EXHIBIT 10.3

 

SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (“Amendment”), dated as of November
24, 2003 (the “Amendment Date”), is among Texas Industries, Inc., TXI
Operations, LP, Riverside Cement Company, Chaparral Steel Midlothian, LP,
Chaparral (Virginia) Inc., Bank of America, N.A. (in its capacity as
administrative agent for the Lenders), and each of the lending institutions
party hereto.

 

RECITALS:

 

A. The Obligated Parties, the Lenders, and the Administrative Agent have entered
into that certain Credit Agreement dated as of June 6, 2003 (as amended, the
“Credit Agreement”) pursuant to which the Lenders have provided certain credit
facilities to the Borrowers.

 

B. The Obligated Parties have requested that the Lenders amend certain
provisions of the Credit Agreement as provided hereinbelow.

 

C. Subject to satisfaction of the conditions set forth herein, the Lenders are
willing to amend the Credit Agreement as specifically provided herein.

 

NOW, THEREFORE, in consideration of the premises herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE 1

 

Definitions

 

Section 1.1 Definitions. Capitalized terms used in this Amendment, to the extent
not otherwise defined herein, shall have the same meanings as in the Credit
Agreement, as amended hereby.

 

ARTICLE 2

 

Amendments

 

Section 2.1 Amendment to Section 5.2 of the Credit Agreement. Effective as of
the Amendment Date, Section 5.2(k) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:

 

(k) The Obligated Parties will furnish, or cause to be furnished, as soon as
available, but in any event on the third Business Day of each calendar week for
the last Business Day of the preceding calendar week and at such other

 

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times, from time to time, as may be reasonably requested by the Administrative
Agent, a Borrowing Base Certificate and supporting information in connection
therewith including (i) a schedule of each Borrower’s Accounts created, credits
given, cash collected, and other adjustments made to such Borrower’s Accounts
since the date of the last such schedule and Borrowing Base Certificate and (ii)
a summary schedule of Inventory of each Borrower by location; provided that, if
Availability during the calendar week for which such Borrowing Base Certificate
and supporting information is required to be furnished to the Administrative
Agent was at all times equal to or in excess of $100,000,000, such Borrowing
Base Certificate and supporting information shall not be required to be
furnished for such calendar week; and, provided further that, notwithstanding
the immediately preceding proviso, with respect to any calendar month in which
the Availability was at all times equal to or in excess of $100,000,000, the
Obligated Parties shall provide such Borrowing Base Certificate and other
supporting information within ten Business Days of the end of the applicable
calendar month for the period ended as of the last day of such calendar month.

 

Section 2.2 Amendments to Annex A of the Credit Agreement. Effective as of the
Amendment Date, Annex A of the Credit Agreement is hereby amended as follows.

 

(a) The definition of “EBITDA” in Annex A of the Credit Agreement is hereby
amended and restated to read in its entirety as follows:

 

“EBITDA” means, with respect to any fiscal period of any Person (the “subject
Person”), Adjusted Net Earnings from Operations, plus, without duplication and
to the extent included in the determination of Adjusted Net Earnings from
Operations for such fiscal period, Interest Expense, plus Federal, state, local,
and foreign income taxes, plus depreciation and amortization, in each case for
the subject Person on a consolidated basis, plus amounts paid under the
Convertible Subordinated Debentures.

 

(b) The definition of “Fixed Charges” in Annex A of the Credit Agreement is
hereby amended and restated to read in its entirety as follows:

 

“Fixed Charges” means, with respect to any fiscal period, determined for any
Person (the “subject Person”), without duplication, the sum of Interest Expense,
Capital Expenditures (excluding in the case of the Obligated Parties Capital
Expenditures funded with Debt other than Revolving Loans, but including, without
duplication, principal payments with respect to any such Debt), Distributions in
respect of any Capital Stock, scheduled principal payments of Debt, and the net
amount (not less than zero) of Federal, state, local, and foreign income taxes
paid during such fiscal period; provided that with respect to the Obligated
Parties payments made with respect to amounts owing under the Convertible
Subordinated Debentures and the Convertible Trust Preferred Securities

 

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shall constitute a single payment equal to the largest of such payments made for
the purpose of calculating Fixed Charges.

 

(c) Clause (e) of the definition of “Restricted Investment” in Annex A of the
Credit Agreement is hereby amended and restated to read in its entirety as
follows:

 

(e) Investments in commercial paper (i) given a rating of “A1” or better by
Standard & Poor’s Corporation or “P1” or better by Moody’s Investors Service,
Inc. and maturing not more than 180 days from the date of creation thereof or
(ii) given a rating of “A2” or better by Standard & Poor’s Corporation or “P2”
or better by Moody’s Investors Service, Inc. and maturing not more than 90 days
from the date of creation thereof.

 

(d) The reference to “May 31, 2004” in clause (a) of the definition of “Tangible
Net Worth Requirement Increase” in Annex A of the Credit Agreement is hereby
amended to read “May 31, 2003”.

 

ARTICLE 3

 

Conditions

 

Section 3.1 Conditions Precedent. The effectiveness of this Amendment is subject
to the satisfaction of each of the following conditions precedent:

 

(a) The Administrative Agent shall have received all of the following, each
dated the date of this Amendment (unless otherwise indicated), in form and
substance satisfactory to the Administrative Agent:

 

(i) Amendment Documents. This Amendment and any other instrument, document, or
certificate reasonably required by the Administrative Agent to be executed or
delivered by the Obligated Parties in connection with this Amendment, in each
case duly executed (the “Amendment Documents”); and

 

(ii) Additional Information. The Administrative Agent shall have received such
additional documents, instruments, and information as the Administrative Agent
may reasonably request to effect the transactions contemplated hereby.

 

(b) The representations and warranties contained herein, in the Credit Agreement
and in all other Loan Documents, as amended hereby, shall be true and correct in
all material respects as of the date hereof as if made on the date hereof except
for such representations and warranties limited by their terms to a specific
date.

 

(c) All corporate proceedings taken in connection with the transactions
contemplated by this Amendment and all other agreements, documents, and
instruments

 

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executed and/or delivered pursuant hereto, and all legal matters incident
thereto, shall be satisfactory to the Administrative Agent; and

 

(d) No Default or Event of Default shall be in existence after giving effect to
this Amendment.

 

Section 3.2 Evidence of Satisfaction. Delivery by the Administrative Agent of a
counterpart of this Amendment executed by the Administrative Agent and the
Majority Lenders shall evidence the satisfaction of the conditions precedent set
forth in Section 3.1 of this Amendment and the effectiveness of this Amendment.

 

ARTICLE 4

 

Miscellaneous

 

Section 4.1 Expenses. The Borrowers agree to pay to the Administrative Agent all
fees, costs, and expenses owed to and/or incurred by the Administrative Agent in
connection with this Amendment as provided in Section 13.7 of the Credit
Agreement.

 

Section 4.2 Ratifications. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Credit Agreement and, except as expressly modified and superseded by this
Amendment, the terms and provisions of the Credit Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Each of the Obligated Parties, the Administrative Agent, and the Lenders
agree that the Credit Agreement as amended hereby and the other Loan Documents
shall continue to be legal, valid, binding, and enforceable in accordance with
their respective terms.

 

Section 4.3 Representations and Warranties. Each Obligated Party hereby
represents and warrants to the Administrative Agent and the Lenders that, as of
the date of and after giving effect to this Amendment, (a) the execution,
delivery, and performance of this Amendment and any and all other Amendment
Documents executed and/or delivered in connection herewith have been authorized
by all requisite action on the part of such Obligated Party and will not violate
such Obligated Party’s organizational or governing document, (b) the
representations and warranties contained in the Credit Agreement and in the
other Loan Documents are true and correct on and as of the date hereof, in all
material respects, as if made again on and as of the date hereof except for such
representations and warranties limited by their terms to a specific date, and
(c) after giving effect to this Amendment, no Default or Event of Default
exists.

 

Section 4.4 Survival of Representations and Warranties. All representations and
warranties made in this Amendment or any other Loan Document, including any Loan
Document furnished in connection with this Amendment, shall survive the
execution and delivery of this Amendment and the other Loan Documents, and no
investigation by the Administrative Agent or any Lender, or any closing, shall
affect the representations and warranties or the right of the Administrative
Agent and the Lenders to rely upon them.

 

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Section 4.5 Reference to Credit Agreement. Each of the Loan Documents, including
the Credit Agreement, the Amendment Documents, and any and all other agreements,
documents, or instruments now or hereafter executed and delivered pursuant to
the terms hereof or pursuant to the terms of the Credit Agreement as amended
hereby, are hereby amended so that any reference in such Loan Documents to the
Credit Agreement, whether direct or indirect, shall mean a reference to the
Credit Agreement as amended hereby.

 

Section 4.6 Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

 

Section 4.7 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE APPLICABLE LAWS OF
THE U.S.

 

Section 4.8 Successors and Assigns. This Amendment is binding upon and shall
inure to the benefit of the Obligated Parties, the Administrative Agent, and the
Lenders and their respective successors and assigns, except no Obligated Party
may assign or transfer any of its respective rights or obligations hereunder
without the prior written consent of the Lenders.

 

Section 4.9 Counterparts. This Amendment may be executed in one or more
counterparts, and on telecopy counterparts each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.

 

Section 4.10 Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

 

Section 4.11 Entire Agreement. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers in several counterparts effective as of the
Effective Date specified in the preamble hereof.

 

[Signatures of Parties Omitted]

 

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