SETTLEMENT AGREEMENT

WHEREAS,the Portland Cement Association and other entities petitioned for administrative reconsideration ofthe U.S. Environmental Protection Agency's ( "EPA's")

National Emissions Standards foN Hazardous AiN Pollutants From the Portland Cement Manufacturing Industry, 75 Fed. Reg. 54970 (Sept. 9, 2010) ( "NESHAP Rule"); and Standards of Performancefor Portland CementPlants, 75 Fed. Reg. 54970 (Sept. 9, 2010) ( "NSPS Rule"); WHEREAS,on May 17, 2011,EPA granted in part and denied in part the petitions for administrative reconsideration. See National Emission Standards for Hazardous Air Pollutants From the Portland Cement Manufacturing Indust~y...Denial in Past and Grant in PaNt of Petitions to Reconsider, 76 Fed. Reg. 28,318 (May 17, 2011); WHEREAS,the Portland Cement Association,Ash Grove Cement Co., CEMEX,Inc., Eagle Materials Inc., Holcim (US)Inc., Lafarge North America Inc., Lafarge Midwest, Inc., and Lafarge Building Materials Inc., Riverside Cement Company and TXI Operations, LP,and Lehigh Cement Company (collectively, "PCA")also petitioned for judicial review ofthe NESHAP Rule,the NSPS Rule, and the partial denial ofreconsideration, in the U.S. Court ofAppeals for the District ofColumbia Circuit. See Portland CementAssn v. EPA,No. 10-

Page 1 of 111358 and consolidated cases (D.C. Cir.);Portland CementAssn v. EPA,No. 10-

1359 and consolidated cases (D.C. Cir.)(collectively, the "Existing Litigation"); WHEREAS,on December 9, 2011,the U.S. Court ofAppeals for the District ofColumbia Circuit issued an opinion in the Existing Litigation, which, among other things, remanded to EPA for further consideration EPA's denial of PCA's administrative petition to reconsider the NESHAP Rule; WHEREAS,the deadline for filing petitions for rehearing or rehearing en Banc is currently April 23, 2012; WHEREAS,Holcim (US)Inc. petitioned for administrative reconsideration ofthe particulate matter ( "PM")standard in the NESHAP Rule and submitted new data on PM emissions from cement kilns as measured using a continuous emissions monitor. See Petition for Reconsideration and Stay Submitted by Holcim (US)Inc. (Nov. 15, 2011); WHEREAS,EPA has not yet proposed any amendments to the NESHAP Rule and/or NSPS Rule based on: (i)the partial grant ofthe petitions for administrative reconsideration; (ii)the remand from the D.C. Circuit; or (iii) Holcim (US)Inc.'s petition for reconsideration; WHEREAS,PCA and EPA (collectively, the "Parties")wish to enter this Settlement Agreement( "Agreement")to avoid further litigation and to preserve judicial resources;

Page 2 of 11NOW THEREFORE,PCA and EPA,intending to be bound by this

Agreement,hereby stipulate and agree as follows:

By June 15, 2012,the EPA Administrator shall sign for publication in the Federal Register a notice ofproposed rulemaking (the "Notice")that at least addresses (a)the issues upon which EPA granted reconsideration as identified in 76 Fed. Reg. 28,318, 28,325-26 (May 17, 2011);(b)the remand from the D.C. Circuit on December 9, 2011; and (c)the Holcim (US)Inc. petition for administrative reconsideration ofthe PM standard in the NESHAP Rule. 2. EPA further agrees that, in the Notice referenced in Paragraph 1 of this Agreement,EPA will either (a)propose to reset the compliance timeframe for existing sources subject to the portland cement NESHAP to at least September 9, 2015, ifEPA determines that such an action is supported by the administrative record at the time ofproposal, or (b)in the event EPA does not propose a compliance date extension to at least September 9, 2015 for existing sources, solicit comment in the Notice on whether the existing source compliance deadlines should be extended and make clear that the final rule may include such an extension ifjustified. 3. By December 20, 2012,the EPA Administrator shall sign for publication in the Federal Register a final action on the Notice referenced in Paragraphs 1 and 2 ofthis Agreement, including (a)the issues upon which EPA

Page3of11granted reconsideration on May 17, 2011;(b)the remand from the D.C. Circuit on

December 9, 2011;(c)the Holcim (US)Inc. petition for administrative reconsideration ofthe PM standard in the NESHAP Rule; and (d)EPA's final decision on whether to extend the compliance deadlines for existing sources. 4. By no later than the deadline for filing a petition for rehearing and rehearing en Banc,the Parties agree to file a joint motion to hold the case in abeyance pending completion ofthe actions identified in Paragraphs 1 through 3 of this Agreement and subject to the termination provision ofParagraph 7. 5. Ifthe above

-referenced motion is granted by the Court on or before 5 p.m. on the deadline for filing a petition for rehearing and rehearing en Banc,PCA agrees not to file any petitions for rehearing and rehearing en Banc except as otherwise provided in this Agreement. Ifthe motion is not granted by 5 p.m. on the deadline for filing a petition for rehearing and rehearing en Banc,the Parties recognize that PCA may file its petition for rehearing and rehearing en Banc. If PCA files a petition for rehearing or rehearing en Banc, EPA may at its election withdraw from this Agreement,and upon compliance with the notice provisions in Paragraph 14 shall not be obligated to comply with any portion ofthis Agreement. IfEPA so elects, this Agreement is deemed terminated, and PCA shall be free to withdraw any motion to hold the case in abeyance (ifnot yet granted), or to move to lift the abeyance (ifthe motion has already been granted).

Page 4 of 116. Except as provided in Paragraph 7, if EPA complies with Paragraphs

through 3 ofthis Agreement,then the Parties will terminate the Existing Litigation promptly after the final action required by Paragraph 3 is published in the Federal Register. Specifically: (a)ifthe case remains in abeyance and no petition for rehearing and rehearing en Banc is on file, the Parties shall jointly

move to terminate the abeyance, inform the Court that neither PCA nor EPA will be seeking rehearing or rehearing en Banc, and ask the Court to issue the mandate; (b)ifthe case remains in abeyance and a petition for rehearing or rehearing en banc is on file, the Parties shall jointly move to terminate the abeyance, inform the Court that PCA is withdrawing the petition for rehearing and rehearing en Banc, and ask the Court to issue the mandate. 7. IfEPA does not comply with any requirement ofParagraphs 1 through 3, or ifthe Notice required by Paragraph 1 does not propose to extend the existing source compliance deadline to at least September 9, 2015,PCA may at its election, move to terminate the abeyance and file, ifnot already filed and held in abeyance,a petition for rehearing and rehearing en Banc. The Parties agree that this Paragraph 7 constitutes PCA's sole remedy ifEPA does not comply with any requirement ofParagraphs 1 through 3 ofthis Agreement, and that contempt of court is not an available remedy under this Agreement.

Page 5 of 118. The commitments by EPA in this Agreement are subject to the

availability ofappropriated funds. No provision ofthis Agreement shall be interpreted as or constitute a commitment or requirement that EPA obligate or pay funds in contravention ofthe Anti

-Deficiency Act, 31 U.S.C. § 1341, or any other applicable federal statute. 9. Nothing in this Agreement shall be construed to limit or modify any discretion EPA may have to alter, amend, or revise regulations promulgated pursuant to this Agreement,from time to time, or to promulgate superseding regulations. 10. Nothing in this Agreement shall be construed to limit or modify the discretion accorded EPA by the Clean Air Act or by general principles of administrative law, in taking the actions which are the subject ofthis Agreement. EPA's obligation to perform the actions specified in Paragraphs 1 through 3 ofthis Agreement,by the dates specified in those Paragraphs,does not constitute a limitation or modification ofEPA's discretion within the meaning ofthis Paragraph. 11. The Parties agree and acknowledge that before this Agreement can be finalized, EPA must provide notice in the Federal Register and an opportunity for comment pursuant to Clean Air Act § 113 (g), 42 U.S.C. § 7413(g). EPA will expeditiously prepare such notice and forward it to the Office ofFederal Register

Page 6 of 11within 15 days ofexecution ofthis Agreement by the Parties. Nothing in this

Paragraph should delay or defer the Parties' joint motion to hold the case in abeyance,pursuant to Paragraph 4 ofthis Agreement. After this Agreement has undergone an opportunity for notice and comment,the Administrator and/or the Attorney General, as appropriate, shall promptly consider any such written comments in determining whether to withdraw or withhold consent to this Agreement, in accordance with section 113 (g)ofthe Clean Air Act. Ifthe federal government elects to withdraw or withhold consent to this Agreement,PCA shall have the right to withdraw from this Agreement and file a request to lift the abeyance requested by the Parties. 12. This Agreement may be modified by written stipulation signed by the Parties. 13. Nothing in this Agreement shall be construed to limit any right that PCA may have to seek review ofany final action issued pursuant to Paragraph 3 of this Agreement;nor shall this Agreement be construed to limit PCA from initiating

a claim under section 304(a)ofthe Clean Air Act to allege a failure ofEPA to perform nondiscretionary duty as set forth in the Act. 14. Any notices required or provided for by this Agreement shall be in writing, effective upon receipt, and sent to the following: For PCA: Andrew T. O'Hare

Vice President, Regulatory Affairs

Page 7 of 11Portland Cement Association 500 New Jersey Avenue, 7th Floor Washington,DC 20001 Office: (202)408-9494 Fax: (202)408-0877 e-mail: aohare@cement.org For EPA: Steven Silverman,Attorney

Office ofGeneral Counsel U.S. Environmental protection Agency 1200 Pennsylvania Ave.,NW Washington D.C. 20009 Office: (202)564-5523 email: Silverman.Steven@epamail.epa.gov Daniel Dertke, Trial Attorney Environmental Defense Section Environment and Natural Resources Division P.O. Box 7611 Washington D.C. 20044 Attn: DJ # 90-5-2-3-18959 Office: (202)514-0994 email: daniel.dertke@usdoj.gov

or such other person as either Party may subsequently identify in writing to the other Party. 15. The undersigned representatives ofeach Party certify that they are fully authorized by the Party they represent to consent to this Agreement and its terms. IGN IA S. MORENO ~ Ass sta t Attorney G 1 En iro me N tural eso r ivision i DATE: DANIEL R. DERTKE .Page 8 of 11

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### Beth S. Ginsberg Jason T. Morgan Stoel Rives LLP 600 University Street, Suite 3600 Seattle, WA 98101 (206) 624-0900 On behalf of Petitioner Ash Grove Cement Company 

# i*iuc Ashley C. Parrish Cynthia A.M. Stroman KING & SPALDING LLP 1700 Pennsylvania Avenue, N.W. Washington, D.C. 20006 Telephone: (202) 737-0500 Facsimile: (202) 626-3737 Email: aparrish@kslaw.com On behalf of Petitioners Riverside Cement Company and TXI Operations, LP

DATE: Chet M. Thompson CR0 WELL & MORING LLP 1001 Pennsylvania Ave., N.W. Washington, DC 20004 Telephone: (202) 624-2500 Facsimile: (202) 628-5116 On behalf of Petitioner CEMEX, Inc.

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