Document:

Separation and Distribution Agreement

 Exhibit 10.1 
  
 [EXECUTION] 
  
 SEPARATION AND DISTRIBUTION AGREEMENT 
  
 Dated as of July 6, 2005 
  
 Between 
  
 TEXAS INDUSTRIES, INC. 
  
 and 
  
 CHAPARRAL STEEL
COMPANY 

 TABLE OF CONTENTS 
  

					
	 Section

	 	 	  	Page No.

	ARTICLE I DEFINITIONS	  	 
	1.1	 	Definitions	  	1
	1.2	 	Interpretation	  	7
		
	ARTICLE II BUSINESS SEPARATION	  	 
	2.1	 	Separation of Chaparral Business	  	8
	2.2	 	Retained Assets	  	9
	2.3	 	Assumption of Liabilities	  	10
	2.4	 	Retained Liabilities	  	11
	2.5	 	Sequencing of Separation of Chaparral Business	  	11
	2.6	 	New Agreements	  	12
	2.7	 	Termination of Existing Intercompany Agreements	  	12
	2.8	 	Shared Contracts and Liabilities	  	12
	2.9	 	No TXI Representations or Warranties	  	13
		
	ARTICLE III THE DISTRIBUTION	  	 
	3.1	 	Issuance and Delivery of Chaparral Shares	  	13
	3.2	 	Distribution of Chaparral Shares	  	13
	3.3	 	TXI Board Action	  	14
	3.4	 	Additional Approvals	  	14
		
	ARTICLE IV BUSINESS SEPARATION CLOSING MATTERS	  	 
	4.1	 	Delivery of Instruments of Conveyance	  	14
	4.2	 	Delivery of Other Agreements	  	14
	4.3	 	Provision of Corporate Records	  	14
		
	ARTICLE V EMPLOYEE MATTERS	  	 
	5.1	 	Employment	  	14
	5.2	 	Severance	  	15
	5.3	 	Employment Solicitation	  	15
	5.4	 	Personnel Records	  	15
	5.5	 	Cessation of Participation in TXI Welfare Plans	  	15
	5.6	 	Chaparral’s Welfare Plans	  	15
	5.7	 	Welfare Plan Liabilities	  	15
	5.8	 	Flexible Spending Accounts	  	16
	5.9	 	TXI Assets	  	17
	5.10	 	Past Credit for Amounts Paid	  	17
	5.11	 	Disability	  	17
	5.12	 	Cessation of Participation in TXI Non-ERISA Benefit Arrangements	  	17
	5.13	 	Assumption of Certain Employee Related Obligations	  	17
	5.14	 	Equity Compensation Plans	  	18
	5.15	 	Workers’ Compensation	  	19
	5.16	 	Accrued Days Off	  	20
	5.17	 	Leaves of Absence	  	20
	5.18	 	Defined Contribution and Defined Benefit Plans	  	20
	5.19	 	Past Service Credit	  	21
	5.20	 	Reimbursement and Indemnification	  	22
	5.21	 	Further Cooperation	  	22

  

 ii 

					
	ARTICLE VI CERTAIN COVENANTS	  	 
	6.1	 	Commercially Reasonable Efforts	  	22
	6.2	 	Non-Assignable Contracts	  	22
	6.3	 	Novation of Assumed Liabilities; Release of Guarantees	  	23
	6.4	 	Further Assurances	  	23
	6.5	 	Collection of Accounts Receivable	  	24
	6.6	 	Election of Chaparral Board of Directors	  	24
	6.7	 	Late Payments	  	24
	6.8	 	Registration and Listing	  	25
	6.9	 	No Noncompetition	  	25
	6.10	 	Litigation	  	25
	6.11	 	Signs; Use of Company Name	  	25
	6.12	 	Transition Services	  	26
		
	ARTICLE VII CONDITIONS TO THE DISTRIBUTION	  	 
	7.1	 	Consummation of Pre-Distribution Transactions	  	26
	7.2	 	Effectiveness of Registration Statement; No Stop Order	  	26
	7.3	 	Approval of NASDAQ Listing Application	  	26
	7.4	 	Approval by TXI Board of Directors	  	26
	7.5	 	Receipt of Tax Opinion	  	27
	7.6	 	Consents	  	27
	7.7	 	No Other Events	  	27
	7.8	 	No Actions	  	27
	7.9	 	Compliance with State and Foreign Securities and “Blue Sky” Laws	  	27
	7.10	 	Resignations	  	27
	7.11	 	Dissemination of Information to TXI Stockholders	  	27
	7.12	 	Ancillary Agreements	  	27
	7.13	 	Satisfaction of Conditions	  	27
		
	ARTICLE VIII INSURANCE MATTERS	  	 
	8.1	 	Insurance Prior to the Distribution Date	  	28
	8.2	 	Ownership of Existing Policies and Programs	  	28
	8.3	 	Maintenance of Insurance for Chaparral	  	28
	8.4	 	Acquisition and Maintenance of Post-Distribution Insurance by Chaparral	  	28
	8.5	 	Property Damage and Business Interruption Insurance Claims Administration for Pre-Distribution Claims	  	28
	8.6	 	Liability and Workers Compensation Insurance Claims Administration for Pre-Distribution Claims	  	28
	8.7	 	Non-Waiver of Rights to Coverage	  	29
	8.8	 	Scope of Affected Policies of Insurance	  	29
		
	ARTICLE IX EXPENSES	  	 
	9.1	 	Allocation of Expenses	  	29
		
	ARTICLE X INDEMNIFICATION	  	 
	10.1	 	Release of Pre-Distribution Claims	  	30
	10.2	 	Indemnification by Chaparral	  	31
	10.3	 	Indemnification by TXI	  	31
	10.4	 	Applicability of and Limitation on Indemnification	  	32
	10.5	 	Adjustment of Indemnifiable Losses	  	32
	10.6	 	Procedures for Indemnification of Third Party Claims	  	32
	10.7	 	Procedures for Indemnification of Direct Claims	  	34
	10.8	 	Contribution	  	34
	10.9	 	Remedies Cumulative	  	34
	10.10	 	Survival	  	35

  

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	ARTICLE XI DISPUTE RESOLUTION	  	 
	11.1	 	Escalation and Mediation	  	35
	11.2	 	Continuity of Service and Performance	  	35
	11.3	 	Choice of Forum	  	35
	11.4	 	Ability to Pursue Other Legal Remedies	  	35
		
	ARTICLE XII ACCESS TO INFORMATION AND SERVICES	  	 
	12.1	 	Agreement for Exchange of Information	  	35
	12.2	 	Ownership of Information	  	36
	12.3	 	Compensation for Providing Information	  	36
	12.4	 	Retention of Records	  	36
	12.5	 	Limitation of Liability	  	36
	12.6	 	Production of Witnesses	  	36
	12.7	 	Confidentiality	  	37
	12.8	 	Privileged Matters	  	37
		
	ARTICLE XIII MISCELLANEOUS	  	 
	13.1	 	Entire Agreement	  	38
	13.2	 	Choice of Law and Forum	  	38
	13.3	 	Amendment	  	38
	13.4	 	Waiver	  	38
	13.5	 	Partial Invalidity	  	39
	13.6	 	Execution in Counterparts	  	39
	13.7	 	Successors and Assigns	  	39
	13.8	 	Third Party Beneficiaries	  	39
	13.9	 	Notices	  	39
	13.10	 	Performance	  	40
	13.11	 	No Public Announcement	  	40
	13.12	 	Termination	  	40
	13.13	 	Limitation of Liability	  	40

  
 Schedule 
  

			
	2.1(a)(ii)	    	Owned Real Property
	2.1(a)(iii)	    	Personal Property Leases
	2.1(a)(iv)	    	TXI Transportation Company Assets
	2.1(a)(v)	    	Intellectual Property
	2.1(a)(vi)	    	Contracts
	2.1(b)(i)	    	Chaparral Real Estate Leases
	2.1(b)(ii)	    	TXI Real Estate Leases
	2.4(d)	    	Retained Liabilities
	2.5(a)	    	Restructuring Transactions
	2.7	    	Non-Terminated Intercompany Agreements
	2.8	    	Shared Contracts
	6.6	    	Director Nominees
	6.10(a)	    	Assumed Actions
	6.10(b)	    	Transferred Actions

  

 iv 

 SEPARATION AND DISTRIBUTION AGREEMENT 
  
 THIS AGREEMENT is made as of July 6, 2005 by and between Texas Industries, Inc. (“TXI”), a Delaware
corporation, and Chaparral Steel Company (“Chaparral”), a Delaware corporation, and, as of the date hereof, a wholly-owned subsidiary of TXI. 
  

WHEREAS, TXI, through certain subsidiaries, is engaged in the business of manufacturing and selling steel products (the “Chaparral
Business”). 
  
 WHEREAS, the Board of Directors of TXI
has determined that it would be advisable and in the best interests of TXI and its stockholders for TXI to transfer and assign, or cause to be transferred and assigned, to Chaparral the business, operations, assets and liabilities related to the
Chaparral Business; 
  
 WHEREAS, TXI has agreed to transfer,
assign or lease, or cause to be transferred, assigned or leased, to the Chaparral Parties (as hereinafter defined) substantially all of the assets and properties of the Chaparral Business, and Chaparral has agreed to the transfer, assignment or
lease of such assets and to assume, or cause to be assumed, substantially all of the liabilities and obligations arising out of or relating to the Chaparral Business (the “Contribution”); 
  
 WHEREAS, the Board of Directors of TXI has determined that it would be
advisable and in the best interests of TXI and its stockholders for TXI to distribute on a pro rata basis to the holders of TXI’s common stock, par value $1.00 per share (“TXI Common Stock”), without any consideration being
paid by the holders of such TXI Common Stock, all of the outstanding shares of Chaparral common stock, par value $0.01 per share (together with the preferred share purchase rights associated therewith, the “Chaparral Common Stock”),
then owned by TXI (the “Distribution”); 
  
 WHEREAS, for federal income tax purposes, the Contribution and Distribution are intended to qualify for tax-free treatment under Sections 355, 361 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the
“Code”); and 
  
 WHEREAS, it is appropriate and
desirable to set forth the principal transactions required to effect the Contribution and Distribution and certain other agreements that will govern the relationship of TXI and Chaparral following the Distribution. 
  
 NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties hereto hereby agree as follows: 
  
 ARTICLE I

 DEFINITIONS 
  
 SECTION 1.1 Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1.1. 
  
 “Actions” means any action, claim, demand, suit,
arbitration, inquiry, subpoena, discovery request, proceeding or investigation by or before any court or grand jury, any governmental or other regulatory or administrative entity, agency or commission or any arbitration tribunal, domestic or
foreign. 
  
 “Affiliate” means, with respect to
any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with such Person. For the purpose of this definition, the term “control” means the power to direct the management of an entity,
directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the term “controlled” has the meaning correlative to the foregoing. After the Distribution, Chaparral and TXI shall not be deemed to
be under common control for purposes hereof due solely to the fact that Chaparral and TXI have stockholders in common. 

 “Agent” means Mellon Investor Services, LLC, the distribution agent appointed by TXI to
distribute shares of Chaparral Common Stock pursuant to the Distribution. 
  
 “Ancillary Agreements” means the Tax Sharing Agreement, the TXI Real Estate Leases, the Chaparral Real Estate Leases, an Environmental Monitoring and Management Agreement, a Preliminary Single
Property Designation Agreement, a Software License and any other agreement regarding the ongoing business and service relationships between the TXI Parties and Chaparral Parties. 
  
 “Assumed Actions” has the meaning set forth in Section 6.10(a). 
  
 “Assumed Liabilities” has the meaning set forth in Section
2.3. 
  
 “Cessation Time” has the meaning set
forth in Section 5.5. 
  
 “Chaparral” has the
meaning set forth in the first paragraph of this Agreement. 
  
 “Chaparral 401(k) Plan” has the meaning set forth in Section 5.18(a)(i). 
  
 “Chaparral Business” has the meaning set forth in the recitals. 
  
 “Chaparral Business Employee” means (i) any individual employed at any time on or prior to the Distribution
Date by TXI or any of its Subsidiaries who has, as of the Distribution Date, or who, immediately prior to his or her termination of employment by TXI or any of its Subsidiaries had, employment duties primarily related to the Chaparral Business, and
(ii) any other individual employed prior to the Distribution Date by TXI or any of its Subsidiaries who accepts an offer to become an employee of Chaparral on the Distribution Date. 
  
 “Chaparral Common Stock” has the meaning set forth in the recitals. 
  
 “Chaparral Distributable Share” means for each holder of
record of TXI Common Stock as of the close of business on the Record Date one share of Chaparral Common Stock for every share of TXI Common Stock outstanding and held of record by such holder at such time. 
  
 “Chaparral FSP” has the meaning set forth in Section
5.18(b)(i). 
  
 “Chaparral Indemnified Parties”
has the meaning set forth in Section 10.3. 
  
 “Chaparral Parties” means Chaparral, the direct or indirect Subsidiaries acquired by Chaparral as part of the Transferred Assets and any Subsidiaries formed or acquired after the date hereof. 
  
 “Chaparral Real Estate Leases” has the meaning set forth in
Section 2.1(b)(i). 
  
 “Chaparral Share(s)”
mean(s) each share of Chaparral Common Stock. 
  
 “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at Part 6 of Subtitle B of Title I of ERISA and at section 4980B of the Code. 
  
 “Code” has the meaning set forth in the Recitals.

  

 2 

 “Contracts” has the meaning set forth in Section 2.1(a)(vi). 
  
 “Contribution” has the meaning set forth in the Recitals.

  
 “Conveyancing Instruments” has the meaning
set forth in Section 4.1. 
  
 “Copyrights” means
United States and foreign copyrights, both registered and unregistered, along with the registrations and applications to register any such copyrights. 
  
 “Credit Facility” means a $150 million senior secured revolving credit facility to be entered into by Chaparral. 
  
 “Debt Issuance Costs” means the underwriting commitment and
syndication fees and any other fees and expenses under the Credit Facility and the Note Offering, plus all rating agency fees, plus all counsel and accounting fees (including the fees of lenders’ counsel relating to the Credit Facility) and
other costs relating to the Credit Facility and Note Offering. 
  
 “Distribution” has the meaning set forth in the Recitals. 
  
 “Distribution Date” means the date determined by the Board of Directors of TXI as the date on which the Distribution is payable to holders of TXI Common Stock on the Record Date. 
  
 “ERISA” means the Employee Retirement Income Security Act of
1974, as amended, 29 U.S.C. §1001, et. seq. 
  
 “Escalation Notice” has the meaning set forth in Section 11.1(a). 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Expenses” means any and all expenses incurred in connection with investigating, defending or asserting any claim, action, suit or
proceeding incident to any matter indemnified against hereunder (including court filing fees, court costs, arbitration fees or costs, witness fees, and reasonable fees and disbursements of legal counsel, investigators, expert witnesses, consultants,
accountants and other professionals). 
  
 “Governmental
Authority” means any foreign, federal, state, local or other government, governmental, statutory or administrative authority, regulatory body or commission or any court, tribunal or judicial or arbitral body. 
  
 “Indemnified Party” has the meaning set forth in Section
10.5(a). 
  
 “Indemnifying Party” has the meaning
set forth in Section 10.5(a). 
  
 “Indemnity Payment”
has the meaning set forth in Section 10.5(a). 
  
 “Information” has the meaning set forth in Section 12.1(a). 
  
 “Information Statement” has the meaning set forth in Section 6.8(a). 
  
 “Insurance Charges” has the meaning set forth in Section 8.6. 
  

 3 

 “Intellectual Property License Agreements” means licenses relating to the Patents and
patent disclosures set forth on Schedule 2.1(a)(v). 
  
 “Intercompany Agreements” means any contract, agreement or lease between a TXI Party and a Chaparral Party entered into prior to the Distribution excluding this Agreement and the Ancillary Agreements. 
  
 “IRS” means the U.S. Internal Revenue Service. 

 
 “Liability” means any and all debts, liabilities and
obligations, absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising (unless otherwise specified in this Agreement), including all costs and Expenses relating thereto, and
including, without limitation, those debts, liabilities and obligations arising under any law, rule, regulation, Action, threatened Action, order or consent decree of any Governmental Authority or any award of any arbitrator of any kind, and those
arising under any contract, commitment or undertaking. 
  
 “Losses” means any and all losses, costs, obligations, Liabilities, settlement payments, awards, judgments, fines, penalties, damages, fees, expenses, deficiencies, claims or other charges, absolute or contingent, matured
or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown (including, without limitation, the costs and Expenses of any and all Actions, threatened Actions, demands, assessments, judgments, settlements and compromises relating
thereto and attorneys’ fees and any and all Expenses whatsoever reasonably incurred in investigating, preparing or defending against any such Actions or threatened Actions). 
  
 “Material Governmental Approvals and Consents” means any material notices, reports or other filings to be
made with or to, or any material consents, registrations, approvals, permits, clearances or authorizations to be obtained from, any Governmental Authority. 
  
 “Non-ERISA Benefit Arrangement” means each contract, agreement, policy, practice, program, plan, trust or arrangement, other than a
Pension Plan or Welfare Plan, providing for benefits, perquisites or compensation of any nature to any Chaparral Business Employee, or to any family member, dependent or beneficiary of any such Chaparral Business Employee, including, without
limitation, disability, severance, health, dental, life, accidental death and dismemberment, travel and accident, tuition reimbursement, supplemental unemployment, vacation, sick, personal or bereavement days, holidays, retirement, deferred
compensation, profit sharing, bonus, stock-based compensation or other forms of incentive compensation. 
  
 “Non-Permitted Names” has the meaning set forth in Section 6.11. 
  
 “Note Offering” means the offering by Chaparral pursuant to Rule 144A and Regulation S under the Securities
Act of 1933, as amended, of senior unsecured notes of Chaparral in the aggregate principal amount of up to $300 million. 
  
 “Offering Memorandum” means Chaparral’s offering memorandum relating to the Note Offering. 
  
 “Owned Real Property” has the meaning set forth in Section
2.1(a)(ii). 
  
 “Party” means the TXI Parties or
the Chaparral Parties. 
  
 “Patents” means United
States and foreign patents and applications for patents, including any continuations, continuations-in-part, divisions, renewals, reissues and extensions thereof. 
  

 4 

 “Pension Plan” means any pension plan as defined in section 3(2) of ERISA, without
regard to sections 4(b)(4) or 4(b)(5) of ERISA. 
  
 “Person” means any individual, corporation, partnership, joint venture, limited liability company, association, joint-stock company, trust, unincorporated organization or Governmental Authority. 
  
 “Personal Property Leases” has the meaning set forth in
Section 2.1(a)(iii). 
  
 “Prime Rate” means the
rate that Bank of America (or any successor thereto or other major money center commercial bank agreed to by the Parties) announces from time to time as its prime lending rate, as in effect from time to time. 
  
 “Privilege” has the meaning set forth in Section 12.8(a).

  
 “Privileged Information” has the meaning set
forth in Section 12.8(a). 
  
 “Record Date” means
the date determined by the Board of Directors of TXI as the record date for the Distribution. 
  
 “Registration Statement” has the meaning set forth in Section 6.8(a). 
  
 “Retained Assets” means all of the TXI Parties’ assets other than the Transferred Assets. 
  
 “Retained Business” means the business of the TXI Parties
other than the Chaparral Business. 
  
 “Retained
Liabilities” means all of the TXI Parties’ Liabilities other than the Assumed Liabilities. 
  
 “SEC” means the United States Securities and Exchange Commission. 
  
 “Shared Contract” means a contract, agreement or lease with a third Person that directly benefits both a
TXI Party and a Chaparral Party. 
  
 “Software”
means computer software programs, in source code and object code form, including, without limitation, all related source diagrams, flow charts, specifications, documentation and all other materials and documentation necessary to allow a
reasonably skilled third party programmer or technician to maintain, support or enhance the Software. 
  
 “Subsidiary” means, when used with reference to any Person, any corporation or other organization whether incorporated or unincorporated
of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided, however, that no Person that is not directly or indirectly
wholly-owned by any other Person shall be a Subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person. After the Distribution, Chaparral and TXI shall not be deemed to be under
common control for purposes hereof due solely to the fact that Chaparral and TXI have stockholders in common. 
  
 “Tax Benefit” means a reduction in the tax liability of a taxpayer for any taxable period. A Tax Benefit shall be deemed to have been
realized or received 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 relevant item on the tax liability of such taxpayer in all prior periods, is less
than it would have been if such liability were determined without regard to such item. 
  

 5 

 “Tax Cost” means an increase in the tax liability of a taxpayer for any taxable period.
A Tax Cost shall be deemed to arise 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 relevant item on the tax liability of such taxpayer in all prior
periods, is greater than it would have been if such tax liability were determined without regard to such item. 
  
 “Substitute Option” has the meaning set forth in Section 5.14(a). 
  
 “Tax Sharing Agreement” means the Tax Sharing and Indemnification Agreement, dated the date hereof, between
TXI and Chaparral. 
  
 “Third Party Claim” has
the meaning set forth in Section 10.6(a). 
  
 “Third Party
Consents” has the meaning set forth in Section 6.1. 
  
 “Trademarks” means all United States, state and foreign trademarks, service marks, logos, trade dress and trade names, whether registered or unregistered, including all goodwill associated with the foregoing, and all
registrations and pending applications to register the foregoing. 
  
 “Transferred Actions” has the meaning set forth in Section 6.10(b). 
  
 “Transferred Assets” has the meaning set forth in Section 2.1. 
  
 “Transferred Intellectual Property” has the meaning set forth in Section 2.1(a)(v). 
  
 “TXI” has the meaning set forth in the first paragraph of
this Agreement. 
  
 “TXI 401(k) Plan” has the
meaning set forth in Section 5.18(a)(i). 
  
 “TXI Business
Employee” means any individual employed at any time on or prior to the Distribution Date by TXI or any of its Subsidiaries who has, as of the Distribution Date, or who, immediately prior to his or her termination of employment by TXI or any
of its Subsidiaries had, employment duties primarily related to the Retained Business 
  
 “TXI Common Stock” has the meaning set forth in the Recitals. 
  
 “TXI FSP” has the meaning set forth in Section 5.18(b)(i). 
  
 “TXI Indemnified Parties” has the meaning set forth in Section 10.2. 
  
 “TXI Option” has the meaning set forth in Section 5.14(a).

  
 “TXI Parties” means TXI and its direct and
indirect Subsidiaries (including those formed or acquired after the date hereof), other than the Chaparral Parties. 
  
 “TXI Policies” has the meaning set forth in Section 8.2. 
  
 “TXI Real Estate Leases” has the meaning set forth in Section 2.1(b)(ii).  
  

 6 

 “Welfare Plan” means any employee welfare plan as defined in section 3(1) of ERISA,
without regard to sections 4(b)(4) or 4(b)(5) of ERISA. 
  
 SECTION 1.2 Interpretation. 
  

	 	(a)	In this Agreement, unless the context clearly indicates otherwise: 

  

	 	(i)	words used in the singular include the plural and words used in the plural include the singular; 

  

	 	(ii)	reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement;

  

	 	(iii)	reference to any gender includes the other gender; 

  

	 	(iv)	the word “including” means “including but not limited to”; 

  

	 	(v)	reference to any Article, Section, Exhibit or Schedule means such Article or Section of, or such Exhibit or Schedule to, this Agreement, as the case may be, and references in any
Section or definition to any clause means such clause of such Section or definition; 

  

	 	(vi)	the words “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and
not to any particular Section or other provision hereof; 

  

	 	(vii)	reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent
permitted by the provisions thereof and by this Agreement; 

  

	 	(viii)	reference to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in
whole or in part, and in effect at the time of determining compliance or applicability; 

  

	 	(ix)	relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through”
means “through and including”; 

  

	 	(x)	accounting terms used herein shall have the meanings historically ascribed to them by TXI based upon TXI’s internal financial policies and procedures in effect prior to the
date of this Agreement; 

  

	 	(xi)	if there is any conflict between the provisions of the body of this Agreement and the Exhibits or Schedules hereto, the provisions of the body of this Agreement shall control unless
explicitly stated otherwise in such Exhibit or Schedule; 

  

	 	(xii)	the titles to Articles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect
the meaning or interpretation of this Agreement; 

  

 7 

	 	(xiii)	any portion of this Agreement obligating a Party to take any action or refrain from taking any action, as the case may be, shall mean that such Party shall also be obligated to
cause its relevant Subsidiaries to take such action or refrain from taking such action, as the case may be; and 

  

	 	(xiv)	unless otherwise specified in this Agreement, all references to dollar amounts herein shall be in respect of lawful currency of the United States. 

  
 (b) Any rule of construction or interpretation otherwise requiring this
Agreement to be construed or interpreted against either Party shall not apply to any construction or interpretation hereof. 
  
 ARTICLE II 
 BUSINESS SEPARATION

  
 SECTION 2.1 Separation of Chaparral Business.

  
 (a) Transfer of Assets. Subject to the terms and
conditions of this Agreement and the Ancillary Agreements, prior to the Distribution, TXI has caused or, prior to the Distribution, shall cause the TXI Parties to convey, assign, transfer, contribute and set over to the Chaparral Parties, and
Chaparral has caused or shall cause the Chaparral Parties to accept and receive, all right, title and interest of the TXI Parties in and to the following assets (all of such assets being hereinafter referred to as the “Transferred
Assets”), including the following: 
  

	 	(i)	Capital Stock. All of the capital stock of Chaparral Steel Investments, Inc. and Chaparral Steel (Virginia) Inc.; 

  

	 	(ii)	Owned Real Property. Those certain parcels of land described on Schedule 2.1(a)(ii) (the “Owned Real Property”) and any and all improvements, fixtures,
machinery, equipment and other property described in such Schedule and located on such Owned Real Property; 

  

	 	(iii)	Personal Property Leases. Those certain machinery, equipment or other tangible personal property leases (the “Personal Property Leases”) set forth on
Schedule 2.1(a)(iii); 

  

	 	(iv)	Transportation Assets. The assets of TXI Transportation Company set forth on Schedule 2.1(a)(iv); 

  

	 	(v)	Intellectual Property. (i) All Trademarks, Copyrights, Patents and Software that are used solely in the Chaparral Business, including those set forth on Schedule
2.1(a)(v); (ii) all business and technical information, nonpatented inventions, including the patent disclosures set forth on Schedule 2.1(a)(v), discoveries, processes, formulations, trade secrets, know-how and technical data used solely in the
Chaparral Business made or conceived by employees, consultants or contractors of TXI or its Subsidiaries as to which the TXI Parties have rights under any agreement or otherwise relating to the foregoing; (iii) all business and technical
information, nonpatented inventions, discoveries, processes, formulations, trade secrets, know-how and technical data used solely in the Chaparral Business made or conceived by third parties as to which the TXI Parties have rights pursuant to
executory agreements with said third parties relating to the foregoing; and (iv) all permits, grants, contracts, agreements and licenses running to or from a TXI Party relating to the foregoing; and all rights that are associated with the foregoing
(collectively, the “Transferred Intellectual Property”); 

  

 8 

	 	(vi)	Contracts. All of the contracts set forth on Schedule 2.1(a)(vi) (the “Contracts”); 

  

	 	(vii)	Permits and Licenses. All permits, approvals, licenses, franchises, authorizations or other rights granted by any Governmental Authority held or applied for by a TXI
Party and that are used solely in the Chaparral Business or that relate solely to the Transferred Assets, to the extent they are legally assignable to Chaparral; 

  

	 	(viii)	Claims and Indemnities. All rights, claims, demands, causes of action, judgments, decrees and rights to indemnity or contribution, whether absolute or contingent,
contractual or otherwise, in favor of a TXI Party to the extent it relates to the Chaparral Business, including the right to sue, recover and retain such recoveries and the right to continue in the name of a TXI Party any pending actions relating to
the foregoing, and to recover and retain any damages therefrom, but only to the extent relating to the Chaparral Business; 

  

	 	(ix)	Books and Records. All books and records (including all records pertaining to customers, suppliers and personnel), wherever located, that are related principally to
the Chaparral Business; 

  

	 	(x)	Tax Credits. Any right, title or interest in any tax refund, credit or benefit to which any of the Chaparral Parties is entitled in accordance with the terms of the
Tax Sharing Agreement; and 

  

	 	(xi)	Other Assets. All other assets, tangible or intangible, including all goodwill, that are used principally in the Chaparral Business, including, without limitation,
domain names and websites, or which TXI has agreed to transfer pursuant to the terms of this Agreement or any Ancillary Agreement or Conveyancing Instrument. 

  
 (b) Leases of Real Property. Subject to the terms and conditions of this Agreement and the Ancillary Agreements,
prior to the Distribution the Parties shall enter into the following leases of real property: 
  

	 	(i)	Those certain real estate leases from Chaparral, as lessor, to TXI, as lessee, set forth on Schedule 2.1(b)(i) (the “Chaparral Real Estate Leases”) and any and all
improvements, fixtures, machinery, equipment and other property located on the premises demised under the Chaparral Real Estate Leases; and 

  

	 	(ii)	Those certain real estate leases from TXI, as lessor, to Chaparral, as lessee, set forth on Schedule 2.1(b)(ii) (the “TXI Real Estate Leases”) and any and all
improvements, fixtures, machinery, equipment and other property located on the premises demised under the TXI Real Estate Leases. 

  
 SECTION 2.2 Retained Assets. Notwithstanding anything to the contrary herein, the following shall be transferred to TXI or the appropriate TXI
Party, if owned or held by a Chaparral Party, and included in the Retained Assets: 
  
 (a) Cash. Cash and cash equivalents, any cash on hand or in bank accounts, certificates of deposit, commercial paper and similar securities owned or held by any TXI Party or Chaparral Party as of the
close of business on the Distribution Date, except for deposits securing leases and other obligations related solely to the Chaparral Business; 
  

 9 

 (b) Tax Refunds. Any right, title or interest in and to any tax refund, credit or benefit
to which any of the TXI Parties is entitled in accordance with the terms of the Tax Sharing Agreement; 
  
 (c) Accruals. Any amounts accrued on the books and records of TXI or a TXI Party with respect to any Retained Liabilities; 
  
 (d) Employee Benefits. Except as provided in Article V, assets
relating primarily to the provision of benefits to present or former employees of the Chaparral Business; 
  
 (e) Insurance Premiums and Refunds. Any right, title or interest in and to any prepaid insurance premiums or premium refunds for the TXI
Policies; 
  
 (f) Intellectual Property Rights. All
email addresses and all Trademarks, Copyrights, Patents, Software and other intellectual property rights that are not used solely in the Chaparral Business; and 
  
 (g) Other Assets. All assets which TXI has agreed to retain pursuant to the terms of this Agreement or any
Ancillary Agreement or Conveyancing Instrument. 
  
 SECTION 2.3
Assumption of Liabilities. In connection with the transactions contemplated by Section 2.1, and except as set forth in Section 2.4, Chaparral shall and hereby does, and shall cause the Chaparral Parties to, assume on a joint and several basis,
and pay, comply with and discharge in accordance with their terms all Liabilities of the TXI Parties arising out of the ownership or use of the Transferred Assets or the operation of the Chaparral Business, whether existing on the date hereof or
arising at any time after the date hereof, whether based on circumstances, events or actions arising heretofore or hereafter, whether or not such Liabilities shall have been disclosed herein, and whether or not reflected on the books and records of
the TXI Parties or the Chaparral Parties (all of such Liabilities being hereinafter referred to as the “Assumed Liabilities”), including: 
  
 (a) Environmental. All Liabilities of the TXI Parties involving the health or safety of persons or the protection of the environment or
natural resources to the extent arising out of the Chaparral Business or the Transferred Assets; 
  
 (b) Leases and Contracts. All Liabilities of the TXI Parties under or related to the Personal Property Leases and the Contracts, such
assumption to occur as (i) assignee if such Personal Property Leases and Contracts are assignable and are assigned or otherwise transferred to the Chaparral Parties, or (ii) subcontractor, sublessee or sublicensee as provided in Section 6.2 if such
assignment of such Personal Property Leases and Contracts and/or proceeds thereof is prohibited by law, by the terms thereof or not permitted by the other contracting party; 
  
 (c) Employees. All Liabilities of the TXI Parties in connection with claims of past or current employees of
the Chaparral Business, except as otherwise expressly provided in this Agreement; 
  
 (d) Actions. All Liabilities of the TXI Parties related to (i) any Actions to the extent that they assert a claim arising out of the operation of the Chaparral Business or the ownership or use of the
Transferred Assets, whether before or after the Distribution Date, and (ii) Assumed Actions; 
  
 (e) Tax Liabilities. All Liabilities for which any Chaparral Party is liable in accordance with the terms of the Tax Sharing Agreement; 
  

 10 

 (f) Letters of Credit. Any Liabilities incurred by TXI relating to any letter of credit
posted by TXI for the benefit of a Chaparral Party, including letter of credit fees paid by TXI to the issuer of the letters of credit; 
  
 (g) Other Liabilities. All other Liabilities of the TXI Parties which Chaparral has agreed to assume pursuant to the terms of this Agreement
or any Ancillary Agreement or Conveyancing Instrument. 
  
 SECTION 2.4 Retained Liabilities. Notwithstanding anything to the contrary in this Agreement, neither Chaparral nor any of the other Chaparral Parties shall assume the Retained Liabilities, including the following: 
  
 (a) Benefit Plans. Except as provided in Article V, the
Liabilities under the TXI employee benefit plans; 
  
 (b) Tax
Liabilities. All Liabilities for which TXI is liable in accordance with the terms of the Tax Sharing Agreement; 
  
 (c) Retained Business. All Liabilities arising out of the ownership or use of the Retained Assets or the operation of the Retained Business;
and 
  
 (d) Other Liabilities. The Liabilities set
forth on Schedule 2.4(d) and all Liabilities which TXI has agreed to retain pursuant to the terms of this Agreement or any Ancillary Agreement or Conveyancing Instrument. 
  
 SECTION 2.5 Sequencing of Separation of Chaparral Business. The separation of the Chaparral Business shall be
effected as follows: 
  
 (a) Corporate Restructuring. The
Parties acknowledge that on or before the date hereof, the corporate restructuring transactions set forth on Schedule 2.5(a) have been completed by TXI and its appropriate Subsidiaries. 
  
 (b) Transfers. After the consummation of the transactions set forth in Section 2.5(a), TXI contributed to Chaparral
as an additional contribution to capital the capital stock provided in Section 2.1(a)(i), and TXI shall, and shall cause the TXI parties to, transfer all of TXI’s right, title and interest in and to the other Transferred Assets to the
appropriate Chaparral Parties. 
  
 (c) Assumption. In
consideration for and simultaneous with the consummation of the transactions described in Section 2.5(b), the Chaparral Parties shall, and hereby do, assume on a joint and several basis, and discharge in accordance with their respective terms, all
of the Assumed Liabilities. 
  
 (d) Financing
Transactions. After the consummation of the transactions set forth in Sections 2.5(a) through (c), TXI shall contribute to the capital of Chaparral (Virginia) Inc. all but $25 million of its intercompany receivable from Chaparral (Virginia)
Inc., and Chaparral shall and shall cause the other Chaparral Parties to (i) enter into the Credit Facility and related agreements, (ii) consummate the Note Offering, and (iii) and borrow sufficient funds under the Credit Facility to permit
Chaparral to pay the dividend as provided in Section 2.5(e). 
  
 (e) Dividend. Immediately following the consummation of the transactions described in Section 2.5(a) through (d), Chaparral shall pay to TXI, as a dividend, approximately $341 million in cash, the exact amount thereof to be
determined by subtracting the Debt Issuance Costs from $350 million. TXI shall use the entire amount of the dividend to pay creditors who are not Affiliates of TXI. 
  

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 (f) Releases. Upon consummation of the transactions described in Sections 2.5(a) through (e), TXI
shall cause the Chaparral Parties to be released from their guarantees of TXI’s obligations under TXI’s 10 1/4% Senior Notes due 2011. 
  
 (g)
Contribution. Immediately before the Distribution, TXI will contribute to the capital of Chaparral (Virginia) Inc. any the remaining amount of its intercompany receivable from Chaparral (Virginia) Inc. 
  
 Notwithstanding the foregoing, TXI may elect in its sole discretion at any time prior to the
Distribution to omit or modify any of the transactions set forth in Sections 2.1 through 2.5 or to include additional transactions. 
  
 SECTION 2.6 New Agreements. Immediately following the consummation of the transactions described in Section 2.5, the appropriate TXI Parties and
Chaparral Parties shall execute and deliver the following agreements, which shall thereafter become binding agreements between the parties thereto in accordance with their terms: 
  

	 	(a)	The Tax Sharing Agreement; 

  

	 	(b)	The TXI Real Estate Leases; 

  

	 	(c)	The Chaparral Real Estate Leases; 

  

	 	(d)	The Environmental Monitoring and Management Agreement; and 

  

	 	(e)	All other Ancillary Agreements. 

  
 SECTION 2.7 Termination of Existing Intercompany Agreements. Except for this Agreement and the Ancillary Agreements and as otherwise expressly
provided in this Agreement, the Ancillary Agreements or as set forth on Schedule 2.7, all Intercompany Agreements and all other intercompany arrangements and courses of dealings, whether or not in writing and whether or not binding, in effect
immediately prior to the Distribution Date, shall be terminated and be of no further force and effect from and after the Distribution Date. 
  
 SECTION 2.8 Shared Contracts and Liabilities. 
  
 (a) Liabilities that relate to any Shared Contract set forth in Schedule 2.8 or that arose on or before the Distribution Date but do not relate primarily
to the Chaparral Business or to any other business of TXI (“Shared Liabilities”) shall be allocated between the TXI Parties, on the one hand, and the Chaparral Parties on the other hand, as follows: 
  

	 	(i)	first, if the Shared Liability is incurred exclusively in respect of a benefit received by one Party, the Party receiving such benefit shall be responsible for such Shared
Liability; 

  

	 	(ii)	second, if the Shared Liability relates to a Shared Contract but cannot be so allocated under clause (i), such Shared Liability shall be allocated between the Parties based on the
relative proportions of total benefit received (over the term of the Shared Contract, measured as of the date of the allocation) under the relevant Shared Contract. Notwithstanding the foregoing, each Party shall be responsible for any and all
Shared Liabilities arising out of or resulting from its breach of the relevant Shared Contract; 

  

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	 	(iii)	third, if the Shared Liability does not relate to a Shared Contract and cannot be so allocated under clause (i), such Shared Liability shall be allocated between the Parties based
on the relative proportions of total benefit received in connection with the matter pursuant to which the Shared Liability arose; and 

  

	 	(iv)	fourth, if the Shared Liability cannot be so allocated under clauses (i) through (iii), such Shared Liability shall be allocated evenly between the Parties.

  
 (b) If any of the TXI Parties, on the one hand,
or any of the Chaparral Parties, on the other hand, receive any benefit or payment under any Shared Contract that was intended for the other Party, the Party receiving such benefit or payment will use commercially reasonable efforts to deliver,
transfer or otherwise afford such benefit or payment to the other Party. 
  
 (c) The TXI Parties shall have the sole right, responsibility and authority for administration of pre-Distribution claims that relate to or affect any Shared Liability. The expenses of such administration shall be
treated as Shared Liabilities. 
  
 SECTION 2.9 No TXI
Representations or Warranties. Except as expressly set forth herein or in any Ancillary Agreement, TXI does not represent or warrant in any way (i) as to the value or freedom from encumbrance of, or any other matter concerning, any of the
Transferred Assets or Assumed Liabilities or (ii) as to the legal sufficiency to convey title to any of the Transferred Assets on the execution, delivery and filing of the Conveyancing Instruments. ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN
“AS IS, WHERE IS” BASIS (AND IN THE CASE OF THE OWNED REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM OF DEED OR CONVEYANCE) WITHOUT ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MARKETABILITY,
TITLE, VALUE, FREEDOM FROM ENCUMBRANCE OR ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, and the Chaparral Parties shall bear the economic and legal risks that any conveyances of such assets shall prove to be insufficient or that the
Chaparral Parties’ title to any such assets shall be other than good and marketable and free of encumbrances. Except as expressly set forth in this Agreement or in any Ancillary Agreement, TXI does not represent or warrant that the obtaining of
the consents or approvals, the execution and delivery of any amendatory agreements and the making of the filings and applications contemplated by this Agreement shall satisfy the provisions of all applicable agreements or the requirements of all
applicable laws or judgments, and, subject to Section 6.3, the Chaparral Parties shall bear the economic and legal risk that any necessary consents or approvals are not obtained or that any requirements of law or judgments are not complied with.
Notwithstanding the foregoing, the Parties shall fully cooperate and use commercially reasonable efforts to obtain all consents and approvals, to enter into all amendatory agreements and to make all filings and applications that may be required for
the consummation of the transactions contemplated by this Agreement. 
  
 ARTICLE III 
 THE DISTRIBUTION 
  

SECTION 3.1 Issuance and Delivery of Chaparral Shares. Chaparral shall issue to TXI the number of Chaparral Shares required so that the total
number of Chaparral Shares held by TXI immediately prior to the Distribution is equal to the total number of Chaparral Shares distributable pursuant to Section 3.2. TXI shall deliver to the Agent one or more stock certificates representing all
Chaparral Shares then issued and outstanding, together with one or more stock power(s) endorsed in blank and, with respect to any uncertificated shares to be distributed pursuant to Section 3.2, shall take such steps as are necessary to permit such
shares to be distributed in the manner described in Section 3.2. In its capacity as Chaparral’s transfer agent, the Agent will distribute such shares in the manner described in Section 3.2. 
  
 SECTION 3.2 Distribution of Chaparral Shares. TXI shall instruct the
Agent to (i) distribute the Chaparral Distributable Share to each holder of record of TXI Common Stock at the close of business 
  

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 on the Record Date, and (ii) after completing the transactions described in Section 3.3, deliver to Chaparral as a
contribution to Chaparral, all remaining Chaparral Shares, if any, then held by the Agent. Any such returned Chaparral Shares shall be immediately cancelled by Chaparral and shall not constitute treasury shares. Each distributed Chaparral Share
shall be validly issued, fully paid and nonassessable and free of preemptive rights. The shares of Chaparral Common Stock distributed shall be distributed as uncertificated shares registered in book-entry form through the direct registration system.
Except as required by applicable law, no certificates therefor shall be distributed. The Agent shall deliver an account statement to each holder of Chaparral Common Stock reflecting such holder’s ownership interest in shares of Chaparral Common
Stock. 
  
 SECTION 3.3 TXI Board Action. The TXI Board of
Directors shall, in its discretion, establish the Record Date and the Distribution Date and all appropriate procedures in connection with the Distribution. The Board of Directors of TXI also shall have the right to adjust the Chaparral Distributable
Share at any time prior to the Distribution. The consummation of the transactions provided for in this Article III shall only be effected after the Distribution has been declared by the TXI Board of Directors. 
  
 SECTION 3.4 Additional Approvals. TXI shall cooperate with Chaparral
in effecting, and if so requested by Chaparral, TXI shall, as the sole stockholder of Chaparral prior to the Distribution, ratify any actions which are reasonably necessary or desirable to be taken by Chaparral to effectuate the transactions
referenced in or contemplated by this Agreement in a manner consistent with the terms hereof, including the preparation and implementation of appropriate plans, agreements and arrangements for employees of the Chaparral Business and non-employee
members of Chaparral’s board of directors. 
  
 ARTICLE IV

 BUSINESS SEPARATION CLOSING MATTERS 
  
 SECTION 4.1 Delivery of Instruments of Conveyance. In order to effectuate the transactions contemplated by Article II, the Parties shall execute
and deliver, or cause to be executed and delivered, prior to or as of the Distribution such deeds, easements, licenses, rights of first refusal, bills of sale, instruments of assumption, instruments of assignment, stock powers, certificates of title
and other instruments of assignment, transfer, assumption and conveyance (collectively, the “Conveyancing Instruments”) as the Parties shall reasonably deem necessary or appropriate to effect such transactions. 
  
 SECTION 4.2 Delivery of Other Agreements. Prior to or as of the
Distribution, the Parties shall execute and deliver, or shall cause to be executed and delivered, each of the Ancillary Agreements. 
  
 SECTION 4.3 Provision of Corporate Records. Prior to or as promptly as practicable after the Distribution, TXI shall deliver to Chaparral all
corporate books and records of Chaparral Parties and copies of all corporate books and records of the TXI Parties relating to the Chaparral Business, including in each case all active agreements, litigation files and government filings. 

 
 ARTICLE V 
 EMPLOYEE MATTERS 
  
 SECTION 5.1 Employment. On or before the Distribution Date, one of the Chaparral Parties shall employ or continue to employ each Chaparral Business Employee who, as of the day immediately prior thereto is
employed by TXI or any of its Affiliates or Subsidiaries, including any such employee who is then an inactive employee on approved medical, non-medical or short-term disability, long-term disability or weekly indemnity leave of absence or absent
from active employment due to occupational illness or injury covered by workers’ compensation. The terms and conditions of employment with Chaparral (x) shall be communicated to each such Chaparral Business Employee prior to the Distribution
Date in a form mutually satisfactory to Chaparral and TXI, (y) shall include credit, for all purposes, for all years of service credited by TXI and its Subsidiaries and Affiliates, and (z) may include a requirement to execute a confidentiality and
non-compete agreement between such Chaparral Business Employee and Chaparral. 
  

 14 

 SECTION 5.2 Severance. It is not intended that any Chaparral Business Employee will be eligible
for termination or severance payments or benefits from TXI or its Subsidiaries or Affiliates as a result of the transfer or change of employment from TXI to Chaparral or their respective Subsidiaries or Affiliates. Notwithstanding the preceding
sentence, in the event that any such termination or severance payments or benefits become payable on account of such transfer, change or the refusal of a Chaparral Business Employee to accept employment with Chaparral, Chaparral shall indemnify the
TXI Parties and their Affiliates, for the amount of such termination or severance payments or benefits. Chaparral shall be liable, and indemnify the TXI Parties and their Affiliates, for any termination or severance obligations owed to Chaparral
Business Employees on or after the Distribution Date, including obligations to Chaparral Business Employees whose employment ceased prior to the Distribution Date. 
  
 SECTION 5.3 Employment Solicitation. For a period of three (3) years following the Distribution Date, neither the TXI
Parties nor the Chaparral Parties may, and will not permit any of their respective Affiliates or agents to, solicit or recruit for employment any then current exempt salaried, managerial or supervisory employees of the other, without the prior
written consent of the other. Nothing in this Section 5.3 shall be construed so as to (i) prohibit the hiring by either the TXI Parties or the Chaparral Parties of any exempt salaried, managerial or supervisory employee of the other who in good
faith is believed to be actively seeking employment on his/her own initiative without prior contact initiated by any employee or agent of the company where employment is sought, or (ii) prohibit the hiring of any person who applied for employment
with either company in response to any public advertising medium. 
  
 SECTION 5.4 Personnel Records. Subject to applicable law, all information and records regarding employment and personnel matters of Chaparral Business Employees will be Transferred Assets and shall be retained after the Distribution
Date by Chaparral in accordance with all laws relating to the collection, storage, retention and disclosure of such records. Access to such records after the Distribution Date will be provided to TXI in accordance with Section 12.1. Notwithstanding
the foregoing, TXI shall retain reasonable access to those records necessary to TXI’s continued administration of any plans or programs on behalf of Chaparral Business Employees after the Distribution Date for so long as said administration
continues pursuant to this Agreement. TXI shall also retain copies of all confidentiality and non-compete agreements with any Chaparral Business Employee in which TXI has an interest. 
  
 SECTION 5.5 Cessation of Participation in TXI Welfare Plans. Except as otherwise provided in this Agreement or as
required by the terms of any TXI Welfare Plan or by COBRA or any comparable state law, participation in the TXI Welfare Plans by all Chaparral Business Employees will cease as of 11:59 p.m. on the Distribution Date (the “Cessation Time”).

  
 SECTION 5.6 Chaparral’s Welfare Plans. Effective
as of the Cessation Time, Chaparral shall have in place for the benefit of Chaparral Business Employees and their respective eligible dependents, health (including medical, vision and dental), life, accidental death and dismemberment, disability and
other Welfare Plans substantially similar to the Welfare Plans maintained by TXI or any of its Subsidiaries or Affiliates in which such individuals participated immediately prior to the Cessation Time. Chaparral Business Employees shall be eligible
to participate in the Chaparral Welfare Plans immediately following the Cessation Time on the same basis on which they were eligible to participate in the TXI Welfare Plans immediately prior to the Cessation Time. 
  
 SECTION 5.7 Welfare Plan Liabilities. 
  
 (a) Chaparral Liabilities. Except as provided in this Agreement, as
of the Cessation Time, Chaparral shall assume, and be solely responsible for all Welfare Plan Liabilities incurred by any Chaparral Business Employee or his or her dependents after the Cessation Time. 
  

 15 

 (b) TXI Liabilities. TXI shall continue to be responsible after the Cessation Time for employer
Liabilities under its Welfare Plans with respect to the following: 
  

	 	(i)	Terminated Employees. Any Chaparral Business Employee whose employment terminated prior to the Cessation Time for any reason and who elected or is eligible to elect,
pursuant to a TXI-sponsored continuation plan or rights under COBRA or any comparable state law, to continue participation in any Welfare Plan in which he/she was enrolled on the applicable date of termination. 

  

	 	(ii)	Dependents. Any dependent of a Chaparral Business Employee whose employment terminated prior to the Cessation Time who elected, or is eligible to elect pursuant to
rights under COBRA or any comparable state law continuation coverage under TXI’s Welfare Plans as of the Cessation Time. 

  

	 	(iii)	Retirees. Any Chaparral Business Employee whose employment terminated prior to the Cessation Time due to retirement and who elected or is eligible to elect, pursuant
to a TXI-sponsored continuation plan or rights under COBRA, or any comparable state law, to continue participation in any Welfare Plan. 

  

	 	(iv)	Disabled Persons. Any Chaparral Business Employee who is not on TXI’s payroll and is receiving long-term disability benefits as of the Cessation Time who is
eligible to elect, pursuant to a TXI-sponsored continuation plan or rights under COBRA, or any comparable state law, to continue participation in any Welfare Plan. 

  

	 	(v)	Pre-Distribution Claims. Except as provided in Sections 5.2, 5.8 and 5.11, all claims for self-insured welfare benefits incurred by Chaparral Business Employees prior
to the Cessation Time, whether such claims have been paid or remain unpaid as of such date. Claims incurred by Chaparral Business Employees prior to the Cessation Time pursuant to the terms of a fully insured plan maintained by TXI or Chaparral
shall be paid pursuant to such plan. Claims for health benefits shall be considered to be incurred prior to the Cessation Time if the services related to such claims were provided prior to the Cessation Time. Claims for all other welfare benefits
shall be considered to be incurred prior to the Cessation Time if the date of loss occurred prior to the Cessation Time. 

  
 SECTION 5.8 Flexible Spending Accounts. Effective as of the Cessation Time, Chaparral shall have in place a flexible spending account plan in which
Chaparral Business Employees shall maintain their existing eligibility and participation status under the flexible spending account plan maintained by TXI. Salary reduction elections made by Chaparral Business Employees under the TXI flexible
spending account plan shall continue to apply with respect to the Chaparral flexible spending account plan at least through the end of the 2005 calendar year. As of the Cessation Time, Chaparral shall credit or debit (as applicable), or cause to be
credited or debited, the account of each Chaparral Business Employee under the Chaparral flexible spending account plan with an amount equal to the positive or negative balance of such Chaparral Business Employee’s flexible spending accounts
under the TXI flexible spending account plan immediately prior to the Cessation Time. For purposes of this Section, the balance of a Chaparral Business Employee’s flexible spending account shall be determined as the amount of the Chaparral
Business Employee’s contributions for the 2005 calendar year to the account as of the Cessation Time minus the amount of his or her reimbursements for the 2005 calendar year from the account as of the Cessation Time. TXI shall pay, or cause to
have paid, to Chaparral any net positive balance of the amounts credited to the flexible spending accounts of Chaparral Business Employees as of the Cessation Time, and Chaparral shall pay, or cause to have paid, to TXI any net negative balance of
the amounts credited to such accounts. Any such payments shall be made as soon as administratively practicable after the Cessation Time. Chaparral shall assume and be solely responsible for (i) all claims which have been submitted by Chaparral
Business Employees under 
  

 16 

 the TXI flexible spending account plan but not yet paid as of the Cessation Time, and (ii) all claims submitted under the
Chaparral flexible spending account plan after the Cessation Time. TXI shall provide Chaparral with copies of any records available to TXI to document the claims described in clause (i) above. 
  
 SECTION 5.9 TXI Assets. Except as provided in Section 5.8 above, TXI
shall retain all claim reserves, bank accounts, trust funds or other balances maintained by or on behalf of TXI’s Welfare Plans. 
  
 SECTION 5.10 Past Credit for Amounts Paid. Chaparral shall credit Chaparral Business Employees with any amounts paid under the TXI Welfare Plans
toward satisfaction of applicable deductible amounts and copayments, coinsurance and out-of-pocket maximums under the corresponding Welfare Plans maintained by Chaparral to the extent such payments would have been taken into account under the TXI
Welfare Plans. TXI shall provide Chaparral with copies of any records available to TXI to document such payments. 
  
 SECTION 5.11. Disability. 
  
 (a) Short-Term Disability Benefits. Chaparral shall be responsible for all claims for short-term disability benefits payable to Chaparral Business
Employees on or after the Distribution Date. TXI shall continue to be responsible after the Distribution Date to fund all claims for short-term disability benefits incurred by a Chaparral Business Employee prior to the Distribution Date. 

 
 (b) Long-Term Disability Benefits. Chaparral shall continue to be
responsible after the Cessation Time for all claims for long-term disability incurred prior to the Cessation Time by any Chaparral Business Employee who is absent from active employment due to a total disability, as defined in the Chaparral
disability plan, on or prior to the Cessation Time. Chaparral shall also assume and be responsible for long-term disability benefits for any Chaparral Business Employee who is receiving short-term disability benefits as of the Cessation Time and who
becomes eligible for long-term disability benefits thereafter. Chaparral shall assume and be solely responsible for all other claims for long-term disability payable after the Cessation Time with respect to any Chaparral Business Employee.

  
 SECTION 5.12 Cessation of Participation in TXI Non-ERISA
Benefit Arrangements. Except as otherwise provided in this Agreement or as required by the terms of any TXI Non-ERISA Benefit Arrangement, participation in TXI Non-ERISA Benefit Arrangements will cease for all Chaparral Business Employees as of
the Cessation Time. 
  
 SECTION 5.13 Assumption of Certain
Employee Related Obligations. Effective as of the Cessation Time, the Chaparral Parties shall assume, and none of the TXI Parties or any of their Affiliates shall have any further Liability for, the following agreements, obligations and
Liabilities; provided, however, that if any such agreement, obligation or Liability cannot be assumed by the Chaparral Parties for a reason beyond the control of the parties hereto, including the refusal of a third party to agree to such an
assumption, then the Chaparral Parties shall indemnify the TXI Parties and their Affiliates and hold them harmless with respect to such agreement, obligation or Liability, as though it had been assumed by the Chaparral Parties. 
  
 (a) Agreements entered into between TXI, its Subsidiaries or Affiliates and
Chaparral Business Employees. 
  
 (b) Agreements entered into
between TXI, its Subsidiaries or Affiliates and independent contractors providing services to the Chaparral Business. 
  
 (c) All confidentiality and non-compete agreements between TXI, its Subsidiaries or Affiliates and Chaparral Business Employees. 
  

 17 

 (d) All wages, salary, incentive compensation, commissions and bonuses payable to Chaparral Business
Employees after the Cessation Time except that TXI shall retain Liability for amounts payable to Chaparral Business Employees under all incentive plans for the 2005 fiscal year. 
  
 (e) Any severance payments owed, but not yet paid, to any Chaparral Business Employee whose employment terminated prior to
the Cessation Time. 
  
 (f) All moving expenses incurred by
Chaparral Business Employees in connection with the Distribution. 
  
 (g) All Liabilities and obligations whatsoever of the Chaparral Business with respect to claims made by or with respect to Chaparral Business Employees or any other persons who at any time prior to the Distribution Date had employment
duties primarily related to the Chaparral Business relating to Non-ERISA Benefit Arrangements with respect to the Chaparral Business and not otherwise retained or assumed by TXI pursuant to this Agreement, including such liabilities relating to
actions or omissions of or by Chaparral or any officer, director, employee or agent thereof prior to the Distribution Date. 
  
 SECTION 5.14 Equity Compensation Plans. 
  
 (a) Unexercisable Options. Each outstanding option to purchase TXI Common Stock that is held by a Chaparral Business Employee (a “TXI
Option”) shall, to the extent such TXI Option is not exercisable as of the Cessation Time, be cancelled and replaced with a substitute option granted by Chaparral to purchase from Chaparral shares of Chaparral Common Stock (a “Substitute
Option”). The number of shares of Chaparral Common Stock subject to each Substitute Option and the exercise price per share will be calculated in accordance with the following formulas: 
  
 Number of Substitute Options Shares = Number of TXI Option Shares /
(Post-Spin Chaparral Closing Price / Pre-Spin TXI Closing Price) 
  
 Exercise Price per Share = Post-Spin Chaparral Closing Price x Closing Price Ratio 
  
 where 
  
 “Number of
Substitute Option Shares” is the number of shares of Chaparral Common Stock subject to a Substitute Option that will be granted by Chaparral to a Chaparral Business Employee. Any fractional number will be rounded down to the next whole number.

  
 “Number of TXI Option Shares” is the number of
shares of TXI Common Stock subject to an unvested TXI Option held by a Chaparral Business Employee at the Cessation Time. 
  
 “Post-Spin Chaparral Closing Price” is the closing price of Chaparral Common Stock sold in the regular way on the first business day after the
Distribution Date. 
  
 “Pre-Spin TXI Closing Price” is
the closing price of TXI Common Stock sold in the regular way on the Distribution Date. 
  

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 “Exercise Price per Share” is the exercise price per share of a Substitute Option that will be
granted by Chaparral to a Chaparral Business Employee. 
  
 “Closing Price Ratio” is the exercise price per share of an unvested TXI Option divided by the Pre-Spin TXI Closing Price. 
  
 Employment or service credited by TXI and its Subsidiaries and Affiliates and Chaparral shall be taken into account in determining when such Substitute
Options become exercisable, and when they terminate. Except as otherwise provided herein, each substitute option shall be exercisable upon the same terms and conditions as were applicable under the related TXI Option immediately prior to the
Cessation Time. 
  
 (b) Exercisable Options. Each
outstanding TXI Option that is, or is scheduled to be, exercisable as of the Cessation Time shall remain exercisable following the Distribution Date, pursuant to its terms, only for the period during which such TXI Option remains exercisable
following the holder’s termination of employment with TXI, its Subsidiaries or Affiliates, provided that the number of shares of TXI Common Stock subject to each such TXI Option and the exercise price per share shall be adjusted in the same
manner as TXI adjusts options to purchase TXI Common Stock held by its other employees. 
  
 (c) Restricted Stock. In connection with the Distribution, the restrictions on each outstanding share of restricted stock held by a director of TXI who becomes a director of Chaparral shall lapse in accordance
with the terms of the applicable TXI equity compensation plan and award agreement. 
  
 (d) Chaparral Performance Share Plan. On the Distribution Date, Chaparral shall assume and be solely responsible for all obligations and Liabilities under any outstanding Chaparral Steel Company Performance
Share Agreement and Plan. 
  
 (e) TXI Common Stock Award
Plan. On the Distribution Date, Chaparral shall assume and be solely responsible for all obligations and Liabilities under any outstanding award under the Texas Industries, Inc. Common Stock Award Plan to Tommy A. Valenta and William H. Dickert.
Such awards to Mr. Valenta and Mr. Dickert shall be adjusted in the same manner as unexercisable stock options are adjusted pursuant to Section 5.14(a). TXI will retain sole responsibility for all obligations and Liabilities under any other
outstanding award under the Texas Industries, Inc. Common Stock Award Plan. 
  
 (f) Other Equity Awards. Except as provided in Sections 5.14(a) through (e), all outstanding equity compensation awards held by Chaparral Business Employees under the TXI equity compensation plans shall be
subject to the terms of such plans and applicable award agreements. 
  
 SECTION 5.15 Workers’ Compensation. Except as provided herein, Chaparral shall be solely responsible for all claims for workers’ compensation reported by a Chaparral Business Employee on or after the Distribution Date. TXI
shall continue to be responsible after the Distribution Date for administering all claims for workers’ compensation reported by a Chaparral Business Employee prior to the Distribution Date under the terms of any TXI workers’ compensation
policy or plan; however, Chaparral shall reimburse, and shall indemnify TXI, or its Subsidiaries or Affiliates, for any amounts payable under such claims. In accordance with Sections 5.20 and 8.6, TXI shall transfer, or cause to be transferred, to
Chaparral any accrued, unpaid liabilities related to such incurred claims or incurred but not reported claims which have been accrued by TXI, its Subsidiaries or Affiliates prior to the Distribution Date. Such accruals are intended to reflect claims
cost within the specified deductible amount stipulated in each relevant insurance policy for several past years with open claims. Any adjustments to the accruals required after the Distribution Date are the sole responsibility of Chaparral and will
be remitted as required by this Agreement in Sections 5.20 and 8.6. 
  

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 SECTION 5.16 Accrued Days Off. Chaparral shall recognize and assume all Liability for all
vacation, holiday, flex days and personal days off, including banked vacation, accrued by Chaparral Business Employees as of the Cessation Time, and Chaparral shall credit each Chaparral Business Employee with such days off accrual. 
  
 SECTION 5.17 Leaves of Absence. Chaparral shall establish leave of
absence policies which are substantially similar to the leave of absence policies maintained by TXI and will continue to apply such policies to inactive Chaparral Business Employees who are on an approved leave of absence as of the Distribution
Date. Chaparral Business Employees shall be eligible for leaves of absence after the Distribution Date to the same extent they would have been had they remained employed by TXI, its Subsidiaries or Affiliates. Leaves of absence taken by Chaparral
Business Employees prior to the Distribution Date shall be deemed to have been taken as employees of Chaparral. 
  
 SECTION 5.18 Defined Contribution and Defined Benefit Plans. 
  

	 	(a)	Employees’ Retirement Plan. 

  

	 	(i)	Establishment of Chaparral 401(k) Plan. Effective as of the Distribution Date, Chaparral shall adopt, establish and maintain a Pension Plan and trust qualified under
section 401(a) and section 501(a) of the Code (the “Chaparral 401(k) Plan”) that is substantially similar to the TXI Retirement Plan and trust (the “TXI 401(k) Plan”). Chaparral shall assume and thereafter be solely responsible
for all then existing or future employer Liabilities arising from or related to the Chaparral 401(k) Plan and the administration thereof. As soon as practicable after the adoption of the Chaparral 401(k) Plan, Chaparral shall submit an application
to the IRS for a determination regarding the qualification of the Chaparral 401(k) Plan and shall take any actions not inconsistent with Chaparral’s other general commitments contained in this Agreement and make any amendments necessary to
receive a favorable determination letter. 

  

	 	(ii)	Transfer of Account Balances. As soon as administratively practicable after the Distribution Date, the TXI 401(k) Plan will be split-up into the portion composed of
the assets allocable to the TXI Business Employees, and the portion composed of assets allocable to the Chaparral Business Employees. The portion of the TXI 401(k) Plan composed of assets allocable to the Chaparral Business Employees will then be
merged into the Chaparral 401(k) Plan. The assets which will be transferred in the merger to the Chaparral 401(k) Plan will include applicable TXI stock and Chaparral stock, and promissory notes evidencing outstanding loan balances of Chaparral
Business Employees, all in accordance with section 414(l) of the Code. Without limiting the generality of the foregoing, the transferred assets will remain subject to applicable qualified domestic relations orders (as defined in section 414(p) of
the Code). 

  

	 	(iii)	Company Contributions. Chaparral shall assume and be responsible for making the employer contributions to the Chaparral 401(k) Plan accounts of Chaparral Business
Employees for all calendar years beginning with 2005. The employer contributions for calendar year 2005 shall be calculated on the basis of Chaparral Business Employees’ income and contributions for calendar year 2005, regardless of whether
earned or paid before or after the Cessation Time. 

  

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	 	(b)	Financial Security Plan and Other Deferred Compensation. 

  

	 	(i)	Establishment of Chaparral Financial Security Plan. TXI maintains four plans that provide retirement benefits to a select group of management or highly paid employees,
including both TXI Business Employees and Chaparral Business Employees, collectively the “TXI Financial Security Plan” or “TXI FSP”. The TXI FSP has been adopted by Chaparral for the benefit if its pre-Distribution Date
employees, and Chaparral has full liability and responsibility to provide the benefits promised under the TXI FSP to such employees. Effective as of the Distribution Date, Chaparral shall withdraw from the TXI FSP, shall establish a form of
Financial Security Plan (the “Chaparral FSP”) that is substantially similar to the form of TXI FSP except that it shall provide benefits solely for Chaparral Business Employees. Effective on the Distribution Date TXI shall amend the TXI
FSP to exclude Chaparral Business Employees and to provide that the TXI FSP will provide benefits solely for the TXI Business Employees. 

  

	 	(ii)	Assumption of Existing Plans. Effective on the Distribution Date, Chaparral shall assume and thereafter be solely responsible for all then existing or future employer
Liabilities arising from or related to the Chaparral FSP’s covering any Chaparral Business Employees and the administration thereof. 

  

	 	(iii)	Transfer of Insurance Policies. As soon as administratively practicable after the Distribution Date, TXI shall transfer to Chaparral the life insurance policies on the
lives of Chaparral Business Employees who have benefits under the Chaparral FSP. In addition, Chaparral shall transfer to TXI any life insurance policies in which Chaparral is the beneficiary on the lives of TXI Business Employees whose TXI FSP
obligations are retained by TXI. 

  

	 	(iv)	Directors’ Deferred Compensation. TXI permits each of its directors (“TXI Director”) to annually defer a portion of his or her director fees pursuant to
a Deferred Compensation Agreement (“TXI Director’s Agreement”), and to, in effect, convert the amount of the deferred compensation into hypothetical TXI shares, with a corresponding number of actual TXI shares distributed upon the
applicable distribution date set froth in each such TXI Director’s Agreement. Effective on the Distribution Date, Chaparral shall assume and thereafter be solely responsible for all then existing or future Liabilities and administrative
responsibilities arising from or related to all TXI Director’s Agreements to which any TXI Director who becomes a Chaparral director (“Chaparral Director”) is a party, and such assumed TXI Director’s Agreements are hereafter
referred to as “Chaparral Director’s Agreements”. All of the Agreements will be amended, effective on the Distribution Date, to provide that (i) the additional hypothetical Chaparral shares credited under each TXI Director’s
Agreement as a result of the Distribution shall be converted to an equivalent value of TXI shares, and (ii) the hypothetical TXI shares credited under each Chaparral Director’s Agreement shall be converted to an equivalent value of hypothetical
Chaparral shares. As a result of such conversions, on the applicable distribution dates TXI Directors will receive only TXI shares and Chaparral Directors will receive only Chaparral shares. 

  
 SECTION 5.19 Past Service Credit. With respect to all Chaparral
Business Employees, Chaparral shall recognize all service, plan participation and membership recognized under TXI’s Welfare Plans, Non-ERISA Benefit Arrangements, retirement plans and programs including the TXI 401(k) Plan and the TXI FSP for
purposes of determining benefit eligibility, participation, vesting, and calculation of benefits under Chaparral’s Welfare Plans, Non-ERISA Benefit Arrangements, retirement plans and programs including the Chaparral 401(k) Plan, the Chaparral
FSP. TXI will provide to Chaparral copies of any records available to TXI to document such service, plan participation and membership and cooperate 
  

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 with Chaparral to resolve any discrepancies or obtain any missing data for purposes of determining benefit eligibility,
participation, vesting and calculation of benefits with respect to such Chaparral Business Employees. 
  
 SECTION 5.20 Reimbursement and Indemnification. The parties hereto agree to reimburse each other, within 30 days of receipt from the other party of
appropriate verification, for all costs and expenses which each may incur on behalf of the other as a result of any of the Welfare Plans, Pension Plans and Non-ERISA Benefit Arrangements and, as contemplated by Section 5.2, any termination or
severance payments or benefits. All Liabilities retained, assumed or indemnified against by Chaparral pursuant to this Article V shall be deemed Assumed Liabilities, and all Liabilities retained, assumed or indemnified against by TXI pursuant to
this Article V shall be deemed Retained Liabilities. 
  
 SECTION 5.21 Further Cooperation. The parties shall provide each other such records and information as may be necessary or appropriate to carry out their obligations under this Article V or for the purposes of administering
the Chaparral plans described herein, and they will cooperate in the filing of documents required by the transfer of assets and liabilities described herein. 
  
 ARTICLE VI 
 CERTAIN COVENANTS

  
 SECTION 6.1 Commercially Reasonable Efforts. Upon
the terms and subject to the conditions set forth in this Agreement, each of the Parties agrees to use all commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with
the other Parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including (i) the obtaining of all necessary actions
or non-actions, waivers, consents and approvals from Governmental Authorities and the making of all necessary registrations and filings (including filings with Governmental Authorities) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Authority, (ii) the obtaining of all necessary consents, approvals or waivers from third parties (“Third Party Consents”), (iii) the defending of
any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement, the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Authority vacated or reversed and (iv) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by this Agreement. 
  
 SECTION 6.2 Non-Assignable Contracts. If and to the extent that any
TXI Party is unable to obtain any consent, approval or amendment necessary for the transfer or assignment to any Chaparral Party of any Contract or other rights relating to the Chaparral Business that would otherwise be transferred or assigned to
such Chaparral Party as contemplated by this Agreement or any other agreement or document contemplated hereby, (i) such TXI Party shall continue to be bound thereby and the purported transfer or assignment to such Chaparral Party shall automatically
be deemed deferred until such time as all legal impediments are removed and all necessary consents have been obtained, and (ii) unless not permitted by the terms thereof or by law, the Chaparral Parties shall pay, perform and discharge fully all of
the obligations of the TXI Parties thereunder from and after the Distribution, or such earlier time as such transfer or assignment would otherwise have taken place, and indemnify the TXI Parties for all indemnifiable Losses arising out of such
performance by such Chaparral Party. The TXI Parties shall, without further consideration therefor, pay and remit to the applicable Chaparral Party promptly all monies, rights and other considerations received in respect of such performance. The TXI
Parties shall exercise or exploit their rights and options under all such Contracts and other rights, agreements and documents referred to in this Section 6.2 only as reasonably directed by Chaparral and at Chaparral’s expense. If and when any
such consent, approval or amendment shall be obtained or such Contract or other right or agreement shall otherwise become transferable or assignable or be able to be novated, the TXI Parties shall promptly assign or transfer and novate (to the
extent permissible) all of their rights and obligations thereunder to the applicable Chaparral Party without payment of further consideration, and the Chaparral 
  

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 Party shall, without the payment of any further consideration therefor, assume such rights and obligations. To the extent
that the transfer or assignment of any Contract or other right (or the proceeds thereof) pursuant to this Section 6.2 is prohibited by law or the terms thereof, this Section 6.2 shall operate to create a subcontract with the applicable Chaparral
Party to perform each relevant Contract or other right, agreement or document at a subcontract price equal to the monies, rights and other considerations received by the TXI Parties with respect to the performance by such Chaparral Party.

  
 SECTION 6.3 Novation of Assumed Liabilities; Release of
Guarantees. 
  
 (a) Except as otherwise specifically
provided in Section 2.8 with respect to Shared Contracts and elsewhere in this Agreement, it is expressly understood and agreed to by the Parties that upon the assumption by the Chaparral Parties of the Assumed Liabilities, the TXI Parties and their
respective officers, directors and employees shall be released unconditionally by the Chaparral Parties from any and all Liability, whether joint, several or joint and several, for the discharge, performance or observance of any of the Assumed
Liabilities, so that the Chaparral Parties will be solely responsible for such Assumed Liabilities. 
  
 (b) The Chaparral Parties, at the reasonable request of any TXI Party, shall use commercially reasonable efforts to obtain, or cause to be obtained, any
consent, approval, release, substitution or amendment required to novate (including with respect to any federal government contract) or assign all obligations under the Assumed Liabilities, or to obtain in writing the unconditional release of all
parties to such arrangements other than the Chaparral Parties. 
  
 (c) If a Chaparral Party is unable to obtain any such required consent, approval, release, substitution or amendment, the applicable TXI Party shall continue to be bound by such Assumed Liability and, unless not permitted by law or the
terms thereof, the Chaparral Parties shall, as agent or subcontractor for the TXI Parties, pay, perform and discharge fully all of the obligations or other Liabilities of the TXI Parties thereunder from and after the date hereof. The Chaparral
Parties shall indemnify and hold harmless the TXI Parties against any Liabilities arising in connection with such Assumed Liability. Except as otherwise set forth in this Agreement, the TXI Parties shall, without further consideration, pay and
remit, or cause to be paid or remitted, to the applicable Chaparral Party promptly the after-tax amount of all money, rights and other consideration received by it in respect of such performance (unless any such consideration is a Retained Asset).
If and when any such consent, approval, release, substitution or amendment shall be obtained or such Assumed Liability shall otherwise become assignable or be able to be novated, the applicable TXI Party shall thereafter assign, or cause to be
assigned, all of their rights, obligations and other Liabilities thereunder to the applicable Chaparral Party without payment of further consideration, and the Chaparral Parties shall, without the payment of any further consideration, assume such
rights and obligations. 
  
 SECTION 6.4 Further Assurances.

  
 (a) In addition to the actions specifically provided for
elsewhere in this Agreement, each of the Parties shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable laws,
regulations and agreements to consummate and make effective the Distribution and the other agreements and documents contemplated hereby. Without limiting the generality of the foregoing, each Party shall cooperate with the other Party to execute and
deliver, or use commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all consents, approvals or
authorizations of, any Governmental Authority or any other Person under any permit, license, Contract or other instrument, and to take all such other actions as such Party may reasonably be requested to take by the other Party from time to time,
consistent with the terms of this Agreement, in order to confirm the title of the Chaparral Parties to all of the Transferred Assets and the Chaparral Business, to put the applicable Chaparral Party in actual possession and 
  

 23 

 operating control thereof and to permit the applicable Chaparral Party to exercise all rights with
respect thereto and to effectuate the provisions and purposes of this Agreement and the other agreements and documents contemplated hereby or thereby. 
  
 (b) If any asset used principally in and reasonably necessary to the conduct of the Chaparral Business is not transferred to the applicable Chaparral
Party, or any asset used principally in and reasonably necessary to the conduct of the Retained Business is transferred to any Chaparral Party, TXI and Chaparral shall negotiate in good faith after the Distribution to determine whether such asset
should be transferred to a Chaparral Party or to a TXI Party, as the case may be, and the terms and conditions upon which such asset shall be made available to a Chaparral Party or to a TXI Party, as the case may be. Unless expressly provided to the
contrary in this Agreement or any Ancillary Agreement, if any Liability arising out of or relating to the Chaparral Business is retained by any TXI Party, or any Liability arising out of or relating to the Retained Business is assumed by any
Chaparral Party, TXI and Chaparral shall negotiate in good faith after the Distribution to determine whether such Liability should be transferred to a Chaparral Party or a TXI Party, as the case may be, and/or the terms and conditions upon which any
such Liability shall be transferred. 
  
 SECTION 6.5 Collection
of Accounts Receivable. 
  
 (a) Following the
Distribution, the TXI Parties shall be entitled to control all collection actions related to the Retained Business and the Chaparral Parties shall be entitled to control all collection actions related to the Chaparral Business, in each case
including the determination of what actions are necessary or appropriate and when and how to take any such action. 
  
 (b) If, after the Distribution, any Chaparral Party shall receive any remittance from any account debtors with respect to the accounts receivable arising
out of the Retained Business or other amounts due any TXI Party in respect of services rendered by any TXI Party, or any TXI Party shall receive any remittance from any account debtors with respect to the accounts receivable arising out of the
Chaparral Business or other amounts due any Chaparral Party in respect of services rendered by any Chaparral Party, such Party shall receive and deposit such remittance and hold the same for the benefit of the other Party. The Parties shall
reconcile any amounts held under this Section 6.5 on a weekly basis, with the difference between the amounts held by each Party for the benefit of the other being settled by a cash payment to be made as soon as practicable following such
reconciliation and, in any event, no later than five business days following the completion of such reconciliation. 
  
 (c) Each Party shall deliver to the other such schedules and other information with respect to accounts receivable as each shall reasonably request from
time to time in order to permit such Parties to reconcile their respective records and to monitor the collection of all accounts receivable. Each Party shall afford the other reasonable access to its books and records relating to any accounts
receivable. 
  
 SECTION 6.6 Election of Chaparral Board of
Directors. Prior to the Distribution, TXI agrees to vote all shares of Chaparral Common Stock held by it in favor of the nominees to the Board of Directors of Chaparral, as set forth on Schedule 6.6. 
  
 SECTION 6.7 Late Payments. Except as expressly provided to the
contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within 30
days of the date of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to the Prime Rate. 
  

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 SECTION 6.8 Registration and Listing. Prior to the Distribution: 
  
 (a) TXI and Chaparral shall cooperate with respect to the preparation of the
registration statement on Form 10, including such amendments or supplements thereto as may be necessary (together, the “Registration Statement”), to effect the registration of the Chaparral Common Stock under the Exchange Act. The
Registration Statement shall include or incorporate by reference an information statement to be sent by TXI to its stockholders in connection with the Distribution (the “Information Statement”). Chaparral and TXI shall use commercially
reasonable efforts to cause the Registration Statement to become and remain effective under the Exchange Act as soon as reasonably practicable. As soon as practicable, after the Record Date, TXI shall mail the Information Statement to the holders of
TXI Common Stock. 
  
 (b) The Parties shall use commercially
reasonable efforts to take all such action as may be necessary or appropriate under state and foreign securities and “Blue Sky” laws in connection with the transactions contemplated by this Agreement. 
  
 (c) TXI and Chaparral shall prepare, and Chaparral shall file and seek to
make effective, an application for the listing of the Chaparral Common Stock on the NASDAQ National Market, subject to official notice of issuance. TXI shall, to the extent commercially reasonable, give notice of the Record Date in compliance with
Rule 10b-17 of the Securities Exchange Act of 1934, as amended. 
  
 (d) The Parties shall cooperate in preparing, filing with the SEC and causing to become effective any registration statements or amendments thereto that are necessary or appropriate in order to effect the transactions contemplated hereby or
to reflect the establishment of, or amendments to, any employee benefit plans contemplated hereby. 
  
 SECTION 6.9 No Noncompetition. After the Distribution, either Party may, except as otherwise provided in the Ancillary Agreements, (i) engage in
the same or similar activities or lines of business as the other Party or (ii) do business, or refrain from doing business, with any potential or actual supplier or customer of the other Party. 
  
 SECTION 6.10 Litigation. 
  
 (a) As of the Distribution, the Chaparral Parties shall assume and, except
as provided in Article VIII, pay all Liabilities that may result from the Assumed Actions and all fees and costs relating to the defense of the Assumed Actions, including attorneys’ fees and costs incurred after the Distribution. “Assumed
Actions” means those cases, claims and investigations (in which any TXI Party or any Affiliate of a TXI Party, other than a Chaparral Party, is a defendant or the party against whom the claim or investigation is directed) primarily related to
the Chaparral Business, including those listed on Schedule 6.10(a). 
  
 (b) The TXI Parties shall transfer the Transferred Actions to Chaparral, and Chaparral shall receive and have the benefit of all of the proceeds of such Transferred Actions. “Transferred Actions” means those cases and claims (in
which any TXI Party or any of its Affiliates is a plaintiff or claimant) primarily relating to the Chaparral Business, including those listed on Schedule 6.10(b). 
  
 (c) Each Party agrees that at all times from and after the Distribution, if an Action is commenced by a third party naming
both Parties as defendants thereto and with respect to which one Party is a nominal defendant, then the other Party shall use commercially reasonable efforts to cause such nominal defendant to be removed from such Action. 
  
 SECTION 6.11 Signs; Use of Company Name. Prior to December 31, 2005,
Chaparral shall remove (or, if necessary, on an interim basis cover up) any and all exterior and interior signs and identifiers on the Transferred Assets that refer or pertain to TXI, any TXI Party or the Retained Business, in the case 

 

 25 

 of Chaparral, or that refer or pertain to Chaparral, any Chaparral Party or the Chaparral Business on the Retained
Assets, in the case of TXI. Such removal shall be at the expense of the Party that owns the signs. After such period, (i) the Chaparral Parties shall not use or display the names “Texas Industries”, “TXI” or any variations
thereof, or other Trademarks, trade names, logos or identifiers using any of such names or otherwise owned by or licensed to any TXI Party that have not been assigned or licensed to a Chaparral Party, and (ii) the TXI Parties shall not use or
display the name “Chaparral” or any variations thereof, or other Trademarks, trade names, logos or identifiers using any of such names or otherwise owned by or licensed to any Chaparral Party that have not been assigned or licensed to a
TXI Party (collectively, the “Non-Permitted Names”), without the prior written consent of the other Party; provided, however, that notwithstanding the foregoing, nothing contained in this Agreement shall prevent either Party from using the
other’s name in public filings with Governmental Authorities, materials intended for distribution to either Party’s stockholders or any other communication in any medium that describes the relationship between the Parties, including
materials distributed to employees relating to the transition of employee benefit plans; provided further that Chaparral shall be permitted to use its inventories of packaging and promotional materials and other supplies existing on the date hereof
that bear the TXI name or logo until June 30, 2006. 
  
 SECTION
6.12 Transition Services. Although neither Party is aware of any transition services that either Party will be required to provide to the other after the Distribution, for a period of one year after the Distribution if either Party discovers
that it requires the continuation of any service that had been provided by the other Party prior to the Distribution, each Party will negotiate in good faith an agreement to provide such services. Such agreement will provide that such services will
be provided for up to two years after the Distribution at a price and on terms that could be obtained on an arms length basis from an independent third party. Such services may include the licensing of any intellectual property rights owned by one
Party and used by the other Party prior to the Distribution. 
  
 ARTICLE VII 
 CONDITIONS TO THE DISTRIBUTION 
  
 The obligation of TXI to effect the Distribution is subject to the satisfaction or the waiver by TXI of each of the following conditions:

  
 SECTION 7.1 Consummation of Pre-Distribution
Transactions. The pre-Distribution transactions contemplated by Article II of this Agreement shall have been consummated in all material respects. 
  
 SECTION 7.2 Effectiveness of Registration Statement; No Stop Order. The Registration Statement shall have been declared effective by the SEC, and
no stop order suspending the effectiveness of the Registration Statement shall have been initiated or, to the knowledge of either of the Parties, threatened by the SEC. 
  
 SECTION 7.3 Approval of NASDAQ Listing Application. The Chaparral Common Stock to be distributed in the Distribution
shall have been approved for listing on the NASDAQ National Market, subject to official notice of issuance. 
  
 SECTION 7.4 Approval by TXI Board of Directors. This Agreement and the transactions contemplated hereby, including the declaration of the
Distribution and a determination that TXI has sufficient surplus for the dividend in accordance with Section 170 of the Delaware General Corporation Law, shall have been duly approved by the Board of Directors of TXI in accordance with applicable
law and the Restated Certificate of Incorporation, as amended, and By-Laws of TXI. 
  

 26 

 SECTION 7.5 Receipt of Tax Opinion. TXI’s Board of Directors shall have received an opinion
satisfactory to it of its tax counsel which shall not have been rescinded, substantially to the effect that the Contribution will qualify as a tax-free transaction for federal income tax purposes under Section 368(a)(1)(D) of the Code, that the
Distribution will qualify as a tax-free distribution for federal income tax purposes under Section 355 of the Code, and that no income, gain or loss will be recognized by TXI, Chaparral or the TXI stockholders as a result of the Contribution or the
Distribution. 
  
 SECTION 7.6 Consents. 
  
 (a) All Material Governmental Approvals and Consents required to permit the
valid consummation of the Distribution shall have been obtained without any conditions being imposed that would have a material adverse effect on TXI or Chaparral. 
  
 (b) TXI shall have obtained the Third Party Consents that shall be required in connection with the Distribution or
Contribution, including any consents required from holders of TXI’s 10 1/4% Senior Notes due 2011 (to the
extent not theretofore repaid), except those for which the failure to obtain such consents, approvals or waivers would not, in the reasonable opinion of TXI, individually or in the aggregate have a material adverse effect on TXI, Chaparral or the
consummation of the Distribution or Contribution. 
  
 SECTION 7.7 No Other Events. No other events or developments shall have occurred that, in the judgment of the TXI Board of Directors, would result in the Distribution having a material adverse effect on TXI or its stockholders.

  
 SECTION 7.8 No Actions. No action, suit or proceeding
shall have been instituted or threatened by or before any court or quasi-judicial or administrative agency of any federal, state, local or foreign jurisdiction or before any arbitrator to restrain, enjoin or otherwise prevent the Distribution or the
other transactions contemplated by this Agreement (including a stop order with respect to the effectiveness of the Registration Statement), and no order, injunction, judgment, ruling or decree issued by any court of competent jurisdiction shall be
in effect restraining the Distribution or such other transactions. 
  
 SECTION 7.9 Compliance with State and Foreign Securities and “Blue Sky” Laws. The Parties shall have taken all such action as may be necessary or appropriate under state and foreign securities and “blue sky” laws
in connection with the Distribution. 
  
 SECTION 7.10
Resignations. Prior to the Distribution, all of TXI’s designees shall have resigned or been removed as officers and from all Boards of Directors or similar governing bodies of all Chaparral Parties and all of Chaparral’s designees
shall have resigned or been removed as officers and from all Boards of Directors or similar governing bodies of all TXI Parties. 
  
 SECTION 7.11 Dissemination of Information to TXI Stockholders. Prior to the Distribution, the Parties shall have prepared and mailed to the holders
of TXI Common Stock such information concerning Chaparral, its business, operations and management, the Distribution and such other matters as TXI shall reasonably determine and as may be required by law. 
  
 SECTION 7.12 Ancillary Agreements. Each of the Ancillary Agreements
shall have been executed and delivered, and each of such agreements shall be in full force and effect. 
  
 SECTION 7.13 Satisfaction of Conditions. The satisfaction of the foregoing conditions are for the sole benefit of TXI and shall not give rise to or
create any duty on the part of TXI or the TXI Board of Directors to waive or not waive any such condition, to effect the Distribution or in any way limit TXI’s power of termination set forth in Section 13.12. 
  

 27 

 ARTICLE VIII 
 INSURANCE MATTERS 
  
 SECTION 8.1 Insurance Prior to the Distribution Date. Except as may otherwise be expressly provided in this Article VIII, the TXI Parties and their Affiliates shall not have any Liability whatsoever as a result of the insurance
policies and practices of TXI and its Subsidiaries and Affiliates in effect at any time prior to the Distribution Date, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy and the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise. 
  
 SECTION 8.2 Ownership of Existing Policies and Programs. TXI or one or more of the other TXI Parties shall continue to own all property damage and
business interruption, and liability insurance policies and programs, including, without limitation, primary and excess general liability, executive liability, automobile, workers’ compensation, property damage and business interruption, crime
and surety insurance policies, in effect on or before the Distribution Date (collectively, the “TXI Policies” and individually, a “TXI Policy”). Subject to the provisions of this Agreement, the TXI Parties shall retain all of
their respective rights, benefits and privileges, if any, under the TXI Policies. Nothing contained herein shall be construed to be an attempted assignment of or a change to any part of the ownership of the TXI Policies. With respect to any claim
relating to the Chaparral Business or the Transferred Assets, TXI shall have sole responsibility for claims administration and financial administration of the TXI Policies and such administration shall be governed solely by the terms of Sections 8.5
and 8.6. 
  
 SECTION 8.3 Maintenance of Insurance for
Chaparral. Through the Distribution Date, TXI will maintain in full force and effect its existing insurance to the extent that it applies to the Transferred Assets or the Chaparral Business. 
  
 SECTION 8.4 Acquisition and Maintenance of Post-Distribution Insurance by
Chaparral. Commencing on and as of the Distribution Date, Chaparral shall be responsible for establishing and maintaining separate property damage and business interruption and liability insurance policies and programs (including, primary and
excess general liability, executive liability, automobile, workers’ compensation, property damage and business interruption, crime, surety and other similar insurance policies) for activities and claims involving any Chaparral Party or any of
their Affiliates, the Chaparral Business and the Transferred Assets, in each case with commercially reasonable limits and deductibles. Each of the Chaparral Parties and its Affiliates, as appropriate, shall be responsible for all administrative and
financial matters relating to insurance policies established and maintained by the Chaparral Parties for such claims relating to any period on or after the Distribution. 
  
 SECTION 8.5 Property Damage and Business Interruption Insurance Claims Administration for Pre-Distribution Claims.
For property damage and business interruption Losses related to the Transferred Assets or the Chaparral Business which occur prior to the Distribution Date, TXI shall have the sole right, responsibility and authority to prepare and process
claims, including claims that are to be paid by the TXI Parties in whole or in part because of insurance or reinsurance in support of property damage and business interruption insurance maintained by TXI prior to the Distribution Date. Any amounts
received by TXI with respect to any such unresolved claims in existence on the Distribution Date that are settled subsequent to the Distribution Date shall be paid to Chaparral within five (5) business days of receipt thereof by TXI. 
  
 SECTION 8.6 Liability and Workers Compensation Insurance Claims
Administration for Pre-Distribution Claims. The TXI Parties shall have the sole right, responsibility and authority for liability and workers compensation claims administration and financial administration of pre-Distribution claims that relate
to or affect the TXI Policies or that are uninsured due to the terms of the TXI Policies. Upon notification by a Chaparral Party of a claim relating to a Chaparral Party under one or more of the TXI Policies, TXI shall cooperate with Chaparral in
asserting and pursuing coverage and payment for such claim by the appropriate insurance carrier(s). In asserting and pursuing such coverage and payment, and 
  

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 subject to Section 10.6, TXI shall have sole power and authority to make binding decisions, determinations, commitments
and stipulations on its own behalf and on behalf of the Chaparral Parties, which decisions, determinations, commitments and stipulations shall be final and conclusive if reasonably made to maximize the overall economic benefit of the TXI Policies.
The Chaparral Parties shall assume responsibility for, and shall pay to the appropriate insurance carriers or other Persons, any premiums, retrospectively-rated premiums, defense costs, indemnity payments, deductibles, retentions or uninsured costs
arising from liability or workers compensation Losses which are uninsured because of coverage terms or conditions of the policies covering such Losses, or other charges (collectively, “Insurance Charges”) whenever arising, which shall
become due and payable under the terms and conditions of any applicable TXI Policy in respect of any Liabilities, Losses, claims, Actions or occurrences, whenever arising or becoming known, arising out of the ownership, use or operation of any of
the assets, businesses, operations or Liabilities of any Chaparral Party or any of its Affiliates, when the same relate to the period prior to, on or after the Distribution Date. To the extent that the terms of any applicable TXI Policy provide that
any TXI Party shall have an obligation to pay or guarantee the payment of any Insurance Charges relating to any Chaparral Party, TXI shall be entitled to demand that Chaparral make such payment directly to the Person entitled thereto. In connection
with any such demand, TXI shall submit to Chaparral a copy of any invoice or listing of claims received by TXI pertaining to such Insurance Charges together with appropriate supporting documentation. In the event that Chaparral fails to pay any such
Insurance Charges when due and payable, whether at the request of the Person entitled to payment or upon demand by TXI, the TXI Parties may (but shall not be required to) pay such Insurance Charges for and on behalf of the Chaparral Parties and,
thereafter, Chaparral Parties shall forthwith reimburse TXI for such payment within 30 days. Subject to the other provisions of this Article VIII, the retention by TXI of the TXI Policies and the responsibility for claims administration and
financial administration of such policies are in no way intended to limit, inhibit or preclude any right of Chaparral, TXI or any other insured to insurance coverage for any insured claims under the TXI Policies. 
  
 SECTION 8.7 Non-Waiver of Rights to Coverage. An insurance carrier
that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto, or, solely by virtue of the provisions of this Article VIII, have any subrogation rights with respect thereto. No insurance carrier
or any third party shall be entitled to a benefit (i.e. a benefit they would not be entitled to receive had no Distribution occurred or in the absence of the provisions of this Article VIII) by virtue of the provisions hereof. 
  
 SECTION 8.8 Scope of Affected Policies of Insurance. The provisions of
this Article VIII relate solely to matters involving property, damage and business interruption, and liability insurance policies and programs, including, without limitation, primary and excess general liability, executive liability, automobile,
workers’ compensation, property damage and business interruption, crime and surety insurance policies, and shall not be construed to affect any obligation of or impose any obligation on the Parties with respect to any life, health and accident,
dental or medical or any other insurance policies applicable to any of the officers, directors, employees or other representatives of the Parties or their Affiliates. 
  
 ARTICLE IX 
 EXPENSES 
  
 SECTION 9.1 Allocation of
Expenses. Except as otherwise provided in this Agreement or any other agreement contemplated hereby, or as otherwise agreed to in writing by the Parties, all fees and expenses incurred in connection with the transactions contemplated hereby or
thereby, other than the Debt Issuance Costs, shall be paid by TXI. Specifically, (i) TXI shall absorb all of the costs associated with the dedication of internal resources and personnel to the transactions contemplated hereby at all times prior to
the Distribution Date, and (ii) TXI shall pay all fees and expenses that are related directly to the implementation of the Distribution transactions on or prior to the Distribution Date. Chaparral shall pay all Debt Issuance Costs. All fees and
expenses incurred after the Distribution Date shall be paid by the party incurring such fees and expenses. 
  

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 ARTICLE X 
 INDEMNIFICATION 
  
 SECTION 10.1 Release of Pre-Distribution Claims. 
  
 (a) Except as provided in Section 10.1(b), effective as of the Distribution Date, each Party does hereby, on behalf of itself and its respective Subsidiaries and Affiliates, successors and assigns and all Persons who at any time prior to
the Distribution Date have been shareholders, directors, officers, agents or employees of either Party (in each case, in their respective capacities as such), remise, release and forever discharge the other Party, its respective Subsidiaries and
Affiliates, successors and assigns and all Persons who at any time prior to the Distribution Date have been shareholders, directors, officers, agents or employees of such Party (in each case, in their respective capacities as such), and their
respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or
otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution Date, including in
connection with the transactions and all other activities to implement the Distribution. 
  
 (b) Nothing contained in Section 10.1(a) shall impair any right of any Person identified in Section 10.1(a) to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or
understandings that are specified in Section 2.7 or the Schedule thereto not to terminate as of the Distribution Date, in each case in accordance with its terms. Nothing contained in Section 10.1(a) shall release any Person from: 
  

	 	(i)	any Liability provided in or resulting from any agreement of the Parties that is specified in Section 2.7 or the Schedule thereto as not to terminate as of the Distribution Date, or
any other Liability specified in Section 2.7 as not to terminate as of the Distribution Date; 

  

	 	(ii)	any Liability, contingent or otherwise, assumed, transferred, assigned, retained or allocated to a Party, its Subsidiaries or Affiliates in accordance with, or any other Liability
of any Party, its Subsidiaries or Affiliates under this Agreement; 

  

	 	(iii)	any Liability that any Indemnified Party may have with respect to indemnification or contribution pursuant to this Agreement for claims brought against the Parties or their
respective Subsidiaries or Affiliates by third Persons, which Liability shall be governed by the provisions of this Article X and, if applicable, the appropriate provisions of the Ancillary Agreements. 

  
 (c) Neither Party shall make, nor permit any of its Subsidiaries or
Affiliates to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against the other Party, or any other Person released pursuant to Section 10.1(a), with respect to
any Liability released pursuant to Section 10.1(a). 
  
 (d) It is
the intent of each of the Parties by virtue of the provisions of this Section 10.1 to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to
have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Distribution Date, between the Parties (including any contractual agreements or arrangements existing or alleged to exist between the
Parties on or before the Distribution Date), except as expressly set forth in Section 10.1(b). At any time, at the reasonable request of either Party, the other Party shall execute and deliver releases reflecting the provisions hereof. 

 

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 SECTION 10.2 Indemnification by Chaparral. Except as provided in Section 10.5 and except as
expressly provided in the Ancillary Agreements, Chaparral shall, and shall cause each of the other Chaparral Parties to, indemnify, defend and hold harmless the TXI Parties and each of their Affiliates, directors, officers, employees and agents, and
each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “TXI Indemnified Parties”), from and against any and all Expenses or Losses incurred or suffered by one or more of the TXI Indemnified Parties,
in connection with, relating to, arising out of or due to, directly or indirectly, any of the following items: 
  
 (a) any claim that the information relating to a Chaparral Party included in the Registration Statement, the Information Statement or the Offering
Memorandum is or was false or misleading with respect to any material fact or omits or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading, regardless of whether the occurrence, action or other event giving rise to the applicable matter took place prior to or subsequent to the Distribution Date; 
  
 (b) the Chaparral Business as conducted before, on or after the Distribution
Date; 
  
 (c) the Transferred Assets; 
  
 (d) the Assumed Liabilities; and 
  
 (e) the breach by any Chaparral Party of any covenant or agreement set forth
in this Agreement, any Ancillary Agreement or any Conveyancing Instrument, 
  
 in each case, regardless of when or where the loss, claim, accident, occurrence, event or happening giving rise to the Expense or Loss took place, or whether any such loss, claim, accident, occurrence, event or
happening is known or unknown, or reported or unreported. 
  
 SECTION 10.3 Indemnification by TXI. Except as provided in Section 10.5 and except as expressly provided in the Ancillary Agreements, TXI shall indemnify, defend and hold harmless the Chaparral Parties and each of their Affiliates,
directors, officers, employees and agents, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Chaparral Indemnified Parties”), from and against any and all Expenses or Losses incurred or
suffered by one or more of the Chaparral Indemnified Parties in connection with, relating to, arising out of or due to, directly or indirectly, any of the following items: 
  
 (a) any claim that the information relating to TXI (but excluding information relating to Chaparral) included in the
Registration Statement, the Information Statement or the Offering Memorandum is or was false or misleading with respect to any material fact or omits or omitted to state any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading, regardless of whether the occurrence, action or other event giving rise to the applicable matter took place prior to or subsequent to the Distribution
Date; 
  
 (b) the business (other than the Chaparral Business)
conducted by the TXI Parties or predecessors before, on or after the Distribution Date; 
  
 (c) the assets owned by the TXI Parties other than the Transferred Assets; 
  
 (d) the Liabilities (including the Retained Liabilities) of the TXI Parties other than the Assumed Liabilities; 
  

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 (e) the breach by any TXI Party of any covenant or agreement set forth in this Agreement, any Ancillary
Agreement or any Conveyancing Instrument; 
  
 regardless of when
or where the loss, claim, accident, occurrence, event or happening giving rise to the Expense or Loss took place, or whether any such loss, claim, accident, occurrence, event or happening is known or unknown, or reported or unreported. 

 
 SECTION 10.4 Applicability of and Limitation on Indemnification.
EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE INDEMNITY OBLIGATION UNDER THIS ARTICLE X SHALL APPLY NOTWITHSTANDING ANY INVESTIGATION MADE BY OR ON BEHALF OF ANY INDEMNIFIED PARTY AND SHALL APPLY WITHOUT REGARD TO WHETHER THE LOSS, LIABILITY, CLAIM,
DAMAGE, COST OR EXPENSE FOR WHICH INDEMNITY IS CLAIMED HEREUNDER IS BASED ON STRICT LIABILITY, ABSOLUTE LIABILITY, ANY OTHER THEORY OF LIABILITY OR ARISES AS AN OBLIGATION FOR CONTRIBUTION. 
  
 SECTION 10.5 Adjustment of Indemnifiable Losses. 
  
 (a) The amount that any Party or any of its Affiliates (an
“Indemnifying Party”) is required to pay to any Person entitled to indemnification hereunder (an “Indemnified Party”) shall be reduced by any insurance proceeds and other amounts actually recovered by or on behalf of such
Indemnified Party in reduction of the related Expense or Loss. If an Indemnified Party receives a payment (an “Indemnity Payment”) required by this Agreement from an Indemnifying Party in respect of any Expense or Loss and subsequently
actually receives insurance proceeds or other amounts in respect of such Expense or Loss, then such Indemnified Party shall pay to the Indemnifying Party a sum equal to the lesser of (1) the after-tax amount of such Insurance Proceeds or other
amounts actually received or (2) the net amount of Indemnity Payments actually received previously. The Indemnified Party agrees that the Indemnifying Party shall be subrogated to such Indemnified Party under any insurance policy. 
  
 (b) An insurer who would otherwise be obligated to pay any claim shall not
be relieved of the responsibility with respect thereto, or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto. 
  
 (c) Indemnity Payments (i) shall be increased to take into account any Tax Costs incurred by the Indemnified Party arising
from any Indemnity Payments from the Indemnifying Party and (ii) shall be reduced to take into account any Tax Benefit received by the Indemnified Party arising from the incurrence or payment of any Indemnity Payment. 
  
 (d) Amounts paid by TXI to or for the benefit of Chaparral, or by Chaparral
to or for the benefit of TXI, under this Article X (and under other specified provisions of this Agreement) shall be treated by the Parties, for all applicable tax purposes, as adjustments to the amount of Transferred Assets. 
  
 SECTION 10.6 Procedures for Indemnification of Third Party Claims.

  
 (a) If any third party shall make any claim or commence
any arbitration proceeding or suit (collectively, a “Third Party Claim”) against any one or more of the Indemnified Parties with respect to which an Indemnified Party intends to make any claim for indemnification against any Chaparral
Party under Section 10.2 or against TXI Party under Section 10.3, such Indemnified Party shall promptly give written notice to the Indemnifying Party describing such Third Party Claim in reasonable detail. Notwithstanding the foregoing, the failure
of any Indemnified Party to provide notice in accordance with this Section 10.6(a) shall not relieve the related Indemnifying Party of its obligations under this Article X, except to the extent that such Indemnifying Party is actually prejudiced by
such failure to provide notice. 
  

 32 

 (b) The Indemnifying Party shall have 30 days after receipt of the notice referred to in Section 10.6(a)
to notify the Indemnified Party that it elects to conduct and control the defense of such Third Party Claim. If the Indemnifying Party does not give the foregoing notice, the Indemnified Party shall have the right to defend, contest, settle or
compromise such Third Party Claim in the exercise of its exclusive discretion subject to the provisions of Section 10.6(c), and the Indemnifying Party shall, upon request from any of the Indemnified Parties, promptly pay to such Indemnified Parties
in accordance with the other terms of this Section 10.6(b) the amount of any Expense or Loss resulting from their Liability to the third party claimant. If the Indemnifying Party gives the foregoing notice, the Indemnifying Party shall have the
right to undertake, conduct and control, through counsel reasonably acceptable to the Indemnified Party, and at its sole expense, the conduct and settlement of such Third Party Claim, and the Indemnified Party shall cooperate with the Indemnifying
Party in connection therewith, provided that (i) the Indemnifying Party shall not thereby permit any lien, encumbrance or other adverse charge to thereafter attach to any asset of any Indemnified Party; (ii) the Indemnifying Party shall not thereby
permit any injunction against any Indemnified Party; (iii) the Indemnifying Party shall permit the Indemnified Party and counsel chosen by the Indemnified Party and reasonably acceptable to the Indemnifying Party to monitor such conduct or
settlement and shall provide the Indemnified Party and such counsel with such information regarding such Third Party Claim as either of them may reasonably request (which request may be general or specific), but the fees and expenses of such counsel
chosen by the Indemnified Party (including allocated costs of in-house counsel and other personnel) shall be borne by the Indemnified Party unless (A) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (B) the named parties to any such Third Party Claim include the Indemnified Party and the Indemnifying Party and in the reasonable opinion of counsel to the Indemnified Party representation of both parties by the same counsel would
be inappropriate due to actual or likely conflicts of interest between them, in either of which cases the reasonable fees and disbursements of counsel for such Indemnified Party (including allocated costs of in-house counsel and other personnel)
shall be paid by the Indemnified Party; and (iv) the Indemnifying Party shall agree promptly to reimburse to the extent required under this Article X the Indemnified Party for the full amount of any Expense or Loss resulting from such Third Party
Claim and all related expenses incurred by the Indemnified Party. In no event shall the Indemnifying Party, without the prior written consent of the Indemnified Party, settle or compromise any claim or consent to the entry of any judgment that does
not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party a release from all Liability in respect of such claim. 
  
 If the Indemnifying Party shall not have undertaken the conduct and control of the defense of any Third
Party Claim as provided above, the Indemnifying Party shall nevertheless be entitled through counsel chosen by the Indemnifying Party and reasonably acceptable to the Indemnified Party to monitor the conduct or settlement of such claim by the
Indemnified Party, and the Indemnified Party shall provide the Indemnifying Party and such counsel with such information regarding such Third Party Claim as either of them may reasonably request (which request may be general or specific), but all
costs and expenses incurred in connection with such monitoring shall be borne by the Indemnifying Party. 
  
 (c) So long as the Indemnifying Party is contesting any such Third Party Claim in good faith, the Indemnified Party shall not pay or settle any such Third
Party Claim. Notwithstanding the foregoing, the Indemnified Party shall have the right to pay or settle any such Third Party Claim, provided that in such event the Indemnified Party shall waive any right to indemnity therefor by the Indemnifying
Party, and no amount in respect thereof shall be claimed as an Expense or a Loss under this Article X. 
  
 If the Indemnified Party determines in its reasonable good faith judgment that the Indemnifying Party is not contesting such Third Party
Claim in good faith, the Indemnified Party shall have the right to undertake control of the defense of such Third Party Claim upon five days written notice to the Indemnifying Party and thereafter to defend, contest, settle or compromise such Third
Party Claim in the exercise of its exclusive discretion. 
  

 33 

 If the Indemnified Party shall have undertaken the conduct and control of the defense of
any Third Party Claim as provided above, the Indemnified Party, on not less than 45 days prior written notice to the Indemnifying Party, may make settlement (including payment in full) of such Third Party Claim, and such settlement shall be binding
upon the Parties for the purposes hereof, unless within said 45-day period the Indemnifying Party shall have requested the Indemnified Party to contest such Third Party Claim at the expense of the Indemnifying Party. In such event, the Indemnified
Party shall promptly comply with such request and the Indemnifying Party shall have the right to direct the defense of such claim or any litigation based thereon subject to all of the conditions of Section 10.6(b). Notwithstanding anything in this
Section 10.6(c) to the contrary, if the Indemnified Party, in the good-faith belief that a claim may materially and adversely affect it other than as a result of money damages or other money payments, advises the Indemnifying Party that it has
determined to settle a claim, the Indemnified Party shall have the right to do so at its own cost and expense, without any requirement to contest such claim at the request of the Indemnifying Party, but without any right under the provisions of this
Article X for indemnification by the Indemnifying Party. 
  
 (d)
To the extent that, with respect to any claim governed by the Tax Sharing Agreement, there is any inconsistency between the provisions of the Tax Sharing Agreement and this Section 10.6, the provisions of the Tax Sharing Agreement shall control with
respect to such claim. 
  
 SECTION 10.7 Procedures for
Indemnification of Direct Claims. Any claim for indemnification on account of an Expense or a Loss made directly by the Indemnified Party against the Indemnifying Party and that does not result from a Third Party Claim shall be asserted by
written notice from the Indemnified Party to the Indemnifying Party specifically claiming indemnification hereunder. Such Indemnifying Party shall have a period of 45 days after the receipt of such notice within which to respond thereto. If such
Indemnifying Party does not respond within such 45-day period, such Indemnifying Party shall be deemed to have accepted responsibility to make payment and shall have no further right to contest the validity of such claim. If such Indemnifying Party
does respond within such 45-day period and rejects such claim in whole or in part, such Indemnified Party shall be free to pursue resolution as provided in Article XI. 
  
 SECTION 10.8 Contribution. If the indemnification provided for in this Article X is unavailable to an Indemnified
Party in respect of any Expense or Loss arising out of or related to information contained in the Registration Statement, the Information Statement or the Offering Memorandum, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Expense or Loss in such proportion as is appropriate to reflect the relative fault of the Chaparral Indemnified Parties, on the one hand, or the TXI
Indemnified Parties, on the other hand, in connection with the statements or omissions that resulted in such Expense or Loss. The relative fault of any Chaparral Indemnified Party, on the one hand, and of any TXI Indemnified Party, on the other
hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission of a material fact relates to information supplied by the Chaparral Business or a
Chaparral Indemnified Party, on the one hand, or by the Retained Business or a TXI Indemnified Party, on the other hand. 
  
 SECTION 10.9 Remedies Cumulative. The remedies provided in this Article X shall be cumulative and, subject to the provisions of Article XI, shall
not preclude assertion by an Indemnified Party of any other rights or the seeking of any and all other remedies against any Indemnifying Party. 
  

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 SECTION 10.10 Survival. All covenants and agreements of the Parties contained in this Agreement,
including those relating to indemnification, shall survive the Distribution Date indefinitely, unless a specific survival or other applicable period is expressly set forth herein. 
  
 ARTICLE XI 
 DISPUTE RESOLUTION 
  
 SECTION 11.1 Escalation
and Mediation. 
  
 (a) The Parties agree to use commercially
reasonable efforts to resolve expeditiously any dispute, controversy or claim between them with respect to the matters covered hereby that may arise from time to time on a mutually acceptable negotiated basis. In furtherance of the foregoing, any
Party involved in a dispute, controversy or claim may deliver a notice (an “Escalation Notice”) demanding an in-person meeting involving representatives of the Parties at a senior level of management of the Parties. A copy of any such
Escalation Notice shall be given to the General Counsel, or like officer or official, of each Party involved in the dispute, controversy or claim (which copy shall state that it is an Escalation Notice pursuant to this Agreement). Any agenda,
location or procedures for such discussions or negotiations between the Parties may be established by the Parties from time to time; provided, however, that the Parties shall use commercially reasonable efforts to meet within 30 days of the
Escalation Notice. 
  
 (b) The Parties may agree to retain a
mediator, acceptable to both Parties, to aid the Parties in their discussions and negotiations by informally providing advice to the Parties. Any opinion expressed by the mediator shall be strictly advisory and shall not be binding on the Parties,
nor shall any opinion expressed by the mediator be admissible in any action or proceeding. The mediator shall be selected by the Party that did not deliver the applicable Escalation Notice from the list of individuals to be supplied to the Parties
by the American Arbitration Association or such other entity as may be mutually agreeable to the Parties. Costs of the mediator shall be borne equally by the Parties involved in the matter, except that each Party shall be responsible for its own
expenses. 
  
 SECTION 11.2 Continuity of Service and
Performance. Unless otherwise agreed in writing, the Parties will continue to provide service and honor all other commitments under this Agreement and each Ancillary Agreement during the course of dispute resolution pursuant to the provisions of
this Article XI with respect to all matters not subject to such dispute, controversy or claim. 
  
 SECTION 11.3 Choice of Forum. Any mediation hereunder shall take place in Dallas, Texas, unless otherwise agreed in writing by the Parties. 
  
 SECTION 11.4 Ability to Pursue Other Legal Remedies. For the avoidance of doubt, nothing in this Article XI shall
prevent any Party from pursuing any and all remedies available to it in connection with a dispute relating to this Agreement or any of the Ancillary Agreements. 
  

ARTICLE XII 
 ACCESS TO INFORMATION
AND SERVICES 
  
 SECTION 12.1 Agreement for Exchange of
Information. 
  
 (a) At all times from and after the
Distribution Date for a period of seven years, as soon as reasonably practicable after written request: (i) the TXI Parties shall afford to the Chaparral Parties and their authorized accountants, counsel and other designated representatives
reasonable access during normal business hours, at Chaparral’s expense and provide copies of, all records, books, contracts, instruments, data, documents and other information (collectively, “Information”) in the possession or under
the control of the TXI Parties immediately following the Distribution Date 
  

 35 

 that relates to Chaparral, the Chaparral Business, the Chaparral Business Employees or tax returns
required to be filed by Chaparral; and (ii) the Chaparral Parties shall afford to the TXI Parties and their authorized accountants, counsel and other designated representatives reasonable access during normal business hours to, or, at TXI’s
expense, provide copies of, all Information in the possession or under the control of the Chaparral Parties immediately following the Distribution Date that relates to TXI, the Retained Business, the employees of TXI or tax returns required to be
filed by TXI; provided, however, that in the event that either Party determines that any such provision of or access to Information could violate any law or agreement or waive any attorney-client privilege, the Parties shall take all reasonable
measures to permit the compliance with such obligations in a manner that avoids any such harm or consequence. 
  
 (b) Either Party may request Information under Section 12.1(a): (i) to comply with reporting, disclosure, filing or other requirements imposed on the
requesting party (including under applicable securities or tax laws) by a Governmental Authority having jurisdiction over the requesting party, (ii) for use in any other judicial, regulatory, administrative, tax or other proceeding or in order to
satisfy audit, accounting, claims defense, regulatory filings, litigation, tax or other similar requirements, (iii) for use in compensation, benefit or welfare plan administration or other bona fide business purposes or (iv) to comply with its
obligations under this Agreement or any Ancillary Agreement. 
  
 SECTION 12.2 Ownership of Information. Any Information owned by one Party that is provided to a requesting Party pursuant to Section 12.1 shall be deemed to remain the property of the providing Party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed to grant or confer rights of license or otherwise in any such Information. 
  
 SECTION 12.3 Compensation for Providing Information. The Party requesting Information agrees to reimburse the providing Party for the reasonable
costs, if any, of creating, gathering and copying such Information, to the extent that such costs are incurred for the benefit of the requesting Party. Except as otherwise specifically provided in this Agreement, such costs shall be computed in
accordance with the providing Party’s standard methodology and procedures. 
  
 SECTION 12.4 Retention of Records. To facilitate the possible exchange of Information pursuant to this Article XII after the Distribution Date, the Parties agree to use commercially reasonable efforts to retain
all Information in their respective possession or control on the Distribution Date in accordance with the policies and procedures of TXI as in effect on the Distribution Date or such other procedures as may reasonably be adopted by the applicable
Party after the Distribution Date. No party will destroy, or permit any of its Subsidiaries or Affiliates to destroy, any Information that the other Party may have the right to obtain pursuant to this Agreement prior to the seventh anniversary of
the date hereof, and thereafter without first using commercially reasonable efforts to notify the other Party of the proposed destruction and giving the other Party the opportunity to take possession of such Information prior to such destruction;
provided, however, that in the case of any Information relating to taxes, the provisions of the Tax Sharing Agreement shall apply. 
  
 SECTION 12.5 Limitation of Liability. No Party shall have any Liability to the other Party (i) if any Information exchanged or provided pursuant to
this Agreement that is an estimate or forecast, or that is based on an estimate or forecast, is found to be inaccurate, in the absence of gross negligence or willful misconduct by the Party providing such Information, or (ii) if any Information is
destroyed after commercially reasonable efforts to comply with the provisions of Section 12.4. 
  
 SECTION 12.6 Production of Witnesses. At all times from and after the Distribution Date, each Party shall use commercially reasonable efforts to make available to the other Party (without cost other than
reimbursement of actual out-of-pocket expenses to, and upon prior written request of, the other Party) its directors, officers, employees and agents as witnesses to the extent that the same may reasonably be required by the other Party in connection
with any legal, administrative or other proceeding in which the requesting Party may from time to time be involved with respect to the Chaparral Business, the Retained Business or any transactions contemplated hereby. 
  

 36 

 SECTION 12.7 Confidentiality. 
  
 (a) From and after the Distribution Date, each of TXI and Chaparral shall hold, and shall cause their respective
Subsidiaries, Affiliates, directors, officers, employees, agents, consultants, advisors and other representatives to hold, in strict confidence, with at least the same degree of care that applies to TXI’s confidential and proprietary
information pursuant to policies in effect as of the Distribution Date or such other procedures as may reasonably be adopted by the applicable Party after the Distribution Date, all non-public information concerning or belonging to the other Party
or any of its Subsidiaries or Affiliates obtained by it prior to the Distribution Date, accessed by it pursuant to Section 12.1, or furnished to it by the other Party or any of its Subsidiaries or Affiliates pursuant to this Agreement or any
agreement or document contemplated hereby, including, without limitation, any trade secrets, technology, know-how and other non-public, proprietary intellectual property rights licensed pursuant to the Intellectual Property License Agreements and
shall not release or disclose such information to any other Person, except their representatives, who shall be bound by the provisions of this Section 12.7; provided, however, that TXI and Chaparral and their Subsidiaries, Affiliates, respective
directors, officers, employees, agents, consultants, advisors and other representatives may disclose such information if, and only to the extent that, (i) a disclosure of such information is compelled by judicial or administrative process or, in the
opinion of such Party’s counsel, by other requirements of law (in which case the disclosing Party will provide, to the extent practicable under the circumstances, advance written notice to the other Party of its intent to make such disclosure),
or (ii) such Party can show that such information (A) is published or is or otherwise becomes available to the general public or is in the public domain without breach of this Agreement; (B) has been furnished or made known to the recipient without
any obligation to keep it confidential by a third party under circumstances which are not known to the recipient to involve a breach of the third party’s obligations to a Party hereto; (C) was developed independently of information furnished to
the recipient under this Agreement; or (D) in the case of information furnished after the Distribution Date, was not known to the recipient at the time of the Distribution but became known to the recipient prior to the time of receipt thereof from
the other Party. 
  
 (b) Each Party acknowledges that the other
Party would not have an adequate remedy at law for the breach by the acknowledging Party of any one or more of the covenants contained in this Section 12.7 and agrees that, in the event of such breach, the other Party may, in addition to the other
remedies that may be available to it, apply to a court for an injunction to prevent breaches of this Section 12.7 and to enforce specifically the terms and provisions of this Section. Notwithstanding any other Section hereof, the provisions of this
Section 12.7 shall survive the Distribution Date indefinitely. 
  
 SECTION 12.8 Privileged Matters. 
  
 (a) Each of
TXI and Chaparral agrees to maintain, preserve and assert all privileges, including, without limitation, privileges arising under or relating to the attorney-client relationship (which shall include without limitation the attorney-client and work
product privileges), not heretofore waived, that relate to the Chaparral Business, the Retained Business, the Assumed Liabilities, the Retained Liabilities, the Transferred Assets and the Retained Assets for any period prior to the Distribution Date
(“Privilege” or “Privileges”). Each Party acknowledges and agrees that any costs associated with asserting any Privilege shall be borne by the Party requesting that such privilege be asserted. Each Party agrees that it shall not
waive any Privilege that could be asserted under applicable law without the prior written consent of the other Party. The rights and obligations created by this Section 12.8 shall apply to all information as to which, but for the Distribution,
either Party would have been entitled to assert or did assert the protection of a Privilege (“Privileged Information”), including without limitation, (i) any and all information 
  

 37 

 generated prior to the Distribution Date but which, after the Distribution, is in the possession of
either Party; and (ii) all information generated, received or arising after the Distribution Date that refers to or relates to Privileged Information generated, received or arising prior to the Distribution Date. 
  
 (b) Upon receipt by either Party of any subpoena, discovery or other request
that may call for the production or disclosure of Privileged Information or if either Party obtains knowledge that any current or former employee of a TXI Party or a Chaparral Party has received any subpoena, discovery or other request that may call
for the production or disclosure of Privileged Information, such Party shall notify promptly the other Party of the existence of the request and shall provide the other Party a reasonable opportunity to review the information and to assert any
rights it may have under this Section 12.8 or otherwise to prevent the production or disclosure of Privileged Information. Each Party agrees that it will not produce or disclose any information that may be covered by a Privilege under this Section
12.8 unless (i) the other Party has provided its written consent to such production or disclosure (which consent shall not be unreasonably withheld), or (ii) a court of competent jurisdiction has entered a final, nonappealable order finding that the
information is not entitled to protection under any applicable Privilege. 
  
 (c) TXI’s transfer of books and records and other information to Chaparral, and TXI’s agreement to permit Chaparral to possess Privileged Information existing or generated prior to the Distribution Date, are
made in reliance on Chaparral’s agreement, as set forth in Sections 12.7 and 12.8, to maintain the confidentiality of Privileged Information and to assert and maintain all applicable Privileges. The access to information being granted pursuant
to Section 12.1, the agreement to provide witnesses and individuals pursuant to Section 12.6 and the transfer of Privileged Information to Chaparral pursuant to this Agreement shall not be deemed a waiver of any Privilege that has been or may be
asserted under this Section 12.8 or otherwise. Nothing in this Agreement shall operate to reduce, minimize or condition the rights granted to TXI in, or the obligations imposed upon Chaparral by, this Section 12.8. 
  
 ARTICLE XIII 
 MISCELLANEOUS 
  
 SECTION 13.1 Entire Agreement. This Agreement and the Ancillary Agreements, including the Schedules and Exhibits referred to herein and therein and the documents delivered pursuant hereto and thereto,
constitute the entire agreement between the Parties with respect to the subject matter contained herein or therein, and supersede all prior agreements, negotiations, discussions, understandings, writings and commitments between the Parties with
respect to such subject matter. 
  
 SECTION 13.2 Choice of Law
and Forum. This Agreement shall be governed by and construed and enforced in accordance with the substantive laws of the State of Texas and the federal laws of the United States of America applicable therein, as though all acts and omissions
related hereto occurred in Texas. 
  
 SECTION 13.3
Amendment. Prior to the Distribution Date, this Agreement and the Ancillary Agreements may be amended or supplemented by TXI in its sole discretion. After the Distribution Date, this Agreement and the Ancillary Agreements shall not be amended or
supplemented except by a written instrument signed by an authorized representative of each of the Parties. 
  
 SECTION 13.4 Waiver. Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the Party or
Parties entitled to the benefit thereof. Any such waiver shall be validly and sufficiently given for the purposes of this Agreement if, as to any Party, it is in writing signed by an authorized representative of such Party. The failure of any Party
to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, or in any way to affect the validity of this Agreement or any part hereof or the right of any Party thereafter to enforce each and every
such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach. 
  

 38 

 SECTION 13.5 Partial Invalidity. Wherever possible, each provision hereof shall be interpreted in
such a manner as to be effective and valid under applicable law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such provision or provisions shall
be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such provision or provisions or any other provisions hereof, unless such a construction would be
unreasonable. 
  
 SECTION 13.6 Execution in Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original instrument, but all of which shall be considered one and the same agreement, and shall become binding when one or more counterparts have been
signed by and delivered to each of the Parties. 
  
 SECTION
13.7 Successors and Assigns. This Agreement and each Ancillary Agreement shall be binding upon and inure to the benefit of the Parties hereto and thereto, respectively, and their successors and permitted assigns; provided, however, that the
rights of either Party under this Agreement and each Ancillary Agreement shall not be assignable by such Party without the prior written consent of the other Party. The successors and permitted assigns hereunder shall include, without limitation,
any permitted assignee as well as the successors in interest to such permitted assignee (whether by merger, liquidation (including successive mergers or liquidations) or otherwise). 
  
 SECTION 13.8 Third Party Beneficiaries. Except to the extent otherwise provided in Article X or in any Ancillary
Agreement, the provisions of this Agreement and each Ancillary Agreement are solely for the benefit of the Parties and their respective Affiliates, successors and permitted assigns and shall not confer upon any third Person any remedy, claim,
Liability, reimbursement or other right in excess of those existing without reference to this Agreement or any Ancillary Agreement. Nothing in this Agreement or any Ancillary Agreement shall obligate TXI or Chaparral to assist any Chaparral Business
Employee to enforce any rights such employee may have with respect to any of the employee benefits described in this Agreement. 
  
 SECTION 13.9 Notices. All notices, requests, claims, demands and other communications required or permitted hereunder shall be in writing and shall
be deemed given or delivered (i) when delivered personally, (ii) if transmitted by facsimile when confirmation of transmission is received, (iii) if sent by registered or certified mail, postage prepaid, return receipt requested, on the third
business day after mailing or (iv) if sent by private courier when received; and shall be addressed as follows: 
  
 If to TXI, to: 
  
 TXI Industries, Inc. 
 1341 W. Mockingbird
Lane 
 Dallas, Texas 75247 
 Attention: General Counsel 
 Facsimile: 972/647-3320 
  
 If to Chaparral, to: 
  
 Chaparral Steel Company 
 300 Ward Road

 Midlothian, Texas 76065 
 Attention: General Counsel 
 Facsimile: 972/775-1930 
  

 39 

 or to such other address as such Party may indicate by a notice delivered to the other Party. 
  
 SECTION 13.10 Performance. Each Party shall cause to be performed, and
hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party. 
  
 SECTION 13.11 No Public Announcement. Neither TXI nor Chaparral shall, without the approval of the other, make any press release or other public
announcement concerning the transactions contemplated by this Agreement, except as and to the extent that any such Party shall be so obligated by law or the rules of any stock exchange or quotation system, in which case the other Party shall be
advised and the Parties shall use commercially reasonable efforts to cause a mutually agreeable release or announcement to be issued; provided, however, that the foregoing shall not preclude communications or disclosures necessary to implement the
provisions of this Agreement or to comply with the accounting and SEC disclosure obligations or the rules of any stock exchange. 
  
 SECTION 13.12 Termination. Notwithstanding any provisions hereof, this Agreement may be terminated and the Distribution abandoned at any time prior
to the Distribution Date by and in the sole discretion of the Board of Directors of TXI without the prior approval of any Person. In the event of such termination, this Agreement shall forthwith become void and no Party shall have any Liability to
any Person by reason of this Agreement. 
  
 SECTION
13.13 Limitation of Liability. In no event shall any TXI Party be liable to any Chaparral Party or any Chaparral Party be liable to any TXI Party for any special, consequential, indirect, incidental or punitive damages or lost profits, however
caused and on any theory of liability (including negligence) arising in any way out of this Agreement, whether or not such party has been advised of the possibility of such damages; provided, however, that the foregoing limitations shall not limit
each Party’s indemnification obligations for Liabilities to third parties as set forth in Article X. 
  

 40 

 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their authorized representatives as
of the date first above written. 
  

			
	TEXAS INDUSTRIES, INC.
		
	By	 	 /s/ Mel G. Brekhus

	Name:	 	Mel G. Brekhus
	Title:	 	President and Chief Executive Officer
	
	CHAPARRAL STEEL COMPANY
		
	By	 	 /s/ J. Celtyn Hughes

	Name:	 	J. Celtyn Hughes
	Title:	 	Vice President and Chief Financial Officer

  

 41Tax Sharing and Indemnification Agreement

 Exhibit 10.2 
  
 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; 

 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. 

 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; 
  
 (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. 

 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. 

 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. 

 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. 

 (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. 

 (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. 

 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. 
  
 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. 

 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. 

 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.

 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] 

 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

	Name:	 	Richard M. Fowler
	Title:	 	Executive Vice President – Finance and Chief
	 	 	Financial Officer

 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

	Name:	 	J. Celtyn Hughes
	Title:	 	Vice President and Chief Financial Officer

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