Exhibit 10.4

TAX SHARING AND INDEMNIFICATION AGREEMENT

          This Tax Sharing and Indemnification Agreement (this “Agreement”) is
entered into as of the Distribution Date by and between Texas Industries, Inc.,
a Delaware corporation (“Distributing”), on behalf of itself and each
Distributing Affiliate, and Chaparral Steel Company, a Delaware corporation
(“Controlled”), and their respective successors.

RECITALS

          WHEREAS, Distributing is the common parent of an affiliated group of
corporations within the meaning of section 1504(a) of the Code, and currently
files consolidated income Tax Returns with the Controlled Affiliates and the
Distributing Affiliates;

          WHEREAS, Distributing, along with Distributing Affiliates, conducts
the cement, aggregate and concrete  products business, which consists of cement
production facilities, sand and gravel and other aggregate operations, and
ready-mix concrete operations (the “Cement Business”);

          WHEREAS, Controlled, a first-tier subsidiary of Distributing, along
with Controlled Affiliates, conducts the steel products business, which
manufactures structural steel products and steel bar products (the “Steel
Business”), as more fully described in the Form 10 initially filed with the
Securities and Exchange Commission (“SEC”) on May 6, 2005, as amended by
Amendment No. 1 filed with the SEC on June 10, 2005, and as amended by Amendment
No. 2 filed with the SEC on June 27, 2005 (the “Form 10”);

          WHEREAS, Distributing has agreed to transfer and assign, or cause to
be transferred and assigned, to Controlled all of the assets and liabilities of,
and Subsidiaries that conduct, the Steel Business (the “Contribution”) pursuant
to that certain Separation and Distribution Agreement dated July 6, 2005 (the
“Separation Agreement”);

          WHEREAS, the Board of Directors of Distributing has determined that it
would be advisable and in the best interests of Distributing and its
shareholders for Distributing to distribute on a pro rata basis to the holders
of record of Distributing common stock, par value $1.00 per share, without any
consideration being paid by such holders, all of the outstanding shares of
Controlled common stock, par value $0.01 per share, owned directly by
Distributing (the “Distribution”);

          WHEREAS, as part of the Contribution and Distribution, Controlled will
declare and pay a cash dividend of approximately $341 million to Distributing,
which Distributing will use to pay its unrelated creditors (the “Dividend”);

          WHEREAS, Distributing and Controlled intend that the Contribution and
the Distribution qualify as tax-free to Distributing and its shareholders under
sections 355, 361 and 368(a)(1)(D) of the Code;

          WHEREAS, Distributing, the Controlled Affiliates, and the Distributing
Affiliates are parties to an amended and restated tax sharing agreement dated as
of June 1, 2002 (the “Existing Tax Sharing Agreement”), which currently governs
the parties’ respective responsibilities for Taxes;

          WHEREAS, pursuant to the Distribution, the Controlled Affiliates will
cease to be members of the Distributing Consolidated Group;

          WHEREAS, the parties hereto are entering into this Agreement: to
ensure the tax-free status of the Contribution and the Distribution; to provide
certain indemnities; and to provide for various administrative matters relating
to Taxes, including: (1) the preparation and filing of Tax Returns along with
the payment or refund of Taxes due and payable or receivable thereon; (2) the
retention and maintenance of relevant records necessary to prepare and file
appropriate Tax Returns, as well as the provision for appropriate access to
those records by the parties to this Agreement; (3) the conduct of audits,
examinations, and proceedings by appropriate governmental entities that could
result in a redetermination of Taxes; and (4) the cooperation of all parties
with one another in order to fulfill their duties and responsibilities under
this Agreement and under the Code and other applicable law;

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          WHEREAS, the parties desire to set forth their respective
responsibilities for Taxes, including any Taxes that could be incurred in
connection with the Distribution; and

          WHEREAS, the parties hereto intend to incorporate the principles from
the Existing Tax Sharing Agreement into this Agreement.

AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and agreements set forth below, the parties do hereby agree
as follows:

ARTICLE I
DEFINITIONS

          Unless otherwise defined in this Agreement, capitalized terms shall
have the meanings ascribed thereto in the Separation Agreement.  As used in this
Agreement, the following terms shall have the following meanings:

          1.1.          “2005 Year” is defined at Section 3.3(a).

          1.2.          “2006 Year” is defined at Section 3.3(a).

          1.3.          “Adjustment” means any proposed or final change in the
taxable income or Tax Liability of a taxpayer by a Taxing Authority.

          1.4.          “Affiliate” means, when used with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
such Person.

          1.5.          “Agreement” has the meaning set forth in the Preamble to
this Agreement.

          1.6.          “Cement Business” has the meaning set forth in the
Recitals to this Agreement. 

          1.7.          “Change Month” is defined at Section 2.4. 

          1.8.          “Code” means the Internal Revenue Code of 1986, as
amended.

          1.9.          “Combined State Tax” means, with respect to each United
States state or local taxing jurisdiction, any income, franchise or similar tax
payable to such state or local taxing jurisdiction in which any Controlled
Affiliate files Returns with a Distributing Affiliate, on a consolidated,
combined or unitary basis for purposes of such Tax.

          1.10.        “Combined State Tax Return” means any Return with respect
to any Combined State Tax that includes any Pre-Distribution Tax Period.

          1.11.        “Contribution” has the meaning set forth in the Recitals
to this Agreement and includes Distributing’s receipt of the Dividend.

          1.12.        “Controlled” has the meaning set forth in the Preamble to
this Agreement. 

          1.13.        “Controlled Affiliate” means Controlled and any Affiliate
of Controlled after the Distribution Date.

          1.14.        “Controlled Change in Control Tax” means any Tax imposed
by reason of Code section 355(e) or any comparable provision of state or local
law as a result of one or more persons acquiring, directly or indirectly, stock
representing a 50% or greater interest in Controlled or a successor to
Controlled.

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          1.15.        “Controlled Indemnified Party” is defined at Section
7.2. 

          1.16.        “Controlled Indemnifying Parties” is defined at Section
7.1.

          1.17.        “Controlled Separate Return” means any state or local Tax
Return of any Controlled Affiliate, other than any Combined State Tax Return,
that includes any Pre-Distribution Tax Period.

          1.18.        “Controlled Separate Tax Liability” means an amount equal
to the Tax Liability that Controlled and each Controlled Affiliate would have
incurred if they had filed a consolidated return, combined return or a separate
return, as the case may be, separate from the members of the Distributing
Consolidated Group, for the relevant Tax period, and such amount shall be
computed by Distributing in a manner consistent with the Existing Tax Sharing
Agreement.

          1.19.        “Designated Officers” is defined at Section 9.1(b).

          1.20.        “Disputes” is defined at Section 9.1(a). 

          1.21.        “Distributing” has the meaning set forth in the Preamble
to this Agreement.

          1.22.        “Distributing Affiliate” means Distributing and any
Affiliate of Distributing (other than a Controlled Affiliate) before, on or
after the Distribution Date, as applicable.

          1.23.        “Distributing Consolidated Group” means the group of
companies filing a consolidated Federal Tax Return or Combined State Tax Return,
as the case may be, that includes Distributing.

          1.24.        “Distributing Consolidated Return” means any consolidated
Federal Tax Return or Combined State Tax Return of the Distributing Consolidated
Group that includes any Pre-Distribution Tax Period.

          1.25.        “Distributing Indemnified Party” is defined at Section
7.1. 

          1.26.        “Distributing Indemnifying Parties” is defined at Section
7.2. 

          1.27.         “Distribution” has the meaning set forth in the Recitals
to this Agreement. 

          1.28.         “Distribution Date” has the meaning set forth in the
Separation Agreement.

          1.29.        “Dividend” has the meaning set forth in the Recitals to
this Agreement.

          1.30.        “Existing Tax Sharing Agreement” has the meaning set
forth in the Recitals to this Agreement.

          1.31.        “Federal Tax” means any Tax imposed under the Code,
including any interest, penalty or other additions to Tax imposed under Subtitle
F of the Code.

          1.32.        “Federal Tax Return” means any Return with respect to any
Federal Taxes that includes any Pre-Distribution Tax Period.

          1.33.        “Final Determination” means the final resolution of any
Tax matter.  A Final Determination shall result from the first to occur of:

 

 

          (a)          the expiration of 30 days after the IRS’s acceptance of a
Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and
Acceptance of Overassessment on Form 870 or 870-AD (or any successor comparable
form) (the “Waiver”), except as to reserved matters specified therein, or the
expiration of 30 days after acceptance by any other Taxing Authority of a
comparable agreement or form under the laws of any other jurisdiction, including
state, local, and foreign jurisdictions; unless, within such period, the
taxpayer gives notice to the other party to this Agreement of the taxpayer’s
intention to attempt to recover all or part of any amount paid pursuant to the
Waiver by the filing of a timely claim for refund;

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          (b)          a decision, judgment, decree, or other order by a court
of competent jurisdiction that is not subject to further judicial review (by
appeal or otherwise) and that has become final;

 

 

 

 

 

          (c)          the execution of a closing agreement under Code section
7121, or the acceptance by the IRS of an offer in compromise under Code section
7122, or comparable agreements under the laws of any other jurisdiction,
including state, local, and foreign jurisdictions; except as to reserved matters
specified therein;

 

 

 

 

 

          (d)          the expiration of the time for filing a claim for refund
or for instituting suit in respect of a claim for refund that was disallowed in
whole or part by the IRS or any other Taxing Authority;

 

 

 

 

 

          (e)          the expiration of the applicable statute of limitations;
or

 

 

 

 

 

          (f)          an agreement by the parties hereto that a Final
Determination has been made.

          1.34.        “Indemnified Liability” is defined at Section 7.3. 

          1.35.        “Indemnified Parties” is defined at Section 7.2.

          1.36.        “Indemnifying Parties” is defined at Section 7.2.

          1.37.        “Initial Mediation Period” is defined at Section 9.1(b). 

          1.38.        “Intercompany Accounts” means the intercompany receivable
and payable accounts that were maintained before the Distribution between
Distributing and Controlled or between Distributing and the relevant Controlled
Affiliate.

          1.39.        “IRS” means the Internal Revenue Service.

          1.40.        “IRS Interest Rate” means the rate of interest imposed
from time to time on underpayments of income tax pursuant to Code section
6621(a)(2).

          1.41.        “Opinion Documents” means (i) the Spin-Off Opinion, (ii)
the officer’s certificates issued by Distributing and Controlled to Thompson &
Knight LLP in connection with the Spin-Off Opinion and (iii) all other documents
provided by Distributing and Controlled to Thompson & Knight LLP and on which
Thompson & Knight LLP relied in issuing the Spin-Off Opinion.

          1.42.        “Person” means any natural person, corporation, business
trust, joint venture, association, company, partnership, or government or any
agency or political subdivision thereof.

          1.43.        “Post-Distribution Tax Period” means (i) any tax period
ending after the Distribution Date, and (ii) with respect to a tax period that
begins on or before the Distribution Date and ends after the Distribution Date,
such portion of the tax period that begins on the day after the Distribution
Date.

          1.44.        “Pre-Distribution Tax Period” means (i) any tax period
beginning and ending before or on the Distribution Date, and (ii) with respect
to a tax period that begins on or before and ends after the Distribution Date,
such portion of the tax period that begins before the Distribution Date and ends
at the close of the Distribution Date.

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          1.45.        “Private Letter Ruling” means a private letter ruling
from the IRS to the effect that a transaction does not prevent the Contribution
or the Distribution from qualifying for tax-free treatment for Distributing or
its shareholders under Code Sections 355, 361 or 368(a)(1)(D) and any other
applicable sections of the Code, assuming that the Distribution would have
qualified for tax-free treatment if such transaction did not occur, which ruling
is in form and substance reasonably satisfactory to Distributing.  Such a ruling
may rely upon, and may assume the accuracy of, any representations given in any
Opinion Document, and any customary representations or assumptions.

          1.46.         “Proceeding” is defined at Section 8.2(a).

          1.47.         “Return” means any return, declaration, report, claim
for refund, or information or return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

          1.48.        “SEC” has the meaning set forth in the Recitals to this
Agreement.

          1.49.        “Separation Agreement” has the meaning set forth in the
Recitals to this Agreement. 

          1.50.        “Separation Tax” means any Tax (other than any Controlled
Change in Control Tax) imposed on any Distributing Affiliate or Controlled
Affiliate in connection with the Contribution and Distribution that would not
have occurred had the Contribution and Distribution not occurred.

          1.51.        “Short Period” is defined at Section 3.3(a).

          1.52.        “Spin-Off Opinion” means the opinion received from
Thompson & Knight LLP to the effect that the Distribution and the Contribution
will qualify as tax-free to Distributing and its shareholders under sections
355, 361 and 368(a)(1)(D) of the Code.

          1.53.         “Steel Business” has the meaning set forth in the
Recitals to this Agreement. 

          1.54.        “Subsidiary” means with respect to Distributing or
Controlled, any Person of which Distributing or Controlled, respectively,
controls or owns, directly or indirectly, more than 50% of the stock or other
equity interest entitled to vote on the election of members to the board of
directors or similar governing body.

          1.55.        “Substantial Negotiations” means discussions of
significant economic terms (for example, the exchange ratio in a merger) by one
or more officers, directors, or controlling shareholders of any Distributing
Affiliate or Controlled Affiliate or another Person or Persons with the implicit
or explicit permission of one or more officers, directors, or controlling
shareholders of any Distributing Affiliate or Controlled Affiliate.  This
definition shall be interpreted consistently with the definition of “substantial
negotiations” contained in Treas. Reg. § 1.355-7(h)(1).

          1.56.        “Tax Asset” means any Tax Item that may have the effect
of producing a Tax Benefit.

          1.57.        “Tax Benefit” means a reduction in the Tax Liability of a
taxpayer (whether a Distributing Affiliate or a Controlled Affiliate) for any
taxable period.  Except as otherwise provided in this Agreement, a Tax Benefit
shall be deemed to have been realized or received from a Tax Item in a taxable
period only if and to the extent that the Tax Liability of the taxpayer for such
period, after taking into account the effect of the Tax Item on the Tax
Liability of such taxpayer in all prior periods, is less than it would have been
if such Tax Liability were determined without regard to such Tax Item.

          1.58.        “Taxes” means all federal, state, local and foreign gross
or net income, gross receipts, withholding, payroll, franchise, transfer, sales,
use, value added, estimated or other taxes of any kind whatsoever or similar
charges and assessments, including all interest, penalties and additions imposed
with respect to such amounts which any Distributing Affiliate or any Controlled
Affiliate is required to pay, collect or withhold, together with any interest
and any penalties, additions or additional amounts imposed with respect thereto,
and “Tax” means any of the Taxes.

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          1.59.        “Taxing Authority” means the IRS or any other
governmental authority or any subdivision, agency, commission or authority
thereof or any quasi-governmental or private body having jurisdiction pursuant
to applicable law over the assessment, determination, collection or imposition
of any Tax.

          1.60.        “Tax Item” means any item of income, gain, loss,
deduction, credit, recapture of credit, or any other item (including basis)
which may have the effect of increasing or decreasing Taxes paid or payable.

          1.61.        “Tax Liability” means the net amount of Taxes due and
paid or payable for any taxable period, determined after applying all tax
credits and all applicable carrybacks or carryovers for net operating losses,
net capital losses, unused general business tax credits, or any other Tax Items
arising from a prior or subsequent taxable period, and all other relevant
adjustments.

          1.62.        “Tax Returns” means all reports, estimates, declarations
of estimated tax, information statements and returns relating to, or required to
be filed in connection with any Taxes, including information returns or reports
with respect to backup withholding and other payments to third parties.

          1.63.        “Unqualified Tax Opinion” means an unqualified “will”
opinion of tax counsel to the effect that a transaction does not prevent the
Contribution or the Distribution from qualifying for tax-free treatment for
Distributing or its shareholders under Code sections 355, 361 or 368(a)(1)(D)
and any other applicable sections of the Code, assuming that the Distribution
would have qualified for tax-free treatment if such transaction did not occur,
which opinion is in form and substance reasonably satisfactory to Distributing. 
An Unqualified Tax Opinion may rely upon, and may assume the accuracy of, any
representations given in any Opinion Document, and any customary representations
contained in an officer’s certificate delivered by an officer of Distributing or
Controlled to such counsel.

ARTICLE II
PREPARATION AND FILING OF TAX RETURNS.

          2.1.          Designation of Agent.  With regard to each Distributing
Consolidated Return, each Controlled Affiliate hereby irrevocably authorizes and
designates Distributing as its agent, coordinator, and administrator, for the
purpose of taking any and all actions (including the execution of waivers of
applicable statutes of limitation) necessary or incidental to the filing of any
such Tax Return or other Tax proceedings, and for the purpose of making payments
to, or collecting refunds from, any Taxing Authority, provided that Controlled
may continue to participate in any such Tax proceedings as provided herein.

          2.2.          Distributing Consolidated Returns.  Distributing will
prepare all Distributing Consolidated Returns.  Distributing shall have the
exclusive right to (a) file, prosecute, compromise, or settle any claim for
refund, and (b) determine whether any refunds to which the Distributing
Consolidated Group may be entitled shall be received by way of refund or credit
against the Tax Liability of the Distributing Consolidated Group.

          2.3.          Taxable Period Ends on Distribution Date.  Unless
prohibited by applicable law, any taxable period of any Controlled Affiliate
that is included in a Distributing Consolidated Return that includes the
Distribution Date shall end on the Distribution Date.

          2.4.          Allocation.  The books of each Controlled Affiliate
shall be closed (a) at the end of the month preceding the month that includes
the Distribution Date and (b) at the end of the month that includes the
Distribution Date (the “Change Month”).  Items of income and deduction of each
Controlled Affiliate for the Change Month will be ratably allocated on a daily
basis consistent with Treasury Regulation section 1.1502-76(b)(2)(iii), except
that extraordinary items within the meaning of Treasury Regulation section
1.1502-76(b)(2)(ii)(C) are not subject to proration.  Rather, extraordinary
items will be allocated to the day they are taken into account.

          2.5.          Controlled Separate Returns.  Controlled shall be solely
responsible for the preparation and filing of all Controlled Separate Returns.
Controlled shall be responsible for paying to the applicable Taxing Authorities
all Taxes shown as due from any Controlled Affiliate on the Controlled Separate
Returns.

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          2.6.          Post-Distribution Conduct of Controlled.  On or after
the Distribution Date, Controlled will not, nor will it permit any Controlled
Affiliate to, make or change any accounting method, change its taxable year,
amend any Return or take any Tax position on any Return, take any other action,
omit to take any action, or enter into any transaction, that may reasonably be
expected to result in, or does result in, any increased Tax Liability or
reduction of any Tax Asset of the Distributing Consolidated Group or any
Distributing Affiliate.

          2.7          Allocation of Consolidated Alternative Minimum Tax. 
Distributing shall allocate a portion of the consolidated alternative minimum
tax credit of the Distributing Consolidated Group, if any, to Controlled. 
Distributing, in its sole discretion, shall apply any reasonable method
consistent with the purposes of the alternative minimum tax credit to make such
allocation, including the allocation method currently provided under Prop.
Treas. Reg. § 1.1502-55(h)(6).

          2.8          Allocation of Pre-Distribution Earnings and Profits. 
Distributing and Controlled agree to allocate earnings and profits of
Distributing between Distributing and Controlled in accordance with Treas. Reg.
§ 1.312-10.

ARTICLE III
TAX SHARING

          3.1.          Controlled’s Liability for Taxes.  Controlled and each
Controlled Affiliate shall be jointly and severally liable for the following
Taxes, and shall be entitled to receive and retain all refunds of Taxes
previously incurred by Controlled or the Steel Business with respect to such
Taxes:

 

 

          (a)          all Taxes incurred with respect to all Distributing
Consolidated Returns to the extent that such Taxes are related to (i) a
Controlled Separate Tax Liability or (ii) the Steel Business for any taxable
period;

 

 

 

 

 

          (b)          all Taxes related to Controlled Separate Returns as
provided for in Section 2.5 of this Agreement; and

 

 

 

 

 

          (c)          all Taxes incurred with respect to Controlled and any
Controlled Affiliate for any Post-Distribution Tax Period.

          3.2.          Distributing’s Liability for Taxes.  Distributing and
each Distributing Affiliate shall be jointly and severally liable for the
following Taxes, and shall be entitled to receive and retain all refunds of
Taxes previously incurred by Distributing with respect to such Taxes:

 

 

          (a)          except as provided for in Section 3.1(a), all Taxes
incurred with respect to all Distributing Consolidated Returns; and

 

 

 

 

 

          (b)          all Taxes incurred with respect to Distributing and any
Distributing Affiliate for any Post-Distribution Tax Period.

          3.3.          Payment of Allocable Taxes.

 

 

          (a)          Within ten (10) days before the date that Distributing
files the Distributing Consolidated Return for the taxable year ending May 31,
2005 (the “2005 Year”), Controlled shall pay (or shall cause the relevant
Controlled Affiliate to pay) to Distributing an amount equal to the Controlled
Separate Tax Liability for the 2005 Year, if any, minus any Taxes paid by or
credited to Controlled or any Controlled Affiliate with respect to the 2005 Year
(including estimated tax payments and any amounts for such Taxes reflected in
the Intercompany Accounts).  This Section 3.3(a) shall also apply with respect
to the Distributing Consolidated Return for the portion of the taxable year
ending May 31, 2006 (the “2006 Year”) that ends on the Distribution Date (the
“Short Period”), applying the principles of Section 2.4.

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          (b)          If Controlled or a Controlled Affiliate generates a net
operating loss for federal income tax purposes rather than a Controlled Separate
Tax Liability on a stand-alone basis as determined pursuant to the Existing Tax
Sharing Agreement and past practice for the Short Period or the 2005 Year,
Distributing shall pay to Controlled an amount equal to the product obtained by
multiplying 35% by the amount of such loss.  Distributing shall pay such amount
to Controlled within ten (10) days before the date that Distributing files the
Distributing Consolidated Return for the 2006 Year or 2005 Year, whichever is
applicable.  Distributing shall not, however, make any such payment to the
extent that (i) any portion of Distributing’s consolidated net operating loss
for federal income tax purposes from the 2005 Year or the Short Period is
carried over to the first Post-Distribution Tax Period of Controlled or a
Controlled Affiliate or (ii) Distributing has previously paid Controlled or a
Controlled Affiliate (via adjustment of Intercompany Accounts, this Section 3.3,
or otherwise).

 

 

 

 

 

          (c)          If any Tax Return for a Pre-Distribution Tax Period is
examined by a Taxing Authority and such examination results in additional
Controlled Separate Return Liability or a reduction in a net operating loss for
which Distributing previously paid Controlled or a Controlled Affiliate (via
adjustment of Intercompany Accounts, this Section 3.3, or otherwise), Controlled
(or a Controlled Affiliate, if appropriate) shall pay (or cause the Controlled
Affiliate to pay) to Distributing an amount equal to either the increase in
Controlled Separate Return Liability or the product of (i) the decrease in net
operating loss and (ii) 35%, as applicable, within thirty (30) days after a
Final Determination.

 

 

 

 

 

          (d)          If any Tax Return for a Pre-Distribution Tax Period is
examined by a Taxing Authority and such examination results in a lower
Controlled Separate Return Liability or a higher net operating loss of
Controlled or a Controlled Affiliate that is utilized in a Distributing
Consolidated Return, Distributing shall pay to Controlled an amount equal to
either the decrease in Controlled Separate Return Liability or the product of
(i) the increase in net operating loss and (ii) 35%, within thirty (30) days
after a Final Determination.

 

 

 

 

 

          (e)          If a deduction reported by a Distributing Affiliate is
allocated, in whole or in part, to a Controlled Affiliated pursuant to a Final
Determination, then (i) Section 3.3(d) will not apply, and (ii) Controlled will
promptly pay to Distributing 35% times the amount of such deduction to the
extent such deduction created or increased a net operating loss for a Controlled
Affiliate for a Pre-Distribution Tax Period which a Controlled Affiliated
carried over to a Post-Distribution Tax Period.

 

 

 

 

 

          (f)          The provisions of this Section 3.3 are intended to
conform to the Existing Tax Sharing Agreement and the parties’ usual course of
dealing and past practice and shall be interpreted consistently therewith.

          3.4.          Separation Taxes.  Notwithstanding anything in this
Agreement to the contrary, Controlled shall indemnify and hold harmless each
Distributing Affiliate against liability for (i) any Controlled Change in
Control Tax and (ii) any Separation Tax for which Controlled or its Affiliates
has an obligation to indemnify Distributing under any provision of this
Agreement.  Distributing shall indemnify and hold harmless each Controlled
Affiliate against liability for all other Separation Taxes.

ARTICLE IV
COOPERATION AND EXCHANGE OF INFORMATION; AUDITS AND ADJUSTMENTS

          4.1.          Tax Return Information.

 

 

          (a)          Controlled shall, and shall cause each appropriate
Controlled Affiliate to, provide Distributing with all information and other
assistance reasonably requested by Distributing to enable the Distributing
Affiliates to prepare and file Distributing Consolidated Returns required to be
filed by them pursuant to this Agreement.

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          (b)          Distributing shall, and shall cause each appropriate
Distributing Affiliate to, provide Controlled with all information and other
assistance reasonably requested by Controlled to enable the Controlled
Affiliates to prepare and file Controlled Separate Returns required to be filed
by them pursuant to this Agreement.

          4.2.          Audits and Adjustments.

 

 

          (a)          Whenever a Distributing Affiliate or Controlled Affiliate
receives in writing from the IRS or any other Taxing Authority notice of an
Adjustment that may give rise to a payment from the other party under this
Agreement or otherwise affect the other party’s Taxes, Distributing or
Controlled, as the case may be, shall give written notice of the Adjustment to
the other party in accordance with the terms of Article VIII.  The audit shall
be controlled and settled pursuant to the terms of that article.

 

 

 

 

 

          (b)          Controlled agrees to cooperate reasonably, and shall
cause each Controlled Affiliate to cooperate reasonably, with Distributing in
the negotiation, settlement, or litigation of any liability for Taxes of any
Distributing Affiliate.

 

 

 

 

 

          (c)          Distributing agrees to cooperate reasonably, and shall
cause each Distributing Affiliate to cooperate reasonably, with Controlled in
the negotiation, settlement, or litigation of any liability for Taxes of any
Controlled Affiliate.

 

 

 

 

 

          (d)          Distributing will reasonably promptly notify Controlled
in writing of any Adjustment involving a change in the tax basis of any asset of
any Controlled Affiliate, specifying the nature of the change so that such
Controlled Affiliate will be able to reflect the revised basis on its tax books
and records for periods beginning on or after the Distribution Date.

          4.3.          Controlled Carrybacks.  Whenever permitted to do so by
applicable law, and unless agreed otherwise by Distributing, Controlled shall
elect to relinquish any carryback period which would include any
Pre-Distribution Tax Period.

          For purposes of this Article IV, the term “party” shall refer to any
Distributing Affiliate and any Controlled Affiliate, as the case may be.

ARTICLE V
RETENTION OF RECORDS

          5.1.          Retention of Records.  Distributing and Controlled agree
to retain the appropriate records that may affect the determination of the
liability for Taxes of any Controlled Affiliate or Distributing Affiliate,
respectively, until such time as there has been a Final Determination with
respect to such liability for Taxes.  A party may satisfy its obligations under
the preceding sentence by allowing the other party to duplicate records at such
second party’s request and expense.

          5.2.          Statute of Limitations.  Distributing and Controlled
will notify each other in writing of any waivers or extensions of the applicable
statute of limitations that may affect the period for which any materials,
records, or documents must be retained.

ARTICLE VI
COVENANTS

          6.1.          Distributing Covenants.  Distributing covenants to
Controlled that no Distributing Affiliate will take any action or fail to take
any action that would cause the Contribution or the Distribution to fail to
qualify as tax-free under Code sections 355, 361 and 368(a)(1)(D) or any
corresponding provision of state or local law.  Without limiting the foregoing,
Distributing covenants to Controlled that:

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

 

 

          (a)          During the six-month period following the Distribution
Date, no Distributing Affiliate will liquidate, merge, or consolidate with any
Person.

 

 

 

 

 

          (b)          During the six-month period following the Distribution
Date, no Distributing Affiliate will sell, exchange, distribute, or otherwise
dispose of assets to any Person, except in the ordinary course of business.

 

 

 

 

 

          (c)          Following the Distribution, Distributing and its
Subsidiaries will, for at least two years, continue the active conduct of the
Cement Business.

 

 

 

 

 

          (d)          No Distributing Affiliate will take any action
inconsistent with the information and representations in the Opinion Documents.

 

 

 

 

 

          (e)          For two years following the Distribution, no Distributing
Affiliate will repurchase stock of Distributing in a manner contrary to the
requirements of Revenue Procedure 96-30 or in a manner contrary to the
representations made in the Opinion Documents.

 

 

 

 

 

          (f)          No Distributing Affiliate will permit its agents to take
any of the actions described in items (a) through (e) above on its behalf.

          6.2.          Controlled Covenants.  Controlled covenants to
Distributing that no Controlled Affiliate will take any action or fail to take
any action, which action or failure to act would cause the Contribution or the
Distribution to fail to qualify as tax-free under Code sections 355, 361 and
368(a)(1)(D) or any corresponding provision of state or local law.  Without
limiting the foregoing, Controlled covenants to Distributing that:

 

 

          (a)          During the six-month period following the Distribution
Date, no Controlled Affiliate will liquidate, merge, or consolidate with any
Person, or enter into any Substantial Negotiations, agreements, understandings,
or arrangements with respect to any such transaction.

 

 

 

 

 

          (b)          During the six-month period following the Distribution
Date, no Controlled Affiliate will sell, exchange, distribute, or otherwise
dispose of assets to any Person, or enter into any Substantial Negotiations,
agreements, understandings, or arrangements with respect to any such
transaction, except in the ordinary course of business.

 

 

 

 

 

          (c)          Following the Distribution, Controlled and its
Subsidiaries will, for a minimum of two years, continue the active conduct of
the Steel Business.

 

 

 

 

 

          (d)          No Controlled Affiliate will take any action inconsistent
with the information and representations in the Opinion Documents.

 

 

 

 

 

          (e)          For two years following the Distribution, no Controlled
Affiliate will repurchase stock of Controlled in a manner contrary to the
requirements of Revenue Procedure 96-30 or in a manner contrary to the
representations made in the Opinion Documents.

 

 

 

 

 

          (f)          No Controlled Affiliate will permit its agents to take
any of the actions described in items (a) through (e) above on its behalf.

          6.3.          Exceptions.  Other than with respect to the matters
described in Section 6.2(a) or Section 6.2(b), any Distributing Affiliate or
Controlled Affiliate may take actions inconsistent with the covenants contained
in Article VI if Distributing or Controlled, as the case may be, obtains an
Unqualified Tax Opinion or a Private Letter Ruling, it being understood that
each party hereto agrees to cooperate with the party seeking such opinion or
ruling and to use its reasonable best efforts to assist the party seeking such
opinion or ruling in its attempting to obtain, as expeditiously as possible, any
opinion or ruling described in this Section 6.3.

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ARTICLE VII
INDEMNITY OBLIGATIONS

          7.1.          Controlled Indemnity.  Each Controlled Affiliate
(collectively, jointly and severally, the “Controlled Indemnifying Parties”)
will jointly and severally indemnify each Distributing Affiliate (each a
“Distributing Indemnified Party”) against and hold them harmless from:

 

 

          (a)          any Tax incurred with respect to all Distributing
Consolidated Returns to the extent that such Taxes are related to (i) a
Controlled Separate Tax Liability or (ii) the Steel Business for any taxable
period, but excluding (for purposes of this Section 7.1(a)) any Separation
Taxes;

 

 

 

 

 

          (b)          any separate state and local Tax of any Controlled
Affiliate;

 

 

 

 

 

          (c)          any Separation Taxes resulting from a breach by a
Controlled Indemnifying Party of (i) any representation or covenant in an
Opinion Document (as such representation is modified, qualified or elaborated in
any subsequent Opinion Document), (ii) any representation, covenant or other
agreement set forth in this Agreement, or (iii) any agreements or covenants
between a Distributing Affiliate and a Controlled Affiliate pertaining to Tax
matters;

 

 

 

 

 

          (d)          any Controlled Change in Control Tax;

 

 

 

 

 

          (e)          any Tax Liability arising from an Adjustment for which
Controlled is responsible under Section 3.3;

 

 

 

 

 

          (f)          any Tax imposed on a Distributing Affiliate as a result
of Controlled’s failure to cooperate with Distributing under Article VIII; and

 

 

 

 

 

          (g)          any Tax imposed on a Distributing Affiliate resulting
from Controlled’s adoption of a position inconsistent with the allocation set
out in Section 2.4.

          7.2.          Distributing Indemnity.  Each Distributing Affiliate
(collectively, jointly and severally, the “Distributing Indemnifying Parties”
and, together with Controlled Indemnifying Parties, the “Indemnifying Parties”)
will jointly and severally indemnify each Controlled Affiliate (each a
“Controlled Indemnified Party” and, together with the Distributing Indemnified
Parties, the “Indemnified Parties”) against and hold them harmless from:

 

 

          (a)          any Distributing Consolidated Group Taxes, excluding any
such Taxes for which Controlled is required to indemnify Distributing under
Section 7.1 of this Agreement, and (for purposes of this Section 7.2) any
Separation Taxes;

 

 

 

 

 

          (b)          any separate state or local Tax and any foreign Tax of
any Distributing Affiliate;

 

 

 

 

 

          (c)          any liability or damage arising from the breach by any
Distributing Affiliate of (i) any representation or covenant in an Opinion
Document (as such representation is modified, qualified or elaborated in any
subsequent Opinion Document), (ii) any representation, covenant or other
agreement set forth in this Agreement, or (iii) any agreements or covenants
between a Distributing Affiliate and a Controlled Affiliate pertaining to Tax
matters;

 

 

 

 

 

          (d)          any Separation Taxes (other than such Taxes for which
Controlled is required to indemnify Distributing under Section 7.1);

 

 

 

 

 

          (e)          any Tax liability arising from an Adjustment for which
Distributing is responsible under Section 3.3; and

 

 

 

 

 

          (f)          any Tax imposed on a Controlled Affiliate (other than a
Separation Tax) as a result of Distributing’s failure to cooperate with
Controlled under Article VIII.

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          7.3.          Amount of Indemnity.  The amount of Tax included in any
item described in Section 7.1 or 7.2 (each an “Indemnified Liability”) that is
incurred by any Indemnified Party shall be determined pursuant to Section 3.3. 
If Section 3.3 does not address the amount of an Indemnified Liability, in the
case of a Tax based or determined with reference to income for any year, the
amount of Tax included in any item described in Section 7.1 or 7.2 shall be the
difference between (x) the actual Tax incurred by the Indemnified Party for such
year and (y) the amount of Tax that the Indemnified Party would have paid in
such year absent the Tax Items (or adjustments thereto) in that year or any
prior year giving rise to the Indemnified Liability.  For the avoidance of
doubt, if an Adjustment to any Tax Item would have resulted in additional Tax
paid but for the availability of net operating losses or tax credits, the
Indemnifying Party shall indemnify the Indemnified Party when, as, and to the
extent that such loss or credit carryforward would otherwise have been available
to reduce any Tax. 

          7.4.          Tax Consequences of Payments.  All amounts payable under
this Agreement shall be treated as adjustments to the amount of the
Contribution, provided that if any Taxing Authority determines that the amounts
received by an Indemnified Party nevertheless are taxable, then the Indemnifying
Party shall make additional payments to the Indemnified Party so that the
Indemnified Party is made whole on an after-tax basis.  For this purpose, the
amount of Taxes imposed on the payments shall be determined based on the taxing
jurisdiction’s highest marginal Tax rate applicable to taxable income of
corporations such as the Indemnified Party on income of the character subject to
tax and indemnified against under this Article VII for the taxable period in
which the Distribution occurs (net of any federal Tax Benefit from state and
local Taxes).

ARTICLE VIII
PROCEDURAL ASPECTS OF INDEMNITY

          8.1.          General.

 

 

          (a)          If either any Indemnified Party or any Indemnifying Party
receives any written notice of deficiency, claim or Adjustment or any other
written communication from any Taxing Authority that may result in an
Indemnified Liability, the party receiving such notice or communication shall
promptly give written notice thereof to the other party, provided that any delay
by an Indemnified Party in so notifying an Indemnifying Party shall not relieve
the Indemnifying Party of any liability hereunder, except to the extent (i) such
delay restricts the ability of the Indemnifying Party to contest the resulting
Indemnified Liability administratively or in the courts in accordance with
Section 8.2 and (ii) the Indemnifying Party is materially and adversely
prejudiced by the delay.

 

 

 

 

 

          (b)          The parties hereto undertake and agree that from and
after such time as they obtain knowledge that any representative of a Taxing
Authority has begun to investigate or inquire into the Distribution (whether or
not such investigation or inquiry is a formal or informal investigation or
inquiry), the party obtaining such knowledge shall (i) notify the other party
thereof, provided that any delay by an Indemnified Party in so notifying an
Indemnifying Party shall not relieve the Indemnifying Party of any liability
hereunder (except to the extent (A) such delay restricts the ability of the
Indemnifying Party to contest the resulting Indemnified Liability
administratively or in the courts in accordance with Section 8.2 and (B) the
Indemnifying Party is materially and adversely prejudiced by such delay), (ii)
consult with the other party from time to time as to the conduct of such
investigation or inquiry, (iii) provide the other party with copies of all
correspondence with such Taxing Authority or any representative thereof
pertaining to such investigation or inquiry, and (iv) arrange for a
representative of the other party to be present at all meetings with such Taxing
Authority or any representative thereof pertaining to such investigation or
inquiry.

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          8.2.          Contests.

 

 

          (a)          Provided that (i) an Indemnifying Party shall furnish the
Indemnified Party with evidence reasonably satisfactory to the Indemnified Party
of the Indemnifying Party’s ability to pay the full amount of the Indemnified
Liability and (ii) such Indemnifying Party acknowledges in writing that the
asserted liability is an Indemnified Liability, such Indemnifying Party may
assume and direct the defense or settlement of any tax examination,
administrative appeal, hearing, arbitration, suit or other proceeding (each a
“Proceeding”) commenced, filed or otherwise initiated or convened to investigate
or resolve the existence and extent of such liability.

 

 

 

 

 

          (b)          If the Indemnified Liability is grouped with other
unrelated asserted liabilities or issues in the Proceeding, the parties shall
use their respective best efforts to cause the Indemnified Liability to be the
subject of a separate Proceeding.  If such severance is not possible, the
Indemnifying Party shall assume and direct and be responsible only for the
matters relating to the Indemnified Liability.  The Indemnified Party may
settle, partially settle, or otherwise resolve any controversy involving the
Indemnified Party’s Tax Return to which the particular Adjustment relates, so
long as the Indemnified Party does not settle, partially settle, or otherwise
resolve the controversy in a manner inconsistent with the Indemnifying Party’s
position, without prior written consent, which may not be unreasonably withheld,
from the Indemnifying Party.

 

 

 

 

 

          (c)          Notwithstanding the foregoing, if at any time during a
Proceeding controlled by an Indemnifying Party pursuant to Section 8.2(a) such
Indemnifying Party fails to provide evidence reasonably satisfactory to the
Indemnified Party of its ability to pay the full amount of the Indemnified
Liability or the Indemnified Party reasonably determines, after due
investigation, that such Indemnifying Party could not pay the full amount of the
Indemnified Liability, then the Indemnified Party may assume control of the
Proceedings after the expiration of seven (7) days after the giving of written
notice to the Indemnifying Party notifying such party of the Indemnified Party’s
intent to assume control of the Proceedings.

 

 

 

 

 

          (d)          In addition to amounts referred to in Section 3.3,
Section 7.1, or Section 7.2, an Indemnifying Party shall pay all reasonable
out-of-pocket expenses and other costs related to the Indemnified Liability,
including but not limited to fees for attorneys, accountants, expert witnesses
or other consultants retained by such Indemnifying Party and/or the Indemnified
Party.  To the extent that any such expenses and other costs have been or are
paid by an Indemnified Party, the Indemnifying Party shall promptly reimburse
the Indemnified Party therefor.

 

 

 

 

 

          (e)          An Indemnifying Party shall not pay (unless otherwise
required by a proper notice of levy and after prompt notification to the
Indemnified Party of receipt of notice and demand for payment), settle,
compromise or concede any portion of the Indemnified Liability without the
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld.  An Indemnifying Party shall, on a timely basis, keep the
Indemnified Party informed of all developments in the Proceeding and provide the
Indemnified Party with copies of all pleadings, briefs, orders, and other
written papers.

 

 

 

 

 

          (f)          Any Proceeding that is not controlled or which is no
longer controlled by an Indemnifying Party pursuant to this Section 8.2 shall be
controlled and directed exclusively by the Indemnified Party, and any related
reasonable out-of-pocket expenses and other costs incurred by the Indemnified
Party, including but not limited to fees for attorneys, accountants, expert
witness or other consultants, shall be reimbursed by the Indemnifying Party.  An
Indemnified Party will not be required to pursue the claim in federal district
court, the Court of Federal Claims or any state or foreign court if, as a
prerequisite to such court’s jurisdiction, the Indemnified Party is required to
pay the asserted liability, unless the funds necessary to invoke such
jurisdiction are provided by the Indemnifying Party.

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

          8.3.          Time and Manner of Payment.  An Indemnifying Party shall
pay to the Indemnified Party the amount of the Indemnified Liability and any
expenses or other costs indemnified against (less any amount paid directly by an
Indemnifying Party to the Taxing Authority) no less than seven (7) days prior to
the date payment of the Indemnified Liability is to be made to the Taxing
Authority.  Such payment shall be paid by wire transfer of immediately available
funds to an account designated by the Indemnified Party by written notice given
to the Indemnifying Party at least three (3) days prior to the due date of such
payment.  If an Indemnifying Party delays making payment beyond the due date
hereunder, such party shall pay interest on the amount unpaid at the IRS
Interest Rate for each day and the actual number of days for which any amount
due hereunder is unpaid.

          8.4.          Refunds.  In connection with this Agreement, if an
Indemnified Party receives a refund in respect of amounts paid by an
Indemnifying Party to any Taxing Authority on its behalf, or should any such
amounts that would otherwise be refundable to the Indemnifying Party be applied
by the Taxing Authority to obligations of the Indemnified Party unrelated to an
Indemnified Liability, then such Indemnified Party shall, promptly following
receipt (or notification of credit), remit such refund and any related interest
to such Indemnifying Party.

          8.5.          Cooperation.  The parties shall cooperate with one
another in a timely manner in any administrative or judicial Proceeding
involving any matter that may result in an Indemnified Liability.

          8.6.          Affiliates.  Distributing agrees and acknowledges that
Distributing shall be responsible for the performance of the obligations of each
Distributing Affiliate under this Agreement.  Controlled agrees and acknowledges
that Controlled shall be responsible for the performance of the obligations of
each Controlled Affiliate under this Agreement.

          8.7.          Application to Present and Future Subsidiaries.  This
Agreement is being entered into by Distributing and Controlled on behalf of
themselves and each Distributing Affiliate and each Controlled Affiliate,
respectively.  This Agreement shall constitute a direct obligation of each such
affiliate and shall be deemed to have been readopted and affirmed on behalf of
any corporation or other entity that becomes a Distributing Affiliate or a
Controlled Affiliate in the future.

ARTICLE IX
DISPUTE RESOLUTION

          9.1.          Disputes.

 

 

          (a)          Resolution of any and all disputes arising from or in
connection with this Agreement, whether based on contract, tort, statute, or
otherwise, including, but not limited to, disputes in connection with claims by
third parties (collectively, “Disputes”) shall be subject to the provisions of
this Section 9.1; provided, however, that nothing contained herein shall
preclude either party from seeking or obtaining (i) injunctive relief or (ii)
equitable or other judicial relief to enforce the provisions hereof or to
preserve the status quo pending resolution of Disputes hereunder.

 

 

 

 

 

          (b)          Either party may give the other party written notice of
any Dispute not resolved in the normal course of business.  The parties shall
attempt in good faith to resolve any Dispute promptly by negotiation between
executives of the parties who have authority to settle the controversy and who
are at a higher level of management than the persons with direct responsibility
for administration of this Agreement.  Within 30 days after the giving of the
notice, the foregoing executives of both parties shall meet at a mutually
acceptable time and place, and thereafter as often as they reasonably deem
necessary for a period not to exceed 15 days, to attempt to resolve the
Dispute.  All reasonable requests for information made by one party to the other
will be honored.  If the parties do not resolve the Dispute within such 15-day
period (the “Initial Mediation Period”), the parties shall attempt in good faith
to resolve the Dispute by negotiation between (a) in the case of Distributing,
the Chief Financial Officer, and (b) in the case of Controlled, the Chief
Financial Officer (collectively, the “Designated Officers”).  Such officers
shall meet at a mutually acceptable time and place (but in any event no later
than 15 days following the expiration of the Initial Mediation Period) and
thereafter as often as they reasonably deem necessary for a period not to exceed
15 days, to attempt to resolve the Dispute.

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

 

 

          (c)          If the Dispute has not been resolved by negotiation
within 75 days of the giving of the first party’s notice, or if the parties
failed to meet within 30 days of the first party’s giving of notice, or if the
Designated Officers failed to meet within 60 days of the first party’s giving of
notice, either party may commence any litigation or other procedure allowed by
law.

ARTICLE X
GENERAL

          10.1.          Term of the Agreement.  This Agreement shall become
effective as of the Distribution Date, and except as expressly provided herein,
shall continue in full force and effect indefinitely.

          10.2.          Injunctions.  The parties acknowledge that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with its specific terms or were otherwise
breached.  The parties hereto shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any court having jurisdiction,
such remedy being in addition to any other remedy to which they may be entitled
at law or in equity.

          10.3.          Assignment.  Neither of the parties may assign or
delegate any of its rights or duties under this Agreement without the prior
written consent of the other party, which consent will not be unreasonably
withheld. This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective successors and permitted assigns.

          10.4.          Further Assurances.  Subject to the provisions hereof,
the parties hereto shall make, execute, acknowledge and deliver such other
instruments and documents, and take all such other actions, as may be reasonably
required in order to effectuate the purposes of this Agreement and to consummate
the transactions contemplated hereby.  Subject to the provisions hereof, each
party shall, in connection with entering into this Agreement, performing its
obligations hereunder and taking any and all actions relating hereto, comply
with all applicable laws, regulations, orders, and decrees, and promptly provide
the other party with all such information as it may reasonably request in order
to be able to comply with the provisions of this sentence.

          10.5.          Waivers.  No failure or delay on the part of the
parties in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  No modification or waiver of any provision of this Agreement or
consent to any departure by the parties therefrom shall in any event be
effective unless the same shall be in writing, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.

          10.6.          Change of Law.  If, due to any change in applicable
law, regulation, or interpretation thereof by any court of law or other
governing body having jurisdiction subsequent to the date of this Agreement,
performance of any provision of this Agreement or any transaction contemplated
hereby shall become impracticable or impossible, the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such provision.

          10.7.          Confidentiality.  Subject to any contrary requirement
of law and the rights of each party to enforce its rights hereunder in any legal
action, each party agrees that it shall keep strictly confidential, and shall
cause its employees and agents to keep strictly confidential, any information
that it or any of its employees or agents may require pursuant to, or in the
course of performing its obligations under, any provision of this Agreement.

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          10.8.          Headings.  Descriptive headings are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.

          10.9.          Counterparts.  For the convenience of the parties, any
number of counterparts of this Agreement may be executed by the parties hereto,
and each such executed counterpart shall be, and shall be deemed to be, an
original instrument.

          10.10.        Notices.  All notices, requests, claims and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery by
hand, by reputable overnight courier service, by facsimile transmission, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 10.10)
listed below:

 

Distributing at:

Texas Industries, Inc.

 

 

1341 W. Mockingbird Lane

 

 

Dallas, Texas  75247

 

 

Attn:  General Counsel

 

 

Phone:  (972) 647-6700

 

 

Fax:  (972) 647-3320

 

 

 

 

Controlled at:

Chaparral Steel Company

 

 

300 Ward Road

 

 

Midlothian, Texas  76065

 

 

Attn:  General Counsel

 

 

Phone:  (972) 775-8241

 

 

Fax:  (972) 775-1930

or to such other address as any party may, from time to time, designate in a
written notice delivered in a like manner. Notice delivered by hand shall be
deemed given when received by the recipient.  Notice delivered by mail as set
out above shall be deemed given three (3) business days after the date the same
have been deposited in a United States post office.  Notice delivered by
reputable overnight courier shall be deemed given on the next following business
day after the same have been deposited with a reputable overnight courier (e.g.,
Federal Express).  Notice given by facsimile transmission shall be deemed given
on the day of transmission if such transmission is sent prior to 5:00 P.M.
central standard time and if telephone confirmation of receipt is obtained
promptly thereafter.   

          10.11.        Costs and Expenses.  Unless specifically provided
herein, each party agrees to pay its own costs and expenses resulting from the
fulfillment of its respective obligations hereunder.

          10.12.        Entire Agreement.  This Agreement shall constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and shall supersede all prior agreements and undertakings, both written
and oral, between the parties with respect to the subject matter hereof and
thereof.  On or prior to the Distribution Date, all agreements (other than this
Agreement) providing for the allocation or sharing of Taxes to which any
Controlled Affiliate would otherwise be bound following the Distribution shall
have no further force and effect.

          10.13.        Interest on Late Payments.  If a party delays making any
payment beyond the due date hereunder, such party shall pay interest on the
amount unpaid at the IRS Interest Rate for each day and the actual number of
days for which any amount due hereunder is unpaid.

          10.14.        Amendments.  This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, the
parties or (b) by a waiver in accordance with Section 10.5.

          10.15.        No Third-Party Beneficiaries.  This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective present and future Subsidiaries, and nothing herein, express or
implied, is intended to or shall confer upon any third parties any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

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          10.16.        Governing Law and Severability.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of Texas,
including the provisions of such laws relating to conflict of laws.  If any term
or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.

[Signature Pages Follow]

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          IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their respective officers, each of whom is duly authorized, all
as of the Distribution Date.

 

DISTRIBUTING:

 

 

 

 

TEXAS INDUSTRIES, INC.

 

 

 

 

By:

/s/ RICHARD M. FOWLER

 

 

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Name:

Richard M. Fowler

 

Title:

Executive Vice President – Finance and Chief Financial Officer

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          IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their respective officers, each of whom is duly authorized, all
as of the Distribution Date.

 

CONTROLLED:

 

 

 

 

CHAPARRAL STEEL COMPANY

 

 

 

 

By:

/s/ J. CELTYN HUGHES

 

 

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Name:

J. Celtyn Hughes

 

Title:

Vice President and Chief Financial Officer

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