212)
Stock sold to Solite Corp.
Salaried Pension Plan,
2,900 shares .................... 5,800 105,280 111,080
Net income ....................... 1,346,871 1,346,871
Distributions to non-core
businesses, net ................. (1,683,888) (1,683,888)
---------- -----------
Balances, March 31, 1997 ......... $435,000 $704,650 $3,085,800 $1,061,900 $1,153,620 $ 667,232 $7,108,202
======== ======== ========== ========== ========== ========== ===========
</TABLE>

The accompanying notes are an integral part of the financial statements

F-32
<PAGE>

SOLITE CORPORATION

STATEMENTS OF CASH FLOWS

for the years ended March 31, 1997 and 1996

<TABLE>
<CAPTION>
1997 1996
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income ........................................................ $ 1,346,871 $ 1,480,375
Depreciation, depletion and amortization .......................... 2,751,890 2,900,902
Gain on disposition of assets ..................................... (203,913) (255,031)
Deferred tax benefit .............................................. (181,000) (576,000)
Reimbursement of deposits held by insurance administrator ......... 536,030 --
Compensation expense (Note 12) .................................... -- 331,723
Stock bonuses ..................................................... 38,095 31,020
Changes in operating assets and liabilities:
Receivables ..................................................... (746,450) (555,530)
Inventories ..................................................... 644,794 624,105
Other current assets ............................................ 154,887 3,035,079
Other assets .................................................... (90,431) (60,460)
Accounts payable ................................................ 1,020,323 1,227,547
Accrued payroll and benefits .................................... 55,726 11,057
Accrued health and casualty claims insurance .................... 225,955 146,786
Other operating liabilities ..................................... 484,457 258,662
------------ ------------
Net cash provided by operating activities ..................... 6,037,234 8,600,235
------------ ------------
Cash flows from investing activities:
Purchases of property, plant and equipment ........................ (1,298,390) (465,193)
Proceeds from sale of assets ...................................... 228,628 273,573
Cost of environmental permits ..................................... (314,981) (425,623)
------------ ------------
Net cash used by investing activities ......................... (1,384,743) (617,243)
------------ ------------
Cash flows from financing activities:
Proceeds from short-term borrowings ............................... -- 800,000
Principal payments on notes payable ............................... (2,380,156) (6,013,718)
Proceeds from issuance of preferred stock ......................... -- 2,754,077
Proceeds from issuance of common stock ............................ 111,080 --
Purchases of common stock ......................................... (115,212) (91,085)
Distributions to non-core businesses .............................. (1,183,910) (5,641,327)
------------ ------------
Net cash used by financing activities ......................... (3,568,198) (8,192,053)
------------ ------------
Increase (decrease) in cash and cash equivalents .............. 1,084,293 (209,061)
Cash and cash equivalents:
Beginning of period ............................................... 357,046 566,107
------------ ------------
End of period ..................................................... $ 1,441,339 $ 357,046
============ ============
Supplemental information, cash paid for interest (net of
$42,454 capitalized in 1997)........................................ $ 1,940,904 $ 2,004,626
Noncash investing and financing activities:
Assets financed by notes payable .................................. 128,452 --
Property, plant and equipment contributed by non-core
businesses ....................................................... 264,214 851,424
Assumption by Company of non-core businesses' debt ................ 764,192 3,539,731
Common stock issued as employee bonuses ........................... 38,095 31,020
</TABLE>

The accompanying notes are an integral part of the financial statements

F-33
<PAGE>

SOLITE CORPORATION

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION:

These financial statements of Solite Corporation (the "Company") consist
of the following businesses owned by Solite Corporation: Solite Corporation
(excluding Sand and Gravel Division); Carolina Solite Corporation (excluding
the Florida Solite Company); Solite Lightweight Transportation, Inc.;
Lightweight Block Company, Incorporated; Boston Concrete Products,
Incorporated; Lightweight Block-Eden Corporation; Lightweight Block--Lexington
Corporation; Charlotte Block, Inc.; Oldover Corporation (excluding the Green
Cove Springs facilities); M&M Chemical and Equipment Co., Inc. and Eden Machine
and Design Corporation. Significant intercompany transactions and balances have
been eliminated. Non-core businesses consist of the following entities which
are excluded from these financial statements: Northeast Solite Corporation;
Florida Solite Company; Kentucky Solite Corporation; Sand & Gravel Division of
Solite Corporation; Southern Materials Corporation; Solite Masonry Units
Corporation; JTN Land Corporation; Terry Glenn Coal Company; Environmental
Conservation Systems, Inc.; Industrial Environmental Systems, Inc.; Standard
Minerals Corporation; RR, Incorporated; Massey Concrete Corporation; Rockville
Nurseries Corporation; Stoneridge Farms, Inc.; Rappahannock Farm Enterprises,
Inc.; Big Ugly Coal Corporation; Princess Anne Coal Corporation; JTN Leasing
Company; Lightweight Block Company, Inc. (a North Carolina corporation) and
Lightweight Block - Wilmington Corporation. References to "non-core businesses"
relate to the businesses owned by Solite Corporation which will not be acquired
pursuant to the definitive agreement, described below.

On September 10, 1997, Giant Cement Holding, Inc. ("Giant") signed a
definitive agreement with the Company to purchase certain assets and assume
certain liabilities of the Company. These financial statements present the
assets, liabilities and results of operations of the businesses to be acquired
pursuant to the agreement as of and for the periods indicated. The sale is
subject to certain conditions. These financial statements do not include any
adjustments to the carrying value of the Company's net assets that might result
from this proposed transaction.

The Company is involved in the manufacture and sale of masonry blocks and
lightweight aggregate construction materials. The Company is also involved in
waste recycling and resource recovery, utilizing industrial waste as fuel in
its kilns. The Company sells primarily to customers in the eastern United
States.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

CASH AND CASH EQUIVALENTS--The Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.

INVENTORIES--Inventories are carried at the lower of annual average cost
or market with the exception of repair parts and supplies, which are carried at
the lower of first-in, first-out cost or market.

PROPERTY, PLANT AND EQUIPMENT--Property, plant and equipment are stated at
cost. The Company records depreciation over the estimated useful lives of the
related assets, ranging from five to thirty-three years. The Company records
depreciation principally on the straight-line method. Depletion of quarry
property is computed on a units extracted basis based on estimated total units
available. When property, plant and equipment is sold or retired. the related
cost and accumulated depreciation is removed from the accounts and any gain or
loss is included in income.

OTHER ASSETS--Other assets include certain costs incurred to obtain
multi-year operating permits upon certification of compliance with
environmental regulations. Deferred permit certification costs are amortized
over the estimated period benefited, presently two to five years.

ENVIRONMENTAL LIABILITIES--The Company evaluates environmental
contingencies and, if appropriate, accrues the estimated cost by charging
income for the gross liability for all matters where a future loss is probable
and reasonably estimable. If it is probable that the Company will be
indemnified and/or recover all or a portion of a probable loss, and the amount
of such recovery is reasonably estimable, the Company accrues the related asset
on a gross basis. The Company utilizes all of the information available to it
to estimate the range or amount of loss and the timing of loss payments.

REVENUE RECOGNITION--The Company derives revenue from product sales and
resource recovery services. Revenue for product sales is recognized in the
period in which the product is shipped to customers. Revenue for resource

F-34
<PAGE>

SOLITE CORPORATION

NOTES TO FINANCIAL STATEMENTS, Continued

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:

recovery services is recognized in the period in which the service is provided.
Inventories of waste-derived fuel are immaterial.

INCOME TAXES--The Company is included in a consolidated tax return which
includes the non-core businesses. The Company provides for income taxes as if
the Company filed a separate return. Deferred tax liabilities and assets are
recorded for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the temporary
differences between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Deferred tax assets are reduced by a
valuation allowance if, based on available evidence, it is more likely than not
that some portion or all of the deferred tax assets will not be realized.

CONCENTRATION OF CREDIT RISK--Accounts receivable are principally from
customers dependent upon the construction industry. However, concentrations of
credit risk with respect to trade receivables are partially mitigated due to
the large number of customers comprising the Company's customer base and their
geographic dispersion. Trade receivables are short-term, and probable bad debt
losses are considered in establishing the allowance for doubtful accounts. The
Company generally does not require collateral for receivables. Substantially
all of the Company's cash is maintained in one financial institution, and
balances are in excess of federal government insurance limits.

USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Significant estimates relate to raw material and in process inventory
quantities, valuation allowances and self- insurance reserves. See Notes 6 and
11 with respect to the allocation of estimated costs of interest and
administrative functions.

3. INVENTORIES:

Inventories at March 31 are as follows:

1997 1996
------------- -------------
Finished goods ........................... $3,488,353 $4,931,252
In process ............................... 3,140,330 2,145,480
Raw materials ............................ 115,527 168,809
Supplies, repair parts and fuel .......... 962,240 1,105,703
---------- ----------
$7,706,450 $8,351,244
========== ==========

4. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment at March 31 are as follows:

<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Land and mineral resources ........................... $ 1,167,844 $ 1,188,184
Buildings and improvements ........................... 3,305,296 3,276,125
Furniture and fixtures ............................... 946,482 937,487
Equipment ............................................ 25,688,555 24,072,777
Transportation equipment ............................. 2,628,286 2,543,289
----------- -----------
33,736,463 32,017,862
Less accumulated depreciation and depletion .......... 19,300,275 16,832,982
----------- -----------
$14,436,188 $15,184,880
=========== ===========
</TABLE>

F-35
<PAGE>

SOLITE CORPORATION

NOTES TO FINANCIAL STATEMENTS, Continued

5. INCOME TAXES:
The provision (benefit) for income taxes at March 31 is as follows:

1997 1996
------------- -------------
Current:
Federal ......... $ 567,000 $1,404,000
State ........... 324,000 147,000
Deferred:
Federal ......... (154,000) (478,000)
State ........... (27,000) (98,000)
---------- ----------
$ 710,000 $ 975,000
========== ==========

The following is a reconciliation between the federal income tax rate and
the Company's effective income tax rate:

<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Statutory tax rate .................................. 34.0% 34.0%
State income taxes, net of federal benefit .......... 4.1 4.4
Excess depletion for tax purposes ................... (2.3) (2.7)
Executive compensation expense and other ............ (1.3) 4.0
---- ----
34.5% 39.7%
==== ====
</TABLE>

Cumulative gross deferred tax assets and liabilities relate to the
following at March 31:

<TABLE>
<CAPTION>
1997 1996
--------------- ---------------
<S> <C> <C>
Net operating loss carryforwards ...................... $ 3,789,000 $ 2,756,000
Alternative minimum tax credit carryforwards .......... 717,000 717,000
Pension benefits ...................................... 170,000 138,000
Inventory ............................................. 113,000 328,000
Self-insurance accruals ............................... 302,000 193,000
Other ................................................. 333,000 216,000
------------ ------------
5,424,000 4,348,000
Valuation allowance ................................... (1,134,000) (30,000)
------------ ------------
Net deferred tax assets ........................... 4,290,000 4,318,000
Depreciation .......................................... (2,346,000) (2,555,000)
------------ ------------
Net deferred tax asset ............................ 1,944,000 1,763,000
Current deferred tax asset ............................ 918,000 875,000
------------ ------------
Non-current deferred tax asset .................... $ 1,026,000 $ 888,000
============ ============
</TABLE>

Net operating loss carryforwards begin expiring in 2011.

F-36
<PAGE>

SOLITE CORPORATION

NOTES TO FINANCIAL STATEMENTS, Continued

6. FINANCING:

Debt consists of the following at March 31:

<TABLE>
<CAPTION>
1997 1996
-------------- --------------------
<S> <C> <C>
Revolving credit line with a bank, interest payable monthly at prime
plus 1.00% (prime equals 8.50% at March 31, 1997) ................... $10,224,729 $ 11,255,625(A)
Revolving credit line with a bank, interest payable monthly at prime
plus 1.00% .......................................................... 6,019,859 6,291,995(B)
Two lines of credit with banks, interest payable monthly at prime plus
1.50% ............................................................... 2,000,000 2,000,000(C)
Five senior notes payable to insurance companies, interest payable
monthly at rates up to 12.32% ....................................... 7,441,827 8,505,662(D)
Seven notes payable for automobiles, interest and principal payable
monthly at rates up to 10.25% ....................................... 115,163 --
----------- -------------
25,801,578 28,053,282
Less amounts allocated to non-core business .......................... 8,763,355 9,527,547(E)
----------- -------------
$17,038,223 $ 18,525,735
=========== =============
</TABLE>

The revolving credit lines, lines of credit, senior notes and notes
payable for automobiles are recorded by the Company. However, all covenants in
the debt agreements apply to both the Company and non-core businesses. The
Company and non-core businesses are in default of certain covenants as of March
31, 1997 and have obtained waivers of these violations. However, all debt
allocated to the Company has been classified as current based on the maturity
dates expiring within the next year.

(A) The total amount available (including outstanding borrowings) under
the agreement at March 31, 1997 is $18,500,000, which decreases to $10,500,000
upon the occurrence of certain trigger events, as defined in the credit
agreement. Subsequent to year-end, the bank amended the credit agreement to
change the maturity date to December 31, 1997.

(B) The total amount available (including outstanding borrowings) under
the agreement at March 31, 1997 is $10,000,000, which decreases to $6,000,000
upon the occurrence of certain trigger events, as defined in the credit
agreement. Subsequent to year-end, the bank amended the credit agreement to
change the maturity date to December 31, 1997.

(C) The total amount available (including outstanding borrowings) under
the lines of credit at March 31, 1997 is $2,000,000. Subsequent to year-end,
the banks amended the credit agreements to change the maturity dates to
December 31, 1997. The lines of credit are guaranteed by an
officer/stockholder.

(D) Subsequent to year-end, the insurance companies amended the debt
agreements to change the maturity dates to January 31, 1998.

(E) For purposes of the Company's financial statements, a portion of the
debt has been allocated to non-core businesses based on the ratio of the
non-core businesses' overhead expenses to the total overhead expenses of the
Company and non-core businesses.

The Company and non-core businesses have pledged substantially all of
their assets as collateral under the revolving credit lines, lines of credit,
senior notes and notes payable for automobiles.

7. PENSION PLAN:

The Company has two noncontributory defined benefit pension plans covering
substantially all employees not covered by union sponsored plans. The Company's
funding policy for these plans is to fund pension cost as determined by its
actuaries. Plan assets consist primarily of mutual funds. At December 31, 1996
and 1995, plan assets included 7,800 and 4,900 shares of the parent company's
stock valued at $289,000 and $212,000, respectively.

F-37
<PAGE>

SOLITE CORPORATION

NOTES TO FINANCIAL STATEMENTS, Continued

7. PENSION PLAN, continued:

The actuarial valuation performed for the Company's plans was performed
for the Company and the non- core businesses. For purposes of these financial
statements, a portion of the pension liability, pension expense and pension
disclosure balances for the funded status and pension expense was allocated to
the Company in the ratio of the Company's employee headcount to the total
Company and non-core businesses' employee headcount.

The following table sets forth the plan's funded status as of January 1
and amounts recognized in the Company's balance sheet at March 31:

<TABLE>
<CAPTION>
1997 1996
---------------- ----------------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation ........................................ $ 8,532,132 $ 8,062,812
Nonvested ........................................................ 134,995 188,880
------------- -------------
Accumulated benefit obligation ..................................... 8,667,127 8,251,692
Effect of future compensation increases ............................ 1,411,111 1,557,930
------------- -------------
Project benefit obligation ......................................... 10,078,238 9,809,622
Plan assets at fair value .......................................... (12,116,109) (11,380,416)
------------- -------------
Plan assets in excess of projected benefit obligation .............. (2,037,871) (1,570,794)
Unrecognized net gain .............................................. 2,200,651 1,568,713
Unrecognized prior service cost .................................... (218,926) (251,680)
Unrecognized net transition asset .................................. 493,622 610,882
------------- -------------
Accrued pension cost included in other current liabilities ......... $ 437,476 $ 357,121
============= =============
</TABLE>

The assumed discount rates for 1997 and 1996 were 7.5% and 7.0%,
respectively. The long-term rates of return on assets and rates of increase for
future compensation were 8.0% and 5.0%, respectively, in 1997 and 1996.

Pension expense for the plans includes the following:

<TABLE>
<CAPTION>
1997 1996
--------------- ---------------
<S> <C> <C>
Service cost, benefits earned during the year .......... $ 412,811 $ 334,935
Interest cost on projected benefit obligation .......... 656,257 638,217
Actual return on assets ................................ (1,413,053) (2,231,956)
Net amortization and deferral .......................... 431,376 1,384,948
------------ ------------
Total .............................................. $ 87,391 $ 126,144
============ ============
</TABLE>

8. COMMITMENTS AND CONTINGENCIES:

The Company's policy is to partially self-insure group medical benefits
for its employees and the employees of its subsidiaries. The Company is
self-insured to certain maximum limits. At March 31, 1997 and 1996,
approximately $225,000 and $285,000, respectively, in medical claims were
accrued. In addition, the Company is self-insured to certain maximum limits for
general liability, business auto and workmen's compensation benefits. At March
31, 1997 and 1996, approximately $790,000 and $504,000, respectively, in claims
were accrued.

The Company and the non-core businesses have posted letters of credit
pursuant to environmental regulations. At March 31, 1997, these letters of
credit total $2,942,000. The Company would be obligated together with the
non-core businesses for repayment of any commitments under these letters of
credit.

The Company guarantees the payment of certain debt owed by another entity
owned by the non-core businesses. This debt is owed to the president of the
Company. The balance of the debt at March 31, 1997 totaled $1,200,000.

F-38
<PAGE>

SOLITE CORPORATION

NOTES TO FINANCIAL STATEMENTS, Continued

8. COMMITMENTS AND CONTINGENCIES, continued:

The Company's operations and properties are subject to extensive and
changing federal, state and local laws (including common law), regulations and
ordinances relating to noise and dust suppression, air and water quality, as
well as to the handling, treatment, storage and disposal of wastes
("Environmental Laws", see Note 10). In connection with the Company's quarry
sites and utilization of hazardous waste-derived fuel, Environmental Laws also
provide significant penalties for violators, as well as liabilities and costs
of cleaning up releases of hazardous wastes into the environment. Violation of
mandated procedures under operating permits, even if immaterial or
unintentional, may result in fines, shutdowns, remedial actions or revocation
of such permits.

The Company has entered into an administrative order of consent with the
U.S. Environmental Protection Agency (EPA) for the lightweight aggregate
manufacturing facility of Florida Solite Company, a non-core business. This
corrective action order requires the Company, Florida Solite Company and the
non-core businesses to investigate areas of the plant sites where activities
took place that could be associated with environmental contamination. If
contaminated areas are identified, the Company, Florida Solite Company and the
non-core businesses could be required to take remedial action.

The Company is contingently liable for any investigative and corrective
action costs should Florida Solite Company, together with the non-core
businesses, be unable to meet these obligations. Management believes that it is
reasonably possible Florida Solite Company and the non-core businesses will
incur corrective action costs in the future ranging from $268,000 to $1,118,000
at this facility.

The Company and non-core businesses are involved in various administrative
matters or litigation. While the final resolution of any matter may have an
impact on the Company's financial results for a particular reporting period,
management believes that the ultimate disposition of these matters will not
have a materially adverse effect upon the financial position of the Company.

9. OPERATING LEASES:
The Company leases various equipment and surface rights to mineral land
under operating leases with remaining terms of up to sixteen years. Certain
vehicle leases include provisions for additional rent payments based on miles
driven. Rent expense totaled $3,448,000 and $3,294,000 in 1997 and 1996,
respectively.

Minimum future rental commitments under all noncancelable operating leases
at March 31, 1997 for the next five years are as follows:

1998 ......... $1,626,000
1999 ......... 1,127,000
2000 ......... 574,000
2001 ......... 295,000
2002 ......... 159,000

10. ENVIRONMENTAL:

Although a loss is probable, it is not possible at this time to reasonably
estimate the amount of any obligation for remediation at these locations that
may be material to the Company's financial statements because the extent of
environmental impact, remediation alternatives (which could involve no or
minimal action) and concurrence of the regulatory authorities have not yet
advanced to the stage where a reasonable estimate of any loss can be made.
However, at March 31, 1997, the Company has accrued $55,000, which represents
amounts the Company expects

F-39
<PAGE>

SOLITE CORPORATION

NOTES TO FINANCIAL STATEMENTS, Continued

10. ENVIRONMENTAL, continued:

to incur to prepare reports to the Division of Solid Waste Management which
would then be used to determine the need for further investigative or remedial
activities.

As part of a consent order executed in September 1996 with the Alabama
Department of Environmental Management, the Company agreed to pay a $150,000
settlement and strengthen its controls over the tracking of shipments of
hazardous waste. This amount was accrued as of March 31, 1996.

11. RELATED PARTY:

During 1997 and 1996, the Company's sales included $2,423,000 and
$1,997,000 of sales to non-core businesses. At March 31, 1997 and 1996, the
Company had approximately $193,000 of receivables due from non-core businesses.

The Company provides certain administrative functions to the non-core
businesses including senior executive management services, accounting, legal
and human resources services. The cost of these functions has been allocated to
the non-core businesses by a formula based on the level of revenue, headcount
and projects. Administrative costs allocated to non-core businesses were
approximately $1,868,000 and $1,925,000 in 1997 and 1996, respectively.

12. PREFERRED STOCK:

The Company has three series of outstanding preferred stock. Series A and
Series B preferred stock have a $50 par value and do not accrue dividends for
the first year following their issuance. Thereafter, dividends are cumulative
and, if and when declared, accrue at $4 per share payable annually. Each of
these shares is entitled to one-quarter of one vote for all purposes for which
the holders of common shares are entitled to vote. They are redeemable for cash
at any time at the option of the Company, in whole or in part, at $60 per share
plus accrued dividends, for an aggregate amount of $609,000 and $973,000 for
Series A and Series B, respectively, at March 31, 1997, except that the
preferred shareholder has the option of converting the redeemed shares into
common stock at a rate of one common share for four preferred shares. Series A
and Series B preferred shares have a liquidation value of $50 per share plus
accrued dividends for an aggregate amount of $522,000 and $832,000,
respectively, at March 31, 1997.

Series C preferred stock has a $200 par value and does not accrue
dividends for the first year following issuance. Thereafter, dividends are
cumulative and, if and when declare, accrue at $21.50 per share payable
annually. Each share is entitled to one vote for all purposes for which the
holders of common shares are entitled to vote. They are redeemable for cash at
any time at the option of the Company, in whole or in part, at $240 per share
plus accrued dividends, for an aggregate amount of $3,786,000 at March 31, 1997
except that the preferred shareholder has the option of converting the redeemed
shares into common stock at a rate of one common share for one preferred share.
This series of preferred stock has a liquidation value of $200 per share plus
accrued dividends for an aggregate amount of $3,169,000 at March 31, 1997. In
1996, the Company sold 15,429 shares of Series C preferred stock to an
officer/shareholder for $178.50 per share, resulting in a discount of $331,723
which has been recorded as compensation expense in the accompanying March 31,
1996 financial statements.

At March 31, 1997, dividends in arrears which have not been paid, declared
or accrued are $87,000 for Series A preferred stock, $127,000 for Series B
preferred stock and $83,000 for Series C preferred stock.

F-40
<PAGE>

SOLITE CORPORATION

NOTES TO FINANCIAL STATEMENTS, Continued

13. MANAGEMENT PLANS:

The Company and the non-core businesses have had recurring operating
losses and incurred a consolidated net loss in 1997 of approximately
$3,174,000. Additionally, as noted in Note 6, the Company and the non- core
businesses were in default of their financing agreements, which have been
waived, and their maturity dates have been extended to between December 31,
1997 and January 31, 1998, and the Company and the non-core businesses are
dependent upon continued financing from their lenders. The Company and non-core
businesses have entered into plans to sell substantially all of their assets,
including the assets of the Company (as defined in Note 1). The ability of the
Company to continue as a going concern and address their financial concerns is
dependent on the success of the plans for asset sales and the continued
financing from their lenders. These financial statements do not include any
adjustments that might result from this uncertainty.

F-41

<PAGE>

Annex I

Conversion Schedule

The conversion ratios for Solite Preferred Stock in the Conversion and
Solite Common Stock in the Merger will be the conversion ratio for such class
shown under the dollar amount equal to the average of the closing bid and asked
prices per share of Giant Common Stock on the Nasdaq National Market for the 20
trading days immediately before the Effective Time, rounded to the nearest
eighth (the "Giant Conversion Price"). The Common Exchange Ratio shows the
exchange ratio for the 175,000 shares of Giant Common Stock to be issued at the
Effective Time. The Escrow Exchange Ratio shows the exchange ratio for the
150,000 shares of Giant Common Stock to be placed in escrow pursuant to the
Merger Agreement and assumes the release of all 150,000 shares from escrow. No
fractional shares will be issued in the Conversion or the Merger.

Each holder of shares of Solite Preferred Stock who would otherwise be
entitled to receive a fraction of a share of Solite Common Stock will receive,
in lieu thereof, cash (without interest) in an amount determined by multiplying
the fractional interest to which such holder would otherwise be entitled by the
quotient derived by dividing (i) the amount shown on the Equity Value of
Northeast Solite and Solite Combined for the Giant Conversion Price by (ii) the
Total Shares of Solite Common Stock owned upon Conversion based on such Giant
Conversion Price.

Each holder of shares of Solite Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of Giant Common Stock (after taking into account all Solite Certificates
delivered by such holder) will receive, in lieu thereof, cash (without
interest) in an amount determined by multiplying (i) the fractional interest to
which such holder would otherwise be entitled and (ii) the average of the
closing bid and asked prices per share for Giant Common Stock on the Nasdaq
National Market for the twenty trading days immediately preceding the Effective
Time.

GIANT CONVERSION PRICE

$15

<TABLE>
<CAPTION>
$15.000 $15.125 $15.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 9,633,150 9,673,775 9,714,400
Preferred Conversion Ratio:
Series A .......................... 4.9236 4.8869 4.8507
Series B .......................... 4.9269 4.8902 4.8540
Series C .......................... 19.7037 19.5568 19.4120
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 42,835 42,516 42,201
Series B .......................... 69,435 68,917 68,407
Series C .......................... 304,008 301,741 299,508
--------- --------- ---------
Total Shares ..................... 949,028 945,924 942,866
Common Exchange Ratio .............. 0.1844 0.1850 0.1856
Escrow Exchange Ratio .............. 0.1581 0.1586 0.1591
---------- ---------- -------
Aggregate Exchange Ratio ......... 0.3425 0.3436 0.3447

<CAPTION>
$15.375 $15.500 $15.625 $15.750 $15.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 9,755,025 9,795,650 9,836,275 9,876,900 9,917,525
Preferred Conversion Ratio:
Series A .......................... 4.8150 4.7799 4.7453 4.7112 4.6776
Series B .......................... 4.8183 4.7832 4.7486 4.7144 4.6808
Series C .......................... 19.2694 19.1289 18.9904 18.8539 18.7193
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 41,891 41,585 41,284 40,988 40,695
Series B .......................... 67,905 67,410 66,922 66,440 65,966
Series C .......................... 297,308 295,139 293,002 290,896 288,820
--------- --------- --------- --------- ---------
Total Shares ..................... 939,853 936,884 933,958 931,074 928,231
Common Exchange Ratio .............. 0.1862 0.1868 0.1874 0.1880 0.1885
Escrow Exchange Ratio .............. 0.1596 0.1601 0.1606 0.1611 0.1616
--------- --------- --------- --------- ---------
Aggregate Exchange Ratio ......... 0.3458 0.3469 0.3480 0.3491 0.3501
</TABLE>

I-1
<PAGE>

GIANT CONVERSION PRICE

$16

<TABLE>
<CAPTION>
$16.000 $16.125 $16.250 $16.375
------- ------- ------- --------
<S> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 9,958,150 9,998,775 10,039,400 10,080,025
Preferred Conversion Ratio:
Series A .......................... 4.6444 4.6118 4.5795 4.5478
Series B .......................... 4.6476 4.6149 4.5827 4.5509
Series C .......................... 18.5866 18.4558 18.3269 18.1997
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750
Series A .......................... 40,407 40,122 39,842 39,565
Series B .......................... 65,499 65,038 64,583 64,135
Series C .......................... 286,773 284,755 282,766 280,803
--------- --------- ---------- ----------
Total Shares ..................... 925,429 922,665 919,941 917,254
Common Exchange Ratio .............. 0.1891 0.1897 0.1902 0.1908
Escrow Exchange Ratio .............. 0.1621 0.1626 0.1631 0.1635
--------- --------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3512 0.3522 0.3533 0.3543

<CAPTION>
$16.500 $16.625 $16.750 $16.875
------- ------- ------- -------
<S> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 10,120,650 10,161,275 10,201,900 10,242,525
Preferred Conversion Ratio:
Series A .......................... 4.5164 4.4855 4.4550 4.4249
Series B .......................... 4.5195 4.4886 4.4581 4.4280
Series C .......................... 18.0743 17.9506 17.8286 17.7082
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750
Series A .......................... 39,293 39,024 38,759 38,497
Series B .......................... 63,693 63,257 62,827 62,403
Series C .......................... 278,868 276,960 275,077 273,220
---------- ---------- ---------- ----------
Total Shares ..................... 914,604 911,991 909,413 906,870
Common Exchange Ratio .............. 0.1913 0.1919 0.1924 0.1930
Escrow Exchange Ratio .............. 0.1640 0.1645 0.1649 0.1654
---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3553 0.3564 0.3574 0.3584
</TABLE>

$17

<TABLE>
<CAPTION>
$17.000 $17.125 $17.250
------- ------- --------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 10,283,150 10,323,775 10,364,400
Preferred Conversion Ratio:
Series A .......................... 4.3953 4.3660 4.3371
Series B .......................... 4.3983 4.3690 4.3401
Series C .......................... 17.5894 17.4723 17.3566
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 38,239 37,984 37,733
Series B .......................... 61,985 61,572 61,164
Series C .......................... 271,388 269,580 267,796
---------- ---------- ----------
Total Shares ..................... 904,361 901,886 899,443
Common Exchange Ratio .............. 0.1935 0.1940 0.1946
Escrow Exchange Ratio .............. 0.1659 0.1663 0.1668
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3594 0.3604 0.3613

<CAPTION>
$17.375 $17.500 $17.625 $17.750 $17.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 10,405,025 10,445,650 10,486,275 10,526,900 10,567,525
Preferred Conversion Ratio:
Series A .......................... 4.3086 4.2804 4.2527 4.2252 4.1982
Series B .......................... 4.3115 4.2834 4.2556 4.2281 4.2010
Series C .......................... 17.2425 17.1299 17.0188 16.9091 16.8007
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 37,485 37,240 36,998 36,760 36,524
Series B .......................... 60,762 60,365 59,974 59,587 59,205
Series C .......................... 266,035 264,298 262,583 260,890 259,219
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 897,032 894,653 892,305 889,987 887,698
Common Exchange Ratio .............. 0.1951 0.1956 0.1961 0.1966 0.1971
Escrow Exchange Ratio .............. 0.1672 0.1677 0.1681 0.1685 0.1690
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3623 0.3633 0.3642 0.3652 0.3661
</TABLE>

$18

<TABLE>
<CAPTION>
$18.000 $18.125 $18.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 10,608,150 10,648,775 10,689,400
Preferred Conversion Ratio:
Series A .......................... 4.1715 4.1451 4.1190
Series B .......................... 4.1743 4.1479 4.1218
Series C .......................... 16.6938 16.5882 16.4840
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 36,292 36,062 35,836
Series B .......................... 58,829 58,456 58,089
Series C .......................... 257,569 255,940 254,331
---------- ---------- ----------
Total Shares ..................... 885,439 883,208 881,006
Common Exchange Ratio .............. 0.1976 0.1981 0.1986
Escrow Exchange Ratio .............. 0.1694 0.1698 0.1703
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3670 0.3680 0.3689

<CAPTION>
$18.375 $18.500 $18.625 $18.750 $18.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 10,730,025 10,770,650 10,811,275 10,851,900 10,892,525
Preferred Conversion Ratio:
Series A .......................... 4.0933 4.0679 4.0428 4.0180 3.9935
Series B .......................... 4.0961 4.0707 4.0456 4.0208 3.9963
Series C .......................... 16.3810 16.2793 16.1789 16.0797 15.9818
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 35,612 35,391 35,172 34,957 34,744
Series B .......................... 57,726 57,368 57,014 56,665 56,319
Series C .......................... 252,743 251,174 249,625 248,094 246,583
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 878,831 876,683 874,561 872,466 870,396
Common Exchange Ratio .............. 0.1991 0.1996 0.2001 0.2006 0.2011
Escrow Exchange Ratio .............. 0.1707 0.1711 0.1715 0.1719 0.1723
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3698 0.3707 0.3716 0.3725 0.3734
</TABLE>

I-2
<PAGE>

GIANT CONVERSION PRICE

$19

<TABLE>
<CAPTION>
$19.000 $19.125 $19.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 10,933,150 10,973,775 11,014,400
Preferred Conversion Ratio:
Series A .......................... 3.9693 3.9455 3.9218
Series B .......................... 3.9721 3.9481 3.9245
Series C .......................... 15.8850 15.7893 15.6949
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 34,533 34,325 34,120
Series B .......................... 55,978 55,641 55,308
Series C .......................... 245,089 243,614 242,156
---------- ---------- ----------
Total Shares ..................... 868,351 866,330 864,334
Common Exchange Ratio .............. 0.2015 0.2020 0.2025
Escrow Exchange Ratio .............. 0.1727 0.1731 0.1735
----------- ----------- ----------
Aggregate Exchange Ratio ......... 0.3743 0.3751 0.3760

<CAPTION>
$19.375 $19.500 $19.625 $19.750 $19.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 11,055,025 11,095,650 11,136,275 11,176,900 11,217,525
Preferred Conversion Ratio:
Series A .......................... 3.8985 3.8755 3.8527 3.8302 3.8079
Series B .......................... 3.9012 3.8781 3.8553 3.8328 3.8105
Series C .......................... 15.6015 15.5092 15.4181 15.3280 15.2389
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 33,917 33,716 33,518 33,322 33,129
Series B .......................... 54,979 54,654 54,333 54,015 53,701
Series C .......................... 240,715 239,292 237,885 236,495 235,121
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 862,362 860,413 858,487 856,583 854,701
Common Exchange Ratio .............. 0.2029 0.2034 0.2038 0.2043 0.2047
Escrow Exchange Ratio .............. 0.1739 0.1743 0.1747 0.1751 0.1755
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3769 0.3777 0.3786 0.3794 0.3802
</TABLE>

$20

<TABLE>
<CAPTION>
$20.000 $20.125 $20.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 11,258,150 11,298,775 11,339,400
Preferred Conversion Ratio:
Series A .......................... 3.7859 3.7642 3.7427
Series B .......................... 3.7885 3.7667 3.7452
Series C .......................... 15.1509 15.0639 14.9778
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 32,937 32,748 32,561
Series B .......................... 53,391 53,085 52,781
Series C .......................... 233,763 232,420 231,093
---------- ---------- ----------
Total Shares ..................... 852,842 851,003 849,186
Common Exchange Ratio .............. 0.2052 0.2056 0.2061
Escrow Exchange Ratio .............. 0.1759 0.1763 0.1766
----------- ----------- ----------
Aggregate Exchange Ratio ......... 0.3811 0.3819 0.3827

<CAPTION>
$20.375 $20.500 $20.625 $20.750 $20.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 11,380,025 11,420,650 11,461,275 11,501,900 11,542,525
Preferred Conversion Ratio:
Series A .......................... 3.7214 3.7004 3.6796 3.6591 3.6388
Series B .......................... 3.7240 3.7029 3.6821 3.6616 3.6413
Series C .......................... 14.8929 14.8087 14.7256 14.6433 14.5620
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 32,376 32,194 32,013 31,834 31,657
Series B .......................... 52,482 52,185 51,892 51,603 51,316
Series C .......................... 229,781 228,484 227,201 225,932 224,678
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 847,389 845,613 843,856 842,119 840,401
Common Exchange Ratio .............. 0.2065 0.2070 0.2074 0.2078 0.2082
Escrow Exchange Ratio .............. 0.1770 0.1774 0.1778 0.1781 0.1785
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3835 0.3843 0.3851 0.3859 0.3867
</TABLE>

$21

<TABLE>
<CAPTION>
$21.000 $21.125 $21.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 11,583,150 11,623,775 11,664,400
Preferred Conversion Ratio:
Series A .......................... 3.6187 3.5988 3.5792
Series B .......................... 3.6212 3.6013 3.5816
Series C .......................... 14.4816 14.4021 14.3235
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 31,483 31,310 31,139
Series B .......................... 51,033 50,753 50,476
Series C .......................... 223,437 222,210 220,997
---------- ---------- ----------
Total Shares ..................... 838,703 837,023 835,361
Common Exchange Ratio .............. 0.2087 0.2091 0.2095
Escrow Exchange Ratio .............. 0.1788 0.1792 0.1796
----------- ----------- ----------
Aggregate Exchange Ratio ......... 0.3875 0.3883 0.3891

<CAPTION>
$21.375 $21.500 $21.625 $21.750 $21.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 11,705,025 11,745,650 11,786,275 11,826,900 11,867,525
Preferred Conversion Ratio:
Series A .......................... 3.5597 3.5405 3.5215 3.5026 3.4840
Series B .......................... 3.5621 3.5429 3.5239 3.5050 3.4864
Series C .......................... 14.2457 14.1687 14.0926 14.0173 13.9428
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 30,970 30,802 30,637 30,473 30,311
Series B .......................... 50,201 49,930 49,662 49,396 49,134
Series C .......................... 219,797 218,609 217,435 216,272 215,123
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 833,717 832,092 830,483 828,892 827,318
Common Exchange Ratio .............. 0.2099 0.2103 0.2107 0.2111 0.2115
Escrow Exchange Ratio .............. 0.1799 0.1803 0.1806 0.1810 0.1813
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3898 0.3906 0.3913 0.3921 0.3928
</TABLE>

I-3
<PAGE>

GIANT CONVERSION PRICE

$22

<TABLE>
<CAPTION>
$22.000 $22.125 $22.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Independent and
Merged Combined ................... 11,908,150 11,948,775 11,989,400
Preferred Conversion Ratio:
Series A .......................... 3.4656 3.4474 3.4293
Series B .......................... 3.4680 3.4497 3.4317
Series C .......................... 13.8690 13.7961 13.7239
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 30,151 29,992 29,835
Series B .......................... 48,874 48,617 48,363
Series C .......................... 213,985 212,860 211,746
---------- ---------- ----------
Total Shares ..................... 825,760 824,219 822,694
Common Exchange Ratio .............. 0.2119 0.2123 0.2127
Escrow Exchange Ratio .............. 0.1817 0.1820 0.1823
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3936 0.3943 0.3950

<CAPTION>
$22.375 $22.500 $22.625 $22.750 $22.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Independent and
Merged Combined ................... 12,030,025 12,070,650 12,111,275 12,151,900 12,192,525
Preferred Conversion Ratio:
Series A .......................... 3.4115 3.3938 3.3763 3.3590 3.3419
Series B .......................... 3.4138 3.3961 3.3786 3.3613 3.3442
Series C .......................... 13.6525 13.5818 13.5118 13.4425 13.3740
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 29,680 29,526 29,374 29,224 29,075
Series B .......................... 48,111 47,862 47,615 47,371 47,130
Series C .......................... 210,644 209,553 208,473 207,405 206,347
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 821,184 819,691 818,213 816,750 815,301
Common Exchange Ratio .............. 0.2131 0.2135 0.2139 0.2143 0.2146
Escrow Exchange Ratio .............. 0.1827 0.1830 0.1833 0.1837 0.1840
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3958 0.3965 0.3972 0.3979 0.3986
</TABLE>

$23

<TABLE>
<CAPTION>
$23.000 $23.125 $23.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Independent and
Merged Combined ................... 12,233,150 12,273,775 12,314,400
Preferred Conversion Ratio:
Series A .......................... 3.3249 3.3082 3.2915
Series B .......................... 3.3272 3.3104 3.2938
Series C .......................... 13.3061 13.2390 13.1725
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 28,927 28,781 28,636
Series B .......................... 46,890 46,654 46,419
Series C .......................... 205,300 204,264 203,238
---------- ---------- ----------
Total Shares ..................... 813,868 812,449 811,044
Common Exchange Ratio .............. 0.2150 0.2154 0.2158
Escrow Exchange Ratio .............. 0.1843 0.1846 0.1849
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.3993 0.4000 0.4007

<CAPTION>
$23.375 $23.500 $23.625 $23.750 $23.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Independent and
Merged Combined ................... 12,355,025 12,395,650 12,436,275 12,476,900 12,517,525
Preferred Conversion Ratio:
Series A .......................... 3.2751 3.2588 3.2427 3.2267 3.2109
Series B .......................... 3.2773 3.2610 3.2449 3.2289 3.2131
Series C .......................... 13.1067 13.0415 12.9770 12.9131 12.8498
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 28,493 28,352 28,211 28,073 27,935
Series B .......................... 46,188 45,958 45,730 45,505 45,282
Series C .......................... 202,223 201,217 200,222 199,236 198,260
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 809,654 808,277 806,913 805,564 804,227
Common Exchange Ratio .............. 0.2161 0.2165 0.2169 0.2172 0.2176
Escrow Exchange Ratio .............. 0.1853 0.1856 0.1859 0.1862 0.1865
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4014 0.4021 0.4028 0.4034 0.4041
</TABLE>

$24

<TABLE>
<CAPTION>
$24.000 $24.125 $24.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 12,558,150 12,598,775 12,639,400
Preferred Conversion Ratio:
Series A .......................... 3.1953 3.1798 3.1644
Series B .......................... 3.1974 3.1819 3.1666
Series C .......................... 12.7872 12.7251 12.6637
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 27,799 27,664 27,530
Series B .......................... 45,062 44,843 44,626
Series C .......................... 197,293 196,336 195,388
---------- ---------- ----------
Total Shares ..................... 802,904 801,593 800,295
Common Exchange Ratio .............. 0.2180 0.2183 0.2187
Escrow Exchange Ratio .............. 0.1868 0.1871 0.1874
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4048 0.4054 0.4061

<CAPTION>
$24.375 $24.500 $24.625 $24.750 $24.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 12,680,025 12,720,650 12,761,275 12,801,900 12,842,525
Preferred Conversion Ratio:
Series A .......................... 3.1492 3.1341 3.1192 3.1045 3.0898
Series B .......................... 3.1514 3.1363 3.1214 3.1066 3.0919
Series C .......................... 12.6028 12.5426 12.4829 12.4237 12.3652
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 27,398 27,267 27,137 27,009 26,881
Series B .......................... 44,412 44,200 43,989 43,781 43,575
Series C .......................... 194,449 193,519 192,598 191,686 190,782
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 799,009 797,736 796,475 795,226 793,988
Common Exchange Ratio .............. 0.2190 0.2194 0.2197 0.2201 0.2204
Escrow Exchange Ratio .............. 0.1877 0.1880 0.1883 0.1886 0.1889
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4068 0.4074 0.4080 0.4087 0.4093
</TABLE>

I-4
<PAGE>

GIANT CONVERSION PRICE

$25

<TABLE>
<CAPTION>
$25.000 $25.125 $25.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 12,883,150 12,923,775 12,964,400
Preferred Conversion Ratio:
Series A .......................... 3.0753 3.0610 3.0467
Series B .......................... 3.0774 3.0630 3.0488
Series C .......................... 12.3071 12.2497 12.1927
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 26,755 26,630 26,507
Series B .......................... 43,370 43,167 42,967
Series C .......................... 189,887 189,000 188,122
---------- ---------- ----------
Total Shares ..................... 792,762 791,548 790,345
Common Exchange Ratio .............. 0.2207 0.2211 0.2214
Escrow Exchange Ratio .............. 0.1892 0.1895 0.1898
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4100 0.4106 0.4112

<CAPTION>
$25.375 $25.500 $25.625 $25.750 $25.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 13,005,025 13,045,650 13,086,275 13,126,900 13,167,525
Preferred Conversion Ratio:
Series A .......................... 3.0326 3.0187 3.0048 2.9911 2.9775
Series B .......................... 3.0347 3.0207 3.0069 2.9931 2.9796
Series C .......................... 12.1363 12.0804 12.0250 11.9701 11.9158
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 26,384 26,262 26,142 26,023 25,904
Series B .......................... 42,768 42,571 42,376 42,182 41,991
Series C .......................... 187,251 186,389 185,534 184,687 183,848
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 789,153 787,972 786,802 785,642 784,493
Common Exchange Ratio .............. 0.2218 0.2221 0.2224 0.2227 0.2231
Escrow Exchange Ratio .............. 0.1901 0.1904 0.1906 0.1909 0.1912
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4118 0.4125 0.4131 0.4137 0.4143
</TABLE>

$26

<TABLE>
<CAPTION>
$26.000 $26.125 $26.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 13,208,150 13,248,775 13,289,400
Preferred Conversion Ratio:
Series A .......................... 2.9641 2.9507 2.9375
Series B .......................... 2.9661 2.9527 2.9395
Series C .......................... 11.8619 11.8085 11.7555
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 25,787 25,671 25,556
Series B .......................... 41,801 41,613 41,426
Series C .......................... 183,017 182,193 181,376
---------- ---------- ----------
Total Shares ..................... 783,355 782,227 781,108
Common Exchange Ratio .............. 0.2234 0.2237 0.2240
Escrow Exchange Ratio .............. 0.1915 0.1918 0.1920
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4149 0.4155 0.4161

<CAPTION>
$26.375 $26.500 $26.625 $26.750 $26.875
------- ------- ------- ------- -------

<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 13,330,025 13,370,650 13,411,275 13,451,900 13,492,525
Preferred Conversion Ratio:
Series A .......................... 2.9244 2.9114 2.8985 2.8857 2.,8731
Series B .......................... 2.9264 2.9134 2.9005 2.8877 2.8751
Series C .......................... 11.7031 11.6511 11.5996 11.5485 11.4979
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 25,442 25,329 25,217 25,106 24,996
Series B .......................... 41,241 41,058 40,877 40,697 40,518
Series C .......................... 180,567 179,765 178,970 178,182 177,401
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 780,000 778,902 777,813 776,734 775,665
Common Exchange Ratio .............. 0.2244 0.2247 0.2250 0.2253 0.2256
Escrow Exchange Ratio .............. 0.1923 0.1926 0.1928 0.1931 0.1934
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4167 0.4173 0.4178 0.4184 0.4190
</TABLE>

$27

<TABLE>
<CAPTION>
$27.000 $27.125 $27.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 13,533,150 13,573,775 13,614,400
Preferred Conversion Ratio:
Series A .......................... 2.8606 2.8481 2.8358
Series B .......................... 2.8625 2.8501 2.8377
Series C .......................... 11.4477 11.3979 11.3486
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 24,887 24,779 24,671
Series B .......................... 40,341 40,166 39,992
Series C .......................... 176,626 175,859 175,098
---------- ---------- ----------
Total Shares ..................... 774,604 773,553 772,511
Common Exchange Ratio .............. 0.2259 0.2262 0.2265
Escrow Exchange Ratio .............. 0.1936 0.1939 0.1942
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4196 0.4201 0.4207

<CAPTION>
$27.375 $27.500 $27.625 $27.750 $27.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 13,655,025 13,695,650 13,736,275 13,776,900 13,817,525
Preferred Conversion Ratio:
Series A .......................... 2.8236 2.8115 2.7995 2.7876 2.7757
Series B .......................... 2.8255 2.8134 2.8014 2.7895 2.7776
Series C .......................... 11.2997 11.2513 11.2032 11.1555 11.1083
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 24,565 24,460 24,355 24,252 24,149
Series B .......................... 39,820 39,649 39,480 39,312 39,145
Series C .......................... 174,343 173,596 172,854 172,119 171,390
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 771,479 770,454 769,439 768,432 767,434
Common Exchange Ratio .............. 0.2268 0.2271 0.2274 0.2277 0.2280
Escrow Exchange Ratio .............. 0.1944 0.1947 0.1949 0.1952 0.1955
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4213 0.4218 0.4224 0.4229 0.4235
</TABLE>

I-5
<PAGE>

GIANT CONVERSION PRICE

$28

<TABLE>
<CAPTION>
$28.000 $28.125 $28.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 13,858,150 13,898,775 13,939,400
Preferred Conversion Ratio:
Series A .......................... 2.7640 2.7524 2.7409
Series B .......................... 2.7659 2.7543 2.7428
Series C .......................... 11.0614 11.0150 10.9689
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 24,047 23,946 23,846
Series B .......................... 38,980 38,817 38,654
Series C .......................... 170,667 169,950 169,240
---------- ---------- ----------
Total Shares ..................... 766,444 765,463 764,490
Common Exchange Ratio .............. 0.2283 0.2286 0.2289
Escrow Exchange Ratio .............. 0.1957 0.1960 0.1962
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4240 0.4246 0.4251

<CAPTION>
$28.375 $28.500 $28.625 $28.750 $28.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 13,980,025 14,020,650 14,061,275 14,101,900 14,142,525
Preferred Conversion Ratio:
Series A .......................... 2.7295 2.7182 2.7070 2.6958 2.6848
Series B .......................... 2.7314 2.7200 2.7088 2.6977 2.6866
Series C .......................... 10.9232 10.8779 10.8330 10.7885 10.7443
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 23,747 23,648 23,551 23,454 23,358
Series B .......................... 38,493 38,334 38,175 38,018 37,862
Series C .......................... 168,535 167,836 167,143 166,455 165,773
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 763,525 762,568 761,618 760,677 759,743
Common Exchange Ratio .............. 0.2292 0.2295 0.2298 0.2301 0.2303
Escrow Exchange Ratio .............. 0.1965 0.1967 0.1969 0.1972 0.1974
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4257 0.4262 0.4267 0.4273 0.4278
</TABLE>

$29

<TABLE>
<CAPTION>
$29.000 $29.125 $29.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 14,183,150 14,223,775 14,264,400
Preferred Conversion Ratio:
Series A .......................... 2.6738 2.6630 2.6522
Series B .......................... 2.6757 2.6648 2.6540
Series C .......................... 10.7004 10.6569 10.6138
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 23,262 23,168 23,074
Series B .......................... 37,708 37,555 37,403
Series C .......................... 165,097 164,426 163,761
---------- ---------- ----------
Total Shares ..................... 758,817 757,899 756,987
Common Exchange Ratio .............. 0.2306 0.2309 0.2312
Escrow Exchange Ratio .............. 0.1977 0.1979 0.1982
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4283 0.4288 0.4293

<CAPTION>
$29.375 $29.500 $29.625 $29.750 $29.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 14,305,025 14,345,650 14,386,275 14,426,900 14,467,525
Preferred Conversion Ratio:
Series A .......................... 2.6415 2.6309 2.6204 2.6099 2.5996
Series B .......................... 2.6433 2.6327 2.6222 2.6117 2.6014
Series C .......................... 10.5710 10.5286 10.4865 10.4447 10.4033
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 22,981 22,889 22,797 22,706 22,616
Series B .......................... 37,252 37,103 36,954 36,807 36,661
Series C .......................... 163,101 162,446 161,796 161,152 160,513
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 756,084 755,187 754,298 753,416 752,540
Common Exchange Ratio .............. 0.2315 0.2317 0.2320 0.2323 0.2325
Escrow Exchange Ratio .............. 0.1984 0.1986 0.1989 0.1991 0.1993
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4298 0.4304 0.4309 0.4314 0.4319
</TABLE>

$30

<TABLE>
<CAPTION>
$30.000 $30.125 $30.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 14,508,150 14,548,775 14,589,400
Preferred Conversion Ratio:
Series A .......................... 2.5893 2.5791 2.5690
Series B .......................... 2.5911 2.5809 2.5708
Series C .......................... 10.3622 10.3214 10.2810
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 22,527 22,438 22,350
Series B .......................... 36,516 36,372 36,230
Series C .......................... 159,879 159,250 158,625
Total Shares ..................... 751,672 750,810 749,956
Common Exchange Ratio .............. 0.2328 0.2331 0.2333
Escrow Exchange Ratio .............. 0.1996 0.1998 0.2000
--------- ---------- ---------
Aggregate Exchange Ratio ......... 0.4324 0.4329 0.4334

<CAPTION>
$30.375 $30.500 $30.625 $30.750 $30.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 14,630,025 14,670,650 14,711,275 14,751,900 14,792,525
Preferred Conversion Ratio:
Series A .......................... 2.5590 2.5490 2.5392 2.5294 2.5196
Series B .......................... 2.5607 2.5508 2.5409 2.5311 2.5214
Series C .......................... 10.2408 10.2010 10.1615 10.1223 10.0834
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 22,263 22,177 22,091 22,005 21,921
Series B .......................... 36,088 35,948 35,809 35,671 35,533
Series C .......................... 158,006 157,391 156,782 156,177 155,576
Total Shares ..................... 749,108 748,266 747,431 746,603 745,780
Common Exchange Ratio .............. 0.2336 0.2339 0.2341 0.2344 0.2347
Escrow Exchange Ratio .............. 0.2002 0.2005 0.2007 0.2009 0.2011
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4338 0.4343 0.4348 0.4353 0.4358
</TABLE>

I-6
<PAGE>

GIANT CONVERSION PRICE

$31

<TABLE>
<CAPTION>
$31.000 $31.125 $31.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 14,833,150 14,873,775 14,914,400
Preferred Conversion Ratio:
Series A .......................... 2.5100 2.5004 2.4909
Series B .......................... 2.5117 2.5021 2.4926
Series C .......................... 10.0447 10.0064 9.9684
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 21,837 21,754 21,671
Series B .......................... 35,397 35,262 35,128
Series C .......................... 154,980 154,389 153,802
---------- ---------- ----------
Total Shares ..................... 744,965 744,155 743,351
Common Exchange Ratio .............. 0.2349 0.2352 0.2354
Escrow Exchange Ratio .............. 0.2014 0.2016 0.2018
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4363 0.4367 0.4372

<CAPTION>
$31.375 $31.500 $31.625 $31.750 $31.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 14,955,025 14,995,650 15,036,275 15,076,900 15,117,525
Preferred Conversion Ratio:
Series A .......................... 2.4815 2.4721 2.4628 2.4536 2.4445
Series B .......................... 2.4832 2.4738 2.4645 2.4553 2.4461
Series C .......................... 9.9306 9.8932 9.8560 9.8191 9.7825
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 21,589 21,507 21,427 21,346 21,267
Series B .......................... 34,995 34,863 34,732 34,602 34,473
Series C .......................... 153,220 152,642 152,068 151,499 150,934
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 742,554 741,763 740,977 740,198 739,424
Common Exchange Ratio .............. 0.2357 0.2359 0.2362 0.2364 0.2367
Escrow Exchange Ratio .............. 0.2020 0.2022 0.2024 0.2026 0.2029
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4377 0.4381 0.4386 0.4391 0.4395
</TABLE>

$32

<TABLE>
<CAPTION>
$32.000 $32.125 $32.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 15,158,150 15,198,775 15,239,400
Preferred Conversion Ratio:
Series A .......................... 2.4354 2.4624 2.4174
Series B .......................... 2.4370 2.4280 2.4191
Series C .......................... 9.7461 9.7101 9.6742
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 21,188 21,109 21,031
Series B .......................... 34,345 34,218 34,092
Series C .......................... 150,373 149,816 149,264
---------- ---------- ----------
Total Shares ..................... 738,656 737,894 737,137
Common Exchange Ratio .............. 0.2369 0.2372 0.2374
Escrow Exchange Ratio .............. 0.2031 0.2033 0.2035
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4400 0.4404 0.4409

<CAPTION>
$32.375 $32.500 $32.625 $32.750 $32.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 15,280,025 15,320,650 15,361,275 15,401,900 15,442,525
Preferred Conversion Ratio:
Series A .......................... 2.4085 2.3997 2.3909 2.3823 2.3736
Series B .......................... 2.4012 2.4013 2.3926 2.3839 2.3753
Series C .......................... 9.6387 9.6034 9.5684 9.5336 9.4991
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 20,954 20,877 20,801 20,726 20,651
Series B .......................... 33,966 33,842 33,719 33,596 33,474
Series C .......................... 148,715 148,171 147,630 147,094 146,561
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 736,386 735,640 734,900 734,165 733,436
Common Exchange Ratio .............. 0.2376 0.2379 0.2381 0.2384 0.2386
Escrow Exchange Ratio .............. 0.2037 0.2039 0.2041 0.2043 0.2045
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4413 0.4418 0.4422 0.4427 0.4431
</TABLE>

$33

<TABLE>
<CAPTION>
$33.000 $33.125 $33.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 15,483,150 15,523,775 15,564,400
Preferred Conversion Ratio:
Series A .......................... 2.3651 2.3566 2.3481
Series B .......................... 2.3667 2.3582 2.3497
Series C .......................... 9.4648 9.4307 9.3970
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 20,576 20,502 20,429
Series B .......................... 33,354 33,234 33,115
Series C .......................... 146,032 145,507 144,986
---------- ---------- ----------
Total Shares ..................... 732,712 731,993 731,279
Common Exchange Ratio .............. 0.2388 0.2391 0.2393
Escrow Exchange Ratio .............. 0.2047 0.2049 0.2051
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4436 0.4440 0.4444

<CAPTION>
$33.375 $33.500 $33.625 $33.750 $33.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 15,605,025 15,645,650 15,686,275 15,726,900 15,767,525
Preferred Conversion Ratio:
Series A .......................... 2.3397 2.3314 2.3231 2.3149 2.3068
Series B .......................... 2.3413 2.3330 2.3247 2.3165 2.3084
Series C .......................... 9.3634 9.3301 9.2970 9.2642 9.2316
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 20,356 20,283 20,211 20,140 20,069
Series B .......................... 32,996 32,879 32,762 32,647 32,532
Series C .......................... 144,468 143,954 143,444 142,937 142,434
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 730,570 729,866 729,168 728,474 727,785
Common Exchange Ratio .............. 0.2395 0.2398 0.2400 0.2402 0.2405
Escrow Exchange Ratio .............. 0.2053 0.2055 0.2057 0.2059 0.2061
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4449 0.4453 0.4457 0.4461 0.4466
</TABLE>

I-7
<PAGE>

GIANT CONVERSION PRICE

$34

<TABLE>
<CAPTION>
$34.000 $34.125 $34.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 15,808,150 15,848,775 15,889,400
Preferred Conversion Ratio:
Series A .......................... 2.2987 2.2907 2.2827
Series B2.3003 .................... 2.3003 2.2922 2.2842
Series C .......................... 9.1992 9.1670 9.1351
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 19,999 19,929 19,859
Series B .......................... 32,418 32,304 32,192
Series C .......................... 141,934 141,438 140,946
---------- ---------- ----------
Total Shares ..................... 727,101 726,422 725,747
Common Exchange Ratio .............. 0.2407 0.2409 0.2411
Escrow Exchange Ratio .............. 0.2063 0.2065 0.2067
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4470 0.4474 0.4478

<CAPTION>
$34.375 $34.500 $34.625 $34.750 $34.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 15,930,025 15,970,650 16,011,275 16,051,900 16,092,525
Preferred Conversion Ratio:
Series A .......................... 2.2748 2.2669 2.2591 2.2513 2.2436
Series B2.3003 .................... 2.2763 2.2684 2.2606 2.2529 2.2451
Series C .......................... 9.1034 9.0719 9.0407 9.0096 8.9788
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 19,790 19,722 19,654 19,587 19,519
Series B .......................... 32,080 31,969 31,859 31,750 31,641
Series C .......................... 140,457 139,971 139,488 139,009 138,533
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 725,077 724,412 723,751 723,095 722,444
Common Exchange Ratio .............. 0.2414 0.2416 0.2418 0.2420 0.2422
Escrow Exchange Ratio .............. 0.2069 0.2071 0.2073 0.2074 0.2076
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4482 0.4486 0.4490 0.4495 0.4499
</TABLE>

$35

<TABLE>
<CAPTION>
$35.000 $35.125 $35.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 16,133,150 16,173,775 16,214,400
Preferred Conversion Ratio:
Series A .......................... 2.2360 2.2284 2.2208
Series B .......................... 2.2375 2.2299 2.2223
Series C .......................... 8.9481 8.9177 8.8875
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750
Series A .......................... 19,453 19,387 19,321
Series B .......................... 31,533 31,426 31,319
Series C .......................... 138,061 137,591 137,125
---------- ---------- ----------
Total Shares ..................... 721,796 721,154 720,515
Common Exchange Ratio .............. 0.2425 0.2427 0.2429
Escrow Exchange Ratio .............. 0.2078 0.2080 0.2082
---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4503 0.4507 0.4511

<CAPTION>
$35.375 $35.500 $35.625 $35.750 $35.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Northeast Solite
and Solite Combined ............... 16,255,025 16,295,650 16,336,275 16,376,900 16,417,525
Preferred Conversion Ratio:
Series A .......................... 2.2133 2.2059 2.1985 2.1911 2.1838
Series B .......................... 2.2148 2.2074 2.2000 2.1926 2.1853
Series C .......................... 8.8575 8.8277 8.7980 8.7686 8.7394
Shares Owned Upon Conversion:
Current Common .................... 532,750 532,750 532,750 532,750 532,750
Series A .......................... 19,256 19,191 19,127 19,063 18,999
Series B .......................... 31,213 31,108 31,004 30,900 30,797
Series C .......................... 136,662 136,202 135,745 135,291 134,840
---------- ---------- ---------- ---------- ----------
Total Shares ..................... 719,881 719,251 718,626 718,004 717,387
Common Exchange Ratio .............. 0.2431 0.2433 0.2435 0.2437 0.2439
Escrow Exchange Ratio .............. 0.2084 0.2086 0.2087 0.2089 0.2091
---------- ---------- ---------- ---------- ----------
Aggregate Exchange Ratio ......... 0.4515 0.4519 0.4523 0.4526 0.4530
</TABLE>

I-8
<PAGE>

Annex II

Articles VIII, IX and X of the Solite Articles of Incorporation, which
designate the Solite Series A Preferred Stock, Solite Series B Preferred Stock
and Solite Series C Preferred Stock will be deleted in their entirety and the
following substituted, in lieu thereof:

ARTICLE VIII
CONVERSION OF PREVIOUSLY ISSUED
PREFERRED SHARES INTO COMMON SHARES

8.1 Prior Designation of Preferred Shares Series. Pursuant to Article III
of these Articles of Incorporation, the corporation has the authority to issue
in series 100,000 Preferred Shares, of which, the corporation has previously
designated 25,000 shares as Series A Preferred Shares, 16,300 shares as Series
B Preferred Shares, and 16,807 shares as Series C Preferred Shares.

8.2 Effective Time. The "Effective Time" shall mean date and time of day
that the State Corporation Commission of Virginia issues a certificate of
amendment (the "Certificate of Amendment") evidencing the adoption of the
articles of amendment which set forth this Article VIII.

8.3 Conversion of Preferred Shares; Fractional Shares. At the Effective
Time, without any action on the part of the holders of the Preferred Shares,
each Preferred Share issued and outstanding immediately prior to the Effective
Time shall be converted into Common Shares (the "Conversion") according to the
following ratios (the "Preferred Shares Conversion Ratios"):

(i) Each Series A Preferred Share shall be converted into ___*
Common Shares.

(ii) Each Series B Preferred Share shall be converted into ___*
Common Shares.

(iii) Each Series C Preferred Share shall be converted into ___*
Common Shares.

(b) Notwithstanding the foregoing, the former holders of Preferred
Shares shall not have the right to receive any fractional Common Shares as the
result of the Conversion. In lieu of any such fractional Common Shares, each
former holder of Preferred Shares, who otherwise would be entitled to receive a
fractional Common Share, shall be entitled to receive from the corporation an
amount of cash, without interest thereon, determined by multiplying (i) the
fractional Common Share interest to which such former holder would otherwise be
entitled by (ii) $ ** (such amount of cash hereinafter referred to as the
"Fractional Share Cash Amount").

(c) After the Conversion, each certificate evidencing ownership of
Series A Preferred Shares, Series B Preferred Shares or Series C Preferred
Shares shall evidence the ownership of the number of Common Shares determined in
accordance with the Preferred Shares Conversion Ratios, excluding any fractional
Common Share, and (ii) the right to receive from the corporation the Fractional
Share Cash Amount payable in lieu of such excluded fractional Common Share.

- ------------
* The conversion ratio to be inserted will be the conversion ratio for such
class shown on Annex I under the dollar amount equal to the average of the
closing bid and asked prices per share of Giant Common Stock on the Nasdaq
National Market for the 20 trading dates immediately preceding the Effective
Time, rounded to the nearest eighth (the "Giant Conversion Price").

** The amount to be inserted will equal the quotient derived by dividing (i)
the amount shown on Annex I for the Equity Value of Northeast Solite and Solite
Combined under the dollar amount of the Giant Conversion Price by (ii) the
Total Shares owned upon Conversion shown under the dollar amount equal to the
Giant Conversion Price.

II-1
<PAGE>

Annex III

February 26, 1998

Board of Directors
Solite Corporation
P.O. Box 27211
Richmond, Virginia 23261

Gentlemen:

You have requested our opinion as to the fairness, from a financial point
of view, that the consideration to be delivered to the holders of Series A, B
and C Convertible Redeemable Preferred Stock (collectively the "Preferred") in
the form of a portion of the Merger Consideration, as defined below, is fair to
the holders of Preferred and common shareholders of the Company. It is our
understanding that Solite Corporation (the "Company") has accepted and signed
an Agreement and Plan of Merger of the Company with and into a wholly owned
subsidiary of Giant Cement Holding, Inc. ("GCHI") upon terms enumerated therein
(the "Transaction") and in consideration for 325,000 shares of common stock of
GCHI (the "Merger Consideration"). The Transaction is described in the
Agreement and Plan of Merger by and among Giant Cement Holding, Inc., GCHI
Acquisition Corp., and Solite Corporation, dated September 10, 1997 as amended
(the "Agreement"). We were retained by the Board of Directors of the Company
and commenced our investigation on January 20, 1997.

Pursuant to the Agreement, all shares of Preferred will convert into
shares of common stock prior to the consummation of the Transaction. After
conversion of the Preferred and also prior to the consummation of the
Transaction, the Company will spin- off certain assets ("Independent Assets"),
which, pursuant to the Agreement, are not to be among the assets of the Company
at the time the Transaction is consummated. Independent Assets will be spun-off
in a tax-free transaction (the "Spin-Off") to a corporation which is an
existing subsidiary of the Company ("Independent"). All of the equity of
Independent will be owned beneficially by the common shareholders of the
Company in the same percentages as they beneficially owned the Company at the
time that the Spin-Off is consummated.

At the closing of the Transaction, the Company, and therefore all the
remaining assets, will be merged with and into GCHI Acquisition Corp.
("Merged"), and shareholders of the Company will exchange their common shares
for 175,000 shares of the Merger Consideration. At closing, 150,000 shares of
the Merger Consideration will be deposited in escrow accounts as follows: (i)
75,000 shares to the "Escrow Account" (as defined in the Agreement), and (ii)
75,000 shares to the "Indemnity Escrow Account" (also defined in the
Agreement). Each common shareholder will have the right to receive the Merger
Consideration equal to his percentage ownership in the Company, post Preferred
conversion. For the purpose of determining the conversion ratio, the value of
the GCHI shares constituting the Merger Consideration at closing will be equal
to the average of the closing bid and asked prices per share for GCHI stock for
the twenty trading days immediately preceding closing.

Company shareholders will receive the 75,000 shares of the Merger
Consideration that were deposited in the Escrow Account within 90 days if the
closing balance sheet of the Company reflects a consolidated net book value
greater than $4.5 million (not including the potential write-off of AF Old Drum
Handling Facility estimated to be approximately $250,000) and net current
assets greater than $5.0 million. Company shareholders will also receive 37,500
shares on the second and third anniversaries of the closing date if liability
claims against Merged are below negotiated levels as specified in the
Agreement. The release of shares from each of these escrow accounts is
dependent upon there being no pending claims under the indemnification
provisions of the Agreement at the time such shares would otherwise be released
pursuant to the terms of the Agreement. Company shareholders will receive
shares held in the Escrow Account and the Indemnity Escrow Account equal to
their percentage ownership in the Company, post Preferred conversion.

In connection with the opinion, we have reviewed, among other things, (i)
the financial structure of the proposed Transaction, (ii) the Agreement, (iii)
internally prepared, unaudited, historical operating results of the Company's
operations that will constitute Independent upon consummation of the Spin-Off,
(iv) internally prepared projections for Independent, (v) the Series B
Preferred Shares Offering Memorandum, (vi) draft of Request for Ruling under
Section 355 to the Internal Revenue Service, (vii) Asset Purchase Agreement
between Solite Corporation, Southern Materials Corporation, Rappahannock Farm
Enterprises, Inc., Rockville Nurseries

III-1
<PAGE>

Corporation, John W. Roberts, and Mid-Atlantic Materials, Inc., dated August
29, 1997, (viii) third party appraisals for certain Kentucky and Florida
operations, dated August 31, 1992, which have not been independently updated to
the present, and (ix) Golder Associates, Inc. Preliminary Remediation Cost
Evaluation for the Florida Solite Company Facility in Green Cove Springs,
Florida, dated April 23, 1997, (x) Amendment Number 1 and Amendment Number 2 to
Form S-4 for Giant Cement Holding, Inc. dated November 12, 1997 and December 4,
1997, respectively, and (xi) the redemption and conversion provisions for the
Solite Preferred Stock in the Solite Articles of Incorporation as currently in
effect. We have held discussions with the members of the management of the
Company regarding its past and current business operations, financial condition
and future prospects. We have also held discussions with the Company's
accountants and performed such other investigations as we deemed necessary to
render the fairness opinion contained herein.

Ferris, Baker Watts, Inc. has no current investment banking relationship
with the Company except for our review of the fairness to the holders of
Preferred and common shareholders of the Company of the consideration to be
delivered to the holders of Preferred in the form of the Merger Consideration.

In rendering our opinion, we have assumed and relied upon the accuracy and
completeness of all financial and other information reviewed by us for the
purposes of this opinion whether publicly available or provided to us by the
Company, and we have not assumed any responsibility for independent
verification of such information. We express no opinion as to the consideration
to be received by holders of Preferred or common stock who may perfect
dissenters' statutory fair appraisal remedies. Based upon the foregoing and
based upon other such matters that we consider relevant, it is our opinion
that, as of the date of this letter, the consideration to be received by the
holders of Preferred in the form of a portion of the Merger Consideration as
outlined in Exhibit A and common stock in Independent is fair to the holders of
Preferred and common shareholders of the Company from a financial point of
view. Our opinion is based on economic, market and other considerations as in
effect on, and the information made available to us as of, the date of this
letter. Our opinion was prepared at the request of the Board of Directors of
the Company and does not constitute a recommendation as to how a shareholder
should vote on matters associated with the Preferred. Subsequent events may
affect the conclusions reached in this opinion, and we neither have nor do we
assume any obligation to update, revise or reaffirm this opinion which speaks
solely as of this date and with respect to matters contained herein.

Very truly yours,

FERRIS, BAKER WATTS, INC.

III-2
<PAGE>

Exhibit A

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$15

<TABLE>
<CAPTION>
$15.000 $15.125 $15.250 $15.375
------- ------- ------- -------
<S> <C> <C> <C> <C>
Equity Value of Merged ........... 4,875,000 4,915,625 4,956,250 4,996,875
Equity Value of Independent ...... 4,758,150 4,758,150 4,758,150 4,758,150
--------- --------- --------- ---------
Total Equity Value ............. 9,633,150 9,673,775 9,714,400 9,755,025
Par Value of Preferred Stock ..... 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........ 43.86% 43.68% 43.50% 43.32%
Shares Owned Upon Conversion:
Current Common .................. 532,750 532,750 532,750 532,750
Series A ........................ 42,835 42,516 42,201 41,891
Series B ........................ 69,435 68,917 68,407 67,905
Series C ........................ 304,008 301,741 299,508 297,308
--------- --------- --------- ---------
Total Shares ................... 949,028 945,924 942,866 939,853
Percentage of Ownership:
Current Common .................. 56.14% 56.32% 56.50% 56.68%
Series A ........................ 4.51% 4.49% 4.48% 4.46%
Series B ........................ 7.32% 7.29% 7.26% 7.23%
Series C ........................ 32.03% 31.90% 31.77% 31.63%
-------- -------- -------- --------
Total .......................... 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................ 4.9236 4.8869 4.8507 4.8150
Series B ........................ 4.9269 4.8902 4.8540 4.8183
Series C ........................ 19.7037 19.5568 19.4120 19.2694

<CAPTION>
$15.500 $15.625 $15.750 $15.875
------- ------- ------- -------
<S> <C> <C> <C> <C>
Equity Value of Merged ........... 5,037,500 5,078,125 5,118,750 5,159,375
Equity Value of Independent ...... 4,758,150 4,758,150 4,758,150 4,758,150
--------- --------- --------- ---------
Total Equity Value ............. 9,795,650 9,836,275 9,876,900 9,917,525
Par Value of Preferred Stock ..... 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........ 43.14% 42.96% 42.78% 42.61%
Shares Owned Upon Conversion:
Current Common .................. 532,750 532,750 532,750 532,750
Series A ........................ 41,585 41,284 40,988 40,695
Series B ........................ 67,410 66,922 66,440 65,966
Series C ........................ 295,139 293,002 290,896 288,820
--------- --------- --------- ---------
Total Shares ................... 936,884 933,958 931,074 928,231
Percentage of Ownership:
Current Common .................. 56.86% 57.04% 57.22% 57.39%
Series A ........................ 4.44% 4.42% 4.40% 4.38%
Series B ........................ 7.20% 7.17% 7.14% 7.11%
Series C ........................ 31.50% 31.37% 31.24% 31.12%
--------- --------- --------- ---------
Total .......................... 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................ 4.7799 4.7453 4.7112 4.6776
Series B ........................ 4.7832 4.7486 4.7144 4.6808
Series C ........................ 19.1289 18.9904 18.8539 18.7193
</TABLE>

$16

<TABLE>
<CAPTION>
$16.000 $16.125 $16.250 $16.375
------- ------- ------- -------
<S> <C> <C> <C> <C>
Equity Value of Merged ........... 5,200,000 5,240,625 5,281,250 5,321,875
Equity Value of Independent ...... 4,758,150 4,758,150 4,758,150 4,758,150
--------- --------- ---------- ----------
Total Equity Value ............. 9,958,150 9,998,775 10,039,400 10,080,025
Par Value of Preferred Stock ..... 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........ 42.43% 42.26% 42.09% 41.92%
Shares Owned Upon Conversion:
Current Common .................. 532,750 532,750 532,750 532,750
Series A ........................ 40,407 40,122 39,842 39,565
Series B ........................ 65,499 65,038 64,583 64,135
Series C ........................ 286,773 284,755 282,766 280,803
--------- --------- ---------- ----------
Total Shares ................... 925,429 922,665 919,941 917,254
Percentage of Ownership:
Current Common .................. 57.57% 57.74% 57.91% 58.08%
Series A ........................ 4.37% 4.35% 4.33% 4.31%
Series B ........................ 7.08% 7.05% 7.02% 6.99%
Series C ........................ 30.99% 30.86% 30.74% 30.61%
--------- --------- ---------- ----------
Total .......................... 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................ 4.6444 4.6118 4.5795 4.5478
Series B ........................ 4.6476 4.6149 4.5827 4.5509
Series C ........................ 18.5866 18.4558 18.3269 18.1997

<CAPTION>
$16.500 $16.625 $16.750 $16.875
------- ------- ------- -------
<S> <C> <C> <C> <C>
Equity Value of Merged ........... 5,362,500 5,403,125 5,443,750 5,484,375
Equity Value of Independent ...... 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ----------
Total Equity Value ............. 10,120,650 10,161,275 10,201,900 10,242,525
Par Value of Preferred Stock ..... 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........ 41.75% 41.58% 41.42% 41.25%
Shares Owned Upon Conversion:
Current Common .................. 532,750 532,750 532,750 532,750
Series A ........................ 39,293 39,024 38,759 38,497
Series B ........................ 63,693 63,257 62,827 62,403
Series C ........................ 278,868 276,960 275,077 273,220
---------- ---------- ---------- ----------
Total Shares ................... 914,604 911,991 909,413 906,870
Percentage of Ownership:
Current Common .................. 58.25% 58.42% 58.58% 58.75%
Series A ........................ 4.30% 4.28% 4.26% 4.25%
Series B ........................ 6.96% 6.94% 6.91% 6.88%
Series C ........................ 30.49% 30.37% 30.25% 30.13%
---------- ---------- ---------- ----------
Total .......................... 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................ 4.5164 4.4855 4.4550 4.4249
Series B ........................ 4.5195 4.4886 4.4581 4.4280
Series C ........................ 18.0743 17.9506 17.8286 17.7082
</TABLE>

III-3
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$17

<TABLE>
<CAPTION>
$17.000 $17.125 $17.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 5,525,000 5,565,625 5,606,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 10,283,150 10,323,775 10,364,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 41.09% 40.93% 40.77%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 38,239 37,984 37,733
Series B ............................ 61,985 61,572 61,164
Series C ............................ 271,388 269,580 267,796
---------- ---------- ----------
Total Shares ....................... 904,361 901,886 899,443
Percentage of Ownership:
Current Common ...................... 58.91% 59.07% 59.23%
Series A ............................ 4.23% 4.21% 4.20%
Series B ............................ 6.85% 6.83% 6.80%
Series C ............................ 30.01% 29.89% 29.77%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 4.3953 4.3660 4.3371
Series B ............................ 4.3983 4.3690 4.3401
Series C ............................ 17.5894 17.4723 17.3566

<CAPTION>
$17.375 $17.500 $17.625 $17.750 $17.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 5,646,875 5,687,500 5,728,125 5,768,750 5,809,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 10,405,025 10,445,650 10,486,275 10,526,900 10,567,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 40.61% 40.45% 40.30% 40.14% 39.99%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 37,485 37,240 36,998 36,760 36,524
Series B ............................ 60,762 60,365 59,974 59,587 59,205
Series C ............................ 266,035 264,298 262,583 260,890 259,219
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 897,032 894,653 892,305 889,987 887,698
Percentage of Ownership:
Current Common ...................... 59.39% 59.55% 59.70% 59.86% 60.01%
Series A ............................ 4.18% 4.16% 4.15% 4.13% 4.11%
Series B ............................ 6.77% 6.75% 6.72% 6.70% 6.67%
Series C ............................ 29.66% 29.54% 29.43% 29.31% 29.20%
--------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 4.3086 4.2804 4.2527 4.2252 4.1982
Series B ............................ 4.3115 4.2834 4.2556 4.2281 4.2010
Series C ............................ 17.2425 17.1299 17.0188 16.9091 16.8007
</TABLE>

$18

<TABLE>
<CAPTION>
$18.000 $18.125 $18.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 5,850,000 5,890,625 5,931,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
--------- --------- ---------
Total Equity Value ................. 10,608,150 10,648,775 10,689,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 39.83% 39.68% 39.53%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 36,292 36,062 35,836
Series B ............................ 58,829 58,456 58,089
Series C ............................ 257,569 255,940 254,331
---------- ---------- ----------
Total Shares ....................... 885,439 883,208 881,006
Percentage of Ownership:
Current Common ...................... 60.17% 60.32% 60.47%
Series A ............................ 4.10% 4.08% 4.07%
Series B ............................ 6.64% 6.62% 6.59%
Series C ............................ 29.09% 28.98% 28.87%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 4.1715 4.1451 4.1190
Series B ............................ 4.1743 4.1479 4.1218
Series C ............................ 16.6938 16.5882 16.4840

<CAPTION>
$18.375 $18.500 $18.625 $18.750 $18.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 5,971,875 6,012,500 6,053,125 6,093,750 6,134,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 10,730,025 10,770,650 10,811,275 10,851,900 10,892,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 39.38% 39.23% 39.08% 38.94% 38.79%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 35,612 35,391 35,172 34,957 34,744
Series B ............................ 57,726 57,368 57,014 56,665 56,319
Series C ............................ 252,743 251,174 249,625 248,094 246,583
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 878,831 876,683 874,561 872,466 870,396
Percentage of Ownership:
Current Common ...................... 60.62% 60.77% 60.92% 61.06% 61.21%
Series A ............................ 4.05% 4.04% 4.02% 4.01% 3.99%
Series B ............................ 6.57% 6.54% 6.52% 6.49% 6.47%
Series C ............................ 28.76% 28.65% 28.54% 28.44% 28.33%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 4.0933 4.0679 4.0428 4.0180 3.9935
Series B ............................ 4.0961 4.0707 4.0456 4.0208 3.9963
Series C ............................ 16.3810 16.2793 16.1789 16.0797 15.9818
</TABLE>

III-4
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$19

<TABLE>
<CAPTION>
$19.000 $19.125 $19.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged .............. 6,175,000 6,215,625 6,256,250
Equity Value of Independent ......... 4,758,150 4,758,150 4,758,150
--------- --------- ---------
Total Equity Value ................ 10,933,150 10,973,775 11,014,400
Par Value of Preferred Stock ........ 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........... 38.65% 38.50% 38.36%
Shares Owned Upon Conversion:
Current Common ..................... 532,750 532,750 532,750
Series A ........................... 34,533 34,325 34,120
Series B ........................... 55,978 55,641 55,308
Series C ........................... 245,089 243,614 242,156
---------- ---------- ----------
Total Shares ...................... 868,351 866,330 864,334
Percentage of Ownership:
Current Common ..................... 61.35% 61.50% 61.64%
Series A ........................... 3.98% 3.96% 3.95%
Series B ........................... 6.45% 6.42% 6.40%
Series C ........................... 28.22% 28.12% 28.02%
---------- ---------- ----------
Total ............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................... 3.9693 3.9455 3.9218
Series B ........................... 3.9721 3.9481 3.9245
Series C ........................... 15.8850 15.7893 15.6949

<CAPTION>
$19.375 $19.500 $19.625 $19.750 $19.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged .............. 6,296,875 6,337,500 6,378,125 6,418,750 6,459,375
Equity Value of Independent ......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................ 11,055,025 11,095,650 11,136,275 11,176,900 11,217,525
Par Value of Preferred Stock ........ 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........... 38.22% 38.08% 37.94% 37.81% 37.67%
Shares Owned Upon Conversion:
Current Common ..................... 532,750 532,750 532,750 532,750 532,750
Series A ........................... 33,917 33,716 33,518 33,322 33,129
Series B ........................... 54,979 54,654 54,333 54,015 53,701
Series C ........................... 240,715 239,292 237,885 236,495 235,121
---------- ---------- ---------- ---------- ----------
Total Shares ...................... 862,362 860,413 858,487 856,583 854,701
Percentage of Ownership:
Current Common ..................... 61.78% 61.92% 62.06% 62.19% 62.33%
Series A ........................... 3.93% 3.92% 3.90% 3.89% 3.88%
Series B ........................... 6.38% 6.35% 6.33% 6.31% 6.28%
Series C ........................... 27.91% 27.81% 27.71% 27.61% 27.51%
---------- ---------- ---------- ---------- ----------
Total ............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................... 3.8985 3.8755 3.8527 3.8302 3.8079
Series B ........................... 3.9012 3.8781 3.8553 3.8328 3.8105
Series C ........................... 15.6015 15.5092 15.4181 15.3280 15.2389
</TABLE>

$20

<TABLE>
<CAPTION>
$20.000 $20.125 $20.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged .............. 6,500,000 6,540,625 6,581,250
Equity Value of Independent ......... 4,758,150 4,758,150 4,758,150
--------- --------- ---------
Total Equity Value ................ 11,258,150 11,298,775 11,339,400
Par Value of Preferred Stock ........ 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........... 37.53% 37.40% 37.26%
Shares Owned Upon Conversion:
Current Common ..................... 532,750 532,750 532,750
Series A ........................... 32,937 32,748 32,561
Series B ........................... 53,391 53,085 52,781
Series C ........................... 233,763 232,420 231,093
---------- ---------- ----------
Total Shares ...................... 852,842 851,003 849,186
Percentage of Ownership:
Current Common ..................... 62.47% 62.60% 62.74%
Series A ........................... 3.86% 3.85% 3.83%
Series B ........................... 6.26% 6.24% 6.22%
Series C ........................... 27.41% 27.31% 27.21%
---------- ---------- ----------
Total ............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................... 3.7859 3.7642 3.7427
Series B ........................... 3.7885 3.7667 3.7452
Series C ........................... 15.1509 15.0639 14.9778

<CAPTION>
$20.375 $20.500 $20.625 $20.750 $20.875
------- ------- ------- ------- -------

<S> <C> <C> <C> <C> <C>
Equity Value of Merged .............. 6,621,875 6,662,500 6,703,125 6,743,750 6,784,375
Equity Value of Independent ......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
--------- --------- --------- --------- ---------
Total Equity Value ................ 11,380,025 11,420,650 11,461,275 11,501,900 11,542,525
Par Value of Preferred Stock ........ 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........... 37.13% 37.00% 36.87% 36.74% 36.61%
Shares Owned Upon Conversion:
Current Common ..................... 532,750 532,750 532,750 532,750 532,750
Series A ........................... 32,376 32,194 32,013 31,834 31,657
Series B ........................... 52,482 52,185 51,892 51,603 51,316
Series C ........................... 229,781 228,484 227,201 225,932 224,678
---------- ---------- ---------- ---------- ----------
Total Shares ...................... 847,389 845,613 843,856 842,119 840,401
Percentage of Ownership:
Current Common ..................... 62.87% 63.00% 63.13% 63.26% 63.39%
Series A ........................... 3.82% 3.81% 3.79% 3.78% 3.77%
Series B ........................... 6.19% 6.17% 6.15% 6.13% 6.11%
Series C ........................... 27.12% 27.02% 26.92% 26.83% 26.73%
---------- ---------- ---------- ---------- ----------
Total ............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................... 3.7214 3.7004 3.6796 3.6591 3.6388
Series B ........................... 3.7240 3.7029 3.6821 3.6616 3.6413
Series C ........................... 14.8928 14.8087 14.7256 14.6433 14.5620
</TABLE>

III-5
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$21

<TABLE>
<CAPTION>
$21.000 $21.125 $21.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged .............. 6,825,000 6,865,625 6,906,250
Equity Value of Independent ......... 4,758,150 4,758,150 4,758,150
--------- --------- ---------
Total Equity Value ................ 11,583,150 11,623,775 11,664,400
Par Value of Preferred Stock ........ 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........... 36.48% 36.35% 36.23%
Shares Owned Upon Conversion:
Current Common ..................... 532,750 532,750 532,750
Series A ........................... 31,483 31,310 31,139
Series B ........................... 51,033 50,753 50,476
Series C ........................... 223,437 222,210 220,997
---------- ---------- ----------
Total Shares ...................... 838,703 837,023 835,361
Percentage of Ownership:
Current Common .................... 63.52% 63.65% 63.77%
Series A ........................... 3.75% 3.74% 3.73%
Series B ........................... 6.08% 6.06% 6.04%
Series C ........................... 26.64% 26.55% 26.46%
---------- ---------- ----------
Total ............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................... 3.6187 3.5988 3.5792
Series B ........................... 3.6212 3.6013 3.5816
Series C ........................... 14.4816 14.4021 14.3235

<CAPTION>
$21.375 $21.500 $21.625 $21.750 $21.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged .............. 6,946,875 6,987,500 7,028,125 7,068,750 7,109,375
Equity Value of Independent ......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................ 11,705,025 11,745,650 11,786,275 11,826,900 11,867,525
Par Value of Preferred Stock ........ 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........... 36.10% 35.97% 35.85% 35.73% 35.61%
Shares Owned Upon Conversion:
Current Common ..................... 532,750 532,750 532,750 532,750 532,750
Series A ........................... 30,970 30,802 30,637 30,473 30,311
Series B ........................... 50,201 49,930 49,662 49,396 49,134
Series C ........................... 219,797 218,609 217,435 216,272 215,123
---------- ---------- ---------- ---------- ----------
Total Shares ...................... 833,717 832,092 830,483 828,892 827,318
Percentage of Ownership:
Current Common .................... 63.90% 64.03% 64.15% 64.27% 64.39%
Series A ........................... 3.71% 3.70% 3.69% 3.68% 3.66%
Series B ........................... 6.02% 6.00% 5.98% 5.96% 5.94%
Series C ........................... 26.36% 26.27% 26.18% 26.09% 26.00%
----------- ---------- ---------- ---------- ----------
Total ............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................... 3.5597 3.5405 3.5215 3.5026 3.4840
Series B ........................... 3.5621 3.5429 3.5239 3.5050 3.4864
Series C ........................... 14.2457 14.1687 14.0926 14.0173 13.9428
</TABLE>

$22

<TABLE>
<CAPTION>
$22.000 $22.125 $22.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged .............. 7,150,000 7,190,625 7,231,250
Equity Value of Independent ......... 4,758,150 4,758,150 4,758,150
--------- --------- ---------
Total Equity Value ................ 11,908,150 11,948,775 11,989,400
Par Value of Preferred Stock ........ 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........... 35.48% 35.36% 35.24%
Shares Owned Upon Conversion:
Current Common ..................... 532,750 532,750 532,750
Series A ........................... 30,151 29,992 29,835
Series B ........................... 48,874 48,617 48,363
Series C ........................... 213,985 212,860 211,746
---------- ---------- ----------
Total Shares ...................... 825,760 824,219 822,694
Percentage of Ownership:
Current Common ..................... 64.52% 64.64% 64.76%
Series A ........................... 3.65% 3.64% 3.63%
Series B ........................... 5.92% 5.90% 5.88%
Series C ........................... 25.91% 25.83% 25.74%
---------- ---------- ----------
Total ............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................... 3.4656 3.4474 3.4293
Series B ........................... 3.4680 3.4497 3.4317
Series C ........................... 13.8690 13.7961 13.7239

<CAPTION>
$22.375 $22.500 $22.625 $22.750 $22.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged .............. 7,271,875 7,312,500 7,353,125 7,393,750 7,434,375
Equity Value of Independent ......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................ 12,030,025 12,070,650 12,111,275 12,151,900 12,192,525
Par Value of Preferred Stock ........ 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ........... 35.12% 35.01% 34.89% 34.77% 34.66%
Shares Owned Upon Conversion:
Current Common ..................... 532,750 532,750 532,750 532,750 532,750
Series A ........................... 29,680 29,526 29,374 29,224 29,075
Series B ........................... 48,111 47,862 47,615 47,371 47,130
Series C ........................... 210,644 209,553 208,473 207,405 206,347
---------- ---------- ---------- ---------- ----------
Total Shares ...................... 821,184 819,691 818,213 816,750 815,301
Percentage of Ownership:
Current Common ..................... 64.88% 64.99% 65.11% 65.23% 65.34%
Series A ........................... 3.61% 3.60% 3.59% 3.58% 3.57%
Series B ........................... 5.86% 5.84% 5.82% 5.80% 5.78%
Series C ........................... 25.65% 25.56% 25.48% 25.39% 25.31%
---------- ---------- ---------- ---------- ----------
Total ............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ........................... 3.4115 3.3938 3.3763 3.3590 3.3419
Series B ........................... 3.4138 3.3961 3.3786 3.3613 3.3442
Series C ........................... 13.6525 13.5818 13.5118 13.4425 13.3740
</TABLE>

III-6
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$23

<TABLE>
<CAPTION>
$23.000 $23.125 $23.250
------- ------- -------

<S> <C> <C> <C>
Equity Value of Merged ............... 7,475,000 7,515,625 7,556,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 12,233,150 12,273,775 12,314,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 34.54% 34.43% 34.31%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 28,927 28,781 28,636
Series B ............................ 46,890 46,654 46,419
Series C ............................ 205,300 204,264 203,238
---------- ---------- ----------
Total Shares ....................... 813,868 812,449 811,044
Percentage of Ownership:
Current Common ...................... 65.46% 65.57% 65.69%
Series A ............................ 3.55% 3.54% 3.53%
Series B ............................ 5.76% 5.74% 5.72%
Series C ............................ 25.23% 25.14% 25.06%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 3.3249 3.3082 3.2915
Series B ............................ 3.3272 3.3104 3.2938
Series C ............................ 13.3061 13.2390 13.1725

<CAPTION>
$23.375 $23.500 $23.625 $23.750 $23.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 7,596,875 7,637,500 7,678,125 7,718,750 7,759,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 12,355,025 12,395,650 12,436,275 12,476,900 12,517,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 34.20% 34.09% 33.98% 33.87% 33.76%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 28,493 28,352 28,211 28,073 27,935
Series B ............................ 46,188 45,958 45,730 45,505 45,282
Series C ............................ 202,223 201,217 200,222 199,236 198,260
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 809,654 808,277 806,913 805,564 804,227
Percentage of Ownership:
Current Common ...................... 65.80% 65.91% 66.02% 66.13% 66.24%
Series A ............................ 3.52% 3.51% 3.50% 3.48% 3.47%
Series B ............................ 5.70% 5.69% 5.67% 5.65% 5.63%
Series C ............................ 24.98% 24.89% 24.81% 24.73% 24.65%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 3.2751 3.2588 3.2427 3.2267 3.2109
Series B ............................ 3.2773 3.2610 3.2449 3.2289 3.2131
Series C ............................ 13.1067 13.0415 12.9770 12.9131 12.8498
</TABLE>

$24

<TABLE>
<CAPTION>
$24.000 $24.125 $24.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 7,800,000 7,840,625 7,881,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
--------- --------- ---------
Total Equity Value ................. 12,558,150 12,598,775 12,639,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 33.65% 33.54% 33.43%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 27,799 27,664 27,530
Series B ............................ 45,062 44,843 44,626
Series C ............................ 197,293 196,336 195,388
---------- ---------- ----------
Total Shares ....................... 802,904 801,593 800,295
Percentage of Ownership:
Current Common ...................... 66.35% 66.46% 66.57%
Series A ............................ 3.46% 3.45% 3.44%
Series B ............................ 5.61% 5.59% 5.58%
Series C ............................ 24.57% 24.49% 24.41%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 3.1953 3.1798 3.1644
Series B ............................ 3.1974 3.1819 3.1666
Series C ............................ 12.7872 12.7251 12.6637

<CAPTION>
$24.375 $24.500 $24.625 $24.750 $24.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 7,921,875 7,962,500 8,003,125 8,043,750 8,084,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
--------- --------- --------- --------- ---------
Total Equity Value ................. 12,680,025 12,720,650 12,761,275 12,801,900 12,842,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 33.32% 33.22% 33.11% 33.01% 32.90%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 27,398 27,267 27,137 27,009 26,881
Series B ............................ 44,412 44,200 43,989 43,781 43,575
Series C ............................ 194,449 193,519 192,598 191,686 190,782
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 799,009 797,736 796,475 795,226 793,988
Percentage of Ownership:
Current Common ...................... 66.68% 66.78% 66.89% 66.99% 67.10%
Series A ............................ 3.43% 3.42% 3.41% 3.40% 3.39%
Series B ............................ 5.56% 5.54% 5.52% 5.51% 5.49%
Series C ............................ 24.34% 24.26% 24.18% 24.10% 24.03%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 3.1492 3.1341 3.1192 3.1045 3.0898
Series B ............................ 3.1514 3.1363 3.1214 3.1066 3.0919
Series C ............................ 12.6028 12.5426 12.4829 12.4237 12.3652
</TABLE>

III-7
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$25

<TABLE>
<CAPTION>
$25.000 $25.125 $25.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 8,125,000 8,165,625 8,206,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
--------- --------- ---------
Total Equity Value ................. 12,883,150 12,923,775 12,964,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 32.80% 32.70% 32.59%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 26,755 26,630 26,507
Series B ............................ 43,370 43,167 42,967
Series C ............................ 189,887 189,000 188,122
---------- ---------- ----------
Total Shares ....................... 792,762 791,548 790,345
Percentage of Ownership:
Current Common ...................... 67.20% 67.30% 67.41%
Series A ............................ 3.37% 3.36% 3.35%
Series B ............................ 5.47% 5.45% 5.44%
Series C ............................ 23.95% 23.88% 23.80%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 3.0753 3.0610 3.0467
Series B ............................ 3.0774 3.0630 3.0488
Series C ............................ 12.3071 12.2497 12.1927

<CAPTION>
$25.375 $25.500 $25.625 $25.750 $25.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 8,246,875 8,287,500 8,328,125 8,368,750 8,409,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
--------- --------- --------- --------- ---------
Total Equity Value ................. 13,005,025 13,045,650 13,086,275 13,126,900 13,167,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 32.49% 32.39% 32.29% 32.19% 32.09%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 26,384 26,262 26,142 26,023 25,904
Series B ............................ 42,768 42,571 42,376 42,182 41,991
Series C ............................ 187,251 186,389 185,534 184,687 183,848
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 789,153 787,972 786,802 785,642 784,493
Percentage of Ownership:
Current Common ...................... 67.51% 67.61% 67.71% 67.81% 67.91%
Series A ............................ 3.34% 3.33% 3.32% 3.31% 3.30%
Series B ............................ 5.42% 5.40% 5.39% 5.37% 5.35%
Series C ............................ 23.73% 23.65% 23.58% 23.51% 23.44%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 3.0326 3.0187 3.0048 2.9911 2.9775
Series B ............................ 3.0347 3.0207 3.0069 2.9931 2.9796
Series C ............................ 12.1363 12.0804 12.0250 11.9701 11.9158
</TABLE>

$26

<TABLE>
<CAPTION>
$26.000 $26.125 $26.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 8,450,000 8,490,625 8,531,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
--------- --------- ---------
Total Equity Value ................. 13,208,150 13,248,775 13,289,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 31.99% 31.89% 31.80%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 25,787 25,671 25,556
Series B ............................ 41,801 41,613 41,426
Series C ............................ 183,017 182,193 181,376
---------- ---------- ----------
Total Shares ....................... 783,355 782,227 781,108
Percentage of Ownership:
Current Common ...................... 68.01% 68.11% 68.20%
Series A ............................ 3.29% 3.28% 3.27%
Series B ............................ 5.34% 5.32% 5.30%
Series C ............................ 23.36% 23.29% 23.22%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.9641 2.9507 2.9375
Series B ............................ 2.9661 2.9527 2.9395
Series C ............................ 11.8619 11.8085 11.7555

<CAPTION>
$26.375 $26.500 $26.625 $26.750 $26.875
------- ------- ------- ------- -------

<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 8,571,875 8,612,500 8,653,125 8,693,750 8,734,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 13,330,025 13,370,650 13,411,275 13,451,900 13,492,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 31.70% 31.60% 31.51% 31.41% 31.32%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 25,442 25,329 25,217 25,106 24,996
Series B ............................ 41,241 41,058 40,877 40,697 40,518
Series C ............................ 180,567 179,765 178,970 178,182 177,401
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 780,000 778,902 777,813 776,734 775,665
Percentage of Ownership:
Current Common ...................... 68.30% 68.40% 68.49% 68.59% 68.68%
Series A ............................ 3.26% 3.25% 3.24% 3.23% 3.22%
Series B ............................ 5.29% 5.27% 5.26% 5.24% 5.22%
Series C ............................ 23.15% 23.08% 23.01% 22.94% 22.87%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.9244 2.9114 2.8985 2.8857 2.8731
Series B ............................ 2.9264 2.9134 2.9005 2.8877 2.8751
Series C ............................ 11.7031 11.6511 11.5996 11.5485 11.4979
</TABLE>

III-8
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$27

<TABLE>
<CAPTION>
$27.000 $27.125 $27.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 8,775,000 8,815,625 8,856,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 13,533,150 13,573,775 13,614,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 31.22% 31.13% 31.04%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 24,887 24,779 24,671
Series B ............................ 40,341 40,166 39,992
Series C ............................ 176,626 175,859 175,098
---------- ---------- ----------
Total Shares ....................... 774,604 773,553 772,511
Percentage of Ownership:
Current Common ...................... 68.78% 68.87% 68.96%
Series A ............................ 3.21% 3.20% 3.19%
Series B ............................ 5.21% 5.19% 5.18%
Series C ............................ 22.80% 22.73% 22.67%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.8606 2.8481 2.8358
Series B ............................ 2.8625 2.8501 2.8377
Series C ............................ 11.4477 11.3979 11.3486

<CAPTION>
$27.375 $27.500 $27.625 $27.750 $27.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 8,896,875 8,937,500 8,978,125 9,018,750 9,059,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
--------- --------- --------- --------- ---------
Total Equity Value ................. 13,655,025 13,695,650 13,736,275 13,776,900 13,817,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 30.94% 30.85% 30.76% 30.67% 30.58%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 24,565 24,460 24,355 24,252 24,149
Series B ............................ 39,820 39,649 39,480 39,312 39,145
Series C ............................ 174,343 173,596 172,854 172,119 171,390
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 771,479 770,454 769,439 768,432 767,434
Percentage of Ownership:
Current Common ...................... 69.06% 69.15% 69.24% 69.33% 69.42%
Series A ............................ 3.18% 3.17% 3.17% 3.16% 3.15%
Series B ............................ 5.16% 5.15% 5.13% 5.12% 5.10%
Series C ............................ 22.60% 22.53% 22.46% 22.40% 22.33%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.8236 2.8115 2.7995 2.7876 2.7757
Series B ............................ 2.8255 2.8134 2.8014 2.7895 2.7776
Series C ............................ 11.2997 11.2513 11.2032 11.1555 11.1083
</TABLE>

$28

<TABLE>
<CAPTION>
$28.000 $28.125 $28.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 9,100,000 9,140,625 9,181,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 13,858,150 13,898,775 13,939,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 30.49% 30.40% 30.31%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 24,047 23,946 23,846
Series B ............................ 38,980 38,817 38,654
Series C ............................ 170,667 169,950 169,240
---------- ---------- ----------
Total Shares ....................... 766,444 765,463 764,490
Percentage of Ownership:
Current Common ...................... 69.51% 69.60% 69.69%
Series A ............................ 3.14% 3.13% 3.12%
Series B ............................ 5.09% 5.07% 5.06%
Series C ............................ 22.27% 22.20% 22.14%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.7640 2.7524 2.7409
Series B ............................ 2.7659 2.7543 2.7428
Series C ............................ 11.0614 11.0150 10.9689

<CAPTION>
$28.375 $28.500 $28.625 $28.750 $28.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 9,221,875 9,262,500 9,303,125 9,343,750 9,384,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
--------- --------- --------- --------- ---------
Total Equity Value ................. 13,980,025 14,020,650 14,061,275 14,101,900 14,142,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 30.22% 30.14% 30.05% 29.96% 29.88%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 23,747 23,648 23,551 23,454 23,358
Series B ............................ 38,493 38,334 38,175 38,018 37,862
Series C ............................ 168,535 167,836 167,143 166,455 165,773
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 763,525 762,568 761,618 760,677 759,743
Percentage of Ownership:
Current Common ...................... 69.78% 69.86% 69.95% 70.04% 70.12%
Series A ............................ 3.11% 3.10% 3.09% 3.08% 3.07%
Series B ............................ 5.04% 5.03% 5.01% 5.00% 4.98%
Series C ............................ 22.07% 22.01% 21.95% 21.88% 21.82%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.7295 2.7182 2.7070 2.6958 2.6848
Series B ............................ 2.7314 2.7200 2.7088 2.6977 2.6866
Series C ............................ 10.9232 10.8779 10.8330 10.7885 10.7443
</TABLE>

III-9
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$29

<TABLE>
<CAPTION>
$29.000 $29.125 $29.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 9,425,000 9,465,625 9,506,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 14,183,150 14,223,775 14,264,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 29.79% 29.71% 29.62%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 23,262 23,168 23,074
Series B ............................ 37,708 37,555 37,403
Series C ............................ 165,097 164,426 163,761
---------- ---------- ----------
Total Shares ....................... 758,817 757,899 756,987
Percentage of Ownership:
Current Common ...................... 70.21% 70.29% 70.38%
Series A ............................ 3.07% 3.06% 3.05%
Series B ............................ 4.97% 4.96% 4.94%
Series C ............................ 21.76% 21.69% 21.63%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.6738 2.6630 2.6522
Series B ............................ 2.6757 2.6648 2.6540
Series C ............................ 10.7004 10.6569 10.6138

<CAPTION>
$29.375 $29.500 $29.625 $29.750 $29.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 9,546,875 9,587,500 9,628,125 9,668,750 9,709,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 14,305,025 14,345,650 14,386,275 14,426,900 14,467,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 29.54% 29.45% 29.37% 29.29% 29.21%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 22,981 22,889 22,797 22,706 22,616
Series B ............................ 37,252 37,103 36,954 36,807 36,661
Series C ............................ 163,101 162,446 161,796 161,152 160,513
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 756,084 755,187 754,298 753,416 752,540
Percentage of Ownership:
Current Common ...................... 70.46% 70.55% 70.63% 70.71% 70.79%
Series A ............................ 3.04% 3.03% 3.02% 3.01% 3.01%
Series B ............................ 4.93% 4.91% 4.90% 4.89% 4.87%
Series C ............................ 21.57% 21.51% 21.45% 21.39% 21.33%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.6415 2.6309 2.6204 2.6099 2.5996
Series B ............................ 2.6433 2.6327 2.6222 2.6117 2.6014
Series C ............................ 10.5710 10.5286 10.4865 10.4447 10.4033
</TABLE>

$30

<TABLE>
<CAPTION>
$30.000 $30.125 $30.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 9,750,000 9,790,625 9,831,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
--------- --------- ---------
Total Equity Value ................. 14,508,150 14,548,775 14,589,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 29.12% 29.04% 28.96%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 22,527 22,438 22,350
Series B ............................ 36,516 36,372 36,230
Series C ............................ 159,879 159,250 158,625
---------- ---------- ----------
Total Shares ....................... 751,672 750,810 749,956
Percentage of Ownership:
Current Common ...................... 70.88% 70.96% 71.04%
Series A ............................ 3.00% 2.99% 2.98%
Series B ............................ 4.86% 4.84% 4.83%
Series C ............................ 21.27% 21.21% 21.15%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.5893 2.5791 2.5690
Series B ............................ 2.5911 2.5809 2.5708
Series C ............................ 10.3622 10.3214 10.2810

<CAPTION>
$30.375 $30.500 $30.625 $30.750 $30.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 9,871,875 9,912,500 9,953,125 9,993,750 10,034,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 14,630,025 14,670,650 14,711,275 14,751,900 14,792,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 28.88% 28.80% 28.72% 28.64% 28.56%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 22,263 22,177 22,091 22,005 21,921
Series B ............................ 36,088 35,948 35,809 35,671 35,533
Series C ............................ 158,006 157,391 156,782 156,177 155,576
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 749,108 748,266 747,431 746,603 745,780
Percentage of Ownership:
Current Common ...................... 71.12% 71.20% 71.28% 71.36% 71.44%
Series A ............................ 2.97% 2.96% 2.96% 2.95% 2.94%
Series B ............................ 4.82% 4.80% 4.79% 4.78% 4.76%
Series C ............................ 21.09% 21.03% 20.98% 20.92% 20.86%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.5590 2.5490 2.5392 2.5294 2.5196
Series B ............................ 2.5607 2.5508 2.5409 2.5311 2.5214
Series C ............................ 10.2408 10.2010 10.1615 10.1223 10.0834
</TABLE>

III-10
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$31

<TABLE>
<CAPTION>
$31.000 $31.125 $31.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 10,075,000 10,115,625 10,156,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 14,833,150 14,873,775 14,914,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 28.49% 28.41% 28.33%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 21,837 21,754 21,671
Series B ............................ 35,397 35,262 35,128
Series C ............................ 154,980 154,389 153,802
---------- ---------- ----------
Total Shares ....................... 744,965 744,155 743,351
Percentage of Ownership:
Current Common ...................... 71.51% 71.59% 71.67%
Series A ............................ 2.93% 2.92% 2.92%
Series B ............................ 4.75% 4.74% 4.73%
Series C ............................ 20.80% 20.75% 20.69%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.5100 2.5004 2.4909
Series B ............................ 2.5117 2.5021 2.4926
Series C ............................ 10.0447 10.0064 9.9684

<CAPTION>
$31.375 $31.500 $31.625 $31.750 $31.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 10,196,875 10,237,500 10,278,125 10,318,750 10,359,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 14,955,025 14,995,650 15,036,275 15,076,900 15,117,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 28.25% 28.18% 28.10% 28.03% 27.95%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 21,589 21,507 21,427 21,346 21,267
Series B ............................ 34,995 34,863 34,732 34,602 34,473
Series C ............................ 153,220 152,642 152,068 151,499 150,934
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 742,554 741,763 740,977 740,198 739,424
Percentage of Ownership:
Current Common ...................... 71.75% 71.82% 71.90% 71.97% 72.05%
Series A ............................ 2.91% 2.90% 2.89% 2.88% 2.88%
Series B ............................ 4.71% 4.70% 4.69% 4.67% 4.66%
Series C ............................ 20.63% 20.58% 20.52% 20.47% 20.41%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.4815 2.4721 2.4628 2.4536 2.4445
Series B ............................ 2.4832 2.4738 2.4645 2.4553 2.4461
Series C ............................ 9.9306 9.8932 9.8560 9.8191 9.7825
</TABLE>

$32

<TABLE>
<CAPTION>
$32.000 $32.125 $32.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 10,400,000 10,440,625 10,481,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 15,158,150 15,198,775 15,239,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 27.88% 27.80% 27.73%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 21,188 21,109 21,031
Series B ............................ 34,345 34,218 34,092
Series C ............................ 150,373 149,816 149,264
---------- ---------- ----------
Total Shares ....................... 738,656 737,894 737,137
Percentage of Ownership:
Current Common ...................... 72.12% 72.20% 72.27%
Series A ............................ 2.87% 2.86% 2.85%
Series B ............................ 4.65% 4.64% 4.62%
Series C ............................ 20.36% 20.30% 20.25%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.4354 2.4264 2.4174
Series B ............................ 2.4370 2.4280 2.4191
Series C ............................ 9.7461 9.7101 9.6742

<CAPTION>
$32.375 $32.500 $32.625 $32.750 $32.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 10,521,875 10,562,500 10,603,125 10,643,750 10,684,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 15,280,025 15,320,650 15,361,275 15,401,900 15,442,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 27.65% 27.58% 27.51% 27.43% 27.36%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 20,954 20,877 20,801 20,726 20,651
Series B ............................ 33,966 33,842 33,719 33,596 33,474
Series C ............................ 148,715 148,171 147,630 147,094 146,561
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 736,386 735,640 734,900 734,165 733,436
Percentage of Ownership:
Current Common ...................... 72.35% 72.42% 72.49% 72.57% 72.64%
Series A ............................ 2.85% 2.84% 2.83% 2.82% 2.82%
Series B ............................ 4.61% 4.60% 4.59% 4.58% 4.56%
Series C ............................ 20.20% 20.14% 20.09% 20.04% 19.98%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.4085 2.3997 2.3909 2.3823 2.3736
Series B ............................ 2.4102 2.4013 2.3926 2.3839 2.3753
Series C ............................ 9.6387 9.6034 9.5684 9.5336 9.4991
</TABLE>

III-11
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$33

<TABLE>
<CAPTION>
$33.000 $33.125 $33.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 10,725,000 10,765,625 10,806,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 15,483,150 15,523,775 15,564,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 27.29% 27.22% 27.15%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 20,576 20,502 20,429
Series B ............................ 33,354 33,234 33,115
Series C ............................ 146,032 145,507 144,986
---------- ---------- ----------
Total Shares ....................... 732,712 731,993 731,279
Percentage of Ownership:
Current Common ...................... 72.71% 72.78% 72.85%
Series A ............................ 2.81% 2.80% 2.79%
Series B ............................ 4.55% 4.54% 4.53%
Series C ............................ 19.93% 19.88% 19.83%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.3651 2.3566 2.3481
Series B ............................ 2.3667 2.3582 2.3497
Series C ............................ 9.4648 9.4307 9.3970

<CAPTION>
$33.375 $33.500 $33.625 $33.750 $33.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 10,846,875 10,887,500 10,928,125 10,968,750 11,009,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 15,605,025 15,645,650 15,686,275 15,726,900 15,767,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 27.08% 27.01% 26.94% 26.87% 26.80%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 20,356 20,283 20,211 20,140 20,069
Series B ............................ 32,996 32,879 32,762 32,647 32,532
Series C ............................ 144,468 143,954 143,444 142,937 142,434
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 730,570 729,866 729,168 728,474 727,785
Percentage of Ownership:
Current Common ...................... 72.92% 72.99% 73.06% 73.13% 73.20%
Series A ............................ 2.79% 2.78% 2.77% 2.76% 2.76%
Series B ............................ 4.52% 4.50% 4.49% 4.48% 4.47%
Series C ............................ 19.77% 19.72% 19.67% 19.62% 19.57%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.3397 2.3314 2.3231 2.3149 2.3068
Series B ............................ 2.3413 2.3330 2.3247 2.3165 2.3084
Series C ............................ 9.3634 9.3301 9.2970 9.2642 9.2316
</TABLE>

$34

<TABLE>
<CAPTION>
$34.000 $34.125 $34.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 11,050,000 11,090,625 11,131,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 15,808,150 15,848,775 15,889,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 26.73% 26.66% 26.59%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 19,999 19,929 19,859
Series B ............................ 32,418 32,304 32,192
Series C ............................ 141,934 141,438 140,946
---------- ---------- ----------
Total Shares ....................... 727,101 726,422 725,747
Percentage of Ownership:
Current Common ...................... 73.27% 73.34% 73.41%
Series A ............................ 2.75% 2.74% 2.74%
Series B ............................ 4.46% 4.45% 4.44%
Series C ............................ 19.52% 19.47% 19.42%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.2987 2.2907 2.2827
Series B ............................ 2.3003 2.2922 2.2842
Series C ............................ 9.1992 9.1670 9.1351

<CAPTION>
$34.375 $34.500 $34.625 $34.750 $34.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 11,171,875 11,212,500 11,253,125 11,293,750 11,334,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 15,930,025 15,970,630 16,011,275 16,051,900 16,092,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 26.53% 26.46% 26.39% 26.32% 26.26%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 19,790 19,722 19,654 19,587 19,519
Series B ............................ 32,080 31,969 31,859 31,750 31,641
Series C ............................ 140,457 139,971 139,488 139,009 138,533
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 725,077 724,412 723,751 723,095 722,444
Percentage of Ownership:
Current Common ...................... 73.47% 73.54% 73.61% 73.68% 73.74%
Series A ............................ 2.73% 2.72% 2.72% 2.71% 2.70%
Series B ............................ 4.42% 4.41% 4.40% 4.39% 4.38%
Series C ............................ 19.37% 19.32% 19.27% 19.22% 19.18%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.2748 2.2669 2.2591 2.2513 2.2436
Series B ............................ 2.2763 2.2684 2.2606 2.2529 2.2451
Series C ............................ 9.1034 9.0719 9.0407 9.0095 8.9788
</TABLE>

III-12
<PAGE>

Solite Conversion Matrix

Average Closing Bid/Asked Price for GCHI

$35

<TABLE>
<CAPTION>
$35.000 $35.125 $35.250
------- ------- -------
<S> <C> <C> <C>
Equity Value of Merged ............... 11,375,000 11,415,625 11,456,250
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150
---------- ---------- ----------
Total Equity Value ................. 16,133,150 16,173,775 16,214,400
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 26.19% 26.13% 26.06%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750
Series A ............................ 19,453 19,387 19,321
Series B ............................ 31,533 31,426 31,319
Series C ............................ 138,061 137,591 137,125
---------- ---------- ----------
Total Shares ....................... 721,796 721,154 720,515
Percentage of Ownership:
Current Common ...................... 73.81% 73.87% 73.94%
Series A ............................ 2.70% 2.69% 2.68%
Series B ............................ 4.37% 4.36% 4.35%
Series C ............................ 19.13% 19.08% 19.03%
---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.2360 2.2284 2.2208
Series B ............................ 2.2375 2.2299 2.2223
Series C ............................ 8.9481 8.9177 8.8875

<CAPTION>
$35.375 $35.500 $35.625 $35.750 $35.875
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Equity Value of Merged ............... 11,496,875 11,537,500 11,578,125 11,618,750 11,659,375
Equity Value of Independent .......... 4,758,150 4,758,150 4,758,150 4,758,150 4,758,150
---------- ---------- ---------- ---------- ----------
Total Equity Value ................. 16,255,025 16,295,650 16,336,275 16,376,900 16,417,525
Par Value of Preferred Stock ......... 4,225,450 4,225,450 4,225,450 4,225,450 4,225,450
Ownership Upon Conversion ............ 25.99% 25.93% 25.87% 25.80% 25.74%
Shares Owned Upon Conversion:
Current Common ...................... 532,750 532,750 532,750 532,750 532,750
Series A ............................ 19,256 19,191 19,127 19,063 18,999
Series B ............................ 31,213 31,108 31,004 30,900 30,797
Series C ............................ 136,662 136,202 135,745 135,291 134,840
---------- ---------- ---------- ---------- ----------
Total Shares ....................... 719,881 719,251 718,626 718,004 717,387
Percentage of Ownership:
Current Common ...................... 74.01% 74.07% 74.13% 74.20% 74.26%
Series A ............................ 2.67% 2.67% 2.66% 2.65% 2.65%
Series B ............................ 4.34% 4.33% 4.31% 4.30% 4.29%
Series C ............................ 18.98% 18.94% 18.89% 18.84% 18.80%
---------- ---------- ---------- ---------- ----------
Total .............................. 100.00% 100.00% 100.00% 100.00% 100.00%
Preferred Conversion Ratio:
Series A ............................ 2.2133 2.2059 2.1985 2.1911 2.1838
Series B ............................ 2.2148 2.2074 2.2000 2.1926 2.1853
Series C ............................ 8.8575 8.8277 8.7980 8.7686 8.7394
</TABLE>

III-13
<PAGE>

ANNEX IV

AGREEMENT AND PLAN OF MERGER
by and among
GIANT CEMENT HOLDING, INC.
GCHI ACQUISITION CORP.
and
SOLITE CORPORATION
Dated as of September 10, 1997, as amended

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
ARTICLE I
THE MERGER; THE SURVIVING ENTITY ............................................... 1
Section 1.1 The Merger ........................................................ 1
Section 1.2 Effective Time of the Merger ...................................... 1
Section 1.3 Closing ........................................................... 1
Section 1.4 Articles of Organization .......................................... 1
Section 1.5 Operating Agreement ............................................... 2

ARTICLE II
CONVERSION OF SHARES ........................................................... 2
Section 2.1 Exchange Ratio .................................................... 2
Section 2.2 Exchange of Company Common Stock .................................. 3
Section 2.3 No Fractional Securities .......................................... 3
Section 2.4 Adjustment to Consideration ....................................... 4
Section 2.5 Right to Set-Off .................................................. 5

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY .................................. 5
Section 3.1 Organization ...................................................... 5
Section 3.2 Capitalization .................................................... 5
Section 3.3 Company Subsidiaries .............................................. 5
Section 3.4 Authority Relative to this Agreement .............................. 6
Section 3.5 Articles of Incorporation and By-laws ............................. 6
Section 3.6 Consents and Approvals; No Violations ............................. 6
Section 3.7 Financial Statements .............................................. 7
Section 3.8 Absence of Certain Changes or Events; Material Contracts .......... 7
Section 3.9 Litigation ........................................................ 7
Section 3.10 Absence of Undisclosed Liabilities ................................ 7
Section 3.11 No Default ........................................................ 7
Section 3.12 Taxes ............................................................. 7
Section 3.13 Title to Properties; Encumbrances ................................. 8
Section 3.14 Intellectual Property ............................................. 9
Section 3.15 Compliance with Applicable Law .................................... 9
Section 3.16 Employee Benefit Plans; ERISA ..................................... 9
Section 3.17 Labor Matters ..................................................... 11
Section 3.18 Environmental Laws and Regulations ................................ 11
Section 3.19 Restrictions on Business Activities ............................... 13
Section 3.20 Vote Required ..................................................... 13
Section 3.21 Registration Statement; Proxy Statement ........................... 13
Section 3.22 Affiliate Transactions ............................................ 13
Section 3.23 Opinion of Financial Advisor ...................................... 14
Section 3.24 Brokers ........................................................... 14
Section 3.25 Ruling Request .................................................... 14
Section 3.26 Full Disclosure ................................................... 14
</TABLE>

IV-i
<PAGE>

<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE ACQUISITION SUB ........... 14
Section 4.1 Organization ...................................................... 14
Section 4.2 Capitalization .................................................... 14
Section 4.3 Authority Relative to this Agreement .............................. 15
Section 4.4 Certificate of Incorporation and By-laws .......................... 15
Section 4.5 Consents and Approvals; No Violations ............................. 15
Section 4.6 Reports and Financial Statements .................................. 15
Section 4.7 Restrictions on Business Activities ............................... 16
Section 4.8 No Stockholder Vote ............................................... 16
Section 4.9 Registration Statement; Proxy Statement ........................... 16
Section 4.10 Absence of Certain Changes or Events .............................. 16
Section 4.11 Ruling Request .................................................... 16
Section 4.12 Brokers ........................................................... 16
Section 4.13 Full Disclosure ................................................... 16

ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER ......................................... 16
Section 5.1 Conduct of Business by the Company Pending the Merger ............. 16
Section 5.2 Conduct of Business by the Parent Pending the Merger .............. 17
Section 5.3 Conduct of Business of the Acquisition Sub ........................ 18

ARTICLE VI
ADDITIONAL AGREEMENTS .......................................................... 18
Section 6.1 Registration Statement; Proxy Statement ........................... 18
Section 6.2 Company Stockholder Approval; Recommendation ...................... 18
Section 6.3 Agreements with Employee Shareholders ............................. 18
Section 6.4 Access and Information ............................................ 18
Section 6.5 No Solicitation ................................................... 19
Section 6.6 Reasonable Best Efforts ........................................... 19
Section 6.7 Consents; Approvals ............................................... 20
Section 6.8 Board of Directors ................................................ 20
Section 6.9 Expenses .......................................................... 20
Section 6.10 Public Announcements .............................................. 20
Section 6.11 Supplemental Disclosure ........................................... 20
Section 6.12 Agreements of Affiliates .......................................... 20
Section 6.13 Agreements of Shareholders of Northeast ........................... 20
Section 6.14 Agreements of Shareholders of the Company ......................... 20
Section 6.15 Agreement of Spin-Off Entity ...................................... 21
Section 6.16 Ruling Request .................................................... 21
Section 6.17 Conversion of Company Preferred Stock ............................. 21
Section 6.18 Proxy Agreement ................................................... 21
Section 6.19 Opinion of Financial Advisor ...................................... 21

ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER ....................................... 21
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger ........ 21
Section 7.2 Conditions to Obligations of the Parent and the Acquisition
Sub to Effect the Merger........................................... 22
</TABLE>

IV-ii
<PAGE>

<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
Section 7.3 Conditions to Obligation of the Company to Effect the Merger ..... 23

ARTICLE VIII
TERMINATION .................................................................... 24
Section 8.1 Termination ...................................................... 24
Section 8.2 Effect of Termination ............................................ 25

ARTICLE IX
INDEMNIFICATION ................................................................ 26
Section 9.1 Survival of Representations and Warranties ....................... 26
Section 9.2 Indemnification of Parent Claimants .............................. 26
Section 9.3 Indemnification Procedures ....................................... 26
Section 9.4 Release of Shares of Parent Common Stock ......................... 27
Section 9.5 Limitations on Indemnity ......................................... 28

ARTICLE X
GENERAL PROVISIONS ............................................................. 28
Section 10.1 Amendment and Modification ....................................... 28
Section 10.2 Waiver ........................................................... 28
Section 10.3 Survivability; Investigations .................................... 28
Section 10.4 Notices .......................................................... 28
Section 10.5 Descriptive Headings; Interpretation ............................. 30
Section 10.6 Entire Agreement; Assignment ..................................... 30
Section 10.7 Governing Law .................................................... 30
Section 10.8 Severability ..................................................... 30
Section 10.9 Counterparts ..................................................... 30
Section 10.10 Tax Treatment .................................................... 30
</TABLE>

IV-iii
<PAGE>

SCHEDULES

Schedule A
Schedule B-1
Schedule B-2
Schedule 3.2(b)
Schedule 3.3
Schedule 3.3(a)
Schedule 3.6
Schedule 3.7
Schedule 3.8
Schedule 3.9
Schedule 3.10
Schedule 3.11
Schedule 3.12
Schedule 3.13
Schedule 3.14(a)
Schedule 3.15
Schedule 3.16(a)
Schedule 3.16(b)
Schedule 3.17
Schedule 3.18(e)
Schedule 3.18(f)
Schedule 3.18(i)
Schedule 3.19
Schedule 3.22
Schedule 4.5
Schedule 5.1(b)
Schedule 5.1(d)
Schedule 6.12

EXHIBITS

<TABLE>
<S> <C>
Exhibit A Form of Proxy Agreement
Exhibit B Form of Escrow Agreement
Exhibit C Form of Indemnity Escrow Agreement
Exhibit D Form of Affiliate Agreement
Exhibit E Form of Northeast Shareholder Agreement
Exhibit F Form of Giant Shareholder Agreement
Exhibit G Form of Northeast Agreement
Exhibit H Form of Opinion of McGuire Woods Battle and Boothe, L.L.P.
Exhibit I Form of Market Stand-Off Agreement with John Roberts
Exhibit J Form of Tax Provisions Agreement
Exhibit K Form of Indemnity Agreement
Exhibit L Form of Non-Competition with John Roberts
Exhibit M Form of License Agreement
Exhibit N Form of Services Agreement
Exhibit O Form of Non-Competition Agreement
Exhibit P Form of Opinion of Proskauer Rose LLP
</TABLE>

IV-iv
<PAGE>

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER dated as of September 10, 1997, as amended
among GIANT CEMENT HOLDING, INC., a Delaware corporation (the "Parent"), GCHI
ACQUISITION CORP., a Virginia corporation wholly-owned by Parent (the
"Acquisition Sub"), and SOLITE CORPORATION, a Virginia corporation (the
"Company").

The Parent, the Acquisition Sub , and the Company desire that the Parent
acquire all of the outstanding capital stock of the Company, which will own (a)
three lightweight aggregate facilities and the associated resource recovery
operations facilities, (b) five concrete block plants, (c) the M&M Chemical
hazardous waste treatment and blending facility, (d) the transportation
operations associated with the foregoing, and (e) other assets associated with
the foregoing (the "Core Business"), and which will be subject to certain
liabilities including, but not limited to, up to $20 million of long and short
term debt of the Company pursuant to the merger (the "Merger") of the
Acquisition Sub with and into the Company in accordance with the terms of this
Agreement, and the Virginia Stock Corporation Act (the "VSCA").

Prior to the Closing (as defined below) the Company intends to
distribute an interest in all assets and businesses of the Company other than
the Core Business (the "Noncore Business") to the shareholders of the Company
in a transaction that is intended to qualify as nontaxable to the Company and
its shareholders under Section 368(a)(1)(D) and Section 355 of the Internal
Revenue Code of 1986, as amended (the "Code") (the "Spin-Off"). The Spin-Off is
more fully described on Schedule A.

Contemporaneously with the execution and delivery of this Agreement, the
shareholders of the Company listed on Schedule B-1 have executed and delivered
to the Parent an agreement in the form of Exhibit A hereto, pursuant to which
such shareholders have granted to the Parent an irrevocable proxy to vote their
shares in favor of the Merger.

For federal income tax purposes, it is intended that the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code.

The parties hereto agree as follows:

ARTICLE I
THE MERGER; THE SURVIVING ENTITY

Section 1.1 The Merger. In accordance with the provisions of this
Agreement, the VSCA, at the Effective Time (as defined in Section 1.2), the
Acquisition Sub shall be merged with and into the Company (the "Merger"), the
separate existence of the Acquisition Sub shall thereupon cease, and the
Company shall be the surviving entity in the Merger (the "Surviving Entity")
and shall continue its corporate existence under the laws of the Commonwealth
of Virginia. The Merger shall have the effects set forth in Section 13.1-721 of
the VSCA. The plan of merger included in this Agreement is separately stated in
the Plan of Merger (the "Plan of Merger") attached hereto as Schedule A-1. The
parties agree that subject to the provisions of this Agreement, including the
approval of the Plan of Merger by the requisite vote of stockholders of the
Company, the Plan of Merger shall be incorporated into the articles of merger
to be filed with the State Corporation Commission of Virginia.

Section 1.2 Effective Time of the Merger. The Merger shall become
effective at the time a certificate of merger is issued by the State
Corporation Commission of Virginia (the "SCC") or at such later time specified
in, properly executed Articles of Merger, in the form required by and executed
in accordance with the VSCA, filed with the SCC, in accordance with the
provisions of Section 13.1-720 of the VSCA. Such filing shall be made as soon
as practicable after the Closing (as defined in Section 1.3). When used in this
Agreement, the term "Effective Time" shall mean the date and time at which the
Merger shall become effective.

Section 1.3 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Proskauer
Rose LLP, 1585 Broadway, New York, New York 10036, at 10:00 a.m., local time,
on the fifth business day after the day on which all of the conditions set
forth in Article VII are satisfied or waived or on such other date and at such
other time and place as the Parent and the Company shall agree (the "Closing
Date").

Section 1.4 Articles of Organization. The articles of incorporation of
the Company in effect at the Effective Time shall be the articles of
incorporation of the Surviving Entity until amended in accordance with
applicable law.

IV-1
<PAGE>

Section 1.5 Operating Agreement. The by-laws of the Company in effect at
the Effective Time shall be the by-laws of the Surviving Entity until amended
or revoked in accordance with applicable law.

ARTICLE II
CONVERSION OF SHARES

Section 2.1 Exchange Ratio. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof:

(a) Each share of common stock, par value $2 per share of the Company
(the "Company Common Stock"), issued and outstanding immediately prior to
the Effective Time shall be converted into the right to receive:

(i) a number of shares of the voting common stock, par value $.01 per
share (the "Parent Common Stock"), of the Parent, payable upon the
surrender of the certificate formerly representing such share of Company
Common Stock, equal to the quotient derived by dividing (A) 325,000
minus the number of shares to be placed in the Escrow Account and the
Indemnity Escrow Account described below, by (B) the number of
outstanding shares of Company Common Stock at the Closing (hereinafter
referred to collectively, as the "Outstanding Stock"); and

(ii) if any shares of Parent Common Stock are made available for
distribution pursuant to Section 2.4(c) or (d), a number of such shares
of Parent Common Stock equal to the quotient derived by dividing (A) the
total number of shares of Parent Common Stock so available pursuant to
Section 2.4(c) or (d) by (B) the Outstanding Stock.

(b) Each share of Acquisition Sub Common Stock outstanding on the
Effective Date shall, without any action on the part of the holder thereof,
be converted into one share of Company Common Stock, which shall upon such
conversion be validly issued and outstanding, fully paid and nonassessable,
and shall constitute all of the issued and outstanding capital stock of the
Company immediately following the Merger.

(c) The amount of Parent Common Stock to be received pursuant to Section
2.1(a), shall be adjusted to reflect fully the effect of any stock split or
reverse split or stock dividend (including any dividend or distribution of
securities convertible into Parent Common Stock or Company Common Stock),
the record date for which shall occur after the date hereof and prior to the
Effective Time.

(d) If any certificate for shares of Parent Common Stock is to be issued
to a person other than the registered holder of the Company Common Stock
represented by the certificate or certificates surrendered with respect
thereto, it shall be a condition to such issuance that the certificate or
certificates so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the person requesting such exchange will
have paid to the Parent or any person designated by the Parent any transfer
or other taxes required as a result of such issuance to a person other than
the holder of such Company Common Stock, or established to the satisfaction
of the Parent or any agent designated by the Parent that such tax has been
paid or is not payable.

(e) At the Effective Time, the stock transfer books of the Company shall
be closed, and there shall be no further registration of transfers of
Company Common Stock and Company Preferred Stock thereafter on the records
of the Company.

(f) Neither the Parent, the Acquisition Sub nor the Company shall be
liable to any holder of Company Common Stock or Company Preferred Stock for
any securities delivered or any amount paid to a public official pursuant to
applicable abandoned property laws.

(g) No dividends or other distributions declared or made after the
Effective Time with respect to Parent Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered
certificates representing Company Common Stock until such certificates are
surrendered pursuant to Section 2.1. Subject to applicable law, upon such
surrender, there shall be paid to the record holder certificates
representing whole shares of Parent Common Stock issued in exchange
therefor, without interest, at the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to the shares of Parent Common Stock.

IV-2
<PAGE>

(h) In the event any certificates representing Company Common Stock shall
have been lost, stolen or destroyed, the Parent (as defined in Section 2.2)
shall issue in exchange for such lost, stolen or destroyed certificates,
upon the making of an affidavit of that fact by the holder thereof, the
consideration referred to in Section 2.1(a); provided, however, that the
Parent may, in its discretion and as a condition precedent to the issuance
and delivery thereof, require the owner of such lost, stolen or destroyed
certificates to deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against the Parent or the
Escrow Agent with respect to the certificates alleged to have been lost,
stolen or destroyed.

(i) The holders of shares of Company Common Stock as to which dissenter's
rights shall have been duly demanded under applicable law ("Dissenting
Shares"), if any, shall be entitled to payment by the Surviving Entity only
of the fair value of such shares plus accrued interest to the extent
permitted by and in accordance with the provisions of applicable law;
provided, however, that (i) if any holder of the Dissenting Shares shall,
under the circumstances permitted by applicable law, subsequently deliver a
written withdrawal of such holder's demand or (ii) if any holder fails to
establish such holder's entitlement to rights to payment as provided under
applicable law, such holder or holders (as the case may be) shall forfeit
such right to payment for such shares and such shares shall thereupon be
deemed to have been converted into Parent Common Stock pursuant to Section
2.1(a) as of the Effective Time. The Surviving Entity shall be solely
responsible for, and shall pay out of its own funds, any amounts which
become due and payable to holders of Dissenting Shares, and such amounts
shall not be paid directly or indirectly by the Parent.

Section 2.2 Exchange of Company Common Stock.

(a) Promptly after the Effective Time, each shareholder shall present to
the Parent for cancellation a certificate or certificates which immediately
prior to the Effective Time represented Outstanding Stock (the "Certificates")
that were converted pursuant to Section 2.1, and the Parent shall upon
presentation thereof deliver to such shareholder in exchange therefor (x) a
certificate representing that number of whole shares of Parent Common Stock
which such shareholder has the right to receive pursuant to the provisions of
Section 2.1(a)(i), and (y) cash in lieu of any fractional shares of Parent
Common Stock to which such shareholder is entitled pursuant to Section 2.3,
after giving effect to any required tax withholdings.

(b) Promptly after the Effective Time, the Parent shall (i) deliver to
the escrow agent (the "Escrow Agent") under the escrow agreement dated the
Effective Date, substantially in the form attached hereto as Exhibit B, a
certificate representing 75,000 shares of Parent Common Stock (the "Escrow
Account") to be held pursuant to such escrow agreement for dissemination
pursuant to Section 2.4(c), and (iii) deliver to the escrow agent (the
"Indemnity Escrow Agent") under the escrow agreement dated the Effective Time,
substantially in the form of Exhibit C, a certificate representing 75,000 shares
of Parent Common Stock (the "Indemnity Escrow Account") to be held pursuant to
the provisions of Section 9.4. The shares of Parent Common Stock shall be deemed
to have been issued at the Effective Time.

(c) Promptly after the Closing Balance Sheet, as that term is defined in
Section 2.4, becomes the Final Closing Balance Sheet, as that term is defined in
Section 2.4, Parent shall determine if the holders of the Outstanding Stock at
the Effective Time are entitled to any shares from the Escrow Account pursuant
to Section 2.4(c). Subject to Section 2.5, upon a determination that such
holders are entitled to any shares from the Escrow Account pursuant to Section
2.4(c), Parent shall thereupon direct the Escrow Agent to deliver to each such
holder (a) a certificate representing that number of whole shares of Parent
Common Stock which such holder has the right to receive pursuant to the
provisions of Section 2.4(c), and (b) cash in lieu of any fractional shares of
Parent Common Stock to which such holder is entitled pursuant to Section 2.3,
after giving effect to any required tax withholdings.

Section 2.3 No Fractional Securities. No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of certificates representing Company Common Stock, and
such fractional interests shall not entitle the owner thereof to vote or to any
rights of a security holder. In lieu of any such fractional securities, each
holder of Company Common Stock who would otherwise have been entitled to a
fraction of a share of Parent Common Stock upon surrender of such holder's
certificates will be entitled to receive, and the Parent will timely make a cash
payment (without interest) determined by multiplying (i) the fractional interest
to which such holder would otherwise be entitled (after taking into account all
shares of Outstanding Stock then held of record by such holder) and (ii) the
average of the closing bid and asked prices per share of Parent Common Stock as
quoted on The NASDAQ Stock Market, Inc. ("NASDAQ") for the twenty trading days
immediately preceding the Closing.

IV-3
<PAGE>

Section 2.4 Adjustment to Consideration.

(a) As soon as practicable after the Closing, and in any event not later
than 90 days after the Closing, the Parent shall prepare, or cause to be
prepared, and shall furnish to Northeast Solite Corporation, a New York
corporation (the "Spin-Off Entity") a consolidated balance sheet for the Company
as of the Closing Date, after giving effect to the Spin-Off (the "Closing
Balance Sheet"), but before giving effect to the MZerger and any adjustments
related thereto. The Closing Balance Sheet shall be prepared in accordance with
generally accepted accounting principles ("GAAP"), on a basis consistent with
the Report On Audits of Divisional Financial Statements of Solite Corporation
for the years ended March 31, 1997 and 1996, prepared by Coopers & Lybrand LLP,
including the writedown of clinker inventories by approximately $3.6 million to
net realizable value not previously recorded by the Company. If the Spin-Off
Entity disagrees with any aspect of the Closing Balance Sheet, it may object to
the Closing Balance Sheet in writing, detailing its disagreement (the "Dispute
Notice"). If no Dispute Notice is given to the Parent by the Spin-Off Entity
within 30 days after the Closing Balance Sheet is furnished to the Spin-Off
Entity, the Closing Balance Sheet shall be deemed final and binding for all
purposes under this Agreement.

(b) If the Parent and the Spin-Off Entity are unable to resolve any
matter which is the subject of a Dispute Notice within 30 days after such
Dispute Notice is given to the Parent by the Spin-Off Entity, such matter shall
be submitted for resolution to an independent accounting firm selected jointly
by the Parent and the Spin-Off Entity. If the Parent and the Spin-Off Entity are
unable to agree upon such accounting firm within 15 days after the end of the
30-day period referred to in the preceding sentence, then such matter shall be
submitted for resolution to the independent accounting firm of KPMG Peat
Marwick. KPMG Peat Marwick or the independent accounting firm to whom such
matter is submitted for resolution is hereinafter referred to as the "Accounting
Firm." The determinations of the Accounting firm shall be final and binding for
all purposes under this Agreement. The Closing Balance Sheet, as it shall be
deemed final and binding pursuant to the last sentence of Section 2.4(a), as it
shall be agreed upon by Parent and the Spin-Off Entity, or as it shall be
determined by the Accounting Firm pursuant to this Section 2.4(b) is hereinafter
referred to as the "Final Closing Balance Sheet." The Parent and the Spin-Off
Entity will share responsibility for fees and expenses of the Accounting Firm as
follows: (i) if the Accounting Firm resolves all of the matters subject to the
Dispute Notice in favor of the Parent, the Spin-Off Entity will be responsible
for all the fees and expenses of the Accounting Firm; (ii) if the Accounting
Firm resolves all of the matters subject to a Dispute Notice in favor of the
Spin-Off Entity, the Parent will be responsible for all the fees and expenses of
the Accounting Firm; and if the Accounting Firm resolves some of the matters
subject to the Dispute Notice in favor of the Parent and the rest of such
matters in favor of the Spin-Off Entity, the Spin-Off Entity will be responsible
for the fraction of the fees and expenses of the Accounting Firm equal to (A)
the difference between the amount in dispute and the amount of the adjustments
to the Closing Balance Sheet over (B) the amount in dispute, and the Parent will
be responsible for the remainder of the fees and expenses.

(c) If the consolidated net book value of the Company reflected in the
Final Closing Balance Sheet is less than $4.5 million, then (i) the Parent shall
be entitled to receive from the Escrow Account and to cancel the number of whole
shares of Parent Common Stock as shall equal the quotient derived by dividing
(A) the amount by which $4.5 million exceeds the consolidated net book value of
the Company reflected in the Final Closing Balance Sheet by (B) $22 per share of
Parent Common Stock, and (ii) subject to Section 2.4(d), the balance of the
shares of Parent Common Stock in the Escrow Account shall be available
immediately for distribution pursuant to Section 2.1(a)(ii). If the consolidated
net book value of the Company reflected in the Final Closing Balance Sheet is
more than $4.5 million, then, subject to Section 2.4(d), all the shares of
Parent Common Stock in the Escrow Account shall be available immediately for
distribution pursuant to Section 2.1(a)(ii). For purposes of calculating net
book value, no effect will be given to (i) up to $1,000,000 of valuation
allowance recorded against the net deferred tax assets of the Company and (ii)
the cost of the AF Container Management Facility (estimated at $250,000), if the
Company writes-off the cost of such facility.

(d) If the net current assets of the Company reflected in the Final
Closing Balance Sheet is less than $5.0 million, then (i) the Parent shall be
entitled to receive from the Escrow Account and to cancel the number of whole
shares of Parent Common Stock as shall equal the quotient derived by dividing
(A) the amount by which $5.0 million exceeds the net current assets of the
Company reflected in the Final Closing Balance Sheet by (B) $22 per share of
Parent Common Stock, and (ii) subject to Section 2.4(c), the balance of the
shares of Parent Common Stock in the Escrow Account shall be available
immediately for distribution pursuant to Section 2.1(a)(ii). If the net current
assets of the Company reflected in the Final Closing Balance Sheet is more than
$5.0 million, then, subject to Section 2.4(c), all the shares of Parent Common
Stock in the Escrow Account shall be available immediately for distribution
pursuant to Section 2.1(a)(ii). For purposes of calculating net current assets
no effect

IV-4
<PAGE>

will be given to current installments to indebtedness for borrowed money in an
aggregate amount not exceeding $20 million. For the purposes hereof, net
current assets shall be equal to (x) the sum of cash, accounts receivable less
than 60 days past due and inventories less (y) the sum of accounts payable,
accrued expenses and other current liabilities.

Section 2.5 Right to Set-Off. Notwithstanding anything to the contrary
contained in this Agreement, Parent shall have the right to set-off against the
shares of Parent Common Stock in the Escrow Account and in the Indemnity Escrow
Account the amount of its Losses, as that term is hereinafter defined, for which
it is entitled to indemnification pursuant to Article IX; provided, however,
that no shares of Parent Common Stock that are otherwise required, pursuant to
Section 2.4, to be distributed pursuant to Section 2.1(a)(ii) shall be retained
in the Escrow Account unless the aggregate Losses (as defined in Section 9.2
hereof) as to which there are then pending claims asserted by a Parent Claimant
exceed $1,000,000.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and the Acquisition Sub as
follows:

Section 3.1 Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Virginia and has the corporate power to carry on its business as it is now being
conducted or presently proposed to be conducted. The Company is duly qualified
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except where
failure to qualify does not and cannot reasonably be expected to have a material
adverse effect, individually or in the aggregate, on the financial condition,
results of operations, business, assets, liabilities, or properties of the Core
Business taken as a whole, or the ability of the Company to consummate the
Merger and the other transactions contemplated by this Agreement (a "Company
Material Adverse Effect").

Section 3.2 Capitalization.

(a) The authorized capital stock of the Company consists of 1,000,000
shares of Company Common Stock, 100,000 shares of Preferred Stock issuable in
series, of which the Company has designated 25,000 shares as Series A Preferred
Stock, par value $50 per share of the Company (the "Company Series A Preferred
Stock"), 16,300 shares as Series B Preferred Stock, par value $50 per share of
the Company (the "Company Series B Preferred Stock") and 16,807 shares as Series
C Preferred Stock, par value $200 per share of the Company (the "Company Series
C Preferred Stock" and collectively with the Company Series A Preferred Stock
and the Company Series B Preferred Stock, the "Company Preferred Stock"). As of
the date hereof (i) 532,750 shares of Company Common Stock were issued and
outstanding, all of which were validly issued and are fully paid and
nonassessable, (ii) 8,700 shares of Company Series A Preferred Stock were issued
and outstanding, all of which were validly issued and are fully paid and
nonassessable, (iii) 14,093 shares of Company Series B Preferred Stock were
issued and outstanding, all of which were validly issued and are fully paid and
nonassessable and (iv) 15,429 shares of Company Series C Preferred Stock were
issued and outstanding, all of which were validly issued and are fully paid and
nonassessable.

(b) Except as disclosed in this Section 3.2 or as set forth on Schedule
3.2(b), (i) there is no outstanding right, subscription, warrant, call, option
or other agreement or arrangement of any kind to purchase or otherwise to
receive from the Company or any of its Subsidiaries any of the outstanding
authorized but unissued shares of the capital stock or any other security of the
Company or any of its Subsidiaries, (ii) there is no outstanding security of any
kind convertible into or exchangeable for such capital stock and (iii) there is
no voting trust or other agreement or understanding to which the Company or any
of its Subsidiaries is a party or is bound with respect to the voting of the
capital stock of the Company or any of its Subsidiaries.

Section 3.3 Company Subsidiaries. Schedule 3.3 contains a complete and
accurate list of all Subsidiaries or affiliates of the Company. As used in this
Agreement, the term "Subsidiary" means, with respect to the Company, any
corporation or other organization, whether incorporated or unincorporated, of
which at least a majority of the securities or other interests having by their
terms ordinary voting power to elect a majority of the board of directors or
others performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party and/or
one or more of its Subsidiaries and is part of the

IV-5
<PAGE>

Core Business. Each Subsidiary of the Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Each Subsidiary of the Company has the corporate power to carry
on its business as it is now being conducted or presently proposed to be
conducted. Each Subsidiary of the Company is duly qualified as a foreign
corporation authorized to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except where
the failure to qualify does not and cannot reasonably be expected to have a
Company Material Adverse Effect. All of the outstanding shares of capital stock
of the Subsidiaries of the Company that are corporations are validly issued,
fully paid and nonassessable. Except as set forth on Schedule 3.3(a), all of
the outstanding shares of capital stock of each Subsidiary of the Company are
owned by the Company or a Subsidiary of the Company free and clear of any
liens, pledges, security interests, claims, charges or other encumbrances of
any kind whatsoever ("Liens").

Section 3.4 Authority Relative to this Agreement. The Company has the
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Company and the consummation by the Company
of the transactions contemplated on its part hereby (other than the ratio for
the conversion of Company Preferred Stock to Company Common Stock) have been
duly authorized by the Company's Board of Directors and, except for (A) the
approval of the Merger and approval of the conversion of Company Preferred
Stock to Company Common Stock by (i) the affirmative vote of more than
two-thirds of the votes that holders of the outstanding Company Common Stock
and Company Preferred Stock are entitled to cast and (ii) the affirmative vote
of more than two-thirds of the votes that the holders of the outstanding
Company Common Stock, Company Series A Preferred Stock, Company Series B
Preferred Stock and Company Series C Preferred Stock, each voting as a separate
voting group, are entitled to cast and (B) approval of the conversion of
Company Preferred Stock to Company Common Stock by the affirmative vote of a
majority of the votes that holders of outstanding Company Common Stock and
Company Preferred Stock, other than John W. Roberts and his family, are
entitled to cast no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or for the Company to consummate the
transactions contemplated hereby. The Company's Board of Directors has
determined that it is advisable and in the best interests of the Company's
shareholders for the Company to enter into a business combination with Parent
upon the terms and subject to the conditions of this Agreement. This Agreement
has been duly and validly executed and delivered by the Company and constitutes
a valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms.

Section 3.5 Articles of Incorporation and By-laws. The Company has
heretofore furnished to the Parent a complete and correct copy of the articles
of incorporation and by-laws, as amended to date of the Company and of each of
its Subsidiaries. All such articles of incorporation and by-laws are in full
force and effect. The Company is not in violation of any of the provisions of
its articles of incorporation or by-laws and none of the Company's Subsidiaries
is in violation of its articles of incorporation or by-laws.

Section 3.6 Consents and Approvals; No Violations. Neither the
execution, delivery and performance of this Agreement by the Company, nor the
consummation by the Company of the transactions contemplated hereby, will (i)
conflict with or result in any breach of any provisions of the articles of
incorporation, by-laws or other organizational documents of the Company or any
of its Subsidiaries, (ii) require a filing with, or a permit, authorization,
consent or approval of, any federal, state, local or foreign court, arbitral
tribunal, administrative agency or commission or other governmental or other
regulatory authority or administrative agency or commission (a "Governmental
Entity"), except in connection with or in order to comply with the applicable
provisions of the Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the filing of Articles of Merger as required by the VSCA, and the filing
of an amendment to the Company's articles of incorporation to effect the
Conversion (as defined), (iii) except as set forth on Schedule 3.6, result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under, or result in the creation of a Lien on any property or
asset of the Company or any of its Subsidiaries pursuant to, any of the terms,
conditions or provisions of any material note, bond, mortgage, indenture,
license, contract, agreement or other instrument or permit or obligation (each,
a "Contract") to which the Company or any of its Subsidiaries is a party or by
which any of them or any of their properties or assets may be bound or (iv)
violate any law, order, writ, injunction, decree, statute, rule or regulation
of any Governmental Entity applicable to the Company, any of its Subsidiaries
or any of their properties or assets.

IV-6
<PAGE>

Section 3.7 Financial Statements. The Company has delivered to the
Parent (a) the audited consolidated financial statements of the Company and its
Subsidiaries and the unaudited financial statements of the Subsidiaries
included in the Core Business, in each case, for the years ended March 31,
1995, 1996 and 1997, and (b) the interim unaudited financial statements of the
Company and the Subsidiaries of the Company included in the Core Business for
the three months ended June 30, 1997 (collectively, the "Financial
Statements"). Except as disclosed on Schedule 3.7, the Financial Statements of
the Company have been prepared in accordance with GAAP consistently applied
throughout the periods indicated. The Financial Statements fairly present
(subject, in the case of unaudited statements, to normal, recurring year-end
adjustments and any other adjustments described therein) the consolidated
financial position of the Company and its consolidated Subsidiaries as at the
dates thereof and the consolidated results of operations and cash flows of the
Company and its consolidated Subsidiaries for the periods then ended. Since
June 30, 1997 (the "Balance Sheet Date"), there has been no change in any of
the significant financial accounting policies, practices or procedures of the
Company or any of its consolidated Subsidiaries.

Section 3.8 Absence of Certain Changes or Events; Material
Contracts. Except for the Spin-Off which is described on Schedule A and such
other matters as are set forth on Schedule 3.8, since April 1, 1997, (i)
neither the Company nor any of its Subsidiaries with respect to the Core
Business has conducted its business and operations other than in the ordinary
course of business and consistent with past practices or taken any actions
that, if this Agreement had been in effect, would have violated or been
inconsistent with the provisions of Section 5.1 and (ii) there has not been any
fact, event, circumstance or other change affecting or relating to the Company
or any of its Subsidiaries which has had or is reasonably likely to have a
Company Material Adverse Effect. Except as set forth on Schedule 3.8, the
transactions contemplated by this Agreement will not constitute a change of
control under or require the consent from or the giving of notice to a third
party pursuant to the terms, conditions or provisions of any material Contract
to which the Company or any of its Subsidiaries is a party.

Section 3.9 Litigation. Except for routine litigation that individually
and in the aggregate if determined adversely to the Company would not result in
the Company paying net of insurance in excess of $100,000 and except as set
forth on Schedule 3.9, there is no suit, action, proceeding or investigation
pending or, to the best knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries, the outcome of which, in the
reasonable judgment of the Company, is likely to have a Company Material
Adverse Effect; nor is there any judgment, decree, injunction, ruling or order
of any Governmental Entity outstanding against the Company or any of its
Subsidiaries having, or which is reasonably likely to have, a Company Material
Adverse Effect.

Section 3.10 Absence of Undisclosed Liabilities. Except for liabilities
or obligations which are accrued or reserved against in the Financial
Statements (or reflected in the notes thereto) or which were incurred after the
Balance Sheet Date in the ordinary course of business and consistent with past
practice, and except as set forth on Schedule 3.10, none of the Company and its
Subsidiaries has any liabilities or obligations (whether absolute, accrued,
contingent or otherwise) of a nature required by GAAP to be reflected in a
consolidated balance sheet (or reflected in the notes thereto) or which would
have a Company Material Adverse Effect.

Section 3.11 No Default. Except as set forth on Schedule 3.11, neither
the Company nor any Subsidiary of the Company is in default or violation (and
no event has occurred which with notice or the lapse of time or both would
constitute a default or violation) of any term, condition or provision of any
material Contract to which the Company or any of its Subsidiaries is a party or
by which they or any of their properties or assets may be bound.

Section 3.12 Taxes.

(a) The Company has heretofore delivered or will make available to Parent
true, correct and complete copies of the consolidated federal, state, local and
foreign income, franchise sales and other Tax Returns (as hereinafter defined)
filed by the Company and the Company Subsidiaries for each of the Company's
years ended March 31, 1997, 1996 and 1995 inclusive. Except as set forth on
Schedule 3.12, the Company has duly filed, and each Subsidiary has duly filed,
all material federal, state, local and foreign income, franchise, sales and
other Tax Returns required to be filed by the Company or any of its
Subsidiaries. All such Tax Returns are true, correct and complete, and the
Company and its Subsidiaries have duly paid all Taxes (as hereinafter defined)
shown on such Tax Returns and the Company has made adequate provision for
payment of all accrued but unpaid Taxes anticipated

IV-7
<PAGE>

in respect of all periods since the periods covered by such Tax Returns. Except
as set forth on Schedule 3.12, all deficiencies assessed as a result of any
examination of Tax Returns of the Company or any of its Subsidiaries by
federal, state, local or foreign tax authorities have been paid or reserved on
the financial statements of the Company in accordance with GAAP consistently
applied. The Company has heretofore delivered or will make available to Parent
true, correct and complete copies of all written tax-sharing agreements and
written descriptions of all such unwritten agreement or arrangements to which
the Company or any of its Subsidiaries is a party. Except as set forth in
Schedule 3.12, no issue has been raised in writing addressed to the Company, or
to the best knowledge of the Company's president, chief financial officer, or
tax manager, orally, during the past five years by any federal, state, local or
foreign taxing authority which, if properly raised with regard to any period
other than the period then beginning examined, could reasonably be expected to
result in a material deficiency for such other period and no examination by any
such tax authority during such five year period has culminated in the
determination of a material tax deficiency or in any other adjustment. Except
as disclosed in Schedule 3.12 hereof, neither the Company nor any of its
Subsidiaries has granted any extension or waiver of the statutory period of
limitations applicable to any claim for any material Taxes. Except as set forth
in Schedule 3.12, (i) neither the Company nor any of its Subsidiaries is a
party to any agreement, contract or arrangement that would result, separately
or in the aggregate, in the payment of any "excess parachute payments" within
the meaning of Section 280G of the Code; (ii) no consent has been filed under
Section 341(f) of the Code with respect to any of the Company or its
Subsidiaries; (iii) neither the Company nor any of its Subsidiaries has
participated in, or cooperated with, an international boycott within the
meaning of Section 999 of the Code; (iv) neither the Company nor any of its
Subsidiaries has issued or assumed any corporate acquisition indebtedness, as
defined in Section 279(b) of the Code; (v) neither the Company nor any of its
subsidiaries has changed a method of accounting or taken any other action
requiring any adjustment under section 481 of the Code or any other provision
of law or regulation in any year subsequent to the year of the change of
accounting method or other action; (vi) neither the Company nor any of its
subsidiaries has entered into a closing agreement or other agreement with the
Internal Revenue Service or any other taxing authority having any effect on any
tax period subsequent to the tax period that was under examination, (vii)
neither the Company nor any of its subsidiaries holds any receivable that is
subject to the installment method of accounting for tax purposes and (viii) the
Company has not been a United States real property holding corporation, as
defined in Section 897(c)(2) of the Code, during the previous five years. The
Company and each of its Subsidiaries have complied (and until the Effective
Time will comply) in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes (including,
without limitation, withholding of Taxes pursuant to Sections 1441 and 1442 of
the Code or similar provisions under any foreign laws) and have, within the
time and in the manner prescribed by law, withheld from employee wages and paid
over to the proper governmental authorities all amounts required to be so
withheld and paid over under all applicable laws.

(b) For purposes of this Agreement, the term "Taxes" shall mean all
taxes, charges, fees, levies, duties, imposts or other assessments, including,
without limitation, income, gross receipts, excise, property, sales, use, value
added, transfer, gains, license, payroll, wage, unemployment compensation,
social security, occupation, severance, disability, withholding, capital stock,
stamps, registration, franchise, premium, windfall profits, environmental
(including taxes under Section 59A of the Code), alternative or add-on minimum,
estimated or other tax of any kind whatsoever (whether disputed or not) imposed
by the United States, or any state, local or foreign government or subdivision
or agency thereof, including any related charges, fees, interest, penalties or
additions thereto or other assessments. For purposes of this Agreement, the term
"Tax Return" shall mean any report, return or other information or document
required to be supplied to a taxing authority in connection with Taxes.

Section 3.13 Title to Properties; Encumbrances. Except as described in
the following sentence or set forth on Schedule 3.13, each of the Company and
its Subsidiaries has good, valid and marketable title to, or a valid leasehold
interest in, all of its material properties and assets (real, personal and
mixed, tangible and intangible), including, without limitation, all the
properties and assets reflected in the consolidated balance sheet of the Company
and its Subsidiaries as of March 31, 1997 (except for properties and assets
disposed of in the ordinary course of business and consistent with past
practices since March 31, 1997 and pursuant to the Spin-Off). None of such
properties or assets are subject to any Liens (whether absolute, accrued,
contingent or otherwise), except minor imperfections of title and encumbrances,
if any, which are not substantial in amount, do not materially detract from the
value of the property or assets subject thereto and do not impair the operations
of any of the Company and its Subsidiaries.

IV-8
<PAGE>

Section 3.14 Intellectual Property.

(a) The Company and/or its Subsidiaries are the sole and exclusive owners
of, or have the right to use, all material patents, patent applications, patent
rights, trademarks, trademark rights, trade names, trade name rights,
copyrights, service marks, trade secrets, registrations for and applications for
registration of trademarks, service marks and copyrights, technology and
know-how, rights in computer software and other proprietary rights and
information and all technical and user manuals and documentation made or used in
connection with any of the foregoing, used or held for use in connection with
the businesses of the Company or any of its Subsidiaries as currently conducted
(collectively, the "Intellectual Property"). Any and all material licenses
covering any such Intellectual Property are listed on Schedule 3.14(a) hereto.
The Intellectual Property owned by the Company and/or its Subsidiaries is free
and clear of all Liens except as set forth on Schedule 3.14(a) and except minor
imperfections of title and encumbrances, if any, which are not substantial in
amount, do not materially detract from the value of the Intellectual Property
subject thereto and do not impair the operations of any of the Company and its
Subsidiaries.

(b) All grants, registrations and applications for Intellectual Property
that are used in and are material to the conduct of the Business (as hereinafter
defined) (i) are valid, subsisting, in proper form and enforceable, and have
been duly maintained, including the submission of all necessary filings and fees
in accordance with the legal and administrative requirements of the appropriate
jurisdictions and (ii) have not lapsed, expired or been abandoned, and no
registration therefor is the subject of any legal or governmental proceeding
before any registration authority in any jurisdiction.

(c) Each of the Company and its Subsidiaries owns or has the right to use
all of the material Intellectual Property used by it or held for use by it in
connection with its business. To the Company's and Subsidiaries' knowledge,
there are no conflicts with or infringements of any Intellectual Property by any
third party. The conduct of the businesses of the Company and its Subsidiaries
as currently conducted (collectively, the "Business") does not conflict with or
infringe in any way any proprietary right of any third party, and there is no
claim, suit, action or proceeding pending or threatened against the Company or
any of its Subsidiaries (i) alleging any such conflict or infringement with any
third party's proprietary rights, or (ii) challenging the ownership, use,
validity or enforceability of the Intellectual Property.

Section 3.15 Compliance with Applicable Law. Except as set forth on
Schedule 3.15, (i) the Company and its Subsidiaries hold, and are in substantial
compliance with the terms of, all material permits, licenses, exemptions, orders
and approvals of all Governmental Entities necessary for the current and
proposed conduct of their respective businesses ("Company Permits"), (ii) no
fact exists or event has occurred, and no action or proceeding is pending or, to
the Company's knowledge, threatened, that has a reasonable possibility of
resulting in a revocation, nonrenewal, termination, suspension or other material
impairment of any material Company Permits, (iii) the businesses of the Company
and its Subsidiaries are being conducted in substantial compliance with all
material applicable statutes, laws, ordinances, rules, regulations, judgments,
decrees, injunctions or orders of any Governmental Entity ("Applicable Law"),
(iv) no investigation or review by any Governmental Entity with respect to the
Core Business (other than routine investigations or reviews to which the Core
Business is subject in the ordinary course of business) is pending, or to the
Company's knowledge, threatened, and (v) no Governmental Entity has indicated an
intention to conduct such an investigation or review.

Section 3.16 Employee Benefit Plans; ERISA.

(a) Schedule 3.16(a) contains a list of all "employee benefit plans,"
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and any other bonus, profit sharing, pension,
severance, deferred compensation, fringe benefit, insurance, welfare,
post-retirement, health, life, stock option, stock purchase, restricted stock,
tuition refund, service award, company car, scholarship, relocation, disability,
accident, sick, vacation, holiday, termination, unemployment, individual
employment, consulting, executive compensation, incentive, commission, payroll
practices, retention, change in control, noncompetition, or other plan,
agreement, policy, trust fund, or arrangement (whether written or unwritten,
insured or self-insured) (i) established, maintained, sponsored, or contributed
to (or with respect to which any obligation to contribute has been undertaken)
within the last six years by the Company or any entity that would be deemed a
"single employer" with the Company under Section 414(b), (c), (m), or (o) of the
Internal Revenue Code of 1986, as amended (the "Code") or Section 4001 of ERISA
(an "ERISA Affiliate") on behalf of any employee, director, shareholder, or

IV-9
<PAGE>

partner of the Company (whether current, former, or retired) or their
beneficiaries or (ii) with respect to which the Company or any ERISA Affiliate
has or has had within the past six years any obligation on behalf of any such
employee, director, shareholder or partner of the Company, or their
beneficiaries (each a "Plan" and, collectively, the "Plans"). With respect to
each Plan, true and complete copies, if applicable, of the documents embodying
or relating to the Plan, including, without limitation, each material
communication received by or furnished to the Company or any ERISA Affiliate
from the Internal Revenue Service ("IRS"), the Pension Benefit Guaranty
Corporation ("PBGC"), U.S. Department of Labor ("DOL"), or any other
governmental authority including, without limitation, the most recent
determination letter received from the IRS, have been made available to Buyer.

(b) Except as disclosed on Schedule 3.16(b), none of the Company, any
ERISA Affiliate, or any of their respective predecessors has ever contributed
to, contributes to, has ever been required to contribute to, or otherwise
participated in or participates in or in any way, directly or indirectly, has
any liability with respect to any plan subject to Section 412 of the Code,
Section 302 of ERISA or Title IV of ERISA, including, without limitation any,
"multiemployer plan" (within the meaning of Sections (3)(37) or 4001(a)(3) of
ERISA or Section 414(f) of the Code), or any single employer pension plan
(within the meaning of Section 4001(a)(15) of ERISA). The Company has no
liability and is not expected to incur any liability under Section 302 or Title
IV of ERISA or Section 412 of the Code including, without limitation, any
liability for a reportable event under Section 4043(b) of ERISA, withdrawal
liability for a complete withdrawal (under Section 4203 of ERISA) or a partial
withdrawal (under Section 4205 of ERISA or an accumulated funding deficiency
(under Section 302 of ERISA or Section 412 of the Code), whether or not waived.
All premiums due to the Pension Benefit Guaranty Corporation by the Company and
any ERISA Affiliates have been paid on a timely basis. With respect to any Plan,
the present value of all benefit liabilities, whether or not vested, under
Section 4001(a)(16) of ERISA does not exceed the current fair market value of
assets of such Plan based on the most recent Plan actuarial valuation using the
methodology to calculate the projected benefit obligation under Financial
Accounting Standard Board SFAS No. 87 and no amendments or other modifications
have been made to such Plan or its actuarial assumptions since the date of such
Plan's most recent actuarial report.

(c) The Company, each ERISA Affiliate, each Plan, and each "plan sponsor"
(within the meaning of Section 3(16) of ERISA) of each "welfare benefit plan"
(within the meaning of Section 3(1) of ERISA) has complied in all material
respects with the requirements of Section 4980B of the Code and Title I,
Subtitle B, Part 6 of ERISA.

(d) With respect to each of the Plans identified on Schedule 3.16(a),
except as described on such Schedule:

(i) each Plan intended to qualify under Section 401(a) of the Code has
been qualified since its inception and has received a determination letter from
the IRS that the Plan is qualified under Section 401 of the Code and any trust
maintained pursuant thereto is exempt from federal income taxation under Section
501 of the Code and the Company is not aware of any circumstances that have
occurred or are likely to occur through the date of the Closing that caused or
could cause the loss of such qualification or exemption or the imposition of any
penalty or tax liability;

(ii) all payments required by any Plan, any collective bargaining
agreement or other agreement, or by law (including, without limitation, all
contributions, insurance premiums, or intercompany charges) with respect to all
periods through the date of the Closing shall have been made prior to the
Closing (on a pro rata basis where such payments are otherwise discretionary at
year end) or provided for by the Company as applicable, by full accruals as if
all targets required by such Plan had been or will be met at maximum levels) on
its financial statements;

(iii) no claim, lawsuit, arbitration or other action has been
threatened, asserted, instituted, or anticipated against the Plans (other than
non-material routine claims for benefits, and appeals of such claims), any
trustee or fiduciaries thereof, the Company, any ERISA Affiliate, any director,
officer, or employee thereof, or any of the assets of any trust of the Plans;

(iv) the Plan complies and has been maintained and operated in all
material respects in accordance with its terms and applicable law, including,
without limitation, ERISA and the Code;

(v) no "prohibited transaction," within the meaning of Section 4975 of
the Code and Section 406 of ERISA, has occurred or is expected to occur with
respect to the Plan (and the consummation of the transactions contemplated by
this Agreement will not constitute or directly or indirectly result in such a
"prohibited transaction");

IV-10
<PAGE>

(vi) no Plan is or expected to be under audit or investigation by the
IRS, DOL, or any other governmental authority and no such completed audit, if
any, has resulted in the imposition of any tax or penalty;

(vii) each Plan intended to meet requirements for tax-favored
treatment under any provision of the Code, including, without limitation,
Sections 79, 105, 106, 117, 120, 125, 127, 129, 132, 162(m), 404, 404A, 419,
419A, or 501(c)(9) of the Code satisfies the applicable requirements under the
Code in all material respects; and

(viii) with respect to each Plan that is funded mostly or partially
through an insurance policy, the Company has no liability in the nature of
retroactive rate adjustment, loss sharing arrangement or other actual or
contingent liability arising wholly or partially out of events occurring on or
before the Closing.

(e) The consummation of the transactions contemplated by this Agreement
will not give rise to any liability, including, without limitation, liability
for severance pay, unemployment compensation, termination pay, or withdrawal
liability, or accelerate the time of payment or vesting or increase the amount
of compensation or benefits due to any employee, director, shareholder, or
partner of the Company (whether current, former, or retired) or their
beneficiaries solely by reason of such transactions. No amounts payable under
any Plan will fail to be deductible for federal income tax purposes by virtue of
Sections 280G or 162(m) of the Code.

(f) The Company does not maintain, contribute to, or in any way provide
for any benefits of any kind whatsoever (other than under Section 4980B of the
Code, the Federal Social Security Act, or a plan qualified under Section 401(a)
of the Code) to any current or future retiree or terminee.

(g) Neither the Company nor any officer or employee thereof, has made any
promises or commitments, whether legally binding or not, to create any
additional plan, agreement, or arrangement, or to modify or change any existing
Plan.

(h) No event, condition, or circumstance exists that could result in an
increase of the benefits provided under any Plan or the expense of maintaining
any Plan from the level of benefits or expense incurred for the most recent
fiscal year ended before the Closing.

(i) The Company has no unfunded liabilities pursuant to any Plan that is
not intended to be qualified under Section 401(a) of the Code.

(j) No event, condition, or circumstance exists that would prevent the
amendment or termination of any Plan.

Section 3.17 Labor Matters. (i) There are no controversies pending or,
to the knowledge of the Company or any of its Subsidiaries, threatened, between
the Company or any of its Subsidiaries and any of their respective employees
with respect to the Core Business; (ii) except as set forth on Schedule 3.17,
neither the Company nor any of its Subsidiaries is a party to, or bound by, any
collective bargaining agreement, contract or other understanding with a labor
union or labor organization with respect to the Core Business and, to the
knowledge of the Company, there is no activity involving any employees of the
Company or its Subsidiaries with respect to the Core Business seeking to
certify a collective bargaining unit or engaging in any other organizational
activity; and (iii) neither the Company nor any of its Subsidiaries has any
knowledge of any strikes, slowdowns, work stoppages, lockouts, or threats
thereof, by or with respect to any employees of the Company and any of its
Subsidiaries with respect to the Core Business.

Section 3.18 Environmental Laws and Regulations.

(a) All references in this Section 3.18 to the Company or to the Core
Business shall include the Company's Subsidiaries, and all predecessors thereto,
and any person or entity the liabilities of which, pursuant to applicable
federal, state, local or common law, rule, regulation, ordinance, code, order or
judgment (including any judicial or administrative interpretations, guidances,
directives, policy statements or opinions) relating to the injury to, or the
pollution or protection of human health and safety or the Environment
("Environmental Laws"), contractually, by common law, by operation of law or
otherwise, the Company or the Core Business may have succeeded to.

(b) All of the current and past operations of the Company and the Real
Property, including any operations at or from any Real Property presently or
formerly owned, used, leased, occupied, managed or operated by the Company,
(collectively, the "Real Property"), substantially comply and have at all times
substantially complied

IV-11
<PAGE>

with all applicable Environmental Laws, except for past noncompliance that has
been cured and does not result in the imposition of any present or future
liability or obligation. The Company has not engaged in, authorized, allowed or
suffered any operations or activities upon any of the Real Property for the
purpose of or in any way involving the release, discharge, spilling, emission,
dumping or disposal of any petroleum, petroleum products, petroleum-derived
substances, radioactive materials, hazardous wastes, polychlorinated biphenyls,
lead based paint, radon, urea formaldehyde, asbestos or any materials
containing asbestos, and any materials or substances regulated or defined as or
included in the definition of "hazardous substances," "hazardous materials,"
"hazardous constituents," "toxic substances," "pollutants," "contaminants" or
any similar denomination intended to classify or regulate substances by reason
of toxicity, carcinogenicity, ignitability, corrosivity or reactivity under any
Environmental Law ("Hazardous Substances") at, on, under or from the Real
Property, in violation of any applicable Environmental Laws, except for
releases, discharges, spills, emissions, dumpings or disposal which have been
cleaned up in compliance with the requirements of the Environmental Laws.

(c) Neither the Company's assets nor the Real Property contain any
Hazardous Substances in, on, over, under or at it, in concentrations which would
presently violate any applicable Environmental Laws or would be reasonably
likely to result in the imposition of liability or obligations on the present or
former owner, manager, or operator of the Real Property under any applicable
Environmental Laws, including any liability or obligations for the
investigation, corrective action, remediation or monitoring of Hazardous
Substances in, on, over, under or at the Real Property, except as set forth on
Schedule 3.18(f) hereto.

(d) None of the Real Property is listed or proposed for listing on the
National Priorities List pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. [0015] 9601 et seq., or any
similar inventory of sites requiring investigation or remediation maintained by
any state or locality as a site requiring future investigation or remediation.
The Company has not received any notice, whether oral or written, from any
governmental entity or third party of any actual or threatened claims,
judgments, damages (including punitive damages), losses, penalties, fines,
liabilities, encumbrances, liens, violations, costs and expenses (including
attorneys' and consultants' fees) of investigation, remediation, monitoring or
defense of any matter relating to human health, safety or any surface or
subsurface physical medium or natural resource, including, air, land, soil,
surface waters, ground waters, stream and river sediments, biota and any indoor
area, surface or physical medium (the "Environment") of whatever kind or nature
by any party, entity or authority, (i) which have been incurred as a result of
(x) the existence of a release of Hazardous Substances in, on, under, at or
emanating from any Real Property, (y) the offsite transportation, treatment,
storage or disposal of Hazardous Substances generated by the Company (z) the
violation of any Environmental Laws, except as set forth on Schedule 3.15 and
Schedule 3.18(f) hereto or (ii) which arise under the Environmental Laws
("Environmental Liabilities") with respect to the Company's business, assets or
Real Property.

(e) There are no underground storage tanks, asbestos or asbestos
containing materials, polychlorinated biphenyls, urea formaldehyde, or other
Hazardous Substances (other than small quantities of Hazardous Substances and
permitted waste fuels for use in the ordinary course of the business of the
Company, which are stored and maintained in accordance and in full compliance
with all applicable Environmental Laws) in, on, over, under or at any Real
Property in forms or quantities requiring investigation or remediation under the
Environmental Laws, except as set forth on Schedule 3.18(e) and Schedule 3.18(f)
hereto.

(f) There are no conditions existing at any Real Property or with respect
to the assets or business of the Core Business that require, or which with the
giving of notice or the passage of time or both will reasonably likely require
remedial or corrective action, removal, monitoring or closure pursuant to the
Environmental Laws, except as set forth on Schedule 3.18(f). There are no
conditions associated with the Spin-Off Entity or the Noncore Business which are
reasonably likely to result in the imposition of liability or obligation in
excess of $100,000, individually or in the aggregate or that exceed the levels
of financial assurance currently required to be maintained pursuant to the
Environmental Laws or which will be required to be maintained by the Spin-Off
Entity, except for the corrective action obligations of Florida Solite Company,
concerning which the Company has disclosed all significant information to the
Parent and which is solely the obligation of the Spin-Off Entity.

(g) The Core Business has all the permits, licenses, authorizations and
approvals necessary for the conduct of its Business and for the operations on,
in or at the Real Property (the "Environmental Permits"), which are required
under applicable Environmental Laws. The Core Business is in substantial
compliance with the terms and conditions of all such Environmental Permits, and,
to the best knowledge of the Company, no reason exists

IV-12
<PAGE>

why Parent would not be capable of continued operation of the Core Business in
substantial compliance with the Environmental Permits and the applicable
Environmental Laws.

(h) The Company has provided or made available to and which have been
reviewed by Parent all environmental assessments, audits, studies and
investigations created or performed within the five years prior to the date of
this Agreement and current Environmental Permits and has provided reasonable
access to all environmental data, reports and other written environmental
information in its custody, possession or control concerning the assets or
business of the Core Business and the Real Property.

(i) The Company has not contractually, by operation of law, by the
Environmental Laws, by common law or otherwise assumed or succeeded to any
Environmental Liabilities of any predecessors or any other person or entity,
except as set forth on Schedule 3.18(i).

(j) None of the items listed on Schedules 3.15, 3.18(e), (f) or (i) has,
or is reasonably likely to have a Company Material Adverse Effect.

Section 3.19 Restrictions on Business Activities. Except for this
Agreement and as set forth on Schedule 3.19, there is no material agreement,
judgement, injunction, order or decree binding upon the Core Business which has
or could reasonably be expected to have (after giving effect to the
consummation of the Spin-Off and the Merger) the effect of prohibiting or
materially impairing the business practice of the Company or any of its
Subsidiaries with respect to the Core Business, acquisition of property by the
Company or any of its Subsidiaries with respect to the Core Business or the
conduct of the Core Business as currently conducted or as proposed to be
conducted by the Company.

Section 3.20 Vote Required. The approval of the Merger and approval of
the conversion of Company Preferred Stock to Company Common Stock by (i) the
affirmative vote of more than two-thirds of the votes that holders of the
outstanding Company Common Stock and Company Preferred Stock are entitled to
cast and (ii) the affirmative vote of more than two-thirds of the votes that
the holders of the outstanding Company Common Stock, Company Series A Preferred
Stock, Company Series B Preferred Stock and Company Series C Preferred Stock,
each voting as a separate voting group, are entitled to cast, and the approval
of the conversion of Company Preferred Stock to Company Common Stock by the
affirmative vote of a majority of the votes that holders of outstanding Company
Common Stock and Company Preferred Stock, other than John W. Roberts and his
family, are entitled to cast are the only votes of the holders of any class or
series of the Company's capital stock necessary to approve the Spin-Off, the
Merger and the other transactions contemplated hereby.

Section 3.21 Registration Statement; Proxy Statement. The information
provided and to be provided by the Company for use in the Proxy Statement
relating to the meeting of the Company's shareholders to be held in connection
with the Merger (the "Proxy Statement"), on the date it is first mailed to the
Company's shareholders and on the date of the Special Meeting (as defined), and
in the Registration Statement on Form S-4 pursuant to which the Parent Common
Stock will be issued in the Merger (the "Registration Statement") and the
related Prospectus (such Prospectus, in the form filed by Parent pursuant to
Rule 424(b) under the Securities Act, or, if no filing is made pursuant to Rule
424(b) under the Securities Act, in the form contained in the Registration
Statement declared effective by the Securities and Exchange Commission (the
"Commission"), being herein called the "Prospectus"), on the date the
Registration Statement is declared effective shall not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Company shall notify the Parent promptly of
the receipt of any comments by the Commission and of any request by the
Commission for amendments or supplements to the Proxy Statement or the
Registration Statement or for additional information, and shall supply the
Parent with copies of all correspondence with the Commission with respect to
any of the foregoing. If at any time prior to the Special Meeting, any event
should occur relating to the Company, its Subsidiaries or any of their
respective affiliates, directors or officers which should be described in an
amendment or supplement to the Proxy Statement or Registration Statement, the
Company shall promptly inform the Parent. Whenever any event occurs which
should be described in an amendment or supplement to the Proxy Statement or
Registration Statement, the Company shall upon learning of such event,
cooperate with the Parent to promptly file and clear with the Commission and,
if applicable, mail such amendment or supplement to the shareholders of the
Company.

Section 3.22 Affiliate Transactions. Except as set forth in Schedule
3.22, there are no material Contracts or other transactions between the Company
or any of its Subsidiaries, on the one hand, and any (i) officer,

IV-13
<PAGE>

director or shareholder of the Company or any of its Subsidiaries or (ii)
affiliate (as such term is defined in Regulation 12b-2 promulgated under the
Exchange Act) of any such officer, director or shareholder, on the other hand.

Section 3.23 Opinion of Financial Advisor. The Company has been orally
advised by its financial advisor, Co-View Capital, Inc., that in its opinion,
as of the date hereof, the consideration to be received by holders of the
Company Common Stock in the Merger is fair from a financial point of view to
such holders.

Section 3.24 Brokers. No broker, finder or financial advisor (other than
Co-View Capital, Inc. and Ferris, Baker Watts Incorporated) is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger or
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company. The Company has previously furnished to the Parent
a complete and correct copy of all agreements between the Company and Co-View
Capital, Inc. and Ferris, Baker Watts Incorporated pursuant to which such firm
would be entitled to any payment relating to the transactions contemplated
hereunder.

Section 3.25 Ruling Request. The information (other than that relating
to the Parent and Acquisition Sub) set forth in the request for private letter
ruling with regard to the Spin-Off ("PLR") that has been filed with the
Internal Revenue Service (the "Service") on behalf of the Company, and all
information (other than that relating to the Parent and the Acquisition Sub)
subsequently submitted to the Service in support of the request for that PLR,
includes all the relevant facts relating to the request and such facts are
true, correct and complete.

Section 3.26 Full Disclosure. No statement contained in any certificate
or schedule furnished or to be furnished by the Company or its Subsidiaries to
the Parent or the Acquisition Sub in, or pursuant to the provisions of, this
Agreement contains or shall contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary, in the light of the
circumstances under which it is made, to make the statements herein or therein
not misleading.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT
AND THE ACQUISITION SUB

The Parent and the Acquisition Sub represent and warrant to the Company
as follows:

Section 4.1 Organization. The Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power to carry on its business as it is now being
conducted or presently proposed to be conducted. The Parent is duly qualified
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities make such qualification necessary, except where
the failure to be so qualified will not have a material adverse effect
individually or in the aggregate, on the financial condition, results of
operations, business, assets, liabilities, or properties of the Parent and its
Subsidiaries taken as a whole or on the ability of the Parent to consummate the
Merger and the other transactions contemplated by this Agreement (a "Parent
Material Adverse Effect"). The Acquisition Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Acquisition Sub has not engaged in any business (and will not engage in any
business) (other than in connection with this Agreement and the transactions
contemplated hereby) since the date of its formation.

Section 4.2 Capitalization.

(a) The authorized capital stock of the Parent consists of 20,000,000
shares of Parent Common Stock and 2,000,000 shares of preferred stock, par value
$0.01 per share ("Parent Preferred Stock"). As of the date hereof, (i) 9,421,082
shares of the Parent Common Stock were issued and outstanding and (ii) options
to acquire 477,375 shares of Parent Common Stock were outstanding under all
stock option plans of the Parent. As of the date hereof, no shares of the Parent
Preferred Stock were issued and outstanding. All of the outstanding shares of
the Parent Common Stock are, and the shares of Parent Common Stock issuable in
exchange for shares of Company Common Stock at the Effective Time in accordance
with this Agreement will be, when so issued, duly authorized, validly issued,
fully paid and nonassessable.

(b) All of the outstanding capital stock of the Acquisition Sub is owned
by the Parent, and are validly issued, fully paid and nonassessable.

IV-14
<PAGE>

(c) Except for options to purchase 472,000 shares of Parent Common Stock,
(i) there is no outstanding right, subscription, warrant, call, option or other
agreement or arrangement of any kind to purchase or otherwise to receive from
the Parent or any of its subsidiaries any of the outstanding authorized but
unissued or treasury shares of the capital stock or any other security of the
Parent or any of its subsidiaries, (ii) there is no outstanding security of any
kind convertible into or exchangeable for such capital stock and (iii) there is
no voting trust or other agreement or understanding to which the Parent or any
of its subsidiaries is a party or is bound with respect to the voting of the
capital stock of the Parent of any of its subsidiaries.

Section 4.3 Authority Relative to this Agreement. Each of the Parent and
the Acquisition Sub has the requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by each of the Parent and
the Acquisition Sub and the consummation by the Parent and the Acquisition Sub
of the transactions contemplated on its part hereby has been duly authorized by
the Board of Directors of the Parent and the Acquisition Sub, respectively, and
no other corporate proceedings on the part of the Parent or the Acquisition Sub
are necessary to authorize this Agreement or for the Parent and the Acquisition
Sub to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by each of the Parent and the
Acquisition Sub and constitutes a valid and binding agreement of each of the
Parent and the Acquisition Sub, enforceable against the Parent and the
Acquisition Sub in accordance with its terms.

Section 4.4 Certificate of Incorporation and By-laws. The Parent has
heretofore furnished to the Company a complete and correct copy of its
certificate of incorporation and by-laws, as amended to date. Such certificate
of incorporation and by-laws are in full force and effect. The Parent is not in
violation of any of the provisions of its certificate of incorporation or
by-laws. The Acquisition Sub has heretofore furnished the Company a complete
and correct copy of its certificate of incorporation and by-laws, as amended to
date. Such certificate of incorporation and by-laws are in full force and
effect. The Acquisition Sub is not in violation of any of the provisions of its
certificate of incorporation or by-laws.

Section 4.5 Consents and Approvals; No Violations. Neither the
execution, delivery and performance of this Agreement by the Parent or the
Acquisition Sub, nor the consummation by the Parent or the Acquisition Sub of
the transactions contemplated hereby will (i) conflict with or result in any
breach of any provisions of the certificate of incorporation or by-laws of the
Parent or the Acquisition Sub, (ii) require a filing with, or a permit,
authorization, consent or approval of, any Governmental Entity except in
connection with or in order to comply with the applicable provisions of the HSR
Act, the Securities Act, the Exchange Act, state securities or "blue sky" laws,
the By-Laws of the National Association of Securities Dealers, and the filing
of Articles of Merger as required by the VSCA, (iii) except as set forth on
Schedule 4.5, result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, or result in the
creation of a Lien on any property or asset of the Parent or any of its
subsidiaries pursuant to, any of the terms, conditions or provisions of any
material Contract to which the Parent or the Acquisition Sub is a party or by
which either of them or any of their properties or assets may be bound or (iv)
violate any law, order, writ, injunction, decree, statute, rule or regulation
of any Governmental Entity applicable to the Parent, the Acquisition Sub or any
of their properties or assets.

Section 4.6 Reports and Financial Statements. The Parent has timely
filed all reports required to be filed with the Commission pursuant to the
Exchange Act or the Securities Act (collectively, the "Parent SEC Reports"),
and has previously made available to the Company true and complete copies of
all such Parent SEC Reports. Such Parent SEC Reports, as of their respective
dates, complied in all material respects with the applicable requirements of
the Securities Act and the Exchange Act, as the case may be, and none of such
Parent SEC Reports contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Parent included in the Parent
SEC Reports have been prepared in accordance with GAAP consistently applied
throughout the periods indicated (except as otherwise noted therein or, in the
case of unaudited statements, as permitted by applicable law) and fairly
present (subject, in the case of unaudited statements, to normal, recurring
year-end adjustments and any other adjustments described therein) the
consolidated financial position of the Parent and its consolidated subsidiaries
as of the dates thereof and the consolidated results of operations and cash
flows of the Parent and its consolidated subsidiaries for the periods then
ended.

IV-15
<PAGE>

Section 4.7 Restrictions on Business Activities. Except as set forth in
the Parent's current report on Form 8-K, dated December 8, 1997 and except for
this Agreement, there is no material agreement, judgement, injunction, order or
decree binding upon the Parent or any of its subsidiaries which has or could
reasonably be expected to have the effect of prohibiting or materially
impairing the business practice of the Parent or any of its subsidiaries,
acquisition of property by the Parent or any of its subsidiaries or the conduct
of business by the Parent or any of its subsidiaries as currently conducted or
as proposed to be conducted by the Parent.

Section 4.8 No Stockholder Vote. No vote of the shareholders of the
Parent is necessary to approve the Merger or the issuance of Parent Common Stock
therein.

Section 4.9 Registration Statement; Proxy Statement. The information
provided and to be provided by the Parent and the Acquisition Sub for use in the
Proxy Statement, on the date the preliminary Proxy Statement is filed with the
Commission, on the date it is first mailed to the Company's shareholders and on
the date of the Special Meeting (as defined), and in the Registration Statement
and the related Prospectus, on the date the Registration Statement is declared
effective shall not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made not misleading. The Parent
and the Acquisition Sub shall notify the Company promptly of the receipt of any
comments by the Commission and of any request by the Commission for amendments
or supplements to the Proxy Statement or the Registration Statement or for
additional information, and shall supply the Company with copies of all
correspondence with the Commission with respect to any of the foregoing. If at
any time prior to the Special Meeting, any event should occur relating to the
Parent or the Acquisition Sub or their respective affiliates, directors or
members, as the case may be, or officers which should be described in an
amendment or supplement to the Proxy Statement or Registration Statement, the
Parent shall promptly inform the Company. Whenever any event occurs which should
be described in an amendment or supplement to the Proxy Statement or
Registration Statement, the Parent shall upon learning of such event, cooperate
with the Company to promptly file and clear with the Commission and, if
applicable, mail such amendment or supplement to the shareholders of the
Company.

Section 4.10 Absence of Certain Changes or Events. Since June 30, 1997,
there has not been any fact, event, circumstance or other changes affecting or
relating to the Parent or any f its subsidiaries which has had or is
reasonably likely to have a Parent Material Adverse Effect.

Section 4.11 Ruling Request. The information set forth in the PLR with
regard to the Spin-Off relating to the Parent or the Acquisition Sub or the
Merger that has been filed with the Service, and all information relating to
the Parent or the Acquisition Sub or the Merger subsequently submitted to the
Service in support of the request for the PLR, includes all such relevant facts
and such facts are true, correct and complete.

Section 4.12 Brokers. No broker, finder or financial advisor is entitled
to any brokerage finder's or other fee or commission in connection with the
Merger or the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or the Acquisition Sub.

Section 4.13 Full Disclosure. No statement contained in any certificate
or schedule furnished or to be furnished by the Parent or the Acquisition Sub
to the Company in, or pursuant to the provisions of, this Agreement contains or
shall contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary, in the light of the circumstances under
which it is made, to make the statements herein or therein not misleading.

ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER

Section 5.1 Conduct of Business by the Company Pending the Merger. After
the date of this Agreement and prior to the Effective Time, unless the Parent
shall otherwise agree in writing, or as otherwise expressly contemplated by
this Agreement:

(a) Except in connection with the Spin-Off, the Company shall conduct,
and cause each of its Subsidiaries to conduct, its business only in the ordinary
and usual course consistent with past practice, and the Company shall use, and
cause each of its Subsidiaries to use, its reasonable efforts to preserve intact
the present business organization, keep available the services of its present
officers and key employees, and preserve the goodwill of those having business
relationships with it;

IV-16
<PAGE>

(b) except in connection with the recapitalization involving the exchange
of the Company Preferred Stock for the Company Common Stock (the "Conversion")
and the Spin-Off, the Company shall not, nor shall it permit any of its
Subsidiaries to, (i) amend its articles of incorporation, bylaws or other
organizational documents, (ii) split, combine or reclassify any shares of its
outstanding capital stock, (iii) declare, set aside or pay any dividend or other
distribution payable in cash, stock or property (other than as required in order
to accomplish the Spin-Off), or (iv) except as otherwise required by the
existing agreements with certain stockholders, which agreements and stockholders
are listed on Schedule 5.1(b) hereto, directly or indirectly redeem or otherwise
acquire any shares of its capital stock or shares of the capital stock of any of
its Subsidiaries other than as described in the request for the PLR;

(c) the Company shall not, nor shall it permit any of its Subsidiaries
to, (i) except in connection with the Conversion, the Spin-Off and the Noncore
Business, authorize for issuance, issue or sell or agree to issue or sell any
shares of, or Rights to acquire or convertible into any shares of, its capital
stock or shares of the capital stock of any of its Subsidiaries (whether through
the issuance or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise); (ii) except in connection with the Spin-Off
and the Noncore Business, merge or consolidate with another entity; (iii) except
in connection with the Spin-Off and the Noncore Business, acquire or purchase an
equity interest in or a substantial portion of the assets of another
corporation, partnership or other business organization or otherwise acquire any
assets outside the ordinary and usual course of business and consistent with
past practice or otherwise enter into any material contract, commitment or
transaction outside the ordinary and usual course of business consistent with
past practice; (iv) except in connection with the Spin-Off and the Noncore
Business, sell, lease, license, waive, release, transfer, encumber or otherwise
dispose of any of its assets outside the ordinary and usual course of business
and consistent with past practice; (v) incur, assume or prepay any material
indebtedness or any other material liabilities other than in the ordinary course
of business and consistent with past practice; (vi) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person; (vii) make any loans,
advances or capital contributions to, or investments in, any other person, other
than to Subsidiaries of the Company; (viii) authorize or make capital
expenditures in excess of the amounts currently budgeted therefor; (ix) permit
any insurance policy naming the Company or any Subsidiary of the Company as a
beneficiary or a loss payee to be canceled or terminated other than in the
ordinary course of business; or (x) except in connection with the Conversion,
the Spin-Off and the Noncore Business, enter into any contract, agreement,
commitment or arrangement with respect to any of the foregoing;

(d) the Company shall not, nor shall it permit its Subsidiaries to, (i)
adopt, enter into, terminate or amend (except as may be required by Applicable
Law) any Company Plan or other arrangement for the current or future benefit or
welfare of any director, officer or current or former employee, (ii) except as
set forth on Schedule 5.1(d), increase in any manner the compensation or fringe
benefits of, or pay any bonus to, any director, officer or employee (except for
normal increases in salaried compensation in the ordinary course of business
consistent with past practice), or (iii) take any action to fund or in any other
way secure, or to accelerate or otherwise remove restrictions with respect to,
the payment of compensation or benefits under any employee plan, agreement,
contract, arrangement or other Company Plan;

(e) the Company shall not, nor shall it permit its Subsidiaries to, take
any action with respect to, or make any material change in, its accounting or
tax policies or procedures, except as required by law or to comply with GAAP;

(f) the Company shall not, nor shall it permit its Subsidiaries to, take
any action, other than as required by GAAP, to change accounting policies or
procedures or cash maintenance policies or procedures (including, without
limitation, procedures with respect to revenue recognition, capitalization of
development costs, payments of accounts payable and collection of accounts
receivable;

(g) the Company shall not, nor shall it permit its Subsidiaries to, pay,
discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities reflected or asserted against in
the financial statements of the Company or incurred in the ordinary course of
business and consistent with past practice;

Section 5.2 Conduct of Business by the Parent Pending the Merger. Prior
to the Effective Time, unless the Company shall otherwise first agree in
writing, or as otherwise expressly contemplated by this Agreement,

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neither the Parent nor the Acquisition Sub shall knowingly take any action or
fail to take any action that would jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code or the
qualification of the Spin-Off under Section 368(a)(1)(D) and Section 355 of the
Code.

Section 5.3 Conduct of Business of the Acquisition Sub. During the
period from the date of this Agreement to the Effective Time, the Acquisition
Sub shall not engage in any activities of any nature except as provided in or
contemplated by this Agreement. It is understood that the Acquisition Sub was
formed by the Parent solely for the purpose of effecting the Merger, and that
the Acquisition Sub will have no material assets and no material liabilities
prior to the Merger.

ARTICLE VI
ADDITIONAL AGREEMENTS

Section 6.1 Registration Statement; Proxy Statement.

(a) As promptly as practicable after the execution of this Agreement, the
Company and the Parent shall prepare and file with the Commission the
Registration Statement, which shall include a preliminary Prospectus with
respect to the Parent Common Stock to be issued in connection with the Merger.
As promptly as practicable after comments are received from the Commission with
respect to the Registration Statement and after the furnishing by the Company
and the Parent of all information required to be contained therein (including,
without limitation, financial statements and supporting schedules and
certificates and reports of independent public accountants), the Parent and the
Company shall use their best efforts to cause the Registration Statement to
become effective as soon thereafter as practicable. The definitive Proxy
Statement shall contain the opinion of Co-View Capital, Inc. referred to in
Section 6.19; provided, that such opinion shall be brought down to and dated a
date not more than two business days prior to the date of the Proxy Statement.

(b) The Company shall cause the Proxy Statement to be mailed to the
shareholders of the Company and, if necessary, after the Proxy Statement shall
have been mailed, promptly circulate amended, supplemental or supplemented proxy
materials and, if required in connection therewith, resolicit proxies.

(c) The Parent and the Company shall make all necessary filings with
respect to the Merger under the Securities Act and the Exchange Act and the
rules and regulations thereunder and under applicable blue sky or similar laws
and shall use their best efforts to obtain required approvals and clearances
with respect thereto.

Section 6.2 Company Stockholder Approval; Recommendation. The Company,
acting through its Board of Directors, shall (i) call a special meeting of the
shareholders of the Company for the purpose of voting upon this Agreement and
the Merger (the "Special Meeting") and (ii) include in the Proxy Statement the
recommendation of its Board of Directors that shareholders of the Company
approve and adopt this Agreement and approve the Merger.

Section 6.3 Agreements with Employee Shareholders. The Company shall use
its reasonable best efforts to terminate as of the Effective Time the agreement
with each of the persons listed on Schedule 5.1(b) hereto, the form of which
agreement is attached to such Schedule.

Section 6.4 Access and Information.

(a) Each of the Company and the Parent shall (and shall cause its
Subsidiaries and its and their respective officers, directors, employees,
auditors and agents to) permit the other and the other's officers, employees,
financial advisors, legal counsel, accountants, consultants and other
representatives to conduct an investigation and evaluation of such party (other
than the Noncore Business (except to the extent reasonably necessary to confirm
that all Core Business assets have been transferred with the Core Business and
that all liabilities of the Noncore Business have been transferred in the
Spin-Off)), will provide such assistance in connection therewith as is
reasonably requested and will give access at reasonable times throughout the
period prior to the Effective Time to the relevant books, records, properties,
facilities, employees and business of such party, provided that no investigation
pursuant to this Section 6.4 shall affect any representations or warranties made
herein or the conditions to the obligations of the respective parties to
consummate the Merger. Unless otherwise required by law, each party agrees that
it (and its Subsidiaries and its and their respective representatives) shall
hold in confidence all non-public information so acquired.

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<PAGE>

(b) The Parent shall have the right to retain an environmental consultant
reasonably acceptable to the Company to undertake further environmental
assessment of the Real Property, the Company's business and assets, including a
Phase II assessment. The Phase II assessment may involve, among other things,
intrusive sampling and testing of the soil and groundwater, integrity testing of
any underground storage tanks, an asbestos survey, and radon testing. The
Company shall provide complete and unfettered access to its business, assets and
the Real Property, for the conduct of the environmental assessments, and shall
provide to the environmental consultant all known and available information and
documentation concerning any environmental matters pertaining to the Company's
business, assets and the Real Property.

Section 6.5 No Solicitation.

(a) Prior to the Effective Time, the Company agrees that neither it, any
of its Subsidiaries or its affiliates, nor any of the respective directors,
officers, employees, agents or representatives of the foregoing will, directly
or indirectly, solicit, initiate, facilitate or encourage (including by way of
furnishing or disclosing non-public information) any inquiries or the making of
any proposal with respect to any merger, consolidation or other business
combination involving the Core Business or the acquisition of capital stock of
the Company or any Subsidiary constituting part of the Core Business or all or
any significant assets of the Core Business (an "Acquisition Transaction") or
negotiate, explore or otherwise engage in discussions with any person (other
than the Parent and its representatives) with respect to any Acquisition
Transaction or enter into any agreement, arrangement or understanding with
respect to any such Acquisition Transaction or which would require it to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by this Agreement provided, however, that the Company may, in
response to an unsolicited written proposal from a third party with respect to
an Acquisition Transaction, furnish information to and engage in discussions
with such third party, in each case only if the Board of Directors of the
Company determines in good faith by a majority vote, after consultation with its
financial advisors and based upon the advice of outside counsel to the Company,
that failing to take such action would result in a breach of the fiduciary
duties of the Board of Directors and, prior to taking such action, the Company
(i) provides reasonable notice to Parent to the effect that it is taking such
action and (ii) receives from such corporation, partnership, person or other
entity or group (and delivers to Parent) an executed confidentiality agreement
in reasonably customary form. The Company agrees that as of the date hereof, it,
its Subsidiaries and affiliates, and the respective directors, officers,
employees, agents and representatives of the foregoing, shall immediately cease
and cause to be terminated any existing activities, discussions or negotiations
with any person (other than the Parent and its representatives) conducted
heretofore with respect to any Acquisition Transaction. The Company agrees to
immediately advise Parent in writing of any inquiries or proposals (or desire to
make a proposal) received by (or indicated to), any such information requested
from, or any such negotiations or discussions sought to be initiated or
continued with, any of it, its Subsidiaries or affiliates, or any of the
respective directors, officers, employees, agents or representatives of the
foregoing, in each case from a person (other than the Parent and its
representatives) with respect to an Acquisition Transaction, and the terms
thereof, including the identity of such third party, and to update on an ongoing
basis or upon the Parent's request, the status thereof, as well as any actions
taken or other developments pursuant to this Section 6.5.

(b) Except as set forth in this Section 6.5(b), the Board of Directors of
the Company shall not (i) withdraw or modify, or propose to withdraw or modify,
in a manner adverse to the Parent or the Sub, the approval or recommendation by
the Board of Directors of this Agreement or the Merger, (ii) approve or
recommend, or propose to approve or recommend, any Acquisition Transaction or
(iii) cause the Company to enter into any agreement with respect to any
Acquisition Transaction. Notwithstanding the foregoing, in the event that prior
to the Effective Time the Board of Directors of the Company determines in its
good faith reasonable judgment, by a majority vote, after consultation with its
financial advisors, that the Acquisition Transaction is more favorable to the
stockholders of the Company than the Merger and, based upon the advice of
outside counsel to the Company, that such action is required by the fiduciary
duties of the Board of Directors, the Board of Directors of the Company may
withdraw or modify its approval or recommendation of this Agreement and the
Merger, approve or recommend such Acquisition Transaction or (subject to Section
8.2(b)) cause the Company to enter into an agreement with respect to such
Acquisition Transaction, but only if the Company gives Parent at least five
business days' prior written notice thereof, during which time Parent may make,
and, in such event, the Company shall in good faith consider, a counter proposal
to such Acquisition Transaction.

Section 6.6 Reasonable Best Efforts. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all action and to do, or cause

IV-19
<PAGE>

to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, obtaining of all necessary
waivers, consents and approvals and the effecting of all necessary
registrations and filings. Without limiting the generality of the foregoing, as
promptly as practicable, the Company, the Parent and the Acquisition Sub shall
make all filings and submissions under the HSR Act as may be reasonably
required to be made in connection with this Agreement and the transactions
contemplated hereby. The Company will furnish to the Parent and the Acquisition
Sub, and the Parent and the Acquisition Sub will furnish to the Company, such
information and assistance as the other may reasonably request in connection
with the preparation of any such filings or submissions.

Section 6.7 Consents; Approvals. The Company and the Parent shall each
use their best efforts to obtain all consents, waivers, approvals,
authorizations or orders (including, without limitation, all United States and
foreign governmental and regulatory approvals), and the Company and the Parent
shall make all filings (including, without limitation, all filings with United
States or foreign governmental or regulatory agencies) required in connection
with the authorization, execution and delivery of this Agreement by the Company
and the Parent and the consummation by them of the transactions contemplated
hereby.

Section 6.8 Board of Directors. At the Closing, the Parent shall cause
John W. Roberts to be elected a director of the Parent. Mr. Roberts's sole
compensation from the Parent will be the Parent's standard directors' fees as
specified in the Parent's Proxy Statement.

Section 6.9 Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement (including the
Exhibits and Schedules hereto) and the transactions contemplated hereby (and
thereby) shall be paid by the party incurring such expenses. Notwithstanding
the foregoing, all costs and expenses incurred in connection with the Spin-Off
shall be paid by the Spin-Off Entity.

Section 6.10 Public Announcements. Each of the Parent, the Acquisition
Sub, and the Company agrees that it will not issue any press release or
otherwise make any public statement with respect to this Agreement (including
the Exhibits and Schedules hereto) or the transactions contemplated hereby (or
thereby) without the prior consent of the other party, which consent shall not
be unreasonably withheld or delayed; provided, however, that such disclosure
can be made without obtaining such prior consent if (i) the disclosure is
required by law or by obligations imposed pursuant to any listing agreement
with any national securities exchange and (ii) the party making such disclosure
has first used its reasonable best efforts to consult with (but not obtain the
consent of) the other party about the form and substance of such disclosure.

Section 6.11 Supplemental Disclosure. The Company shall give prompt
notice to the Parent, and the Parent shall give prompt notice to the Company,
of (i) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be likely to cause (x) any representation or
warranty contained in this Agreement to be untrue or inaccurate or (y) any
covenant, condition or agreement contained in this Agreement not to be complied
with or satisfied and (ii) any failure of the Company or the Parent, as the
case may be, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 6.11 shall not have any effect
for the purpose of determining the satisfaction of the conditions set forth in
Article VII of this Agreement or otherwise limit or affect the remedies
available hereunder to any party.

Section 6.12 Agreements of Affiliates. Schedule 6.12 delivered by the
Company to the Parent identifies "Affiliates" of the Company for purposes of
Rule 145 under the Securities Act. The Company shall use its best efforts to
cause each such Affiliate to deliver to the Parent prior to the Closing Date a
written agreement substantially in the form of Exhibit D hereto.

Section 6.13 Agreements of Shareholders of Northeast. The Company shall
use its reasonable best efforts to cause each of the holders of at least 1.0%
of the total outstanding shares of capital stock of the Spin-Off Entity to be
issued in connection with the Spin-Off to deliver to the Parent prior to the
Closing Date a written agreement substantially in the form of Exhibit E hereto.

Section 6.14 Agreements of Shareholders of the Company. The Company
shall use its reasonable best efforts to cause each of the holders of at least
1.0% of the total outstanding shares of Parent Common Stock to be issued in
connection with the Merger to deliver to the Parent prior to the Closing Date a
written agreement substantially in the form of Exhibit F hereto.

IV-20
<PAGE>

Section 6.15 Agreement of Spin-Off Entity. The Company shall cause the
Spin-Off Entity to deliver to the Parent prior to the Closing Date a written
agreement substantially in the form of Exhibit G hereto pursuant to which the
Spin-Off Entity will (i) agree not to take any action inconsistent with the PLR
request made to the Service and the PLR issued in response thereto, including
but not limited to, for a period of one year from and after the Effective Time
discontinuing or substantially reducing its level of operation at its
lightweight aggregate plant located in New York, and (ii) agree not to solicit
or otherwise interfere with the employment relationship between the Company and
its employees.

Section 6.16 Ruling Request. The Parent and the Company shall use their
best efforts to cause additional information requested by the Service in
connection with the PLR to be submitted promptly to the Service and to cause
the requested PLR to be issued. The Company shall permit counsel for the Parent
to participate in the preparation of all additional submissions to the Service
in support of the PLR and to participate fully in all proceedings before the
Service with respect to the PLR and cause such counsel to be promptly provided
with copies of all correspondence from the Service with respect to the PLR and
of the PLR.

Section 6.17 Conversion of Company Preferred Stock. Immediately prior to
the Effective Time, the Company shall use its reasonable best efforts to cause
all outstanding shares of the Company Preferred Stock to be converted into
Company Common Stock and following that conversion the former holders of the
Company Preferred Stock shall have no rights against the Company with respect
to that stock.

Section 6.18 Proxy Agreement. The Company shall use its reasonable best
efforts to cause the shareholders of the Company listed on Schedule B-2 to
execute and deliver to the Parent an agreement in the form of Exhibit A within
10 days of the date of this Agreement.

Section 6.19 Opinion of Financial Advisor. The Company shall use its
reasonable best efforts to cause its financial advisor, Co-View Capital, Inc.,
to deliver a written copy of its opinion that the consideration to be received
by the holders of the Company's Common Stock in the Merger is fair from a
financial point of view to such holders, to the Parent within 10 days of the
date of this Agreement.

ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER

Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:

(a) Approval of Shareholders. This Agreement, the Merger and related
transactions shall have been approved and adopted by the requisite vote or
consent of the shareholders of the Company in accordance with applicable
law and the Company's articles of incorporation and by-laws.

(b) Effectiveness of Registration Statement. The Registration Statement
shall have become effective in accordance with the provisions of the
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order.

(c) HSR Approval. Any waiting period applicable to the consummation of
the Merger under the HSR Act shall have expired or been terminated, and no
action shall have been instituted by the Department of Justice or Federal
Trade Commission challenging or seeking to enjoin the consummation of this
transaction, which action shall have not been withdrawn or terminated.

(d) No Order. No Governmental Entity (including a federal or state
court) of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which materially restricts, prevents or
prohibits consummation of the Merger or any transaction contemplated by
this Agreement; provided, however, that the parties shall use their
reasonable best efforts to cause any such decree, judgment, injunction or
other order to be vacated or lifted.

(e) Opinion of Counsel. The Parent, the Acquisition Sub or the Company
shall not have obtained an opinion from counsel to the effect that as a
result of a change in law the Spin-Off will no longer qualify as a
reorganization within the meaning of Section 368(a) of the Code.

IV-21
<PAGE>

(f) IRS Ruling. The Company shall have obtained a ruling from the
Service, in form and substance satisfactory to counsel for the Company and
the Parent, to the effect that the Spin-Off will qualify as nontaxable to
the Company and its shareholders under Section 368(a)(1)(D) and Section
355 of the Code (except to the extent of any gain recognized under Section
357(c) of the Code).

Section 7.2 Conditions to Obligations of the Parent and the Acquisition
Sub to Effect the Merger. The obligations of the Parent and the Acquisition Sub
to effect the Merger shall be subject to the satisfaction at or prior to the
Effective Time of the following additional conditions, unless waived in writing
by the Parent:

(a) Representations and Warranties. The representations and warranties
of the Company set forth in this Agreement shall be true and correct in
all material respects, as of the date hereof, and, except to the extent
such representations and warranties speak as of an earlier date, as of the
Effective Time as though made at and as of the Effective Time, and the
Parent shall have received a certificate signed on behalf of the Company
by the chief executive officer or the chief financial officer of the
Company to such effect.

(b) Performance of Obligations of the Company and the Shareholders. The
Company shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the
Effective Time, and the Parent shall have received a certificate signed on
behalf of the Company by the chief executive officer or the chief
financial officer of the Company to such effect.

(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required
to be made, by the Company for the authorization, execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby shall have been obtained and made by the Company.

(d) Governmental Actions. There shall not have been instituted, pending
or threatened any action or proceeding (or investigation or other inquiry
that might result in such an action or proceeding) by any governmental
authority or administrative agency before any governmental authority,
administrative agency or court of competent jurisdiction, nor shall there
be in effect any judgment, decree or order of any governmental authority,
administrative agency or court of competent jurisdiction, in either case,
seeking to prohibit or limit the Parent from exercising all material
rights and privileges pertaining to its ownership of the Surviving Entity
or the ownership or operation by the Parent or any of its subsidiaries of
all or a portion of the business or assets of the Parent or any of its
subsidiaries, or seeking to compel the Parent or any of its subsidiaries
to dispose of or hold separate all or a material portion of the business
or assets of the Parent or any of its subsidiaries, as a result of the
Merger or the transactions contemplated by this Agreement.

(e) Opinion of Counsel. The Parent shall have received the opinion of
McGuire Woods Battle & Boothe LLP, as counsel to the Company,
substantially in the form of Exhibit H.

(f) Affiliate Agreements. The Parent shall have received from each
person identified in Schedule 6.12 an Affiliate Agreement, and each such
Affiliate Agreement shall be in full force and effect.

(g) Northeast Shareholder Agreement. The Parent shall have received from
the persons who each hold 1% or more, and who hold in the aggregate at
least 50%, of the total outstanding shares of capital stock of the
Spin-Off Entity to be issued in connection with the Spin-Off a Northeast
Shareholder Agreement, and each such Northeast Shareholder Agreement shall
be in full force and effect.

(h) Giant Shareholder Agreement (Company). The Parent shall have
received from the persons who each hold 1% or more, and who hold in the
aggregate at least 70%, of the total outstanding shares of Parent Common
Stock to be issued in connection with the Merger a Giant Shareholder
Agreement, and each such Giant Shareholder Agreement shall be in full
force and effect.

(i) Escrow Agreement. The Company and the Spin-Off Entity shall have
executed and delivered the Escrow Agreement in substantially the form of
Exhibit B hereto.

(j) Indemnity Escrow Agreement. The Company shall have executed and
delivered the Indemnity Escrow Agreement in substantially the form of
Exhibit C hereto.

(k) Agreement of Spin-Off Entity. The Parent shall have received from
the Spin-Off Entity an Agreement in substantially the form of Exhibit G
hereto and such Agreement shall be in full force and effect.

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<PAGE>

(l) Material Adverse Change. Since the date of this Agreement, there has
been no change, circumstance or occurrence in the business, results of
operations or financial condition of the Company or any of its
Subsidiaries having or reasonably likely to have a material adverse effect
on the business, properties or results of operations of the Company and
its Subsidiaries, taken as a whole.

(m) Market Stand-Off Agreement. John W. Roberts shall have entered into
a market stand-off agreement in the form annexed hereto as Exhibit I.

(n) Environmental Reports. The Parent shall not have received, from any
environmental consultant retained by it, a Phase II assessment report(s),
which report(s) disclose any environmental conditions with respect to the
Company's business, assets or the Real Property that present, or would be
reasonably likely to give rise to, any material Environmental Liabilities
not reflected in the Company's March 31, 1997 audited financial
statements, and which reports are satisfactory to the Parent in form and
content. The Parent shall provide the Company with copies of any such
reports as soon as practicable following the Parent's receipt thereof.

(o) Tax Agreement. Parent shall have received from the Spin-Off Entity a
Tax Provisions Agreement in substantially the form of Exhibit J hereto and
such Tax Provisions Agreement shall be in full force and effect.

(p) Indemnity Agreement. Parent shall have received from the Spin-Off
Entity an Indemnity Agreement in substantially the form of Exhibit K
hereto and such Indemnity Agreement shall be in full force and effect.

(q) Resignation and Noncompetition. John W. Roberts shall have resigned
as Chairman of the Board, President and Chief Executive Officer of Solite
Corporation and all affiliated entities, including the Surviving Entity,
and shall have entered into a Noncompetition Agreement in the form annexed
hereto as Exhibit L.

(r) Conversion of Company Preferred Stock. Immediately prior to the
Effective Time, the Company shall have caused the Company Preferred Stock
to be converted into Company Common Stock.

(s) FIRPTA Statement. The Parent shall have received (i) the statement
provided in Treasury Regulations Section 1.899-2(h)(i) and 1.445-2(c)(3)
that the Company was not a U.S. real property holding corporation during
the previous five years and (ii) a certificate that notice of the issuance
of that statement was given to the Service pursuant to Section
1.899-2(h)(2).

(t) Stock Redemptions. The Company shall not have directly or indirectly
redeemed or otherwise acquired any shares of its capital stock or shares
of the capital stock of any of its Subsidiaries pursuant to the agreements
listed on Schedule 5.1(b) hereto for cash or other consideration in excess
of $10,000 in the aggregate.

(u) Services Agreement. The Spin-Off Entity shall have executed and
delivered the Services Agreement in substantially the form of Exhibit N
hereto.

(v) Non-Competition Agreement. The Spin-Off Entity shall have executed
and delivered the Non-Competition Agreement in substantially the form of
Exhibit O hereto.

(w) Release of Obligations. The Company shall have been released from
(i) its guaranty of any and all obligations of the Spin-Off Entity and/or
its Subsidiaries to John W. Roberts, including, without limitation, the
obligation of Northeast Solite Corporation under the August 7, 1987 Note
payable to Mr. Roberts; and (ii) any and all past or prospective
obligations under the Lease Agreement dated July 1994 between John W.
Roberts and the Company for sand and gravel property, mineral extraction
and plant site rent.

Section 7.3 Conditions to Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following additional
conditions:

(a) Representations and Warranties. The representations and warranties
of the Parent and the Acquisition Sub set forth in this Agreement shall be
true and correct in all material respects as of the date hereof, and,
except to the extent such representations and warranties speak as of an
earlier date, as of the Effective Time as though made on and as of the
Effective Time, and the Company shall have received a

IV-23
<PAGE>

certificate signed on behalf of the Parent by the chief executive officer
or the chief financial officer of the Parent to such effect.

(b) Performance of Obligations of Parent and the Acquisition Sub. Each
of the Parent and the Acquisition Sub shall have performed in all material
respects all obligations required to be performed by it under this
Agreement at or prior to the Effective Time, and the Company shall have
received a certificate signed on behalf of the Parent by the chief
executive officer or the chief financial officer of the Parent to such
effect.

(d) Fairness Opinion. The Company shall have received (i) the opinion of
Co-View Capital, Inc., to the effect that the consideration to be paid
pursuant to the Agreement is fair, from a financial point of view, to the
Company and its shareholders, and (ii) on or prior to filing the
Registration Statement the opinion of Ferris, Baker Watts Incorporated
that the conversion of Company Preferred Stock referred to in Section 6.17
is fair, from a financial point of view, to the Company and its
shareholders. Such opinions shall have been confirmed in writing at the
Effective Time.

(e) Tax Opinion. The Company shall have received the opinions of McGuire
Woods Battle & Boothe LLP and Proskauer Rose LLP at or prior to the
Effective Time, to the effect that the Merger qualifies as a
reorganization within the meaning of Section 368(a) of the Code.

(f) License Agreement. The Parent shall have executed and delivered a
License Agreement, substantially in the form of Exhibit M.

(g) Material Adverse Change. Since the date of this Agreement, there has
been no change, circumstance or occurrence in the business, results of
operations or financial condition of the Parent or any of its subsidiaries
having or reasonably likely to have a material adverse effect on the
business, properties or results of operations of the Parent and its
subsidiaries, taken as a whole.

(h) Opinions of Counsel. The Company shall have received the opinions of
Proskauer Rose LLP and Hunton & Williams as counsel to the Parent,
substantially in the form of Exhibit P hereto.

(i) Tax Agreement. The Spin-Off Entity shall have received from the
Parent a Tax Provisions Agreement in substantially the form of Exhibit J
hereto and such Tax Provisions Agreement shall be in full force and
effect.

(j) Services Agreement. The Parent shall have executed and delivered the
Services Agreement in substantially the form of Exhibit N hereto.

(k) Non-Competition Agreement. The Parent shall have executed and
delivered the Non-Competition Agreement in substantially the form of
Exhibit O hereto.

(l) Agreement of Spin-Off Entity. The Parent shall have executed and
delivered the Spin-Off Entity Agreement in substantially the form of
Exhibit G hereto.

ARTICLE VIII
TERMINATION

Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
shareholders of the Parent or the Company:

(a) by mutual consent of the Parent and the Company;

(b) by either the Parent or the Company, if the Merger shall not have
been consummated before April 30, 1998;

(c) by the Parent, if (i) there has been a breach in any material respect
of any representations or warranties of the Company, (ii) there has been a
breach in any material respect of any of the covenants or agreements set
forth in this Agreement on the part of the Company, which breach is not
curable or, if curable, is not cured

IV-24
<PAGE>

within 30 days after written notice of such breach is given by the Parent
to the Company, (iii) the Board of Directors of the Company (x) withdraws
or amends or modifies in a manner adverse to Parent or Sub its
recommendation or approval in respect of this Agreement or the Merger, (y)
makes any recommendation with respect to an Acquisition Transaction
(including making no recommendation or stating an inability to make a
recommendation), other than a recommendation to reject such Acquisition
Transaction, or (z) breaches Section 6.5, in any material respect, (iv) any
corporation, partnership, person or other entity or group (as defined in
Section 13(d)(3) of the Exchange Act) ("Acquiring Person") other than John
W. Roberts, any member of Mr. Roberts' family, any trust for the benefit of
Mr. Roberts and/or any member or members of his family, any legal
representatives of any of the foregoing, Parent, or any affiliate or
Subsidiary of the Parent, shall have become the beneficial owner of 33 % or
more of the outstanding voting equity of the Company (either on a primary
or a fully diluted basis), or (v) any other Acquisition Transaction shall
have occurred with any Acquiring Person other than the Parent, or any
affiliate or Subsidiary of Parent;

(d) by the Parent, if the Company shall have failed to cause the
shareholders of the Company listed on Schedule B-2 to execute and deliver to
the Parent an agreement in the form of Exhibit A within 10 days of the date
of this Agreement; provided, however, that the Parent shall have no right to
terminate this Agreement pursuant to this Section 8.1(d) if the Company shall
have caused other shareholders of the Company to execute and deliver to the
Parent an agreement in the form of Exhibit A within 10 days of this Agreement
so that the Parent shall have received proxies from shareholders holding in
excess of two-thirds of the outstanding Company Common Stock;

(e) by the Parent, if the Company shall have failed to cause its
financial advisor, Co-View Capital, Inc. to deliver the opinion referred to
in Section 6.19 within 10 days of the date of this Agreement; and

(f) by the Company, if (i) there has been a breach in any material
respect of any representations or warranties of Parent or the Acquisition
Sub, (ii) there has been a breach in any material respect of any of the
covenants or agreements set forth in this Agreement on the part of the Parent
or the Acquisition Sub, which breach is not curable or, if curable, is not
cured within 30 days after written notice of such breach is given by the
Company to the Parent, or (iii) such termination is necessary to allow the
Company to enter into an Acquisition Transaction in accordance with the last
sentence of Section 6.5(b) (provided that the termination described in this
clause (iii) shall not be effective unless and until the Company shall have
paid to Parent in full the fee described in Section 8.2(b) hereof.

Section 8.2 Effect of Termination.

(a) In the event of termination of this Agreement pursuant to this
Article VIII, the Merger shall be deemed abandoned and this Agreement shall
forthwith become void, without liability on the part of any party hereto, except
as provided in this Section 8.2 and Section 6.9, and except that nothing herein
shall relieve any party from liability for any breach of this Agreement.

(b) If (x) Parent shall have terminated this Agreement pursuant to
Sections 8.1(c)(iii),(iv) or (v) or (y) either (1) the Company shall have
terminated this Agreement pursuant to Section 8.1(b) or (2) Parent shall have
terminated this Agreement pursuant to Section 8.1(c)(i) or (ii) and, prior to or
within six (6) months after any termination described in this clause (y), the
Company (or any of its Subsidiaries) shall have directly or indirectly entered
into a definitive agreement for, or shall have consummated, an Acquisition
Transaction, or (z) the Company shall have terminated this Agreement pursuant to
Section 8.1(f), then, in any of such cases, the Company shall pay Parent a
termination fee of one million seven hundred fifty thousand dollars
($1,750,000). Any fees payable under this Section 8.2(b) shall be paid in same
day funds no later than: (i) five business days after a termination described in
clause (x) of this Section 8.2(b); (ii) concurrently with or prior to the
entering into of the definitive agreement for, or the consummation of, such
Acquisition Transaction, in the case of a termination described in clause (y) of
this Section 8.2(b); or (iii) concurrently with or prior to a termination
described in clause (z) of this Section 8.2(b).

ARTICLE IX
INDEMNIFICATION

Section 9.1 Survival of Representations and Warranties. All
representations and warranties contained in Article III and the additional
agreements of the Company contained in Article VI of this Agreement shall
survive the Closing and shall not terminate until the third anniversary of the
Closing at which time they shall

IV-25
<PAGE>

lapse; provided, however, that the representations and warranties set forth in
Sections 3.9, 3.10, 3.12, 3.13, 3.15, 3.16 and 3.18 shall not lapse until the
fifth anniversary of the Closing. Notwithstanding the provisions of the
preceding sentence, any representation or warranty in respect of which
indemnification may be sought shall survive the applicable termination date if
written notice, given in good faith, of a specific breach thereof is given to
Northeast prior to such applicable termination date, whether or not liability
has been actually incurred or definitively determined. No investigation by
Giant, heretofore or hereafter made, shall affect the survival of any
representation and warranty contained herein.

Section 9.2 Indemnification of Parent Claimants. From and after the
Closing, the Spin-Off Entity, and to the extent solely of the shares deposited
in the Escrow Account and the Indemnity Escrow Account, the shareholders of the
Company, shall indemnify and save the Parent, Acquisition Sub and their
respective affiliates, directors, officers, employees, agents and
representatives and all of their successors and assigns (collectively "Parent
Claimants" and individually "Parent Claimant") harmless from and defend each of
them from and against any and all demands, claims, actions, liabilities,
losses, costs, damages or expenses whatsoever (including any reasonable
attorneys', accountants' and consultants' fees) (collectively, "Losses")
asserted against, imposed upon or incurred by the Parent Claimants resulting
from or arising out of (a) any inaccuracy or breach of any representation or
warranty of the Company contained herein; (b) any breach of any covenant or
obligation of the Company contained herein; (c) any breach of any covenant or
obligation of the Spin-Off Entity contained in the Indemnity Agreement; (d) to
the extent they arise from the ownership, use, lease, occupancy or operation of
any Real Property: (i) any violation of or noncompliance with the Environmental
Laws or any permit, license, approval, authorization or registration issued
under the Environmental Laws prior to the Effective Time; (ii) the disposal,
discharge or release of solid wastes or Hazardous Substances prior to the
Effective Time whether in compliance with Environmental Laws or not; (iii) the
ownership, operation or use of any landfill, wastewater treatment facility, air
pollution control equipment, storage lagoon, impoundment, or other waste
management or pollution control facility or equipment prior to the Effective
Time whether in compliance with the Environmental Laws or not; (iv) exposure to
any Hazardous Substances, noises, odors or vibrations, excluding single
unrelated individual workers' compensation claims in the ordinary course of
business, prior to the Effective Time; (e) any liability or obligation of
Northeast, its Subsidiaries or the Noncore Business, whether incurred prior to
or after the Effective Time; or (f) any breach of any covenant or obligation of
the Spin-Off Entity contained in the Tax Provisions Agreement, the form of
which is attached hereto as Exhibit J.

Section 9.3 Indemnification Procedures.

(a) The rights and obligations of each party claiming a right to
indemnification hereunder ("Indemnitee") from the other party ("Indemnitor")
shall be governed by the following rules:

(i) The Indemnitee shall give prompt written notice to the Indemnitor of
any state of facts which Indemnitee determines will give rise to a claim by the
Indemnitee against the Indemnitor based on the indemnity agreements contained
herein, stating the nature and basis of said claims and the amount thereof, to
the extent known. No failure to give such notice shall affect the
indemnification obligations of Indemnitor hereunder, except to the extent such
failure materially prejudices such Indemnitor's ability successfully to defend
the matter giving rise to the indemnification claim.

(ii) In the event any action, suit or proceeding is brought against the
Indemnitee, with respect to which the Indemnitor may have liability under the
indemnity agreements contained herein, then upon the written acknowledgment by
the Indemnitor within thirty days of the bringing of such action, suit or
proceeding that it is undertaking and will prosecute the defense of the claim
under such indemnity agreements and confirming that the claim is one with
respect to which the Indemnitor is obligated to indemnify and that it will be
able to pay the full amount of potential liability in connection with any such
claim, the action, suit or proceeding (including all proceedings on appeal or
for review which counsel for the Indemnitee shall deem appropriate) may be
defended by the Indemnitor. However, in the event the Indemnitor shall not offer
reasonable assurances as to its financial capacity to satisfy any final judgment
or settlement, the Indemnitee may assume the defense and dispose of the claim,
after 30 days' prior written notice to the Indemnitor. The Indemnitee shall have
the right to employ its own counsel in any such case, but the fees and expenses
of such counsel shall be at the Indemnitee's own expense unless (a) the
employment of such counsel and the payment of such fees and expenses both shall
have been specifically authorized by the Indemnitor in connection with the
defense of such action, suit or proceeding or (b) the Indemnitee shall have
reasonably concluded and specifically notified the Indemnitor that there may be
specific defenses

IV-26
<PAGE>

available to it which are different from or additional to those available to
the Indemnitor, if a judgment against Indemnitees in such action, suit or
proceeding will, in the good faith opinion of Indemnitee, establish a custom or
precedent which will be adverse to the best interest of its continuing
business.

(iii) In addition, in any event specified in clause (b) of the second
sentence of subparagraph (ii) above, the Indemnitor, to the extent made
necessary by such different or additional defenses, shall not have the right to
direct the defense of such action, suit or proceeding on behalf of the
Indemnitee. If Indemnitor and Indemnitee cannot agree on a mechanism to separate
the defense of matters extending beyond the scope of indemnification, such
matters shall be defended on the basis of joint consultation.

(iv) The Indemnitee shall be kept fully informed by the Indemnitor of
such action, suit or proceeding at all stages thereof, whether or not it is
represented by counsel. The Indemnitor shall, at the Indemnitor's expense, make
available to the Indemnitee and its attorneys and accountants all books and
records of the Indemnitor relating to such proceedings or litigation, and the
parties hereto agree to render to each other such assistance as they may
reasonably require of each other in order to ensure the proper and adequate
defense of any such action, suit or proceeding.

(b) The Indemnitor shall make no settlement of any claims which
Indemnitor has undertaken to defend, without Indemnitee's consent, unless the
Indemnitor fully indemnifies the Indemnitee for all losses, there is no finding
or admission of violation of law by, or effect on any other claims that may be
made against, the Indemnitee and the relief granted in connection therewith
requires no action on the part of and has no effect on the Indemnitee.

Section 9.4 Release of Shares of Parent Common Stock. The shares of
Parent Common Stock held in the Escrow Account and the Indemnity Escrow Account
shall be available to satisfy the indemnification claims of Parent Claimants
pursuant to this Section 9. The shares of Parent Common Stock in the Escrow
Account shall be available to satisfy the indemnification claims of Parent
Claimants to the extent such shares of Parent Common Stock have not been
released pursuant to Section 2.4. Unless a claim or claims by Parent Claimants
are then pending, in amounts in excess of the then value of 37,500 shares of
Parent Common Stock, 37,500 shares of Parent Common Stock held in the Indemnity
Escrow Account shall be released on the second anniversary of the Closing Date,
and unless any claim or claims by Parent Claimants are then pending, the
balance of the shares of Parent Common Stock held in the Indemnity Escrow
Account shall be released on the third anniversary of the Closing Date. For the
purposes of this Section 9.4, the value of Parent Common Stock shall be the
average of the closing bid and asked prices per share of Parent Common Stock as
quoted on NASDAQ for the twenty trading days immediately preceding any release
of Parent Common Stock. Any dispute relating to or in respect of the rights of
any Indemnitee to receive shares of Parent Common Stock from the Escrow Account
or the Indemnity Escrow Account in satisfaction of an indemnification claim
pursuant to 9.2 hereof (an "Indemnification Dispute") shall be submitted to,
and resolved exclusively pursuant to arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association. Such
arbitration shall take place in Richmond, Virginia and shall be subject to the
substantive law of the State of Virginia. Decisions pursuant to such
arbitration shall be final, conclusive and binding upon the parties. Upon the
conclusion of arbitration, the parties may apply to any court of competent
jurisdiction to enforce the decision pursuant to such arbitration. The parties
hereto waive and shall not seek jury trial in any lawsuit, proceeding, claim,
counterclaim, defense or other litigation or dispute relating to or in respect
of an Indemnification Dispute. Neither party shall submit a dispute to
arbitration before that party has sought to resolve the dispute through direct
negotiation with the other party. If the dispute is not resolved within three
weeks after a demand for direct negotiation, the parties shall attempt to
resolve the dispute through mediation. If the parties do not promptly agree on
a mediator, either party may request the then senior judge of the civil
division of the Circuit Court for the City of Richmond, Virginia to appoint a
mediator. If the mediator is unable to facilitate a settlement of the dispute
within a reasonable period of time, as determined by the mediator, the mediator
shall issue a written statement to the parties to that effect and either party
may then submit the dispute to arbitration as provided herein. The fees and
expenses of the mediator shall be shared equally by the parties. If the dispute
is submitted to arbitration, the arbitrator shall award the prevailing or
substantially prevailing party its expenses and costs, including costs of
arbitration and reasonable attorney's fees.

Section 9.5 Limitations on Indemnity. Notwithstanding anything to the
contrary herein, (a) the obligations of the Spin-Off Entity and the shareholders
of the Company pursuant to Section 9.2(a) through (d) hereof shall (i) arise
only with respect to individual claims in excess of $25,000, (ii) arise with
respect to claims related to conditions subject to Corrective Action disclosed
on Schedule 3.18(f) hereto, to the extent that Losses relative

IV-27
<PAGE>

to disclosed conditions exceed $125,000 per lightweight aggregate manufacturing
site (including Oldover facilities), (iii) arise only if the aggregate claims
are in excess of $250,000, and (iv) with respect to the first $250,000 of
aggregate claims, be limited to $125,000, and (b) the liability of the Spin-Off
Entity pursuant to Section 9.2 hereof shall (i) be limited to the amount of
Parent Claimants' Losses in excess of the value of the shares of Parent Common
Stock then held in the Escrow Account and the Indemnity Escrow Account, and
(ii) terminate with respect to any claims not asserted prior to the fifth
anniversary of the Effective Time.

ARTICLE X
GENERAL PROVISIONS

Section 10.1 Amendment and Modification. At any time prior to the
Effective Time, this Agreement may be amended, modified or supplemented only by
written agreement (referring specifically to this Agreement) of the Parent, the
Acquisition Sub and the Company with respect to any of the terms contained
herein.

Section 10.2 Waiver. At any time prior to the Effective Time, the Parent
and the Acquisition Sub, on the one hand, and the Company, on the other hand,
may (i) extend the time for the performance of any of the obligations or other
acts of the other, (ii) waive any inaccuracies in the representations and
warranties of the other contained herein or in any documents delivered pursuant
hereto and (iii) waive compliance by the other with any of the agreements or
conditions contained herein which may legally be waived. Any such extension or
waiver shall be valid only if set forth in an instrument in writing
specifically referring to this Agreement and signed on behalf of such party.

Section 10.3 Survivability; Investigations. The respective
representations and warranties of the Parent, the Acquisition Sub and the
Company contained herein or in any certificates or other documents delivered
prior to or as of the Effective Time (i) shall not be deemed waived or
otherwise affected by any investigation made by any party hereto and (ii) shall
survive beyond the Effective Time. The covenants and agreements of the parties
hereto (including the Surviving Entity after the Merger) shall survive the
Effective Time without limitation (except for those which, by their terms,
contemplate a shorter survival period).

Section 10.4 Notices. All notices and other communications hereunder
shall be in writing and shall be delivered personally or by next-day courier or
telecopied with confirmation of receipt, to the parties at the addresses
specified below (or at such other address for a party as shall be specified by
like notice; provided that notices of a change of address shall be effective
only upon receipt thereof. Any such notice shall be effective upon receipt, if
personally delivered or telecopied, or one day after delivery to a courier for
next-day delivery.

(a) If to the Parent or the Acquisition Sub, to:

Giant Cement Holding, Inc.
320-D Midland Parkway
Summerville, SC 29485

Attention: Mr. Terry L. Kinder

with a copy to:

Proskauer Rose LLP
1585 Broadway
New York, New York 10036

Attention: Robert A. Cantone, Esq.

IV-28
<PAGE>

(b) if to the Company, to:

Solite Corporation
2508 Chamberlayne Avenue
Richmond, VA 23222

Attention: Mr. John W. Roberts

with a copy to:

McGuire Woods Battle & Boothe LLP
One James Center
901 East Cary Street
Richmond, VA 23219

Attention: Thomas L. Newton, Jr.

Section 10.5 Descriptive Headings; Interpretation. The headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. References
in this Agreement to Sections, Schedules, Exhibits or Articles mean a Section,
Schedule, Exhibit or Article of this Agreement unless otherwise indicated.
References to this Agreement shall be deemed to include the Exhibits and
Schedules hereto, unless the context otherwise requires. The term "person"
shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust, a Governmental Entity or an unincorporated organization.

Section 10.6 Entire Agreement; Assignment. This Agreement (including the
Schedules and other documents and instruments referred to herein) and the
Confidentiality Agreement effective May 14, 1996 among the Parent and the
Company constitutes the entire agreement and supersede all other prior
agreements and understandings, both written and oral, among the parties or any
of them, with respect to the subject matter hereof. This Agreement is not
intended to confer upon any person not a party hereto any rights or remedies
hereunder. This Agreement shall not be assigned by operation of law or
otherwise; provided that Parent or the Acquisition Sub may assign its rights
and obligations hereunder to a direct or indirect subsidiary of the Parent, but
no such assignment shall relieve the Parent or the Acquisition Sub, as the case
may be, of its obligations hereunder.

Section 10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia without
giving effect to the provisions thereof relating to conflicts of law.

Section 10.8 Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect against a party hereto, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby and such invalidity, illegality or unenforceability shall only
apply as to such party in the specific jurisdiction where such judgment shall
be made.

Section 10.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.

Section 10.10 Tax Treatment. The Parent agrees that the Spin-Off shall
be treated by the Parent as nontaxable to the Company and its shareholders
under Section 355 and 368(a)(1)(D) of the Code (except to the extent of any
gain recognized under Section 357(c) of the Code) and the Merger shall be
treated by the Parent as a reorganization within the meaning of Section 368(a)
of the Code and that the positions, elections and methods taken or reflected in
all Federal, state or local tax returns in respect of the Spin-Off and the
Merger shall reflect or be consistent with the foregoing. The Parent agrees not
to take any action that would cause the Spin-Off or the Merger to fail to so
qualify.

IV-29
<PAGE>

IN WITNESS WHEREOF, each of the Parent, the Acquisition Sub and the
Company has caused this Agreement to be executed on its behalf by its officers
thereunto duly authorized, all as of the date first above written.

GIANT CEMENT HOLDING, INC.

By: /s/ Terry L. Kinder
------------------------------
Name: Terry L. Kinder
Title:

GCHI ACQUISITION CORP.

By: /s/ Terry L. Kinder
------------------------------
Name: Terry L. Kinder
Title:

SOLITE CORPORATION

By: /s/ John W. Roberts
------------------------------
Name: John W. Roberts
Title:

IV-30
<PAGE>

Schedule A-1 to
the Agreement and
Plan of Merger

PLAN OF MERGER

PLAN OF MERGER (this "Plan") of Solite Corporation (the "Company"), a
Virginia corporation, and GCHI Acquisition Corp. (the "Acquisition Sub"), a
Virginia corporation wholly-owned by Giant Cement Holding, Inc., a Delaware
corporation (the "Parent").

ARTICLE I
Terms of the Merger

1.1 The Merger. The names of the corporations to be merged are Solite
Corporation and GCHI Acquisition Corp. At the Effective Time, GCHI shall merge
with and into the Company (the "Merger"), the separate corporate existence of
GCHI shall cease and the Company shall survive and continue to exist as a
Virginia corporation (Solite, as the surviving corporation in the Merger,
sometimes being referred to herein as the "Surviving Corporation").

1.2 Effect of the Merger. The Merger shall become effective at the time
a certificate of merger is issued by the State Corporation Commission of
Virginia (the "SCC") or at such later time specified in properly executed
Articles of Merger, in the form required by and executed in accordance with the
Virginia Stock Corporation Act ("VSCA"), filed with the SCC, in accordance with
the provisions of Section 13.1-720 of the VSCA. The Merger shall have the
effects prescribed in the VSCA. When used in this Plan, the term "Effective
Time" shall mean the date and time at which the Merger shall become effective.

1.3 Articles of Incorporation and By-Laws. The articles of incorporation
and bylaws of the Company in effect at the Effective Time shall be the articles
of incorporation of the Surviving Corporation until amended in accordance with
applicable law.

ARTICLE II
Manner and Basis of Converting Shares

2.1 Exchange Ratio. At the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof:

(i) a number of shares of the voting common stock, par value $.01 per
share of the Parent (the "Parent Common Stock"), payable upon the
surrender of the certificate formerly representing such share of Company
Common Stock, equal to the quotient derived by dividing (A) 325,000 minus
the number of shares to be placed in the Escrow Account and the Indemnity
Escrow Account described below, by (B) the number of outstanding shares
of Company Common Stock at the Closing (hereinafter referred to
collectively, as the "Outstanding Stock"); and

IV-31
<PAGE>

2.2 Exchange of Company Common Stock.

IV-32
<PAGE>

(b) Promptly after the Effective Time, the Parent shall (i) deliver to
the escrow agent (the "Escrow Agent") under the escrow agreement dated the
Effective Date, a certificate representing 75,000 shares of Parent Common Stock
(the "Escrow Account") to be held pursuant to such escrow agreement for
dissemination pursuant to Section 2.4(c), and (iii) deliver to the escrow agent
(the "Indemnity Escrow Agent") under the escrow agreement dated the Effective
Time, a certificate representing 75,000 shares of Parent Common Stock (the
"Indemnity Escrow Account") to be held pursuant to the provisions of Section 9.4
of the Agreement and Plan of Merger, dated September 10, 1997, as amended, among
Parent, Acquisition Sub, and the Company. The shares of Parent Common Stock
shall be deemed to have been issued at the Effective Time.

2.3 No Fractional Securities. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of certificates representing Company Common Stock, and such fractional
interests shall not entitle the owner thereof to vote or to any rights of a
security holder. In lieu of any such fractional securities, each holder of
Company Common Stock who would otherwise have been entitled to a fraction of a
share of Parent Common Stock upon surrender of such holder's certificates will
be entitled to receive, and the Parent will timely make a cash payment (without
interest) determined by multiplying (i) the fractional interest to which such
holder would otherwise be entitled (after taking into account all shares of
Outstanding Stock then held of record by such holder) and (ii) the average of
the closing bid and asked prices per share of Parent Common Stock as quoted on
The NASDAQ Stock Market, Inc. ("NASDAQ") for the twenty trading days immediately
preceding the Closing.

2.4 Adjustment to Consideration.

(a) As soon as practicable after the Closing, and in any event not later
than 90 days after the Closing, the Parent shall prepare, or cause to be
prepared, and shall furnish to Northeast Solite Corporation, a New York
corporation (the "Spin-Off Entity") a consolidated balance sheet for the Company
as of the Closing Date, after giving effect to the Spin-Off (the "Closing
Balance Sheet"), but before giving effect to the Merger and any adjustments
related thereto. The Closing Balance Sheet shall be prepared in accordance with
generally accepted accounting principles ("GAAP"), on a basis consistent with
the Report On Audits of Divisional Financial Statements of Solite Corporation
for the years ended March 31, 1997 and 1996, prepared by Coopers & Lybrand LLP,
including the writedown of clinker inventories by approximately $3.6 million to
net realizable value not previously recorded by the Company. If the Spin-Off
Entity disagrees with any aspect of the Closing Balance Sheet, it may object to
the Closing Balance Sheet in writing, detailing its disagreement (the "Dispute
Notice"). If no Dispute Notice is given to the Parent by the Spin-Off Entity
within 30 days after the Closing Balance Sheet is furnished to the Spin-Off
Entity, the Closing Balance Sheet shall be deemed final and binding for all
purposes under this Agreement.

IV-33
<PAGE>

for all the fees and expenses of the Accounting Firm; (ii) if the Accounting
Firm resolves all of the matters subject to a Dispute Notice in favor of the
Spin-Off Entity, the Parent will be responsible for all the fees and expenses
of the Accounting Firm; and if the Accounting Firm resolves some of the matters
subject to the Dispute Notice in favor of the Parent and the rest of such
matters in favor of the Spin-Off Entity, the Spin-Off Entity will be
responsible for the fraction of the fees and expenses of the Accounting Firm
equal to (A) the difference between the amount in dispute and the amount of the
adjustments to the Closing Balance Sheet over (B) the amount in dispute, and
the Parent will be responsible for the remainder of the fees and expenses.

(c) If the consolidated net book value of the Company reflected in the
Final Closing Balance Sheet is less than $4.5 million, then (i) the Parent shall
be entitled to receive from the Escrow Account and to cancel the number of whole
shares of Parent Common Stock as shall equal the quotient derived by dividing
(A) the amount by which $4.5 million exceeds the consolidated net book value of
the Company reflected in the Final Closing Balance Sheet by (B) $22 per share of
Parent Common Stock, and (ii) subject to Section 2.4(d), the balance of the
shares of Parent Common Stock in the Escrow Account shall be available
immediately for distribution pursuant to Section 2.1(a)(ii). If the consolidated
net book value of the Company reflected in the Final Closing Balance Sheet is
more than $4.5 million, then, subject to Section 2.4(d), all the shares of
Parent Common Stock in the Escrow Account shall be available immediately for
distribution pursuant to Section 2.1(a)(ii). For purposes of calculating net
book value, no effect will be given to (i) up to $1,000,000 of valuation
allowance recorded against the net deferred tax assets of the Company and (ii)
the cost of the AF Old Container Management Handling Facility (estimated at
$250,000), if the Company writes-off the cost of such facility.

2.5 Termination. The Boards of Directors of the Company and the
Acquisition Sub may terminate and abandon the Merger at any time prior to the
issuance of the Certificate of Merger, subject to any contractual rights,
without further shareholder action, in such manner as shall be agreed upon by
such Boards of Directors.

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<PAGE>

Opinion of CoView Capital, Inc. Annex V

March 16, 1998

Board of Directors
Solite Corporation
2508-10 Chamberlayne Avenue
Richmond, VA 23222

Gentlemen:

Giant Cement Holding, Inc., GCHI Acquisition Corp. (collectively, "Giant")
and Solite Corporation ("Solite" or the "Company") have entered into an
Agreement and Plan of Merger (the "Plan") dated September 10, 1997 as amended.
Pursuant to the Plan, among other things, Giant will acquire by way of a merger
(the "Merger") all of the outstanding shares of capital stock of the Company in
exchange for 175,000 shares of Giant Common Stock; an additional 150,000 shares
of Giant Common Stock will be placed in escrow upon consummation of the Merger.
Of these additional shares, 75,000 shall be distributed to holders of Solite
common stock, depending upon the extent by which Solite meets certain financial
tests at closing. The other 75,000 shares shall be held in escrow to satisfy
the indemnification claims, if any, of Giant under the Plan. Giant will also
assume up to $20 million of Solite's debt. Prior to the Merger, Solite will
contribute certain stock and assets to a subsidiary which will then be spun off
to the shareholders of Solite (the "Spin-Off"). The Merger terms and conditions
are more fully set forth in the Plan.

CoView Capital has been asked to render an opinion (the "Opinion") as to
the fairness of the Merger, from a financial point of view, to the stockholders
of Solite.

CoView is an investment banking firm and a member of the National
Association of Securities Dealers (NASD), and is regularly engaged as financial
advisor to companies in the divestiture and sale of businesses and in the
valuation of companies in connection with mergers and acquisitions and private
placements. CoView is currently acting as financial advisor to Solite in
connection with the Merger and will receive a fee upon consummation of the
Merger for acting as financial advisor to the Company and for rendering the
Opinion. In addition, Solite has agreed to indemnify CoView for certain
liabilities arising from the delivery of the Opinion.

In our capacity as financial advisor and in rendering our Opinion, we have
reviewed and analyzed, among other things, the following:

[bullet] trends in the building, aggregate, cement and hazardous waste
management and treatment industries;

[bullet] developments in the Company's and Giant's markets;

[bullet] publicly available information with respect to certain of Solite's and
Giant's competitors;

[bullet] historical Company and Giant financial statements;

[bullet] internal financial statements and other financial and operating data
provided by Solite's and Giant's managements, including historical and
pro forma statements excluding the Spin-Off assets;

[bullet] Company projections for the fiscal years 1998 through 2000;

[bullet] Giant projections for the fiscal years 1997 through 2000;

[bullet] securities research analysts' reports regarding Giant;

[bullet] information and market valuations pertaining to publicly-traded
companies which are engaged in activities relatively similar and
comparable to those of the Company;

[bullet] publicly-available information pertaining to the financial terms of
comparable acquisition transactions;

[bullet] the Agreement and Plan of Merger dated as of September 10, 1997;

[bullet] the Proxy Statement/Prospectus dated as of December 5, 1997;

In addition, we:

[bullet] participated in discussions with the representatives of Solite
and Giant;

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<PAGE>

[bullet] discussed with the managements of Solite and of Giant the strategic
logic for the Merger;

[bullet] performed a Discounted Cash Flow (DCF) analysis on future Company
projections using various discount rates to determine the Company's
net present value;

[bullet] discussed with Solite's and Giant's senior management their respective
financial statements, operations, future prospects, and financial
projections, as well as the pro forma impact of the Merger.

CoView has relied upon, without independent verification or investigation,
the accuracy and completeness of all financial and other information provided
by Solite and Giant and certain publicly available information. All internal
financial statements, projections, operating data and estimates reviewed by
CoView for the purposes of this Opinion have been assumed to have been prepared
to reflect the best available estimates and judgements. We have not made or
obtained any independent evaluations or appraisals of any of the Company's or
Giant's assets, properties, liabilities or securities. We have relied upon the
reasonableness and accuracy of all internal financial projections, forecasts,
estimates, and analyses, including, without limitation, those forecasts,
estimates and analyses relating to future cash flows (collectively the
"Projections"). We have not independently verified the reasonableness and
accuracy of data and information used in preparing the Projections.

CoView has assumed that the Merger will be treated as a tax-free
reorganization and will be consummated according to the terms of the Plan.

This letter was prepared at the request and for the information of the
Board of Directors of Solite and may not be used for any other purpose without
our prior written consent, other than for inclusion in the Proxy Statement
relating to the meeting of Solite's shareholders to be held in connection with
the Merger. It is further understood that CoView's opinion in no way addresses
the market price at which Giant shares will trade at any particular future
time, nor does the opinion represent a recommendation as to how Solite
shareholders should vote on the Merger.

Based upon and subject to the foregoing, it is our opinion, as of the date
hereof, that the Merger, taken as a whole, is fair, from a financial point of
view, to the stockholders of Solite.

/s/ CoView Capital, Inc.
--------------------------------
CoView Capital, Inc.

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<PAGE>
Annex VI
CODE OF VIRGINIA TITLE 13.1. CORPORATIONS.
CHAPTER 9. VIRGINIA STOCK CORPORATION ACT.
ARTICLE 15. DISSENTERS' RIGHTS.

[sec] 13.1-729 Definitions.
In this article:

"Corporation" means the issuer of the shares held by a dissenter before
the corporate action, except that (i) with respect to a merger, "corporation"
means the surviving domestic or foreign corporation or limited liability
company by merger of that issuer, and (ii) with respect to a share exchange,
"corporation" means the acquiring corporation by share exchange, rather than
the issuer, if the plan of share exchange places the responsibility for
dissenters' rights on the acquiring corporation.

"Dissenter" means a shareholder who is entitled to dissent from corporate
action under [sec] 13.1-730 and who exercises that right when and in the manner
required by [sec][sec] 13.1-732 through 13.1-739.

"Fair value," with respect to a dissenter's shares, means the value of the
shares immediately before the effectuation of the corporate action to which the
dissenter objects, excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.

"Interest" means interest from the effective date of the corporate action
until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.

"Record shareholder" means the person in whose name shares are registered
in the records of a corporation or the beneficial owner of shares to the extent
of the rights granted by a nominee certificate on file with a corporation.

"Beneficial shareholder" means the person who is a beneficial owner of
shares held by a nominee as the record shareholder.

"Shareholder" means the record shareholder or the beneficial shareholder.

[sec] 13.1-730 Right to dissent.
A. A shareholder is entitled to dissent from, and obtain payment of the
fair value of his shares in the event of, any of the following corporate
actions:

1. Consummation of a plan of merger to which the corporation is a party
(i) if shareholder approval is required for the merger by [sec] 13.1-718 or the
articles of incorporation and the shareholder is entitled to vote on the merger
or (ii) if the corporation is a subsidiary that is merged with its parent under
[sec] 13.1-719;

2. Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan;

3. Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation if the shareholder was entitled to vote on the sale
or exchange or if the sale or exchange was in furtherance of a dissolution on
which the shareholder was entitled to vote, provided that such dissenter's
rights shall not apply in the case of (i) a sale or exchange pursuant to court
order, or (ii) a sale for cash pursuant to a plan by which all or substantially
all of the net proceeds of the sale will be distributed to the shareholders
within one year after the date of sale;

4. Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws, or a resolution of the board of
directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.

B. A shareholder entitled to dissent and obtain payment for his shares
under this article may not challenge the corporate action creating his
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.

C. Notwithstanding any other provision of this article, with respect to a
plan of merger or share exchange or a sale or exchange of property there shall
be no right of dissent in favor of holders of shares of any class or series
which, at the record date fixed to determine the shareholders entitled to
receive notice of and to vote at the meeting

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<PAGE>

at which the plan of merger or share exchange or the sale or exchange of
property is to be acted on, were (i) listed on a national securities exchange
or on the National Association of Securities Dealers Automated Quotation System
(NASDAQ) or (ii) held by at least 2,000 record shareholders, unless in either
case:

1. The articles of incorporation of the corporation issuing such shares
provide otherwise;

2. In the case of a plan of merger or share exchange, the holders of the
class or series are required under the plan of merger or share exchange to
accept for such shares anything except:

a. Cash;

b. Shares or membership interests, or shares or membership interests and
cash in lieu of fractional shares (i) of the surviving or acquiring corporation
or limited liability company or (ii) of any other corporation or limited
liability company which, at the record date fixed to determine the shareholders
entitled to receive notice of and to vote at the meeting at which the plan of
merger or share exchange is to be acted on, were either listed subject to
notice of issuance on a national securities exchange or held of record by at
least 2,000 record shareholders or members; or

c. A combination of cash and shares or membership interests as set forth
in subdivisions 2 a and 2 b of this subsection; or

3. The transaction to be voted on is an "affiliated transaction" and is
not approved by a majority of "disinterested directors" as such terms are
defined in [sec] 13.1-725.

D. The right of a dissenting shareholder to obtain payment of the fair
value of his shares shall terminate upon the occurrence of any one of the
following events:

1. The proposed corporate action is abandoned or rescinded;

2. A court having jurisdiction permanently enjoins or sets aside the
corporate action; or

3. His demand for payment is withdrawn with the written consent of the
corporation.

[sec] 13.1-731 Dissent by nominees and beneficial owners.
A. A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one person and notifies the corporation in
writing of the name and address of each person on whose behalf he asserts
dissenters' rights. The rights of a partial dissenter under this subsection are
determined as if the shares as to which he dissents and his other shares were
registered in the names of different shareholders.

B. A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if:

1. He submits to the corporation the record shareholder's written consent
to the dissent not later than the time the beneficial shareholder asserts
dissenters' rights; and

2. He does so with respect to all shares of which he is the beneficial
shareholder or over which he has power to direct the vote.

[sec] 13.1-732 Notice of dissenters' rights.
A. If proposed corporate action creating dissenters' rights under
[sec] 13.1-730 is submitted to a vote at a shareholders' meeting, the meeting
notice shall state that shareholders are or may be entitled to assert
dissenters' rights under this article and be accompanied by a copy of this
article.

B. If corporate action creating dissenters' rights under [sec] 13.1-730 is
taken without a vote of shareholders, the corporation, during the ten-day
period after the effectuation of such corporate action, shall notify in writing
all record shareholders entitled to assert dissenters' rights that the action
was taken and send them the dissenters' notice described in [sec] 13.1-734.

VI-2
<PAGE>

[sec] 13.1-733 Notice of intent to demand payment.
A. If proposed corporate action creating dissenters' rights under
[sec] 13.1-730 is submitted to a vote at a shareholders' meeting, a shareholder
who wishes to assert dissenters' rights (i) shall deliver to the corporation
before the vote is taken written notice of his intent to demand payment for his
shares if the proposed action is effectuated and (ii) shall not vote such
shares in favor of the proposed action.

B. A shareholder who does not satisfy the requirements of subsection A of
this section is not entitled to payment for his shares under this article.

[sec] 13.1-734 Dissenters' notice.
A. If proposed corporate action creating dissenters' rights under
[sec] 13.1-730 is authorized at a shareholders' meeting, the corporation,
during the ten-day period after the effectuation of such corporate action,
shall deliver a dissenters' notice in writing to all shareholders who satisfied
the requirements of [sec] 13.1-733.

B. The dissenters' notice shall:

1. State where the payment demand shall be sent and where and when
certificates for certificated shares shall be deposited;

2. Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;

3. Supply a form for demanding payment that includes the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action and requires that the person asserting dissenters' rights
certify whether or not he acquired beneficial ownership of the shares before or
after that date;

4. Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty nor more than sixty days after the date
of delivery of the dissenters' notice; and

5. Be accompanied by a copy of this article.

[sec] 13.1-735 Duty to demand payment.
A. A shareholder sent a dissenters' notice described in [sec] 13.1-734
shall demand payment, certify that he acquired beneficial ownership of the
shares before or after the date required to be set forth in the dissenters'
notice pursuant to subdivision 3 of subsection B of [sec] 13.1-734, and, in the
case of certificated shares, deposit his certificates in accordance with the
terms of the notice.

B. The shareholder who deposits his shares pursuant to subsection A of
this section retains all other rights of a shareholder except to the extent
that these rights are canceled or modified by the taking of the proposed
corporate action.

C. A shareholder who does not demand payment and deposits his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this article.

[sec] 13.1-736 Share restrictions.
A. The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received.

B. The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder except to the
extent that these rights are canceled or modified by the taking of the proposed
corporate action.

[sec] 13.1-737 Payment.
A. Except as provided in [sec] 13.1-738, within thirty days after receipt
of a payment demand made pursuant to [sec] 13.1-735, the corporation shall pay
the dissenter the amount the corporation estimates to be the fair value of his
shares, plus accrued interest. The obligation of the corporation under this
paragraph may be enforced (i) by the circuit court in the city or county where
the corporation's principal office is located, or, if none in this

VI-3
<PAGE>

Commonwealth, where its registered office is located or (ii) at the election of
any dissenter residing or having its principal office in the Commonwealth, by
the circuit court in the city or county where the dissenter resides or has its
principal office. The court shall dispose of the complaint on an expedited
basis.

B. The payment shall be accompanied by:

1. The corporation's balance sheet as of the end of a fiscal year ending
not more than sixteen months before the effective date of the corporate action
creating dissenters' rights, an income statement for that year, a statement of
changes in shareholders' equity for that year, and the latest available interim
financial statements, if any;

2. An explanation of how the corporation estimated the fair value of the
shares and of how the interest was calculated;

3. A statement of the dissenters' right to demand payment under
[sec] 13.1-739; and

4. A copy of this article.

[sec] 13.1-738 After-acquired shares.
A. A corporation may elect to withhold payment required by [sec] 13.1-737
from a dissenter unless he was the beneficial owner of the shares on the date
of the first publication by news media or the first announcement to
shareholders generally, whichever is earlier, of the terms of the proposed
corporate action, as set forth in the dissenters' notice.

B. To the extent the corporation elects to withhold payment under
subsection A of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
offer to pay this amount to each dissenter who agrees to accept it in full
satisfaction of his demand. The corporation shall send with its offer an
explanation of how it estimated the fair value of the shares and of how the
interest was calculated, and a statement of the dissenter's right to demand
payment under [sec] 13.1-739.

[sec] 13.1-739 Procedure if shareholder dissatisfied with payment or offer.
A. A dissenter may notify the corporation in writing of his own estimate
of the fair value of his shares and amount of interest due, and demand payment
of his estimate (less any payment under [sec] 13.1-737), or reject the
corporation's offer under [sec] 13.1-738 and demand payment of the fair value
of his shares and interest due, if the dissenter believes that the amount paid
under [sec] 13.1-737 or offered under [sec] 13.1-738 is less than the fair
value of his shares or that the interest due is incorrectly calculated.

B. A dissenter waives his right to demand payment under this section
unless he notifies the corporation of his demand in writing under subsection A
of this section within thirty days after the corporation made or offered
payment for his shares.

[sec] 13.1-740 Court action.
A. If a demand for payment under [sec] 13.1-739 remains unsettled, the
corporation shall commence a proceeding within sixty days after receiving the
payment demand and petition the circuit court in the city or county described
in subsection B of this section to determine the fair value of the shares and
accrued interest. If the corporation does not commence the proceeding within
the sixty-day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.

B. The corporation shall commence the proceeding in the city or county
where its principal office is located, or, if none in this Commonwealth, where
its registered office is located. If the corporation is a foreign corporation
without a registered office in this Commonwealth, it shall commence the
proceeding in the city or county in this Commonwealth where the registered
office of the domestic corporation merged with or whose shares were acquired by
the foreign corporation was located.

C. The corporation shall make all dissenters, whether or not residents of
this Commonwealth, whose demands remain unsettled parties to the proceeding as
in an action against their shares and all parties shall be served with a copy
of the petition. Nonresidents may be served by registered or certified mail or
by publication as provided by law.

VI-4
<PAGE>

D. The corporation may join as a party to the proceeding any shareholder
who claims to be a dissenter but who has not, in the opinion of the
corporation, complied with the provisions of this article. If the court
determines that such shareholder has not complied with the provisions of this
article, he shall be dismissed as a party.

E. The jurisdiction of the court in which the proceeding is commenced
under subsection B of this section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend a
decision on the question of fair value. The appraisers have the powers
described in the order appointing them, or in any amendment to it. The
dissenters are entitled to the same discovery rights as parties in other civil
proceedings.

F. Each dissenter made a party to the proceeding is entitled to judgment
(i) for the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the corporation or (ii) for
the fair value, plus accrued interest, of his after-acquired shares for which
the corporation elected to withhold payment under [sec] 13.1-738.

[sec] 13.1-741 Court costs and counsel fees.
A. The court in an appraisal proceeding commenced under [sec] 13.1-740
shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court shall
assess the costs against the corporation, except that the court may assess
costs against all or some of the dissenters, in amounts the court finds
equitable, to the extent the court finds the dissenters did not act in good
faith in demanding payment under [sec] 13.1-739.

B. The court may also assess the reasonable fees and expenses of experts,
excluding those of counsel, for the respective parties, in amounts the court
finds equitable:

1. Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the requirements
of [sec][sec] 13.1-732 through 13.1-739; or

2. Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses are
assessed did not act in good faith with respect to the rights provided by this
article.

C. If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded
the dissenters who were benefited.

D. In a proceeding commenced under subsection A of [sec] 13.1-737 the
court shall assess the costs against the corporation, except that the court may
assess costs against all or some of the dissenters who are parties to the
proceeding, in amounts the court finds equitable, to the extent the court finds
that such parties did not act in good faith in instituting the proceeding.

VI-5

Annex VI
CODE OF VIRGINIA TITLE 13.1. CORPORATIONS.
CHAPTER 9. VIRGINIA STOCK CORPORATION ACT.
ARTICLE 15. DISSENTERS' RIGHTS.

[sec] 13.1-729 Definitions.
In this article:

"Beneficial shareholder" means the person who is a beneficial owner of
shares held by a nominee as the record shareholder.

"Shareholder" means the record shareholder or the beneficial shareholder.

[sec] 13.1-730 Right to dissent.
A. A shareholder is entitled to dissent from, and obtain payment of the
fair value of his shares in the event of, any of the following corporate
actions:

2. Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan;

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<PAGE>

1. The articles of incorporation of the corporation issuing such shares
provide otherwise;

2. In the case of a plan of merger or share exchange, the holders of the
class or series are required under the plan of merger or share exchange to
accept for such shares anything except:

a. Cash;

c. A combination of cash and shares or membership interests as set forth
in subdivisions 2 a and 2 b of this subsection; or

3. The transaction to be voted on is an "affiliated transaction" and is
not approved by a majority of "disinterested directors" as such terms are
defined in [sec] 13.1-725.

D. The right of a dissenting shareholder to obtain payment of the fair
value of his shares shall terminate upon the occurrence of any one of the
following events:

1. The proposed corporate action is abandoned or rescinded;

2. A court having jurisdiction permanently enjoins or sets aside the
corporate action; or

3. His demand for payment is withdrawn with the written consent of the
corporation.

B. A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if:

1. He submits to the corporation the record shareholder's written consent
to the dissent not later than the time the beneficial shareholder asserts
dissenters' rights; and

2. He does so with respect to all shares of which he is the beneficial
shareholder or over which he has power to direct the vote.

VI-2
<PAGE>

B. A shareholder who does not satisfy the requirements of subsection A of
this section is not entitled to payment for his shares under this article.

B. The dissenters' notice shall:

1. State where the payment demand shall be sent and where and when
certificates for certificated shares shall be deposited;

2. Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;

4. Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty nor more than sixty days after the date
of delivery of the dissenters' notice; and

5. Be accompanied by a copy of this article.

13.1-735 Duty to demand payment.
A. A shareholder sent a dissenters' notice described in [sec] 13.1-734
shall demand payment, certify that he acquired beneficial ownership of the
shares before or after the date required to be set forth in the dissenters'
notice pursuant to subdivision 3 of subsection B of [sec] 13.1-734, and, in the
case of certificated shares, deposit his certificates in accordance with the
terms of the notice.

[sec] 13.1-736 Share restrictions.
A. The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received.

VI-3
<PAGE>

B. The payment shall be accompanied by:

2. An explanation of how the corporation estimated the fair value of the
shares and of how the interest was calculated;

3. A statement of the dissenters' right to demand payment under
[sec] 13.1-739; and

4. A copy of this article.

VI-4
<PAGE>

B. The court may also assess the reasonable fees and expenses of experts,
excluding those of counsel, for the respective parties, in amounts the court
finds equitable:

1. Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the requirements
of [sec][sec] 13.1-732 through 13.1-739; or

VI-5
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers
Article TENTH of Giant's Certificate of Incorporation provides that Giant
shall indemnify and hold harmless, to the fullest extent authorized by the
Delaware General Corporation Law, its officers and directors against all
expenses, liability and loss actually and reasonably incurred in connection
with any civil, criminal, administrative or investigative action, suit or
proceeding. The Amended and Restated Certificate of Incorporation also extends
indemnification to those serving at the request of Giant as directors,
officers, employees or agents of other enterprises.

In addition, Article NINTH of Giant's Certificate of Incorporation
provides that no director shall be personally liable for any breach of
fiduciary duty. Article NINTH does not eliminate a director's liability (i) for
a breach of his or her duty of loyalty to Giant or its shareholders, (ii) for
acts of intentional misconduct, (iii) under Section 174 of the Delaware General
Corporation Law for unlawful declarations of dividends or unlawful stock
purchases or redemptions, or (iv) for any transactions from which the director
derived an improper personal benefit.

Section 145 of the Delaware General Corporation Law permits a corporation
to indemnify its directors and officers against expenses (including attorney's
fees), judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties, if such directors or officers acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests
of the corporation and, with respect to any criminal action or proceeding, had
no reason to believe their conduct was unlawful. In a derivative action, i.e.,
one by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors and officers in
connectionly with respect to a matter as to which they shall have acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification shall be made
if such person shall have been adjudged liable to the corporation, unless and
only to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant officers or directors are
reasonably entitled to indemnity for such expenses despite such adjudication of
liability.

Section 102(b)(7) of the Delaware General Corporation Law provides that a
corporation may eliminate or limit the personal liability of a director to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its shareholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit. No such provision shall eliminate or limit the liability of a director
for any act or omission occurring prior to the date when such provision becomes
effective.

Item 21. Exhibits and Financial Statements
(a) Exhibits

The exhibits required by Item 601 of Regulation S-K and filed herewith are
listed in the Exhibit Index immediately preceding the exhibits.

(b) Financial Statement Schedules

All schedules are omitted as the required information is presented in the
consolidated financial statements or related notes incorporated by reference in
the Proxy Statement/Prospectus or are not applicable.

Opinion of CoView Capital, Inc. (filed as Annex V to the Proxy
Statement/Prospectus constituting part of this Registration Statement and
incorporated herein by reference).

II-1
<PAGE>

Item 22. Undertakings
(1) The undersigned registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(2) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the undersigned registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

(3) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.

(4) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and Giant
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.

(5) The undesigned registrant hereby undertakes:

(a) To file, during any period in which any offers or sales are being
made, a post-effective amendment to the registrant statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in aggregate, represent a fundamental
change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" in the effective registration statement;

(iii) To include any material information with respect to the plan or
distribution not previously disclosed in the registration statement or any
other material change to such information in the registration statement.

(b) That for the purpose of determining any liability under the Act each
such post-effective amendment may be deemed to be a new registration statement
relating to the securities being offered therein and the offering of such
securities at the time may be deemed to be the initial bona fide offering
thereof.

(c) To remove from registration by means of a post-effective amendment any
of the securities which are being registered which remain unsold at the
termination of the offering.

(6) As follows: that prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called for by the applicable
registration form with respect to reoffering by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.

II-2
<PAGE>

(7) That every prospectus (i) that is filed pursuant to paragraph (1)
immediately preceding or (ii) that purports to meet the requirements of Section
10(a)(3) of the Act and is used in connection with an offering of securities
subject to Rule 415, will be filed as part of an amendment to the registration
statement and will not be used until such amendment is effective, and that, for
purposes of determinging any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new regisration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has
duly caused this Post-effective Amendment No. 1 to Registration Statement No.
333-36783 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bath, State of Pennsylvania, on March 31, 1998.

GIANT CEMENT HOLDING, INC.

By: /s/ Gary L. Pechota
----------------------------
Gary L. Pechota
Chairman, President, Chief Executive
Officer and Director

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Gary L. Pechota and Terry L. Kinder, and each of
them, such person's true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for such persons and in such person's name,
place and stead, in any and all capacities, to sign any and all Amendments
(including pre-effective and post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the United States Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, and both of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agents, or either
of them, or his substitute or substitutes, may lawfully do or cause to be done
by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
- --------------------------- ---------------------------------------------- ---------------
/s/ Gary L. Pechota Chairman, President, Chief Executive Officer March 31, 1998
- ------------------------- and Director (principal executive officer)
Gary L. Pechota

Gary L. Pechota
/s/ Terry L. Kinder Vice President, Chief Financial Officer, March 31, 1998
- ------------------------- Secretary, Treasurer and Director
Terry L. Kinder (principal financial and accounting officer)

/s/ Dean M. Boylan Director March 31, 1998
- -------------------------
Dean M. Boylan

/s/ Edward Brodsky Director March 31, 1998
- -------------------------
Edward Brodsky

/s/ Robert L. Jones Director March 31, 1998
- -------------------------
Robert L. Jones
</TABLE>

II-4
<PAGE>

EXHIBIT INDEX

Unless otherwise indicated, exhibits are incorporated by reference to the
correspondingly numbered exhibits in the Giant Cement Holding, Inc.'s
Registration Statement on Form S-1 (Registration No. 33-78260)

<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ----------- --------
<S> <C> <C>
2.1 Agreement and Plan of Merger, dated as of September 10, 1997 as amended, by
and among Giant Cement Holding, Inc., GCHI Acquisition Corp and Solite
Corporation (filed as Annex I to the Proxy Statement/Prospectus included in this
Registration Statement)
3.1 Certificate of Incorporation
3.2 Bylaws
5.1 + Opinion of Proskauer Rose LLP regarding legality
8.1 + Opinion of Proskauer Rose LLP re tax matters
8.2 + Opinion of McGuire Woods Battle & Boothe LLP re tax matters
10.1 1994 Employee Stock Option Plan
10.2 1994 Outside Director Stock Option Plan
10.3 Form of Employment Agreement between the Company and Gary L. Pechota, as
amended
10.4 Form of Employment Agreement between the Company and Terry L. Kinder, as
amended
10.5 Loan and Security Agreement, dated November 23, 1993, between Giant and The
CIT Group/Equipment Financing, Inc.("CIT")
10.6 Secured Promissory Note, date November 23, 1993, from Giant to CIT
10.7 South Carolina Mortgage and Security Agreement, dated November 23, 1993,
between Giant and CIT
10.8 Continuing Guarantee Agreement, dated November 23, 1993, between Giant and
CIT
10.9 Collateral Value Maintenance Agreement, dated November 23,1993, between
Giant and CIT
10.10 Form of First Amendment to Loan and Security Agreement between Giant and
CIT
10.11 Form of Continuing Guaranty Agreement by the Company in favor of CIT
10.12 Form of Second Amendment to Loan and Security Agreement between Giant and
CIT
10.13 Secured Promissory Note, dated August 31, 1995, from Giant to CIT
10.14 Form of Release and Indemnification Agreement between GROUP, KCC
Delaware Company, and the Company
10.15 Tax Sharing Agreement, dated November 23, 1993, between the Company and
GROUP
</TABLE>

II-5
<PAGE>

<TABLE>
<S> <C>
10.16 Form of Tax Sharing and Indemnification Agreement between the Company and
GROUP
10.17 Credit Agreement, dated December 20, 1996, between GCHI, Giant, Keystone,
GRR, GCHI Investments and Giant NC and SouthTrust Bank of Alabama.
(incorporated by reference to Giant's Annual Report on Form 10-K for the year
ended December 31, 1996)
10.18+ Proxy Agreement
10.19+ Form of Letter of Transmittal
10.20+ Form of Instructions
21.1 List of Subsidiaries of the Registrant (incorporated by reference to Giant's
Annual Report on Form 10-K for the year ended December 31, 1996)
23.1* Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Coopers & Lybrand L.L.P.
23.3* Consent of McPhillips, Lieland & Deans, P.C.
23.4 Consent of Proskauer Rose LLP (included in exhibit 5.1)
24.1 Powers of Attorney (included in Part II of the Registration Statement)
</TABLE>

- --------
* Filed herewith.
+ Previously filed.

II-6

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Proxy
Statement/Prospectus constituting a part of this Registration Statement on Form
S-4 of our report dated February 5, 1998 except as to Note 14, for which the
date is March 23, 1998, on our audit of the consolidated financial statements
and schedule of Giant Cement Holding, Inc. ("Giant") as of December 31, 1997
and 1996, and for each of the three years in the period ended December 31,
1997. We also consent to the references to our firm under the captions
"Background Of The Spin-Off And The Merger" and "Experts" in the Proxy
Statement/Prospectus.

Charlotte, North Carolina
March 30, 1998

/s/ Coopers & Lybrand L.L.P.
------------------------------

Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the inclusion in this Proxy Statement/Prospectus
constituting a part of the registration statement on Form S-4 of our report,
which includes an explanatory paragraph related to the Company's ability to
continue as a going concern, dated August 11, 1997, except as to the
information in the second paragraph of Note 1, for which the date is September
10, 1997, and Note 6 with respect to the extensions of maturity dates, for
which the date is November 6, 1997, on our audit of the financial statements of
Solite Corporation as of March 31, 1997 and 1996, and for the years then ended.

Charlotte, North Carolina
March 30, 1998

/s/ Coopers & Lybrand L.L.P.
----------------------------------

Exhibit 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the inclusion in this Proxy Statement/Prospectus
constituting a part of the registration statement on Form S-4 of our report,
which includes an explanatory paragraph related to the Company's ability to
continue as a going concern, dated August 6, 1997, except as to the information
in Note 16, for which the date is September 10, 1997, and Note 4 with respect
to waivers and the extensions of maturity dates, for which the date is November
6, 1997, on our audit of the financial statements of Solite Corporation and
Subsidiaries as of March 31, 1997 and 1996, and for the years then ended. We
also consent to the reference to our firm under the caption "Experts" in the
Proxy Statement/Prospectus.

Norfolk, Virginia
March 20, 1998

/s/ McPhillips, Lieland & Deans, P.C.
---------------------------------------