Exhibit 10.1

 
EXECUTION COPY
 

 

 
Texas Industries, Inc.
 
and the Guarantors
 
listed on Schedule A hereto
 

 
$650,000,000
 
9¼% Senior Notes due 2020
 
Purchase Agreement
 
dated July 27, 2010
 
Banc of America Securities LLC
 
Goldman, Sachs & Co.
 
UBS Securities LLC
 
Wells Fargo Securities, LLC
 
Comerica Securities, Inc.
 
SunTrust Robinson Humphrey, Inc.
 
Capital One Southcoast, Inc.
 
U.S. Bancorp Investments, Inc.
 

 
 

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Purchase Agreement
 
July 27, 2010
 
BANC OF AMERICA SECURITIES LLC
GOLDMAN, SACHS & CO.
UBS SECURITIES LLC
WELLS FARGO SECURITIES, LLC
COMERICA SECURITIES, INC.
SUNTRUST ROBINSON HUMPHREY, INC.
CAPITAL ONE SOUTHCOAST, INC.
U.S. BANCORP INVESTMENTS, INC.
As Initial Purchasers
 
c/o BANC OF AMERICA SECURITIES LLC
One Bryant Park
New York, New York 10036
 
Ladies and Gentlemen:
 
Texas Industries Inc., a Delaware corporation (the “Company”), proposes to issue
and sell to the several Initial Purchasers named in Schedule B (the “Initial
Purchasers”), acting severally and not jointly, the respective amounts set forth
in such Schedule B of $650,000,000 aggregate principal amount of the Company’s
9¼%  Senior Notes due 2020 (the “Notes”).
 
The Notes will be issued pursuant to an indenture, dated as of the Closing Date
(as defined in Section 2) (the “Indenture”), among the Company, the Guarantors
(as defined below) and U.S. Bank National Association, as trustee (the
“Trustee”).  Notes issued in book-entry form will be issued in the name of Cede
& Co., as nominee of The Depository Trust Company (the “Depositary”) pursuant to
a DTC Agreement, to be dated on or prior to the Closing Date (the “DTC
Agreement”), among the Company and the Depositary.
 
The payment of principal of, premium and Liquidated Damages (as defined in the
Indenture), if any, and interest on the Notes and the Exchange Notes (as defined
below) will be fully and unconditionally guaranteed on a senior basis, jointly
and severally by the Guarantors listed on Schedule A hereto (collectively, the
“Guarantors”) pursuant to their guarantees (the “Guarantees”).  The Notes and
the Guarantees thereof are herein collectively referred to as the “Securities”
and the Exchange Notes and the Guarantees thereof are herein collectively
referred to as the “Exchange Securities.”
 
The holders of the Notes will be entitled to the benefits of a registration
rights agreement, to be dated as of the Closing Date (the “Registration Rights
Agreement”), among the Company, the Guarantors and the Initial Purchasers,
pursuant to which the Company and the Guarantors will agree to file, under the
circumstances set forth therein, a registration statement with the Securities
and Exchange Commission (the “Commission”) registering under the Securities Act
of 1933 (as amended, the “Securities Act,” which term, as used herein, includes
the rules and regulations of the Commission promulgated thereunder) debt
securities of the Company and the Guarantors with terms substantially identical
to the Notes (the “Exchange Notes”) and the Guarantees thereof to be offered in
exchange for the Notes and the Guarantees thereof (the “Exchange Offer”) and, to
the extent required by the Registration Rights Agreement, a shelf registration
statement relating to resales of the Notes
 
The Company understands that the Initial Purchasers propose to make an offering
of the Securities on the terms and in the manner set forth herein and in the
Pricing Disclosure Package (the first time when sales of

 
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the Securities are made is referred to as the “Time of Sale”) and the Final
Offering Memorandum (each as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein, all or a
portion of the Securities to subsequent purchasers (the “Subsequent Purchasers”)
at any time after the date of this Purchase Agreement (this “Agreement”).  The
Securities are to be offered and sold to or through the Initial Purchasers
without being registered with the Commission under the Securities Act, in
reliance upon exemptions therefrom.  The terms of the Securities and the
Indenture will require that investors that acquire Securities expressly agree
that Securities may only be resold or otherwise transferred, after the date
hereof, if such Securities are registered for sale under the Securities Act or
if an exemption from the registration requirements of the Securities Act is
available (including the exemptions afforded by Rule 144A (“Rule 144A”) or
Regulation S (“Regulation S”) thereunder).
 
The Company has prepared a preliminary offering memorandum, dated as of July 27,
2010 (the “Preliminary Offering Memorandum”) and a pricing supplement thereto
dated the date hereof and attached as Exhibit A hereto (the “Pricing
Supplement”).  The Preliminary Offering Memorandum and the Pricing Supplement
are herein referred to as the “Pricing Disclosure Package.”  Promptly after the
execution of this Agreement, the Company will prepare a final offering
memorandum dated the date hereof (the “Final Offering Memorandum”).  Unless
stated to the contrary, any references herein to the terms “Pricing Disclosure
Package” and “Final Offering Memorandum” shall be deemed to refer to and include
any information filed under the Securities Exchange Act of 1934 (as amended, the
“Exchange Act,” which term, as used herein, includes the rules and regulations
of the Commission promulgated thereunder), prior to the Time of Sale and
incorporated by reference therein, and any references herein to the terms
“amend,” “amendment” or “supplement” with respect to the Final Offering
Memorandum shall be deemed to refer to and include any information filed under
the Exchange Act subsequent to the Time of Sale that is incorporated by
reference therein.  All references in this Agreement to financial statements and
schedules and other information which is “contained,” “included” or “stated” (or
other references of like import) in the Pricing Disclosure Package (including
the Preliminary Offering Memorandum) or Final Offering Memorandum shall be
deemed to mean and include all such financial statements and schedules and other
information which are incorporated by reference in the Pricing Disclosure
Package or Final Offering Memorandum, as the case may be.
 
In connection with the offering of the Notes, the Company is offering to
purchase for cash (the “Tender Offer”) any and all of its outstanding 7 ¼%
Senior Notes due 2013 (the “Existing Notes”) and has solicited consents to
proposed amendments (the “Amendment”) to the related indenture dated July 6,
2005 by and among the Company, the Guarantors and Wells Fargo Bank, National
Association (the “Consent Solicitation” and such indenture, as amended and
supplemented through the date hereof, the “2005 Indenture”) pursuant to the
terms of an Offer to Purchase and Consent Solicitation Statement dated July 27,
2010 and the related Consent and Letter of Transmittal (together, as amended,
the “Tender Offer Documents”).  If the Amendment is approved, it will be set
forth in a third supplemental indenture (the “Supplemental Indenture”) to the
2005 Indenture.
 
The issuance and sale of the Notes and the Tender Offer and the Consent
Solicitation are collectively referred to herein as the “Transactions.”
 
Each of the Company and the Guarantors hereby confirms its agreements with the
Initial Purchasers as follows:
 
                                Section 1. Representations and Warranties.  Each
of the Company and the Guarantors hereby jointly and severally represents,
warrants and covenants to each Initial Purchaser, as of the date hereof
(including at the Time of Sale) and as of the Closing Date (references in this
Section 1 to the “Offering Memorandum” are to (x) the Pricing Disclosure Package
in the case of representations and warranties made as of the date hereof and (y)
the Final Offering Memorandum in the case of representations and warranties made
as of the Closing Date), as follows:
 
                                (a) No Registration Required.  Subject to
compliance by the Initial Purchasers with the representations and warranties set
forth in Section 2 hereof and with the procedures set forth in Section 7 hereof,
it is not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers and to each Subsequent Purchaser in the
manner contemplated by this Agreement and the Offering Memorandum to register
the Securities under the Securities Act or, until such time as the Exchange
Securities are issued pursuant to an effective registration statement, to
qualify the Indenture under the Trust Indenture Act of 1939 (the “Trust
Indenture Act,” which term, as used herein, includes the rules and regulations
of the Commission promulgated thereunder).

 
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               (b) No Integration of Offerings or General Solicitation.  Neither
the Company nor any Guarantor has, directly or indirectly, solicited any offer
to buy or offered to sell, and will not, directly or indirectly, solicit any
offer to buy or offer to sell, in the United States or to any United States
citizen or resident, any security which is or would be integrated with the sale
of the Securities in a manner that would require the Securities to be registered
under the Securities Act.  None of the Company, the Guarantors, their respective
affiliates (as such term is defined in Rule 501(b) under the Securities Act
(each, an “Affiliate”)), or any person acting on its or any of their behalf
(other than the Initial Purchasers, as to whom neither the Company nor the
Guarantors makes any representation or warranty) has engaged or will engage, in
connection with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502(c) under the
Securities Act.  With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Company, the Guarantors, their respective
Affiliates or any person acting on their behalf (other than the Initial
Purchasers, as to whom neither the Company nor any Guarantor makes any
representation or warranty) has engaged or will engage in any directed selling
efforts within the meaning of Regulation S and (ii) each of the Company and the
Guarantors and their respective Affiliates and any person acting on their behalf
(other than the Initial Purchasers, as to whom neither the Company nor any
Guarantor makes any representation or warranty) has complied and will comply
with the offering restrictions set forth in Regulation S.
 
                                 (c) Eligibility for Resale under
Rule 144A.  The Securities are eligible for resale pursuant to Rule 144A and
will not be, at the Closing Date, of the same class as securities listed on a
national securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated interdealer quotation system.
 
                                (d) Pricing Disclosure Package and Offering
Memorandum.  Neither the Pricing Disclosure Package, as of the Time of Sale or
as of the Closing Date, nor the Final Offering Memorandum, as of its date or (as
amended or supplemented in accordance with Section 3(a), if applicable) as of
the Closing Date, contains or will contain or represents or will represent any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that this
representation, warranty and agreement shall not apply to statements in or
omissions from the Pricing Disclosure Package, the Final Offering Memorandum or
any amendment or supplement thereto made in reliance upon and in conformity with
information furnished to the Company in writing by any Initial Purchaser through
Banc of America Securities LLC expressly for use in the Pricing Disclosure
Package, the Final Offering Memorandum or amendment or supplement thereto, as
the case may be.  Each of the Pricing Disclosure Package and the Final Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A.  No order preventing the use of the
Preliminary Offering Memorandum, the Pricing Supplement or the Final Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act, has been issued or, to the
knowledge of the Company, has been threatened.
 
                                (e) Other Written Communications.  The Company
(including its agents and representatives, other than the Initial Purchasers in
their capacity as such) has not prepared, made, used, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or refer to any
written communication that constitutes an offer to sell or solicitation of an
offer to buy the Securities (each such communication by the Company or its
agents and representatives an “Issuer Written Communication”) other than (i) the
Pricing Disclosure Package, (ii) the Final Offering Memorandum, (iii) the
documents listed on Annex A hereto and (iv) any electronic road show.  Each such
Issuer Written Communication, when taken together with the Pricing Disclosure
Package, did not at the Time of Sale, and will not at the Closing Date, contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and each Issuer Written
Communication does not conflict with the information contained in the Pricing
Disclosure Package or the Final Offering Memorandum.
 
The documents incorporated by reference in the Offering Memorandum at the time
they were or hereafter are filed with the Commission complied and will comply in
all material respects with the requirements of the Exchange Act.

 
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(f) The Purchase Agreement.  This Agreement has been duly authorized, executed
and delivered by, and is a valid and binding agreement of, the Company and each
Guarantor, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
 
                                (g) The Registration Rights Agreement.  At the
Closing Date, the Registration Rights Agreement will have been duly authorized,
executed and delivered by, and will be a valid and binding agreement of, the
Company and each of the Guarantors, enforceable against the Company and each
Guarantor in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general
equitable principles and except as rights to indemnification thereunder may be
limited by applicable law.
 
                                (h) The DTC Agreement.  At the Closing Date, the
DTC Agreement will have been duly authorized, executed and delivered by the
Company, and, assuming the due authorization, execution and delivery thereof by
the other parties thereto, will be a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
 
                                (i) Authorization of the Securities and the
Exchange Securities.  (i) The Notes to be purchased by the Initial Purchasers
from the Company are in the form contemplated by the Indenture, have been duly
authorized for issuance and sale pursuant to this Agreement and the Indenture,
at the Closing Date will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor, will constitute valid and binding
agreements of the Company, enforceable in accordance with their terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles and will be
entitled to the benefits of the Indenture.  (ii) The Exchange Notes have been
duly and validly authorized for issuance by the Company and, when issued and
authenticated in accordance with the terms of the Indenture, the Registration
Rights Agreement and the Exchange Offer, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or affecting
enforcement of the rights and remedies of creditors or by general principles of
equity and will be entitled to the benefits of the Indenture.
 
                                (j) Authorization of the Indenture.  The
Indenture (including the Guarantees contemplated thereunder) has been duly
authorized by the Company and each of the Guarantors and, at the Closing Date,
will have been duly executed and delivered by the Company and each of the
Guarantors and will constitute a valid and binding agreement of the Company and
each of the Guarantors, enforceable against the Company and each of the
Guarantors in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
 
(k) Authorization of the Tender Offer and the Consent Solicitation.  The Company
shall consummate the Tender Offer and the Consent Solicitation in accordance
with their applicable terms and shall take on a timely basis all material
actions necessary or required in relation thereto.  The Company has taken all
necessary corporate action to authorize the Tender Offer and the Consent
Solicitation.  As of the date on which the Tender Offer and the Consent
Solicitation are consummated (assuming receipt by the Company of the requisite
consents pursuant to the Consent Solicitation), the Company will have all
necessary corporate power and authority to perform all of its obligations
contemplated under the Tender Offer Documents and to execute the Supplemental
Indenture in connection with the Existing Notes.
 
                                (l) Description of the Securities and the
Indenture.  The Notes, the Exchange Notes and the Indenture will conform in all
material respects to the respective statements relating thereto contained in the
Offering Memorandum.  The Exchange Notes will conform in all material respects
to the respective statements

 
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relating thereto contained in the Offering Memorandum and the Registration
Statement at the time such Registration Statement becomes effective.
 
                                (m) No Material Adverse Change.  Except as
otherwise disclosed in the Offering Memorandum, subsequent to the respective
dates as of which information is given in the Offering Memorandum:  (i) there
has been no material adverse change, or any development that could reasonably be
expected to result in such a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of business, of
the Company and its subsidiaries, considered as one entity, or the Guarantors,
considered as one entity (any such change is called a “Material Adverse
Change”); (ii) neither the Company and its subsidiaries, considered as one
entity, nor the Guarantors, considered as one entity, have incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not in
the ordinary course of business; and (iii) except as disclosed in the Offering
Memorandum and except for the regular quarterly dividends on the Common Stock in
amounts per share that are consistent with past practice, there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
 
                                (n) Independent Accountants.  Ernst & Young LLP,
who have expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) and internal
control over financial reporting of the Company and its subsidiaries filed with
the Commission and incorporated by reference in the Offering Memorandum is an
independent registered public accounting firm within the meaning of Regulation
S-X under the Securities Act and the Exchange Act.
 
                                (o) Preparation of the Financial
Statements.  The financial statements, together with the related notes,
incorporated by reference in the Offering Memorandum present fairly the
consolidated financial position of the Company and its subsidiaries as of and at
the dates indicated and the results of their operations and cash flows for the
periods specified.  Such financial statements have been prepared in conformity
with generally accepted accounting principles, as applied in the United States,
applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto.  The financial data set forth in
the Offering Memorandum under the caption “Summary–Summary Historical
Consolidated Financial and Other Data” fairly present the information set forth
therein on a basis consistent with that of the financial statements contained in
the Offering Memorandum.
 
                                (p) Incorporation and Good Standing of the
Company and its Subsidiaries.  Each of the Company and its subsidiaries has been
duly incorporated or organized, as applicable, and is validly existing as a
corporation, trust, limited liability company, limited partnership or general
partnership in good standing under the laws of the jurisdiction of its
incorporation or organization and has corporate, trust, limited liability
company, or partnership power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum
and, in the case of the Company and each of the Guarantors, to enter into and
perform its obligations, as applicable, under each of this Agreement, the
Registration Rights Agreement, the DTC Agreement, the Securities, the Exchange
Securities and the Indenture.  The Company and each subsidiary is duly qualified
as a foreign corporation, trust, limited liability company, limited partnership,
or general partnership, as applicable, to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material
Adverse Change.  The only jurisdictions in which the Company and its
subsidiaries are required to be so qualified are set forth in Schedule C
hereto.  All of the issued and outstanding capital stock or partnership or other
ownership interest of each subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and, except as disclosed in the Offering
Memorandum, is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance or claim.
 
                                (q) Capitalization and Other Capital Stock
Matters.  As of May 31, 2010 on a consolidated basis, after giving pro forma
effect to the Transactions, the Company would have an outstanding capitalization
as set forth in the Offering Memorandum under the caption “Capitalization”
(other than for subsequent issuances of capital stock, if any, pursuant to
employee benefit plans).  All of the outstanding shares of capital stock of the

 
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Company have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and state
securities laws.  None of the outstanding shares of capital stock of the Company
were issued in violation of any preemptive rights, rights of first refusal or
other similar rights to subscribe for or purchase securities of the Company.
 
                                (r) Stock Exchange Listing.  The Common Stock of
the Company is registered pursuant to Section 12(b) of the Exchange Act and is
listed on the New York Stock Exchange (the “NYSE”), and the Company has taken no
action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the NYSE, nor has the Company received any notification that the
Commission or the NYSE is contemplating terminating such registration or
listing.
 
                                (s) Non-Contravention of Existing Instruments;
No Further Authorizations or Approvals Required.  Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or in default (or,
with the giving of notice or lapse of time or both, would be in default)
(“Default”) under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject (each, an “Existing Instrument”), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change.  The
Company’s and each Guarantors’ execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the Indenture, the issuance and
delivery of the Securities and the Exchange Securities, the Company’s execution,
delivery and performance of the DTC Agreement, and consummation of the Tender
Offer and the Consent Solicitation in accordance with their terms (i) have been
duly authorized by all necessary corporate, trust, limited liability company or
partnership action of the Company and the Guarantors and will not result in any
violation of the provisions of the charter or by-laws, trust agreement,
operating agreement or partnership agreement of the Company or any subsidiary,
(ii) assuming receipt by the Company of requisite consents pursuant to the
Consent Solicitation and effectiveness of the Amendment, will not conflict with
or constitute a breach of, or constitute a Default or a Debt Repayment
Triggering Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, or require the consent of any
other party to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and such consents as have been
obtained and are in full force and effect and (iii) will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any subsidiary.  No consent, approval,
authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency, is required for the
Company’s or any Guarantor’s, as applicable, execution, delivery and performance
of this Agreement, the Registration Rights Agreement, the DTC Agreement or the
Indenture, or the issuance and delivery of the Securities or the Exchange
Securities, or consummation of the Tender Offer and the Consent Solicitation,
except such as have been obtained or made by the Company or such Guarantors and
are in full force and effect and except such as may be required by federal and
state securities laws with respect to the filing and effectiveness of the
applicable registration statement under the Securities Act and qualification of
the Indenture under the Trust Indenture Act in connection with the Registration
Rights Agreement.  As used herein, a “Debt Repayment Triggering Event” means any
event or condition which gives, or with the giving of notice or lapse of time
would give, the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.  The Existing Instruments listed in
Schedule D hereto (the “Material Existing Instruments”) are the only agreements
that are material to the Company and its subsidiaries taken as a whole.
 
                                (t) No Material Actions or Proceedings.  Except
as otherwise disclosed in the Offering Memorandum, there are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company’s and the Guarantors’ knowledge, threatened (i) against or affecting the
Company or any of its subsidiaries, or (ii) which has as the subject thereof any
property owned or leased by, the Company or any of its subsidiaries, where in
any such case (A) there is a reasonable possibility that such action, suit or
proceeding would be determined adversely to the Company or such subsidiary and
(B) any such action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or adversely
affect the consummation of the Transactions.  No material labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the best of
the Company’s and the Guarantors’ knowledge, is threatened or imminent.
 
(
 
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                                (u) Intellectual Property Rights.  The Company
and its subsidiaries own or possess sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, “Intellectual Property Rights”) reasonably necessary to conduct
their businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not reasonably be expected to result in a
Material Adverse Change.  Neither the Company nor any of its subsidiaries has
received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would reasonably be expected to result in a Material
Adverse Change.
  
                                (v) All Necessary Permits, etc.  The Company and
each subsidiary possess such valid and current certificates, authorizations or
permits issued by the appropriate local, state, federal or foreign regulatory
agencies or bodies necessary to conduct their respective businesses, each such
certificate, authorization and permit being in full force and effect, and the
Company and each subsidiary is in compliance with the terms of each such
certificate, authorization and permit, except where the failure to so possess or
comply would not, individually or in the aggregate, result in a Material Adverse
Change.  Except as disclosed in the Offering Memorandum, neither the Company nor
any subsidiary has received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Change.
 
                                (w) Title to Properties.  The Company and each
of its subsidiaries has good and marketable title to all the properties and
assets reflected as owned in the financial statements referred to in
Section 1(o) above (or elsewhere in the Offering Memorandum), in each case free
and clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except such as do not materially and adversely affect
the value of such property and do not materially interfere with the use made or
proposed to be made of such property by the Company or such subsidiary or as
disclosed in the Offering Memorandum.  The real property, improvements,
equipment and personal property held under lease by the Company or any
subsidiary are held under valid and enforceable leases, with such exceptions as
are not material and do not materially interfere with the use made or proposed
to be made of such real property, improvements, equipment or personal property
by the Company or such subsidiary.
 
                                (x) Tax Law Compliance.  The Company and its
consolidated subsidiaries have filed all necessary material federal, state and
foreign income and franchise tax returns and have paid all material taxes
required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them, except for such
taxes that are contested in good faith by proper proceedings.  The Company has
made adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(o) above in respect of all federal, state
and foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its consolidated subsidiaries has not been
finally determined.
 
                                (y) Company Not an “Investment Company”.  The
Company is not, and after giving effect to the Transactions, will not be, an
“investment company” within the meaning of Investment Company Act of 1940, as
amended (the “Investment Company Act”) and will conduct its business in a manner
so that it will not become subject to the Investment Company Act.

                                (z) Insurance.  Except as otherwise disclosed in
the Offering Memorandum, each of the Company and its subsidiaries are insured by
recognized, financially sound institutions with coverage in such amounts and
with such deductibles and covering such risks as are generally deemed prudent
and customary for their businesses including, but not limited to, policies
covering real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes.  The Company has no reason to believe that it or any subsidiary
will not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Change.  Neither the
Company nor any subsidiary has been denied any insurance coverage that it has
sought or for which it has applied.
 
                                (aa) No Price Stabilization or
Manipulation.  Neither the Company nor any Guarantor has taken or will take,
directly or indirectly, any action designed to or that might be reasonably
expected to cause or result in
 
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stabilization or manipulation of the price of any security of the Company to
facilitate the consummation of the Transactions.
 
                                (bb) Solvency.  Each of the Company and the
Guarantors is, and as of the Closing Date will be, Solvent.  As used herein, the
term “Solvent” means, with respect to the Company and each Guarantor on a
particular date, that on such date (i) the fair market value of its assets
(including rights to contribution and reimbursement) is greater than the total
amount of its liabilities (including contingent liabilities), (ii) the present
fair salable value of its assets is greater than the amount that will be
required to pay its probable liabilities on its debts as they become absolute
and matured, (iii) it is then able to realize upon its assets and pay its debts
and other liabilities, including contingent obligations, as they mature, (iv) it
does not have unreasonably small capital to carry on its business as conducted
and as proposed to be conducted and (v) it does not intend to, and does not
believe that it will, incur debts and liabilities beyond its ability to pay as
such debts and liabilities mature.
 
                                (cc) Disclosure Controls and Procedures.  The
Company has established and maintains disclosure controls and procedures (as
such term is defined in Rules 13a-15 and 15d-14 under the Exchange Act); such
disclosure controls and procedures are designed to ensure that material
information relating to the Company and its subsidiaries is made known to the
chief executive officer and chief financial officer of the Company by others
within the Company or any of its subsidiaries, and such disclosure controls and
procedures are reasonably effective to perform the functions for which they were
established subject to the limitations of any such control system.
 
                                (dd) Company’s Accounting System.  The Company
maintains a system of accounting controls sufficient to provide reasonable
assurances that: (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles, as applied in the United States, and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.  Except as otherwise disclosed in the Offering Memorandum, the
Company is not aware, and the Company’s auditors have not brought to the
Company’s attention:  (i) any currently existing significant deficiencies or
material weaknesses in the design or operation of internal controls which could
adversely affect the Company’s ability to record, process, summarize, and report
financial data; or (ii) any fraud, whether or not material, that involves
management or other employees who have a role in the Company’s internal
controls.
 
                                (ee) Sarbanes-Oxley.  There is and has been no
failure on the part of the Company and any of the Company’s directors or
officers, in their capacities as such, to comply in any material respect with
any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”), including
Section 402 related to loans and Sections 302 and 906 related to certifications.
 
                                (ff) Compliance with Environmental Laws.  Except
as otherwise disclosed in the Offering Memorandum or would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Change
(i) neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, “Materials of Environmental Concern”), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern
(collectively, “Environmental Laws”), which violation includes, but is not
limited to, noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its subsidiaries
under applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries received any
written communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Company or any of its subsidiaries
is in violation of any Environmental Law; (ii) there is no claim, action or
cause of action filed with a court or governmental authority of which the
Company has been served, notified or otherwise made aware, no investigation with
respect to which the Company or any of its subsidiaries has received written
notice, and no written notice by any person or entity alleging

 
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potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal injuries,
attorneys’ fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental
Concern at any location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, “Environmental Claims”), pending
or, to the best of the Company’s or any Guarantor’s knowledge, threatened
against the Company or any of its subsidiaries or any person or entity whose
liability for any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law; and (iii) to
the best of the Company’s and each Guarantor’s knowledge, there are no past or
present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably could result
in a violation of any Environmental Law or form the basis of an Environmental
Claim against the Company or any of its subsidiaries or against any person or
entity whose liability for any Environmental Claim the Company or any of its
subsidiaries has retained or assumed either contractually or by operation of
law.
 
                                (gg) Periodic Review of Costs of Environmental
Compliance.  In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties).  On the basis of such review and the amount of
its established reserves, the Company has reasonably concluded that, except as
described in the Offering Memorandum, such associated costs and liabilities
would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Change.
 
                                (hh) ERISA Compliance.  The Company and its
subsidiaries and any “employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, “ERISA”)) established or
maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as
defined below) are in compliance in all material respects with the applicable
provisions of ERISA, or if not in material compliance would not result in a
Material Adverse Change.  “ERISA Affiliate” means, with respect to the Company
or a subsidiary, any member of any group of organizations described in Sections
414(b), (c), (m) or (o) of the Code of which the Company or such subsidiary is a
member.  No “reportable event” (as defined under ERISA) for which notice
requirements have not been waived has occurred or is reasonably expected to
occur with respect to any “employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates and which is
covered by Title IV of ERISA, except for such reportable events which would not,
individually or in the aggregate, result in a Material Adverse Change.  No
“employee benefit plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan”
were terminated as of the most recent annual valuation date for such plan, would
have an “amount of unfunded benefit liabilities” (as defined under ERISA) that
would result in a Material Adverse Change.  None of the Company, its
subsidiaries or any of their ERISA Affiliates has incurred or reasonably expects
to incur any material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections
4971, 4975 or 4980B(a) of the Code.  Each “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates
that is intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification.
 
                                (ii) Compliance with Regulation S.  The Company,
the Guarantors and their respective affiliates and all persons acting on their
behalf (other than the Initial Purchasers, as to whom the Company and the
Guarantors make no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with the
offering of the Securities outside the United States and, in connection
therewith, the Offering Memorandum will contain the disclosure required by
Rule 902(g)(2) of the Securities Act.
 
                                (jj) Compliance with Securities Laws.  Each of
the Tender Offer Documents complies and (as amended or supplemented, if amended
or supplemented) will comply in all material respects with all applicable
requirements of the Securities Act and the Exchange Act; and the documents
incorporated or deemed to be incorporated by reference into each of the Tender
Offer Documents complied, as of the date of filing with the
 
 
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Commission, in all material respects with all applicable requirements of the
Securities Act and the Exchange Act; and each of the Tender Offer Documents
(including the documents incorporated or deemed to be incorporated by reference
therein) do not and (as amended or supplemented, if amended or supplemented)
will 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 the light of
the circumstances under which they were made, not misleading.
 
                                (kk) Reporting Issuer.  The Company is a
“reporting issuer,” as defined in Rule 902 under the Securities Act.
 
                                (ll) No Unlawful Contributions or Other
Payments. Neither the Company nor any of its subsidiaries nor, to the best of
the Company’s knowledge, any employee or agent of the Company or any subsidiary,
has made any contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any law or of the character
necessary to be disclosed in the Offering Memorandum in order to make the
statements therein not misleading.
 
                                (mm) No Conflict with Money Laundering
Laws.  The operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all applicable jurisdictions,
the rules and regulations thereunder and any related or similar rules,
regulations or guidelines issued, administered or enforced by any governmental
agency (collectively, the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries with respect to
the Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
 
                                (nn) No Conflict with OFAC Laws.  Neither the
Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
 
Any certificate signed by an officer of the Company or any Guarantor and
delivered to the Initial Purchasers or to counsel for the Initial Purchasers on
the Closing Date shall be deemed to be a representation and warranty by the
Company or such Guarantor to each Initial Purchaser as to the matters set forth
therein.
 
 Section 2. Purchase, Sale and Delivery of the Securities.
 
(a) The Securities.  The Company and the Guarantors agree to issue and sell to
the several Initial Purchasers, severally and not jointly, all of the Securities
upon the terms herein set forth.  On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Initial Purchasers agree, severally and not
jointly, to purchase from the Company the aggregate principal amount of
Securities set forth opposite their names on Schedule B, at a purchase price of
98.25% of the principal amount thereof, payable on the Closing Date.
 
(b) The Closing Date.  Delivery of certificates for the Securities in definitive
form to be purchased by the Initial Purchasers and payment therefor shall be
made at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York,
New York 10022 (or such other place as may be agreed to by the Company and the
Initial Purchasers) at 9:00 a.m., New York City time, on August 10, 2010, or
such other time and date as Banc of America Securities LLC shall designate by
notice to the Company (the time and date of such closing are called the “Closing
Date”).  The Company hereby acknowledges that circumstances under which Banc of
America Securities LLC may provide notice to postpone the Closing Date as
originally scheduled include, but are in no way limited to, any determination by
the Company or Banc of America Securities LLC to recirculate to investors copies
of an amended or supplemented Offering Memorandum or a delay as contemplated by
the provisions of Section 16 hereof.
 
 
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(c) Delivery of the Securities.  The Company shall deliver, or cause to be
delivered, to Banc of America Securities LLC for the accounts of the several
Initial Purchasers certificates for the Securities at the Closing Date against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor.  The certificates for the Securities
shall be in such denominations and registered in the name of Cede & Co., as
nominee of the Depositary, pursuant to the DTC Agreement, and shall be made
available for inspection on the business day preceding the Closing Date at a
location in New York City, as the Initial Purchasers may designate.  Time shall
be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Initial Purchasers.
 
(d) Delivery of Final Offering Memorandum to the Initial Purchasers.  As
promptly as practicable following the execution and delivery of this Agreement
and in any event not later than 12:00 p.m., New York City time, on the second
business day following the date hereof, the Company shall prepare and deliver to
the Initial Purchasers the Final Offering Memorandum, which shall consist of the
Preliminary Offering Memorandum as modified only by the information contained in
the Pricing Supplement.
 
(e) Initial Purchasers as Qualified Institutional Buyers.  Each Initial
Purchaser severally and not jointly represents and warrants to, and agrees with,
the Company that it is a “qualified institutional buyer” within the meaning of
Rule 144A (a “Qualified Institutional Buyer”) and an “accredited investor”
within the meaning of Rule 501(a) under the Securities Act (an “Accredited
Investor”).
 
 Section 3. Additional Covenants.  Each of the Company and the Guarantors,
jointly and severally, further covenants and agrees with each Initial Purchaser,
as follows:
 
(a) Initial Purchasers’ Review of Proposed Amendments and Supplements.  Prior to
amending or supplementing the Preliminary Offering Memorandum or the Pricing
Supplement, or the Final Offering Memorandum prior to the Closing Date, the
Company shall furnish to the Initial Purchasers for review a copy of each such
proposed amendment or supplement, and the Company shall not use any such
proposed amendment or supplement to which the Initial Purchasers reasonably
object.
 
(b) Amendments and Supplements to the Offering Memorandum and Other Securities
Act Matters.  If, prior to the later of (x) the Closing Date and (y) completion
of the placement of the Securities by the Initial Purchasers with the Subsequent
Purchasers, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Final Offering Memorandum, as then amended
or supplemented, in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading, or if in the opinion of
the Initial Purchasers or counsel for the Initial Purchasers it is otherwise
necessary to amend or supplement the Final Offering Memorandum to comply with
law, the Company agrees to promptly prepare (subject to Section 3(a) hereof),
and furnish at its own expense to the Initial Purchasers, amendments or
supplements to the Final Offering Memorandum so that the statements in the Final
Offering Memorandum, as so amended or supplemented, will not, in the light of
the circumstances at the Closing Date and at the time of sale of Securities, be
misleading or so that the Final Offering Memorandum, as amended or supplemented,
will comply with applicable law.

 Following the consummation of the Exchange Offer or the effectiveness of an
applicable shelf registration statement and for so long as the Securities are
outstanding if, in the reasonable judgment of the Initial Purchasers, the
Initial Purchasers or any of their affiliates (as such term is defined in the
rules and regulations under the Securities Act) are required to deliver a
prospectus in connection with sales of, or market-making activities with respect
to, such securities, each of the Company and the Guarantors agree (A) to
periodically amend the applicable registration statement so that the information
contained therein complies with the requirements of Section 10(a) of the
Securities Act, (B) to amend the applicable registration statement or supplement
the related prospectus or the documents incorporated therein when necessary to
reflect any material changes in the information provided therein so that the
registration statement and the prospectus will 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 the light of the circumstances existing as of the
date the prospectus is so delivered, not misleading and  to provide the Initial
Purchasers with copies of each amendment or supplement filed and (C) to provide
the Initial Purchasers with such other documents as the Initial Purchasers may
reasonably request.
 
 
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 The Company and the Guarantors hereby expressly acknowledge that the
indemnification and contribution provisions of Sections 8 and 9 hereof are
specifically applicable and relate to each offering memorandum, registration
statement, prospectus, amendment or supplement referred to in this Section 3(b).
 
(c) Copies of the Offering Documents.  The Company agrees to furnish the Initial
Purchasers, without charge, as many copies of the Preliminary Offering
Memorandum, the Pricing Supplement, any Issuer Written Communication and the
Final Offering Memorandum, and any amendments or supplements thereto, as they
shall have reasonably requested; provided that such requests are made prior to
the original printing of such requested document.
 
(d) Blue Sky Compliance.  The Company and the Guarantors shall cooperate with
the Initial Purchasers and counsel for the Initial Purchasers to qualify or
register the Securities for sale under (or obtain exemptions from the
application of) the Blue Sky or state securities laws of those jurisdictions
designated by the Initial Purchasers, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as
required for the distribution of the Securities.  The Company and the Guarantors
shall not be required to qualify as a foreign corporation or to take any action
that would subject it to general service of process in any such jurisdiction
where it is not presently qualified or where it would be subject to taxation as
a foreign corporation.  The Company and the Guarantors will advise the Initial
Purchasers promptly of the suspension of the qualification or registration of
(or any such exemption relating to) the Securities for offering, sale or trading
in any jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company and the Guarantors shall
use their reasonable best efforts to obtain the withdrawal thereof as soon as
possible.
 
(e) Use of Proceeds.  The Company shall apply the net proceeds from the sale of
the Securities sold by it in the manner described under the caption “Use of
Proceeds” in the Pricing Disclosure Package.
 
(f) The Depositary.  The Company will cooperate with the Initial Purchasers and
use its best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of the Depositary.
 
(g) Additional Issuer Information.  Prior to the completion of the placement of
the Securities by the Initial Purchasers with the Subsequent Purchasers, the
Company shall file, on a timely basis, with the Commission and the NYSE all
reports and documents required to be filed under Section 13 or 15(d) of the
Exchange Act.  Additionally, at any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, for the benefit of holders and
beneficial owners from time to time of Securities, the Company shall furnish, at
its expense, upon request, to holders and beneficial owners of Securities and
prospective purchasers of Securities information (“Additional Issuer
Information”) satisfying the requirements of subsection (d)(4) of Rule 144A.
 
(h) Agreement Not To Offer or Sell Additional Securities.  During the period of
180 days following the date of the Final Offering Memorandum, the Company will
not, without the prior written consent of Banc of America Securities LLC (which
consent may be withheld at the sole discretion of Banc of America Securities
LLC), directly or indirectly, issue, sell, offer to sell, contract or grant any
option to sell, pledge, transfer or establish an open “put equivalent position”
within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of
or transfer, or announce the offering of, or file any registration statement
under the Securities Act in respect of, any debt securities of the Company or
securities exchangeable for or convertible into debt securities of the Company
(other than as contemplated by this Agreement and, if applicable, to register
the Exchange Securities).
 
(i) Future Reports to the Initial Purchasers.  For so long as any Securities or
Exchange Securities remain outstanding, the Company, upon request, will furnish
to Banc of America Securities LLC (i) as soon as reasonably practicable after
the end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such fiscal year
and statements of income, stockholders’ equity and cash flows for the year then
ended and the opinion thereon of the Company’s independent registered public
accounting firm; (ii) as soon as reasonably practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the NYSE or any securities exchange; and (iii) as
soon as
 
 
 
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available, copies of any report or communication of the Company mailed generally
to holders of its capital stock or debt securities (including the holders of the
Securities).
 
(j) No Integration.  The Company agrees that it will not and will cause its
Affiliates not to make any offer or sale of securities of the Company of any
class if, as a result of the doctrine of “integration” referred to in Rule 502
under the Securities Act, such offer or sale would render invalid (for the
purpose of (i) the sale of the Securities by the Company to the Initial
Purchasers, (ii) the resale of the Securities by the Initial Purchasers to
Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent
Purchasers to others) the exemption from the registration requirements of the
Securities Act provided by Section 4(2) thereof or by Rule 144A or by
Regulation S thereunder or otherwise.
 
(k) Legended Securities.  Each certificate for a Security will bear the legend
contained in “Notice to Investors” in the Offering Memorandum for the time
period and upon the other terms stated in the Offering Memorandum.
 
(l) Rating of Securities.  The Company shall take all reasonable action
necessary to enable Standard & Poor’s Ratings Services, a Standard & Poor’s
Financial Services LLC business (“S&P”), and Moody’s Investor Services, Inc.
(“Moody’s”) to provide their respective credit ratings to the Securities at or
prior to the time of their initial issuance.
 
(m) Distribution of Offering Documents.  The Company will not, and will not
permit any of its Affiliates or anyone acting on its or its Affiliates’ behalf
to (other than the Initial Purchasers and their affiliates), distribute prior to
the Closing Date any offering material in connection with the offer and sale of
the Securities other than the Preliminary Offering Memorandum, the Pricing
Supplement, any electronic roadshow and the Final Offering Memorandum.  Before
making, using, authorizing, approving or referring to any Issuer Written
Communication, the Company will furnish to Banc of America Securities LLC and
counsel for the Initial Purchasers a copy of such written communication for
review and will not make, use, authorize, approve or refer to any such written
communication to which Banc of America Securities LLC reasonably objects.
 
 Banc of America Securities LLC, on behalf of the several Initial Purchasers,
may, in its sole discretion, waive in writing the performance by the Company or
any Guarantor of any one or more of the foregoing covenants or extend the time
for their performance.
 
 Section 4. Payment of Expenses.  Each of the Company and the Guarantors jointly
and severally agrees to pay all costs, fees and expenses incurred in connection
with the performance of its obligations hereunder and in connection with the
Transactions (except as otherwise agreed in writing between the Company and any
Initial Purchaser), including without limitation (i) all expenses incident to
the issuance and delivery of the Securities (including all printing and
engraving costs), (ii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Securities to the Initial
Purchasers, (iii) all fees and expenses of the Company’s and the Guarantors’
counsel, independent registered public accounting firm and other advisors, (iv)
all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of each Preliminary Offering Memorandum and
the Offering Memorandum (including financial statements and exhibits), and all
amendments and supplements thereto, this Agreement, the Registration Rights
Agreement, the Indenture, the  DTC Agreement and the Securities, (v) all filing
fees, attorneys’ fees and expenses incurred by the Company, the Guarantors or
the Initial Purchasers in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Securities for offer and sale under the Blue Sky laws and, if requested
by the Initial Purchasers, preparing and printing a “Blue Sky Survey” or
memorandum, and any supplements thereto, advising the Initial Purchasers of such
qualifications, registrations and exemptions, (vi) the fees and expenses of the
Trustee, including the reasonable fees and disbursements of counsel for the
Trustee in connection with the Indenture, the Securities and the Exchange
Securities, (vii) any fees payable in connection with the rating of the
Securities or  the Exchange Securities with the ratings agencies, (viii) any
filing fees incident to, and any reasonable fees and disbursements of counsel to
the Initial Purchasers in connection with the review by the Financial Industry
Regulatory Authority, Inc. (“FINRA”), if any, of the terms of the sale of the
Securities or the Exchange Securities, (ix) all fees and expenses (including
reasonable fees and expenses of counsel) of the Company and the Guarantors in
connection with approval of the Securities by DTC for “book-entry” transfer, and
(x) the performance by the Company and the Guarantors of their respective other
obligations under this Agreement.  Except

 
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as provided in this Section 4, Section 6, Section 8, Section 9, and Section 10
hereof (or as otherwise agreed in writing between the Company and any Initial
Purchaser), the Initial Purchasers shall pay their own expenses, including the
fees and disbursements of their counsel.
 
 Section 5. Conditions of the Obligations of the Initial Purchasers.
 
The obligations of the several Initial Purchasers to purchase and pay for the
Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Guarantors set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and to the timely performance by the Company
and each Guarantor of its covenants and other obligations hereunder, and to each
of the following additional conditions:
 
(a) Accountants’ Comfort Letter.  On the date hereof, the Initial Purchasers
shall have received from Ernst & Young LLP, an independent registered public
accounting firm for the Company, a letter dated the date hereof addressed to the
Initial Purchasers, in form and substance satisfactory to the Initial
Purchasers, containing statements and information of the type ordinarily
included in accountant’s “comfort letters” to Initial Purchasers, delivered
according to Statement of Auditing Standards Nos. 72 and 76 (or any successor
bulletins), with respect to the audited and unaudited financial statements and
certain financial information contained in the Preliminary Offering Memorandum
and the Pricing Supplement.
 
(b) No Material Adverse Change or Ratings Agency Change.  For the period from
and after the date of this Agreement and prior to the Closing Date:
 
(1) in the judgment of the Initial Purchasers there shall not have occurred any
Material Adverse Change; and
 
(2) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded any securities of the Company or any of its subsidiaries by
any “nationally recognized statistical rating organization” as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act.
 
(c) Opinion of Outside Counsel for the Company and the Guarantors.  On the
Closing Date the Initial Purchasers shall have received the favorable opinion of
Thompson & Knight LLP, counsel for the Company and the Guarantors, dated as of
such Closing Date, in form and substance satisfactory to the Initial Purchasers.
 
(d) Opinion of General Counsel for the Company.  On the Closing Date the Initial
Purchasers shall have received the favorable opinion of Frederick G. Anderson,
General Counsel for the Company, dated as of such Closing Date, in form and
substance satisfactory to the Initial Purchasers.
 
                                 (e) Opinion of Counsel for the Initial
Purchasers.  On the Closing Date the Initial Purchasers shall have received the
favorable opinion of Shearman & Sterling LLP, counsel for the Initial
Purchasers, dated as of such Closing Date, with respect to such matters as may
be reasonably requested by the Initial Purchasers.
 
(f) Officers’ Certificate.  On the Closing Date the Initial Purchasers shall
have received a written certificate executed by the Chairman of the Board, Chief
Executive Officer, President or Treasurer of the Company and the Chairman of the
Board, Chief Executive Officer, President or Vice President of each of the
Guarantors and the Chief Financial Officer or Chief Accounting Officer of the
Company and the Chief Financial Officer or chief accounting officer of each of
the Guarantors, dated as of the Closing Date, to the effect set forth in
subsection (b)(2) of this Section 5, and further to the effect that:
 
(1) for the period from and after the date of this Agreement and prior to the
Closing Date there has not occurred, to the best of their knowledge, any
Material Adverse Change;

 
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(2) the representations, warranties and covenants of the Company or such
Guarantor set forth in Section 1 of this Agreement are true and correct with the
same force and effect as though expressly made on and as of the Closing Date;
and
 
(3) the Company or such Guarantor has complied with all the agreements and
satisfied all the conditions on their respective parts to be performed or
satisfied at or prior to the Closing Date.
 
(g) Bring-down Comfort Letter.  On the Closing Date the Initial Purchasers shall
have received from Ernst & Young LLP, an independent registered public
accounting firm for the Company, a letter dated such date, in form and substance
satisfactory to the Initial Purchasers, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a) of
this Section 5, except that (i) it shall cover the financial and accounting
information in the Final Offering Memorandum and any amendment or supplement
thereto and (ii) the specified date referred to therein for the carrying out of
procedures shall be no more than three business days prior to the Closing Date.
 
(h) Registration Rights Agreement.  The Company and the Guarantors shall have
entered into the Registration Rights Agreement and the Initial Purchasers shall
have received executed counterparts thereof.
 
(i) Tender Offer and Consent Solicitation. (a) The Tender Offer and the Consent
Solicitation shall not have been terminated by the Company, (b) the requisite
consents of the holders of the Existing Notes necessary to approve the terms of
the Amendment to be effected pursuant to the Supplemental Indenture shall have
been obtained, (c) concurrently with the closing of the offering of the Notes,
the Company will make the Initial Payment (as defined in the Tender Offer
Documents) pursuant to the Tender Offer and the Consent Solicitation, and (d)
upon payment of the Initial Payment by the Company, the Supplemental Indenture
shall be in full force and effect.
 
(j) Wire Instructions.  The Company shall have furnished the Initial Purchasers
with wiring instructions for the application of the proceeds of the Securities
in accordance with this Agreement.
 
(k) Additional Documents.  On or before the Closing Date, the Initial Purchasers
and counsel for the Initial Purchasers shall have received such other
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Securities
as contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.
 
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Initial
Purchasers by notice to the Company at any time on or prior to the Closing Date,
which termination shall be without liability on the part of any party to any
other party, except that Section 4, Section 6, Section 8 and Section 9 shall at
all times be effective and shall survive such termination
 
 Section 6.  Reimbursement of Initial Purchasers’ Expenses.  If this Agreement
is terminated by the Initial Purchasers pursuant to Section 5, or if the sale to
the Initial Purchasers of the Securities on the Closing Date is not consummated
because of any refusal, inability or failure on the part of the Company or any
Guarantor to perform any agreement herein or to comply with any provision hereof
(other than as a result of a breach of this Agreement by the Initial
Purchasers), each of the Company and the Guarantors jointly and severally agrees
to reimburse the Initial Purchasers (or such Initial Purchasers as have
terminated this Agreement with respect to themselves for any of the foregoing
reasons), severally, upon demand for all out-of-pocket expenses that shall have
been reasonably incurred  by the Initial Purchasers in connection with the
proposed purchase and the offering and sale of the Securities, including but not
limited to reasonable fees and disbursements of counsel, printing expenses,
travel expenses, postage, facsimile and telephone charges.  The obligations of
the Company and the Guarantors under this Section 6 and the provisions of
Section 8 and Section 9 shall at all times be effective and shall survive any
termination of this Agreement.

 
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 Section 7. Offer, Sale and Resale Procedures.  Each of the Initial Purchasers,
on the one hand, and the Company and the Guarantors, on the other hand, hereby
establish and agree to observe the following procedures in connection with the
offer and sale of the Securities:
 
(a) Offers and Sales to Qualified Institutional Buyers.  Offers and sales of the
Securities will be made only by the Initial Purchasers or Affiliates thereof
qualified to do so in the jurisdictions in which such offers or sales are
made.  Each such offer or sale shall only be made (i) to persons whom the
offeror or seller reasonably believes to be qualified institutional buyers (as
defined in Rule 144A under the Securities Act), or (ii) to non-U.S. persons
outside the United States to whom the offeror or seller reasonably believes
offers and sales of the Securities may be made in reliance upon Regulation S
under the Securities Act, upon the terms and conditions set forth in Annex B
hereto, which Annex B is hereby expressly made a part hereof.
 
(b) No General Solicitation.  The Securities will be offered by approaching
prospective Subsequent Purchasers on an individual basis.  No general
solicitation or general advertising (within the meaning of Rule 502 under the
Securities Act) will be used in the United States in connection with the
offering of the Securities.
 
(c) Restrictions on Transfer.  Upon original issuance by the Company and the
Guarantors, and until such time as the same is no longer required under the
applicable requirements of the Securities Act, the Securities (and all
securities issued in exchange therefor or in substitution thereof, other than
the Exchange Securities) shall bear the following legend:
 
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.  THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i)(a) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S
UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS
DEFINED IN RULE 501 (a) (1), (2), (3) OR (7) OF THE SECURITIES ACT (AN
“INSTITUTIONAL ACCREDITED INVESTOR”)) THAT, PRIOR TO SUCH TRANSFER, FURNISHES
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $100,000, AN OPINION
OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
ISSUER SO REQUESTS), (ii) TO THE ISSUER, OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION;

 
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 AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE.”
 
 Following the sale of the Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Company and the Guarantors for any losses, damages
or liabilities suffered or incurred by the Company or the Guarantors, including
any losses, damages or liabilities under the Securities Act, arising from or
relating to any resale or transfer of any Security by a Subsequent Purchaser or
a subsequent transferee.

                                 Section 8. Indemnification.
 
(a) Indemnification of the Initial Purchasers. Each of the Company and the
Guarantors, jointly and severally, agrees to indemnify and hold harmless each
Initial Purchaser, its directors, officers, employees and agents, and each
person, if any, who controls any Initial Purchaser within the meaning of the
Securities Act and the Exchange Act and the directors, officers, employees and
agents of any such controlling person from and against any loss, claim, damage,
liability or expense, as incurred, to which such Initial Purchaser, director,
officer or agent or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company and/or any Guarantor sought to be bound), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or alleged untrue
statement of a material fact contained in the Pricing Disclosure Package, any
Issuer Written Communication (including, but not limited to, any electronic
roadshow), the Final Offering Memorandum, or in any amendment or supplement
thereto, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (ii) upon any act
or failure to act or any alleged act or failure to act by any Initial Purchaser
in connection with, or relating in any manner to, the offering contemplated
hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon any matter covered by
clause (i) above, provided that the Company and the Guarantors shall not be
liable under this clause (ii) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Initial Purchaser through its
gross negligence or willful misconduct; and to reimburse each Initial Purchaser,
its directors, officers and agents and each such controlling person for any and
all expenses (including the reasonable fees and disbursements of counsel chosen
by Banc of America Securities LLC) as such expenses are reasonably incurred by
such Initial Purchaser, director, officer or agent or such controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
the foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission relating to such Initial Purchaser made in reliance upon and in
conformity with written information furnished to the Company by such Initial
Purchaser expressly for use in the Pricing Disclosure Package and the Final
Offering Memorandum (or any amendment or supplement thereto). The indemnity
agreement set forth in this Section 8(a) shall be in addition to any liabilities
that the Company or the Guarantors may otherwise have.
 
(b) Indemnification of the Company, its Directors and Officers.  Each Initial
Purchaser agrees, severally and not jointly, to indemnify and hold harmless the
Company, the Guarantors, and each of their directors, officers and employees and
each person, if any, who controls the Company or the Guarantors within the
meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, the Guarantors
or any such director, officer, employee or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Initial Purchaser), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Pricing Disclosure Package or the Final Offering
Memorandum, or in any amendment or supplement thereto, or arises out of or is
based upon the omission or alleged omission to state therein a material

 
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fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
relating to such Initial Purchaser was made therein, in reliance upon and in
conformity with written information furnished to the Company by such Initial
Purchaser expressly for use therein; and to reimburse the Company, the
Guarantors or any such director, officer, employee or controlling person for any
legal and other expenses (including the reasonable fees and disbursements of
counsel chosen by the Company) as such expenses are reasonably incurred by the
Company, the Guarantors or any such director, officer, employee or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action.  The Company
and the Guarantors hereby acknowledge that the only information that the Initial
Purchasers have furnished to the Company expressly for use in the Pricing
Disclosure Package, the Final Offering Memorandum or any amendment or supplement
thereto, as the case may be, are the statements set forth (A) as the ninth
paragraph on the inside front cover page of the Preliminary Offering Memorandum
and the Final Offering Memorandum concerning stabilization by the Initial
Purchasers and (B) in the tenth paragraph under the caption “Plan of
Distribution” in the Preliminary Offering Memorandum and the Final Offering
Memorandum; and the Initial Purchasers severally confirm that such statements
are correct.
 
(c) Notifications and Other Indemnification Procedures.  Promptly after receipt
by an indemnified party under this Section 8 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party other than under this Section 8 only to the extent it is
not materially prejudiced as a proximate result of such failure.  In case any
such action is brought against any indemnified party and such indemnified party
seeks or intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties.  Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (Banc of America Securities LLC in the case of Section 8(b)
and Section 9), representing the indemnified parties who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party or (iii) the employment of such counsel by the indemnified
parties shall have been authorized in writing by the indemnifying parties in
connection with the defense of such action.
 
(d) Settlements.  The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written consent
(which consent may not be unreasonably withheld), but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.  Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 60 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.  No indemnifying party
 

 
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shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent (i) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
 
 Section 9. Contribution.  If the indemnification provided for in Section 8 is
for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations.  The relative benefits
received by the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the Guarantors, and the total discount received by the Initial Purchasers
bear to the aggregate initial offering price of the Securities.  The relative
fault of the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact or any such inaccurate
or alleged inaccurate representation or warranty relates to information supplied
by the Company and the Guarantors, on the one hand, or the Initial Purchasers,
on the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
 
 The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.  The provisions set forth in Section 8 with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8 for purposes of indemnification and the omission
to provide notice by the indemnified party shall not relieve the indemnifying
party from its contribution obligation regardless of whether the indemnifying
party shall have been materially prejudiced by such omission.

 The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
 
 Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be
required to contribute any amount in excess of the discount received by such
Initial Purchaser in connection with the Securities distributed by it.  No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.  The Initial
Purchasers’ obligations to contribute pursuant to this Section 9 are several,
and not joint, in proportion to their respective commitments as set forth
opposite their names in Schedule B.  For purposes of this Section 9, each
director, officer, employee and agent of an Initial Purchaser and each person,
if any, who controls an Initial Purchaser within the meaning of the Securities
Act and the Exchange Act and the directors, officers, employees and agents of
any such controlling person shall have the same rights to contribution as such
Initial Purchaser, and each director of the Company or any Guarantor, and each
person, if any, who controls the

 
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Company or any Guarantor within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company or any
Guarantor.
 
 Section 10. Termination of this Agreement.  Prior to the Closing Date, this
Agreement may be terminated by the Initial Purchasers by notice given to the
Company if at any time after the Time of Sale (i) trading or quotation in any of
the Company’s securities shall have been suspended or limited by the Commission
or by the NYSE, or trading in securities generally on either the Nasdaq Stock
Market or the NYSE shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or FINRA; (ii) a general banking moratorium shall have been
declared by any of federal, New York, Delaware, Texas or California authorities;
(iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States’ or
international political, financial or economic conditions, as in the judgment of
the Initial Purchasers is material and adverse and makes it impracticable to
market the Securities in the manner and on the terms described in the Offering
Memorandum or to enforce contracts for the sale of securities; (iv) in the
judgment of the Initial Purchasers there shall have occurred any Material
Adverse Change; or (v) the Company or any of its subsidiaries shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Initial Purchasers may interfere
materially with the conduct of the business and operations of the Company and
its subsidiaries regardless of whether or not such loss shall have been
insured.  Any termination pursuant to this Section 10 shall be without liability
on the part of (a) the Company or any Guarantor to any Initial Purchaser, except
that the Company and the Guarantors shall be obligated to reimburse the expenses
of the Initial Purchasers pursuant to Sections 4 and 6 hereof, (b) any Initial
Purchaser to the Company or any Guarantor, or (c) any party hereto to any other
party except that the provisions of Section 8 and Section 9 shall at all times
be effective and shall survive such termination.
 
 Section 11. Representations and Indemnities to Survive Delivery.  The
respective indemnities, agreements, representations, warranties and other
statements of the Company, the Guarantors, of their respective officers and of
the several Initial Purchasers set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Initial Purchaser or the Company or any Guarantor or any of its
or their partners, officers or directors or any controlling person, as the case
may be, and will survive delivery of and payment for the Securities sold
hereunder and any termination of this Agreement.
 
 Section 12. Notices.  All communications hereunder shall be in writing and
shall be mailed, hand delivered or facsimiled and confirmed to the parties
hereto as follows:
 
If to the Initial Purchasers:
 

  Banc of America Securities LLC   One Bryant Park   New York, New York 10036  
Facsimile:  (212) 847-6441   Attention:  High Yield Capital Markets

 
with a copy to:
 

  Shearman & Sterling LLP   599 Lexington Avenue   New York, New York 10022  
Facsimile:  (646) 848-7293   Attention:  Andrew R. Schleider

 
If to the Company and the Guarantors:
 

  Texas Industries, Inc.   1341 West Mockingbird Lane

 
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  Dallas, Texas 75247   Attention: General Counsel

 
with a copy to:
 

  Thompson & Knight LLP   1722 Routh Street   Suite 1500   Dallas, Texas 75201  
Facsimile: (214) 969-1751   Attention:  Joe Dannenmaier

 
 
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
 
 Section 13. Successors.  This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Initial Purchasers
pursuant to Section 16 hereof, and to the benefit of the employees, officers,
directors and agents and controlling persons and their respective employees,
officers, directors, and agents referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder.  The term “successors” shall not include any purchaser
of the Securities as such from any of the Initial Purchasers merely by reason of
such purchase.
 
 Section 14. Partial Unenforceability.  The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision
hereof.  If any Section, paragraph or provision of this Agreement is for any
reason determined to be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are necessary to make
it valid and enforceable.
 
 Section 15. Governing Law; Consent to Jurisdiction.
 
 (a)           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
 
                                (b) Consent to Jurisdiction.  Any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in
the United States District Court for the Southern District of New York or the
courts of the State of New York in each case located in the City and County of
New York (collectively, the “Specified Courts”), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a “Related
Judgment”), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding.  Service of any process, summons, notice or
document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court.  The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
 
 Section 16. Default of One or More of the Several Initial Purchasers.  If any
one or more of the several Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Closing
Date, and the aggregate number of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Securities to be purchased on such
date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Securities set forth opposite their respective
names on Schedule B bears to the aggregate number of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as may be specified by the Initial Purchasers with the consent
of the non-defaulting Initial Purchasers, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on such date. If any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities and the aggregate

 
21

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

 
number of Securities with respect to which such default occurs exceeds 10% of
the aggregate number of Securities to be purchased on the Closing Date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 4, Section 6, Section 8 and Section 9
shall at all times be effective and shall survive such termination.  In any such
case either the Initial Purchasers or the Company shall have the right to
postpone the Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Final Offering
Memorandum or any other documents or arrangements may be effected.
 
 As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 16.  Any action taken under this Section 16 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.
 
 Section 17. No Fiduciary Relationship.  Each of the Company and the Guarantors
hereby acknowledge that the Initial Purchasers are acting solely as initial
purchasers in connection with the purchase and sale of the Securities.  Each of
the Company and the Guarantors further acknowledge that each of the Initial
Purchasers is acting pursuant to a contractual relationship created solely by
this Agreement entered into on an arm’s length basis and in no event do the
parties intend that any Initial Purchaser act or be responsible as a fiduciary
to the Company or any Guarantor, their respective management, stockholders,
creditors or any other person in connection with any activity that such Initial
Purchaser may undertake or has undertaken in furtherance of the purchase and
sale of the Securities, either before or after the date hereof.  The Initial
Purchasers hereby expressly disclaim any fiduciary or similar obligations to
either the Company or the Guarantors, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and each of the Company and Guarantors hereby confirm their understanding and
agreement to that effect.  Each of the Company and the Guarantors and each
Initial Purchaser agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by any Initial Purchaser to either the Company or
the Guarantors regarding such transactions, including but not limited to any
opinions or views with respect to the price or market for the Securities, do not
constitute advice or recommendations to the Company or the Guarantors.  Each of
the Company and the Guarantors hereby waive and release, to the fullest extent
permitted by law, any claims that such Company or Guarantors may have against
the Initial Purchasers with respect to any breach or alleged breach of any
fiduciary or similar duty to the either the Company or the Guarantors in
connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions
 
Section 18. Patriot Act.  The Company acknowledges that in accordance with the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)), the Initial Purchasers are required to obtain, verify
and record information that identifies their respective clients, including the
Company, which information may include the name and address of their respective
clients, as well as other information that will allow the Initial Purchasers to
properly identify their respective clients.
 
                                 Section 19. General Provisions.  This Agreement
constitutes the entire agreement of the parties to this Agreement and supersedes
all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof.  This
Agreement may be executed in two or more counterparts, each one of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.  This Agreement may not be amended or modified
unless in writing by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit.  The Table of Contents and the section headings
herein are for the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement.
 

 
[Signature Page Follows]
 

 
22

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 If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
 
 
Very truly yours,
 
TEXAS INDUSTRIES, INC.
 
By:  /s/ Kenneth R.
Allen                                                                
Name: Kenneth R. Allen
Title:   Vice President, Finance and Chief Financial Officer

 
 

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

 

 
BROOKHOLLOW CORPORATION

 
BROOK HOLLOW PROPERTIES, INC.

 
BROOKHOLLOW OF ALEXANDRIA, INC.

 
BROOKHOLLOW OF VIRGINIA, INC.

 
SOUTHWESTERN FINANCIAL CORPORATION

 
CREOLE CORPORATION

 
PACIFIC CUSTOM MATERIALS, INC.

 
RIVERSIDE CEMENT COMPANY

 
PARTIN LIMESTONE PRODUCTS, INC.

 
RIVERSIDE CEMENT HOLDINGS COMPANY

 
TXI AVIATION, INC.

 
TXI CALIFORNIA INC.

 
TXI CEMENT COMPANY

 
TXI POWER COMPANY

 
TXI RIVERSIDE INC.

 
TXI TRANSPORTATION COMPANY

 
 
By:
  /s/ Kenneth R. Allen

 
Authorized Officer

 

 
 

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

 

 
TEXAS INDUSTRIES HOLDINGS, LLC

 
TEXAS INDUSTRIES TRUST

 
TXI LLC

 
TXI OPERATING TRUST

 
 
By:
  /s/ Kenneth R. Allen

 
Authorized Officer

 
 
 
TXI OPERATIONS, LP

 
By: TXI Operating Trust, its general partner

 
 
By:
  /s/ Kenneth R. Allen

 
Authorized Officer

 
 

 
 

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

 

The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first above written.
 

 
BANC OF AMERICA SECURITIES LLC
GOLDMAN, SACHS & CO.
UBS SECURITIES LLC
WELLS FARGO SECURITIES, LLC
CAPITAL ONE SOUTHCOAST, INC.
SUNTRUST ROBINSON HUMPHREY, INC.
COMERICA SECURITIES, INC.
U.S. BANCORP INVESTMENTS, INC.

By:  BANC OF AMERICA SECURITIES LLC
 
 
By:  /s/ John C.
Cokinos                                                                
Name: John C. Cokinos
        Title: Managing Director
 

 

 
 

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

 

SCHEDULE A
 
GUARANTORS
 

 
Brookhollow Corporation
Brook Hollow Properties, Inc.
Brookhollow of Alexandria, Inc.
Brookhollow of Virginia, Inc.
Southwestern Financial Corporation
Creole Corporation
Pacific Custom Materials, Inc.
Riverside Cement Company
Partin Limestone Products, Inc.
Riverside Cement Holdings Company
Texas Industries Holdings, LLC
Texas Industries Trust
TXI Aviation, Inc.
TXI California Inc.
TXI Cement Company
TXI LLC
TXI Operating Trust
TXI Operations, LP
TXI Power Company
TXI Riverside Inc.
TXI Transportation Company

 

 
A-1

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SCHEDULE B
 
Initial Purchasers
 
Aggregate Principal
Amount of
Securities to be
Purchased
 
BANC OF AMERICA SECURITIES
LLC                                                                                               
  $ 390,000,000  
GOLDMAN, SACHS &
CO.                                                                                               
    65,000,000  
UBS SECURITIES
LLC                                                                                               
    65,000,000  
WELLS FARGO SECURITIES,
LLC                                                                                               
    65,000,000  
COMERICA SECURITIES,
INC.                                                                                               
    19,500,000  
SUNTRUST ROBINSON HUMPHREY,
INC.                                                                                               
    19,500,000  
CAPITAL ONE SOUTHCOAST,
INC.                                                                                               
    13,000,000  
U.S. BANCORP INVESTMENTS,
INC.                                                                                               
    13,000,000  
 
Total                                                                                     
  $ 650,000,000  

 
B-1

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SCHEDULE C
 
TEXAS INDUSTRIES, INC.
 
 SUBSIDIARIES
 

   
 
State of
Authorized to
Do business in:
 
Incorporation
or Organization:
              Texas Industries, Inc. (“TXI”)      AR, CO, DE, LA, OK, TX
 Delaware                            Brookhollow Corporation     DE, TX
 Delaware                   Brook Hollow Properties, Inc.      TX   Texas      
            Brookhollow of Alexandria, Inc.      LA  Louisiana                  
Brookhollow of Virginia, Inc.    VA   Virginia                 Creole
Corporation      DE, CA   Delaware                 Pacific Custom Materials,
Inc.        CA  California                 Riverside Cement Company     CA
 California                   Partin Limestone Products, Inc.    CA  California
                  Riverside Cement Holdings Company     CA, DE   Delaware      
          Texas Industries Holdings, LLC       DE   Delaware                  
Texas Industries Trust   DE   Delaware                 TXI Aviation, Inc.     
TX  Texas                 TXI California Inc.    DE, CA  Delaware              
  TXI Cement Company        DE, TX  Delaware                 TXI LLC      DE
 Delaware                   TXI Operating Trust     DE  Delaware                
TXI Operations, LP       DE, TX, AR, LA, OK, CO  Delaware                  
Southwestern Financial Corporation                            TX  Texas        
        TXI Power Company   TX  Texas                 TXI Riverside Inc.   DE,
CA  Delaware                 TXI Transportation Company       TX, LA  Texas  

 
C-1

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SCHEDULE D
 
MATERIAL EXISTING INSTRUMENTS
 
1.  
Tax Sharing and Indemnification Agreement dated July 6, 2005 between Chaparral
Steel Company and Texas Industries, Inc.;

 
2.  
Separation and Distribution Agreement dated July 6, 2005 between Chaparral Steel
Company and Texas Industries, Inc.;

 
3.  
Amendment No. 1 to Separation and Distribution Agreement dated as of July 27,
2005 between Chaparral Steel Company and Texas Industries, Inc.;

 
4.  
Second Amended and Restated Credit Agreement, dated June 19, 2009, among Texas
Industries, Inc., Bank of America, N.A., as Administrative Agent, Swing Line
Lender, L/C Issuer and lender, UBS Securities LLC, as Syndication Agent, Wells
Fargo Bank, National Association, and Comerica Bank, as Co-Documentation Agents
and as lenders, and UBS Loan Finance LLC, General Electric Capital Corporation,
Suntrust Bank, Capital One, National Association,  and U.S. Bank National
Association, as lenders;

 
5.  
First Amendment to Second Amended and Restated Credit Agreement, dated June 19,
2009, among Texas Industries, Inc., Bank of America, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer and the lenders that are parties
thereto;

 
6.  
Second Amendment to Second Amended and Restated Credit Agreement, dated March
24, 2010, among Texas Industries, Inc., Bank of America, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer and the lenders that are parties
thereto;

 
7.  
Third Amendment to Second Amended and Restated Credit Agreement, dated April 12,
2010, among Texas Industries, Inc., Bank of America, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer and the lenders that are parties
thereto;

 
8.  
Indenture, dated July 6, 2005, among Texas Industries, Inc., the guarantors
named therein and Wells Fargo, National Association, as Trustee;

 
9.  
First Supplemental Indenture dated August 18, 2008 among Texas Industries, Inc.,
the guarantors named therein and Wells Fargo, National Association, as Trustee;

 
10.  
Second Supplemental Indenture dated August 18, 2008 among Texas Industries,
Inc., the guarantors named therein and Wells Fargo, National Association, as
Trustee;

 
11.  
Rights Agreement dated as of November 1, 2006, between Texas Industries, Inc.
and Mellon Investor Services, L.L.C.;

 
12.  
Amendment No. 1 to Rights Agreement, executed February 2, 2010, between Texas
Industries, Inc. and Mellon Investor Services, L.L.C.

 
13.  
Amendment No. 2 to Rights Agreement, dated July 19, 2010, between Texas
Industries, Inc. and Mellon Investor Services, L.L.C.

 
14.  
Registration Rights Agreement, dated July 6, 2005, by and among Texas
Industries, Inc., the guarantors named therein and the initial purchasers named
therein;

 
15.  
Registration Rights Agreement dated as of August 18, 2008, by and among Texas
Industries, Inc., the

 

 
D-1

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

 

 
guarantors named therein and the initial purchasers named therein;

 
16.  
Purchase Agreement dated June 29, 2005 among Texas Industries, Inc. and the
initial purchasers named therein;

 
17.  
Purchase Agreement, dated August 7, 2008, among Texas Industries, Inc., the
guarantors named therein and the initial purchasers named therein;

 
18.  
Contract, dated September 27, 2005 between Riverside Cement Company and Oro
Grande Contractors;

 
19.  
Contract, signed September 21, 2007, between TXI Operations, LP and Amec-Zachry
Contractors.

 
20.  
Contract Amendment No. 1, executed August 17, 2009, between TXI Operations, LP
and Amec-Zachry Contractors; and

 
21.  
Amended and Restated Security Agreement, dated June 19, 2009, among Texas
Industries, Inc., the guarantors named therein and Bank of America, N. A., as
Administrative Agent

 

 

 
D-2

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

 

EXHIBIT A
 
PRICING SUPPLEMENT
 
PRICING SUPPLEMENT
STRICTLY CONFIDENTIAL

 

$650,000,000
 
[logo.gif]
 
TEXAS INDUSTRIES, INC.
9¼% Senior Notes due 2020
July 27, 2010

 
Pricing Supplement dated July 27, 2010 to the Preliminary Offering Memorandum
dated July 27, 2010 of Texas Industries, Inc. (the “Company”)
 
This Pricing Supplement is qualified in its entirety by reference to the
Preliminary Offering Memorandum.
 
The information in this Pricing Supplement supplements the Preliminary Offering
Memorandum and supersedes the information in the Preliminary Offering Memorandum
to the extent inconsistent with the information in the Preliminary Offering
Memorandum.  Terms used herein but not defined herein shall have the respective
meanings as set forth in the Preliminary Offering Memorandum.
 
The notes have not been registered under the Securities Act of 1933 and are
being offered only to (1) “qualified institutional buyers” as defined in Rule
144A under the Securities Act and (2) outside the United States to non-U.S.
persons in compliance with Regulation S under the Securities Act.
 
This investment involves risks.  See “Risk Factors” beginning on page 9 of the
Preliminary Offering Memorandum.  This Pricing Supplement must be read together
with the Preliminary Offering Memorandum.

Issuer:
 
Texas Industries, Inc.
Principal Amount:
$650,000,000

 

 
Ex. C-1

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

 

Title of Securities:
 
9¼% Senior Notes due 2020
Final Maturity Date:
August 15, 2020
 
Offering Price:
100% plus accrued interest, if any, from August 10, 2010
 
Coupon:
9¼% per annum
 
Net Proceeds:
The net proceeds of this offering of notes will be approximately $637.1 million
after deducting commissions and other expenses relating to the offering payable
by us.  As adjusted to give effect to this offering of notes and assuming all of
our 7 1/4% Senior Notes due 2013 are purchased in the tender offer, cash and
cash equivalents as of May 31, 2010 would have been $150.7 million.
 
Interest Payment Dates:
 
February 15 and August 15
 
First Interest Payment Date:
 
February 15, 2011
 
Record Dates:
 
February 1 and August 1
 
Optional Redemption:
 
At any time prior to August 15, 2013, the Company may redeem up to 35% of the
aggregate principal amount of Notes issued under the Indenture (including any
Additional Notes) at a redemption price of 109.250% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the redemption date, subject to the rights of Holders of Notes on the
relevant record date to receive interest due on the relevant interest payment
date, with the net cash proceeds of one or more Equity Offerings; provided that:
 
(1) at least 65% of the aggregate principal amount of Notes issued under the
Indenture (including any Additional Notes) remains outstanding

 
Ex. C-1

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

 
 
 
 
immediately after the occurrence of such redemption (excluding
Notes held by the Company or its Affiliates); and
 
(2) the redemption must occur within 90 days of the date of the closing of such
Equity Offering.
 
At any time on or prior to August 15, 2015, the Company may redeem all or part
of the Notes at a redemption price equal to the sum of (i) the principal amount
thereof, plus (ii) accrued and unpaid interest, if any to the applicable date of
redemption, plus (iii) the Make-Whole Premium.
 
Except pursuant to the preceding paragraphs, the Notes will not be redeemable at
the Company’s option prior to August 15, 2015.
 
On and after August 15, 2015, the Company may redeem all or a part of the Notes
upon not less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, thereon, to the applicable
redemption date, if redeemed during the twelve-month period beginning on August
15 of the years indicated below:
 
Year                                                                                        Percentage
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . .  104.625%
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .
. . . . . . . . . 103.083%
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
. . . . . . . . . 101.542%
2018 and thereafter . . . . . . . . . . . . . . . . . . . . . . . .. ..  . . .
…... . .100.000%
 
 
Initial Purchasers:
Banc of America Securities LLC
 
 

 
Ex. C-1

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

 

 
Goldman, Sachs & Co.
 
   
UBS Securities LLC
 
   
Wells Fargo Securities, LLC
 
   
Comerica Securities, Inc.
 
   
SunTrust Robinson Humphrey, Inc.
 
   
Capital One Southcoast, Inc.
 
   
U.S. Bancorp Investments, Inc.
 
 
Trade Date:
July 27, 2010
 
Settlement Date:
August 10, 2010 (T+10)
 
Distribution:
144A and Regulation S with registration rights as set forth in the Preliminary
Offering Memorandum
 
CUSIP Numbers:
144A CUSIP:
882491AP8
 
Regulation S CUSIP:
U88244AE5

 
Ex. C-1

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

 

ANNEX A
 
NONE
 

 

 
ANNEX A

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

 

ANNEX B
 
TERMS AND CONDITIONS OF OFFERS AND SALES
 
 
The Initial Purchaser understands that:

 
a) The Initial Purchaser agrees that it has not offered or sold and will not
offer or sell the Securities in the United States or to, or for the benefit or
account of, a U.S. Person (other than a distributor), in each case, as defined
in Rule 902 under the Securities Act (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering of the Securities pursuant hereto and the Closing Date, other than in
accordance with Regulation S of the Securities Act or another exemption from the
registration requirements of the Securities Act. The Initial Purchaser agrees
that, during such 40-day restricted period, it will not cause any advertisement
with respect to the Securities (including any “tombstone” advertisement) to be
published in any newspaper or periodical or posted in any public place and will
not issue any circular relating to the Securities, except such advertisements as
permitted by and including the statements required by Regulation S.
 
b) The Initial Purchaser agrees that, at or prior to confirmation of a sale of
Securities by it to any distributor, dealer or person receiving a selling
concession, fee or other remuneration during the 40-day restricted period
referred to in Rule 903 under the Securities Act, it will send to such
distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following effect:
 
“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of your distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the Offering and the
Closing Date, except in either case in accordance with Regulation S under the
Securities Act (or Rule 144A or to Institutional Accredited Investors in
transactions that are exempt from the registration requirements of the
Securities Act), and in connection with any subsequent sale by you of the
Securities covered hereby in reliance on Regulation S during the period referred
to above to any distributor, dealer or person receiving a selling concession,
fee or other remuneration, you must deliver a notice to substantially the
foregoing effect.  Terms used above have the meanings assigned to them in
Regulation S.”
 
 

 
ANNEX B

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