Exhibit 10.1

     
Execution Version
     

Eagle Materials Inc.
$20,000,000 6.08% Series 2007A Senior Notes, Tranche A
due October 2, 2014
$50,000,000 6.27% Series 2007A Senior Notes, Tranche B
due October 2, 2016
$70,000,000 6.36% Series 2007A Senior Notes, Tranche C
due October 2, 2017
$60,000,000 6.48% Series 2007A Senior Notes, Tranche D
due October 2, 2019
 
Note Purchase Agreement
 
Dated as of October 2, 2007
 

 

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Table of Contents

              Section   Heading   Page
Section 1.
  Authorization of Notes     1  
 
           
Section 1.1.
  Description of Notes     1  
Section 1.2.
  Interest Rate     2  
 
           
Section 2.
  Sale and Purchase of Notes     2  
 
           
Section 2.1.
  Series 2007A Notes     2  
Section 2.2.
  Additional Series of Notes     2  
Section 2.3.
  Subsidiary Guaranty     4  
 
           
Section 3.
  Closing     5  
 
           
Section 4.
  Conditions to Closing     5  
 
           
Section 4.1.
  Representations and Warranties     5  
Section 4.2.
  Performance; No Default     5  
Section 4.3.
  Compliance Certificates     6  
Section 4.4.
  Opinions of Counsel     6  
Section 4.5.
  Purchase Permitted By Applicable Law, Etc.     6  
Section 4.6.
  Sale of Other Notes     7  
Section 4.7.
  Payment of Special Counsel Fees     7  
Section 4.8.
  Private Placement Number     7  
Section 4.9.
  Changes in Corporate Structure     7  
Section 4.10.
  Subsidiary Guaranty     7  
Section 4.11.
  Funding Instructions     7  
Section 4.12.
  Proceedings and Documents     7  
 
           
Section 5.
  Representations and Warranties of the Company     8  
 
           
Section 5.1.
  Organization; Power and Authority     8  
Section 5.2.
  Authorization, Etc.     8  
Section 5.3.
  Disclosure     8  
Section 5.4.
  Organization and Ownership of Shares of Subsidiaries; Affiliates     8  
Section 5.5.
  Financial Statements; Material Liabilities     9  
Section 5.6.
  Compliance with Laws, Other Instruments, Etc.     9  
Section 5.7.
  Governmental Authorizations, Etc.     10  
Section 5.8.
  Litigation; Observance of Agreements, Statutes and Orders     10  
Section 5.9.
  Taxes     10  
Section 5.10.
  Title to Property; Leases     10  
Section 5.11.
  Licenses, Permits, Etc.     11  
Section 5.12.
  Compliance with ERISA     11  
Section 5.13.
  Private Offering by the Company     12  

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Table of Contents

              Section   Heading   Page
Section 5.14.
  Use of Proceeds; Margin Regulations     12  
Section 5.15.
  Existing Debt; Future Liens     12  
Section 5.16.
  Foreign Assets Control Regulations, Etc.     13  
Section 5.17.
  Status under Certain Statutes     13  
Section 5.18.
  Environmental Matters     13  
Section 5.19.
  Notes Rank Pari Passu     14  
 
           
Section 6.
  Representations of the Purchaser     14  
 
           
Section 6.1.
  Purchase for Investment     14  
Section 6.2.
  Accredited Investor     14  
Section 6.3.
  Source of Funds     15  
 
           
Section 7.
  Information as to Company     16  
 
           
Section 7.1.
  Financial and Business Information     16  
Section 7.2.
  Officer’s Certificate     19  
Section 7.3.
  Visitation     20  
 
           
Section 8.
  Payment of the Notes     20  
 
           
Section 8.1.
  Required Prepayments     20  
Section 8.2.
  Optional Prepayments with Make-Whole Amount     20  
Section 8.3.
  Allocation of Partial Prepayments     21  
Section 8.4.
  Maturity; Surrender, Etc.     21  
Section 8.5.
  Purchase of Notes     21  
Section 8.6.
  Make-Whole Amount for the Series 2007A Notes     22  
Section 8.7.
  Change in Control     23  
 
           
Section 9.
  Affirmative Covenants     24  
 
           
Section 9.1.
  Compliance with Law     24  
Section 9.2.
  Insurance     25  
Section 9.3.
  Maintenance of Properties     25  
Section 9.4.
  Payment of Taxes and Claims     25  
Section 9.5.
  Corporate Existence, Etc.     25  
Section 9.6.
  Designation of Subsidiaries     25  
Section 9.7.
  Notes to Rank Pari Passu     26  
Section 9.8.
  Additional Subsidiary Guarantors     26  
Section 9.9.
  Books and Records     27  
 
           
Section 10.
  Negative Covenants     27  
 
           
Section 10.1.
  Consolidated Debt to Consolidated EBITDA     27  
Section 10.2.
  Priority Debt     27  
Section 10.3.
  Interest Coverage Ratio     27  
Section 10.4.
  Limitation on Liens     27  
Section 10.5.
  Sales of Assets     29  
Section 10.6.
  Merger and Consolidation     30  

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Table of Contents

              Section   Heading   Page
Section 10.7.
  Transactions with Affiliates     31  
Section 10.8.
  Terrorism Sanctions Regulations     31  
Section 10.9.
  Restricted Subsidiary Group     31  
 
           
Section 11.
  Events of Default     32  
 
           
Section 12.
  Remedies on Default, Etc.     34  
 
           
Section 12.1.
  Acceleration     34  
Section 12.2.
  Other Remedies     35  
Section 12.3.
  Rescission     35  
Section 12.4.
  No Waivers or Election of Remedies, Expenses, Etc.     35  
 
           
Section 13.
  Registration; Exchange; Substitution of Notes     35  
 
           
Section 13.1.
  Registration of Notes     35  
Section 13.2.
  Transfer and Exchange of Notes     36  
Section 13.3.
  Replacement of Notes     36  
 
           
Section 14.
  Payments on Notes     37  
 
           
Section 14.1.
  Place of Payment     37  
Section 14.2.
  Home Office Payment     37  
 
           
Section 15.
  Expenses, Etc.     37  
 
           
Section 15.1.
  Transaction Expenses     37  
Section 15.2.
  Survival     38  
 
           
Section 16.
  Survival of Representations and Warranties; Entire Agreement     38  
 
           
Section 17.
  Amendment and Waiver     38  
 
           
Section 17.1.
  Requirements     38  
Section 17.2.
  Solicitation of Holders of Notes     39  
Section 17.3.
  Binding Effect, Etc.     40  
Section 17.4.
  Notes Held by Company, Etc.     40  
 
           
Section 18.
  Notices     40  
 
           
Section 19.
  Reproduction of Documents     41  
 
         
Section 20.
  Confidential Information     41  
 
           
Section 21.
  Substitution of Purchaser     42  
 
           
Section 22.
  Miscellaneous     43  

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Table of Contents

              Section   Heading   Page
Section 22.1.
  Successors and Assigns     43  
Section 22.2.
  Payments Due on Non-Business Days     43  
Section 22.3.
  Accounting Terms     43  
Section 22.4.
  Severability     43  
Section 22.5.
  Construction     43  
Section 22.6.
  Counterparts     44  
Section 22.7.
  Governing Law     44  
Section 22.8.
  Jurisdiction and Process; Waiver of Jury Trial     44  

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Schedule A
  —   Information Relating to Purchasers
 
       
Schedule B
  —   Defined Terms
 
       
Schedule 4.9
  —   Changes in Corporate Structure
 
       
Schedule 5.4
  —   Subsidiaries of the Company, Ownership of Subsidiary Stock, Affiliates
 
       
Schedule 5.5
  —   Financial Statements
 
       
Schedule 5.11
  —   Licenses, Permits, Etc.
 
       
Schedule 5.15
  —   Existing Debt; Future Liens
 
       
Schedule 10.4
  —   Existing Liens
 
       
Exhibit 1(a)
  —   Form of 6.08% Series 2007A Senior Notes, Tranche A, due October 2, 2014
 
       
Exhibit 1(b)
  —   Form of 6.27% Series 2007A Senior Notes, Tranche B, due October 2, 2016
 
       
Exhibit 1(c)
  —   Form of 6.36% Series 2007A Senior Notes, Tranche C, due October 2, 2017
 
       
Exhibit 1(d)
  —   Form of 6.48% Series 2007A Senior Notes, Tranche D, due October 2, 2019
 
       
Exhibit 2.3
  —   Form of Subsidiary Guaranty
 
       
Exhibit 4.4(a)
  —   Form of Opinion of General Counsel to the Company
 
       
Exhibit 4.4(b)
  —   Form of Opinion of Special Counsel to the Company
 
       
Exhibit 4.4(c)
  —   Form of Opinion of Special Counsel to the Purchasers
 
       
Exhibit S
  —   Form of Supplement to Note Purchase Agreement

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Eagle Materials Inc.
3811 Turtle Creek Blvd., Suite 1100
Dallas, Texas 75219
$20,000,000 6.08% Series 2007A Senior Notes, Tranche A,
due October 2, 2014
$50,000,000 6.27% Series 2007A Senior Notes, Tranche B,
due October 2, 2016
$70,000,000 6.36% Series 2007A Senior Notes, Tranche C,
due October 2, 2017
$60,000,000 6.48% Series 2007A Senior Notes, Tranche D,
due October 2, 2019
Dated as of
October 2, 2007
To the Purchasers listed in
     the attached Schedule A:
Ladies and Gentlemen:
     Eagle Materials Inc., a Delaware corporation (the “Company”), agrees with
the Purchasers listed in the attached Schedule A (the “Purchasers”) to this Note
Purchase Agreement (this “Agreement”) as follows:
Section 1. Authorization of Notes.
     Section 1.1. Description of Notes. The Company will authorize the issue and
sale of the following Senior Notes:

                  Issue   Series and/or
Tranche   Aggregate
Principal
Amount   Interest Rate   Maturity Date Senior Notes   Series 2007A,
Tranche A   $20,000,000   6.08%   October 2, 2014                   Senior Notes
  Series 2007A,
Tranche B   $50,000,000   6.27%   October 2, 2016

 

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Eagle Materials Inc.   Note Purchase Agreement

                  Issue   Series and/or
Tranche   Aggregate
Principal
Amount   Interest Rate   Maturity Date Senior Notes   Series 2007A,
Tranche C   $70,000,000   6.36%   October 2, 2017                   Senior Notes
  Series 2007A,
Tranche D   $60,000,000   6.48%   October 2, 2019

          The Senior Notes described above are individually referred to
respectively as the “Tranche A Notes”, the “Tranche B Notes”, the “Tranche C
Notes” and the “Tranche D Notes” and are collectively referred to as the
“Series 2007A Notes”. The Series 2007A Notes, together with each Series of
Additional Notes which may from time to time be issued pursuant to the
provisions of Section 2.2, are collectively referred to as the “Notes” (such
term shall also include any such notes issued in substitution therefor pursuant
to Section 13 of this Agreement). The Tranche A Notes, the Tranche B Notes, the
Tranche C Notes and the Tranche D Notes shall be substantially in the form set
out in Exhibit 1(a), Exhibit 1(b), Exhibit 1(c) and Exhibit 1(d), respectively,
with such changes therefrom, if any, as may be approved by the Purchasers and
the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
     Section 1.2. Interest Rate. (a) The Series 2007A Notes shall bear interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid
principal thereof from the date of issuance at their respective stated rates of
interest, payable semi-annually in arrears on the 2nd day of April and October
and at maturity, commencing on April 2, 2008, until such principal sum shall
have become due and payable (whether at maturity, upon notice of prepayment or
otherwise), and interest (so computed) on any overdue principal, interest or
Make-Whole Amount shall accrue from the due date thereof (whether by
acceleration or otherwise) at the applicable Default Rate until paid.
Section 2. Sale and Purchase of Notes.
     Section 2.1. Series 2007A Notes. Subject to the terms and conditions of
this Agreement, the Company will issue and sell to each Purchaser and each
Purchaser will purchase from the Company, at the Closing provided for in
Section 3, the Series 2007A Notes of the tranches and in the respective
principal amounts specified opposite such Purchaser’s name in Schedule A at the
purchase price of 100% of the principal amount thereof. The obligations of each
Purchaser hereunder are several and not joint obligations, and each Purchaser
shall have no obligation and no liability to any Person for the performance or
nonperformance by any other Purchaser hereunder.
     Section 2.2. Additional Series of Notes. The Company may, from time to
time, in its sole discretion but subject to the terms hereof, issue and sell one
or more additional Series of its unsecured promissory notes under the provisions
of this Agreement pursuant to a supplement (a “Supplement”) substantially in the
form of Exhibit S, provided that the aggregate principal amount of Notes of all
Series issued pursuant to all Supplements in accordance with the terms of

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Eagle Materials Inc.   Note Purchase Agreement

this Section 2.2 shall not exceed $500,000,000. Each additional Series of Notes
(the “Additional Notes”) issued pursuant to a Supplement shall be subject to the
following terms and conditions:
     (i) each Series of Additional Notes, when so issued, shall be
differentiated from all previous Series by sequential yearly and alphabetical
designation inscribed thereon;
     (ii) Additional Notes of the same Series may consist of more than one
different and separate tranches and may differ with respect to outstanding
principal amounts, maturity dates, interest rates and premiums, if any, and
price and terms of redemption or payment prior to maturity, but all such
different and separate tranches of the same Series shall vote as a single class
and constitute one Series;
     (iii) each Series of Additional Notes shall be dated the date of issue,
bear interest at such rate or rates, mature on such date or dates, be subject to
such mandatory and optional prepayment on the dates and at the premiums, if any,
have such additional or different conditions precedent to closing, such
representations and warranties and such additional covenants as shall be
specified in the Supplement under which such Additional Notes are issued, and
upon execution of any such Supplement, this Agreement shall be amended (a) to
reflect such additional covenants without further action on the part of the
holders of the Notes outstanding under this Agreement, provided, that any such
additional covenants shall inure to the benefit of all holders of Notes so long
as any Additional Notes issued pursuant to such Supplement remain outstanding,
provided further, that if such additional covenants are less restrictive on the
Company than any existing covenants set forth in this Agreement, then such
additional covenants shall not in any way amend the existing covenants without
the prior written consent of the requisite percentage of the holders of the
Notes as set forth in Section 17.1, and (b) to reflect such representations and
warranties as are contained in such Supplement for the benefit of the holders of
such Additional Notes in accordance with the provisions of Section 16;
     (iv) each Series of Additional Notes issued under this Agreement shall be
in substantially the form of Exhibit 1 to Exhibit S hereto with such variations,
omissions and insertions as are necessary or permitted hereunder;
     (v) the minimum principal amount of any Note issued under a Supplement
shall be $100,000, except as may be necessary to evidence the outstanding amount
of any Note originally issued in a denomination of $100,000 or more;
     (vi) all Additional Notes shall constitute Senior Debt of the Company and
shall rank pari passu with all other outstanding Notes; and
     (vii) no Additional Notes shall be issued hereunder if at the time of
issuance thereof and after giving effect to the application of the proceeds
thereof, any Default or Event of Default shall have occurred and be continuing.

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Eagle Materials Inc.   Note Purchase Agreement

          The obligations of the Additional Purchasers to purchase any
Additional Notes shall be subject to the following conditions precedent, in
addition to the conditions specified in the Supplement pursuant to which such
Additional Notes may be issued:
     (a) Compliance Certificate. A duly authorized Senior Financial Officer
shall execute and deliver to each Additional Purchaser and each holder of Notes
an Officer’s Certificate dated the date of issue of such Series of Additional
Notes stating that such officer has reviewed the provisions of this Agreement
(including any Supplements hereto) and setting forth the information and
computations (in sufficient detail) required in order to establish whether after
giving effect to the issuance of the Additional Notes and after giving effect to
the application of the proceeds thereof, the Company is in compliance with the
requirements of Section 10.1 on such date (based upon the financial statements
for the most recent fiscal quarter ended prior to the date of such certificate).
     (b) Execution and Delivery of Supplement. The Company and each such
Additional Purchaser shall execute and deliver a Supplement substantially in the
form of Exhibit S hereto.
     (c) Representations of Additional Purchasers. Each Additional Purchaser
shall have confirmed in the Supplement that the representations set forth in
Section 6 are true with respect to such Additional Purchaser on and as of the
date of issue of the Additional Notes.
     (d) Execution and Delivery of Guaranty Ratification. Provided a Guaranty
Release shall not have occurred, each Subsidiary Guarantor shall execute and
deliver a Guaranty Ratification in the form attached to the Subsidiary Guaranty.
     Section 2.3. Subsidiary Guaranty. (a) The payment by the Company of all
amounts due with respect to the Notes and the performance by the Company of its
obligations under this Agreement and any Supplement will be absolutely and
unconditionally guaranteed by the Subsidiary Guarantors pursuant to the
Subsidiary Guaranty Agreement dated as of even date herewith, which shall be
substantially in the form of Exhibit 2.3 attached hereto, and otherwise in
accordance with the provisions of Section 9.8 hereof (the “Subsidiary
Guaranty”).
          (b) The holders of the Notes agree to discharge and release any
Subsidiary Guarantor from the Subsidiary Guaranty upon receipt of written
notification of the Company, provided that (i) such Subsidiary Guarantor has
been released and discharged (or will be released and discharged concurrently
with the release of such Subsidiary Guarantor under the Subsidiary Guaranty) as
an obligor and guarantor under and in respect of the Bank Credit Agreement and
the Company so certifies to the holders of the Notes in a certificate of a
Responsible Officer, (ii) at the time of such release and discharge, the Company
shall deliver a certificate of a Responsible Officer to the holders of the Notes
stating that no Default or Event of Default exists, and (iii) if any fee or
other form of consideration is given to any holder of Debt of the Company
expressly for the purpose of such release, holders of the Notes shall receive
equivalent consideration (a “Guaranty Release”).

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Eagle Materials Inc.   Note Purchase Agreement

Section 3. Closing.
          The sale and purchase of the Series 2007A Notes to be purchased by
each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West
Monroe Street, Chicago, Illinois 60603 at 10:00 a.m. Central time, at a closing
(the “Closing”) on October 2, 2007 or on such other Business Day thereafter on
or prior to October 15, 2007 as may be agreed upon by the Company and the
Purchasers (the “Closing Date”). On the Closing Date, the Company will deliver
to each Purchaser the Series 2007A Notes to be purchased by such Purchaser in
the form of a single Series 2007A Note (or such greater number of Series 2007A
Notes in denominations of at least $100,000 as such Purchaser may request) dated
the date of the Closing Date and registered in such Purchaser’s name (or in the
name of such Purchaser’s nominee), against delivery by such Purchaser to the
Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the
account of the Company to Account Number [intentionally omitted], at Wells
Fargo, Dallas, Texas 75283-2406, ABA Number [intentionally omitted], in the
Account Name of “Eagle Materials Inc.” If, on the Closing Date, the Company
shall fail to tender such Series 2007A Notes to any Purchaser as provided above
in this Section 3, or any of the conditions specified in Section 4 shall not
have been fulfilled to any Purchaser’s satisfaction, such Purchaser shall, at
such Purchaser’s election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.
Section 4. Conditions to Closing.
          Each Purchaser’s obligation to purchase and pay for the Series 2007A
Notes to be sold to such Purchaser at the Closing is subject to the fulfillment
to such Purchaser’s satisfaction, prior to or at the Closing, of the following
conditions applicable to the Closing Date:
     Section 4.1. Representations and Warranties.
          (a) Representations and Warranties of the Company. The representations
and warranties of the Company in this Agreement shall be correct when made and
at the time of the Closing.
          (b) Representations and Warranties of the Subsidiary Guarantors. The
representations and warranties of the Subsidiary Guarantors in the Subsidiary
Guaranty shall be correct when made and at the time of the Closing.
     Section 4.2. Performance; No Default. The Company and each Subsidiary
Guarantor shall have performed and complied with all agreements and conditions
contained in this Agreement and the Subsidiary Guaranty required to be performed
or complied with by the Company and each such Subsidiary Guarantor prior to or
at the Closing, and after giving effect to the issue and sale of the
Series 2007A Notes (and the application of the proceeds thereof as contemplated
by Section 5.14), no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction

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Eagle Materials Inc.   Note Purchase Agreement

since the date of the Memorandum that would have been prohibited by Section 10
hereof had such Sections applied since such date.
     Section 4.3. Compliance Certificates.
          (a) Officer’s Certificate of the Company. The Company shall have
delivered to such Purchaser an Officer’s Certificate, dated the Closing Date,
certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.
          (b) Secretary’s Certificate of the Company. The Company shall have
delivered to such Purchaser a certificate, dated the Closing Date, certifying as
to the resolutions attached thereto and other corporate proceedings relating to
the authorization, execution and delivery of the Series 2007A Notes and this
Agreement.
          (c) Officer’s Certificate of the Subsidiary Guarantors. Each
Subsidiary Guarantor shall have delivered to such Purchaser an Officer’s
Certificate, dated the Closing Date, certifying that the conditions specified in
Sections 4.1(b), 4.2 and 4.9 have been fulfilled.
          (d) Secretary’s Certificate of the Subsidiary Guarantors. Each
Subsidiary Guarantor shall have delivered to such Purchaser a certificate, dated
the Closing Date, certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Subsidiary Guaranty.
     Section 4.4. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the Closing
Date (a) from James H. Graass, General Counsel of the Company, covering the
matters set forth in Exhibit 4.4(a) and covering such other matters incident to
the transactions contemplated hereby as such Purchaser or its counsel may
reasonably request (and the Company hereby instructs its counsel to deliver such
opinion to the Purchasers), (b) from Baker Botts L.L.P., special counsel for the
Company, covering the matters set forth in Exhibit 4.4(b) and covering such
other matters incident to the transactions contemplated hereby as such Purchaser
or its counsel may reasonably request (and the Company hereby instructs its
counsel to deliver such opinion to the Purchasers), and (c) from Chapman and
Cutler LLP, the Purchasers’ special counsel, in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(c) and covering
such other matters incident to such transactions as such Purchaser may
reasonably request.
     Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of the
Closing such Purchaser’s purchase of Series 2007A Notes shall (a) be permitted
by the laws and regulations of each jurisdiction to which such Purchaser is
subject, without recourse to provisions (such as section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and (c) not subject such Purchaser to any tax, penalty or liability under or
pursuant to any applicable law or regulation, which law or regulation was not in
effect on the date hereof. If requested by such Purchaser, such Purchaser shall
have received an Officer’s Certificate certifying as to such

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Eagle Materials Inc.   Note Purchase Agreement

matters of fact as such Purchaser may reasonably specify to enable such
Purchaser to determine whether such purchase is so permitted.
     Section 4.6. Sale of Other Notes. Contemporaneously with the Closing, the
Company shall sell to each other Purchaser and each other Purchaser shall
purchase the Series 2007A Notes to be purchased by it at the Closing as
specified in Schedule A.
     Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
Date, the reasonable fees, reasonable charges and reasonable disbursements of
the Purchasers’ special counsel referred to in Section 4.4 to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing Date.
     Section 4.8. Private Placement Number. A Private Placement Number issued by
Standard & Poor’s CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for each tranche of the Series 2007A Notes.
     Section 4.9. Changes in Corporate Structure. Neither the Company nor any
Subsidiary Guarantor shall have changed its jurisdiction of organization or,
except as reflected in Schedule 4.9, been a party to any merger or
consolidation, or shall have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.
     Section 4.10. Subsidiary Guaranty. The Subsidiary Guaranty shall have been
duly authorized, executed and delivered by each Subsidiary Guarantor, shall
constitute the legal, valid and binding contract and agreement of each
Subsidiary Guarantor and such Purchaser shall have received a true, correct and
complete copy thereof.
     Section 4.11. Funding Instructions. At least three Business Days prior to
the date of the Closing, each Purchaser shall have received written instructions
signed by a Responsible Officer on letterhead of the Company confirming the
information specified in Section 3, including (i) the name and address of the
transferee bank, (ii) such transferee bank’s ABA number and (iii) the account
name and number into which the purchase price for the Series 2007A Notes is to
be deposited.
     Section 4.12. Proceedings and Documents. All corporate and other
organizational proceedings in connection with the transactions contemplated by
this Agreement and all documents and instruments incident to such transactions
shall be satisfactory to such Purchaser and its special counsel, and such
Purchaser and its special counsel shall have received all such counterpart
originals or certified or other copies of such documents related to the
transactions contemplated hereby as such Purchaser or such special counsel may
reasonably request.

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Eagle Materials Inc.   Note Purchase Agreement

Section 5. Representations and Warranties of the Company.
          The Company represents and warrants to each Purchaser that:
     Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the
Series 2007A Notes and to perform the provisions hereof and thereof.
     Section 5.2. Authorization, Etc. This Agreement and the Notes to be issued
on the Closing Date have been duly authorized by all necessary corporate action
on the part of the Company, and this Agreement constitutes, and upon execution
and delivery thereof each such Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
     Section 5.3. Disclosure. The Company, through its agent, Banc of America
Securities LLC, has delivered to you and each other Purchaser a copy of a
Private Placement Memorandum, dated August 2007 (the “Memorandum”), relating to
the transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Restricted Subsidiaries. This Agreement, the Memorandum,
the documents, certificates or other writings delivered to the Purchasers by or
on behalf of the Company in connection with the transactions contemplated hereby
and the financial statements listed in Schedule 5.5, in each case, delivered to
the Purchasers prior to August 27, 2007 (this Agreement, the Memorandum and such
documents, certificates or other writings and such financial statements being
referred to, collectively, as the “Disclosure Documents”), taken as a whole, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Except as disclosed in the
Disclosure Documents, since March 31, 2007, there has been no change in the
financial condition, operations, business or properties of the Company or any of
its Restricted Subsidiaries except changes that individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect. There is no
fact known to the Company that would reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Disclosure
Documents.
     Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the

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Eagle Materials Inc.   Note Purchase Agreement

Company’s Restricted and Unrestricted Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the Company’s Affiliates, other than Subsidiaries, and (iii) of the Company’s
directors and senior officers.
          (b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
          (c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
          (d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
     Section 5.5. Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser copies of the financial statements of the Company
and its Subsidiaries listed on Schedule 5.5. All of said financial statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments). The Company and its Subsidiaries do not have any Material
liabilities that are not disclosed on such financial statements or otherwise
disclosed in the Disclosure Documents.
     Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Series 2007A
Notes will not (a) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary is bound or by

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which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any
Subsidiary, or (c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any
Subsidiary.
     Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Series 2007A Notes except for certain
filings on form 8-K as may be required by Rule 13a-11 of the Exchange Act.
     Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits, investigations or proceedings pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
Restricted Subsidiary or any property of the Company or any Restricted
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
          (b) Neither the Company nor any Restricted Subsidiary is in default
under any term of any agreement or instrument to which it is a party or by which
it is bound, or any order, judgment, decree or ruling of any court, arbitrator
or Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental Laws or the USA
Patriot Act) of any Governmental Authority, which default or violation,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
     Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that would
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
federal, state or other taxes for all fiscal periods are adequate. The federal
income tax liabilities of the Company and its Subsidiaries have been finally
determined (whether by reason of completed audits or the statute of limitations
having run) for all fiscal years up to and including the fiscal year ended
March 31, 2000.
     Section 5.10. Title to Property; Leases. The Company and its Restricted
Subsidiaries have good and sufficient title to their respective properties which
the Company and its Restricted Subsidiaries own or purport to own that
individually or in the aggregate are Material, including

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Eagle Materials Inc.   Note Purchase Agreement

all such properties reflected in the most recent audited balance sheet referred
to in Section 5.5 or purported to have been acquired by the Company or any
Restricted Subsidiary after said date (except as sold or otherwise disposed of
in the ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement. All leases that individually or in the aggregate
are Material are valid and subsisting and are in full force and effect in all
material respects.
     Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule 5.11,
     (a) the Company and its Restricted Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, proprietary
software, service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict with the
rights of others, except, in each case, as would not reasonably be expected to
result in a Material Adverse Effect;
     (b) to the best knowledge of the Company, no product of the Company or any
of its Restricted Subsidiaries infringes in any respect any license, permit,
franchise, authorization, patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned by any other Person, except, in each
case, as would not reasonably be expected to result in a Material Adverse
Effect; and
     (c) to the best knowledge of the Company, there is no violation by any
Person of any right of the Company or any of its Restricted Subsidiaries with
respect to any patent, copyright, proprietary software, service mark, trademark,
trade name or other right owned or used by the Company or any of its Restricted
Subsidiaries, except, in each case, as would not reasonably be expected to
result in a Material Adverse Effect.
     Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and would not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that would reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or pursuant to such penalty or excise tax
provisions or pursuant to section 401(a)(29) or 412 of the Code or section 4068
of ERISA, other than such liabilities or Liens as would not be individually or
in the aggregate Material.
          (b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan’s most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $5,000,000 in the aggregate
for all Plans. The term “benefit liabilities” has the meaning specified in
section 4001 of ERISA and the terms “current value” and “present value” have the
meanings specified in section 3 of ERISA.

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Eagle Materials Inc.   Note Purchase Agreement

          (c) The Company and its ERISA Affiliates have not incurred any
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
          (d) The expected post-retirement benefit obligation (determined as of
the last day of the Company’s most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
          (e) The execution and delivery of this Agreement and the issuance and
sale of the Series 2007A Notes hereunder will not involve any transaction that
is subject to the prohibitions of Section 406 of ERISA or in connection with
which a tax would be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code.
The representation by the Company in the first sentence of this Section 5.12(e)
is made in reliance upon and subject to the accuracy of each Purchaser’s
representation in Section 6.3 as to the sources of the funds to be used to pay
the purchase price of the Series 2007A Notes to be purchased by such Purchaser.
     Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on the Company’s behalf has offered the Series 2007A Notes or any
similar securities for sale to, or solicited any offer to buy any of the same
from, or otherwise approached or negotiated in respect thereof with, any Person
other than the Purchasers and not more than 45 other Institutional Investors,
each of which has been offered the Series 2007A Notes in connection with a
private sale for investment. Neither the Company nor anyone acting on its behalf
has taken, or will take, any action that would subject the issuance or sale of
the Series 2007A Notes to the registration requirements of Section 5 of the
Securities Act or to the registration requirements of any securities or blue sky
laws of any applicable jurisdiction.
     Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Series 2007A Notes to refinance existing
indebtedness and for general corporate purposes of the Company. No part of the
proceeds from the sale of the Series 2007A Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading
in any securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock
does not constitute more than 5% of the value of the consolidated assets of the
Company and its Subsidiaries and the Company does not have any present intention
that margin stock will constitute more than 5% of the value of such assets. As
used in this Section, the terms “margin stock” and “purpose of buying or
carrying” shall have the meanings assigned to them in said Regulation U.
     Section 5.15. Existing Debt; Future Liens. (a) Except as described therein,
Schedule 5.15 sets forth a complete and correct list of all outstanding Debt of
the Company and its Restricted Subsidiaries as of June 30, 2007, since which
date there has been no Material change in the amounts, interest rates, sinking
funds, installment payments or maturities of the Debt of the Company or its
Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary is

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Eagle Materials Inc.   Note Purchase Agreement

in default and no waiver of default is currently in effect, in the payment of
any principal or interest on any Debt of the Company or such Restricted
Subsidiary, and no event or condition exists with respect to any Debt of the
Company or any Restricted Subsidiary that would permit (or that with notice or
the lapse of time, or both, would permit) one or more Persons to cause such Debt
to become due and payable before its stated maturity or before its regularly
scheduled dates of payment.
          (b) Except as disclosed in Schedule 5.15, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.4.
          (c) Neither the Company nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Debt of the
Company or such Subsidiary, any agreement relating thereto or any other
agreement (including, but not limited to, its charter or other organizational
document) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Debt of the Company, except as specifically indicated in
Schedule 5.15.
     Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the sale
of the Series 2007A Notes by the Company hereunder nor its use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.
          (b) Neither the Company nor any Subsidiary is a Person described or
designated in the Specially Designated Nationals and Blocked Persons List of the
Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or,
to the knowledge of the Company, engages in any dealings or transactions with
any such Person. The Company and its Subsidiaries are in compliance, in all
material respects, with the USA Patriot Act.
          (c) No part of the proceeds from the sale of the Series 2007A Notes
hereunder will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended, assuming in all cases that such Act applies to the Company.
     Section 5.17. Status under Certain Statutes. Neither the Company nor any
Restricted Subsidiary is an “investment company” registered or required to be
registered under the Investment Company Act of 1940, as amended, or is subject
to regulation under the Public Utility Holding Company Act of 2005, as amended,
the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
     Section 5.18. Environmental Matters. (a) Neither the Company nor any
Restricted Subsidiary has knowledge of any claim or has received any notice of
any claim, and no proceeding has been instituted raising any claim against the
Company or any of its Restricted

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Eagle Materials Inc.   Note Purchase Agreement

Subsidiaries or any of their respective real properties now or formerly owned,
leased or operated by any of them, or other assets, alleging any damage to the
environment or violation of any Environmental Laws, except, in each case, such
as would not reasonably be expected to result in a Material Adverse Effect.
          (b) Neither the Company nor any Restricted Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or their use, except, in each case, such as
would not reasonably be expected to result in a Material Adverse Effect.
          (c) Neither the Company nor any of its Restricted Subsidiaries has
stored any Hazardous Materials on real properties now or formerly owned, leased
or operated by any of them or has disposed of any Hazardous Materials in each
case in a manner contrary to any Environmental Laws in each case in any manner
that would reasonably be expected to result in a Material Adverse Effect.
          (d) All buildings on all real properties now owned, leased or operated
by the Company or any of its Restricted Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply would not
reasonably be expected to result in a Material Adverse Effect.
     Section 5.19. Notes Rank Pari Passu. The obligations of the Company under
this Agreement and the Notes rank pari passu in right of payment with all other
senior unsecured Debt (actual or contingent) of the Company, including, without
limitation, all senior unsecured Debt of the Company described in Schedule 5.15
hereto. The obligations of each Subsidiary Guarantor under the Subsidiary
Guaranty rank pari passu in right of payment with all other senior unsecured
Debt (actual or contingent) of such Subsidiary Guarantor, including, without
limitation, all senior unsecured Debt of such Subsidiary Guarantor described in
Schedule 5.15 hereto.
Section 6. Representations of the Purchaser.
     Section 6.1. Purchase for Investment. Each Purchaser severally represents
that it is purchasing the Series 2007A Notes for its own account or for one or
more separate accounts maintained by it or for the account of one or more
pension or trust funds and not with a view to the distribution thereof, provided
that the disposition of such Purchaser’s or such pension or trust funds’
property shall at all times be within such Purchaser’s or such pension or trust
funds’ control. Each Purchaser understands that the Series 2007A Notes have not
been registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Series 2007A Notes.
     Section 6.2. Accredited Investor. Each Purchaser represents that it is an
“accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act

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Eagle Materials Inc.   Note Purchase Agreement

acting for its own account (and not for the account of others) or as a fiduciary
or agent for others (which others are also “accredited investors”). Each
Purchaser further represents that such Purchaser has had the opportunity to ask
questions of the Company and received answers concerning the terms and
conditions of the sale of the Series 2007A Notes.
     Section 6.3. Source of Funds. Each Purchaser severally represents that at
least one of the following statements is an accurate representation as to each
source of funds (a “Source”) to be used by such Purchaser to pay the purchase
price of the Series 2007A Notes to be purchased by such Purchaser hereunder:
     (a) the Source is an “insurance company general account” (as the term is
defined in the United States Department of Labor’s Prohibited Transaction
Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as
defined by the annual statement for life insurance companies approved by the
National Association of Insurance Commissioners (the “NAIC Annual Statement”))
for the general account contract(s) held by or on behalf of any employee benefit
plan together with the amount of the reserves and liabilities for the general
account contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60)
or by the same employee organization in the general account do not exceed 10% of
the total reserves and liabilities of the general account (exclusive of separate
account liabilities) plus surplus as set forth in the NAIC Annual Statement
filed with such Purchaser’s state of domicile; or
     (b) the Source is a separate account that is maintained solely in
connection with such Purchaser’s fixed contractual obligations under which the
amounts payable, or credited, to any employee benefit plan (or its related
trust) that has any interest in such separate account (or to any participant or
beneficiary of such plan (including any annuitant)) are not affected in any
manner by the investment performance of the separate account; or
     (c) the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within
the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the
Company in writing pursuant to this clause (c), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or
     (d) the Source constitutes assets of an “investment fund” (within the
meaning of Part V of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan’s assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total
client assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM

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Eagle Materials Inc.   Note Purchase Agreement

nor a person controlling or controlled by the QPAM (applying the definition of
“control” in Section V(e) of the QPAM Exemption) owns a 5% or more interest in
the Company and (i) the identity of such QPAM and (ii) the names of all employee
benefit plans whose assets are included in such investment fund have been
disclosed to the Company in writing pursuant to this clause (d); or
     (e) the Source constitutes assets of a “plan(s)” (within the meaning of
Section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV of the INHAM exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of “control” in Section IV(d) of the INHAM Exemption) owns a 5%
or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Company in writing pursuant to this clause (e); or
     (f) the Source is a governmental plan; or
     (g) the Source is one or more employee benefit plans, or a separate account
or trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this clause (g); or
     (h) the Source does not include assets of any employee benefit plan, other
than a plan exempt from the coverage of ERISA.
As used in this Section 6.3, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.
Section 7. Information as to Company.
     Section 7.1. Financial and Business Information. The Company shall deliver
to each holder of Notes that is an Institutional Investor:
     (a) Quarterly Statements — within 60 days after the end of each quarterly
fiscal period in each fiscal year of the Company (other than the last quarterly
fiscal period of each such fiscal year),
     (i) a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such quarter, and
     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries, for such quarter and (in the
case of the second and third quarters) for the portion of the fiscal year ending
with such quarter,

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Eagle Materials Inc.   Note Purchase Agreement

setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments, provided that filing with the Securities and Exchange Commission
within the time period specified above the Company’s Quarterly Report on
Form 10-Q prepared in compliance with the requirements therefor shall be deemed
to satisfy the requirements of this Section 7.1(a) and, provided, further, that
the Company shall be deemed to have made such delivery of such Form 10-Q if it
shall have timely made such Form 10-Q available on “EDGAR” and on its home page
on the worldwide web (at the date of this Agreement located at:
http//www.eaglematerials.com) and shall have given each Purchaser prior notice
of such availability on EDGAR and on its home page in connection with each
delivery (such availability and notice thereof being referred to as “Electronic
Delivery”);
     (b) Annual Statements — within 105 days after the end of each fiscal year
of the Company,
     (i) a consolidated balance sheet of the Company and its Subsidiaries, as at
the end of such year, and
     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, provided that
filing with the Securities and Exchange Commission within the time period
specified above of the Company’s Annual Report on Form 10-K for such fiscal year
(together with the Company’s annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor shall be deemed to satisfy the requirements of this
Section 7.1(b), provided, further, that the Company shall be deemed to have made
such delivery of such Form 10-K if it shall have timely made Electronic Delivery
thereof;
     (c) SEC and Other Reports — except for filings referred to in
Section 7.1(a) and (b) above, promptly upon their becoming available and, to the
extent applicable, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public securities
holders generally, and (ii) each regular or

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Eagle Materials Inc.   Note Purchase Agreement

periodic report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and Exchange
Commission and of all press releases and other statements made available
generally by the Company or any Subsidiary to the public concerning developments
that are Material; provided, that the Company shall be deemed to have made such
delivery of any such information if it shall have timely made Electronic
Delivery thereof;
     (d) Notice of Default or Event of Default — promptly, and in any event
within five Business Days after a Responsible Officer becomes aware of the
existence of any Default or Event of Default or that any Person has given any
notice or taken any action with respect to a claimed default hereunder or that
any Person has given any notice or taken any action with respect to a claimed
default of the type referred to in Section 11(f), a written notice specifying
the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;
     (e) ERISA Matters — promptly, and in any event within five Business Days
after a Responsible Officer becomes aware of any of the following, a written
notice setting forth the nature thereof and the action, if any, that the Company
or an ERISA Affiliate proposes to take with respect thereto:
     (i) with respect to any Plan, any reportable event, as defined in
Section 4043(c) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations as in effect on the
date thereof;or
     (ii) the taking by the PBGC of steps to institute, or the threatening by
the PBGC of the institution of, proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan; or
     (iii) any event, transaction or condition that would result in the
incurrence of any liability by the Company or any ERISA Affiliate pursuant to
Title I or IV of ERISA or the imposition of a penalty or excise tax under the
provisions of the Code relating to employee benefit plans, or the imposition of
any Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with any other such
liabilities or Liens then existing, would reasonably be expected to have a
Material Adverse Effect;
     (f) Notices from Governmental Authority — promptly, and in any event within
30 days of receipt thereof, copies of any notice to the Company or any
Subsidiary from any federal or state Governmental Authority relating to any
order, ruling, statute or

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Eagle Materials Inc.   Note Purchase Agreement

other law or regulation that would reasonably be expected to have a Material
Adverse Effect;
     (g) Supplements — promptly and in any event within 10 Business Days after
the execution and delivery of any Supplement, a copy thereof; and
     (h) Requested Information — with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition,
assets or properties of the Company or any of its Subsidiaries or relating to
the ability of the Company to perform its obligations hereunder and under the
Notes as from time to time may be reasonably requested by any such holder of
Notes.
          Notwithstanding the foregoing, in the event that one or more
Unrestricted Subsidiaries shall either (i) own more than 10% of the total
consolidated assets of the Company and its Subsidiaries, or (ii) account for
more than 10% of the consolidated gross revenues of the Company and its
Subsidiaries, determined in each case in accordance with GAAP, then, within the
respective periods provided in Section 7.1(a) and (b) above, the Company shall
deliver to each holder of Notes that is an Institutional Investor, unaudited
financial statements of the character and for the dates and periods as in said
Sections 7.1(a) and (b) covering such group of Unrestricted Subsidiaries (on a
consolidated basis), together with a consolidating statement reflecting
eliminations or adjustments required to reconcile the financial statements of
such group of Unrestricted Subsidiaries to the financial statements delivered
pursuant to Sections 7.1(a) and (b).
     Section 7.2. Officer’s Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth (which, in the case of Electronic Delivery of any such financial
statements, shall be by separate concurrent delivery of such certificate to each
holder of Notes):
     (a) Covenant Compliance — the information required in order to establish
whether the Company was in compliance with the requirements of Sections 10.1
through 10.6, inclusive, and Section 10.9 hereof during the quarterly or annual
period covered by the statements then being furnished (including with respect to
each such Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the terms of
such Sections, and the calculation of the amount, ratio or percentage then in
existence); and
     (b) Event of Default — a statement that such officer has reviewed the
relevant terms hereof and such review shall not have disclosed the existence
during the quarterly or annual period covered by the statements then being
furnished of any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.

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Eagle Materials Inc.   Note Purchase Agreement

     Section 7.3. Visitation. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
     (a) No Default — if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to visit
the principal executive office of the Company, to discuss the affairs, finances
and accounts of the Company and its Subsidiaries with the Company’s officers,
and (with the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Restricted Subsidiary, all at
such reasonable times and as often as may be reasonably requested in writing;
and
     (b) Default — if a Default or Event of Default then exists, at the expense
of the Company, to visit and inspect any of the offices or properties of the
Company or any Restricted Subsidiary, to examine all their respective books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers and independent public accountants (and by this
provision the Company authorizes said accountants to discuss the affairs,
finances and accounts of the Company and its Subsidiaries), all at such times
and as often as may be requested.
Section 8. Payment of the Notes.
     Section 8.1. Required Prepayments. (a) The entire unpaid principal amount
of the Tranche A Notes shall become due and payable on October 2, 2014.
          (b) The entire unpaid principal amount of the Tranche B Notes shall
become due and payable on October 2, 2016.
          (c) The entire unpaid principal amount of the Tranche C Notes shall
become due and payable on October 2, 2017.
          (d) The entire unpaid principal amount of the Tranche D Notes shall
become due and payable on October 2, 2019.
     Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may,
at its option, upon notice as provided below, prepay at any time all, or from
time to time any part of, the Notes of any Series in an amount not less than 10%
of the original aggregate principal amount of the Notes of such Series to be
prepaid, in the case of a partial prepayment (or such lesser amount as shall be
required to effect a partial prepayment resulting from an offer of prepayment
pursuant to Section 10.5), at 100% of the principal amount so prepaid, together
with interest accrued thereon to the date of such prepayment, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount of each Note then outstanding of the applicable Series to be
prepaid. The Company will give each holder of Notes written notice of each
optional prepayment under this Section 8.2 not less than 30 days and not

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more than 60 days prior to the date fixed for such prepayment. Each such notice
shall specify such date, the aggregate principal amount of the Notes of the
applicable Series to be prepaid on such date, the principal amount of each Note
held by such holder to be prepaid (determined in accordance with Section 8.3),
and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated respective Make-Whole Amount due in
connection with such prepayment (calculated as if the date of such notice were
the date of the prepayment), setting forth the details of such computation. Two
Business Days prior to such prepayment, the Company shall deliver to each holder
of Notes of the Series to be prepaid a certificate of a Senior Financial Officer
specifying the calculation of each such Make-Whole Amount as of the specified
prepayment date.
     Section 8.3. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes pursuant to the provisions of Section 8.2, the principal
amount of the Notes of the Series to be prepaid shall be allocated among all of
the Notes of such Series at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof. All regularly
scheduled partial prepayments made with respect to any Series of Additional
Notes pursuant to any Supplement shall be allocated as provided therein.
     Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall
be surrendered to the Company and cancelled and shall not be reissued, and no
Note shall be issued in lieu of any prepaid principal amount of any Note.
     Section 8.5. Purchase of Notes. The Company will not and will not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes of any Series except (a) upon the
payment or prepayment of all of the Notes of such Series in accordance with the
terms of this Agreement (including any Supplement hereto) and the Notes of such
Series or (b) pursuant to a written offer to purchase any outstanding Notes of
such Series made by the Company or an Affiliate pro rata to the holders of the
Notes of such Series upon the same terms and conditions (except that if such
Series has more than one separate tranche, such written offer shall be allocated
among all of the separate tranches of such Series at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof, but such written offer may otherwise differ among such separate
tranches (as appropriate due to different interests rates and/or maturities),
and with respect to each tranche of such Series, such written offer shall be
made pro rata to the holders of such tranche upon the same terms and
conditions). The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement (including any Supplement hereto), and no Notes
may be issued in substitution or exchange for any such Notes.

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Eagle Materials Inc.   Note Purchase Agreement

     Section 8.6. Make-Whole Amount for the Series 2007A Notes. The term
“Make-Whole Amount” means, with respect to any Series 2007A Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Series 2007A Note of the
applicable tranche, minus the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings with respect to the Called Principal of such Series 2007A Note:
     “Called Principal” means the principal of the Series 2007A Note of the
applicable tranche that is to be prepaid pursuant to Section 8.2 or has become
or is declared to be immediately due and payable pursuant to Section 12.1, as
the context requires.
     “Discounted Value” means the amount obtained by discounting all Remaining
Scheduled Payments from their respective scheduled due dates to the Settlement
Date with respect to such Called Principal, in accordance with accepted
financial practice and at a discount factor (applied on the same periodic basis
as that on which interest on such Note is payable) equal to the Reinvestment
Yield.
     “Reinvestment Yield” means 0.50% plus the yield to maturity calculated by
using (i) the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date on screen “PX-1” on the
Bloomberg Financial Market Service (or such other display on the Bloomberg
Financial Market Service having the same information if “PX-1” is replaced by
the Bloomberg Financial Market Service) for the most recently issued, actively
traded, on-the-run benchmark U.S. Treasury securities having a maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement Date,
or (ii) if such yields are not reported as of such time or the yields reported
as of such time are not ascertainable (including by way of interpolation), the
Treasury Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day preceding the
Settlement Date, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. In either case, the yield will be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and
(b) interpolating linearly on a straight line basis between (1) the most
recently issued, actively traded, on-the-run benchmark U.S. Treasury security
with the maturity closest to and greater than the Remaining Average Life and
(2) the most recently issued, actively traded, on-the-run benchmark U.S.
Treasury security with the maturity closest to and less than the Remaining
Average Life. The Reinvestment Yield shall be rounded to the number of decimal
places as appears in the interest rate of the applicable Note.
     “Remaining Average Life” means the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (i) such Called Principal into
(ii) the sum of the products obtained by multiplying (a) the principal component
of each Remaining Scheduled Payment by (b) the number of years (calculated to
the nearest one-twelfth

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Eagle Materials Inc.   Note Purchase Agreement

year) that will elapse between the Settlement Date and the scheduled due date of
such Remaining Scheduled Payment.
     “Remaining Scheduled Payments” means all payments of such Called Principal
and interest thereon that would be due after the Settlement Date if no payment
of such Called Principal were made prior to its scheduled due date, provided
that if such Settlement Date is not a date on which interest payments are due to
be made under the terms of such Note, then the amount of the next succeeding
scheduled interest payment will be reduced by the amount of interest accrued to
such Settlement Date and required to be paid on such Settlement Date pursuant to
Section 8.2 or 12.1.
     “Settlement Date” means, the date on which such Called Principal is to be
prepaid pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
     Section 8.7. Change in Control. (a) Notice of Change in Control or Control
Event. The Company will, within 15 Business Days after any Responsible Officer
has knowledge of the occurrence of any Change in Control or Control Event, give
written notice of such Change in Control or Control Event to each holder of
Notes. If a Change in Control has occurred, such notice shall contain and
constitute an offer to prepay Notes of each Series as described in subparagraph
(b) of this Section 8.7 and shall be accompanied by the certificate described in
subparagraph (e) of this Section 8.7.
          (b) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraph (a) of this Section 8.7 shall be an offer to prepay, in accordance
with and subject to this Section 8.7, all, but not less than all, the Notes held
by each holder (in this case only, “holder” in respect of any Note registered in
the name of a nominee for a disclosed beneficial owner shall mean such
beneficial owner) on a date specified in such offer (the “Proposed Prepayment
Date”). Such Proposed Prepayment Date (which shall be a Business Day) shall be
not less than 20 days and not more than 30 days after the date of such offer (if
the Proposed Prepayment Date shall not be specified in such offer, the Proposed
Prepayment Date shall be the 20th day after the date of such offer).
          (c) Acceptance; Rejection. A holder of Notes may accept or reject the
offer to prepay made pursuant to this Section 8.7 by causing a notice of such
acceptance or rejection to be delivered to the Company at least 5 Business Days
prior to the Proposed Prepayment Date. A failure by a holder of Notes to respond
to an offer to prepay made pursuant to this Section 8.7 shall be deemed to
constitute a rejection of such offer by such holder.
          (d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.7 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment. The prepayment
shall be made on the Proposed Prepayment Date.
          (e) Officer’s Certificate. Each offer to prepay the Notes pursuant to
this Section 8.7 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company

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Eagle Materials Inc.   Note Purchase Agreement

and dated the date of such offer, specifying: (i) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this Section 8.7; (iii) the principal
amount of each Note offered to be prepaid; (iv) the interest that would be due
on each Note offered to be prepaid, accrued to the Proposed Prepayment Date;
(v) that the conditions of this Section 8.7 have been fulfilled; and (vi) in
reasonable detail, the nature and date of the Change in Control.
          (f) “Change in Control” Defined. “Change in Control” means the
following events or circumstances:
The acquisition by any party, or two or more parties acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of 50% or more of the outstanding shares of the stock of the Company entitled to
elect 50% or more of the members of the board of directors of the Company.
          (g) “Control Event” Defined. “Control Event” means:
     (i) the execution by the Company or any of its Subsidiaries or Affiliates
of any agreement or letter of intent with respect to any proposed transaction or
event or series of transactions or events which, individually or in the
aggregate, would reasonably be expected to result in a Change in Control,
     (ii) the execution of any written agreement which, when fully performed by
the parties thereto, would result in a Change in Control, or
     (iii) the making of any written offer by any person (as such term is used
in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the
date of the Closing) or related persons constituting a group (as such term is
used in Rule 13d-5 under the Exchange Act as in effect on the date of the
Closing) to the holders of the common stock of the Company, which offer, if
accepted by the requisite number of holders, would result in a Change in
Control.
Section 9. Affirmative Covenants.
          The Company covenants that so long as any of the Notes are
outstanding:
     Section 9.1. Compliance with Law. Without limiting Section 10.8, the
Company will, and will cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA, the USA Patriot Act and
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

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     Section 9.2. Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the
case of entities of established reputations engaged in the same or a similar
business and similarly situated, except for any non-maintenance that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
     Section 9.3. Maintenance of Properties. The Company will, and will cause
each of its Restricted Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
     Section 9.4. Payment of Taxes and Claims. The Company will, and will cause
each of its Subsidiaries to, file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company or any
Subsidiary not permitted by Section 10.4, provided that neither the Company nor
any Subsidiary need pay any such tax or assessment or claims if (i) the amount,
applicability or validity thereof is contested by the Company or such Subsidiary
on a timely basis in good faith and in appropriate proceedings, and the Company
or a Subsidiary has established adequate reserves therefor in accordance with
GAAP on the books of the Company or such Subsidiary or (ii) the non-filing or
nonpayment, as the case may be, of all such taxes and assessments or claims in
the aggregate would not reasonably be expected to have a Material Adverse
Effect.
     Section 9.5. Corporate Existence, Etc. Subject to Sections 10.5 and 10.6,
the Company will at all times preserve and keep in full force and effect its
corporate existence, and will at all times preserve and keep in full force and
effect the corporate existence of each of its Restricted Subsidiaries (unless
merged into the Company or a Restricted Subsidiary) and all rights and
franchises of the Company and its Restricted Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise would
not, individually or in the aggregate, have a Material Adverse Effect.
     Section 9.6. Designation of Subsidiaries. The Company may from time to time
cause any Subsidiary (other than a Subsidiary Guarantor) to be designated as an
Unrestricted Subsidiary or any Unrestricted Subsidiary to be designated a
Restricted Subsidiary; provided,

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Eagle Materials Inc.   Note Purchase Agreement

however, that at the time of such designation and immediately after giving
effect thereto, (a) no Default or Event of Default would exist under the terms
of this Agreement, and (b) the Company and its Restricted Subsidiaries would be
in compliance with all of the covenants set forth in this Section 9 and
Section 10 if tested on the date of such action and provided, further, that once
a Subsidiary has been designated an Unrestricted Subsidiary, it shall not
thereafter be redesignated as a Restricted Subsidiary on more than one occasion,
and once a Subsidiary has been designated a Restricted Subsidiary, it shall not
thereafter be redesignated as an Unrestricted Subsidiary on more than one
occasion. Within ten (10) days following any designation described above, the
Company will deliver to each holder of Notes a notice of such designation
accompanied by a certificate signed by a Senior Financial Officer of the Company
certifying compliance with all requirements of this Section 9.6 and setting
forth all information required in order to establish such compliance.
     Section 9.7. Notes to Rank Pari Passu. The Notes and all other obligations
under this Agreement of the Company are and at all times shall remain direct and
unsecured obligations of the Company ranking pari passu as against the assets of
the Company with all other Notes from time to time issued and outstanding
hereunder without any preference among themselves and pari passu with the Debt
outstanding under the Bank Credit Agreement and all other present and future
unsecured Debt (actual or contingent) of the Company which is not expressed to
be subordinate or junior in rank to any other unsecured Debt of the Company. All
obligations under the Subsidiary Guaranty of each Subsidiary Guarantor in
respect of the Notes, and all other obligations of such Subsidiary Guarantor
under the Subsidiary Guaranty, are and at all times shall remain direct and
unsecured obligations of such Subsidiary Guarantor ranking pari passu as against
the assets of such Subsidiary Guarantor with all obligations of such Subsidiary
Guarantor under the Subsidiary Guaranty in respect of all other Notes from time
to time issued and outstanding hereunder and guarantied pursuant to the
Subsidiary Guaranty without any preference among themselves and pari passu with
such Subsidiary Guarantor’s Guaranty in respect of the Debt outstanding under
the Bank Credit Agreement and all other present and future unsecured Debt
(actual or contingent) of such Subsidiary Guarantor which is not expressed to be
subordinate or junior in rank to any other unsecured Debt of such Subsidiary
Guarantor.
     Section 9.8. Additional Subsidiary Guarantors. The Company will cause any
Subsidiary which is required by the terms of the Bank Credit Agreement to become
a party to, or otherwise guarantee, Debt in respect of the Bank Credit
Agreement, to enter into the Subsidiary Guaranty and deliver to each of the
holders of the Notes (concurrently with the incurrence of any such obligation
pursuant to the Bank Credit Agreement) the following items:
     (a) a joinder agreement in respect of the Subsidiary Guaranty;
     (b) a certificate signed by an authorized Responsible Officer of the
Company making representations and warranties to the effect of those contained
in Sections 5.1, 5.2, 5.4, 5.6 and 5.7, with respect to such Subsidiary and the
Subsidiary Guaranty, as applicable; and

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Eagle Materials Inc.   Note Purchase Agreement

     (c) an opinion of counsel (who may be in-house counsel for the Company)
addressed to each of the holders of the Notes and reasonably satisfactory to the
Required Holders, to the effect that the Subsidiary Guaranty by such Person has
been duly authorized, executed and delivered and that the Subsidiary Guaranty
constitutes the legal, valid and binding obligation of such Person enforceable
in accordance with its terms, except as an enforcement of such terms may be
limited by bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles.
     Section 9.9. Books and Records. The Company will, and will cause each of
its Restricted Subsidiaries to, maintain proper books of record and account in
conformity with GAAP and all applicable requirements of any Governmental
Authority having legal or regulatory jurisdiction over the Company or such
Restricted Subsidiary, as the case may be.
Section 10. Negative Covenants.
          The Company covenants that so long as any of the Notes are
outstanding:
     Section 10.1. Consolidated Debt to Consolidated EBITDA. The Company will
not at any time permit the ratio of Consolidated Debt to Consolidated EBITDA
(Consolidated EBITDA to be calculated as at the end of each fiscal quarter for
the four consecutive fiscal quarters then ended) to exceed 3.50 to 1.00.
     Section 10.2. Priority Debt. The Company will not at any time permit the
aggregate amount of all Priority Debt to exceed 20% of Consolidated Net Worth,
determined as of the end of the then most recently ended fiscal quarter of the
Company.
     Section 10.3. Interest Coverage Ratio. The Company will not permit the
ratio of Consolidated EBITDA to Consolidated Interest Expense for each period of
four consecutive fiscal quarters (calculated as at the end of each fiscal
quarter for the four consecutive fiscal quarters then ended) to be less than
2.50 to 1.00.
     Section 10.4. Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist (upon the happening of a contingency or
otherwise) any Lien on or with respect to any property or asset (including,
without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted Subsidiary, whether now owned
or held or hereafter acquired, or any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits (unless it makes, or
causes to be made, effective provision whereby the Notes will be equally and
ratably secured with any and all other obligations thereby secured, such
security to be pursuant to an agreement reasonably satisfactory to the Required
Holders and, in any such case, the Notes shall have the benefit, to the fullest
extent that, and with such priority as, the holders of the Notes may be entitled
under applicable law, of an equitable Lien on such property), except:

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Eagle Materials Inc.   Note Purchase Agreement

     (a) Liens for taxes, assessments or other governmental charges that are not
yet due and payable or the payment of which is not at the time required by
Section 9.4;
     (b) any attachment or judgment Lien, unless the judgment it secures shall
not, within 60 days after the entry thereof, have been satisfied, discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 60 days after the expiration of any such stay;
     (c) Liens incidental to the conduct of business or the ownership of
properties and assets (including landlords’, carriers’, warehousemen’s,
mechanics’, materialmen’s and other similar Liens for sums not yet due and
payable), Liens to secure the performance of bids, tenders, leases, or trade
contracts, or to secure statutory obligations (including obligations under
workers compensation, unemployment insurance and other social security
legislation), surety or appeal bonds or other Liens incurred in the ordinary
course of business and not in connection with the borrowing of money, Liens
arising from UCC financing statements filed for notice purposes in respect of
operating leases and Liens in favor of depositary banks or securities
intermediaries incurred in the ordinary course of business and not in connection
with the incurrence of Debt;
     (d) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to the ownership of property or assets or the ordinary conduct of the business
of the Company or any of its Restricted Subsidiaries, or Liens incidental to
minor survey exceptions, zoning restrictions and the like, provided that such
Liens do not, in the aggregate, materially detract from the value of such
property;
     (e) Liens securing Debt of a Restricted Subsidiary to the Company or to a
Wholly-Owned Restricted Subsidiary;
     (f) Liens existing as of the Closing Date and reflected in Schedule 10.4;
     (g) Liens incurred after the Closing Date given to secure the payment of
the purchase price incurred in connection with the acquisition, construction or
improvement of property (other than accounts receivable or inventory) useful and
intended to be used in carrying on the business of the Company or a Restricted
Subsidiary, including Liens existing on such property at the time of acquisition
or construction thereof or Liens incurred within 365 days of such acquisition or
completion of such construction or improvement, provided that (i) the Lien shall
attach solely to the property acquired, purchased, constructed or improved;
(ii) at the time of acquisition, construction or improvement of such property
(or, in the case of any Lien incurred within 365 days of such acquisition or
completion of such construction or improvement, at the time of the incurrence of
the Debt secured by such Lien), the aggregate amount remaining unpaid on all
Debt secured by such Lien on such property, whether or not assumed by the
Company or a Restricted Subsidiary, shall not exceed the lesser of (y) the cost
of such acquisition, construction or improvement or (z) the Fair Market Value of
such property (as determined in good faith by one or more officers of the
Company to whom authority to

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Eagle Materials Inc.   Note Purchase Agreement

enter into the transaction has been delegated by the board of directors of the
Company); and (iii) at the time of such incurrence and after giving effect
thereto, no Default or Event of Default would exist;
     (h) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Company or a Restricted Subsidiary
after the Closing Date or its becoming a Restricted Subsidiary after the Closing
Date (other than after being designated a Restricted Subsidiary pursuant to
Section 9.6 hereof), or any Lien existing on any property acquired after the
Closing Date by the Company or any Restricted Subsidiary at the time such
property is so acquired (whether or not the Debt secured thereby shall have been
assumed), provided that (i) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person’s becoming a
Restricted Subsidiary or such acquisition of property, (ii) each such Lien shall
extend solely to the item or items of property so acquired and, if required by
the terms of the instrument originally creating such Lien, other property which
is an improvement to or is acquired for specific use in connection with such
acquired property, and (iii) at the time of such incurrence and after giving
effect thereto, no Default or Event of Default would exist;
     (i) any extensions, renewals or replacements of any Lien permitted by the
preceding subparagraphs (e), (f), (g) and (h) of this Section 10.4, provided
that (i) no additional property shall be encumbered by such Liens, (ii) the
unpaid principal amount of the Debt or other obligations secured thereby shall
not be increased on or after the date of any extension, renewal or replacement,
and (iii) at such time and immediately after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing;
     (j) Liens granted on accounts receivable and all Related Rights conveyed in
connection with Receivables Securitization Financings; and
     (k) Liens securing Priority Debt of the Company or any Restricted
Subsidiary, provided that the aggregate principal amount of any such Priority
Debt shall be permitted by Section 10.2.
     Section 10.5. Sales of Assets. Except as permitted by Section 10.6, the
Company will not, and will not permit any Restricted Subsidiary to, sell, lease
or otherwise dispose of any substantial part (as defined below) of the assets of
the Company and its Restricted Subsidiaries; provided, however, that the Company
or any Restricted Subsidiary may sell, lease or otherwise dispose of assets
constituting a substantial part of the assets of the Company and its Restricted
Subsidiaries if such assets are sold in an arms length transaction and, at such
time and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing and an amount equal to the net proceeds received from
such sale, lease or other disposition (but only with respect to that portion of
such assets that exceeds the definition of “substantial part” set forth below)
shall be used within 365 days of such sale, lease or disposition, in any
combination:

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Eagle Materials Inc.   Note Purchase Agreement

     (1) for working capital purposes (with respect to any Receivables
Securitization Financing), or to acquire assets used or useful in carrying on
the business of the Company and its Restricted Subsidiaries and having a value
at least equal to the value of such assets sold, leased or otherwise disposed
of; and/or
     (2) to prepay or retire Senior Debt of the Company and/or its Restricted
Subsidiaries, provided that (i) the Company shall offer to prepay each
outstanding Note ratably with all such Senior Debt prepaid or retired, and
(ii) any such prepayment of the Notes shall be made in accordance with the terms
of Section 8.2 (except at par and without the payment of any Make-Whole Amount
or any other premium).
          As used in this Section 10.5, a sale, lease or other disposition of
assets shall be deemed to be a “substantial part” of the assets of the Company
and its Restricted Subsidiaries if the book value of such assets, when added to
the book value of all other assets sold, leased or otherwise disposed of by the
Company and its Restricted Subsidiaries during the period of 12 consecutive
months ending on the date of such sale, lease or other disposition, exceeds 10%
of the book value of Consolidated Total Assets, determined as of the end of the
fiscal quarter immediately preceding such sale, lease or other disposition;
provided that there shall be excluded from any determination of a “substantial
part” any (i) sale or disposition of assets in the ordinary course of business
of the Company and its Restricted Subsidiaries, (ii) any transfer of assets from
the Company to any Wholly-Owned Restricted Subsidiary or from any Restricted
Subsidiary to the Company or a Wholly-Owned Restricted Subsidiary, (iii) sales
of accounts receivable pursuant to one or more Receivables Securitization
Financings with respect to which the aggregate purchase commitments do not
exceed $75,000,000, and (iv) any sale or transfer of property acquired by the
Company or any Restricted Subsidiary after the date of this Agreement to any
Person within 365 days following the acquisition or construction of such
property by the Company or any Restricted Subsidiary if the Company or a
Restricted Subsidiary shall, concurrently with such sale or transfer, lease such
property as lessee.
     Section 10.6. Merger and Consolidation. The Company will not, and will not
permit any of its Restricted Subsidiaries to, consolidate with or merge with any
other Person or convey, transfer or lease all or substantially all of its assets
in a single transaction or series of transactions to any Person; provided that:
     (1) any Restricted Subsidiary of the Company may (x) consolidate with or
merge with, or convey, transfer or lease all or substantially all of its assets
in a single transaction or series of transactions to, (i) the Company or a
Restricted Subsidiary so long as in any merger or consolidation involving the
Company, the Company shall be the surviving or continuing corporation or
(ii) any other Person so long as the survivor is a Restricted Subsidiary, or
(y) convey, transfer or lease all of its assets in compliance with the
provisions of Section 10.5; and
     (2) the foregoing restriction does not apply to the consolidation or merger
of the Company with, or the conveyance, transfer or lease of all or
substantially all of the assets of the Company in a single transaction or series
of transactions to, any Person so long as:

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Eagle Materials Inc.   Note Purchase Agreement

     (a) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety, as the case may
be (the “Successor Entity”), shall be a solvent entity organized and existing
under the laws of the United States of America, any State thereof or the
District of Columbia;
     (b) if the Company is not the Successor Entity, such Successor Entity shall
have executed and delivered to each holder of Notes its assumption of the due
and punctual performance and observance of each covenant and condition of this
Agreement (and each Supplement hereto) and the Notes (pursuant to such
agreements and instruments as shall be reasonably satisfactory to the Required
Holders), and the Successor Entity shall have caused to be delivered to each
holder of Notes (A) an opinion of nationally recognized independent counsel, to
the effect that all agreements or instruments effecting such assumption are
enforceable in accordance with their terms and (B) an acknowledgment from each
Subsidiary Guarantor that the Subsidiary Guaranty continues in full force and
effect; and
     (c) immediately before and immediately after giving effect to such
transaction no Default or Event of Default would exist.
     Section 10.7. Transactions with Affiliates. The Company will not and will
not permit any Restricted Subsidiary to enter into directly or indirectly any
Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the Company
or another Restricted Subsidiary), except in the ordinary course and upon fair
and reasonable terms that are not materially less favorable to the Company or
such Restricted Subsidiary, taken as a whole, than would be obtainable in a
comparable arm’s-length transaction with a Person not an Affiliate.
     Section 10.8. Terrorism Sanctions Regulations. The Company will not and
will not permit any Subsidiary to (a) become a Person described or designated in
the Specially Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (b) to the
best of the Company’s knowledge after reasonable investigation, engage in any
dealings or transactions with any such Person.
     Section 10.9. Restricted Subsidiary Group. The Company will at all times
require that either (i) Consolidated Total Assets equal at least 80% of the
consolidated total assets of the Company and its Subsidiaries, determined in
accordance with GAAP, or (ii) consolidated total revenues of the Company and its
Restricted Subsidiaries for the period of four consecutive fiscal quarters most
recently ended equals at least 80% of the consolidated total revenues of the
Company and its Subsidiaries during such period, determined in accordance with
GAAP.

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Eagle Materials Inc.   Note Purchase Agreement

Section 11. Events of Default.
          An “Event of Default” shall exist if any of the following conditions
or events shall occur and be continuing:
     (a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or
     (b) the Company defaults in the payment of any interest on any Note for
more than five Business Days after the same becomes due and payable; or
     (c) the Company defaults in the performance of or compliance with any term
contained in Section 10 or any covenant in a Supplement which specifically
provides that it shall have the benefit of this paragraph (c) or any Subsidiary
Guarantor defaults in the performance of or compliance with any term of the
Subsidiary Guaranty beyond any period of grace or cure period (if any) provided
with respect thereto; or
     (d) the Company defaults in the performance of or compliance with any term
contained herein or in any Supplement (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not remedied
within 30 days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default or (ii) the Company receiving written notice of such
default from any holder of a Note (any such written notice to be identified as a
“notice of default” and to refer specifically to this paragraph (d) of
Section 11); or
     (e) any Subsidiary Guaranty ceases to be a legally valid, binding and
enforceable obligation or contract of a Subsidiary Guarantor (other than upon a
release of any Subsidiary Guarantor from a Subsidiary Guaranty in accordance
with the terms of Section 2.3(b) hereof), or any Subsidiary Guarantor or any
party by, through or on account of any such Person, challenges in writing the
validity, binding nature or enforceability of any such Subsidiary Guaranty; or
     (f) any representation or warranty made in writing by or on behalf of the
Company or Subsidiary Guarantor in this Agreement or any Subsidiary Guaranty or
by any officer of the Company or any Subsidiary Guarantor in any writing
furnished in connection with the transactions contemplated hereby or by any
Subsidiary Guaranty proves to have been false or incorrect in any material
respect on the date as of which made; or
     (g) (i) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest (in the payment amount of at least
$100,000) on any Debt other than the Notes that is outstanding in an aggregate
principal amount of at least $10,000,000 beyond any period of grace provided
with respect thereto, or (ii) the Company or any Restricted Subsidiary is in
default in the performance of or compliance

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Eagle Materials Inc.   Note Purchase Agreement

with any term of any instrument, mortgage, indenture or other agreement relating
to any Debt other than the Notes in an aggregate principal amount of at least
$10,000,000 or any other condition exists, and as a consequence of such default
or condition such Debt has become, or has been declared, due and payable, or
(iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of Debt to
convert such Debt into equity interests), the Company or any Restricted
Subsidiary has become obligated to purchase or repay Debt other than the Notes
before its regular maturity or before its regularly scheduled dates of payment
in an aggregate outstanding principal amount of at least $10,000,000; or
     (h) the Company or any Material Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
     (i) a court or governmental authority of competent jurisdiction enters an
order appointing, without consent by the Company or any of its Material
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Material Subsidiaries, or any such petition shall be filed against the Company
or any of its Material Subsidiaries and such petition shall not be dismissed
within 60 days; or
     (j) a final judgment or judgments at any one time outstanding for the
payment of money aggregating in excess of $10,000,000 (except to the extent
covered by independent third-party insurance as to which the insurer
acknowledges in writing that such judgment or judgments are covered by such
insurance) are rendered against one or more of the Company or any of its
Restricted Subsidiaries and which judgments are not, within 60 days after entry
thereof, bonded, discharged or stayed pending appeal, or are not discharged
within 60 days after the expiration of such stay; or
     (k) if (i) any Plan shall fail to satisfy the minimum funding standards of
ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
Section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under Section 4042 of ERISA to terminate or appoint
a trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a

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Eagle Materials Inc.   Note Purchase Agreement

subject of any such proceedings, (iii) the aggregate “amount of unfunded benefit
liabilities” (within the meaning of Section 4001(a)(18) of ERISA) under all
Plans, determined in accordance with Title IV of ERISA, shall exceed
$10,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer
Plan, or (vi) the Company or any Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare benefits in a manner
that would increase the liability of the Company or any Subsidiary thereunder;
and any such event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, would reasonably
be expected to have a Material Adverse Effect.
As used in Section 11(k), the terms “employee benefit plan” and “employee
welfare benefit plan” shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
Section 12. Remedies on Default, Etc.
     Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Company described in paragraph (h) or (i) of Section 11 (other than an Event of
Default described in clause (i) of paragraph (h) or described in clause (vi) of
paragraph (h) by virtue of the fact that such clause encompasses clause (i) of
paragraph (h)) has occurred, all the Notes of every Series then outstanding
shall automatically become immediately due and payable.
          (b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 50% in aggregate principal amount of the Notes of
any Series at the time outstanding may at any time at its or their option, by
notice or notices to the Company, declare all the Notes of such Series then
outstanding to be immediately due and payable.
          (c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing with respect to any Notes, any holder
or holders of Notes at the time outstanding affected by such Event of Default
may at any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by such holder or holders to be immediately due and
payable.
          Upon any Note’s becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Note will forthwith mature and the
entire unpaid principal amount of such Note, plus (i) all accrued and unpaid
interest thereon (including, but not limited to, interest accrued thereon at the
Default Rate) and (ii) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are

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Eagle Materials Inc.   Note Purchase Agreement

prepaid or are accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under such circumstances.
     Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
     Section 12.3. Rescission. At any time after the Notes of any Series have
been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
holders of not less than 51% in aggregate principal amount of the Notes of such
Series then outstanding, by written notice to the Company, may rescind and annul
any such declaration and its consequences if (a) the Company has paid all
overdue interest on the Notes of such Series, all principal of and Make-Whole
Amount on any Notes of such Series that are due and payable and are unpaid other
than by reason of such declaration, and all interest on such overdue principal
and Make-Whole Amount and (to the extent permitted by applicable law) any
overdue interest in respect of the Notes of such Series at the Default Rate,
(b) neither the Company nor any other Person shall have paid any amounts which
have become due solely by reason of such declaration, (c) all Events of Default
and Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (d) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to any Notes of such Series. No rescission and
annulment under this Section 12.3 will extend to or affect any subsequent Event
of Default or Default or impair any right consequent thereon.
     Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys’
fees, expenses and disbursements.
Section 13. Registration; Exchange; Substitution of Notes.
     Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not

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Eagle Materials Inc.   Note Purchase Agreement

be affected by any notice or knowledge to the contrary. The Company shall give
to any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
     Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note to
the Company at the address and to the attention of the designated officer (all
as specified in Section 18(iii)), for registration of transfer or exchange (and
in the case of a surrender for registration of transfer accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of
such Note or part thereof), within ten Business Days thereafter, the Company
shall execute and deliver, at the Company’s expense (except as provided below),
one or more new Notes (as requested by the holder thereof) of the same Series
(and of the same tranche if such Series has separate tranches) in exchange
therefor, in an aggregate principal amount equal to the unpaid principal amount
of the surrendered Note. Each such new Note shall be payable to such Person as
such holder may request and shall be substantially in the form of the Note of
such Series originally issued hereunder or pursuant to any Supplement. Each such
new Note shall be dated and bear interest from the date to which interest shall
have been paid on the surrendered Note or dated the date of the surrendered Note
if no interest shall have been paid thereon. The Company may require payment of
a sum sufficient to cover any stamp tax or governmental charge imposed in
respect of any such transfer of Notes. Notes shall not be transferred in
denominations of less than $2,000,000, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, one Note
may be in a denomination of less than $2,000,000. Any transferee, by its
acceptance of a Note registered in its name (or the name of its nominee), shall
be deemed to have made the representations set forth in Sections 6.2 and 6.3.
          The Notes have not been registered under the Securities Act or under
the securities laws of any state and each holder agrees that such Notes shall
not be transferred or resold unless registered under the Securities Act and all
applicable state securities laws or unless an exemption from the requirement for
such registration is available.
     Section 13.3. Replacement of Notes. Upon receipt by the Company at the
address and to the attention of the designated officer (all as specified in
Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of
and the loss, theft, destruction or mutilation of any Note (which evidence shall
be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and
     (a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or
     (b) in the case of mutilation, upon surrender and cancellation thereof,

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Eagle Materials Inc.   Note Purchase Agreement

the Company at its own expense shall execute and deliver not more than 10
Business Days following satisfaction of such conditions, in lieu thereof, a new
Note of the same Series (and of the same tranche if such Series has separate
tranches), dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date of
such lost, stolen, destroyed or mutilated Note if no interest shall have been
paid thereon.
Section 14. Payments on Notes.
     Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount and interest becoming due and payable on the Notes
shall be made in New York, New York at the principal office of Bank of America,
N.A. in such jurisdiction. The Company may at any time, by notice to each holder
of a Note, change the place of payment of the Notes so long as such place of
payment shall be either the principal office of the Company in such jurisdiction
or the principal office of a bank or trust company in such jurisdiction.
     Section 14.2. Home Office Payment. So long as any Purchaser or Additional
Purchaser or such Purchaser’s nominee or such Additional Purchaser’s nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount and interest by the
method and at the address specified for such purpose for such Purchaser on
Schedule A hereto or, in the case of any Additional Purchaser, Schedule A
attached to any Supplement pursuant to which such Additional Purchaser is a
party, or by such other method or at such other address as such Purchaser or
Additional Purchaser shall have from time to time specified to the Company in
writing for such purpose, without the presentation or surrender of such Note or
the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser or Additional Purchaser shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 14.1. Prior
to any sale or other disposition of any Note held by any Purchaser or Additional
Purchaser or such Person’s nominee, such Person will, at its election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by a Purchaser under this Agreement
and that has made the same agreement relating to such Note as the Purchasers
have made in this Section 14.2.
Section 15. Expenses, Etc.
     Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all reasonable actual
out-of-pocket costs and expenses (including reasonable attorneys’ fees of a
special counsel for the Purchasers or any Additional Purchasers and, if
reasonably required by the Required Holders, local or other counsel) incurred by
each Purchaser and each Additional Purchaser and each other holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or

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Eagle Materials Inc.   Note Purchase Agreement

consents under or in respect of this Agreement (including any Supplement) or the
Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement (including any Supplement) or the Notes or in responding to
any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement (including any Supplement) or the Notes, or by
reason of being a holder of any Note, and (b) the costs and expenses, including
financial advisors’ fees, incurred in connection with the insolvency or
bankruptcy of the Company or any Subsidiary or in connection with any work-out
or restructuring of the transactions contemplated hereby and by the Notes. The
Company will pay, and will save each Purchaser, each Additional Purchaser and
each other holder of a Note harmless from, all claims in respect of any fees,
costs or expenses if any, of brokers and finders (other than those, if any,
retained by a Purchaser or other holder in connection with its purchase of the
Notes).
     Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement, any Supplement or the
Notes, and the termination of this Agreement or any Supplement.
Section 16. Survival of Representations and Warranties; Entire Agreement.
          All representations and warranties contained herein or in any
Supplement shall survive the execution and delivery of this Agreement, such
Supplement and the Notes, the purchase or transfer by any Purchaser or any
Additional Purchaser of any such Note or portion thereof or interest therein and
the payment of any Note may be relied upon by any subsequent holder of any such
Note, regardless of any investigation made at any time by or on behalf of any
Purchaser or any Additional Purchaser or any other holder of any such Note. All
statements contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant to this Agreement or any Supplement shall be
deemed representations and warranties of the Company under this Agreement;
provided, that the representations and warranties contained in any Supplement
shall only be made for the benefit of the Additional Purchasers which are party
to such Supplement and the holders of the Notes issued pursuant to such
Supplement, including subsequent holders of any Note issued pursuant to such
Supplement, and shall not require the consent of the holders of existing Notes.
Subject to the preceding sentence, this Agreement (including every Supplement)
and the Notes embody the entire agreement and understanding between the
Purchasers and the Additional Purchasers and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.
Section 17. Amendment and Waiver.
     Section 17.1. Requirements. (a) Subject to Section 17.1(c), this Agreement
(including any Supplement) and the Notes may be amended, and the observance of
any term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (i) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof or the corresponding

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Eagle Materials Inc.   Note Purchase Agreement

provision of any Supplement, or any defined term (as it is used in any such
Section or such corresponding provision of any Supplement), will be effective as
to any holder of Notes unless consented to by such holder of Notes in writing,
and (ii) no such amendment or waiver may, without the written consent of all of
the holders of Notes at the time outstanding directly affected thereby,
(A) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest (if such change results in a decrease in the interest rate) or of the
Make-Whole Amount on, the Notes, (B) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (C) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20
or the corresponding provision of any Supplement.
          (b) Supplements. Notwithstanding anything to the contrary contained
herein, the Company may enter into any Supplement providing for the issuance of
one or more Series of Additional Notes consistent with Section 2.2 hereof
without obtaining the consent of any holder of any other Series of Notes.
          (c) Reduction to Interest Rates, Payments or Make-Whole.
Notwithstanding anything to the contrary contained in Section 17.1(a), (i) the
interest rate (including the time of payment) and Make-Whole Amount (or other
prepayment premium, if applicable) (or method of computation thereof) associated
with any Series of Notes and (ii) the scheduled prepayment provisions set forth
in Section 8.1 of this Agreement (or the corresponding section of any
Supplement), may be amended with the prior written consent of the Company and
all holders of the Notes of such Series, and without any requirements to obtain
the prior written consent of the holders of any other Series of Notes.
     Section 17.2. Solicitation of Holders of Notes.
          (a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof, of any Supplement or of the Notes. The Company will deliver executed or
true and correct copies of each amendment, waiver or consent effected pursuant
to the provisions of this Section 17 to each holder of outstanding Notes
promptly following the date on which it is executed and delivered by, or
receives the consent or approval of, the requisite holders of Notes.
          (b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security or provide other credit
support, to any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes of any waiver or amendment of any of the
terms and provisions hereof or of any Supplement unless such remuneration is
concurrently paid, or security is concurrently granted or other credit support
is concurrently provided, on the same terms, ratably to each holder of Notes
then outstanding even if such holder did not consent to such waiver or
amendment.

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      Eagle Materials Inc.   Note Purchase Agreement

          (c) Consent in Contemplation of Transfer. Any consent made pursuant to
this Section 17 by a holder of Notes that has transferred or has agreed to
transfer its Notes to the Company, any Subsidiary or any Affiliate of the
Company and has provided or has agreed to provide such written consent as a
condition to such transfer shall be void and of no force or effect except solely
as to such holder, and any amendments effected or waivers granted or to be
effected or granted that would not have been or would not be so effected or
granted but for such consent (and the consents of all other holders of Notes
that were acquired under the same or similar conditions) shall be void and of no
force or effect except solely as to such holder.
     Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term “this Agreement” and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
     Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
Section 18. Notices.
     All notices and communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid),
(b) by registered or certified mail with return receipt requested (postage
prepaid) or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
          (i) if to a Purchaser or such Purchaser’s nominee, to such Purchaser
or such Purchaser’s nominee at the address specified for such communications in
Schedule A to this Agreement, or at such other address as such Purchaser or such
Purchaser’s nominee shall have specified to the Company in writing pursuant to
this Section 18;
          (ii) if to an Additional Purchaser or such Additional Purchaser’s
nominee, to such Additional Purchaser or such Additional Purchaser’s nominee at
the address specified for such communications in Schedule A to any Supplement,
or at such other address as such Additional Purchaser or such Additional
Purchaser’s nominee shall have specified to the Company in writing,

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      Eagle Materials Inc.   Note Purchase Agreement

     (iii) if to any other holder of any Note, to such holder at such address as
such other holder shall have specified to the Company in writing pursuant to
this Section 18, or
     (iv) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of Chief Financial Officer, with a copy to the
General Counsel, or at such other address as the Company shall have specified to
the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
Section 19. Reproduction of Documents.
     This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at the Closing or by any
Additional Purchaser (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter furnished
to any Purchaser or any Additional Purchaser, may be reproduced by such
Purchaser or such Additional Purchaser by any photographic, photostatic,
electronic, digital, or other similar process and such Purchaser or such
Additional Purchaser may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser or
such Additional Purchaser in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
Section 20. Confidential Information.
     For the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser or any Additional Purchaser by or on
behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately identified
when received by such Purchaser or Additional Purchaser as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to such
Purchaser or such Additional Purchaser prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by such
Purchaser or such Additional Purchaser or any Person acting on such Purchaser’s
or such Additional Purchaser’s behalf, (c) otherwise becomes known to such
Purchaser or such Additional Purchaser other than through disclosure by the
Company or any Subsidiary, or through disclosure by any other Person known by
such Purchaser or Additional Purchaser to be subject to a confidentiality
agreement or undertaking, or (d) constitutes financial statements delivered to
such Purchaser or such Additional Purchaser

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      Eagle Materials Inc.   Note Purchase Agreement

under Section 7.1 that are otherwise publicly available. Each Purchaser and each
Additional Purchaser will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by such Purchaser or such
Additional Purchaser in good faith to protect confidential information of third
parties delivered to such Purchaser or such Additional Purchaser, provided that
such Purchaser or such Additional Purchaser may deliver or disclose Confidential
Information to (i) such Purchaser’s or such Additional Purchaser’s directors,
trustees, officers, employees, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by such Purchaser’s or such Additional Purchaser’s Notes), (ii) such
Purchaser’s or such Additional Purchaser’s financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note, (iv) any Institutional Investor to which
such Purchaser or such Additional Purchaser sells or offers to sell such Note or
any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (v) any Person from which such Purchaser or such
Additional Purchaser offers to purchase any security of the Company (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (vi) any federal
or state regulatory authority having jurisdiction over such Purchaser or such
Additional Purchaser, (vii) the National Association of Insurance Commissioners
or any similar organization, or any nationally recognized rating agency that
requires access to information about such Purchaser’s or such Additional
Purchaser’s investment portfolio, or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to such Purchaser or such
Additional Purchaser, (x) in response to any subpoena or other legal process,
(y) in connection with any litigation to which such Purchaser or such Additional
Purchaser is a party or (z) if an Event of Default has occurred and is
continuing, to the extent such Purchaser or such Additional Purchaser may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies under such
Purchaser’s or such Additional Purchaser’s Notes, the Subsidiary Guaranty and
this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.
Section 21. Substitution of Purchaser.
     Each Purchaser and each Additional Purchaser shall have the right to
substitute any one of its Affiliates as the purchaser of the Notes that it has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser or such Additional Purchaser and such
Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, any reference to such Purchaser or such Additional Purchaser in
this Agreement (other than in this Section 21), shall

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      Eagle Materials Inc.   Note Purchase Agreement

be deemed to refer to such Affiliate in lieu of such original Purchaser or such
original Additional Purchaser. In the event that such Affiliate is so
substituted as a Purchaser or an Additional Purchaser hereunder and such
Affiliate thereafter transfers to such original Purchaser or such original
Additional Purchaser all of the Notes then held by such Affiliate, upon receipt
by the Company of notice of such transfer, any reference to such Affiliate as a
“Purchaser” or an “Additional Purchaser” in this Agreement (other than in this
Section 21), shall no longer be deemed to refer to such Affiliate, but shall
refer to such original Purchaser or such original Additional Purchaser, and such
original Purchaser or such original Additional Purchaser shall again have all
the rights of an original holder of the Notes under this Agreement.
Section 22. Miscellaneous.
     Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement (including all covenants and other agreements
contained in any Supplement) by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
     Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement, any Supplement or the Notes to the contrary notwithstanding (but
without limiting the requirement in Section 8.4 that the notice of any optional
prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount or interest on any Note that is due
on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day; provided that if the
maturity date of any Note is a date other than a Business Day, the payment
otherwise due on such maturity date shall be made on the next succeeding
Business Day and shall include the additional days elapsed in the computation of
interest payable on such next succeeding Business Day.
     Section 22.3. Accounting Terms. All accounting terms used herein (including
any Supplement) which are not expressly defined in this Agreement have the
meanings respectively given to them in accordance with GAAP. Except as otherwise
specifically provided herein or in any Supplement, (i) all computations made
pursuant to this Agreement (including any Supplement) shall be made in
accordance with GAAP, and (ii) all financial statements shall be prepared in
accordance with GAAP.
     Section 22.4. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
     Section 22.5. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to

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      Eagle Materials Inc.   Note Purchase Agreement

action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
               For the avoidance of doubt, all Schedules and Exhibits attached
to this Agreement shall be deemed to be a part hereof.
     Section 22.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
     Section 22.7. Governing Law. This Agreement and each Supplement shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would permit the application of the
laws of a jurisdiction other than such State.
     Section 22.8. Jurisdiction and Process; Waiver of Jury Trial. (a) The
Company irrevocably submits to the non-exclusive jurisdiction of any New York
State or federal court sitting in the Borough of Manhattan, The City of New
York, over any suit, action or proceeding arising out of or relating to this
Agreement, any Supplement or the Notes. To the fullest extent permitted by
applicable law, the Company irrevocably waives and agrees not to assert, by way
of motion, as a defense or otherwise, any claim that it is not subject to the
jurisdiction of any such court, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.
          (b) The Company consents to process being served by or on behalf of
any holder of Notes in any suit, action or proceeding of the nature referred to
in Section 22.8(a) by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Section 18 or at such other address
of which such holder shall then have been notified pursuant to said Section. The
Company agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.
          (c) Nothing in this Section 22.8 shall affect the right of any holder
of a Note to serve process in any manner permitted by law, or limit any right
that the holders of any of the Notes may have to bring proceedings against the
Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
          (d) The parties hereto to the fullest extent permitted by law hereby
waive trial by jury in any action brought on or with respect to this Agreement,
any

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      Eagle Materials Inc.   Note Purchase Agreement

Supplement, the Notes or any other document executed in connection herewith or
therewith.
* * * * *

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      Eagle Materials Inc.   Note Purchase Agreement

     The execution hereof by the Purchasers shall constitute a contract among
the Company and the Purchasers for the uses and purposes hereinabove set forth.
This Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.

                  Very truly yours,    
 
                Eagle Materials Inc.    
 
           
 
  By   /s/ Arthur R. Zunker, Jr.    
 
           
 
      Name: Arthur R. Zunker, Jr.    
 
      Title: Senior Vice President – Finance and Treasurer    

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      Eagle Materials Inc.   Note Purchase Agreement

Accepted as of the date first written above.

                  John Hancock Life Insurance Company    
 
           
 
  By   /s/ Michael L. Short    
 
           
 
      Michael L. Short    
 
      Managing Director    
 
                John Hancock Variable Life Insurance Company    
 
           
 
  By   /s/ Michael L. Short    
 
           
 
      Michael L. Short    
 
      Managing Director    

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      Eagle Materials Inc.   Note Purchase Agreement

Connecticut General Life Insurance Company
By: Cigna Investments, Inc. (authorized agent)

                  By   /s/ Debra J. Height         Name:   Debra J. Height     
  Title:   Managing Director     

Life Insurance Company of North America
By: Cigna Investments, Inc. (authorized agent)

                  By   /s/ Debra J. Height         Name:   Debra J. Height     
  Title:   Managing Director   

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      Eagle Materials Inc.   Note Purchase Agreement

            State Farm Insurance Company
      By   /s/ Julie Pierce         Julie Pierce        Senior Investment
Officer              By   /s/ Lisa Rogers         Lisa Rogers        Investment
Officer     

            State Farm Life and Accident Assurance Company
      By   /s/ Julie Pierce         Julie Pierce        Senior Investment
Officer              By   /s/ Lisa Rogers         Lisa Rogers        Investment
Officer   

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      Eagle Materials Inc.   Note Purchase Agreement

Massachusetts Mutual Life Insurance Company
By: Babson Capital Management LLC as Investment Advisor

                  By   /s/ Elisabeth A. Perenick         Name:   Elisabeth A.
Perenick        Title:   Managing Director     

C.M. Life Insurance Company
By: Babson Capital Management LLC as Investment Sub-Advisor

                  By   /s/ Elisabeth A. Perenick         Name:   Elisabeth A.
Perenick        Title:   Managing Director   

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      Eagle Materials Inc.   Note Purchase Agreement

ING USA Annuity and Life Insurance Company
ING Life Insurance and Annuity Company
Security Life of Denver Insurance Company
ReliaStar Life Insurance Company
ReliaStar Life Insurance Company of New York
By: ING Investment Management LLC, as Agent

                  By   /s/ James V. Wittich         Name:   James V. Wittich   
    Title:   Senior Vice President   

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      Eagle Materials Inc.   Note Purchase Agreement

            The Guardian Life Insurance Company of America
      By   /s/ Thomas Donohue         Name:   Thomas Donohue        Title:  
Managing Director   

-52-

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      Eagle Materials Inc.   Note Purchase Agreement

American Fidelity Assurance Company
Fort Dearborn Life Insurance Company
Blue Cross and Blue Shield of Florida, Inc.
American Republic Insurance Company
The Catholic Aid Association
The Lafayette Life Insurance Company
Great Western Insurance Company
By: Advantus Capital Management, Inc.

                  By   /s/ Theodore R. Hoxmeier         Name:   Theodore R.
Hoxmeier        Title:   Vice President   

-53-

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      Eagle Materials Inc.   Note Purchase Agreement

            Life Insurance Company of the Southwest
      By   /s/ R. Scott Higgins         Name:   R. Scott Higgins        Title:  
Vice President Sentinel Asset Management        National Life Insurance Company
      By   /s/ R. Scott Higgins         Name:   R. Scott Higgins        Title:  
Vice President Sentinel Asset Management   

-54-

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      Eagle Materials Inc.   Note Purchase Agreement

The Union Central Life Insurance Company
By: Summit Investment Advisors, Inc., as Agent

                  By   /s/ Andrew S. White         Name:   Andrew S. White     
  Title:   Managing Director-Private Placements     

Acacla Life Insurance Company
By: Summit Investment Advisors, Inc., as Agent

                  By   /s/ Andrew S. White         Name:   Andrew S. White     
  Title:   Managing Director-Private Placements     

Ameritas Life Insurance Corp.
By: Summit Investment Advisors, Inc., as Agent

                  By   /s/ Andrew S. White         Name:   Andrew S. White     
  Title:   Managing Director-Private Placements   

-55-

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      Eagle Materials Inc.   Note Purchase Agreement

            National Guardian Life Insurance Company
      By   /s/ R.A. Mucci         Name:   R.A. Mucci        Title:   Senior Vice
President & Treasurer        Settlers Life Insurance Company
      By   /s/ R.A. Mucci         Name:   R.A. Mucci        Title:   Vice
President & Treasurer     

-56-

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Schedule A (to Note Purchase Agreement) intentionally omitted
Schedule A
(to Note Purchase Agreement)

 

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Defined Terms
     As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
     “Additional Notes” is defined in Section 2.2.
     “Additional Purchasers” means purchasers of Additional Notes.
     “Affiliate” means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) with respect to the Company, any Person beneficially
owning or holding, directly or indirectly, 10% or more of any class of voting or
equity interests of the Company or any Subsidiary or any Person of which the
Company and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity interests.
As used in this definition, “Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an “Affiliate” is a reference to an Affiliate of the Company.
     “Anti-Terrorism Order” means Executive Order No. 13,224 of September 24,
2001, Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as
amended.
     “Bank Credit Agreement” means the Amended and Restated Credit Agreement
dated as of December 16, 2004 by and among the Company, JPMorgan Chase Bank,
N.A., as administrative agent, Bank of America, N.A. and Branch Banking and
Trust Company, as co-syndication agents, and Wells Fargo Bank, N.A. and Union
Bank of California, N.A. as co-documentation agents, and the other financial
institutions party thereto, as amended, restated, joined, supplemented or
otherwise modified from time to time, and any renewals, extensions or
replacements thereof, which constitute the primary bank credit facility of the
Company and its Subsidiaries.
     “Business Day” means any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, New York or Dallas, Texas are required or
authorized to be closed.
     “Capital Lease” means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
     “Capital Lease Obligation” means, with respect to any Person and a Capital
Lease, the amount of the obligation of such Person as the lessee under such
Capital Lease which would, in accordance with GAAP, appear as a liability on a
balance sheet of such Person.
Schedule B
(to Note Purchase Agreement)

 

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     “Closing” is defined in Section 3.
     “Closing Date” is defined in Section 3.
     “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
     “Company” means Eagle Materials Inc., a Delaware corporation, or any
successor that becomes such in the manner prescribed in Section 10.6.
     “Confidential Information” is defined in Section 20.
     “Consolidated Debt” means, as of any date of determination, the total
amount of all Debt of the Company and its Restricted Subsidiaries determined on
a consolidated basis in accordance with GAAP.
     “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income
for such period, plus, to the extent deducted in computing such Consolidated Net
Income and without duplication, (a) depreciation, depletion, if any, and
amortization expense for such period, (b) Consolidated Interest Expense for such
period, (c) income tax expense for such period, and (d) other non-cash charges
for such period, all as determined on a consolidated basis in accordance with
GAAP. For purposes of calculating Consolidated EBITDA for any period of four
consecutive quarters, if during such period the Company or any Restricted
Subsidiary shall have acquired or disposed of any Person or acquired or disposed
of all or substantially all of the operating assets of any Person, Consolidated
EBITDA for such period shall be calculated after giving pro forma effect thereto
as if such transaction had occurred on the first day of such period.
     “Consolidated Interest Expense” shall mean, for any period, the aggregate
of all interest expense of the Company and its Restricted Subsidiaries deducted
in the calculation of Consolidated Net Income for such period, determined on a
consolidated basis in accordance with GAAP. For purposes of calculating
Consolidated Interest Expense for any period of four consecutive quarters, if
during such period the Company or any Restricted Subsidiary shall have acquired
or disposed of any Person or acquired or disposed of all or substantially all of
the operating assets of any Person, Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto as if such
transaction had occurred on the first day of such period.
     “Consolidated Net Income” shall mean, for any period, the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
     “Consolidated Net Worth” shall mean the consolidated stockholder’s equity
of the Company and its Restricted Subsidiaries, as defined according to GAAP.

B-2

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     “Consolidated Total Assets” means, as of any date of determination, the
total amount of all assets of the Company and its Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
     “Debt” means, with respect to any Person, without duplication,
     (a) its liabilities for borrowed money;
     (b) its liabilities for the deferred purchase price of property acquired by
such Person (excluding accounts payable and other accrued liabilities arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property);
     (c) its Capital Lease Obligations;
     (d) its liabilities for borrowed money secured by any Lien with respect to
any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities); and
     (e) Guarantees by such Person with respect to liabilities of a type
described in any of clauses (a) through (d) hereof.
     Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
     “Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
     “Default Rate” means, with respect to the Notes of any Series, that rate of
interest that is 2% per annum above the rate of interest stated in clause (a) of
the first paragraph of the Notes of such Series (and of such tranche if such
Series has separate tranches).
     “Electronic Delivery” is defined in Section 7.1(a).
     “Environmental Laws” means any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

B-3

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     “ERISA Affiliate” means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section 414
of the Code.
     “Event of Default” is defined in Section 11.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Fair Market Value” means, at any time and with respect to any property,
the sale value of such property that would be realized in an arm’s-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell), as reasonably
determined in the good faith opinion of the Company’s board of directors.
     “GAAP” means those generally accepted accounting principles as in effect
from time to time in the United States of America.
     “Governmental Authority” means
     (a) the government of
     (i) the United States of America or any state or other political
subdivision thereof, or
     (ii) any jurisdiction in which the Company or any Restricted Subsidiary
conducts all or any part of its business, or which has jurisdiction over any
properties of the Company or any Restricted Subsidiary, or
     (b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.
     “Guaranty” means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Debt, dividend or other obligation of any other Person in any manner, whether
directly or indirectly, including (without limitation) obligations incurred
through an agreement, contingent or otherwise, by such Person:
     (a) to purchase such Debt or obligation or any property constituting
security therefor primarily for the purpose of assuring the owner of such Debt
or obligation of the ability of any other Person to make payment of the Debt or
obligation;
     (b) to advance or supply funds (i) for the purchase or payment of such Debt
or obligation, or (ii) to maintain any working capital or other balance sheet
condition or any income statement condition of any other Person or otherwise to
advance or make available funds for the purchase or payment of such Debt or
obligation;

B-4

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     (c) to lease properties or to purchase properties or services primarily for
the purpose of assuring the owner of such Debt or obligation of the ability of
any other Person to make payment of the Debt or obligation; or
     (d) otherwise to assure the owner of such Debt or obligation against loss
in respect thereof.
     In any computation of the Debt or other liabilities of the obligor under
any Guaranty, the Debt or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor, provided
that the amount of such Debt outstanding for purposes of this Agreement shall
not exceed the maximum amount of Debt that is the subject of such Guaranty.
     “Guaranty Release” is defined in Section 2.3.
     “Hazardous Materials” means any and all pollutants, toxic or hazardous
wastes or other substances that might pose a hazard to health and safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.
     “holder” means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to
Section 13.1.
     “Institutional Investor” means (a) any original purchaser of a Note,
(b) any holder of more than $2,000,000 of the aggregate principal amount of the
Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
     “Lien” means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement (other than an operating
lease) or Capital Lease, upon or with respect to any property or asset of such
Person (including, in the case of stock, shareholder agreements, voting trust
agreements and all similar arrangements).
     “Make-Whole Amount” shall have the meaning (i) set forth in Section 8.6
with respect to any Series 2007A Note and (ii) set forth in the applicable
Supplement with respect to any other Series of Notes.
     “Material” means material in relation to the business, operations, affairs,
financial condition, assets or properties of the Company and its Restricted
Subsidiaries taken as a whole.

B-5

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     “Material Adverse Effect” means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement (including any
Supplement) and the Notes, (c) the ability of any Subsidiary Guarantor to
perform its obligations under the Subsidiary Guaranty or (d) the validity or
enforceability of this Agreement (including any Supplement), the Notes or the
Subsidiary Guaranty.
     “Material Subsidiary” means, at any time, any Restricted Subsidiary of the
Company which, together with all other Restricted Subsidiaries of such
Restricted Subsidiary, accounts for more than (i) 5% of Consolidated Total
Assets or (ii) 5% of consolidated revenue of the Company and its Restricted
Subsidiaries.
     “Memorandum” is defined in Section 5.3.
     “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such
term is defined in Section 4001(a)(3) of ERISA).
     “Notes” is defined in Section 1.
     “Officer’s Certificate” means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
     “PBGC” means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
     “Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or other entity, or a
government or agency or political subdivision thereof.
     “Plan” means an “employee benefit plan” (as defined in Section 3(3) of
ERISA) subject to Title I of ERISA that is or, within the preceding five years,
has been established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.
     “Priority Debt” means (without duplication), as of the date of any
determination thereof, the sum of (i) all unsecured Debt of Restricted
Subsidiaries (including all Guaranties of Debt of the Company but excluding
(x) Debt owing to the Company or any other Restricted Subsidiary, (y) Debt
outstanding at the time such Person became a Restricted Subsidiary (other than
an Unrestricted Subsidiary which is designated as a Restricted Subsidiary
pursuant to Section 9.6 hereof), provided that such Debt shall have not been
incurred in contemplation of such person becoming a Restricted Subsidiary, and
(z) all Guaranties of Debt of the Company by any Restricted Subsidiary which has
also guaranteed the Notes), and (ii) all Debt of the Company and its Restricted
Subsidiaries secured by Liens other than Debt secured by Liens permitted by
subparagraphs (a) through (j), inclusive, of Section 10.4.

B-6

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     “property” or “properties” means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
     “Purchasers” means the purchasers of the Notes named in Schedule A hereto.
     “QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
     “Qualified Institutional Buyer” means any Person who is a qualified
institutional buyer within the meaning of such term as set forth in
Rule 144(a)(1) under the Securities Act.
     “Receivables Securitization Financing” means a transaction or group of
transactions typically referred to as a securitization in which a Person sells,
directly or indirectly through another Person, its accounts receivable on a
non-recourse basis (other than for recourse relating to certain bad acts or
breaches of representations or warranties) in a transaction treated as a legal
true sale to a special purpose bankruptcy remote entity that obtains debt
financing or sells interests in such receivables to finance the purchase price
and any further assignment by such entity in connection therewith.
     “Related Rights” means, with respect to any account receivable that is
conveyed pursuant to a Receivables Securitization Financing (for purposes of
this definition, each such account receivable is referred to as a “Subject
Receivable”, and the Company, together with the Subsidiaries of the Company
which are party to the applicable Receivables Securitization Financing, are
referred to as the “Subject Parties”):
     (a) all of the Subject Parties’ interest in any goods (including returned
goods), and documentation of title evidencing the shipment or storage of any
goods (including returned goods), relating to any sale giving rise to such
Subject Receivable,
     (b) all instruments and chattel paper that may evidence such Subject
Receivable,
     (c) all other security interests or liens and property subject thereto from
time to time purporting to secure payment of such Subject Receivable, whether
pursuant to the contract or agreement evidencing such Subject Receivable or
otherwise, together with all uniform commercial code financing statements or
similar filings related thereto,
     (d) all of the Subject Parties’ rights, interests and claims under the
contracts or agreements evidencing such Subject Receivable and all guaranties,
indemnities, insurance and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Subject
Receivable or otherwise relating to such Subject Receivable, whether pursuant to
the contract or agreement evidencing such Subject Receivable or otherwise;
     (e) all of the Subject Parties’ rights, interests and claims under the
agreements evidencing the applicable Receivables Securitization Financing, any
contract or

B-7

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agreement evidencing such Subject Receivable and any other agreement or document
between the Subject Party that originated such Subject Receivable and the
account debtor with respect to such Subject Receivable;
     (f) all collections and other proceeds of such Subject Receivable, and all
deposit accounts or securities accounts into which the account debtor with
respect to such Subject Receivable is directed to deposit the payments on such
Subject Receivable or into which such payments are regularly deposited;
     (g) all books and records of any Subject Party relating to such Subject
Receivable or any of the foregoing; and
     (h) all collections and other proceeds and products of, and all monies due
or to become due to any Subject Party with respect to, any of the foregoing that
are received by any Subject Party.
     “Required Holders” means, at any time, the holders of not less than 51% in
principal amount of the Notes of each Series at the time outstanding (exclusive
of Notes then owned by the Company or any of its Affiliates and any Notes held
by parties who are contractually required to abstain from voting with respect to
matters affecting the holders of the Notes).
     “Responsible Officer” means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
     “Restricted Subsidiary” means any Subsidiary as to which: (i) at least a
majority of the voting securities are owned by the Company and/or one or more
Restricted Subsidiaries and (ii) the Company has not designated such Subsidiary
an Unrestricted Subsidiary by notice in writing given to the holders of the
Notes.
     “Securities Act” means the Securities Act of 1933, as amended from time to
time.
     “Senior Debt” means, as of the date of any determination thereof, all
Consolidated Debt, other than Subordinated Debt.
     “Senior Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
     “Series” means any series of Notes issued pursuant to this Agreement or any
Supplement hereto.
     “Series 2007A Notes” is defined in Section 1 of this Agreement.
     “Subordinated Debt” means all unsecured Debt of the Company which shall
contain or have applicable thereto subordination provisions providing for the
subordination thereof to other Debt of the Company (including, without
limitation, the obligations of the Company under this Agreement, any Supplement
or the Notes).

B-8

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     “Subsidiary” means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
“Subsidiary” is a reference to a Subsidiary of the Company.
     “Subsidiary Guarantor” means each Subsidiary which is party to the
Subsidiary Guaranty.
     “Subsidiary Guaranty” is defined in Section 2.3.
     “Successor Entity” is defined in Section 10.6.
     “Supplement” is defined in Section 2.2.
     “tranche” means all Notes of a Series having the same maturity, interest
rate and schedule for mandatory prepayments.
     “Tranche A Notes” is defined in Section 1 of this Agreement.
     “Tranche B Notes” is defined in Section 1 of this Agreement.
     “Tranche C Notes” is defined in Section 1 of this Agreement.
     “Tranche D Notes” is defined in Section 1 of this Agreement.
     “Unrestricted Subsidiary” means any Subsidiary so designated by the Company
in accordance with the terms and provisions of this Agreement.
     “USA Patriot Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.
     “Wholly-Owned Restricted Subsidiary” means, at any time, any Restricted
Subsidiary one hundred percent of all of the equity interests (except directors’
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company’s other Wholly-Owned Restricted Subsidiaries at such
time.

B-9

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Schedules 4.9, 5.4, 5.5, 5.11, 5.15, and 10.3 to Note Purchase Agreement
Intentionally Omitted

 

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[Form of Tranche A Note]
Eagle Materials Inc.
6.08% Series 2007A Senior Note, Tranche A, due October 2, 2014

      No. [                    ]   [Date] $[                    ]   PPN: 26969P
B*8

     For Value Received, the undersigned, Eagle Materials Inc. (herein called
the “Company”), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to
[                                        ] or registered assigns, the principal
sum of [                    ] Dollars (or so much thereof as shall not have been
prepaid) on October 2, 2014 with interest (computed on the basis of a 360-day
year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of
6.08% per annum from the date hereof, payable semi-annually, on the 2nd day of
April and October in each year and at maturity, commencing on April 2, 2008,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law, at a rate per annum from time to time equal to 8.08%,
on any overdue payment of interest and, during the continuance of an Event of
Default, on the unpaid balance hereof and on any overdue payment of any
Make-Whole Amount, payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand).
     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America, N.A. in New York, New York
or at such other place as the Company shall have designated by written notice to
the holder of this Note as provided in the Note Purchase Agreement referred to
below.
     This Note is one of a series of Senior Notes (herein called the “Notes”)
issued pursuant to the Note Purchase Agreement, dated as of October 2, 2007 (as
from time to time amended, supplemented or modified, the “Note Purchase
Agreement”), between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, to have (i) agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreement and (ii) made the
representations set forth in Sections 6.2 and 6.3 of the Note Purchase
Agreement. Unless otherwise indicated, capitalized terms used in this Note shall
have the respective meanings ascribed to such terms in the Note Purchase
Agreement.
     This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder’s attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
Exhibit 1(a)
(to Note Purchase Agreement)

 

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     The Company will make required prepayments of principal on the date and in
the amounts specified in the Note Agreement. This Note is subject to optional
prepayment, in whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreement, but not otherwise.
     Pursuant to the Subsidiary Guaranty Agreement dated as of October 2, 2007
(as amended, restated or otherwise modified from time to time, the “Subsidiary
Guaranty”), certain Subsidiaries of the Company have absolutely and
unconditionally guaranteed payment in full of the principal of, Make-Whole
Amount, if any, and interest on this Note and the performance by the Company of
its obligations contained in the Note Purchase Agreement all as more fully set
forth in said Subsidiary Guaranty.
     If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
     This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.

                  Eagle Materials Inc.
 
           
 
  By                  
 
      Name:    
 
           
 
      Title:    
 
           

 E-1(A)-2 

 

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[Form of Tranche B Note]
Eagle Materials Inc.
6.27% Series 2007A Senior Note, Tranche B, due October 2, 2016

      No. [                    ]   [Date] $[                    ]   PPN: 26969P
B@6

     For Value Received, the undersigned, Eagle Materials Inc. (herein called
the “Company”), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to
[                                        ] or registered assigns, the principal
sum of [                    ] Dollars (or so much thereof as shall not have been
prepaid) on September ___, 2016 with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the
rate of 6.27% per annum from the date hereof, payable semi-annually, on the 2nd
day of April and October in each year and at maturity, commencing on April 2,
2008, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law, at a rate per annum from time to time equal to
8.27%, on any overdue payment of interest and, during the continuance of an
Event of Default, on the unpaid balance hereof and on any overdue payment of any
Make-Whole Amount, payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand).
     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America, N.A. in New York, New York
or at such other place as the Company shall have designated by written notice to
the holder of this Note as provided in the Note Purchase Agreement referred to
below.
     This Note is one of a series of Senior Notes (herein called the “Notes”)
issued pursuant to the Note Purchase Agreement, dated as of October 2, 2007 (as
from time to time amended, supplemented or modified, the “Note Purchase
Agreement”), between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, to have (i) agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreement and (ii) made the
representations set forth in Sections 6.2 and 6.3 of the Note Purchase
Agreement. Unless otherwise indicated, capitalized terms used in this Note shall
have the respective meanings ascribed to such terms in the Note Purchase
Agreement.
     This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder’s attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
Exhibit 1(b)
(to Note Purchase Agreement)

 

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

 

     The Company will make required prepayments of principal on the date and in
the amounts specified in the Note Agreement. This Note is subject to optional
prepayment, in whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreement, but not otherwise.
     Pursuant to the Subsidiary Guaranty Agreement dated as of October 2, 2007
(as amended, restated or otherwise modified from time to time, the “Subsidiary
Guaranty”), certain Subsidiaries of the Company have absolutely and
unconditionally guaranteed payment in full of the principal of, Make-Whole
Amount, if any, and interest on this Note and the performance by the Company of
its obligations contained in the Note Purchase Agreement all as more fully set
forth in said Subsidiary Guaranty.
     If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
     This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.

                  Eagle Materials Inc.
 
           
 
  By                  
 
      Name:    
 
           
 
      Title:    
 
           

 E-1(b)-2

 

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[Form of Tranche C Note]
Eagle Materials Inc.
6.36% Series 2007A Senior Note, Tranche C, due October 2, 2017

      No. [                    ]   [Date]
$[                                        ]   PPN: 26969P B#4

     For Value Received, the undersigned, Eagle Materials Inc. (herein called
the “Company”), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to [                    ] or registered
assigns, the principal sum of [                    ] Dollars (or so much thereof
as shall not have been prepaid) on October 2, 2017 with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
hereof at the rate of 6.36% per annum from the date hereof, payable
semi-annually, on the 2nd day of April and October in each year and at maturity,
commencing on April 2, 2008, until the principal hereof shall have become due
and payable, and (b) to the extent permitted by law, at a rate per annum from
time to time equal to 8.36%, on any overdue payment of interest and, during the
continuance of an Event of Default, on the unpaid balance hereof and on any
overdue payment of any Make-Whole Amount, payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand).
     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America, N.A. in New York, New York
or at such other place as the Company shall have designated by written notice to
the holder of this Note as provided in the Note Purchase Agreement referred to
below.
     This Note is one of a series of Senior Notes (herein called the “Notes”)
issued pursuant to the Note Purchase Agreement, dated as of October 2, 2007 (as
from time to time amended, supplemented or modified, the “Note Purchase
Agreement”), between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, to have (i) agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreement and (ii) made the
representations set forth in Sections 6.2 and 6.3 of the Note Purchase
Agreement. Unless otherwise indicated, capitalized terms used in this Note shall
have the respective meanings ascribed to such terms in the Note Purchase
Agreement.
     This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder’s attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the
Exhibit 1(c)
(to Note Purchase Agreement)

 

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

 

purpose of receiving payment and for all other purposes, and the Company will
not be affected by any notice to the contrary.
     The Company will make required prepayments of principal on the date and in
the amounts specified in the Note Agreement. This Note is subject to optional
prepayment, in whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreement, but not otherwise.
     Pursuant to the Subsidiary Guaranty Agreement dated as of October 2, 2007
(as amended, restated or otherwise modified from time to time, the “Subsidiary
Guaranty”), certain Subsidiaries of the Company have absolutely and
unconditionally guaranteed payment in full of the principal of, Make-Whole
Amount, if any, and interest on this Note and the performance by the Company of
its obligations contained in the Note Purchase Agreement all as more fully set
forth in said Subsidiary Guaranty.
     If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
     This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.

                  Eagle Materials Inc.
 
           
 
  By                  
 
      Name:    
 
           
 
      Title:    
 
           

 E-1(c)-2

 

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[Form of Tranche D Note]
Eagle Materials Inc.
6.48% Series 2007A Senior Note, Tranche D, due October 2, 2019

      No. [                    ]   [Date]
$[                                        ]   PPN: 26969P C*7

     For Value Received, the undersigned, Eagle Materials Inc. (herein called
the “Company”), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to
[                                        ] or registered assigns, the principal
sum of [                    ] Dollars (or so much thereof as shall not have been
prepaid) on October 2, 2019 with interest (computed on the basis of a 360-day
year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of
6.48% per annum from the date hereof, payable semi-annually, on the 2nd day of
April and October in each year and at maturity, commencing on April 2, 2008,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law, at a rate per annum from time to time equal to 8.48%,
on any overdue payment of interest and, during the continuance of an Event of
Default, on the unpaid balance hereof and on any overdue payment of any
Make-Whole Amount, payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand).
     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America, N.A. in New York, New York
or at such other place as the Company shall have designated by written notice to
the holder of this Note as provided in the Note Purchase Agreement referred to
below.
     This Note is one of a series of Senior Notes (herein called the “Notes”)
issued pursuant to the Note Purchase Agreement, dated as of October 2, 2007 (as
from time to time amended, supplemented or modified, the “Note Purchase
Agreement”), between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, to have (i) agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreement and (ii) made the
representations set forth in Sections 6.2 and 6.3 of the Note Purchase
Agreement. Unless otherwise indicated, capitalized terms used in this Note shall
have the respective meanings ascribed to such terms in the Note Purchase
Agreement.
     This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder’s attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the
Exhibit 1(d)
(to Note Purchase Agreement)

 

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

 

Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company will not be affected by any notice to the contrary.
     The Company will make required prepayments of principal on the date and in
the amounts specified in the Note Agreement. This Note is subject to optional
prepayment, in whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreement, but not otherwise.
     Pursuant to the Subsidiary Guaranty Agreement dated as of October 2, 2007
(as amended, restated or otherwise modified from time to time, the “Subsidiary
Guaranty”), certain Subsidiaries of the Company have absolutely and
unconditionally guaranteed payment in full of the principal of, Make-Whole
Amount, if any, and interest on this Note and the performance by the Company of
its obligations contained in the Note Purchase Agreement all as more fully set
forth in said Subsidiary Guaranty.
     If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
     This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.

                  Eagle Materials Inc.
 
           
 
  By                  
 
      Name:    
 
           
 
      Title:    
 
           

E-1(d)-2

 

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Form of Subsidiary Guaranty
Subsidiary Guaranty Agreement
Dated as of October 2, 2007
from
The Subsidiary Guarantors Named Herein
for the benefit of
The Holders of the Notes
Re:
$20,000,000 6.08% Series 2007A Senior Notes, Tranche A
due October 2, 2014
$50,000,000 6.27% Series 2007A Senior Notes, Tranche B
due October 2, 2016
$70,000,000 6.36% Series 2007A Senior Notes, Tranche C
due October 2, 2017
$60,000,000 6.48% Series 2007A Senior Notes, Tranche D
due October 2, 2019
OF
Eagle Materials Inc.
Exhibit 2.4(b)
(to Note Purchase Agreement)

 

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

 

Table of Contents

          Section   Heading   Page
Section 1.
  Guaranty   5
 
       
Section 2.
  Representations and Warranties   6
 
       
Section 3.
  Subsidiary Guarantor’s Obligations Unconditional   8
 
       
Section 4.
  Full Recourse Obligations; Pari Passu Ranking   14
 
       
Section 5.
  Waiver   14
 
       
Section 6.
  Waiver of Subrogation   15
 
       
Section 7.
  Subordination   15
 
       
Section 8.
  Effect of Bankruptcy Proceedings, Etc.   16
 
       
Section 9.
  Term of Guaranty   16
 
       
Section 10.
  Contribution   17
 
       
Section 11.
  Limitation of Liability   17
 
       
Section 12.
  Negative Pledge   18
 
       
Section 13.
  Supplemental Agreement   18
 
       
Section 14.
  Definitions and Terms Generally   18
 
       
Section 15.
  Notices   19
 
       
Section 16.
  Amendments, Etc.   20
 
       
Section 17.
  Consent to Jurisdiction; Service of Process   20
 
       
Section 18.
  Waiver of Jury Trial   21
 
       
Section 19.
  Survival   21
 
       
Section 20.
  Severability   21
 
       
Section 21.
  Successors and Assigns   22

E-2.4(b)-2  

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Table of Contents

          Section   Heading   Page
Section 22.
  Table of Contents; Headings   22
 
       
Section 23.
  Counterparts   22
 
       
Section 24.
  Governing Law   22
 
       
Section 25.
  Release   22
 
       
Section 26.
  Covenant Compliance   22

E-2.4(b)-3

 

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     Subsidiary Guaranty Agreement, dated as of October 2, 2007 (the
“Guaranty”), from each of:

  (i)   American Gypsum Company LLC (Delaware),     (ii)   American Gypsum
Marketing Company (Delaware),     (iii)   CCP Cement Company (Nevada),     (iv)
  CCP Concrete/Aggregates LLC (Delaware),     (v)   CCP Gypsum Company (Nevada),
    (vi)   CCP Land Company (Nevada),     (vii)   Centex Cement Corporation
(Nevada),     (viii)   Hollis & Eastern Railroad Company LLC (Delaware),    
(ix)   Mathews Readymix LLC (California),     (x)   M&W Drywall Supply Company
(Nevada),     (xi)   Mountain Cement Company (Nevada),     (xii)   Nevada Cement
Company (Nevada),     (xiii)   Republic Paperboard Company LLC (Delaware),    
(xiv)   Texas Cement Company (Nevada),     (xv)   Western Aggregates LLC
(Nevada),     (xvi)   Western Cement Company of California (California),    
(xvii)   Centex Materials LLC (Delaware),     (xviii)   TLCC GP LLC (Delaware),
    (xix)   TLCC LP LLC (Delaware),     (xx)   AG South Carolina LLC (Delaware),
    (xxi)   Illinois Cement Company LLC (Delaware), and     (xxii)   such
Subsidiaries as shall become parties hereto in accordance with Section 13 hereof
(each a “Subsidiary Guarantor” and collectively the “Subsidiary Guarantors”),

for the benefit of the holders from time to time of the Notes (as defined below)
(the “Holders”). Capitalized terms used herein are defined in Section 14 hereof
or the Note Purchase Agreement referred to below.
     Whereas, Eagle Materials Inc., a Delaware corporation (the “Company”), will
authorize the issue and sale of (i) $20,000,000 6.08% Series 2007A Senior Notes,
Tranche A, due October 2, 2014 (the “Tranche A Notes”), (ii) $50,000,000 6.27%
Series 2007A Senior Notes, Tranche B, due October 2, 2016 (the “Tranche B
Notes”), (iii) $70,000,000 6.36% Series 2007A Senior Notes, Tranche C, due
October 2, 2017 (the “Tranche C Notes”) and (iv) $60,000,000 6.48% Series 2007A
Senior Notes, Tranche D, due October 2, 2019 (the “Tranche D Notes” and,
together with the Tranche A Notes, the Tranche B Notes and the Tranche C Notes,
the “Series 2007A Notes”), pursuant to a Note Purchase Agreement, dated as of
the date hereof (as amended, modified or supplemented from time to time, the
“Note Purchase Agreement”) among the Company and the purchasers named therein.
     Whereas, the Company is authorized to issue Additional Notes (as such term
is defined in the Note Purchase Agreement) of one or more separate series from
time to time in an
E-2.4(b)-4

 

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aggregate principal amount not to exceed $500,000,000 pursuant to Section 2.2 of
the Note Purchase Agreement.
     Whereas, the Additional Notes together with the Series 2007A Notes are
collectively referred to as the “Notes”.
     Whereas, each of the Subsidiary Guarantors is a Subsidiary of the Company.
     Whereas, the Company has agreed that certain of its Subsidiaries will
guarantee its obligations under the Notes and the Note Purchase Agreement.
     Whereas, the Subsidiary Guarantors each acknowledge that they will derive
substantial benefits from the issuance of the Notes.
     Now, Therefore, in consideration of the premises and to induce the Holders
to purchase the Notes, each of the Subsidiary Guarantors, intending to be
legally bound, hereby agrees for the benefit of the Holders, as follows:
Section 1. Guaranty.
     Each Subsidiary Guarantor with all other Subsidiary Guarantors, hereby
absolutely, unconditionally and irrevocably guarantees, jointly and severally,
as a primary obligor and not merely as a surety, to each Holder and its
successors and assigns, the full and punctual payment and performance when due,
whether at stated maturity, by acceleration or otherwise, of the principal of
and Make-Whole Amount and interest on (including, without limitation, interest,
whether or not an allowable claim, accruing after the date of filing of any
petition in bankruptcy, or the commencement of any bankruptcy, insolvency or
similar proceeding relating to the Company) the Notes and all other amounts
under the Note Purchase Agreement and all other obligations, agreements and
covenants of the Company now or hereafter existing under the Note Purchase
Agreement whether for principal, Make-Whole Amount, interest (including interest
accruing or becoming owing both prior to and subsequent to the commencement of
any proceeding against or with respect to the Company under any chapter of Title
11 of the United States Code), indemnification payments, expenses (including
reasonable attorneys’ fees and expenses) or otherwise, and all reasonable costs
and expenses, if any, incurred by any Holder in connection with enforcing any
rights under this Guaranty (all such obligations being the “Guaranteed
Obligations”), and agrees to pay any and all reasonable expenses incurred by
each Holder in enforcing this Guaranty; provided that, notwithstanding anything
contained herein or in the Note Purchase Agreement to the contrary, the maximum
liability of each Subsidiary Guarantor hereunder and under the Note Purchase
Agreement shall in no event exceed such Guarantor’s Maximum Guaranteed Amount,
and provided further, each Subsidiary Guarantor shall be unconditionally
required to pay all amounts demanded of it hereunder prior to any determination
of such Maximum Guaranteed Amount and the recipient of such payment, if so
required by a final non-appealable order of a court of competent jurisdiction,
shall then be liable for the refund of any excess amounts. If any such rebate or
refund is ever required, all other Subsidiary Guarantors (and the Company) shall
be fully liable for the repayment thereof to the maximum extent allowed by
applicable law. This Guaranty is an absolute, unconditional,
E-2.4(b)-5

 

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present and continuing guaranty of payment and not of collectibility and is in
no way conditioned upon any attempt to collect from the Company or any other
action, occurrence or circumstance whatsoever. Each Subsidiary Guarantor agrees
that the Guaranteed Obligations may at any time and from to time exceed the
Maximum Guaranteed Amount of such Subsidiary Guarantor without impairing this
Guaranty or affecting the rights and remedies of the Holders hereunder.
     Notwithstanding any stay, injunction or other prohibition preventing such
action against the Company, if for any reason whatsoever the Company shall fail
or be unable duly, punctually and fully to perform and (in the case of the
payment of Guaranteed Obligations) pay such amounts as and when the same shall
become due and (in the case of the payment of Guaranteed Obligations) payable or
to perform or comply with any other Guaranteed Obligation, each Subsidiary
Guarantor will forthwith (in the case of the payment of Guaranteed Obligations)
pay or cause to be paid such amounts to the Holders, in lawful money of the
United States of America, at the place specified in the Note Purchase Agreement,
or perform or comply with such Guaranteed Obligations or cause such Guaranteed
Obligations to be performed or complied with, (in the case of the payment of
Guaranteed Obligations) together with interest (in the amounts and to the extent
required under such Notes) on any amount due and owing.
Section 2. Representations and Warranties.
     Each Subsidiary Guarantor hereby represents and warrants as follows:
     (a) All representations and warranties contained in the Note Purchase
Agreement that relate to such Subsidiary Guarantor are true and correct in all
respects and are incorporated by reference with the same force and effect as
though set forth herein in full.
     (b) Such Subsidiary Guarantor acknowledges that any default in the due
observance or performance by such Subsidiary Guarantor of any covenant,
condition or agreement contained herein (if, after the running of any applicable
notice and opportunity to cure periods provided in the Note Purchase Agreement,
such default or event of default remains uncured) shall constitute an Event of
Default.
     (c) There are no conditions precedent to the effectiveness of this Guaranty
that have not been satisfied or expressly waived.
     (d) Such Subsidiary Guarantor has, independently and without reliance upon
the Holders and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty. Such Subsidiary Guarantor has investigated fully the benefits and
advantages which will be derived by it from execution of this Guaranty, and the
Board of Directors (or equivalent governing body) of such Subsidiary Guarantor
has decided that a direct and/or an indirect benefit will accrue to such
Subsidiary Guarantor by reason of the execution of this Guaranty.
     (e) (i) This Guaranty is not given with actual intent to hinder, delay or
defraud any Person to which such Subsidiary Guarantor is or will become, on or
after the date hereof,
E-2.4(b)-6

 

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

 

indebted; (ii) such Subsidiary Guarantor has received at least a reasonably
equivalent value in exchange for the giving of this Guaranty; (iii) such
Subsidiary Guarantor is not insolvent on the date hereof and will not become
insolvent as a result of the giving of this Guaranty; (iv) such Subsidiary
Guarantor is not engaged in a business or transaction, nor is about to engage in
a business or transaction, for which any property remaining with such Subsidiary
Guarantor constitutes an unreasonably small amount of capital; and (v) such
Subsidiary Guarantor does not intend to incur debts that will be beyond such
Subsidiary Guarantor’s ability to pay as such debts mature.
     (f) Each Subsidiary Guarantor is a corporation or other legal entity duly
organized and validly existing under the laws of its state of organization, and
has the requisite power, authority and legal right under the laws of its state
of organization to conduct its business as presently conducted and to execute,
deliver and perform its obligations under this Guaranty.
     (g) The execution, delivery and performance of this Guaranty have been duly
authorized by all necessary action, corporate or otherwise, on the part of each
Subsidiary Guarantor, and does not require any consent or approval of, or the
giving of notice to, or the taking of any other action in respect of, any
stockholder or trustee or holder of any equity, indebtedness or obligations of
such Subsidiary Guarantor. This Guaranty constitutes a legal, valid and binding
obligation of each Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms, except that such enforceability is
subject to any limitations arising from bankruptcy, insolvency, liquidation,
moratorium, reorganization and other similar laws of general application
relating to or affecting the rights of creditors or pledgees and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
     (h) The execution, delivery and performance of this Guaranty does not and
will not conflict with or result in any violation of or default under any
provision of the Articles or Certificate of Incorporation or Formation or
by-laws or partnership agreement or operating agreement or other organizational
documents, as the case may be, of any Subsidiary Guarantor, or any indenture,
mortgage, deed of trust, instrument, law, rule or regulation binding on any
Subsidiary Guarantor or any Subsidiary Guarantor’s assets or property or to
which a Subsidiary Guarantor is a party.
     (i) The execution, delivery and performance of this Guaranty does not and
will not result in violation of any judgment or order applicable to any
Subsidiary Guarantor or result in the creation or imposition of any Lien on any
of the properties or revenues of any Subsidiary Guarantor pursuant to any
requirement of law or any indenture, mortgage, deed of trust or other instrument
to which such Subsidiary Guarantor is a party or pursuant to which such
Subsidiary Guarantor or any of its assets or property is bound.
     (j) The execution, delivery and performance of this Guaranty do not and
will not conflict with and do not and will not require any consent, approval or
authorization of, or registration or filing with, any governmental authority or
agency of the state of organization of any Subsidiary Guarantor or of the United
States or any State.
E-2.4(b)-7

 

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

 

     (k) There are no pending or, to the knowledge of any Subsidiary Guarantor,
threatened actions or proceedings against or affecting such Subsidiary Guarantor
or any of its properties by or before any court or administrative agency or
arbiter that would adversely affect the ability of such Subsidiary Guarantor to
perform its obligations hereunder or call into question the validity or
enforceability of this Guaranty.
     (l) Each Subsidiary Guarantor’s obligations under this Guaranty are at
least pari passu in right of payment with all other senior unsecured Debt
(actual or contingent) of such Subsidiary Guarantor, including, without
limitation, all senior unsecured Debt of such Subsidiary Guarantor described in
Schedule 5.15 of the Note Purchase Agreement.
     (m) No Subsidiary Guarantor is in breach of or default under or with
respect to any instrument, document or agreement binding upon such Subsidiary
Guarantor which breach or default would reasonably be expected to have a
Material Adverse Effect. Each Subsidiary Guarantor is in compliance with all
applicable requirements of law except such non-compliance as would not
reasonably be expected to have a Material Adverse Effect.
     (n) The execution, delivery and performance by each Subsidiary Guarantor of
this Guaranty will not render such Subsidiary Guarantor insolvent, nor is it
being made in contemplation of such Subsidiary Guarantor’s insolvency, and the
Subsidiary Guarantor does not have an unreasonably small capital.
Section 3. Subsidiary Guarantor’s Obligations Unconditional.
     (a) This Guaranty shall constitute a guarantee of payment, performance and
compliance and not of collection, and each Subsidiary Guarantor specifically
agrees that it shall not be necessary, and that such Subsidiary Guarantor shall
not be entitled to require, before or as a condition of enforcing the liability
of such Subsidiary Guarantor under this Guaranty or requiring payment or
performance of the Guaranteed Obligations by any Subsidiary Guarantor hereunder,
or at any time thereafter, that any Holder: (a) file suit or proceed to obtain
or assert a claim for personal judgment against the Company or any other Person
that may be liable for or with respect to any Guaranteed Obligation; (b) make
any other effort to obtain payment or performance of any Guaranteed Obligation
from the Company or any other Person that may be liable for or with respect to
such Guaranteed Obligation, except for the making of the demands, when
appropriate, described in Section 1; (c) foreclose against, or seek to realize
upon security now or hereafter existing for such Guaranteed Obligations;
(d) except to the extent set forth in Section 1, exercise or assert any other
right or remedy to which such Holder is or may be entitled in connection with
any Guaranteed Obligation or any security or other guaranty therefor; or
(e) assert or file any claim against the assets or property of the Company or
any other Person liable for any Guaranteed Obligation. Each Subsidiary Guarantor
agrees that this Guaranty shall be continuing, and that the Guaranteed
Obligations will be paid and performed in accordance with their terms and the
terms of this Guaranty, and are the primary, absolute and unconditional
obligations of such Subsidiary Guarantor, irrespective of the value,
genuineness, validity, legality, regularity or enforceability or lack thereof of
any part of the Guaranteed Obligations or any agreement or instrument relating
to the Guaranteed Obligations or this Guaranty, or the existence of any
indemnities with respect to the existence of any other guarantee of or security
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for any of the Guaranteed Obligations, or any substitution, release or exchange
of any other guarantee of or security for any of the Guaranteed Obligations,
and, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, it being the intent of
this Section 3 that the obligations of each Subsidiary Guarantor hereunder shall
be irrevocable, primary, absolute and unconditional under any and all
circumstances.
     (b) Each Subsidiary Guarantor hereby expressly waives notice of acceptance
of and reliance upon this Guaranty, diligence, presentment, demand of payment or
performance, protest and all other notices (except as otherwise provided for in
Section 1) whatsoever, any requirement that the Holders exhaust any right, power
or remedy or proceed against the Company or against any other Person under any
other guarantee of, or security for, or any other agreement, regarding any of
the Guaranteed Obligations. Each Subsidiary Guarantor further agrees that,
subject solely to the requirement of making demands under Section 1, the
occurrence of any event or other circumstance that might otherwise vary the risk
of the Company or such Subsidiary Guarantor or constitute a defense (legal or
equitable) available to, or a discharge of, or a counterclaim or right of
set-off by, the Company or such Subsidiary Guarantor (other than the full and
indefeasible due payment and performance of the Guaranteed Obligations), shall
not affect the liability of any Subsidiary Guarantor hereunder.
     (c) The obligations of each Subsidiary Guarantor under this Guaranty are
not subject to any counterclaim, set-off, deduction, diminution, abatement,
recoupment, suspension, deferment or defense based upon any claim such
Subsidiary Guarantor or any other Person may have against the Company, any
Holder or any other Person, and shall remain in full force and effect without
regard to, and shall not be released, discharged or in any way affected by, any
circumstances or condition whatsoever (whether or not such Subsidiary Guarantor
or the Company shall have any knowledge or notice thereof), including:
     (i) any renewal, extension, modification, increase, decrease, alteration or
rearrangement of all or any part of the Guaranteed Obligations or any instrument
executed in connection therewith, or any contract or understanding with the
Company, the Holders, or any of them, or any other Person, pertaining to the
Guaranteed Obligations;
     (ii) any adjustment, indulgence, forbearance or compromise that might be
granted or given by any Holder to the Company or any other Person liable on the
Guaranteed Obligations, or the failure of any Holder to assert any claim or
demand or to exercise any right or remedy against the Company or any other
Person under the provisions of the Note Purchase Agreement, the Notes or
otherwise; or any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, the Note Purchase Agreement, the
Notes, any guarantee or any other agreement;
     (iii) the insolvency, bankruptcy arrangement, adjustment, composition,
liquidation, disability, dissolution or lack of power of the Company or any
other Person at any time liable for the payment of all or part of the Guaranteed
Obligations; or any dissolution of the Company or any other such Person, or any
change, restructuring or
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termination of the organizational structure or existence of the Company or any
other such Person, or any sale, lease or transfer of any or all of the assets or
property of the Company or any other such Person, or any change in the
shareholders, partners, or members of the Company or any other such Person; or
any default, failure or delay, willful or otherwise, in the performance of the
Guaranteed Obligations;
     (iv) the invalidity, illegality or unenforceability of all or any part of
the Guaranteed Obligations, or any document or agreement executed in connection
with the Guaranteed Obligations, for any reason whatsoever, including the fact
that the Guaranteed Obligations, or any part thereof, exceed the amount
permitted by law, the act of creating the Guaranteed Obligations or any part is
ultra vires, the officers or representatives executing the documents or
otherwise creating the Guaranteed Obligations acted in excess of their
authority, the Guaranteed Obligations violate applicable usury laws, the Company
or any other Person has valid defenses, claims or offsets (whether at law, in
equity or by agreement) which render the Guaranteed Obligations wholly or
partially uncollectible from the Company or any other Person, the creation,
performance or repayment of the Guaranteed Obligations (or the execution,
delivery and performance of any document or instrument representing part of the
Guaranteed Obligations or executed in connection with the Guaranteed Obligations
or given to secure the repayment of the Guaranteed Obligations) is illegal,
uncollectible, legally impossible or unenforceable, or the documents or
instruments pertaining to the Guaranteed Obligations have been forged or
otherwise are irregular or not genuine or authentic;
     (v) any full or partial release of the liability of the Company on the
Guaranteed Obligations or any part thereof, of any co-guarantors, or of any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Guaranteed Obligations or any part thereof, it being recognized,
acknowledged and agreed by each Subsidiary Guarantor that such Subsidiary
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other Person, and such Subsidiary Guarantor has not
been induced to enter into this Guaranty on the basis of a contemplation,
belief, understanding or agreement that any parties other than the Company will
be liable to perform the Guaranteed Obligations, or that the Holders will look
to other parties to perform the Guaranteed Obligations;
     (vi) the taking or accepting of any other security, collateral or guaranty,
or other assurance of payment, for all or any part of the Guaranteed
Obligations;
     (vii) any release, surrender, exchange, subordination, deterioration,
waste, loss or impairment (including negligent, unreasonable or unjustifiable
impairment) of any collateral, property or security, at any time existing in
connection with, or assuring or securing payment of, all or any part of the
Guaranteed Obligations;
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     (viii) the failure of any Holder or any other Person to exercise diligence
or reasonable care in the preservation, protection, enforcement, sale or other
handling or treatment of all or any part of such collateral, property or
security;
     (ix) the fact that any collateral, security, security interest or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Guaranteed Obligations shall not be properly perfected or
created, or shall prove to be unenforceable or subordinate to any other security
interest or Lien, it being recognized and agreed by each Subsidiary Guarantor
that such Subsidiary Guarantor is not entering into this Guaranty in reliance
on, or in contemplation of the benefits of, the validity, enforceability,
collectibility or value of any of the collateral;
     (x) any payment by the Company to any Holder being held to constitute a
preference under any Fraudulent Conveyance Law, or for any reason any Holder
being required to refund such payment or pay such amount to the Company or
someone else;
     (xi) any other action taken or omitted to be taken with respect to the
Guaranteed Obligations, or the security and collateral therefor, whether or not
such action or omission prejudices such Subsidiary Guarantor or increases the
likelihood that such Subsidiary Guarantor will be required to pay the Guaranteed
Obligations pursuant to the terms hereof, it being the unambiguous and
unequivocal intention of such Subsidiary Guarantor that it shall be obligated to
pay the Guaranteed Obligations when due, notwithstanding any occurrence,
circumstance, event, action or omission whatsoever, whether or not contemplated,
and whether or not otherwise or particularly described herein, except for the
full and final indefeasible payment and satisfaction of the Guaranteed
Obligations in cash;
     (xii) the fact that all or any of the Guaranteed Obligations cease to exist
by operation of law, including by way of a discharge, limitation or tolling
thereof under applicable bankruptcy laws;
     (xiii) any other circumstance (including any statute of limitations) that
might in any manner or to any extent otherwise constitute a defense available
to, vary the risk of, or operate as a discharge of, the Company or any Person as
a matter of law or equity;
     (xiv) any change in the ownership of any shares of capital stock (or other
equity interests) of the Company, or any change in the relationship between the
Company and such Subsidiary Guarantor or any termination of any such
relationship;
     (xv) any default, failure or delay, willful or otherwise, in the
performance by the Company, any Subsidiary Guarantor or any other Person of any
obligations of any kind or character whatsoever under the Note Purchase
Agreement or any other agreement;
     (xvi) any merger or consolidation of the Company or any Subsidiary
Guarantor or any other Person into or with any other Person or any sale, lease,
transfer or other
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disposition of any of the assets or property of the Company, any Subsidiary
Guarantor or any other Person to any other Person, or any change in the
ownership of any shares or partnership interests or other equity interests of
the Company, any Subsidiary Guarantor or any other Person;
     (xvii) in respect of the Company, any Subsidiary Guarantor or any other
Person, any change of circumstances, whether or not foreseen or foreseeable,
whether or not imputable to the Company, any Subsidiary Guarantor or any other
Person, or other impossibility of performance through fire, explosion, accident,
labor disturbance, floods, droughts, embargoes, wars (whether or not declared),
civil commotion, acts of God or the public enemy, delays or failure of suppliers
or carriers, inability to obtain materials, action of any Federal or state
regulatory body or agency, change of law or any other causes affecting
performance, or any other force majeure, whether or not beyond the control of
the Company, any Subsidiary Guarantor or any other Person and whether or not of
the kind hereinbefore specified; or
     (xviii) any other occurrence, circumstance, or event whatsoever, whether
similar or dissimilar to the foregoing, whether foreseen or unforeseen, and any
other circumstance which might otherwise constitute a legal or equitable defense
or discharge of the liabilities of a guarantor or surety or which might
otherwise limit recourse against such Subsidiary Guarantor;
provided that the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned above, it being the purpose and intent of this
Guaranty and the parties hereto that the obligations of each Subsidiary
Guarantor shall be absolute and unconditional and shall not be discharged,
impaired or varied except by the payment and performance of all obligations of
the Company under the Note Purchase Agreement and the Notes in accordance with
their respective terms as each may be amended or modified from time to time.
Without limiting the foregoing, it is understood that repeated and successive
demands may be made and recoveries may be had hereunder as and when, from time
to time, the Company or any Subsidiary Guarantor shall default under or in
respect of the terms of the Note Purchase Agreement and that notwithstanding
recovery hereunder for or in respect of any given default or defaults by the
Company or any Subsidiary Guarantor under the Note Purchase Agreement, this
Guaranty shall remain in full force and effect and shall apply to each and every
subsequent default. All waivers herein contained shall be without prejudice to
the Holders at their respective options to proceed against the Company, any
Subsidiary Guarantor or other Person, whether by separate action or by joinder.
     (d) Each Subsidiary Guarantor hereby consents and agrees that any Holder or
Holders from time to time, with or without any further notice to or assent from
any other Subsidiary Guarantor may, without in any manner affecting the
liability of any Subsidiary Guarantor under this Guaranty, and upon such terms
and conditions as any such Holder or Holders may deem advisable:
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     (i) extend in whole or in part (by renewal or otherwise), modify, change,
compromise, release or extend the duration of the time for the performance or
payment of any debt, liability or obligation of the Company or any Subsidiary
Guarantor or of any other Person secondarily or otherwise liable for any debt,
liability or obligations of the Company on the Note Purchase Agreement or the
Notes, or waive any Default or Event of Default with respect thereto, or waive,
modify, amend or change any provision of any other agreement or waive this
Guaranty; or
     (ii) sell, release, surrender, modify, impair, exchange or substitute any
and all property, of any nature and from whomsoever received, held by, or for
the benefit of, any such Holder as direct or indirect security for the payment
or performance of any debt, liability or obligation of the Company, any
Subsidiary Guarantor or of any other Person secondarily or otherwise liable for
any debt, liability or obligation of the Company on the Note Purchase Agreement
or the Notes; or
     (iii) settle, adjust or compromise any claim of the Company or any
Subsidiary Guarantor against any other Person secondarily or otherwise liable
for any debt, liability or obligation of the Company on the Note Purchase
Agreement or the Notes; or
     (iv) purchase Additional Notes form time to time from the Company pursuant
to the terms and provisions of the Note Purchase Agreement.
Each Subsidiary Guarantor hereby ratifies and confirms any such extension,
renewal, change, sale, release, waiver, surrender, exchange, modification,
amendment, impairment, substitution, settlement, adjustment, compromise or
purchase of Additional Notes and that the same shall be binding upon it, and
hereby waives, to the fullest extent permitted by law, any and all defenses,
counterclaims or offsets which it might or could have by reason thereof, it
being understood that such Subsidiary Guarantor shall at all times be bound by
this Guaranty and remain liable hereunder.
     (e) All rights of any Holder may be transferred or assigned at any time in
accordance with the Note Purchase Agreement and shall be considered to be
transferred or assigned at any time or from time to time upon the transfer of
such Note in accordance with the Note Purchase Agreement without the consent of
or notice to the Subsidiary Guarantors under this Guaranty.
     (f) No Holder shall be under any obligation: (i) to marshal any assets in
favor of the Subsidiary Guarantors or in payment of any or all of the
liabilities of the Company or any Subsidiary Guarantor under or in respect of
the Notes or the obligations of the Company and the Subsidiary Guarantors under
the Note Purchase Agreement or (ii) to pursue any other remedy that the
Subsidiary Guarantors may or may not be able to pursue themselves and that may
lighten the Subsidiary Guarantors’ burden, any right to which each Subsidiary
Guarantor hereby expressly waives.
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Section 4. Full Recourse Obligations; Pari Passu Ranking.
     Subject to the Maximum Guaranteed Amount specified above, the obligations
of each Subsidiary Guarantor set forth herein constitute the full recourse
obligations of such Subsidiary Guarantor enforceable against it to the full
extent of all its assets and properties.
     The respective obligations under this Guaranty of the Subsidiary Guarantors
in respect of the Notes, and all other obligations of the Subsidiary Guarantors
hereunder, are and at all times shall remain direct and unsecured obligations of
the Subsidiary Guarantors ranking pari passu as against the assets of the
Subsidiary Guarantors with all obligations of the Subsidiary Guarantors
hereunder in respect of all other Notes from time to time issued and outstanding
under the Note Purchase Agreement without any preference among themselves and
pari passu with the Subsidiary Guarantors’ Guaranty in respect of the Debt
outstanding under the Bank Credit Agreement and all other present and future
unsecured Debt (actual or contingent) of the Subsidiary Guarantors which is not
expressed to be subordinate or junior in rank to any other unsecured Debt of the
Subsidiary Guarantors.
Section 5. Waiver.
     Each Subsidiary Guarantor unconditionally waives, to the extent permitted
by applicable law:
     (a) notice of any of the matters referred to in Section 3;
     (b) notice to such Subsidiary Guarantor of the incurrence of any of the
Guaranteed Obligations, notice to such Subsidiary Guarantor of any breach or
default by the Company or such Subsidiary Guarantor with respect to any of the
Guaranteed Obligations or any other notice that may be required, by statute,
rule of law or otherwise, to preserve any rights of any Holder against such
Subsidiary Guarantor;
     (c) presentment to the Company or such Subsidiary Guarantor or of payment
from the Company or such Subsidiary Guarantor with respect to any Note or other
Guaranteed Obligation or protest for nonpayment or dishonor;
     (d) any right to the enforcement, assertion, exercise or exhaustion by any
Holder of any right, power, privilege or remedy conferred in any Note, the Note
Purchase Agreement or otherwise;
     (e) any requirement of diligence on the part of any Holder;
     (f) any requirement to mitigate the damages resulting from any default
under the Notes or the Note Purchase Agreement;
     (g) any notice of any sale, transfer or other disposition of any right,
title to or interest in any Note or other Guaranteed Obligation by any Holder,
assignee or participant thereof, or in the Note Purchase Agreement;
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     (h) any release of any Subsidiary Guarantor from its obligations hereunder
resulting from any loss by it of its rights of subrogation hereunder; and
     (i) any other circumstance whatsoever which might otherwise constitute a
legal or equitable discharge, release or defense of a guarantor or surety or
which might otherwise limit recourse against such Subsidiary Guarantor.
Section 6. Waiver of Subrogation.
     Notwithstanding any payment or payments made by any Subsidiary Guarantor
hereunder, or any application by any Holder of any security or of any credits or
claims, no Subsidiary Guarantor will assert or exercise any rights of any Holder
or of such Subsidiary Guarantor against the Company to recover the amount of any
payment made by such Subsidiary Guarantor to any Holder hereunder by way of any
claim, remedy or subrogation, reimbursement, exoneration, contribution,
indemnity, participation or otherwise arising by contract, by statute, under
common law or otherwise, and such Subsidiary Guarantor shall not have any right
of recourse to or any claim against assets or property of the Company, in each
case unless and until the Guaranteed Obligations have been indefeasibly paid in
full. Until such time (but not thereafter), each Subsidiary Guarantor hereby
expressly waives any right to exercise any claim, right or remedy which such
Subsidiary Guarantor may now have or hereafter acquire against the Company or
any other Subsidiary Guarantor that arises under the Notes, the Note Purchase
Agreement or from the performance by any Subsidiary Guarantor of the guaranty
hereunder including any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification or participation in any claim, right
or remedy of any Holder against the Company or any Subsidiary Guarantor, or any
security that any Holder now has or hereafter acquires, whether or not such
claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise. If any amount shall be paid to a Subsidiary Guarantor
by the Company or another Subsidiary Guarantor after payment in full of the
Guaranteed Obligations, and all or any portion of the Guaranteed Obligations
shall thereafter be reinstated in whole or in part and any Holder is required to
repay any sums received by any of them in payment of the Guaranteed Obligations,
this Guaranty shall be automatically reinstated and such amount shall be held in
trust for the benefit of the Holders and shall forthwith be paid to the Holders
to be credited and applied to the Guaranteed Obligations, whether matured or
unmatured. The provisions of this paragraph shall survive the termination of
this Guaranty, and any satisfaction and discharge of the Company by virtue of
any payment, court order or any Federal or state law.
Section 7. Subordination.
     If any Subsidiary Guarantor is or becomes the holder of any indebtedness
payable by the Company or another Subsidiary Guarantor, each Subsidiary
Guarantor hereby subordinates all indebtedness owing to it from the Company or
such other Subsidiary Guarantor to all indebtedness of the Company to the
Holders, and agrees that, during the continuance of any Event of Default, it
shall not accept any payment on the same until payment in full of the Guaranteed
Obligations and shall in no circumstance whatsoever attempt to set-off or reduce
any obligations hereunder because of such indebtedness. If any amount shall
nevertheless be paid in violation of the foregoing to a Subsidiary Guarantor by
the Company or another Subsidiary
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Guarantor prior to payment in full of the Guaranteed Obligations, such amount
shall be held in trust for the benefit of the Holders and shall forthwith be
paid to the Holders to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured.
Section 8. Effect of Bankruptcy Proceedings, Etc.
     (a) If after receipt of any payment of, or proceeds of any security applied
(or intended to be applied) to the payment of all or any part of, the Guaranteed
Obligations, any Holder is for any reason compelled to surrender or voluntarily
surrenders (under circumstances in which it believes it could reasonably be
expected to be so compelled if it did not voluntarily surrender), such payment
or proceeds to any Person (i) because such payment or application of proceeds is
or may be avoided, invalidated, declared fraudulent, set aside, determined to be
void or voidable as a preference, fraudulent conveyance, fraudulent transfer,
impermissible set-off or a diversion of trust funds or (ii) for any other
similar reason, including, without limitation, (x) any judgment, decree or order
of any court or administrative body having jurisdiction over any Holder or any
of their respective properties or (y) any settlement or compromise of any such
claim effected by any Holder with any such claimant (including the Company),
then the Guaranteed Obligations or part thereof intended to be satisfied shall
be reinstated and continue, and this Guaranty shall continue in full force as if
such payment or proceeds had not been received, notwithstanding any revocation
thereof or the cancellation of any Note or any other instrument evidencing any
Guaranteed Obligations or otherwise, and the Subsidiary Guarantors, jointly and
severally, shall be liable to pay the Holders, and hereby do indemnify the
Holders and hold them harmless for, the amount of such payment or proceeds so
surrendered and all expenses (including reasonable attorneys’ fees, court costs
and expenses attributable thereto) incurred by any Holder in defense of any
claim made against any of them that any payment or proceeds received by any
Holder in respect of all or part of the Guaranteed Obligations must be
surrendered. The provisions of this paragraph shall survive the termination of
this Guaranty, and any satisfaction and discharge of the Company by virtue of
any payment, court order or any Federal or state law.
     (b) If an event permitting the acceleration of the maturity of any of the
Guaranteed Obligations shall at any time have occurred and be continuing, and
such acceleration shall at such time be prevented by reason of the pendency
against the Company or any other Person of any case or proceeding contemplated
by Section 8(a) hereof, then, for the purpose of defining the obligation of any
Subsidiary Guarantor under this Guaranty, the maturity of the principal amount
of the Guaranteed Obligations shall be deemed to have been accelerated with the
same effect as if an acceleration had occurred in accordance with the terms of
such Guaranteed Obligations, and such Subsidiary Guarantor shall forthwith pay
such principal amount, all accrued and unpaid interest thereon, and all other
Guaranteed Obligations, due or that would have become due but for such case or
proceeding, without further notice or demand.
Section 9. Term of Guaranty.
     This Guaranty and all guarantees, covenants and agreements of each
Subsidiary Guarantor contained herein shall continue in full force and effect
and shall not be discharged until such time as all of the principal of and
interest on the Notes, the other Guaranteed Obligations and other independent
payment obligations of such Subsidiary Guarantor under this
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Guaranty shall be indefeasibly paid in cash and performed in full, and all of
the agreements of each of the other Subsidiary Guarantors hereunder shall be
duly and indefeasibly paid in cash and performed in full.

Section 10. Contribution.
     In order to provide for just and equitable contribution among the
Subsidiary Guarantors, each Subsidiary Guarantor agrees that, to the extent any
Subsidiary Guarantor makes any payment hereunder on any date which, when added
to all preceding payments made by such Subsidiary Guarantor hereunder, would
result in the aggregate payments by such Subsidiary Guarantor hereunder
exceeding its Percentage (as defined below) of all payments then or theretofore
made by all Subsidiary Guarantors hereunder, such Subsidiary Guarantor shall
have a right of contribution against each other Subsidiary Guarantor whose
aggregate payments then or theretofore made hereunder are less than its
Percentage of all payments by all Subsidiary Guarantors then or theretofore made
hereunder, in an amount such that, after giving effect to any such contribution
rights, each Subsidiary Guarantor will have paid only its Percentage of all
payments by all Subsidiary Guarantors then or theretofore made hereunder. Such
contribution rights shall be subordinate and subject in right of payment to the
Guaranteed Obligations and all other indebtedness owed to any Holder and, except
as provided in the next sentence, no Subsidiary Guarantor shall exercise such
rights of contribution until all Guaranteed Obligations have been indefeasibly
paid in cash and performed in full. Furthermore, each Subsidiary Guarantor
hereby unconditionally and irrevocably agrees that in the event any payment
shall be required to be made to any Holder under this Guaranty or any other
guaranty, such Subsidiary Guarantor will contribute, to the maximum extent
permitted by law, such amounts to each other Subsidiary Guarantor and each other
guarantor so as to maximize the aggregate amount paid to the Holders under or in
respect of the Notes and the Note Purchase Agreement. A Subsidiary Guarantor’s
“Percentage” on any date shall mean the percentage obtained by dividing (a) the
Adjusted Net Assets of such Subsidiary Guarantor on such date by (b) the sum of
the Adjusted Net Assets of all Subsidiary Guarantors on such date. “Adjusted Net
Assets” means, for each Subsidiary Guarantor on any date, the lesser of (i) the
amount by which the fair value of the property of such Subsidiary Guarantor
exceeds the total amount of liabilities, including contingent liabilities, but
excluding liabilities under this Guaranty, of such Subsidiary Guarantor on such
date and (ii) the amount by which the present fair salable value of the assets
of such Subsidiary Guarantor on such date exceeds the amount that will be
required to pay the probable liability of such Subsidiary Guarantor on its
debts, excluding debt in respect of this Guaranty, as they become absolute and
matured.
Section 11. Limitation of Liability.
     Each Subsidiary Guarantor hereby confirms that it is the intention of such
Subsidiary Guarantor that the guarantee by such Subsidiary Guarantor pursuant to
this Guaranty not constitute a fraudulent transfer or conveyance for purposes of
Title 11 of the United States Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar applicable Federal or state law
(all such statutes and laws are collectively referred to as “Fraudulent
Conveyance Laws”). To effectuate the foregoing intention, each Subsidiary
Guarantor hereby irrevocably agrees that the obligations of such Subsidiary
Guarantor under this
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Guaranty shall be limited to the amount as will, after giving effect to all
rights to receive any collections from or payments by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor pursuant to Section 10 hereof, result in the obligations of such
Subsidiary Guarantor under this Guaranty not constituting such a fraudulent
transfer or conveyance. In the event that the liability of any Subsidiary
Guarantor hereunder is limited pursuant to this Section 11 to an amount that is
less than the total amount of the Guaranteed Obligations, then it is understood
and agreed that the portion of the Guaranteed Obligations for which such
Subsidiary Guarantor is liable hereunder shall be the last portion of the
Guaranteed Obligations to be repaid.
Section 12. Negative Pledge.
     Except as permitted under Section 10.4 of the Note Purchase Agreement, no
Subsidiary Guarantor will create any Lien on its assets or property to any other
Person during the pendency of this Guaranty.
Section 13. Supplemental Agreement.
     Upon execution and delivery by a Subsidiary of a Supplemental Agreement
substantially in the form of Exhibit A hereto, such Subsidiary shall become a
Subsidiary Guarantor hereunder with the same force and effect as if originally
named as a Subsidiary Guarantor herein. The execution and delivery of any such
instrument shall not require the consent of any other Subsidiary Guarantor
hereunder or of any Holder. The rights and obligations of each Subsidiary
Guarantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Subsidiary Guarantor as a party to this Guaranty.
Section 14. Definitions and Terms Generally.
     (a) Unless otherwise defined herein, capitalized terms defined in the Note
Purchase Agreement are used herein as defined therein. In addition, the
following terms shall have the following meanings.
     “Adjusted Net Assets” has the meaning specified in Section 10 hereof.
     “Fraudulent Conveyance Laws” has the meaning specified in Section 11
hereof.
     “Guaranteed Obligations” has the meaning specified in Section 1 hereof.
     “Guaranty” has the meaning specified in the introduction hereto.
     “holder” means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to
Section 13.1 of the Note Purchase Agreement.
     “Holders” has the meaning specified in the introduction hereto.
E-2.4(b)-18

 

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     “Material Adverse Effect” means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and the Subsidiary Guarantors, taken as a whole, (b) the ability of any
Subsidiary Guarantor to perform its obligations under this Guaranty or (c) the
validity or enforceability of this Guaranty, the Note Purchase Agreement or the
Notes.
     “Maximum Guaranteed Amount” shall mean, for each Subsidiary Guarantor, the
maximum amount which any Subsidiary Guarantor could pay under this Guaranty
without having such payment set aside as a fraudulent transfer or conveyance or
similar action under Fraudulent Conveyance Law.
     “Note Purchase Agreement” has the meaning specified in the Recitals hereto.
     “Notes” has the meaning specified in the Recitals hereto.
     “Percentage” has the meaning specified in Section 10 hereof.
     “property” or “properties” means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
     “Required Holders” has the meaning specified in the Note Purchase
Agreement.
     “Subsidiary Guarantor” has the meaning specified in the introduction
hereto.
     (b) Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Guaranty unless the context shall otherwise require.
Section 15. Notices.
     All notices under the terms and provisions hereof shall be in writing (with
charges prepaid), and shall be delivered or sent by hand, by telecopy, by
express courier service or by registered or certified mail, return receipt
requested, postage prepaid, addressed,
     (a) if to any Holder, at the address set forth in the Note Purchase
Agreement, or at such other address as any such Holder shall from time to time
designate to the Company,
     (b) if to a Subsidiary Guarantor, at the address of such Subsidiary
Guarantor set forth on the signature pages hereto or at such other address as
such Subsidiary Guarantor shall from time to time designate in writing to each
Holder.
A notice or communication shall be deemed to have been duly given and effective:
E-2.4(b)-19

 

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  (a)   when delivered (whether or not accepted), if personally delivered;    
(b)   five Business Days after being deposited in the mail, postage prepaid, if
delivered by first-class mail (whether or not accepted);     (c)   when sent, if
sent via facsimile;     (d)   when delivered if sent by registered or certified
mail (whether or not accepted); and     (e)   on the next Business Day if timely
delivered by an overnight air courier, with charges prepaid (whether or not
accepted).

Section 16. Amendments, Etc.
     No amendment, alteration, modification or waiver of any term or provision
of this Guaranty, nor consent to any departure by any Subsidiary Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and consented to by each Subsidiary Guarantor and the Required Holders provided,
however, that (i) any amendment, alteration, modification or waiver of the terms
and conditions contained in Section 1 hereof shall require consent from all
Holders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given and (ii) any Supplemental
Agreement executed pursuant to Section 13 shall not require the consent of any
Holder or any Subsidiary Guarantor.
Section 17. Consent to Jurisdiction; Service of Process.
     (a) Each Subsidiary Guarantor irrevocably submits to the nonexclusive in
personam jurisdiction of any New York State or federal court sitting in New York
City, over any suit, action or proceeding arising out of or relating to this
Guaranty or the Notes. To the fullest extent it may effectively do so under
applicable law, each Subsidiary Guarantor irrevocably waives and agrees not to
assert, by way of motion, as a defense or otherwise, any claim that it is not
subject to the in personam jurisdiction of any such court, any objection that it
may now or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
     (b) Each Subsidiary Guarantor agrees, to the fullest extent it may
effectively do so under applicable law, that a final judgment in any suit,
action or proceeding of the nature referred to in paragraph (a) of this
Section 17 brought in any such court shall be conclusive and binding upon such
party, subject to rights of appeal and may be enforced in the courts of the
United States of America or the State of New York (or any other courts to the
jurisdiction of which such party is or may be subject) by a suit upon such
judgment.
     (c) Each Subsidiary Guarantor consents to process being served in any suit,
action or proceeding of the nature referred to in paragraph (a) of this
Section 17 by mailing a copy thereof
E-2.4(b)-20

 

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by registered or certified mail, postage prepaid, return receipt requested, to
the address of each Subsidiary Guarantor specified in Section 15 or at such
other address of which the Holders shall then have been notified pursuant to
said Section. Each Subsidiary Guarantor agrees that such service upon receipt
(i) shall be deemed in every respect effective service of process upon it in any
such suit, action or proceeding and (ii) shall, to the full extent permitted by
law, be taken and held to be valid personal service upon and personal delivery
to such party. Notices hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United States Postal Service or
any reputable commercial delivery service.
     (d) Nothing in this Section 17 shall affect the right of any Holder to
serve process in any manner permitted by law, or limit any right that any of the
Holders may have to bring proceedings against any Subsidiary Guarantor in the
courts of any appropriate jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.
Section 18. Waiver of Jury Trial.
     Each Subsidiary Guarantor and by its acceptance hereof each Holder, to the
fullest extent permitted by applicable law, irrevocably and unconditionally
waives the right to trial by jury in any legal or equitable action, suit or
proceeding arising out of or relating to this Guaranty or the Note Purchase
Agreement or any transaction contemplated hereby or thereby or the subject
matter of any of the foregoing.
Section 19. Survival.
     All warranties, representations and covenants made by each Subsidiary
Guarantor herein or in any written certificate or other instrument required to
be delivered by it or on its behalf hereunder or under the Note Purchase
Agreement shall be considered to have been relied upon by the Holders and shall
survive the execution and delivery of this Guaranty, regardless of any
investigation made by any Holder or on such Holder’s behalf. All statements in
any such certificate or other instrument shall constitute warranties and
representations by such Subsidiary Guarantor hereunder.
Section 20. Severability.
     Any provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, each Subsidiary
Guarantor hereby waives any provision of law that renders any provisions hereof
prohibited or unenforceable in any respect.
E-2.4(b)-21

 

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Section 21. Successors and Assigns.
     The terms of this Guaranty shall be binding upon each Subsidiary Guarantor
and its successors and assigns and shall inure to the benefit of the Holders and
their respective successors and assigns.
Section 22. Table of Contents; Headings.
     The section and paragraph headings in this Guaranty and the table of
contents are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof, and all references herein
to numbered sections, unless otherwise indicated, are to sections in this
Guaranty.
Section 23. Counterparts.
     This Guaranty may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
Section 24. Governing Law.
     This Guaranty shall in all respects be governed by, and construed and
interpreted in accordance with, the laws of the State of New York, without
regard to the conflicts of laws principles of such state.
Section 25. Release.
     Notwithstanding any other provision hereof to the contrary, including
without limitation Section 3(c)(v), 3(c)(xiv) and 3(c)(xv), a Subsidiary
Guarantor shall be automatically released from its guaranty hereunder upon the
sale or exchange of all or substantially all of the stock (or other equity
interests) or the assets of such Subsidiary Guarantor permitted pursuant to
Section 10.6 of the Note Purchase Agreement.
Section 26. Covenant Compliance.
     Each Subsidiary Guarantor agrees to comply with each of the covenants
contained herein and in the Note Purchase Agreement that imposes or purports to
impose, by reference to such Subsidiary Guarantor, express or otherwise, through
agreements with the Company, restrictions or obligations on such Subsidiary
Guarantor.
E-2.4(b)-22

 

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     In Witness Whereof, each party hereto has caused this Guaranty to be duly
executed as of the date first above written.

            American Gypsum Company LLC
American Gypsum Marketing Company
CCP Cement Company
CCP Concrete/Aggregates LLC
CCP Gypsum Company
CCP Land Company
Centex Cement Corporation
Hollis & Eastern Railroad Company LLC
Mathews Readymix LLC
M&W Drywall Supply Company
Mountain Cement Company
Nevada Cement Company
Republic Paperboard Company LLC
Texas Cement Company
Western Aggregates LLC
Western Cement Company of California
AG South Carolina LLC
Illinois Cement Company LLC
      By:           Name:           Title:           Centex Materials LLC
TLCC GP LLC
      By:           Name:           Title:           TLCC LP LLC
      By:           Name:           Title:        

Notice for each of the above:

            Address: 3811 Turtle Creek Blvd.
               Suite 1100
               Dallas, Texas 75219

Telecopy: (214) 432-2100
                       

E-2.4(b)-23

 

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Exhibit A
Form of Supplemental Agreement
     Supplemental Agreement dated as of                     , ___from
                    , a ___ organized under the laws of the State of
                     (the “New Subsidiary”), for the benefit of the Holders (as
defined in the Guaranty referred to below). Capitalized terms used herein
without definition shall have the respective meanings ascribed thereto in the
Subsidiary Guaranty Agreement, dated as of October 2, 2007 (the “Guaranty”),
from: (i) [names of guarantors] and (___) such other Subsidiaries (as defined
below) as shall become parties thereto in accordance therewith, for the benefit
of the Holders (as such term is defined in such Guaranty).
     Whereas, Eagle Materials Inc., a Delaware corporation (the “Company”),
authorized the issue and sale of (i) $20,000,000 6.08% Series 2007A Senior
Notes, Tranche A, due October 2, 2014 (the “Tranche A Notes”), (ii) $50,000,000
6.27% Series 2007A Senior Notes, Tranche B, due October 2, 2016 (the “Tranche B
Notes”), (iii) $70,000,000 6.36% Series 2007A Senior Notes, Tranche C, due
October 2, 2017 (the “Tranche C Notes”) and (iv) $60,000,000 6.48% Series 2007A
Senior Notes, Tranche D, due October 2, 2019 (the “Tranche D Notes” and,
together with the Tranche A Notes, the Tranche B Notes and the Tranche C Notes,
the “Series 2007A Notes”), pursuant to a Note Purchase Agreement, dated as of
October 2, 2007 (as amended, modified or supplemented from time to time, the
“Note Purchase Agreement”) among the Company and the purchasers named therein.
     Whereas, the Company is authorized to issue Additional Notes (as such term
is defined in the Note Purchase Agreement) of one or more separate series from
time to time in an aggregate principal amount not to exceed $500,000,000
pursuant to Section 2.2 of the Note Purchase Agreement.
     Whereas, the Additional Notes together with the Series 2007A Notes are
collectively referred to as the “Notes”.
     Whereas, the New Subsidiary is a Subsidiary of the Company.
     Whereas, certain of the existing Subsidiaries of the Company have entered
into the Guaranty.
     Whereas, the Note Purchase Agreement requires that certain Subsidiaries
become party to the Guaranty (as a Subsidiary Guarantor).
     Whereas, the New Subsidiary acknowledges that it has and will derive
substantial benefits from the issuance of the Notes.
     Whereas, the Guaranty specifies that additional Subsidiaries may become
Subsidiary Guarantors under such Guaranty by execution and delivery of an
instrument in the form of this Agreement. The undersigned Subsidiary is
executing this Agreement in accordance with the
E-2.4(b)-24

 

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requirements of the Note Purchase Agreement and the Guaranty in order to become
a Subsidiary Guarantor under the Guaranty as consideration for the Notes
previously purchased.
     Now, Therefore, the New Subsidiary Guarantor agrees as follows:
     Section 1. Guaranty. In accordance with Section 13 of the Guaranty, the New
Subsidiary by its signature hereto shall become a Subsidiary Guarantor under
such Guaranty with the same force and effect as if originally named therein as a
Subsidiary Guarantor and the New Subsidiary hereby (a) agrees to all the terms
and provisions of such Guaranty applicable to it as a Subsidiary Guarantor
thereunder, (b) represents and warrants that the representations and warranties
made by it as a Subsidiary Guarantor are true and correct on and as of the date
hereof with the same effect as though made on and as of the date hereof,
(c) acknowledges receipt of a copy of and agrees to be obligated and bound by
the terms of such Guaranty, and (d) agrees that each reference to a “Subsidiary
Guarantor” in such Guaranty shall be deemed to include the New Subsidiary.
     Section 2. Enforceability. The New Subsidiary hereby represents and
warrants that this Agreement has been duly authorized, executed and delivered by
the New Subsidiary and that each of this Agreement and the Guaranty (as
supplemented hereby) constitutes a legal, valid and binding obligation of the
New Subsidiary enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the applicability of creditors’ rights
generally and by equitable principles of general applicability (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
     Section 3. Effect on Guaranty. Except as expressly supplemented hereby, the
Guaranty shall continue in full force and effect.
     Section 4. Governing Law. This Agreement shall in all respects be governed
by, and construed and interpreted in accordance with, the laws of the State of
New York, without regard to the conflicts of laws principles of such state.
     Section 5. Savings Clause. To the fullest extent permitted under applicable
law, in the event any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect with respect to
the New Subsidiary, no party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, and the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired. The
parties shall endeavor in good-faith negotiations to replace any invalid,
illegal or unenforceable provisions with valid provisions, the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
     Section 6. Notices. All communications to the New Subsidiary shall be given
to it at the address or telecopy number set forth under its signature hereto.
E-2.4(b)-25

 

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     In Witness Whereof, the New Subsidiary has duly executed this Agreement as
of the day and year first above written.

            [New Subsidiary]
      By:           Name:           Title:        

             
 
  Address:        
 
     
 
   
 
           
 
           
 
           
 
           
 
  Telecopy:        
 
           

E-2.4(b)-26

 

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Form of Opinion of General Counsel
to the Company
     The closing opinion of James H. Graass, General Counsel of the Company,
which is called for by Section 4.4 of the Note Purchase Agreement, shall be
dated the Closing Date and addressed to the Purchasers, shall be satisfactory in
scope and form to each Purchaser and shall be in the form attached hereto.
Exhibit 4.4(a)
(to Note Purchase Agreement)

 

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Form of Opinion of Special Counsel
to the Company
     The closing opinion of Baker Botts L.L.P., special counsel to the Company,
which is called for by Section 4.4 of the Note Purchase Agreement, shall be
dated the Closing Date and addressed to the Purchasers, shall be satisfactory in
scope and form to each Purchaser and shall be in the form attached hereto.
Exhibit 4.4(b)
(to Note Purchase Agreement)

 

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Form of Opinion of Special Counsel
to the Purchasers
     The closing opinion of Chapman and Cutler LLP, special counsel to the
Purchasers, called for by Section 4.4 of the Note Purchase Agreement, shall be
dated the Closing Date and addressed to each Purchaser, shall be satisfactory in
form and substance to each Purchaser and shall be to the effect that:
     1. The Company is a corporation, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has the corporate power
and the corporate authority to execute and deliver the Note Purchase Agreement
and to issue the Series 2007A Notes.
     2. The Note Purchase Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding contract
of the Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors’ rights
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law).
     3. The Series 2007A Notes have been duly authorized by all necessary
corporate action on the part of the Company, and the Series 2007A Notes being
delivered on the date hereof have been duly executed and delivered by the
Company and constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance and similar laws affecting creditors’ rights generally,
and general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
     4. The issuance, sale and delivery of the Series 2007A Notes and the
execution and delivery of the Subsidiary Guaranty under the circumstances
contemplated by the Note Purchase Agreement and the Subsidiary Guaranty do not,
under existing law, require the registration of the Series 2007A Notes or the
Subsidiary Guaranty under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as amended.
Exhibit 4.4(c)
(to Note Purchase Agreement)

 

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     With respect to matters of fact upon which such opinion is based, Chapman
and Cutler LLP may rely on appropriate certificates of public officials and
officers of the Company and upon representations of the Company and the
Purchasers delivered in connection with the issuance and sale of the
Series 2007A Notes.
     In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler
LLP may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a certificate of
good standing of the Company from, the Secretary of State of the State of
Delaware, the Bylaws of the Company and the general business corporation law of
the State of Delaware. The opinion of Chapman and Cutler LLP is limited to the
laws of the State of New York, the general business corporation law of the State
of Delaware and the Federal laws of the United States.
E-4.4(c)-2

 

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Eagle Materials Inc.
[Number] Supplement to Note Purchase Agreement
Dated as of                                         
     Re: $                    ___% Series ___Senior Notes
Due                                         
 
Exhibit S
(to Note Purchase Agreement)

 

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Eagle Materials Inc.
3811 Turtle Creek Blvd., Suite 1100
Dallas, Texas 75219
Dated as of
                                        , 20__
To the Purchaser(s) named in
Schedule A hereto
Ladies and Gentlemen:
     This [Number] Supplement to Note Purchase Agreement (the “Supplement”) is
between Eagle Materials Inc., a Delaware corporation (the “Company”), and the
institutional investors named on Schedule A attached hereto (the “Purchasers”).
     Reference is hereby made to that certain Note Purchase Agreement dated as
of October 2, 2007 (the “Note Purchase Agreement”) between the Company and the
purchasers listed on Schedule A thereto. All capitalized terms not otherwise
defined herein shall have the same meaning as specified in the Note Purchase
Agreement. Reference is further made to Section 2.2 of the Note Purchase
Agreement which requires that, prior to the delivery of any Additional Notes,
the Company and each Additional Purchaser shall execute and deliver a
Supplement.
     The Company hereby agrees with the Purchaser(s) as follows:
     1. The Company has authorized the issue and sale of $                    
aggregate principal amount of its ___% Series ___Senior Notes due
                    , ___(the “Series ___Notes”). The Series ___Notes, together
with the Series 2007A Notes [and the Series ___Notes] initially issued pursuant
to the Note Purchase Agreement [and the                      Supplement] and
each series of Additional Notes which may from time to time hereafter be issued
pursuant to the provisions of Section 2.2 of the Note Purchase Agreement, are
collectively referred to as the “Notes” (such term shall also include any such
notes issued in substitution therefor pursuant to Section 13 of the Note
Purchase Agreement). The Series ___Notes shall be substantially in the form set
out in Exhibit 1 hereto with such changes therefrom, if any, as may be approved
by the Purchaser(s) and the Company.
     2. Subject to the terms and conditions hereof and as set forth in the Note
Purchase Agreement and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each Purchaser,
and each Purchaser agrees to purchase from the Company, Series ___Notes in the
principal amount set forth opposite such Purchaser’s name on Schedule A hereto
at a price of 100% of the principal amount thereof on the closing date
hereinafter mentioned.
E-S-2

 

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     3. The sale and purchase of the Series ___Notes to be purchased by each
Purchaser shall occur at the offices of
[                                        ] at 10:00 a.m. Chicago time, at a
closing (the “Closing”) on ___, ___or on such other Business Day thereafter on
or prior to ___, ___as may be agreed upon by the Company and the Purchasers. At
the Closing, the Company will deliver to each Purchaser the Series ___Notes to
be purchased by such Purchaser in the form of a single
Series                      Note (or such greater number of Series ___Notes in
denominations of at least $100,000 as such Purchaser may request) dated the date
of the Closing and registered in such Purchaser’s name (or in the name of such
Purchaser’s nominee), against delivery by such Purchaser to the Company or its
order of immediately available funds in the amount of the purchase price
therefor by wire transfer of immediately available funds for the account of the
Company to account number [                                        ] at
                     Bank, [Insert Bank address, ABA number for wire transfers,
and any other relevant wire transfer information]. If, at the Closing, the
Company shall fail to tender such Series ___Notes to any Purchaser as provided
above in this Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to any Purchaser’s satisfaction, such Purchaser shall,
at such Purchaser’s election, be relieved of all further obligations under this
Supplement and the Note Purchase Agreement, without thereby waiving any rights
such Purchaser may have by reason of such failure or such nonfulfillment.
     4. The obligation of each Purchaser to purchase and pay for the
Series ___Notes to be sold to such Purchaser at the Closing is subject to the
fulfillment to such Purchaser’s satisfaction, prior to the Closing, of the
conditions set forth in Section 4 of the Note Purchase Agreement with respect to
the Series ___Notes to be purchased at the Closing, and to the following
additional conditions:
     (a) Except as supplemented, amended or superceded by the representations
and warranties set forth in Exhibit A hereto, each of the representations and
warranties of the Company set forth in Section 5 of the Note Purchase Agreement
shall be correct as of the date of Closing and the Company shall have delivered
to each Purchaser an Officer’s Certificate, dated the date of the Closing
certifying that such condition has been fulfilled.
     (b) Contemporaneously with the Closing, the Company shall sell to each
Purchaser, and each Purchaser shall purchase, the Series ___Notes to be
purchased by such Purchaser at the Closing as specified in Schedule A.
     5. [Here insert special provisions for Series ___Notes including prepayment
provisions applicable to Series ___Notes (including Make-Whole Amount) and
closing conditions applicable to Series ___Notes].
     6. Each Purchaser represents and warrants that the representations and
warranties set forth in Section 6 of the Note Purchase Agreement are true and
correct on the date hereof with respect to the purchase of the Series ___Notes
by such Purchaser.
     7. The Company and each Purchaser agree to be bound by and comply with the
terms and provisions of the Note Purchase Agreement as fully and completely as
if such Purchaser were an original signatory to the Note Purchase Agreement.
E-S-3

 

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     The execution hereof shall constitute a contract between the Company and
the Purchaser(s) for the uses and purposes hereinabove set forth, and this
agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.

            Eagle Materials Inc.
      By           Name:           Title:        

Accepted as of __________, _____

            [Variation]
      By           Name:           Title:        

E-S-4

 

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Information Relating to Purchasers

                  Principal         Amount of Series         ______ Notes to Be
Name and Address of Purchaser   Purchased [Name of Purchaser]   $
 
       
(1)
  All payments by wire transfer of    
 
  immediately available funds to:      
 
  with sufficient information to identify the    
 
  source and application of such funds.    
 
       
(2)
  All notices of payments and written    
 
  confirmations of such wire transfers:    
 
       
(3)
  All other communications:    

E-S-5

 

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Supplemental Representations
          The Company represents and warrants to each Purchaser that except as
hereinafter set forth in this Exhibit A, each of the representations and
warranties set forth in Section 5 of the Note Purchase Agreement is true and
correct in all material respects as of the date hereof with respect to the
Series ___Notes with the same force and effect as if each reference to
“Series 2007A Notes” set forth therein was modified to refer to the “Series
___Notes” and each reference to “this Agreement” therein was modified to refer
to the Note Purchase Agreement as supplemented by the ___Supplement, and each
reference to “the Closing Date” set forth therein was modified to refer to the
Closing under the                      Supplement. The Section references
hereinafter set forth correspond to the similar sections of the Note Purchase
Agreement which are supplemented hereby:
     Section 5.3. Disclosure. The Company, through its agent, Banc of America
Securities LLC has delivered to each Purchaser a copy of a Private Placement
Memorandum, dated                      (the “Memorandum”), relating to the
transactions contemplated by the ___Supplement. The Memorandum fairly describes,
in all material respects, the general nature of the business and principal
properties of the Company and its Restricted Subsidiaries. The Note Purchase
Agreement, the Memorandum, the documents, certificates or other writings
delivered to each Purchaser by or on behalf of the Company in connection with
the transactions contemplated by the Note Purchase Agreement and the
___Supplement and the financial statements listed in Schedule 5.5 to the
___Supplement, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. Since                     , there has been no change in the financial
condition, operations, business, properties or prospects of the Company or any
Restricted Subsidiary except changes that individually or in the aggregate would
not reasonably be expected to have a Material Adverse Effect. There is no fact
known to the Company that would reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in the
other documents, certificates and other writings delivered to each Purchaser by
or on behalf of the Company specifically for use in connection with the
transactions contemplated hereby.
     Section 5.4. Organization and Ownership of Shares of Subsidiaries.
(a) Schedule 5.4 to the ___Supplement contains (except as noted therein)
complete and correct lists of (i) the Company’s Restricted and Unrestricted
Subsidiaries, and showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class of
its capital stock or similar equity interests outstanding owned by the Company
and each other Subsidiary, (ii) the Company’s Affiliates, other than
Subsidiaries, and (iii) the Company’s directors and senior officers.
          (b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 to the ___Supplement as being
owned by the Company and its Subsidiaries have been validly issued, are fully
paid and nonassessable and are owned by the Company or another Subsidiary free
and clear of any Lien (except as otherwise disclosed in Schedule 5.4 to the
___Supplement).
Exhibit A
(to Supplement)

 

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          (c) Each Subsidiary identified in Schedule 5.4 to the ___Supplement is
a corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to
transact.
          (d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Supplement, the agreements listed
on Schedule 5.4 to the ___ Supplement and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.
     Section 5.5. Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser copies of the financial statements of the Company
and its Subsidiaries listed on Schedule 5.5 to the ___Supplement. All of said
financial statements (including in each case the related schedules and notes)
fairly present in all material respects the consolidated financial position of
the Company and its Subsidiaries as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments). The Company and its Subsidiaries do not have any
Material liabilities that are not disclosed on such financial statements or
otherwise disclosed in the Disclosure Documents.
     Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Series ___Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any Person other
than the Purchasers and not more than [___] other Institutional Investors, each
of which has been offered the Series ___Notes at a private sale for investment.
Neither the Company nor anyone acting on its behalf has taken, or will take, any
action that would subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act.
     Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Series ___Notes to
                                                             and for general
corporate purposes. No part of the proceeds from the sale of the Series ___Notes
pursuant to the ___ Supplement will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System (12 CFR
221), or for the purpose of buying or carrying or trading in any securities
under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of

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Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 5% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 5% of the value of such assets. As used in this
Section, the terms “margin stock” and “purpose of buying or carrying” shall have
the meanings assigned to them in said Regulation U.
     Section 5.15. Existing Debt; Future Liens. (a) Schedule 5.15 to the
                     Supplement sets forth a complete and correct list of all
outstanding Debt of the Company and its Restricted Subsidiaries as of
                    , since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Debt of the Company or its Restricted Subsidiaries. Neither the Company nor
any Restricted Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal or interest on any Debt of the Company
or such Subsidiary and no event or condition exists with respect to any Debt of
the Company or any Restricted Subsidiary that would permit (or that with notice
or the lapse of time, or both, would permit) one or more Persons to cause such
Debt to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
     (b) Except as disclosed in Schedule 5.15 to the                     
Supplement, neither the Company nor any Restricted Subsidiary has agreed or
consented to cause or permit in the future (upon the happening of a contingency
or otherwise) any of its property, whether now owned or hereafter acquired, to
be subject to a Lien not permitted by Section 10.4.
     (c) Neither the Company nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Debt of the
Company or such Subsidiary, any agreement relating thereto or any other
agreement (including, but not limited to, its charter or other organizational
document) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Debt of the Company, except as specifically indicated in
Schedule 5.15 to the ___Supplement.
[Add any additional Sections as appropriate at the time the Series ______ Notes
are issued]

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[Form of Series ______ Note]
Eagle Materials Inc.
___% Series ___Senior Note due                    

No. [                    ]
$[                                        ]   [Date]
PPN [                    ]

     For Value Received, the undersigned, Eagle Materials Inc., a corporation
organized and existing under the laws of the State of Delaware (herein called
the “Company”), hereby promises to pay to
[                                        ], or registered assigns, the principal
sum of [                                        ] Dollars (or so much thereof as
shall not have been prepaid) on                                         , with
interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate of ___% per annum from the date
hereof, payable semiannually, on the ___day of ___and ___in each year,
commencing on the first of such dates after the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
law, at a rate per annum from time to time equal to [2% above the stated rate],
on any overdue payment of interest and, during the continuance of an Event of
Default, on the unpaid balance hereof and on any overdue payment of any
Make-Whole Amount, payable [semiannually] as aforesaid (or, at the option of the
registered holder hereof, on demand).
     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at                                         , in
                                        , or at such other place as the Company
shall have designated by written notice to the holder of this Note as provided
in the Note Purchase Agreement referred to below.
     This Note is one of a series of Senior Notes (the “Notes”) issued pursuant
to a Supplement to the Note Purchase Agreement dated as of October 2, 2007 (as
from time to time amended, supplemented or modified, the “Note Purchase
Agreement”), between the Company, the Purchasers named therein and Additional
Purchasers of Notes from time to time issued pursuant to any Supplement to the
Note Purchase Agreement. This Note and the holder hereof are entitled equally
and ratably with the holders of all other Notes of all series from time to time
outstanding under the Note Purchase Agreement to all the benefits provided for
thereby or referred to therein. Each holder of this Note will be deemed, by its
acceptance hereof, to have (i) agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreement and (ii) made the
representations set forth in Sections 6.2 and 6.3 of the Note Purchase
Agreement. Unless otherwise indicated, capitalized terms used in this Note shall
have the respective meanings ascribed to such terms in the Note Purchase
Agreement.
Exhibit A
(to Supplement)

 

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     This Note is registered with the Company and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder’s attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
     The Company will make required prepayments of principal on the dates and in
the amounts specified in the Note Purchase Agreement. [This Note is not subject
to regularly scheduled prepayments of principal.] This Note is [also] subject to
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Note Purchase Agreement, but not otherwise.
     Pursuant to the Subsidiary Guaranty Agreement dated as of October 2, 2007
(as amended or modified from time to time, the “Subsidiary Guaranty”), certain
Subsidiaries of the Company have absolutely and unconditionally guaranteed
payment in full of the principal of, Make-Whole Amount, if any, and interest on
this Note and the performance by the Company of its obligations contained in the
Note Purchase Agreement all as more fully set forth in said Subsidiary Guaranty.
     If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
     This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.

            Eagle Materials Inc.
      By           Name:           Title:        

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