Document:

Exhibit 10.2

CREDIT AGREEMENT

Dated as of June 30, 2005

among

TEXAS INDUSTRIES, INC.,
 as the Borrower,

BANK OF AMERICA, N.A.,
 as Administrative Agent, Swing Line Lender
 and
 L/C Issuer,

UBS SECURITIES LLC,
 as Syndication Agent,

JPMORGAN CHASE BANK, N.A.,
 WELLS FARGO BANK, NATIONAL ASSOCIATION,
 and
 SUNTRUST BANK,
 as Co-Documentation Agents,

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,
 as
 Sole Lead Arranger and Sole Book Manager

TABLE OF CONTENTS

	
  
Section
  	
   
 	
   
 	
  
Page
  
	
  

  	
   
 	
   
 	
  

  
	
  ARTICLE I.
  	
  
 
  	
  
DEFINITIONS   AND ACCOUNTING TERMS
  	
  
1
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
1.01
  	
  
 
  	
  
Defined   Terms
  	
  
1
  
	
  
 
  	
  
1.02
  	
  
 
  	
  
Other   Interpretive Provisions
  	
  
27
  
	
   
  	
  
1.03
  	
  
 
  	
  
Accounting   Terms.
  	
  
27
  
	
  
 
  	
  
1.04
  	
  
 
  	
  
Rounding
  	
  
28
  
	
  
 
  	
  
1.05
  	
  
 
  	
  
Times of Day
  	
  
28
  
	
  
 
  	
  
1.06
  	
  
 
  	
  
Letter of   Credit Amounts
  	
  
28
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  ARTICLE II.
  	
  
 
  	
  
THE   COMMITMENTS AND CREDIT EXTENSIONS
  	
  
28
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
2.01
  	
  
 
  	
  
Revolving   Loans
  	
  
28
  
	
  
 
  	
  
2.02
  	
  
 
  	
  
Borrowings,   Conversions and Continuations of Loans.
  	
  
29
  
	
  
 
  	
  
2.03
  	
  
 
  	
  
Letters of   Credit.
  	
  
30
  
	
   
  	
  
2.04
  	
  
 
  	
  
Swing Line   Loans.
  	
  
39
  
	
  
 
  	
  
2.05
  	
  
 
  	
  
Prepayments.
  	
  
42
  
	
  
 
  	
  
2.06
  	
  
 
  	
  
Termination   or Reduction of Commitments
  	
  
44
  
	
  
 
  	
  
2.07
  	
  
 
  	
  
Repayment of   Loans.
  	
  
44
  
	
  
 
  	
  
2.08
  	
  
 
  	
  
Interest.
  	
  
45
  
	
   
  	
  
2.09
  	
  
 
  	
  
Fees
  	
  
46
  
	
  
 
  	
  
2.10
  	
  
 
  	
  
Computation   of Interest and Fees
  	
  
46
  
	
  
 
  	
  
2.11
  	
  
 
  	
  
Evidence of   Debt.
  	
  
47
  
	
  
 
  	
  
2.12
  	
  
 
  	
  
Payments   Generally; Administrative Agent’s Clawback.
  	
  
47
  
	
  
 
  	
  
2.13
  	
  
 
  	
  
Sharing of   Payments by Lenders
  	
  
49
  
	
   
  	
  
2.14
  	
  
 
  	
  
Collateral
  	
  
50
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
ARTICLE III.
  	
  
 
  	
  
TAXES, YIELD   PROTECTION AND ILLEGALITY
  	
  
51
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
3.01
  	
  
 
  	
  
Taxes.
  	
  
51
  
	
   
  	
  
3.02
  	
  
 
  	
  
Illegality
  	
  
53
  
	
  
 
  	
  
3.03
  	
  
 
  	
  
Inability to   Determine Rates
  	
  
53
  
	
  
 
  	
  
3.04
  	
  
 
  	
  
Increased   Costs; Reserves on Eurodollar Rate Loans.
  	
  
53
  
	
  
 
  	
  
3.05
  	
  
 
  	
  
Compensation   for Losses
  	
  
55
  
	
  
 
  	
  
3.06
  	
  
 
  	
  
Mitigation   Obligations; Replacement of Lenders.
  	
  
56
  
	
   
  	
  
3.07
  	
  
 
  	
  
Survival
  	
  
56
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
ARTICLE IV.
  	
  
 
  	
  
CONDITIONS   PRECEDENT TO CREDIT EXTENSIONS
  	
  
56
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
4.01
  	
  
 
  	
  
Conditions   of Initial Credit Extension
  	
  
56
  
	
   
  	
  
4.02
  	
  
 
  	
  
Conditions   to all Credit Extensions
  	
  
59
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
ARTICLE V.
  	
  
 
  	
  
REPRESENTATIONS   AND WARRANTIES
  	
  
60
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
5.01
  	
  
 
  	
  
Existence,   Qualification and Power; Compliance with Laws
  	
  
60
  
	
   
  	
  
5.02
  	
  
 
  	
  
Authorization;   No Contravention
  	
  
60
  
	
  
 
  	
  
5.03
  	
  
 
  	
  
Governmental   Authorization; Other Consents
  	
  
60
  
	
  
 
  	
  
5.04
  	
  
 
  	
  
Binding   Effect
  	
  
60
  

-i-

	
  
 
  	
  
5.05
  	
  
 
  	
  
Financial   Statements; No Material Adverse Effect; No Internal Control Event.
  	
  
60
  
	
   
  	
  
5.06
  	
  
 
  	
  
Litigation
  	
  
61
  
	
  
 
  	
  
5.07
  	
  
 
  	
  
No Default
  	
  
61
  
	
  
 
  	
  
5.08
  	
  
 
  	
  
Ownership of   Property; Liens
  	
  
61
  
	
  
 
  	
  
5.09
  	
  
 
  	
  
Environmental   Compliance
  	
  
62
  
	
  
 
  	
  
5.10
  	
  
 
  	
  
Insurance
  	
  
62
  
	
   
  	
  
5.11
  	
  
 
  	
  
Taxes
  	
  
63
  
	
  
 
  	
  
5.12
  	
  
 
  	
  
ERISA   Compliance
  	
  
63
  
	
  
 
  	
  
5.13
  	
  
 
  	
  
Subsidiaries;   Equity Interests
  	
  
64
  
	
  
 
  	
  
5.14
  	
  
 
  	
  
Margin   Regulations; Investment Company Act; Public Utility Holding Company Act.
  	
  
64
  
	
  
 
  	
  
5.15
  	
  
 
  	
  
Disclosure
  	
  
64
  
	
   
  	
  
5.16
  	
  
 
  	
  
Compliance   with Laws
  	
  
64
  
	
  
 
  	
  
5.17
  	
  
 
  	
  
Intellectual   Property; Licenses, Etc
  	
  
65
  
	
  
 
  	
  
5.18
  	
  
 
  	
  
Common   Enterprise
  	
  
65
  
	
  
 
  	
  
5.19
  	
  
 
  	
  
Solvent
  	
  
65
  
	
  
 
  	
  
5.20
  	
  
 
  	
  
Security   Interests
  	
  
65
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
ARTICLE VI.
  	
  
 
  	
  
AFFIRMATIVE   COVENANTS
  	
  
66
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
6.01
  	
  
 
  	
  
Financial   Statements
  	
  
66
  
	
  
 
  	
  
6.02
  	
  
 
  	
  
Certificates;   Other Information
  	
  
67
  
	
   
  	
  
6.03
  	
  
 
  	
  
Notices
  	
  
69
  
	
  
 
  	
  
6.04
  	
  
 
  	
  
Payment of   Obligations
  	
  
69
  
	
  
 
  	
  
6.05
  	
  
 
  	
  
Preservation   of Existence, Etc
  	
  
70
  
	
  
 
  	
  
6.06
  	
  
 
  	
  
Maintenance   of Properties
  	
  
70
  
	
  
 
  	
  
6.07
  	
  
 
  	
  
Maintenance   of Insurance
  	
  
70
  
	
   
  	
  
6.08
  	
  
 
  	
  
Compliance   with Laws
  	
  
70
  
	
  
 
  	
  
6.09
  	
  
 
  	
  
Books and   Records
  	
  
70
  
	
  
 
  	
  
6.10
  	
  
 
  	
  
Inspection   Rights
  	
  
71
  
	
  
 
  	
  
6.11
  	
  
 
  	
  
Use of   Proceeds
  	
  
71
  
	
  
 
  	
  
6.12
  	
  
 
  	
  
Further Assurances
  	
  
71
  
	
   
  	
  
6.13
  	
  
 
  	
  
Additional   Subsidiaries
  	
  
71
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
ARTICLE VII.
  	
  
 
  	
  
NEGATIVE   COVENANTS
  	
  
71
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
7.01
  	
  
 
  	
  
Liens
  	
  
72
  
	
   
  	
  
7.02
  	
  
 
  	
  
Investments
  	
  
72
  
	
  
 
  	
  
7.03
  	
  
 
  	
  
Debt
  	
  
73
  
	
  
 
  	
  
7.04
  	
  
 
  	
  
Fundamental   Changes
  	
  
74
  
	
  
 
  	
  
7.05
  	
  
 
  	
  
Dispositions
  	
  
74
  
	
  
 
  	
  
7.06
  	
  
 
  	
  
Restricted   Payments
  	
  
75
  
	
   
  	
  
7.07
  	
  
 
  	
  
Change in Nature   of Business
  	
  
76
  
	
  
 
  	
  
7.08
  	
  
 
  	
  
Transactions   with Affiliates
  	
  
76
  
	
  
 
  	
  
7.09
  	
  
 
  	
  
Burdensome   Agreements
  	
  
76
  
	
  
 
  	
  
7.10
  	
  
 
  	
  
Use of   Proceeds
  	
  
76
  
	
  
 
  	
  
7.11
  	
  
 
  	
  
Financial   Covenants.
  	
  
76
  

-ii-

	
  
 
  	
  
7.12
  	
  
 
  	
  
Sale and   Leaseback
  	
  
76
  
	
  
 
  	
  
7.13
  	
  
 
  	
  
Sale or   Discount of Receivables
  	
  
77
  
	
  
 
  	
  
7.14
  	
  
 
  	
  
Debt   Modifications
  	
  
77
  
	
  
 
  	
  
7.15
  	
  
 
  	
  
Debt   Payments
  	
  
77
  
	
   
  	
  
7.16
  	
  
 
  	
  
Capital   Expenditures
  	
  
77
  
	
  
 
  	
  
7.17
  	
  
 
  	
  
Centralized   Cash Management Program
  	
  
78
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
ARTICLE   VIII.
  	
  
 
  	
  
EVENTS OF   DEFAULT AND REMEDIES
  	
  
78
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
   
  	
  
8.01
  	
  
 
  	
  
Events of   Default
  	
  
78
  
	
  
 
  	
  
8.02
  	
  
 
  	
  
Remedies   Upon Event of Default
  	
  
80
  
	
  
 
  	
  
8.03
  	
  
 
  	
  
Application   of Funds
  	
  
81
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
ARTICLE IX.
  	
  
 
  	
  
ADMINISTRATIVE   AGENT
  	
  
82
  
	
   
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
9.01
  	
  
 
  	
  
Appointment   and Authority.
  	
  
82
  
	
  
 
  	
  
9.02
  	
  
 
  	
  
Rights as a   Lender
  	
  
82
  
	
  
 
  	
  
9.03
  	
  
 
  	
  
Exculpatory   Provisions
  	
  
82
  
	
  
 
  	
  
9.04
  	
  
 
  	
  
Reliance by   Administrative Agent.
  	
  
83
  
	
   
  	
  
9.05
  	
  
 
  	
  
Delegation   of Duties
  	
  
83
  
	
  
 
  	
  
9.06
  	
  
 
  	
  
Resignation   of Administrative Agent
  	
  
84
  
	
  
 
  	
  
9.07
  	
  
 
  	
  
Non-Reliance   on Administrative Agent and Other Lenders
  	
  
85
  
	
  
 
  	
  
9.08
  	
  
 
  	
  
No Other   Duties, Etc
  	
  
85
  
	
  
 
  	
  
9.09
  	
  
 
  	
  
Administrative   Agent May File Proofs of Claim
  	
  
85
  
	
   
  	
  
9.10
  	
  
 
  	
  
Collateral   and Guaranty Matters
  	
  
86
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
ARTICLE X.
  	
  
 
  	
  
MISCELLANEOUS
  	
  
86
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
10.01
  	
  
 
  	
  
Amendments,   Etc
  	
  
86
  
	
   
  	
  
10.02
  	
  
 
  	
  
Notices;   Effectiveness; Electronic Communication.
  	
  
88
  
	
  
 
  	
  
10.03
  	
  
 
  	
  
No Waiver;   Cumulative Remedies
  	
  
90
  
	
  
 
  	
  
10.04
  	
  
 
  	
  
Expenses;   Indemnity; Damage Waiver.
  	
  
90
  
	
  
 
  	
  
10.05
  	
  
 
  	
  
Payments Set   Aside
  	
  
92
  
	
  
 
  	
  
10.06
  	
  
 
  	
  
Successors   and Assigns.
  	
  
93
  
	
   
  	
  
10.07
  	
  
 
  	
  
Treatment of   Certain Information; Confidentiality
  	
  
97
  
	
  
 
  	
  
10.08
  	
  
 
  	
  
Right of   Setoff
  	
  
98
  
	
  
 
  	
  
10.09
  	
  
 
  	
  
Interest   Rate Limitation
  	
  
98
  
	
  
 
  	
  
10.10
  	
  
 
  	
  
Counterparts;   Integration; Effectiveness
  	
  
99
  
	
  
 
  	
  
10.11
  	
  
 
  	
  
Survival of   Representations and Warranties
  	
  
99
  
	
   
  	
  
10.12
  	
  
 
  	
  
Severability
  	
  
99
  
	
  
 
  	
  
10.13
  	
  
 
  	
  
Replacement   of Lenders
  	
  
99
  
	
  
 
  	
  
10.14
  	
  
 
  	
  
Governing   Law; Jurisdiction; Etc.
  	
  
100
  
	
  
 
  	
  
10.15
  	
  
 
  	
  
Waiver of   Jury Trial
  	
  
101
  
	
  
 
  	
  
10.16
  	
  
 
  	
  
USA PATRIOT   Act Notice
  	
  
102
  
	
   
  	
  
10.17
  	
  
 
  	
  
ENTIRE   AGREEMENT
  	
  
102
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
SIGNATURES
  	
  
 
  	
  
 
  	
  
S-1
  

-iii-

	
  
SCHEDULES
  	
  
 
  	
  
 
  	
   
 
	
   
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
1.01
  	
  
 
  	
  
Existing   Letters of Credit
  	
   
 
	
  
 
  	
  
2.01
  	
  
 
  	
  
Commitments   and Applicable Percentages
  	
   
 
	
  
 
  	
  
5.13
  	
  
 
  	
  
Subsidiaries;   Other Equity Investments; Equity Interests in the Borrower
  	
   
 
	
  
 
  	
  
7.01
  	
  
 
  	
  
Existing   Liens
  	
   
 
	
   
  	
  
7.02(d)
  	
  
 
  	
  
Existing   Investments
  	
   
 
	
  
 
  	
  
7.03(c)
  	
  
 
  	
  
Existing   Debt
  	
   
 
	
  
 
  	
  
10.02
  	
  
 
  	
  
Administrative   Agent’s Office; Certain Addresses for Notices
  	
   
 
	
  
 
  	
  
10.06
  	
  
 
  	
  
Processing   and Recordation Fees
  	
   
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  EXHIBITS
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
 
  	
  
 
  	
  
Form of
  	
   
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
A
  	
  
 
  	
  
Assignment   and Assumption
  	
   
 
	
  
 
  	
  
B
  	
  
 
  	
  
Compliance   Certificate
  	
   
 
	
   
  	
  
C
  	
  
 
  	
  
Guaranty
  	
   
 
	
  
 
  	
  
D
  	
  
 
  	
  
Opinion   Matters
  	
   
 
	
  
 
  	
  
E
  	
  
 
  	
  
Revolving   Loan Note
  	
   
 
	
  
 
  	
  
F
  	
  
 
  	
  
Revolving   Loan Notice
  	
   
 
	
  
 
  	
  
G
  	
  
 
  	
  
Security   Agreement
  	
   
 
	
   
  	
  
H
  	
  
 
  	
  
Swing Line   Loan Notice
  	
   
 
	
  
 
  	
  
I
  	
  
 
  	
  
Swing Line   Note
  	
   
 

-iv-

CREDIT AGREEMENT

          This CREDIT AGREEMENT (“Agreement”) is entered into as of June 30, 2005, among TEXAS INDUSTRIES, INC., a Delaware corporation (the “Borrower”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

          The Borrower has requested that the Lenders provide a revolving credit facility, and the Lenders are willing to do so on the terms and conditions set forth herein.

          In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I.
 DEFINITIONS AND ACCOUNTING TERMS

          1.01   Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

          “Account” has the meaning assigned to such term in the UCC, and also means receivables from the sale of royalty income from the CemStar process.

          “Acquisition” means the acquisition by any Person of (a) a majority of the Equity Interests of another Person, (b) all or substantially all of the assets of another Person or any operating division of another Person or (c) all or substantially all of a line of business of another Person, in each case whether or not involving a merger or consolidating with such other Person.

          “Acquisition Consideration” means the consideration given by the Borrower or any of its Subsidiaries for an Acquisition, including but not limited to the sum of (without duplication) (a) the fair market value of any cash, property (other than Equity Interests issued in respect of such Acquisition) or services given, plus (b) the amount of any Debt assumed, incurred or guaranteed (to the extent not otherwise included) in connection with such Acquisition by the Borrower or any of its Subsidiaries.  

          “Adjusted Net Earnings From Operations” means, with respect to any fiscal period of any Person (the “subject Person”), net income of the subject Person on a consolidated basis after provision for income taxes for such fiscal period, as determined in conformity with GAAP and reported on the financial statements for such fiscal period, excluding any and all of the following included in such net income:  (a) gain, to the extent in excess of $5,000,000, or loss arising from the sale of any capital assets (including sales of surplus operating assets and real estate); (b) gain or loss arising from any write-up or write-down in the book value of any asset; (c) earnings of any other Person, substantially all of the assets of which have been acquired by the subject Person in any manner, to the extent realized by such other Person prior to the date of Acquisition;
(d) earnings of any other Person (excluding Wholly-Owned Subsidiaries) in
which the subject Person has an ownership interest unless (and only to the
extent) such earnings shall actually have been received by the subject Person in
the form of cash distributions; (e) earnings of any Person to which assets
of the subject Person shall have been sold, transferred, or disposed of, or into
which subject Person shall have been merged, or which has been a party with the
subject Person to any consolidation or other form of reorganization, prior to
the date of such transaction; 

-1-

(f) gain arising from the acquisition of debt or equity
securities of the subject Person or from cancellation or forgiveness of Debt;
and (g) gain or loss arising from extraordinary items, as determined in
conformity with GAAP, or from any other non-recurring transaction (including
(i) a charge for the early retirement of the 2003 Senior Notes not to
exceed $12,000,000, (ii) the make-whole payment in respect of the
2003 Senior Notes not to exceed $110,000,000, and (iii) costs in
respect of implementing the Spin-Off Transaction not to exceed $12,500,000 in
aggregate amount).

          “Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

          “Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

          “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

          “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

          “Aggregate Commitments” means the Commitments of all Lenders.

          “Agreement” means this Credit Agreement.

          “Applicable Law” means (a) in respect of any Person, all provisions of Laws applicable to such Person, and all orders and decrees of all courts and determinations of arbitrators applicable to such Person and (b) in respect of contracts made or performed in the State of Texas, “Applicable Law” shall also mean the laws of the United States of America, including, without limitation the foregoing, 12 USC Sections 85 and 86, as amended to the date hereof and as the same may be amended at any time and from time to time hereafter, and any other statute of the United States of America now or at any time hereafter prescribing the maximum rates of interest on loans and extensions of credit, and the laws of the State of Texas.  Chapter 346 (other than Section 346.004) of the Texas Finance Code (which regulates certain revolving credit accounts and
revolving tri-party accounts) shall not apply to the Loans or the other Obligations.

          “Applicable
Percentage” means, with respect to each Lender at any time, the
percentage (carried out to the ninth decimal place), the numerator of which is
the amount of the Commitment of such Lender at such time and the denominator of
which is the Aggregate Commitments at such time; provided that if the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to
Section 8.02, then the Applicable Percentage of each Lender shall be
determined based on the Applicable Percentage of such Lender most recently in
effect, giving effect to any subsequent assignments.  The initial
Applicable Percentage of each Lender is set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable.

-2-

          “Applicable Rate” means the following percentages per annum, based upon the Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a):

	
  
Pricing
   Level
  	
   
 	
  
Leverage   Ratio
  	
   
 	
  
Commitment
   Fee
  	
   
 	
  
Applicable   Margin
   for Eurodollar Rate
   Loans and Letters
   of Credit
  	
   
 	
  
Applicable
   Margin for
   Base Rate
   Loans
  	
   
 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 
	
  1
  	
  
 
  	
  
 
  	
  
<   1.50 to 1.00
  	
  
 
  	
  
 
  	
  
0.250
  	
  
%
  	
  
 
  	
  
1.000
  	
  
%
  	
  
 
  	
  
0.000
  	
  
%
  
	
  2
  	
  
 
  	
  
 
  	
  
<   2.50 to 1.00 but > 1.50 to 1.00
  	
  
 
  	
  
 
  	
  
0.375
  	
  
%
  	
  
 
  	
  
1.250
  	
  
%
  	
  
 
  	
  
0.250
  	
  
%
  
	
  
3
  	
  
 
  	
  
 
  	
  
<   3.50 to 1.00 but > 2.50 to 1.00
  	
  
 
  	
  
 
  	
  
0.500
  	
  
%
  	
  
 
  	
  
1.500
  	
  
%
  	
  
 
  	
  
0.500
  	
  
%
  
	
  4
  	
  
 
  	
  
 
  	
  
>   3.50 to 1.00
  	
  
 
  	
  
 
  	
  
0.500
  	
  
%
  	
  
 
  	
  
2.000
  	
  
%
  	
  
 
  	
  
1.000
  	
  
%
  

          Any increase or decrease in the Applicable Rate resulting from a change in the Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(a); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level 4 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered.  The Applicable Rate in effect from the Closing Date through August 31, 2005 shall be determined based upon Pricing Level 2.

          “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

          “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager.

          “Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

          “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.

          “Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries (and Chaparral and its Subsidiaries) for the fiscal year ended May 31, 2004, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries (and Chaparral and its Subsidiaries), including the notes thereto.

-3-

          “Auto-Extension Letter of Credit” has the meaning specified in Section 2.03 (b)(iii).

          “Availability” means, as of any date of determination, the remainder of (a) the Aggregate Commitments as at such date minus (b) the Total Outstandings as at such date.

          “Availability Period” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender to make Revolving Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

          “Bank of America” means Bank of America, N.A. and its successors.

          “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

          “Base Rate Loan” means a Loan that bears interest based on the Base Rate.

          “Borrower” has the meaning specified in the introductory paragraph hereto.

          “Borrower Materials” has the meaning specified in Section 6.02.

          “Borrowing” means a Revolving Borrowing or a Swing Line Borrowing, as the context may require.

          “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

          “Capital Expenditure” means, for any Person, the aggregate amount of all purchases or acquisitions by such Person of, and expenditures for additions to, items considered to be capital items, including, expenditures relating to property, plant, or equipment, which would be capitalized on such Person’s balance sheet in accordance with GAAP, excluding amounts (a) capitalized as inventory and (b) in respect of purchases, acquisitions and expenditures that are “Acquisitions”, as defined herein.

          “Capital Lease Obligations” means, for any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property, which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP.  For purposes of this Agreement, the amount of such Capital Lease Obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

-4-

          “Cash Collateralize” has the meaning specified in Section 2.03(g).

          “Cash Equivalents” means:  (a) United States dollars; (b) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) maturing, unless such securities are deposited to defease any Debt, not more than twelve months from the date of acquisition; (c) certificates of deposit and eurodollar time deposits with maturities of twelve months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding twelve months and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $500,000,000 and a rating at the time of acquisition thereof of P-1 or better from Moody’s or A-1 or better from S&P; (d) repurchase
obligations with a term of not more than seven days for underlying securities of the types described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c) above; (e) commercial paper having the highest rating obtainable from Moody’s or S&P and in each case maturing within six months after the date of acquisition; (f) auction rate securities rated with the highest short-term ratings by Moody’s and S&P, and maturing within 365 days of acquisition; (g) securities issued and fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, rated at least “A” by Moody’s or S&P and having maturities of not more than twelve months from the date of acquisition; and (h) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in
clauses (a) through (g) of this definition.

          “Cash Management Obligations” means, with respect to any Lender, any obligations owed to such Lender by the Borrower or any of its Subsidiaries which arise as a direct result of the deposit, collection and other cash management, treasury or deposit services provided by such Lender to the Borrower or any such Subsidiary, including without limitation all of the obligations of the Borrower or any of its Subsidiaries to such Lender for overdrafts, for returned checks and other returned items and for credit extended under, or as a result of, cash management, treasury and deposit agreements.

          “Centralized Cash Management Program” means the program through which, until the earlier of (a) the distribution of Chaparral to the Borrower’s shareholders, and (b) September 30, 2005, the Borrower may (1) sweep cash from Chaparral and its Subsidiaries’ concentration accounts, which shall reduce the TXI Advance; provided that the amount swept to the Borrower shall not exceed the outstanding amount of the TXI Advance, or (2) make payments to Chaparral to the extent required by Chaparral for payments, including raw material procurement, payroll and other working capital requirements and capital expenditures which shall increase the TXI Advance; provided that the amount of payments to Chaparral shall not increase the amount of the TXI Advance to an amount in excess of $50,000,000; provided, however, that upon the earlier of
(a) the distribution of Chaparral to the Borrower’s shareholders and (b) September 30, 2005, the Borrower shall contribute the TXI Advance to the capital of Chaparral.

-5-

          “Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any Law, (b) any change in any Law, or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of Law) by any Governmental Authority.

          “Change of Control” means (a) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Borrower and its Subsidiaries, taken as a whole, to any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act, whether or not applicable), (b) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act, whether or not applicable) is or becomes the “beneficial owner”, directly or indirectly, of more than 35% of the total voting power in the aggregate of all classes of Equity Interests of the Borrower then outstanding normally entitled to vote in
elections of directors, (c) during any period of 24 consecutive months after the Closing Date, individuals who at the beginning of such 24-month period constituted the board of directors of the Borrower (together with any new directors whose election by such board of directors or whose nomination for election by the shareholders of the Borrower was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of the Borrower then in office, or (d) any “Change of Control” as defined in the 2005 Senior Notes shall occur in respect thereof.  

          “Chaparral” means Chaparral Steel Company, a Delaware corporation, and prior to the Spin-Off Transaction, a wholly-owned Subsidiary of the Borrower.

          “Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.

          “Co-Documentation Agents” means JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association, and SunTrust Bank, in their capacity as co-documentation agents under any of the Loan Documents, or any successors thereto.

          “Code” means the Internal Revenue Code of 1986.

          “Collateral” has the meaning specified in Section 2.14 of this Agreement.

          “Collateral Documents” means, collectively, the Security Agreement and any other agreement or document, together with all related financing statements and stock powers, executed and delivered in connection with this Agreement to create a Lien on any personal property in favor of the Administrative Agent for the benefit of the Secured Parties.

          “Commitment”
means, as to each Lender, its obligation to (a) make Loans to the Borrower
pursuant to Section 2.01, (b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01, or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

-6-

          “Commitment Fee” has the meaning specified in Section 2.09(a).

          “Compliance Certificate” means a certificate substantially in the form of Exhibit B.

          “Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

          “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

          “Convertible Subordinated Debentures” means the 5.5% Convertible Subordinated Debentures of the Borrower, in an aggregate principal amount of $200,000,000, due 2028.

          “Convertible Trust Preferred Securities” means the 5.5% Convertible Trust Preferred Securities, in an aggregate amount of $200,000,000 evidencing preferred undivided beneficial interests in the assets of TXI Capital Trust I.

          “Credit Extension” means each of the following:  (a) a Borrowing, (b) an L/C Credit Extension, and (c) a Swing Line Borrowing.

          “Debt” means, with respect to any Person, without duplication, (a) debt of such Person for borrowed money, (b) all debt of such Person evidenced by bonds, notes, debentures or similar instruments or bankers’ acceptances or letters of credit (or reimbursement obligations in respect thereof); (c) the balance deferred and unpaid by such Person of the purchase price of any property which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, except any such balance that constitutes an accrued expense or trade payable, (d) all obligations of others secured by any Lien (other than Liens referred to in clauses (b), (c), (d), (e), (g) or (i) of the definition of Permitted Liens) on any property or asset owned by such Person, whether or not the obligation secured thereby shall have been
assumed, (e) to the extent not otherwise included, all Capitalized Lease Obligations of such Person, all obligations of such Person with respect to leases constituting part of a sale and leaseback arrangement, all Guaranties of such Person, all obligations of such Person under Swap Contracts, (f) any “withdrawal liability” of such Person, as such term is defined under part I of Subtitle E of Title IV of ERISA, (g) all Synthetic Lease Obligations of such Person, and (h) all preferred stock issued by such Person and required by the terms thereof to be redeemed, or for which mandatory sinking fund payments are due, by a fixed date prior to one year after the Maturity Date.  

-7-

          “Debt Conversion Event” means the earliest to occur of (a) any default or event of default (however defined or designated) in any instrument or agreement governing, evidencing or creating the Convertible Trust Preferred Securities or the Convertible Subordinated Debentures, (b) any mandatory redemption of the Convertible Trust Preferred Securities or the Convertible Subordinated Debentures or (c) any Special Event (or other event howsoever designated) the effect of which would result in the dissolution or termination of TXI Capital Trust I or would cause the holders of the Convertible Trust Preferred Securities to become holders of the Convertible Subordinated Debentures.

          “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

          “Debt to Capitalization Ratio” means, as of any date of determination, the ratio of (a) Total Debt as of such date of determination to (b) the sum of (i) Total Debt plus (ii) Net Worth, in each case as of such date of determination.

          “Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

          “Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.

          “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

          “Depreciation” means depreciation and depletion expense as determined in accordance with GAAP.

          “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

-8-

          “Dividend” means, as to any Person, any declaration or payment of any dividend (other than a stock dividend) on, or the making of any distribution, loan, advance or investment to or in any holder of, (a) any shares of capital stock (or other equity or beneficial interest) of such Person (other than salaries, bonuses and loans to employees made or paid in the ordinary course of business) or (b) the Convertible Trust Preferred Securities.

          “Dollar” and “$” mean lawful money of the United States.

          “Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

          “EBITDA” means, for any period, determined in accordance with GAAP on a consolidated basis for the Borrower and its Subsidiaries, the sum of (a) Adjusted Net Earnings From Operations for such period, plus (b) to the extent deducted in the determination of Adjusted Net Earnings from Operations for such period, (i) Interest Expense, plus (ii) federal, state, local and foreign income taxes, plus (iii) Depreciation, amortization and other non-recurring non-cash charges (excluding any non-cash charges to the extent that it represents an accrual of or reserve for cash payments in any future period), plus (iv) non-cash charges in respect of employee stock option expenses (excluding any such non-cash charges to the extent that it represents an accrual of or reserve for cash payments in any future period), minus (c) to the extent included in the determination
of Adjusted Net Earnings from Operations for such period, non-cash credits.  

          “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, the L/C Issuer and the Swing Line Lender, and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

          “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

          “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

-9-

          “Environmental Permit” means any permit, license, order, approval or other authorization under Environmental Law material to business of the Borrower or any Subsidiary.

          “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

          “ERISA” means the Employee Retirement Income Security Act of 1974.

          “ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

          “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate a Pension Plan, the treatment of a Pension Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

          “Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day
funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

-10-

          “Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the Eurodollar Rate.

          “Event of Default” has the meaning specified in Section 8.01.

          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 10.13), any withholding
tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to provide the documentation described in Section 3.01(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a).

          “Existing Credit Agreement” means that certain Credit Agreement, dated as of June 6, 2003, among the Borrower, certain of the Borrower’s Subsidiaries party thereto, Bank of America, N.A., as Administrative Agent, Banc of America Securities LLC, as sole lead arranger and book manager, and other lenders named therein, as amended, modified or supplemented.

          “Existing Letters of Credit” means the letter of credit set forth on Schedule 1.01.

          “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

          “Fee Letter” means the letter agreement, dated May 4, 2005 among the Borrower, the Administrative Agent and the Arranger.

-11-

          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

          “Foreign Subsidiary” means each Subsidiary of the Borrower which is organized under the laws of a jurisdiction other than the United States of America or any state or commonwealth thereof.

          “FRB” means the Board of Governors of the Federal Reserve System of the United States.

          “Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

          “GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

          “Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

          “Granting Lender” has the meaning specified in Section 10.06(h).

          “Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Debt or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the
primary obligor to pay such Debt or other obligation, or (iv) entered into
for the purpose of assuring in any other manner the obligee in respect of such
Debt or other obligation of the payment or performance thereof or to protect
such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Debt or other
obligation of any other Person, whether or not such Debt or other obligation is
assumed by such Person (or any right, contingent or otherwise, of any holder of
such Debt to obtain any such Lien).

-12-

The amount of any Guarantee shall be deemed to be an amount equal
to the stated or determinable amount of the related primary obligation, or
portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith.  The term
“Guarantee” as a verb has a corresponding meaning.

          “Guarantors” means, collectively, each Material Domestic Subsidiary (other than TXI Capital Trust I).

          “Guaranty” means the Guaranty made by the Guarantors, substantially in the form of Exhibit C.

          “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

          “Highest Lawful Rate” means at the particular time in question the maximum rate of interest which, under Applicable Law, any Lender is then permitted to charge on the Obligations.  If the maximum rate of interest which, under Applicable Law, any Lender is permitted to charge on the Obligations shall change after the date hereof, the Highest Lawful Rate shall be automatically increased or decreased, as the case may be, from time to time as of the effective time of each change in the Highest Lawful Rate without notice to the Borrower.  For purposes of determining the Highest Lawful Rate under Applicable Law, on each day, if any, that Chapter 303 of the Texas Finance Code establishes the Highest Lawful Rate, such rate shall be the weekly ceiling computed in accordance with Section 303.003 for that day.

          “Honor Date” has the meaning specified in Section 2.03(c)(i).

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

          “Indemnitees” has the meaning specified in Section 10.04(b).

          “Information” has the meaning specified in Section 10.07.

          “Interest Coverage Ratio” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP, the ratio of (a) EBITDA to (b) Interest Expense, in each case for the period of four consecutive fiscal quarters ending on such date of determination.

          “Interest Expense” means, for any period of calculation, calculated for the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP, interest expense (including interest expense pursuant to Capitalized Lease Obligations, but excluding any interest expense in respect of the Convertible Subordinated Debentures) for such period.  For purposes of this Agreement, Interest Expense shall be deemed to have been $6,000,000 during each of the fiscal quarters beginning June 1, 2004, September 1, 2004, December 1, 2004, March 1, 2005 and June 1, 2005.  

-13-

          “Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date.

          “Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Revolving Loan Notice; provided that:

	
  
 
  	
  
          (i)          any   Interest Period that would otherwise end on a day that is not a Business Day   shall be extended to the next succeeding Business Day unless such Business   Day falls in another calendar month, in which case such Interest Period shall   end on the next preceding Business Day;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (ii)         any   Interest Period that begins on the last Business Day of a calendar month (or   on a day for which there is no numerically corresponding day in the calendar   month at the end of such Interest Period) shall end on the last Business Day   of the calendar month at the end of such Interest Period; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (iii)        no   Interest Period shall extend beyond the Maturity Date.
  

          “Internal Control Event” means a material weakness in, or material. fraud that involves management or other employees who have a significant role in, the Borrower’s internal controls over financial reporting, in each case as described in the Securities Laws.

          “Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or Equity Interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Debt of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value
of such Investment.

          “IP Rights” has the meaning specified in Section 5.17.

          “IRS” means the United States Internal Revenue Service.

-14-

          “ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

          “Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower or in favor of the L/C Issuer and relating to any such Letter of Credit.

          “Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

          “L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Revolving Applicable Percentage.

          “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Borrowing.

          “L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

          “L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

          “L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

          “Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the Swing Line Lender.

          “Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

-15-

          “Letter of Credit” means any letter of credit issued hereunder, and shall include the Existing Letters of Credit.  A Letter of Credit may be a commercial letter of credit or a standby letter of credit.

          “Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

          “Letter of Credit Expiration Date” means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

          “Letter of Credit Fee” has the meaning specified in Section 2.03(i).

          “Letter of Credit Sublimit” means an amount equal to $50,000,000.  The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

          “Leverage Ratio” means, as of any date of determination, for the Borrower and its Subsidiaries consolidated in accordance with GAAP, the ratio of (a) Total Debt as of such date of determination to (b) EBITDA for the four fiscal quarters ending on such date of determination.

          “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

          “Limited Amount Period” means, after termination of the initial Unlimited Amount Period, from the first day of any fiscal quarter, the shorter of (a) a period of four fiscal quarters commencing on such day and (b) the period of time from such date to the commencement of an Unlimited Amount Period; provided, however, no consecutive Limited Amount Period shall commence until the first day of the fiscal quarter which is the fifth fiscal quarter after the commencement of the preceding Limited Amount Period.

          “Limited Restricted Payment Period” means, after termination of the initial Unlimited Restricted Payment Period, from the first day of any fiscal quarter, the shorter of (a) a period of four fiscal quarters commencing on such day and (b) the period of time from such date to the commencement of an Unlimited Restricted Payment Period; provided, however, no consecutive Limited Restricted Payment Period shall commence until the first day of the fiscal quarter which is the fifth fiscal quarter after the commencement of the preceding Limited Restricted Payment Period.

          “Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Revolving Loan or a Swing Line Loan.

          “Loan
Documents” means this Agreement, each Note, each Issuer Document, the
Fee Letter, the Guaranty, the Collateral Documents and any other agreement or
document executed, delivered or performable by any Loan Party in connection
herewith or as security for the Obligations.

-16-

          “Loan Parties” means, collectively, the Borrower, each Guarantor and each Grantor (as defined in the Security Agreement).

          “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the ability of the Loan Parties, taken as a whole, to perform their obligations under the Loan Documents; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

          “Material Domestic Subsidiary” means any Domestic Subsidiary that has assets in excess of $10,000.

          “Maturity Date” means (a) June 30, 2010 or (b) such earlier date as the (i) the Obligations become due and payable pursuant to this Agreement (whether by acceleration, prepayment in full, scheduled reduction or otherwise) or (ii) there shall exist an Event of Default under Section 8.01(f) of this Agreement. 

          “Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

          “Net Cash Proceeds” means: 

	
  
 
  	
  
          (a)          with   respect to the sale of any asset by the Borrower or any Subsidiary, the   excess, if any, of (i) the sum of cash and cash equivalents received in   connection with such sale (including any cash received by way of deferred   payment pursuant to, or by monetization of, a note receivable or otherwise,   but only as and when so received) over (ii) the sum of (A) the   principal amount of any Debt that is secured by such asset and that is   required to be repaid in connection with the sale thereof (other than Debt   under the Loan Documents), (B) the out-of-pocket expenses incurred by the   Borrower or any Subsidiary in connection with such sale and (C) income   taxes reasonably estimated to be actually payable within two years of the   date of the relevant asset sale as a result of any gain recognized in
connection therewith; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          with   respect to the sale of any Equity Interest by the Borrower, the excess of   (i) the sum of the cash and cash equivalents received in connection with   such sale over (ii) the underwriting discounts and commissions, and   other out-of-pocket expenses, incurred by the Borrower in connection with   such sale.
  

-17-

          “Net Recovery Proceeds” means, with respect to any Recovery Event, the gross cash proceeds (net of reasonable fees, costs and taxes actually incurred and paid in connection with such Recovery Event and any required permanent payment of Debt (other than Debt secured pursuant to the Collateral Documents) which is secured by the property that is the subject of such Recovery Event) received by the respective Person in connection with such Recovery Event.

          “Net Worth” means, for the Borrower and its Subsidiaries, on a consolidated basis, determined in accordance with GAAP, the sum of (without duplication):  (a) capital stock taken at par value, plus (b) capital surplus, plus (c) retained earnings less treasury stock, plus (d) the Convertible Trust Preferred Securities.

          “Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).

          “Notes” means collectively, the Revolving Loan Notes and the Swing Line Note.

          “Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to (i) any Loan or Letter of Credit, (ii) any Swap Contract of the Borrower or any Subsidiary to which a Lender or an Affiliate of a Lender is a party, provided such Lender was a party to this Agreement at the time such Swap Contract was entered into or (iii) Cash Management Obligations, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest

and fees are allowed claims in such proceeding.

          “Off-Balance Sheet Liabilities” means, with respect to any Person as of any date of determination thereof, without duplication and to the extent not included as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP: (a) with respect to any asset securitization transaction (including any accounts receivable purchase facility) (i) the unrecovered investment of purchasers or transferees of assets so transferred, and (ii) any other payment, recourse, repurchase, hold harmless, indemnity or similar obligation of such Person or any of its Subsidiaries in respect of assets transferred or payments made in respect thereof, other than limited recourse provisions that are customary for transactions of such type and that neither (x) have the effect of limiting the loss or credit risk of such purchasers or transferees with
respect to payment or performance by the obligors of the assets so transferred nor (y) impair the characterization of the transaction as a true sale under applicable Laws (including Debtor Relief Laws); (b) the monetary obligations under any financing lease or so-called “synthetic,” tax retention or off-balance sheet lease transaction which, upon the application of any Debtor Relief Law to such Person or any of its Subsidiaries, would be characterized as indebtedness; (c) the monetary obligations under any sale and leaseback transaction which does not create a liability on the consolidated balance sheet of such Person and its Subsidiaries; (d) any other monetary obligation arising with respect to any other transaction which upon the application of any Debtor Relief Law to such Person or any of its Subsidiaries, would be characterized as indebtedness, or (e) any transaction structured to provide tax deductibility as interest expense of any dividend or similar
payment.

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          “Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

          “Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

          “Outstanding Amount” means (i) with respect to Revolving Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Loans and Swing Line Loans, as the case may be, occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts.

          “Participant” has the meaning specified in Section 10.06(d).

          “PBGC” means the Pension Benefit Guaranty Corporation.

          “Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

          “Permitted Liens” means, as applied to any Person:

	
  
 
  	
  
          (a)          any   Lien in favor of the Administrative Agent to secure the Obligations   (including, without limitation, L/C Obligations and obligations in respect of   Swap Contracts, to the extent included within the definition of Obligations);
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          (i) Liens   on real estate for real estate taxes not yet delinquent, (ii) Liens on   leasehold interests created by the lessor in favor of any mortgagee of the   leased premises, and (iii) Liens for taxes, assessments, governmental   charges, levies or claims that are being diligently contested in good faith   by appropriate proceedings and for which adequate reserves shall have been   set aside on such Person’s books, but only so long as no foreclosure,   restraint, sale or similar proceedings have been commenced with respect   thereto;
  

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          (c)          Liens   of carriers, landlords, warehousemen, mechanics, laborers and materialmen and   other similar Liens incurred in the ordinary course of business for sums not   yet due or being contested in good faith, if such reserve or appropriate   provision, if any, as shall be required by GAAP shall have been made   therefore;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)          Liens   incurred in the ordinary course of business in connection with worker’s   compensation, unemployment insurance or similar legislation, other than Liens   imposed by ERISA;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          Easements,   right-of-way, restrictions and other similar encumbrances on real property   which do not materially interfere with the ordinary conduct of the business   of such Person;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          Liens   created to secure Debt permitted by Sections 7.03(d), which is   incurred solely for the purpose of financing the acquisition or construction   of such assets and incurred at the time of acquisition or construction, so   long as each such Lien shall at all times be confined solely to the asset or   assets so acquired or constructed (and proceeds thereof), and refinancings   thereof so long as any such Lien remains solely on the asset or assets   acquired or constructed and the amount of Debt related thereto is not   increased.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (g)          Liens   in respect of judgments or awards for which appeals or proceedings for review   are being prosecuted and in respect of which a stay of execution upon any   such appeal or proceeding for review shall have been secured, provided that   (i) such Person shall have established adequate reserves for such   judgments or awards, (ii) such judgments or awards shall be fully   insured and the insurer shall not have denied coverage, or (iii) such   judgments or awards shall have been bonded to the reasonable satisfaction of   the Administrative Agent;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (h)          Any   Liens existing on the Closing Date which are described on Schedule 7.01   and which are acceptable to the Lenders, and Liens resulting from the   refinancing of the related Debt, provided that the Debt secured thereby shall   not be increased and the Liens shall not cover additional assets of the   Borrower or any Subsidiary;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)          Liens   filed of record out of an abundance of caution by lessors of personal   property, so long as each such Lien shall at all times be confined solely to   the asset or assets so leased (including additions and accessions thereto and   proceeds of insurance thereon).
  

          “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

-20-

          “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

          “Platform” has the meaning specified in Section 6.02.

          “Preferred Securities Guarantee” means that certain Preferred Securities Guarantee executed by the Borrower and guaranteeing, on a subordinated basis to the Obligations, distributions and redemption obligations in respect of the Convertible Trust Preferred Securities.

          “Recovery Event” means the receipt by any Loan Party of any cash insurance proceeds or condemnation awards payable (i) by reason of theft, loss, physical destruction, damage, taking or any other similar event with respect to any property or assets of any Loan Party and (ii) under any policy of insurance required to be maintained under any Loan Document.

          “Register” has the meaning specified in Section 10.06(c).

          “Registered Public Accounting Firm” has the meaning specified in the Securities Laws and shall be independent of the Borrower as prescribed by the Securities Laws.

          “Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

          “Release” has the meaning specified under any Environmental Law.

          “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

          “Request for Credit Extension” means (a) with respect to a Revolving Borrowing or a conversion or continuation of Revolving Loans, a Revolving Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

          “Required Lenders” means, as of any date of determination, Lenders having more than 50% of the Aggregate Commitments or, if the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, Lenders holding in the aggregate more than 50%of the Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition); provided that the Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

          “Response” has the meaning specified under any Environmental Law.

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          “Responsible Officer” means the chief executive officer, president, chief financial officer, chief accounting officer, treasurer or assistant treasurer of a Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

          “Restricted Debt Payments” has the meaning specified in Section 7.15.

          “Restricted Payment” means (i) any Dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Borrower or any Subsidiary, (ii) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Borrower’s stockholders, partners or members (or the equivalent Person thereof) or (iii) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation, termination of the Convertible Subordinated Debentures, including any prepayment or repayment of,  any
principal of, interest on, or any fees or other amounts related to the Convertible Subordinated Debentures.

          “Revolving Borrowing” means a borrowing consisting of simultaneous Revolving Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

          “Revolving Loan” has the meaning specified in Section 2.01.

          “Revolving Loan Note” means a promissory note made by the Borrower in favor of a Lender evidencing Revolving Loans made by such Lender, substantially in the form of Exhibit E.

          “Revolving Loan Notice” means a notice of (a) a Revolving Borrowing, (b) a conversion of Revolving Loans from one Type to the other, or (c) a continuation of Revolving Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit F.

          “Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

          “SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

          “Secured Party” means each of, and “Secured Parties” means all of, (i) the Administrative Agent, (ii) the Lenders, (iii) any Affiliate of a Lender that is a party to a Swap Contract with the Borrower or any Subsidiary, provided such Lender was a party to this Agreement at the time such Swap Contract was entered into and (iv) the Swing Line Lender.

          “Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board, as each of the foregoing may be amended and in effect on any applicable date hereunder.

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          “Security Agreement” means the Security Agreement executed by the Borrower and its Domestic Subsidiaries (other than TXI Capital Trust I) in favor of Administrative Agent for the benefit of the Secured Parties, in substantially the form of Exhibit G hereto.

          “Senior Secured Debt” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP, the remainder of (a) Total Debt as of such date of determination which is secured by a Lien minus (b) Subordinated Debt as of such date of determination.

          “Senior Secured Leverage Ratio” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP, the ratio of (a) Senior Secured Debt as of such date of determination to (b) EBITDA for the four fiscal quarters ending on such date of determination.

          “Solvent” means, with respect to any Person, as of any date of determination, that the fair value of the assets of such Person (at fair valuation) is, on the date of determination, greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as of such date, that the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the probable liability of such Person on its debts as such debts become absolute and matured, and that, as of such date, such Person will be able to pay all liabilities of such Person as such liabilities mature and such Person does not have unreasonably small capital with which to carry on its business.  In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability discounted to present value at rates believed to be reasonable by such Person acting in good faith.

          “SPC” has the meaning specified in Section 10.06(h).

          “Spin-Off Transaction” means collectively the various transactions described in Chaparral’s Form 10 Registration Statement and related Information Statement filed with the SEC concerning the Borrower’s distribution to its shareholders of the stock of Chaparral, including without limitation:  (a) the Borrower’s contribution or transfer to Chaparral of the Borrower’s subsidiaries engaged in the steel business and certain related assets, and Chaparral’s assumption of the liabilities arising out of the steel business or the transferred assets, (b) the sale of the 2005 Senior Notes by the Borrower and the sale of senior notes of Chaparral, (c) the Borrower’s tender offer for, or other repurchase or prepayment of, the 2003 Senior Notes, (d) Chaparral’s payment to the Borrower of a cash Dividend of approximately $341,000,000 (but
not to exceed $345,000,000), and (e) the registration and distribution of the common Equity Interests of Chaparral to the Borrower’s shareholders.

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          “Subordinated Debt” means all Debt of the Borrower or any Subsidiary which shall be subordinated, on terms satisfactory to the Required Lenders, to the Obligations.

          “Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person; provided, however, that Chaparral and its Subsidiaries shall not be considered Subsidiaries of the Borrower.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

          “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to

the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement to the extent governing contracts of the kinds described in clause (a) of this definition (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

          “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

          “Swing Line” means the revolving credit facility made available by the Swing Line Lender pursuant to Section 2.04.

          “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

          “Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

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          “Swing Line Loan” has the meaning specified in Section 2.04(a).

          “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit H.

          “Swing Line Note” means a promissory note made by the Borrower in favor of the Swing Line Lender evidencing Swing Line Loans made by such Swing Line Lender, substantially in the form of Exhibit I.

          “Swing Line Sublimit” means an amount equal to the lesser of (a) $15,000,000 and (b) the Aggregate Commitments.  The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitments.

          “Syndication Agent” means UBS Securities LLC, in its capacity as syndication agent under any of the Loan Documents, or any successor syndication agent.

          “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

          “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

          “Total Debt” means, as of any date of determination, determined for the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP, the sum (without duplication) of (a) all principal outstanding under the Loan Documents, (b) all principal obligations evidenced by a promissory note or otherwise representing borrowed money, (c) all reimbursement obligations for letters of credit that have been drawn upon and remain outstanding, and (d) all Capitalized Lease Obligations.  Notwithstanding the immediately preceding sentence, Total Debt shall not include the Convertible Subordinated Debentures until and unless a Debt Conversion Event shall occur; provided that prior to the occurrence of a Debt Conversion Event, the aggregate amount of deferred and accrued interest on the Convertible Trust Preferred Securities or the Convertible
Subordinated Debentures shall be included in the calculation of Total Debt.

          “Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

          “2003 Senior Notes” means those certain 10-1/4% senior notes of the Borrower due 2011.

          “2005 Senior Notes” means those certain senior notes of the Borrower due 2013 in the aggregate principal amount not in excess of $250,000,000 pursuant to terms, covenants and provisions satisfactory to the Administrative Agent.

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          “TXI Advance” means the intercompany payable owing from Chaparral to the Borrower, which on the Closing Date shall not exceed $25,000,000, which shall only increase or decrease as provided in the definition of “Centralized Cash Management Program”; provided that the amount at any time outstanding shall not exceed $50,000,000.

          “TXI Capital Trust I” means TXI Capital Trust I, a Delaware statutory trust and wholly-owned Subsidiary of the Borrower.

          “Type” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

          “UCC” means the Uniform Commercial Code of Texas or, where applicable to specific Collateral, any other relevant state.

          “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

          “United States” and “U.S.” mean the United States of America.

          “Unlimited Amount Period” means the period of time from the Closing Date until the commencement of the initial Limited Amount Period, if any.  Thereafter, “Unlimited Amount Period” means any period of time from and including the date of receipt by the Administrative Agent of a Compliance Certificate which is the second consecutive Compliance Certificate evidencing a Leverage Ratio of less than 3.00 to 1.00 to the last day of the first fiscal quarter thereafter, if any, in which the Leverage Ratio as of the end of such fiscal quarter is greater than or equal to 3.00 to 1.00.

          “Unlimited Restricted Payment Period” means the period of time from the Closing Date until the commencement of the initial Limited Restricted Payment Period, if any.  Thereafter, “Unlimited Restricted Payment Period” means any period of time from and including the date of receipt by the Administrative Agent of a Compliance Certificate which is the second consecutive Compliance Certificate evidencing a Leverage Ratio of less than 3.00 to 1.00 and a Senior Secured Leverage Ratio of less than 1.50 to 1.00 to the last day of the first fiscal quarter thereafter, if any, in which the Leverage Ratio is greater than or equal to 3.00 to 1.00 or the Senior Secured Leverage Ratio is greater than or equal to 1.50 to 1.00.

          “Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

          “Wholly-Owned Subsidiary” when used to determine the relationship of a Subsidiary to a Person, means a Subsidiary all of the issued and outstanding Equity Interests (other than directors’ qualifying shares) of which shall at the time be owned by such Person or one or more of such Person’s Wholly-Owned Subsidiaries or by such Person and one or more of such Person’s Wholly-Owned Subsidiaries.

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          1.02    Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

	
  
 
  	
  
          (a)          The   definitions of terms herein shall apply equally to the singular and plural   forms of the terms defined.  Whenever   the context may require, any pronoun shall include the corresponding   masculine, feminine and neuter forms.    The words “include,” “includes” and “including”   shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed   to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise,   (i) any definition of or reference to any agreement, instrument or other   document (including any Organization Document) shall be construed as   referring to such agreement, instrument or other document as from time to   time amended,
supplemented or otherwise modified (subject to any restrictions   on such amendments, supplements or modifications set forth herein or in any   other Loan Document), (ii) any reference herein to any Person shall be   construed to include such Person’s successors and assigns, (iii) the   words “herein,” “hereof” and “hereunder,” and words of   similar import when used in any Loan Document, shall be construed to refer to   such Loan Document in its entirety and not to any particular provision   thereof, (iv) all references in a Loan Document to Articles, Sections,   Exhibits and Schedules shall be construed to refer to Articles and Sections   of, and Exhibits and Schedules to, the Loan Document in which such references   appear, (v) any reference to any law shall include all statutory and   regulatory provisions consolidating, amending, replacing or interpreting such   law and any reference to any law or regulation shall, unless

otherwise   specified, refer to such law or regulation as amended, modified or   supplemented from time to time, and (vi) the words “asset” and “property”   shall be construed to have the same meaning and effect and to refer to any   and all tangible and intangible assets and properties, including cash,   securities, accounts and contract rights.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          In   the computation of periods of time from a specified date to a later specified   date, the word “from” means “from and including;” the words “to”   and “until” each mean “to but excluding;” and the word “through”   means “to and including.”
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          Section   headings herein and in the other Loan Documents are included for convenience   of reference only and shall not affect the interpretation of this Agreement   or any other Loan Document.
  

          1.03    Accounting Terms.

	
  
 
  	
  
          (a)          Generally.  All accounting terms not specifically or   completely defined herein shall be construed in conformity with, and all   financial data (including financial ratios and other financial calculations)   required to be submitted pursuant to this Agreement shall be prepared in   conformity with, GAAP applied on a consistent basis, as in effect from time   to time, applied in a manner consistent with that used in preparing the   Audited Financial Statements, except as otherwise specifically   prescribed herein.
  

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          (b)          Changes   in GAAP.  If at any time any   change in GAAP would affect the computation of any financial ratio or   requirement set forth in any Loan Document, and either the Borrower or the   Required Lenders shall so request, the Administrative Agent, the Lenders and   the Borrower shall negotiate in good faith to amend such ratio or requirement   to preserve the original intent thereof in light of such change in GAAP   (subject to the approval of the Required Lenders); provided that,   until so amended, (i) such ratio or requirement shall continue to be   computed in accordance with GAAP prior to such change therein and   (ii) the Borrower shall provide to the Administrative Agent and the   Lenders financial statements and other documents required under this   Agreement or as reasonably requested hereunder
setting forth a reconciliation   between calculations of such ratio or requirement made before and after   giving effect to such change in GAAP.
  

          1.04    Rounding.  Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

          1.05    Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Central time (daylight or standard, as applicable).

          1.06    Letter of Credit Amounts.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II.
 THE COMMITMENTS AND CREDIT EXTENSIONS

          2.01    Revolving Loans.  Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “Revolving Loan”) to the Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided, however, that after giving effect to any Revolving Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment.  Within
the limits of the Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01.  Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

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          2.02    Borrowings, Conversions and Continuations of Loans.

	
  
 
  	
  
          (a)          Each   Borrowing, each conversion of Loans from one Type to the other, and each   continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable   notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the   Administrative Agent not later than 11:00 a.m. (i) three Business   Days prior to the requested date of any Borrowing of, conversion to or   continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate   Loans to Base Rate Loans, and (ii) on the requested date of any   Borrowing of Base Rate Loans.  Each   telephonic notice by the Borrower pursuant to this Section 2.02(a)   must be confirmed promptly by delivery to the Administrative Agent of a   written Revolving Loan Notice, appropriately completed and
signed by a   Responsible Officer of the Borrower.    Each Borrowing of, conversion to or continuation of Eurodollar Rate   Loans shall be in a principal amount of $5,000,000 or a whole multiple of   $1,000,000 in excess thereof.  Except   as provided in Sections 2.03(c) and 2.04(c), each   Borrowing of or conversion to Base Rate Loans shall be in a principal amount   of $1,000,000 or a whole multiple of $500,000 in excess thereof.  Each Revolving Loan Notice (whether   telephonic or written), shall specify (i) whether the Borrower is   requesting a Borrowing, a conversion of Loans from one Type to the other, or   a continuation of Eurodollar Rate Loans, (ii) the requested date of the   Borrowing, conversion or continuation, as the case may be (which shall be a   Business Day), (iii) the principal amount of Loans to be borrowed,   converted or continued, (iv) the Type of Loans to be borrowed or to   which existing Loans are to be converted, and
(v) if applicable, the   duration of the Interest Period with respect thereto.  If the Borrower fails to specify a Type of   Loan in a Revolving Loan Notice or if the Borrower fails to give a timely   notice requesting a conversion or continuation, then the applicable Loans   shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be   effective as of the last day of the Interest Period then in effect with   respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of, conversion to, or   continuation of Eurodollar Rate Loans in any such Revolving Loan Notice but   fails to specify an Interest Period, it will be deemed to have specified an   Interest Period of one month.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          Following
receipt of a Revolving Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Applicable Percentage of the applicable
Loans, and if no timely notice of a conversion or continuation is provided by
the Borrower, the Administrative Agent shall notify each Lender of the details
of any automatic conversion to Base Rate Loans described in the preceding
subsection.  In the case of a Revolving Borrowing, each Lender shall make
the amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent’s Office not later than
1:00 p.m. on the Business Day specified in the Revolving Loan Notice. 
Upon satisfaction of the applicable conditions set forth in
Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on
the books of Bank of America with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to
(and reasonably acceptable to) the Administrative Agent by the Borrower;
provided, however, that if, on the date the Revolving Loan Notice
with respect to such Borrowing is given by the Borrower, there are L/C
Borrowings outstanding, then the proceeds of such Borrowing, first, shall
be applied to the payment in full of any such L/C Borrowings, and second,
shall be made available to the Borrower as provided above.

 

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          (c)          Except   as otherwise provided herein, a Eurodollar Rate Loan may be continued or   converted only on the last day of an Interest Period for such Eurodollar Rate   Loan.  During the existence of a   Default, no Loans may be requested as, converted to or continued as   Eurodollar Rate Loans without the consent of the Required Lenders.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          The   Administrative Agent shall promptly notify the Borrower and the Lenders of   the interest rate applicable to any Interest Period for Eurodollar Rate Loans   upon determination of such interest rate.    At any time that Base Rate Loans are outstanding, the Administrative   Agent shall notify the Borrower and the Lenders of any change in Bank of   America’s prime rate used in determining the Base Rate promptly following the   public announcement of such change.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          After   giving effect to all Borrowings, all conversions of Loans from one Type to   the other, and all continuations of Loans as the same Type, there shall not   be more than five Interest Periods in effect with respect to Loans.
  

          2.03    Letters of Credit.

	
  
 
  	
  
(a)          The   Letter of Credit Commitment.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
               (i)          Subject   to the terms and conditions set forth herein, (A) the L/C Issuer agrees,   in reliance upon the agreements of the Lenders set forth in this Section 2.03,   (1) from time to time on any Business Day during the period from the   Closing Date until the Letter of Credit Expiration Date, to issue Letters of   Credit for the account of the Borrower, and to amend or extend Letters of   Credit previously issued by it, in accordance with subsection (b) below,   and (2) to honor drawings under the Letters of Credit; and (B) the   Lenders severally agree to participate in Letters of Credit issued for the   account of the Borrower and any drawings thereunder; provided that   after giving effect to any L/C Credit Extension with respect to any Letter of   Credit,
(x) the Total Outstandings shall not exceed the Aggregate Commitments,
(y) the aggregate Outstanding Amount of the Revolving Loans of any Lender,
plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of
the Outstanding Amount of all Swing Line Loans shall not exceed such
Lender’s Commitment, and (z) the Outstanding Amount of the L/C
Obligations shall not exceed the Letter of Credit Sublimit.  Each request
by the Borrower for the issuance or amendment of a Letter of Credit shall be
deemed to be a representation by the Borrower that the L/C Credit Extension so
requested complies with the conditions set forth in the proviso to the preceding
sentence.  Within the foregoing limits, and subject to the terms and
conditions hereof, 
 

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the Borrower’s ability to obtain
Letters of Credit shall be fully revolving, and accordingly the Borrower may,
during the foregoing period, obtain Letters of Credit to replace Letters of
Credit that have expired or that have been drawn upon and reimbursed.  All
Existing Letters of Credit shall be deemed to have been issued pursuant hereto,
and from and after the Closing Date shall be subject to and governed by the
terms and conditions hereof.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
           (ii)        The   L/C Issuer shall not issue any Letter of Credit, if:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
             (A)          subject   to Section 2.03(b)(iii), the expiry date of such requested Letter   of Credit would occur more than twelve months after the date of issuance or   last extension, unless the Required Lenders have approved such expiry date;   or
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
             (B)          the   expiry date of such requested Letter of Credit would occur after the Letter   of Credit Expiration Date, unless all the Lenders have approved such expiry   date.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
           (iii)        The   L/C Issuer shall not be under any obligation to issue any Letter of Credit   if:
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
             (A)          any   order, judgment or decree of any Governmental Authority or arbitrator shall   by its terms purport to enjoin or restrain the L/C Issuer from issuing such   Letter of Credit, or any Law applicable to the L/C Issuer or any request or   directive (whether or not having the force of law) from any Governmental   Authority with jurisdiction over the L/C Issuer shall prohibit, or request   that the L/C Issuer refrain from, the issuance of letters of credit generally   or such Letter of Credit in particular or shall impose upon the L/C Issuer   with respect to such Letter of Credit any restriction, reserve or capital   requirement (for which the L/C Issuer is not otherwise compensated hereunder)   not in effect on the Closing Date, or shall impose upon the L/C Issuer any   unreimbursed loss, cost or expense which was not
applicable
on the Closing   Date and which the L/C Issuer in good faith deems material to it;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
             (B)          the   issuance of such Letter of Credit would violate one or more policies of the   L/C Issuer;
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
             (C)          except   as otherwise agreed by the Administrative Agent and the L/C Issuer, such   Letter of Credit is in an initial stated amount less than $100,000, in the   case of a commercial Letter of Credit, or$100,000, in the case of a standby   Letter of Credit;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
             (D)          such   Letter of Credit is to be denominated in a currency other than Dollars; or
  

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             (E)          a   default of any Lender’s obligations to fund under Section 2.03(c)   exists or any Lender is at such time a Defaulting Lender hereunder, unless   the L/C Issuer has entered into satisfactory arrangements with the Borrower   or such Lender to eliminate the L/C Issuer’s risk with respect to such   Lender.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (iv)       The   L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not   be permitted at such time to issue such Letter of Credit in its amended form   under the terms hereof.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (v)        The   L/C Issuer shall be under no obligation to amend any Letter of Credit if   (A) the L/C Issuer would have no obligation at such time to issue such   Letter of Credit in its amended form under the terms hereof, or (B) the   beneficiary of such Letter of Credit does not accept the proposed amendment   to such Letter of Credit.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (vi)       The   L/C Issuer shall act on behalf of the Lenders with respect to any Letters of   Credit issued by it and the documents associated therewith, and the L/C   Issuer shall have all of the benefits and immunities (A) provided to the   Administrative Agent in Article IX with respect to any acts taken   or omissions suffered by the L/C Issuer in connection with Letters of Credit   issued by it or proposed to be issued by it and Issuer Documents pertaining   to such Letters of Credit as fully as if the term “Administrative Agent” as   used in Article IX included the L/C Issuer with respect to such   acts or omissions, and (B) as additionally provided herein with respect   to the L/C Issuer.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  (b)      Procedures for Issuance and
Amendment of Letters of Credit; Auto-Extension Letters of Credit.

	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
          (i)          Each   Letter of Credit shall be issued or amended, as the case may be, upon the   request of the Borrower delivered to the L/C Issuer (with a copy to the   Administrative Agent) in the form of a Letter of Credit Application,   appropriately completed and signed by a Responsible Officer of the   Borrower.  Such Letter of Credit   Application must be received by the L/C Issuer and the Administrative Agent   not later than 10:00 a.m. at least two Business Days (or such later date   and time as the Administrative Agent and the L/C Issuer may agree in a   particular instance in their sole discretion) prior to the proposed issuance   date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of   Credit, such Letter of Credit Application shall specify in form and detail   satisfactory

to the L/C Issuer: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount thereof;
(C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary
in case of any drawing thereunder; (F) the full text of any certificate to
be presented by such beneficiary in case of any drawing thereunder; and
(G) such other matters as the L/C Issuer may require.  In the case of
a request for an amendment of any outstanding   Letter of Credit,
 

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such Letter of Credit Application shall specify in form and   detail satisfactory to the L/C Issuer (A) the Letter of Credit to be   amended; (B) the proposed date of amendment thereof (which shall be a   Business Day); (C) the nature of the proposed amendment; and   (D) such other matters as the L/C Issuer may require.  Additionally, the Borrower shall furnish   to the L/C Issuer and the Administrative Agent such other documents and   information pertaining to such requested Letter of Credit issuance or   amendment, including any Issuer Documents, as the L/C Issuer or the   Administrative Agent may require.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (ii)         Promptly   after receipt of any Letter of Credit Application, the L/C Issuer will   confirm with the Administrative Agent (by telephone or in writing) that the   Administrative Agent has received a copy of such Letter of Credit Application   from the Borrower and, if not, the L/C Issuer will provide the Administrative   Agent with a copy thereof.  Unless the   L/C Issuer has received written notice from any Lender, the Administrative   Agent or any Loan Party, at least one Business Day prior to the requested   date of issuance or amendment of the applicable Letter of Credit, that one or   more applicable conditions contained in Article IV shall not then   be satisfied, then, subject to the terms and conditions hereof, the L/C   Issuer shall, on the requested date, issue a Letter of Credit for the account   of the Borrower or enter
into the applicable amendment, as the case may be,   in each case in accordance with the L/C Issuer’s usual and customary business   practices.  Immediately upon the issuance   of each Letter of Credit, each Lender shall be deemed to, and hereby   irrevocably and unconditionally agrees to, purchase from the L/C Issuer a   risk participation in such Letter of Credit in an amount equal to the product   of such Lender’s Applicable Percentage times the amount of such Letter   of Credit.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (iii)        If   the Borrower so requests in any applicable Letter of Credit Application, the   L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter   of Credit that has automatic extension provisions (each, an “Auto-Extension   Letter of Credit”); provided that any such Auto-Extension Letter   of Credit must permit the L/C Issuer to prevent any such extension at least   once in each twelve-month period (commencing with the date of issuance of   such Letter of Credit) by giving prior notice to the beneficiary thereof not   later than a day (the “Non-Extension Notice Date”) in each such   twelve-month period to be agreed upon at the time such Letter of Credit is   issued.  Unless otherwise directed by   the L/C Issuer, the Borrower shall not be required to make a specific request   to the L/C
Issuer for any such extension.  Once an Auto-Extension Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the extension of such Letter of Credit at any
time to an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the L/C Issuer shall not permit any such
extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of
Credit in its revised form (as extended) under the terms hereof (by reason of
the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) it has received notice (which may be by telephone or
in writing)
 

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on   or before the day that is five Business Days before the Non-Extension Notice   Date (1) from the Administrative Agent that the Required Lenders have   elected not to permit such extension or (2) from the Administrative   Agent, any Lender or the Borrower that one or more of the applicable   conditions specified in Section 4.02 is not then satisfied, and   in each such case directing the L/C Issuer not to permit such extension.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (iv)         Promptly   after its delivery of any Letter of Credit or any amendment to a Letter of   Credit to an advising bank with respect thereto or to the beneficiary   thereof, the L/C Issuer will also deliver to the Borrower and the   Administrative Agent a true and complete copy of such Letter of Credit or   amendment.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
(c)       Drawings   and Reimbursements; Funding of Participations.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)          Upon   receipt from the beneficiary of any Letter of Credit of any notice of a   drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower   and the Administrative Agent thereof.    Not later than 11:00 a.m. on the date of any payment by the L/C   Issuer under a Letter of Credit (each such date, an “Honor Date”), the   Borrower shall reimburse the L/C Issuer through the Administrative Agent in   an amount equal to the amount of such drawing.  If the Borrower fails to so reimburse the L/C Issuer by such   time, the Administrative Agent shall promptly notify each Lender of the Honor   Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”),   and the amount of such Lender’s Applicable Percentage thereof.  In such event, the Borrower shall be   deemed
to have requested a Revolving Borrowing of Base Rate Loans to be   disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,   without regard to the minimum and multiples specified in Section 2.02   for the principal amount of Base Rate Loans, but subject to the amount of the   unutilized portion of the Commitment and the conditions set forth in Section 4.02   (other than the delivery of a Revolving Loan Notice).  Any notice given by the L/C Issuer or the   Administrative Agent pursuant to this Section 2.03(c)(i) may be   given by telephone if immediately confirmed in writing; provided that   the lack of such an immediate confirmation shall not affect the   conclusiveness or binding effect of such notice.
  
	
   
  	
   
  	
   
  
	
   
  	
            (ii)         Each   Lender shall upon any notice pursuant to Section 2.03(c)(i) make   funds available to the Administrative Agent for the account of the L/C Issuer   at the Administrative Agent’s Office in an amount equal to its Applicable   Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the   Business Day specified in such notice by the Administrative Agent, whereupon,   subject to the provisions of Section 2.03(c)(iii), each Lender   that so makes funds available shall be deemed to have made a Base Rate Loan   to the Borrower in such amount.  The   Administrative Agent shall remit the funds so received to the L/C Issuer.
  

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          (iii)        With   respect to any Unreimbursed Amount that is not fully refinanced by a   Borrowing of Base Rate Loans because the conditions set forth in Section 3.02   cannot be satisfied or for any other reason, the Borrower shall be deemed to have   incurred from the L/C Issuer an L/C Borrowing in the amount of the   Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be   due and payable on demand (together with interest) and shall bear interest at   the Default Rate.  In such event, each   Lender’s payment to the Administrative Agent for the account of the L/C   Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in   respect of its participation in such L/C Borrowing and shall constitute an   L/C Advance from such Lender in satisfaction of its participation obligation   under this
Section 2.03.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (iv)        Until   each Lender funds its Revolving Loan or L/C Advance pursuant to this Section 2.03(c)   to reimburse the L/C Issuer for any amount drawn under any Letter of Credit,   interest in respect of such Lender’s Applicable Percentage of such amount   shall be solely for the account of the L/C Issuer.
  
	
  
 
  	
  
 
  
	
   
  	
  
          (v)         Each   Lender’s obligation to make Revolving Loans or L/C Advances to reimburse the   L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this   Section 2.03(c), shall be absolute and unconditional and shall not be   affected by any circumstance, including (A) any setoff, counterclaim,   recoupment, defense or other right which such Lender may have against the L/C   Issuer, the Borrower or any other Person for any reason whatsoever;   (B) the occurrence or continuance of a Default, or (C) any other   occurrence, event or condition, whether or not similar to any of the   foregoing; provided, however, that each Lender’s obligation to   make Revolving Loans pursuant to this Section 2.03(c) is subject   to the conditions set forth in Section 4.02 (other than
delivery   by the Borrower of a Revolving Loan Notice).    No such making of an L/C Advance shall relieve or otherwise impair the   obligation of the Borrower to reimburse the L/C Issuer for the amount of any   payment made by the L/C Issuer under any Letter of Credit, together with   interest as provided herein.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (vi)        If   any Lender fails to make available to the Administrative Agent for the   account of the L/C Issuer any amount required to be paid by such Lender   pursuant to the foregoing provisions of this Section 2.03(c) by   the time specified in Section 2.03(c)(ii), the L/C Issuer shall   be entitled to recover from such Lender (acting through the Administrative   Agent), on demand, such amount with interest thereon for the period from the   date such payment is required to the date on which such payment is   immediately available to the L/C Issuer at a rate per annum equal to the   greater of the Federal Funds Rate and a rate determined by the L/C Issuer in   accordance with banking industry rules on interbank compensation.  A certificate of the L/C Issuer submitted to   any Lender (through the Administrative Agent) with respect
to any amounts   owing under this clause (vi) shall be conclusive absent manifest error.
  

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          (vii)       The   L/C Issuer will provide to the Administrative Agent reports in detail   acceptable to the Administrative Agent (including draws, payments and   reconciliation payments) with respect to outstanding Letters of Credit issued   by the L/C Issuer, in such frequency as reasonably requested by the   Administrative Agent.  The   Administrative Agent will provide quarterly reports to each Lender with   respect to the outstanding Letters of Credit at such time issued by the L/C   Issuer, and such other information regarding outstanding Letters of Credit or   L/C Obligations reasonably requested by any Lender from time to time.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(d)     Repayment   of Participations.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)        At   any time after the L/C Issuer has made a payment under any Letter of Credit   and has received from any Lender such Lender’s L/C Advance in respect of such   payment in accordance with Section 2.03(c), if the Administrative   Agent receives for the account of the L/C Issuer any payment in respect of   the related Unreimbursed Amount or interest thereon (whether directly from   the Borrower or otherwise, including proceeds of Cash Collateral applied   thereto by the Administrative Agent), the Administrative Agent will   distribute to such Lender its Applicable Percentage thereof (appropriately   adjusted, in the case of interest payments, to reflect the period of time   during which such Lender’s L/C Advance was outstanding) in the same funds as   those received by the Administrative Agent.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (ii)        If   any payment received by the Administrative Agent for the account of the L/C   Issuer pursuant to Section 2.03(c)(i) is required to be returned   under any of the circumstances described in Section 10.05   (including pursuant to any settlement entered into by the L/C Issuer in its   discretion), each Lender shall pay to the Administrative Agent for the   account of the L/C Issuer its Applicable Percentage thereof on demand of the   Administrative Agent, plus interest thereon from the date of such demand to   the date such amount is returned by such Lender, at a rate per annum equal to   the Federal Funds Rate from time to time in effect.  The obligations of the Lenders under this clause shall survive   the payment in full of the Obligations and the termination of this Agreement.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(e)     Obligations   Absolute.  The obligation of   the Borrower to reimburse the L/C Issuer for each drawing under each Letter   of Credit and to repay each L/C Borrowing shall be absolute, unconditional   and irrevocable, and shall be paid strictly in accordance with the terms of   this Agreement under all circumstances, including the following:
  

	
   
  	
  
          (i)          any   lack of validity or enforceability of such Letter of Credit, this Agreement,   or any other Loan Document;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (ii)         the   existence of any claim, counterclaim, setoff, defense or other right that the   Borrower or any Subsidiary may have at any time against any beneficiary or   any transferee of such Letter of Credit (or any Person for whom any such   beneficiary or any such transferee may be acting), the L/C Issuer or any   other Person, whether in connection with this Agreement, the transactions   contemplated hereby or by such Letter of Credit or any agreement or   instrument relating thereto, or any unrelated transaction;
  

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          (iii)       any   draft, demand, certificate or other document presented under such Letter of   Credit proving to be forged, fraudulent, invalid or insufficient in any   respect or any statement therein being untrue or inaccurate in any respect;   or any loss or delay in the transmission or otherwise of any document   required in order to make a drawing under such Letter of Credit;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (iv)       any   payment by the L/C Issuer under such Letter of Credit against presentation of   a draft or certificate that does not strictly comply with the terms of such   Letter of Credit; or any payment made by the L/C Issuer under such Letter of   Credit to any Person purporting to be a trustee in bankruptcy,   debtor-in-possession, assignee for the benefit of creditors, liquidator,   receiver or other representative of or successor to any beneficiary or any   transferee of such Letter of Credit, including any arising in connection with   any proceeding under any Debtor Relief Law; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (v)        any   other circumstance or happening whatsoever, whether or not similar to any of   the foregoing, including any other circumstance that might otherwise   constitute a defense available to, or a discharge of, the Borrower or any   Subsidiary.
  

          The Borrower
shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance
with the Borrower’s instructions or other irregularity, the Borrower will
immediately notify the L/C Issuer.  The Borrower shall be conclusively
deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

	
  
 
  	
  
          (f)          Role   of L/C Issuer.  Each   Lender and the Borrower agree that, in paying any drawing under a Letter of   Credit, the L/C Issuer shall not have any responsibility to obtain any   document (other than any sight draft, certificates and documents expressly   required by the Letter of Credit) or to ascertain or inquire as to the   validity or accuracy of any such document or the authority of the Person   executing or delivering any such document.    None of the L/C Issuer, the Administrative Agent, any of their   respective Related Parties nor any correspondent, participant or assignee of   the L/C Issuer shall be liable to any Lender for (i) any action taken or   omitted in connection herewith at the request or with the approval of the   Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or   (iii) the due execution, effectiveness, validity or enforceability of   any document or instrument related to any Letter of Credit or Issuer   Document.  The Borrower hereby assumes   all risks of the acts or omissions of any beneficiary or transferee with   respect to its use of any Letter of Credit; provided, however,   that this assumption is not intended to, and shall not, preclude the   Borrower’s pursuing such rights and remedies as it may have against the   beneficiary or transferee at law or under any other agreement.  
  

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None of the   L/C Issuer, the Administrative Agent, any of their respective Related Parties   nor any correspondent, participant or assignee of the L/C Issuer shall be   liable or responsible for any of the matters described in clauses (i)   through (v) of Section 2.03(e); provided, however,   that anything in such clauses to the contrary notwithstanding, the Borrower   may have a claim against the L/C Issuer, and the L/C Issuer may be liable to   the Borrower, to the extent, but only to the extent, of any direct, as   opposed to consequential or exemplary, damages suffered by the Borrower which   the Borrower proves were caused by the L/C Issuer’s willful misconduct or   gross negligence or the L/C Issuer’s willful failure to pay under any Letter   of Credit after the presentation to it by the beneficiary of a sight draft   and certificate(s) strictly complying with the terms and conditions of a   Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C   Issuer may accept documents that appear on their face to be in order, without   responsibility for further investigation, regardless of any notice or   information to the contrary, and the L/C Issuer shall not be responsible for   the validity or sufficiency of any instrument transferring or assigning or   purporting to transfer or assign a Letter of Credit or the rights or benefits   thereunder or proceeds thereof, in whole or in part, which may prove to be   invalid or ineffective for any reason.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (g)          Cash   Collateral.  Upon the request of   the Administrative Agent, (i) if the L/C Issuer has honored any full or   partial drawing request under any Letter of Credit and such drawing has   resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit   Expiration Date, any L/C Obligation for any reason remains outstanding, the   Borrower shall, in each case, immediately Cash Collateralize the then   Outstanding Amount of all L/C Obligations.    Sections 2.05 and 8.02(c) set forth certain   additional requirements to deliver Cash Collateral hereunder.  For purposes of this Section 2.03,  Section 2.05 and Section 8.02(c),   “Cash Collateralize” means to pledge and deposit with or deliver to   the Administrative Agent, for the
benefit of the L/C Issuer and the Lenders,   as collateral for the L/C Obligations, cash or deposit account balances   pursuant to documentation in form and substance satisfactory to the   Administrative Agent and the L/C Issuer (which documents are hereby consented   to by the Lenders).  Derivatives of   such term have corresponding meanings.    The Borrower hereby grants to the Administrative Agent, for the   benefit of the L/C Issuer and the Lenders, a security interest in all such   cash, deposit accounts and all balances therein and all proceeds of the   foregoing.  Cash Collateral shall be   maintained in blocked, non-interest bearing deposit accounts at Bank of   America.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (h)          Applicability   of ISP and UCP.  Unless otherwise   expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit   is issued (including any such agreement applicable to an Existing Letter of   Credit), (i) the rules of the ISP shall apply to each standby Letter of   Credit, and (ii) the rules of the Uniform Customs and Practice for   Documentary Credits, as most recently published by the International Chamber   of Commerce at the time of issuance, shall apply to each commercial Letter of   Credit.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)          Letter   of Credit Fees.  The Borrower   shall pay to the Administrative Agent for the account of each Lender in   accordance with its Applicable Percentage a Letter of Credit fee (the “Letter   of Credit Fee”) for each Letter of Credit equal to the Applicable Rate times   the daily amount available to be drawn under such Letter of Credit.  
  

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For purposes   of computing the daily amount available to be drawn under any Letter of   Credit, the amount of such Letter of Credit shall be determined in accordance   with Section 1.06.  Letter   of Credit Fees shall be (i) computed on a quarterly basis in arrears and   (ii) due and payable on the first Business Day after the end of each   March, June, September and December, commencing with the first such date to   occur after the issuance of such Letter of Credit, on the Letter of Credit   Expiration Date and thereafter on demand.    If there is any change in the Applicable Rate during any quarter, the   daily amount available to be drawn under each Letter of Credit shall be   computed and multiplied by the Applicable Rate separately for each period   during such quarter that such Applicable Rate was in effect.  Notwithstanding anything to the contrary   contained herein, upon the request of the Required Lenders, while any
Event   of Default exists, all Letter of Credit Fees shall accrue at the Default   Rate.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (j)          Fronting
Fee and Documentary and Processing Charges Payable to L/C Issuer.  The
Borrower shall pay directly to the L/C Issuer for its own account a fronting fee
with respect to each (i) commercial Letter of Credit at rate separately
agreed to by the Borrower and the L/C Issuer and (ii) standby Letter of
Credit, at the rate per annum specified in the Fee Letter, computed on the daily
amount available to be drawn under such Letter of Credit on a quarterly basis in
arrears.  Such fronting fee with respect to commercial Letters of Credit
shall be due and payable on the date of issuance thereof.  Such fronting
fee with respect to standby Letters of Credit shall be due and payable on the
tenth Business Day after the end of each March, June, September and December in
respect of the most recently-ended quarterly period (or portion thereof, in the
case of the first payment), commencing with the first such date to occur after
the issuance of such Letter of Credit, on the Letter of Credit Expiration Date
and thereafter on demand.  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  In
addition, the Borrower shall pay directly to the L/C Issuer for its own account
the customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the L/C Issuer relating to letters of
credit as from time to time in effect.  Such customary fees and standard
costs and charges are due and payable on demand and are
nonrefundable.
 
	
   
  	
  
 
  
	
  
 
  	
  
          (k)          Conflict   with Issuer Documents.  In the   event of any conflict between the terms hereof and the terms of any Issuer   Document, the terms hereof shall control.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
2.04   Swing Line   Loans.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          The   Swing Line.  Subject to the terms   and conditions set forth herein, the Swing Line Lender agrees, in reliance   upon the agreements of the other Lenders set forth in this Section 2.04,   to make loans (each such loan, a “Swing Line Loan”) to the Borrower   from time to time on any Business Day during the Availability Period in an   aggregate amount not to exceed at any time outstanding the amount of the   Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans,   when aggregated with the Applicable Percentage of the Outstanding Amount of   Revolving Loans and L/C Obligations of the Lender acting as Swing Line   Lender, may exceed the amount of such Lender’s Percentage of the Aggregate   Commitments; provided, however, that after giving effect to any   Swing
Line Loan,
  

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(i) the   Total Outstandings shall not exceed the Aggregate Commitments, and   (ii) the aggregate Outstanding Amount of the Revolving Loans of any   Lender, plus such Lender’s Applicable Percentage of the Outstanding   Amount of all L/C Obligations, plus such Lender’s Applicable Percentage   of the Outstanding Amount of all Swing Line Loans shall not exceed such   Lender’s Commitment, and provided, further, that the Borrower   shall not use the proceeds of any Swing Line Loan to refinance any   outstanding Swing Line Loan.  Within   the foregoing limits, and subject to the other terms and conditions hereof,   the Borrower may borrow under this Section 2.04, prepay under Section 2.05,   and reborrow under this Section 2.04.  Each Swing Line Loan shall be a Base Rate Loan.  Immediately upon the making of a Swing   Line Loan, each Lender shall be deemed to, and
hereby irrevocably and   unconditionally agrees to, purchase from the Swing Line Lender a risk   participation in such Swing Line Loan in an amount equal to the product of   such Lender’s Applicable Percentage times the amount of such Swing   Line Loan.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Borrowing   Procedures.  Each Swing Line   Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing   Line Lender and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the   Swing Line Lender and the Administrative Agent not later than 12:00 noon   on the requested borrowing date, and shall specify (i) the amount to be   borrowed, which shall be a minimum of $100,000, and (ii) the requested   borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by   delivery to the Swing Line Lender and the Administrative Agent of a written   Swing Line Loan Notice, appropriately completed and signed by a Responsible   Officer of the Borrower.  Promptly   after receipt by the Swing Line Lender of any
telephonic Swing Line Loan   Notice, the Swing Line Lender will confirm with the Administrative Agent (by   telephone or in writing) that the Administrative Agent has also received such   Swing Line Loan Notice and, if not, the Swing Line Lender will notify the   Administrative Agent (by telephone or in writing) of the contents   thereof.  Unless the Swing Line Lender   has received notice (by telephone or in writing) from the Administrative   Agent (including at the request of any Lender) prior to 1:00 p.m. on the   date of the proposed Swing Line Borrowing (A) directing the Swing Line   Lender not to make such Swing Line Loan as a result of the limitations set   forth in the proviso to the first sentence of Section 2.04(a), or   (B) that one or more of the applicable conditions specified in Article IV   is not then satisfied, then, subject to the terms and conditions hereof, the   Swing Line Lender will, not later than 2:00 p.m. on the borrowing date
 specified in such Swing Line Loan Notice, make the amount of its Swing Line   Loan available to the Borrower at its office by crediting the account of the   Borrower on the books of the Swing Line Lender in immediately available   funds.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)     Refinancing   of Swing Line Loans.
  

	
  
 
  	
  
          (i)          The   Swing Line Lender at any time in its sole and absolute discretion may   request, on behalf of the Borrower (which hereby irrevocably authorizes the   Swing Line Lender to so request on its behalf), that each Lender make a Base   Rate Loan in an amount equal to such Lender’s Applicable Percentage of the   amount of Swing Line Loans then outstanding.
  

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Such request   shall be made in writing (which written request shall be deemed to be a   Revolving Loan Notice for purposes hereof) and in accordance with the   requirements of Section 2.02, without regard to the minimum and   multiples specified therein for the principal amount of Base Rate Loans, but   subject to the unutilized portion of the Commitment and the conditions set   forth in Section 4.02.    The Swing Line Lender shall furnish the Borrower with a copy of the   applicable Revolving Loan Notice promptly after delivering such notice to the   Administrative Agent.  Each Lender   shall make an amount equal to its Applicable Percentage of the amount   specified in such Revolving Loan Notice available to the Administrative Agent   in immediately available funds for the account of the Swing Line Lender at   the Administrative Agent’s Office not later than 12:00 noon on the day   specified in such Revolving Loan
Notice, whereupon, subject to Section 2.04(c)(ii),   each Lender that so makes funds available shall be deemed to have made a Base   Rate Loan to the Borrower in such amount.    The Administrative Agent shall remit the funds so received to the   Swing Line Lender.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (ii)          If   for any reason any Swing Line Loan cannot be refinanced by such a Borrowing   in accordance with Section 2.04 (c)(i), the request for Base Rate   Loans submitted by the Swing Line Lender as set forth herein shall be deemed   to be a request by the Swing Line Lender that each of the Lenders fund its   risk participation in the relevant Swing Line Loan and each Lender’s payment   to the Administrative Agent for the account of the Swing Line Lender pursuant   to Section 2.04(c)(i) shall be deemed payment in respect of such   participation.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (iii)        If   any Lender fails to make available to the Administrative Agent for the   account of the Swing Line Lender any amount required to be paid by such   Lender pursuant to the foregoing provisions of this Section 2.04(c)   by the time specified in Section 2.04(c)(i), the Swing Line   Lender shall be entitled to recover from such Lender (acting through the   Administrative Agent), on demand, such amount with interest thereon for the   period from the date such payment is required to the date on which such   payment is immediately available to the Swing Line Lender at a rate per annum   equal to the greater of the Federal Funds Rate and a rate determined by the   Swing Line Lender in accordance with banking industry rules on interbank   compensation.  A certificate of the   Swing Line Lender submitted to any Lender (through the
Administrative Agent)   with respect to any amounts owing under this clause (iii) shall be   conclusive absent manifest error.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (iv)        Each
Lender’s obligation to make Revolving Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.04(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence
or continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided,
however, that each Lender’s obligation to make Revolving Loans
pursuant to this Section 2.04(c) is subject to the conditions set
forth in Section 4.02. No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrower to repay Swing Line
Loans, together with interest as provided herein. 
 

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(d)     Repayment   of Participations.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (i)          At   any time after any Lender has purchased and funded a risk participation in a   Swing Line Loan, if the Swing Line Lender receives any payment on account of   such Swing Line Loan, the Swing Line Lender will distribute to such Lender   its Applicable Percentage of such payment (appropriately adjusted, in the   case of interest payments, to reflect the period of time during which such   Lender’s risk participation was funded) in the same funds as those received   by the Swing Line Lender.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (ii)          If   any payment received by the Swing Line Lender in respect of principal or   interest on any Swing Line Loan is required to be returned by the Swing Line   Lender under any of the circumstances described in Section 10.05   (including pursuant to any settlement entered into by the Swing Line Lender   in its discretion), each Lender shall pay to the Swing Line Lender its   Applicable Percentage thereof on demand of the Administrative Agent, plus   interest thereon from the date of such demand to the date such amount is   returned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make such   demand upon the request of the Swing Line Lender.  The obligations of the Lenders under this clause shall survive   the payment in full of the Obligations and the termination of this
Agreement.
  

	
  
 
  	
  
          (e)          Interest   for Account of Swing Line Lender.    The Swing Line Lender shall be responsible for invoicing the Borrower   for interest on the Swing Line Loans.    Until each Lender funds its Base Rate Loan or risk participation   pursuant to this Section 2.04 to refinance such Lender’s   Applicable Percentage of any Swing Line Loan, interest in respect of such   Applicable Percentage shall be solely for the account of the Swing Line   Lender.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          Payments   Directly to Swing Line Lender.    The Borrower shall make all payments of principal and interest in   respect of the Swing Line Loans directly to the Swing Line Lender.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
2.05   Prepayments.
  
	
  
 
  	
  
 
  
	
   
  	
  
          (a)          Voluntary   Prepayments - Revolving Loans.    The Borrower may, upon notice to the Administrative Agent, at any time   or from time to time voluntarily prepay Revolving Loans in whole or in part   without premium or penalty; provided that (i) such notice must be   received by the Administrative Agent not later than 11:00 a.m.   (A) three Business Days prior to any date of prepayment of Eurodollar   Rate Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any   prepayment of Eurodollar Rate Loans shall be in a principal amount of   $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and   (iii) any prepayment of Base Rate Loans shall be in a principal amount   of $1,000,000 or a whole multiple of $500,000 in excess thereof or, in each   case, if less, the entire principal
amount thereof then outstanding.  
  

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Each such   notice shall specify the date and amount of such prepayment and the Type(s)   of Loans to be prepaid.  The   Administrative Agent will promptly notify each Lender of its receipt of each   such notice, and of the amount of such Lender’s Applicable Percentage of such   prepayment.  If such notice is given   by the Borrower, the Borrower shall make such prepayment and the payment   amount specified in such notice shall be due and payable on the date   specified therein.  Any prepayment of   a Eurodollar Rate Loan shall be accompanied by all accrued interest on the   amount prepaid, together with any additional amounts required pursuant to Section   3.05.  Each such prepayment shall   be applied to the Revolving Loans of the Lenders in accordance with their   respective Applicable Percentages.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          Voluntary   Prepayments - Swing Line Loans.    The Borrower may, upon notice to the Swing Line Lender (with a copy to   the Administrative Agent), at any time or from time to time, voluntarily   prepay Swing Line Loans in whole or in part without premium or penalty; provided   that (i) such notice must be received by the Swing Line Lender and the   Administrative Agent not later than 12:00 noon on the date of the   prepayment, and (ii) any such prepayment shall be in a minimum principal   amount of $100,000.  Each such notice   shall specify the date and amount of such prepayment.  If such notice is given by the Borrower,   the Borrower shall make such prepayment and the payment amount specified in   such notice shall be due and payable on the date specified therein.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          Mandatory   Prepayments - Excess Outstandings.    If for any reason the Total Outstandings at any time exceed the   Aggregate Commitments then in effect, the Borrower shall immediately prepay   Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount   equal to such excess; provided, however, that the Borrower   shall not be required to Cash Collateralize the L/C Obligations pursuant to   this Section 2.05(c) unless after the prepayment in full of the   Loans the Total Outstandings exceed the Aggregate Commitments then in effect.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)          Mandatory   Prepayments - Asset Dispositions.    Upon the Disposition of any assets of the Borrower or its   Subsidiaries, other than Dispositions permitted by clauses (a) through   (f) of Section 7.05, the Borrower shall make a mandatory   prepayment to the Administrative Agent for the Lenders (and if the   Outstanding Amount of all Loans is zero, pledge to the Administrative Agent   cash or cash equivalent investments in an amount equal to the lesser of   (i) the aggregate amount of the Net Cash Proceeds of such Disposition   and (ii) any Outstanding Amount of L/C Obligations) in the aggregate   amount equal to the Net Cash Proceeds of such Disposition, which prepayment   shall be applied to the Loans; provided, however, if on the   date of receipt by the Borrower or any of its
Subsidiaries of such Net Cash   Proceeds all of the conditions precedent to a Credit Extension set forth in Section 4.02   are satisfied (other than the delivery of a Revolving Loan Notice), the   Borrower shall not be required to make such prepayment.
  

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          (e)          Prepayment   from Recovery Events.  Immediately   upon receipt by any of the Loan Parties of Net Recovery Proceeds for any   Recovery Event in an aggregate amount in excess of $1,000,000, the Borrower   shall, at the request of the Required Lenders, prepay Loans in an aggregate   principal amount equal to 100% of such excess amount of the Net Recovery   Proceeds from such Recovery Event (and if the Outstanding Amount of all Loans   is zero, pledge to the Administrative Agent cash or cash equivalent investments   in an amount equal to the lesser of (i) such Net Recovery Proceeds and   (ii) any Outstanding Amount of L/C Obligations); provided that   the Required Lenders may, at their discretion, permit or require the   applicable Loan Party to use such Net Recovery Proceeds, or any part thereof,   to replace or
restore any properties or assets in respect of which such Net   Recovery Proceeds were paid within 365 days of receipt thereof; provided,   however, if on the date of receipt by any Loan Party of such Net   Recovery Proceeds all of the conditions precedent to a Credit Extension set   forth in Section 4.02 are satisfied (other than the delivery of a   Revolving Loan Notice), the Borrower shall not be required to make such   prepayment.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (f)          Repayment   Application.  Any mandatory   prepayment of Loans pursuant to Section 2.05(d) or (e)   shall (i) include and be applied to interest to the date of such   prepayment on the principal amount prepaid and any additional amounts   required pursuant to Section 3.05, and (ii) not be subject   to any notice and minimum payment provisions.
  
	
  
 
  	
  
 
  
	
  
          2.06   Termination   or Reduction of Commitments.    The Borrower may, upon notice to the Administrative Agent, terminate   the Aggregate Commitments, or from time to time permanently reduce the   Aggregate Commitments; provided that (i) any such notice shall be   received by the Administrative Agent not later than 10:00 a.m. five   Business Days prior to the date of termination or reduction, (ii) any   such partial reduction shall be in an aggregate amount of $10,000,000 or any   whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall   not terminate or reduce the Aggregate Commitments if, after giving effect   thereto and to any concurrent prepayments hereunder, the Total Outstandings   would exceed the Aggregate Commitment, and (iv) if, after giving effect   to any reduction of the Aggregate Commitments, the Letter of Credit
Sublimit   or the Swing Line Sublimit exceeds the amount of the Aggregate Commitments,   such Sublimit shall be automatically reduced by the amount of such   excess.  The Administrative Agent will   promptly notify the Lenders of any such notice of termination or reduction of   the Aggregate Commitments.  Any   reduction of the Aggregate Commitments shall be applied to the Aggregate   Commitment of each Lender according to its Applicable Percentage.  All fees accrued until the effective date   of any termination of the Aggregate Commitment shall be paid on the effective   date of such termination.
  
	
   
  	
  
 
  
	
  
 
  	
  
2.07   Repayment   of Loans.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          The   Borrower shall repay to the Lenders on the Maturity Date the aggregate   principal amount of Revolving Loans outstanding on such date and all other   outstanding and unpaid Obligations.
  

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          (b)          The   Borrower shall repay each Swing Line Loan on the earlier to occur of   (i) demand of the Swing Line Lender and (ii) the Maturity Date.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
2.08   Interest.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (a)          Subject   to the provisions of subsection (b) below, (i) each Eurodollar Rate   Loan shall bear interest on the outstanding principal amount thereof for each   Interest Period at a rate per annum equal to the lesser of (x) the   Highest Lawful Rate and (y) the Eurodollar Rate for such Interest Period   plus the Applicable Rate; (ii) each Base Rate Loan shall bear   interest on the outstanding principal amount thereof from the applicable   borrowing date at a rate per annum equal to the lesser of (x) the   Highest Lawful Rate and (y) the Base Rate in effect from time to time  plus the Applicable Rate; and   (iii) each Swing Line Loan shall bear interest on the outstanding   principal amount thereof from the applicable borrowing date at a rate per   annum equal to the lesser of
(x) the Highest Lawful Rate and   (y) the Base Rate plus the Applicable Rate.
  

	
  
 
  	
  
 
  	
  
(b)        (i)       If   any amount of principal of any Loan is not paid when due (without regard to   any applicable grace periods), whether at stated maturity, by acceleration or   otherwise, such amount shall thereafter bear interest at a fluctuating   interest rate per annum at all times equal to the lesser of (x) the   Highest Lawful Rate and (y) the Default Rate, to the fullest extent   permitted by applicable Laws.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
             (ii)      If   any amount (other than principal of any Loan) payable by the Borrower under   any Loan Document is not paid when due (without regard to any applicable   grace periods), whether at stated maturity, by acceleration or otherwise,   then upon the request of the Required Lenders, such amount shall thereafter   bear interest, to the fullest extent permitted by Applicable Law at a   fluctuating interest rate per annum at all times equal to the lesser of   (x) the Highest Lawful Rate and (y) the Default Rate, to the   fullest extent permitted by applicable Laws.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
            (iii)      Upon   the request of the Required Lenders, while any Event of Default exists, the   Borrower shall pay interest on the principal amount of all outstanding   Obligations hereunder at a fluctuating interest rate per annum at all times   equal to the Default Rate to the fullest extent permitted by applicable Laws.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
            (iv)      Accrued   and unpaid interest on past due amounts (including interest on past due   interest) shall be due and payable upon demand.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          Interest   on each Loan shall be due and payable in arrears on each Interest Payment   Date applicable thereto and at such other times as may be specified   herein.  Interest hereunder shall be   due and payable in accordance with the terms hereof before and after judgment,   and before and after the commencement of any proceeding under any Debtor   Relief Law.
  

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2.09   Fees.  In addition to certain fees described in   subsections (i) and (j) of Section 2.03:
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          Commitment   Fee.  The Borrower shall pay to   the Administrative Agent for the account of each Lender in accordance with   its Applicable Percentage, a commitment fee (“Commitment Fee”) equal   to the Applicable Rate times the actual daily amount by which the   Aggregate Commitments exceed the sum of (i) the Outstanding Amount of   Loans and (ii) the Outstanding Amount of L/C Obligations.  The Commitment Fee shall accrue at all   times during the Availability Period, including at any time during which one   or more of the conditions in Article IV is not met, and shall be   due and payable quarterly in arrears on the last Business Day of each March,   June, September and December, commencing with the first such date to occur   after the Closing Date, and on the Maturity Date. 
The Commitment Fee shall be calculated quarterly in arrears,   and if there is any change in the Applicable Rate during any quarter, the   actual daily amount shall be computed and multiplied by the Applicable Rate   separately for each period during such quarter that such Applicable Rate was   in effect.  For purposes of   computation of the Commitment Fee, Swing Line Loans shall not be counted   toward or considered usage of the Aggregate Commitments.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(b)     Other   Fees.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (i)          The   Borrower shall pay to the Arranger and the Administrative Agent for their own   respective accounts fees in the amounts and at the times specified in the Fee   Letter.  Such fees shall be fully   earned when paid and shall not be refundable for any reason whatsoever.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (ii)          The   Borrower shall pay to the Lenders such fees as shall have been separately   agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid   and shall not be refundable for any reason whatsoever.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
          2.10   Computation   of Interest and Fees.  All   computations of interest for Base Rate Loans when the Base Rate is determined   by Bank of America’s “prime rate” shall be made on the basis of a year of 365   or 366 days, as the case may be, and actual days elapsed.  Subject to Section 10.09, all   other computations of fees and interest shall be made on the basis of a   360-day year and actual days elapsed (which results in more fees or interest,   as applicable, being paid than if computed on the basis of a 365-day   year).  Interest shall accrue on each   Loan for the day on which the Loan is made, and shall not accrue on a Loan,   or any portion thereof, for the day on which the Loan or such portion is   paid, provided that any Loan that is repaid on the same day on which   it is made shall, subject to Section 2.12(a),
bear interest for   one day.  Each determination by the   Administrative Agent of an interest rate or fee hereunder shall be conclusive   and binding for all purposes, absent manifest error.
  

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          2.11    Evidence   of Debt.
  
	
  
 
  
	
  
 
  	
  
          (a)          The   Credit Extensions made by each Lender shall be evidenced by one or more   accounts or records maintained by such Lender and by the Administrative Agent   in the ordinary course of business.    The accounts or records maintained by the Administrative Agent and   each Lender shall be conclusive absent manifest error of the amount of the   Credit Extensions made by the Lenders to the Borrower and the interest and   payments thereon.  Any failure to so   record or any error in doing so shall not, however, limit or otherwise affect   the obligation of the Borrower hereunder to pay any amount owing with respect   to the Obligations.  In the event of   any conflict between the accounts and records maintained by any Lender and   the accounts and records of the Administrative Agent in respect of such   matters, the accounts and
records of the Administrative Agent shall control   in the absence of manifest error.    Upon the request of any Lender made through the Administrative Agent,   the Borrower shall execute and deliver to such Lender (through the   Administrative Agent) a Revolving Loan Note, and/or Swing Line Note, as   applicable, which shall evidence such Lender’s Loans in addition to such   accounts or records.  Each Lender may   attach schedules to its Notes and endorse thereon the date, Type (if   applicable), amount and maturity of its Loans and payments with respect   thereto.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          In   addition to the accounts and records referred to in subsection (a), each   Lender and the Administrative Agent shall maintain in accordance with its   usual practice accounts or records evidencing the purchases and sales by such   Lender of participations in Letters of Credit and Swing Line Loans.  In the event of any conflict between the   accounts and records maintained by the Administrative Agent and the accounts   and records of any Lender in respect of such matters, the accounts and   records of the Administrative Agent shall control in the absence of manifest   error.
  
	
  
 
  	
  
 
  
	
  
          2.12    Payments   Generally; Administrative Agent’s Clawback.
  
	
  
 
  
	
  
 
  	
  
          (a)          General.  All payments to be made by the Borrower   shall be made without condition or deduction for any counterclaim, defense,   recoupment or setoff.  Except as otherwise   expressly provided herein, all payments by the Borrower hereunder shall be   made to the Administrative Agent, for the account of the respective Lenders   to which such payment is owed, at the Administrative Agent’s Office in   Dollars and in immediately available funds not later than 1:00 p.m. on   the date specified herein.  The   Administrative Agent will promptly distribute to each Lender its Applicable   Percentage (or other applicable share as provided herein) of such payment in   like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the   Administrative Agent after 1:00 p.m.
shall be deemed received on the   next succeeding Business Day and any applicable interest or fee shall   continue to accrue.  If any payment to   be made by the Borrower shall come due on a day other than a Business Day,   payment shall be made on the next following Business Day, and such extension   of time shall be reflected in computing interest or fees, as the case may be.
  

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          (b)          (i)          Funding
by Lenders; Presumption by Administrative Agent.  Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such
Borrowing) that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume
that such Lender has made such share available on such date in accordance with
Section 2.02 (or, in the case of a Borrowing of Base Rate Loans,
that such Lender has made such share available in accordance with and at the
time required by Section 2.02) and may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. 
In such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender and
the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount in immediately available funds with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (A) in the case of a payment to be made by such Lender, the
greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation and
(B) in the case of a payment to be made by the Borrower, the interest rate
applicable to Base Rate Loans.  If the Borrower and such Lender shall pay
such interest to the Administrative Agent for the same or an overlapping period,
the Administrative Agent shall promptly remit to the Borrower the amount of such
interest paid by the Borrower for such period.  If such Lender pays its
share of the applicable Borrowing to the Administrative Agent, then the amount
so paid shall constitute such Lender’s Loan included in such
Borrowing.  Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.
 
	
   
  	
  
 
  
	
  
 
  	
  

                          (ii)          Payments
by Borrower; Presumptions by Administrative Agent.  Unless the
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the L/C Issuer hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the
amount due.  In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the L/C Issuer, as the case may be,
severally agrees to repay to the Administrative Agent forthwith   on demand the amount so distributed to
such Lender or the L/C Issuer, in immediately available funds with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank
compensation.
 

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          A notice of
the Administrative Agent to any Lender or the Borrower with respect to any
amount owing under this subsection (b) shall be conclusive, absent manifest
error.

	
   
  	
  
          (c)          Failure   to Satisfy Conditions Precedent.    If any Lender makes available to the Administrative Agent funds for   any Loan to be made by such Lender as provided in the foregoing provisions of   this Article II, and such funds are not made available to the   Borrower by the Administrative Agent because the conditions to the applicable   Credit Extension set forth in Article IV are not satisfied or   waived in accordance with the terms hereof, the Administrative Agent shall   return such funds (in like funds as received from such Lender) to such   Lender, without interest.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          Obligations   of Lenders Several.  The   obligations of the Lenders hereunder to make Loans, to fund participations in   Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c)   are several and not joint.  The   failure of any Lender to make any Loan, to fund any such participation or to   make any payment under Section 10.04(c) on any date required   hereunder shall not relieve any other Lender of its corresponding obligation   to do so on such date, and no Lender shall be responsible for the failure of   any other Lender to so make its Loan, to purchase its participation or to   make its payment under Section 10.04(c).
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          Funding   Source.  Nothing herein shall be   deemed to obligate any Lender to obtain the funds for any Loan in any   particular place or manner or to constitute a representation by any Lender   that it has obtained or will obtain the funds for any Loan in any particular   place or manner.
  
	
   
  	
  
 
  
	
  
          2.13   Sharing of Payments by Lenders.  If any Lender shall, by   exercising any right of setoff or counterclaim or otherwise, obtain payment   in respect of any principal of or interest on any of the Loans made by it, or   the participations in L/C Obligations or in Swing Line Loans held by it   resulting in such Lender’s receiving payment of a proportion of the aggregate   amount of such Loans or participations and accrued interest thereon greater   than its pro rata share thereof as provided herein, then the   Lender receiving such greater proportion shall (a) notify the   Administrative Agent of such fact, and (b) purchase (for cash at face   value) participations in the Loans and subparticipations in L/C Obligations   and Swing Line Loans of the other Lenders, or make such other adjustments as   shall be equitable, so that the benefit of
all such payments shall be shared   by the Lenders ratably in accordance with the aggregate amount of principal   of and accrued interest on their respective Loans and other amounts owing   them, provided that:
  

	
  
 
  	
  
          (i)          if   any such participations or subparticipations are purchased and all or any   portion of the payment giving rise thereto is recovered, such participations   or subparticipations shall be rescinded and the purchase price restored to   the extent of such recovery, without interest; and
  
	
   
  	
  
 
  
	
  
 
  	
  
          (ii)        the   provisions of this Section shall not be construed to apply to (x) any   payment made by the Borrower pursuant to and in accordance with the express   terms of this Agreement or (y) any payment obtained by a Lender as   consideration for the assignment of or sale of a participation in any of its   Loans or subparticipations in L/C Obligations or Swing Line Loans to any   assignee or participant, other than to the Borrower or any Subsidiary thereof   (as to which the provisions of this Section shall apply).
  

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          Each   Loan Party consents to the foregoing and agrees, to the extent it may   effectively do so under Applicable Law, that any Lender acquiring a   participation pursuant to the foregoing arrangements may exercise against   such Loan Party rights of setoff and counterclaim with respect to such participation   as fully as if such Lender were a direct creditor of such Loan Party in the   amount of such participation.
  
	
  
 
  	
  
 
  
	
  
          2.14   Collateral.  To secure full and complete   payment and performance of the Obligations, the Borrower shall execute and   deliver or cause to be executed and delivered the documents described below   covering the property and collateral described in this Section 2.14   (which, together with any other property and collateral which may now or   hereafter secure the Obligations or any part thereof, is sometimes herein   called the “Collateral”):
  
	
   
  	
  
 
  
	
  
 
  	
  
          (a)          The
Borrower will, and will cause each of its Domestic Subsidiaries to, grant to
Administrative Agent, for the benefit of the Secured Parties, a security
interest in all of its accounts, chattel paper, instruments, documents, books,
records, letter-of-credit rights, inventory, machinery, equipment, financial
assets, investment property, contract rights, deposit accounts, material
trademarks, material patents, material copyrights, other material intellectual
property, payment intangibles, other general intangibles, commercial tort
claims, 100% of Equity Interests in its Domestic Subsidiaries (other than TXI
Capital Trust I) and 66% of Equity Interests in Foreign Subsidiaries owned
directly by the Borrower or any Domestic Subsidiary, and other personal property
subject to the Lien granted pursuant to the Security Agreement, whether now
owned or hereafter acquired, and all products and cash and non-cash proceeds
thereof, pursuant to the Security Agreement, provided in all cases
(i) perfection in such collateral shall be limited to the extent that
perfection may be obtained by (w) the filing of a centralized UCC-1
financing statement, (x) patent, trademark or copyright office filings or
(y) possession of stock certificates and (ii) the security interest
shall not cover any assets with respect to which there are effective and
enforceable legal restrictions against the granting of a security interest
therein.
 
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          The   Borrower will, and will cause each of the Guarantors to execute and deliver   and cause to be executed and delivered such further documents and instruments   as Administrative Agent, in its sole discretion, deems necessary or desirable   to evidence and perfect its Liens in the Collateral.
  

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ARTICLE III.
 TAXES, YIELD PROTECTION AND ILLEGALITY

	
  
 
  	
  
3.01   Taxes.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          Payments   Free of Taxes.  Any and all   payments by or on account of any obligation of the Borrower hereunder or under   any other Loan Document shall be made free and clear of and without reduction   or withholding for any Indemnified Taxes or Other Taxes, provided that if the   Borrower shall be required by Applicable Law to deduct any Indemnified Taxes   (including any Other Taxes) from such payments, then (i) the sum payable   shall be increased as necessary so that after making all required deductions   (including deductions applicable to additional sums payable under this   Section) the Administrative Agent, Lender or L/C Issuer, as the case may be,   receives an amount equal to the sum it would have received had no such   deductions been made, (ii) the Borrower shall make such deductions and   (iii) the
Borrower shall timely pay the full amount deducted to the   relevant Governmental Authority in accordance with Applicable Law.
  
	
  
 
  	
  
 
  
	
   
  	
  
          (b)          Payment   of Other Taxes by the Borrower.    Without limiting the provisions of subsection (a) above, the Borrower   shall timely pay any Other Taxes to the relevant Governmental Authority in   accordance with Applicable Law.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          Indemnification   by the Borrower.  The Borrower   shall indemnify the Administrative Agent, each Lender and the L/C Issuer,   within 10 days after demand therefor, for the full amount of any Indemnified   Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or   asserted on or attributable to amounts payable under this Section) paid by   the Administrative Agent, such Lender or the L/C Issuer, as the case may be,   and any penalties, interest and reasonable expenses arising therefrom or with   respect thereto, whether or not such Indemnified Taxes or Other Taxes were   correctly or legally imposed or asserted by the relevant Governmental   Authority.  A certificate as to the   amount of such payment or liability delivered to the Borrower by a Lender or   the L/C Issuer (with a copy to the Administrative
Agent), or by the   Administrative Agent on its own behalf or on behalf of a Lender or the L/C   Issuer, shall be conclusive absent manifest error.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          Evidence   of Payments.  As soon as   practicable after any payment of Indemnified Taxes or Other Taxes by the   Borrower to a Governmental Authority, the Borrower shall deliver to the   Administrative Agent the original or a certified copy of a receipt issued by   such Governmental Authority evidencing such payment, a copy of the return   reporting such payment or other evidence of such payment reasonably   satisfactory to the Administrative Agent.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (e)          Status   of Lenders.  Any Foreign Lender   that is entitled to an exemption from or reduction of withholding tax under   the law of the jurisdiction in which the Borrower is resident for tax   purposes, or any treaty to which such jurisdiction is a party, with respect   to payments hereunder or under any other Loan Document shall deliver to the   Borrower (with a copy to the Administrative Agent), at the time or times   prescribed by Applicable Law or reasonably requested by the Borrower or the   Administrative Agent, such properly completed and executed documentation   prescribed by Applicable Law as will permit such payments to be made without   withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the Borrower or the Administrative   Agent, shall deliver such other documentation
prescribed by Applicable Law or   reasonably requested by the Borrower or the Administrative Agent as will   enable the Borrower or the Administrative Agent to determine whether or not   such Lender is subject to backup withholding or information reporting   requirements.
  

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          Without   limiting the generality of the foregoing, in the event that the Borrower is   resident for tax purposes in the United States, any Foreign Lender shall   deliver to the Borrower and the Administrative Agent (in such number of   copies as shall be requested by the recipient) on or prior to the date on   which such Foreign Lender becomes a Lender under this Agreement (and from   time to time thereafter upon the request of the Borrower or the Administrative   Agent, but only if such Foreign Lender is legally entitled to do so),   whichever of the following is applicable:
  

	
  
 
  	
  
 
  	
  
          (i)          duly   completed copies of Internal Revenue Service Form W-8BEN claiming   eligibility for benefits of an income tax treaty to which the United States   is a party,
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (ii)         duly   completed copies of Internal Revenue Service Form W-8ECI,
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (iii)        in   the case of a Foreign Lender claiming the benefits of the exemption for   portfolio interest under section 881(c) of the Code, (x) a   certificate to the effect that such Foreign Lender is not (A) a “bank”   within the meaning of section 881(c)(3)(A) of the Code, (B) a “10   percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B)   of the Code, or (C) a “controlled foreign corporation” described in   section 881(c)(3)(C) of the Code and (y) duly completed copies of   Internal Revenue Service Form W-8BEN, or
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (iv)        any   other form prescribed by Applicable Law as a basis for claiming exemption   from or a reduction in United States Federal withholding tax duly completed   together with such supplementary documentation as may be prescribed by   Applicable Law to permit the Borrower to determine the withholding or   deduction required to be made.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)       Treatment   of Certain Refunds.  If the   Administrative Agent, any Lender or the L/C Issuer determines, in its sole   discretion, that it has received a refund of any Taxes or Other Taxes as to   which it has been indemnified by the Borrower or with respect to which the   Borrower has paid additional amounts pursuant to this Section, it shall pay   to the Borrower an amount equal to such refund (but only to the extent of   indemnity payments made, or additional amounts paid, by the Borrower under   this Section with respect to the Taxes or Other Taxes giving rise to such   refund), net of all out-of-pocket expenses of the Administrative Agent, such   Lender or the L/C Issuer, as the case may be, and without interest (other   than any interest paid by the relevant Governmental Authority with respect to   such refund),
provided that the Borrower, upon the request of the   Administrative Agent, such Lender or the L/C Issuer, agrees to repay the   amount paid over to the Borrower (plus any penalties, interest or other   charges imposed by the relevant Governmental Authority) to the Administrative   Agent, such Lender or the L/C Issuer in the event the Administrative Agent,   such Lender or the L/C Issuer is required to repay such refund to such   Governmental Authority.  This   subsection shall not be construed to require the Administrative Agent, any   Lender or the L/C Issuer to make available its tax returns (or any other   information relating to its taxes that it deems confidential) to the Borrower   or any other Person.
  

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          3.02    Illegality.  If any Lender determines that any Law has   made it unlawful, or that any Governmental Authority has asserted that it is   unlawful, for any Lender or its applicable Lending Office to make, maintain   or fund Eurodollar Rate Loans, or to determine or charge interest rates based   upon the Eurodollar Rate, or any Governmental Authority has imposed material   restrictions on the authority of such Lender to purchase or sell, or to take   deposits of, Dollars in the London interbank market, then, on notice thereof   by such Lender to the Borrower through the Administrative Agent, any   obligation of such Lender to make or continue Eurodollar Rate Loans or to   convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until   such Lender notifies the Administrative Agent and the Borrower that the   circumstances giving rise to such determination no
longer exist.  Upon receipt of such notice, the Borrower   shall, upon demand from such Lender (with a copy to the Administrative Agent),   prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to   Base Rate Loans, either on the last day of the Interest Period therefor, if   such Lender may lawfully continue to maintain such Eurodollar Rate Loans to   such day, or immediately, if such Lender may not lawfully continue to   maintain such Eurodollar Rate Loans.    Upon any such prepayment or conversion, the Borrower shall also pay   accrued interest on the amount so prepaid or converted.
  
	
  
 
  	
  
 
  
	
  
          3.03    Inability   to Determine Rates.  If the   Required Lenders determine that for any reason in connection with any request   for a Eurodollar Rate Loan or a conversion to or continuation thereof that   (a) Dollar deposits are not being offered to banks in the London   interbank eurodollar market for the applicable amount and Interest Period of   such Eurodollar Rate Loan, (b) adequate and reasonable means do not   exist for determining the Eurodollar Rate for any requested Interest Period   with respect to a proposed Eurodollar Rate Loan, or (c) the Eurodollar   Rate for any requested Interest Period with respect to a proposed Eurodollar   Rate Loan does not adequately and fairly reflect the cost to such Lenders of   funding such Loan, the Administrative Agent will promptly so notify the   Borrower and each Lender.  Thereafter,   the obligation of
the Lenders to make or maintain Eurodollar Rate Loans shall   be suspended until the Administrative Agent (upon the instruction of the   Required Lenders) revokes such notice.    Upon receipt of such notice, the Borrower may revoke any pending   request for a Borrowing of, conversion to or continuation of Eurodollar Rate   Loans or, failing that, will be deemed to have converted such request into a   request for a Borrowing of Base Rate Loans in the amount specified therein.
  
	
   
  	
  
 
  
	
  
 
  	
  
3.04   Increased   Costs; Reserves on Eurodollar Rate Loans.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)     Increased   Costs Generally.  If any Change in   Law shall:
  

	
  
 
  	
  
 
  	
  
          (i)          impose,   modify or deem applicable any reserve, special deposit, compulsory loan, insurance   charge or similar requirement against assets of, deposits with or for the   account of, or credit extended or participated in by, any Lender (except any   reserve requirement contemplated by Section 3.04(e)) or the L/C   Issuer;
  

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          (ii)          subject   any Lender or the L/C Issuer to any tax of any kind whatsoever with respect   to this Agreement, any Letter of Credit, any participation in a Letter of   Credit or any Eurodollar Rate Loan made by it, or change the basis of taxation   of payments to such Lender or the L/C Issuer in respect thereof (except for   Indemnified Taxes or Other Taxes covered by Section 3.01 and the   imposition of, or any change in the rate of, any Excluded Tax payable by such   Lender or the L/C Issuer); or
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (iii)        impose   on any Lender or the L/C Issuer or the London interbank market any other   condition, cost or expense affecting this Agreement or Eurodollar Rate Loans   made by such Lender or any Letter of Credit or participation therein;
  

	
  
 
  	
  
and the   result of any of the foregoing shall be to increase the cost to such Lender   of making or maintaining any Eurodollar Rate Loan (or of maintaining its   obligation to make any such Loan), or to increase the cost to such Lender or   the L/C Issuer of participating in, issuing or maintaining any Letter of   Credit (or of maintaining its obligation to participate in or to issue any   Letter of Credit), or to reduce the amount of any sum received or receivable   by such Lender or the L/C Issuer hereunder (whether of principal, interest or   any other amount) then, upon request of such Lender or the L/C Issuer, the   Borrower will pay to such Lender or the L/C Issuer, as the case may be, such   additional amount or amounts as will compensate such Lender or the L/C Issuer,   as the case may be, for such additional costs incurred or reduction suffered.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Capital   Requirements.  If any Lender or   the L/C Issuer determines that any Change in Law affecting such Lender or the   L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C   Issuer’s holding company, if any, regarding capital requirements has or would   have the effect of reducing the rate of return on such Lender’s or the L/C   Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s   holding company, if any, as a consequence of this Agreement, the Commitments   of such Lender or the Loans made by, or participations in Letters of Credit   held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a   level below that which such Lender or the L/C Issuer or such Lender’s or the   L/C Issuer’s holding company could have achieved but
for such Change in Law   (taking into consideration such Lender’s or the L/C Issuer’s policies and the   policies of such Lender’s or the L/C Issuer’s holding company with respect to   capital adequacy), then from time to time the Borrower will pay to such   Lender or the L/C Issuer, as the case may be, such additional amount or   amounts as will compensate such Lender or the L/C Issuer or such Lender’s or   the L/C Issuer’s holding company for any such reduction suffered.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)          Certificates   for Reimbursement.  A certificate   of a Lender or the L/C Issuer setting forth the amount or amounts necessary   to compensate such Lender or the L/C Issuer or its holding company, as the   case may be, as specified in subsection (a) or (b) of this Section and   delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the   L/C Issuer, as the case may be, the amount shown as due on any such   certificate within 10 days after receipt thereof.
  

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          (d)          Delay   in Requests.  Failure or delay on   the part of any Lender or the L/C Issuer to demand compensation pursuant to   the foregoing provisions of this Section shall not constitute a waiver of   such Lender’s or the L/C Issuer’s right to demand such compensation, provided   that the Borrower shall not be required to compensate a Lender or the L/C   Issuer pursuant to the foregoing provisions of this Section for any increased   costs incurred or reductions suffered more than nine months prior to the date   that such Lender or the L/C Issuer, as the case may be, notifies the Borrower   of the Change in Law giving rise to such increased costs or reductions and of   such Lender’s or the L/C Issuer’s intention to claim compensation therefor   (except that, if the Change in Law giving rise to such increased
costs or   reductions is retroactive, then the nine-month period referred to above shall   be extended to include the period of retroactive effect thereof).
  
	
   
  	
  
 
  
	
  
 
  	
  
          (e)          Reserves   on Eurodollar Rate Loans.  The   Borrower shall pay to each Lender, as long as such Lender shall be required   to maintain reserves with respect to liabilities or assets consisting of or   including Eurocurrency funds or deposits (currently known as “Eurocurrency   liabilities”), additional interest on the unpaid principal amount of each   Eurodollar Rate Loan equal to the actual costs of such reserves allocated to   such Loan by such Lender (as determined by such Lender in good faith, which   determination shall be conclusive), which shall be due and payable on each   date on which interest is payable on such Loan, provided the Borrower   shall have received at least 10 days’ prior notice (with a copy to the   Administrative Agent) of such additional interest from such Lender.  If a Lender
fails to give notice 10 days   prior to the relevant Interest Payment Date, such additional interest shall   be due and payable 10 days from receipt of such notice.
  
	
  
 
  	
  
 
  
	
  
          3.05   Compensation   for Losses.  Upon demand of   any Lender (with a copy to the Administrative Agent) from time to time, the   Borrower shall promptly compensate such Lender for and hold such Lender   harmless from any loss, cost or expense incurred by it as a result of:
  
	
  
 
  	
  
 
  
	
   
  	
  
          (a)          any   continuation, conversion, payment or prepayment of any Loan other than a Base   Rate Loan on a day other than the last day of the Interest Period for such   Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or   otherwise);
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          any   failure by the Borrower (for a reason other than the failure of such Lender   to make a Loan) to prepay, borrow, continue or convert any Loan other than a   Base Rate Loan on the date or in the amount notified by the Borrower; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          any   assignment of a Eurodollar Rate Loan on a day other than the last day of the   Interest Period therefor as a result of a request by the Borrower pursuant to   Section 10.13;
  
	
  
 
  	
  
 
  

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.  The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

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For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

          3.06   Mitigation Obligations; Replacement of Lenders.

	
  
 
  	
  
          (a)          Designation   of a Different Lending Office.  If   any Lender requests compensation under Section 3.04, or the   Borrower is required to pay any additional amount to any Lender or any   Governmental Authority for the account of any Lender pursuant to Section 3.01,   or if any Lender gives a notice pursuant to Section 3.02, then   such Lender shall use reasonable efforts to designate a different Lending   Office for funding or booking its Loans hereunder or to assign its rights and   obligations hereunder to another of its offices, branches or affiliates, if,   in the judgment of such Lender, such designation or assignment (i) would   eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,   as the case may be, in the future, or eliminate the need for the
notice   pursuant to Section 3.02, as applicable, and (ii) in each   case, would not subject such Lender to any unreimbursed cost or expense and   would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all   reasonable costs and expenses incurred by any Lender in connection with any   such designation or assignment.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          Replacement   of Lenders.  If any Lender   requests compensation under Section 3.04, or if the Borrower is   required to pay any additional amount to any Lender or any Governmental   Authority for the account of any Lender pursuant to Section 3.01,   or if any Lender gives a notice pursuant to Section 3.02, the   Borrower may replace such Lender in accordance with Section 10.13.
  

          3.07   Survival.  All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

ARTICLE IV.
 CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

          4.01   Conditions of Initial Credit Extension.  The obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:

	
  
 
  	
  
          (a)          The   Administrative Agent’s receipt of the following, each of which shall be   originals or telecopies (followed promptly by originals) unless otherwise   specified, each properly executed by a Responsible Officer of the signing   Loan Party, each dated the Closing Date (or, in the case of certificates of   governmental officials, a recent date before the Closing Date) and each in   form and substance satisfactory to the Administrative Agent and each of the   Lenders:
  

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             (i)          executed   counterparts of this Agreement, the Guaranty, the Security Agreement   (together with related UCC-1 financing statements, stock certificates for all   Equity Interests owned by the Loan Parties in each Domestic Subsidiary of the   Borrower (other than TXI Capital Trust I), stock certificates for 66% of   the Equity Interests in the Foreign Subsidiaries owned directly by the   Borrower or a Domestic Subsidiary, and undated stock powers duly executed in   blank) sufficient in number for distribution to the Administrative Agent,   each Lender and the Borrower;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
             (ii)         receipt   of certificates of insurance and endorsements to insurance policies naming   the Administrative Agent as loss payee with respect to all Collateral;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
             (iii)        copies   of all UCC searches of the Borrower and its Domestic Subsidiaries, each such   search showing no Liens except Permitted Liens;
  
	
   
  	
  
 
  
	
  
 
  	
  
             (iv)        Revolving   Loan Notes executed by the Borrower in favor of each Lender requesting a   Revolving Loan Note;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
             (v)         a   Swing Line Note executed by the Borrower in favor of the Swing Line Lender;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
             (vi)        such   certificates of resolutions or other action, incumbency certificates and/or   other certificates of Responsible Officers of each Loan Party as the   Administrative Agent may require evidencing the identity, authority and   capacity of each Responsible Officer thereof authorized to act as a Responsible   Officer in connection with this Agreement and the other Loan Documents to   which such Loan Party is a party;
  
	
  
 
  	
  
 
  
	
   
  	
  
             (vii)       such   documents and certifications as the Administrative Agent may reasonably   require to evidence that each Loan Party is duly organized or formed, and   that each Loan Party is validly existing, in good standing and qualified to   engage in business in each jurisdiction where its ownership, lease or   operation of properties or the conduct of its business requires such qualification,   except to the extent that failure to do so could not reasonably be expected   to have a Material Adverse Effect;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
             (viii)      a   favorable opinion of Thompson & Knight L.L.P., counsel to the Loan   Parties, addressed to the Administrative Agent and each Lender, as to the   matters set forth in Exhibit D and such other matters concerning   the Loan Parties and the Loan Documents as the Administrative Agent may   reasonably request;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
             (ix)         a   certificate of a Responsible Officer of each Loan Party either   (A) attaching copies of all consents, licenses and approvals required in   connection with the execution, delivery and performance by such Loan Party   and the validity against such Loan Party of the Loan Documents to which it is   a party, and such consents, licenses and approvals shall be in full force and   effect, or (B) stating that no such consents, licenses or approvals are   so required;
  

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             (x)          a   certificate signed by a Responsible Officer of the Borrower certifying   (A) that the conditions specified in Sections 4.02(a) and (b)   have been satisfied, and (B) that there has been no event or   circumstance since the date of the Audited Financial Statements that has had   or could be reasonably expected to have, either individually or in the   aggregate, a Material Adverse Effect;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
             (xi)         evidence   that the Existing Credit Agreement has been or concurrently with the Closing   Date is being terminated and all Liens securing obligations under the   Existing Credit Agreement have been or concurrently with the Closing Date are   being released;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
             (xii)        the   2005 Senior Notes shall have been issued;
  
	
   
  	
  
 
  
	
  
 
  	
  
             (xiii)       a   solvency certificate signed by the Chief Financial Officer of the Borrower in   form and substance satisfactory to the Administrative Agent; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
             (xiv)        such   other assurances, certificates, documents, consents or opinions as the   Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required   Lenders reasonably may require.
  

	
  
 
  	
  
          (b)          Any   fees required to be paid on or before the Closing Date shall have been paid.
  
	
  
 
  	
  
 
  
	
   
  	
  
          (c)          Unless   waived by the Administrative Agent, the Borrower shall have paid all fees,   charges and disbursements of counsel to the Administrative Agent to the   extent invoiced prior to or on the Closing Date, plus such additional amounts   of such fees, charges and disbursements as shall constitute its reasonable estimate   of such fees, charges and disbursements incurred or to be incurred by it   through the closing proceedings (provided that such estimate shall not   thereafter preclude a final settling of accounts between the Borrower and the   Administrative Agent).
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          There   shall not have occurred a material adverse change (x) in the business,   assets, properties, liabilities (actual or contingent), operations, condition   (financial or otherwise) or prospects of the Borrower and its Subsidiaries, taken   as a whole, since May 31, 2004 or (y) in the facts and information   regarding such entities represented to date.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          The   initial Credit Extension shall have occurred on or before September 30,   2005.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (f)          After   giving effect to the initial Credit Extension, the (i) Leverage Ratio   (calculated for purposes of this Section 4.01(f) only, to deduct   from the amount of Total Debt the aggregate amount of cash (x) on   deposit with the Administrative Agent and subject to a perfected, first   priority security interest pursuant to a deposit account control agreement   and (y) on deposit with the trustee for the 2003 Senior Notes which   qualifies as eligible funds for the defeasance thereof, but not to exceed the   amount of such notes to be outstanding after the initial Credit Extension),   on a pro forma basis, shall not exceed 2.50 to 1.00 and   (ii) Availability shall not be less than $125,000,000.
  

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          Without limiting the generality of the provisions of Section 9.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

          4.02   Conditions to all Credit Extensions.  The obligation of each Lender to honor any Request for Credit Extension (other than a Revolving Loan Notice requesting only a conversion of Revolving Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent:

	
  
 
  	
  
          (a)          The   representations and warranties of the Borrower and each other Loan Party   contained in Article V or any other Loan Document, or which are   contained in any document furnished at any time under or in connection   herewith or therewith, shall be true and correct on and as of the date of   such Credit Extension, except to the extent that such representations and   warranties specifically refer to an earlier date, in which case they shall be   true and correct as of such earlier date, and except that for purposes of   this Section 4.02, the representations and warranties contained   in subsections (a) and (b) of Section 5.05 shall be deemed   to refer to the most recent statements furnished pursuant to clauses (a)   and (b), respectively, of Section 6.01.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          No   Default shall exist, or would result from such proposed Credit Extension or   from the application of the proceeds thereof.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          The   Administrative Agent and, if applicable, the L/C Issuer or the Swing Line   Lender shall have received a Request for Credit Extension in accordance with   the requirements hereof.
  

          Each Request for Credit Extension (other than a Revolving Loan Notice requesting only a conversion of Revolving Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

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ARTICLE V.
 REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants to the Administrative Agent and the Lenders that:

          5.01     Existence, Qualification and Power; Compliance with Laws.  The Borrower and each Subsidiary (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws; except in each case referred to in clause (b)(i), (c) or
(d), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

          5.02     Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law.  The Borrower and each Subsidiary is in compliance
with all Contractual Obligations referred to in clause (b)(i), except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

          5.03     Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document.

          5.04     Binding Effect.  This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as limited by (a) Debtor Relief Laws and (b) the effect of general principles of equity whether applied by a court of Law or equity.

          5.05   Financial Statements; No Material Adverse Effect; No Internal Control Event.

	
  
 
  	
  
          (a)          The   Audited Financial Statements (i) were prepared in accordance with GAAP   consistently applied throughout the period covered thereby, except as   otherwise expressly noted therein; (ii) fairly present the financial   condition of the Borrower and its Subsidiaries (including Chaparral and its   Subsidiaries) as of the date thereof and their results of operations for the   period covered thereby in accordance with GAAP consistently applied   throughout the period covered thereby, except as otherwise expressly noted   therein; and (iii) show all material consolidated indebtedness and other   liabilities, direct or contingent, of the Borrower and its Subsidiaries   (including Chaparral and its Subsidiaries) as of the date thereof, including   liabilities for taxes, material commitments and Debt, as and to the extent   required
to be reported in accordance with GAAP.
  

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          (b)          The   unaudited consolidated and consolidating balance sheet of the Borrower and   its Subsidiaries (including Chaparral and its Subsidiaries) dated February 28,   2005, and the related consolidated and consolidating statements of income or   operations, shareholders’ equity and cash flows for the fiscal quarter ended   on that date (i) were, with respect to the consolidated statements,   prepared in accordance with GAAP consistently applied throughout the period   covered thereby, except as otherwise expressly noted therein,   (ii) fairly present the financial condition of the Borrower and its   Subsidiaries (including Chaparral and its Subsidiaries) as of the date thereof   and their results of operations for the period covered thereby, subject, in   the case of clauses (i) and (ii), to the absence of footnotes and
to   normal year-end audit adjustments, and (iii) set forth all material   indebtedness and other liabilities, direct or contingent, of the Borrower and   its consolidated Subsidiaries (including Chaparral and its Subsidiaries) as   of the date of such financial statements, including liabilities for taxes,   material commitments and Debt, as and to the extent required to be reported   in accordance with GAAP.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          Since   the date of the Audited Financial Statements, there has been no event or   circumstance (including, without limitation, an Internal Control Event),   either individually or in the aggregate, that has had or could reasonably be   expected to have a Material Adverse Effect.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)          The   Borrower and its Subsidiaries have no Off-Balance Sheet Liabilities except   the Convertible Subordinated Debentures held by TXI Capital Trust I.
  

          5.06   Litigation.  There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

          5.07   No Default.  Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

          5.08   Ownership
of Property; Liens.  Each of the Borrower and each Subsidiary has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  The property of
the Borrower and its Subsidiaries is subject to no Liens, other than Liens
permitted by Section 7.01.

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          5.09   Environmental Compliance.  

	
  
 
  	
  
          (a)          Permits,   Etc.  The Borrower and its   Subsidiaries (i) have obtained all material Environmental Permits   required by Governmental Authorities necessary for the ownership and   operation of their respective properties and the conduct of their respective   businesses; (ii) are in compliance with all terms and conditions of such   Environmental Permits, if any, and with all other material requirements of   applicable Environmental Laws; (iii) have not received notice of any   violation or alleged violation of any Environmental Law or Environmental   Permit; and (iv) are not subject to any actual or contingent   Environmental Liability, in each case in clauses (i) through (iv) immediately   preceding where the effect could not individually or in the aggregate be   reasonably expected to have a Material
Adverse Effect.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Certain   Liabilities.  None of the present   or, to the Borrower’s knowledge, previously owned or operated Properties of   the Borrower or of any of its present or former Subsidiaries, wherever   located, (i) has been placed on or proposed to be placed on the National   Priorities List, the Comprehensive Environmental Response Compensation   Liability Information System list, or their state or local analogs, or have   been otherwise investigated, designated, listed or identified as a potential   site for removal, remediation, cleanup, closure, restoration, reclamation, or   other response activity under any Environmental Laws, except for any such   Property with respect to which such event could not, individually or in the   aggregate, reasonably be expected to have a Material Adverse Effect;   (ii) is subject to a
Lien, arising under or in connection with any Environmental   Laws, that attaches to any revenues or to any Property owned or operated by   the Borrower or any of its Subsidiaries, wherever located, which could   individually or in the aggregate reasonably be expected to have a Material   Adverse Effect; or (iii) has been the site of any Release of Hazardous   Materials from present or past operations which has caused at the site or at   any third party site any condition that has resulted in or could individually   or in the aggregate reasonably be expected to result in the need for Response   that would cause a Material Adverse Effect.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)          Certified   Actions.  Without limiting the   foregoing, (i) all necessary notices have been properly filed, and no   further action is required under current Environmental Law as to each   Response or other restoration or remedial project taken by the Borrower, or   its present or former Subsidiaries on any of their presently or formerly   owned or operated Properties and (ii) the present and future liability,   if any, of the Borrower and its Subsidiaries which could reasonably be   expected to arise in connection with requirements under Environmental Laws   could not individually or in the aggregate be reasonably expected to have a   Material Adverse Effect.
  

          5.10   Insurance. 
The properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Borrower, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Borrower or the applicable Subsidiary
operates.

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          5.11   Taxes. 
The Borrower and its Subsidiaries have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes shown on such returns and all other
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those which
are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance with
GAAP.  There is no proposed tax assessment against the Borrower or
any Subsidiary that would, if made, have a Material Adverse Effect.  Neither
the Borrower nor any Subsidiary is party to any tax sharing agreement with any
party outside the Borrower’s consolidated group other than as a part of the
Spin-Off Transaction.

          5.12   ERISA Compliance.

	
  
 
  	
  
          (a)          Each   Plan is in compliance with the applicable provisions of ERISA, the Code and   other Federal or state Laws, except such noncompliance as could not,   individually or in the aggregate, be reasonably expected to have a Material   Adverse Effect.  Each Plan that is   intended to qualify under Section 401(a) of the Code has qualified in   form and operation under such Section and, to the best knowledge of the   Borrower, nothing has occurred which would prevent, or cause the loss of,   such qualification.  The Borrower and   each ERISA Affiliate have made all required contributions to each Plan   subject to Section 412 of the Code, and no application for a funding   waiver or an extension of any amortization period pursuant to   Section 412 of the Code has been made with respect to any Plan.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          There   are no pending or, to the best knowledge of the Borrower, threatened claims,   actions or lawsuits, or action by any Governmental Authority, with respect to   any Plan that could reasonably be expected to have a Material Adverse   Effect.  There has been no prohibited   transaction or violation of the fiduciary responsibility rules with respect   to any Plan that has resulted or could reasonably be expected to result in a   Material Adverse Effect.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)          (i) No   ERISA Event has occurred or is reasonably expected to occur that,   individually or in the aggregate, could reasonably be expected to have a   Material Adverse Effect; (ii) no Pension Plans have any Unfunded Pension   Liability, individually or in the aggregate for all Pension Plans, in excess   of $1,000,000; (iii) neither the Borrower nor any ERISA Affiliate has   incurred, or reasonably expects to incur, any liability under Title IV   of ERISA with respect to any Pension Plan (other than premiums due and not   delinquent under Section 4007 of ERISA); (iv) neither the Borrower   nor any ERISA Affiliate has incurred, or reasonably expects to incur, any   liability (and no event has occurred which, with the giving of notice under   Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and   (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction   that could be subject to Sections 4069 or 4212(c) of ERISA.
  

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          5.13   Subsidiaries; Equity Interests.  As of the Closing Date, the Borrower has no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens.  The Borrower has no equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13.  All of the outstanding Equity Interests in the Borrower have been validly issued, are fully paid and nonassessable.

          5.14   Margin Regulations; Investment Company Act; Public Utility Holding Company Act.

	
  
 
  	
  
          (a)          The   Borrower is not engaged and will not engage, principally or as one of its   important activities, in the business of purchasing or carrying margin stock   (within the meaning of Regulation U issued by the FRB), or extending   credit for the purpose of purchasing or carrying margin stock.  Following the application of the proceeds   of each Borrowing or drawing under each Letter of Credit, not more than 25%   of the value of the assets (either of the Borrower only or of the Borrower   and its Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01   or Section 7.05 or subject to any restriction contained in any   agreement or instrument between the Borrower and any Lender or any Affiliate   of any Lender relating to Debt and within the scope of Section 8.01(e)   will be
margin stock.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          None   of the Borrower, any Person Controlling the Borrower, or any Subsidiary   (i) is a “holding company,” or a “subsidiary company” of a “holding   company,” or an “affiliate” of a “holding company” or of a “subsidiary   company” of a “holding company,” within the meaning of the Public Utility   Holding Company Act of 1935, or (ii) is or is required to be registered   as an “investment company” under the Investment Company Act of 1940.
  

          5.15   Disclosure.  The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made and on the dates on which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

          5.16   Compliance with Laws.  Each of the Borrower and each Subsidiary is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

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          5.17   Intellectual
Property; Licenses, Etc.  The Borrower and its Subsidiaries own, or
possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, “IP Rights”) that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person.  To the knowledge of the Borrower, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by the Borrower
or any Subsidiary infringes upon any rights held by any other Person.  No
claim or litigation regarding any of the foregoing is pending or, to the best
knowledge of the Borrower, threatened, which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.

          5.18   Common
Enterprise.  The operations of the Borrower and its Subsidiaries require
financing on a basis such that the credit supplied can be made available from
time to time to the Borrower and various of its Subsidiaries, as required for
the continued successful operation of the Borrower and its Subsidiaries as a
whole.  The Borrower has requested the Lender to make credit available
hereunder primarily for the purposes set forth in Section 6.11 and
generally for the purposes of financing the operations of the Borrower and its
Subsidiaries.  The Borrower and each of its Subsidiaries expects to derive
benefit (and the Board of Directors or other similar governing body of the
Borrower and each of its Subsidiaries has determined that such Subsidiary may
reasonably be expected to derive benefit), directly or indirectly, from a
portion of the credit extended by the Lenders hereunder, both in its separate
capacity and as a member of the group of companies, since the successful
operation and condition of the Borrower and each of its Subsidiaries is enhanced
by the continued successful performance of the functions of the group as a
whole.  The Borrower acknowledges that, but for the agreement by each of
the Guarantors to execute and deliver the Guaranty, the Administrative Agent and
the Lenders would not have made available the credit facilities established
hereby on the terms set forth herein.

          5.19   Solvent.  The Borrower is, and the Borrower and its Subsidiaries are on a consolidated basis, Solvent.

          5.20   Security Interests.  The Security Agreement, together with the financing statements that the Administrative Agent is authorized to file in the jurisdiction of incorporation of each Grantor (as defined in the Security Agreement) and the filing of the Security Agreement with the U.S. Patent and Trademark Office, are effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien in the Collateral and the proceeds thereof, to the extent such perfection can be obtained by central UCC filings of financing statements and patent or trademark office filings or possession of stock certificates, that is, subject only to Permitted Liens, prior and superior in right to any other Person.

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ARTICLE VI.
 AFFIRMATIVE COVENANTS

          So long as
any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, the Borrower shall, and shall (except in the case of the
covenants set forth in Sections 6.01, 6.02, and 6.03)
cause each Subsidiary to:

          6.01   Financial Statements.  Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

	
  
 
  	
  
          (a)          as
soon as available, but in any event within 90 days after the end of each fiscal
year of the Borrower (commencing with the fiscal year ended May 31, 2005), a
consolidated and, to the extent prepared by the Borrower, consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year,
and the related consolidated and, to the extent prepared by the Borrower,
consolidating statements of income or operations, shareholders’ equity and
cash flows for such fiscal year (provided that such financial statements may
also include Chaparral and its Subsidiaries as and to the extent required by
GAAP), setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and, with respect to the
consolidated statements, prepared in accordance with GAAP, such consolidated
statements to be audited and accompanied by (i) a report and opinion of a
Registered Public Accounting Firm of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and applicable
Securities Laws and shall not be subject to any “going concern” or
like qualification or exception or any qualification or exception as to the
scope of such audit and (ii) an attestation report of such Registered
Public Accounting Firm as to the Borrower’s internal controls pursuant to
Section 404 of Sarbanes-Oxley, and, to the extent prepared by the Borrower,
such consolidating statements to be certified by a Responsible Officer of the
Borrower to the effect that such statements are fairly stated in all material
respects when considered in relation to the consolidated financial statements of
the Borrower and its Subsidiaries;
 
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          as
soon as available, but in any event within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower (commencing with
the fiscal quarter ended August 31, 2005), a consolidated and, to the extent
prepared by the Borrower, consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, and the related consolidated
and, to the extent prepared by the Borrower, consolidating statements of income
or operations, shareholders’ equity and cash flows for such fiscal quarter
and for the portion of the Borrower’s fiscal year then ended (provided that
such financial statements may also include Chaparral and its Subsidiaries as and
to the extent required by GAAP), setting forth in each case in comparative form
the figures for the corresponding fiscal quarter of the previous fiscal year and
the corresponding portion of the previous fiscal year, all in reasonable detail,
such consolidated statements to be certified by a Responsible Officer of the
Borrower as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes and, to the extent prepared by the Borrower, such
consolidating statements to be certified by a Responsible Officer of the
Borrower to the effect that such statements are fairly stated in all material
respects when considered in relation to the consolidated financial statements of
the Borrower and its Subsidiaries; and
 

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          (c)          as   soon as available, but in any event no more than 15 days after the end of   each fiscal year of the Borrower, forecasts prepared by management of the   Borrower, in form satisfactory to the Administrative Agent, of consolidated   balance sheets and statements of income or operations and cash flows of the   Borrower and its Subsidiaries on a quarterly basis for the immediately   following fiscal year (including the fiscal years in which the Maturity Date   occurs).
  

          As to any information contained in materials furnished pursuant to Section 6.02(c), the Borrower shall not be separately required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in clauses (a) and (b) above at the times specified therein.

          6.02    Certificates; Other Information.  Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent:

	
  
 
  	
  
          (a)          concurrently
with the delivery of the financial statements referred to in
Sections 6.01(a), and (b)(commencing with the delivery of the
financial statements for the fiscal quarter ended August 31, 2005), a duly
completed Compliance Certificate signed by a Responsible Officer of the
Borrower;
 
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          promptly   after any request by the Administrative Agent, copies of any detailed audit   reports, management letters or recommendations submitted to the board of   directors (or the audit committee of the board of directors) of the Borrower   by independent accountants in connection with the accounts or books of the   Borrower or any Subsidiary, or any audit of any of them;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          promptly   after the same are available, copies of each annual report, proxy or   financial statement or other report or communication sent to the stockholders   of the Borrower, and copies of all annual, regular, periodic and special   reports and registration statements which the Borrower may file or be   required to file with the SEC under Section 13 or 15(d) of the   Securities Exchange Act of 1934, and not otherwise required to be delivered   to the Administrative Agent pursuant hereto;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          promptly   after the furnishing thereof, copies of any statement or report furnished to   any holder of debt securities of any Loan Party or any Subsidiary thereof   pursuant to the terms of any indenture, loan or credit or similar agreement   and not otherwise required to be furnished to the Lenders pursuant to Section 6.01   or any other clause of this Section 6.02;
  

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          (e)          promptly,   and in any event within five Business Days after receipt thereof by any Loan   Party or any Subsidiary thereof, copies of each notice or other correspondence   received from the SEC (or comparable agency in any applicable non-U.S.   jurisdiction) concerning any investigation or possible investigation by such   agency regarding financial or other operational results of any Loan Party or   any Subsidiary thereof; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          promptly,   such additional information regarding the business, financial or corporate   affairs of the Borrower or any Subsidiary, or compliance with the terms of   the Loan Documents, as the Administrative Agent or any Lender may from time   to time reasonably request.
  

          Documents required to be delivered pursuant to Section 6.01 or Section 6.02 (other than Section 6.02(a)) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that:  (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a
written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(a) to the Administrative Agent.  Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such
documents.

          The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” 
Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials “PUBLIC.”

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          6.03    Notices.  Promptly notify the Administrative Agent and each Lender:

	
  
 
  	
  
          (a)          of   the occurrence of any Default;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          of
any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect, including such matters as (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Borrower or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Borrower or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental Laws;

	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          of   any litigation, investigation or proceeding affecting any Loan Party in which   the damages, penalties, fines or other sanctions could reasonably be expected   to exceed $5,000,000 (to the extent not covered by independent third-party   insurance) or in which injunctive relief or similar relief is sought, which   relief, if granted, could be reasonably expected to have a Material Adverse   Effect;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)          of   the occurrence of any ERISA Event;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          of   any material change in accounting policies or financial reporting practices   by the Borrower or any Subsidiary; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          of   the occurrence of any Internal Control Event.
  

          Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto.  Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

          6.04   Payment of Obligations.  Pay and discharge as the same shall become due and payable, all its material obligations and liabilities, including (a) all material tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary; (b) all material lawful claims which, if unpaid, would by law become a Lien upon its property; and (c) all Debt in a principal amount of at least $1,000,000, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement pertaining to such Debt.

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          6.05   Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect including, without limitation, licenses and permits issued by the United States Federal Aviation Administration or foreign aeronautical authorities; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse
Effect.

          6.06   Maintenance of Properties.  (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.

          6.07   Maintenance of Insurance.  Maintain with financially sound and reputable insurance companies not Affiliates of the Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons and providing for not less than 30 days prior notice to the Administrative Agent of termination, lapse or cancellation of such insurance.  To the extent required in the Collateral Documents, each insurance policy covering Collateral shall name the Administrative Agent as loss payee, and each liability policy shall name the Administrative Agent as additional insured.

          6.08   Compliance with Laws.  Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

          6.09   Books and Records.  Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be.

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          6.10   Inspection Rights.  Permit representatives and independent contractors of the Administrative Agent or selected by the Required Lenders (accompanied by any Lender which so elects with the consent of the Administrative Agent) to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, prior to an Event of Default, the Borrower shall not be obligated to pay any expenses related to more than one such visit and inspection during any calendar year; provided, further, however,
that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

          6.11   Use of Proceeds.  Use the proceeds of the Credit Extensions to repay all obligations in respect of the Existing Credit Agreement and for working capital, capital expenditures to the extent permitted hereunder, and for other general corporate purposes not in contravention of any Law or of any Loan Document.

          6.12   Further
Assurances.  At any time or from time to time upon reasonable request
by the Administrative Agent, the Borrower shall or shall cause any of the
Borrower’s Subsidiaries to execute and deliver such further documents and do
such other acts and things as the Administrative Agent may reasonably request in
order to effect fully the purposes of this Agreement and the other Loan
Documents and to provide for payment of the Obligations in accordance with the
terms of this Agreement and the other Loan Documents.

          6.13   Additional Subsidiaries.  Within ten Business Days after the time that (a) any Person becomes a Domestic Subsidiary as a result of the creation of such Subsidiary or an Acquisition or otherwise, (i) such Subsidiary, if it is a Material Subsidiary, shall execute (x) a Guaranty, and (y) a Security Agreement, to secure the Obligations, and (ii) 100% of such Subsidiary’s Equity Interests shall be pledged to secure the Obligations, and (b) any Domestic Subsidiary that was not a Material Domestic Subsidiary becomes a Material Domestic Subsidiary, such Subsidiary shall execute a Guaranty and a Security Agreement, and in each case with respect to subsections (a) and (b) above, the Lenders shall receive such board resolutions, officer’s certificates, corporate and other documents and opinions of counsel as the Administrative Agent shall
reasonably request in connection with the actions described in such subsections.  Within thirty days after the time that any Person becomes a Foreign Subsidiary owned directly by the Borrower or a Domestic Subsidiary as a result of the creation of such Subsidiary or an Acquisition or otherwise, (a) 66% of the Subsidiary’s Equity Interests owned directly by the Borrower or any such Domestic Subsidiary shall be pledged to secure the Obligations and (b) the Lenders shall receive such board resolutions, officer’s certificates, corporate and other documents and opinions of counsel as the Administrative Agent shall reasonably request in connection with such pledge.  

ARTICLE VII.
 NEGATIVE COVENANTS

          So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:

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          7.01   Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than Permitted Liens.

          7.02   Investments.  Make any Investments, except:

	
  
 
  	
  
          (a)          Cash   Equivalents;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Investments   in one or more Subsidiaries or Persons which become Subsidiaries (including   Guaranties of their obligations to the extent the related Debt is permitted   hereunder) that (i)(A) are subject to the provisions hereof,   (B) comply with Section 6.13 and (c) if an Acquisition,   complies with Section 7.02(f) or (ii) have been formed for   the sole purpose of engaging in the issuance of the Convertible Trust   Preferred Securities, the Investment in the Convertible Subordinated   Debentures and only those other activities necessary or incidental thereto;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)          Accounts   receivable that arise in the ordinary course of business and are payable on   standard terms or which have been converted to a note receivable;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          Investments   in existence on the Closing Date which are described on Schedule 7.02(d);
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          Investment   in the Convertible Subordinated Debentures;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          Acquisitions,   provided (i) immediately before and after giving effect to such   proposed Acquisition there shall exist no Default, (ii) such Acquisition   shall not be opposed by the board of directors (or other governing body) of   the Person being acquired, (iii) if the aggregate Acquisition   Consideration for such proposed Acquisition exceeds $10,000,000, the   Administrative Agent shall have received a Compliance Certificate at least 10   Business Days prior to the date of such Acquisition setting forth the   covenant calculations in Section 7.11 both immediately before and   after giving effect to the proposed Acquisition, (iv) the assets,   property or business acquired shall be in the types of businesses presently   engaged in by the Borrower and its Subsidiaries, (v) if such Acquisition
results in a Subsidiary, the Administrative Agent shall have received any   documentation required by Section 6.13, and (vi) during any   Limited Amount Period, the Acquisition Consideration for all Acquisitions   during such Limited Amount Period, shall not exceed $20,000,000;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (g)          TXI   Advance made in accordance with the Centralized Cash Management Program; provided   that the aggregate amount at any time outstanding does not exceed $50,000,000   and the contribution of any such TXI Advance to the capital of Chaparral as   contemplated by the Centralized Cash Management Program; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (h)          Investments   not otherwise permitted pursuant to this Section 7.02, provided   (i) immediately before and after giving effect to such proposed   Investment there shall exist no Default and (ii) during any Limited   Amount Period, the aggregate amount of all such other Investments permitted   to be made during such Limited Amount Period, shall not exceed $5,000,000.
  

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          7.03    Debt.  Create, incur, assume or suffer to exist any Debt, except:

	
   
  	
  
          (a)          Debt   under the Loan Documents;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Guaranties   in respect of Debt permitted by this Section 7.03;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          Debt   outstanding on the date hereof and listed on Schedule 7.03(c) and   any refinancings, refundings, renewals or extensions thereof; provided   that (i) the amount of such Debt is not increased at the time of such   refinancing, refunding, renewal or extension except by an amount equal to a   reasonable premium or other reasonable amount paid, and fees and expenses   reasonably incurred, in connection with such refinancing and by an amount   equal to any existing commitments unutilized thereunder and (ii) the   terms relating to principal amount, amortization, maturity, collateral (if   any) and subordination (if any), and other material terms taken as a whole,   of any such refinancing, refunding, renewing or extending Debt, and of any   agreement entered into and of any instrument issued in connection
therewith,   are no less favorable in any material respect to the Loan Parties or the   Lenders than the terms of any agreement or instrument governing the Debt   being refinanced, refunded, renewed or extended and the interest rate   applicable to any such refinancing, refunding, renewing or extending Debt   does not exceed the then applicable market interest rate;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)          Capitalized   Lease Obligations and Debt incurred to purchase assets, provided,   (i) immediately before and after giving effect to such proposed Debt   there shall exist no Default and (ii) during any Limited Amount Period,   the aggregate amount of all such Debt incurred during such Limited Amount   Period, shall not exceed $10,000,000;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          Subordinated   Debt, provided (i) immediately before and after giving effect to   such proposed Subordinated Debt there shall exist no Default and   (ii) during all Limited Amount Periods, the aggregate amount of   Subordinated Debt incurred during all such Limited Amount Periods, shall not   exceed $50,000,000;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          Debt   under the 2005 Senior Notes;
  
	
  
 
  	
  
 
  
	
   
  	
  
          (g)          Debt   in respect of the Convertible Subordinated Debentures;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (h)          Debt   in respect of intercompany loans between and among any of the Borrower and   any Guarantor, each of which such loans shall be evidenced by a promissory   note, provided that such Debt is subordinate to any Obligations under any of   the Loan Documents and under the 2005 Senior Notes in form and substance   satisfactory to the Administrative Agent;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)          obligations   (contingent or otherwise) of the Borrower or any Subsidiary existing or   arising under any Swap Contract, provided that (i) such obligations   are (or were) entered into in the ordinary course of business for the purpose   of directly mitigating risks associated with liabilities, commitments,   investments, assets, or property held or reasonably anticipated by the   Borrower and its Subsidiaries, or changes in the value of securities issued   by the Borrower and its Subsidiaries, and not for purposes of speculation or   taking a “market view;” (ii) such Swap Contract does not contain any   provision exonerating the non-defaulting party from its obligation to make   payments on outstanding transactions to the defaulting party;
  

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          (j)          Guaranties   in respect of transactions by the Borrower or any Subsidiaries permitted   under this Agreement;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (k)          consolidated   cash management obligations in the ordinary course of business among the   Borrower and the Guarantors; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (l)          other   unsecured Debt not otherwise permitted pursuant to this Section 7.03,   provided, (i) immediately before and after giving effect to such   Debt there shall exist no Default, (ii) such unsecured Debt shall not   have (w) any scheduled amortization or mandatory prepayments or   obligations to repurchase prior to thirty days after the Maturity Date,   (x) any terms, covenants and provisions that are more restrictive on the   Borrower and its Subsidiaries or less favorable to the Lenders than this   Agreement and (iii) during all Limited Amount Periods, the aggregate   amount of all such other unsecured Debt incurred during all such Limited   Amount Periods, shall not exceed $50,000,000.
  

          7.04   Fundamental Changes.  Merge, dissolve, liquidate, consolidate with or into another Person except that, so long as no Default exists or would result therefrom any Subsidiary may merge with (a) the Borrower, provided that the Borrower shall be the continuing or surviving Person, or (b) any one or more other Subsidiaries, provided that when any Guarantor is merging with another Subsidiary, a Guarantor shall be the continuing or surviving Person.

          7.05   Dispositions.  Make any Disposition or enter into any agreement to make any Disposition, except:

	
  
 
  	
  
          (a)          Dispositions   of obsolete or worn out property, whether now owned or hereafter acquired, in   the ordinary course of business;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Dispositions   of inventory in the ordinary course of business;
  
	
  
 
  	
  
 
  
	
   
  	
  
          (c)          the   sale, discount, or transfer of delinquent accounts receivable in the ordinary   course of business for purposes of collection;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          Dispositions   of equipment or real property to the extent that (i) such property is   exchanged for credit against the purchase price of similar replacement   property or (ii) the proceeds of such Disposition are reasonably promptly   applied to the purchase price of such replacement property;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          Dispositions   of property by the Borrower or any Subsidiary to the Borrower or to a   Wholly-Owned Subsidiary; provided that if the transferor of such   property is the Borrower or a Guarantor, the transferee thereof must either   be the Borrower or a Guarantor;
  

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          (f)          Dispositions   permitted by Section 7.02, 7.03, 7.04 or 7.06;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (g)          so   long as there exists no Default immediately before and after giving effect to   any such transaction, Dispositions (excluding Collateral other than Inventory   permitted to be Disposed of pursuant to Section 7.05(b)) not   otherwise permitted in clauses (a) through (f) above, the Net Cash   Proceeds of which are applied in accordance with Section 2.05(d);   and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (h)          Dispositions   in respect of the Spin-Off Transaction;
  

provided, however, that any Disposition shall be for fair market value.

          7.06    Restricted Payments.  Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, or issue or sell any Equity Interests, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

	
  
 
  	
  
          (a)          each   Subsidiary may make Restricted Payments to the Borrower, the Guarantors and   any other Person that owns an Equity Interest in such Subsidiary, ratably   according to their respective holdings of the type of Equity Interest in   respect of which such Restricted Payment is being made;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          the   Borrower and each Subsidiary may declare and make any Dividends or other   distributions payable solely in the common stock or other common Equity   Interests of such Person;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          the   Borrower may make regularly scheduled payments of interest in respect of the   Convertible Subordinated Debentures;
  
	
  
 
  	
  
 
  
	
   
  	
  
          (d)          during   an Unlimited Restricted Payment Period, the Borrower may declare and make   other Restricted Payments payable in cash;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          during   a Limited Restricted Payment Period, the Borrower may make Restricted   Payments in an aggregate amount not to exceed $7,500,000, plus (x) 50%   of consolidated net income of the Borrower and its Subsidiaries from and   including May 31, 2005 (less Restricted Payments previously paid pursuant to   this Section 7.06(e) as a result of this clause (x)) and   (y) 100% of the Net Cash Proceeds from the issuance of Equity Interests   of the Borrower from and including May 31, 2005 (less Restricted Payments   previously paid pursuant to this Section 7.06(e) as a result of   this clause (y)); and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          the   Borrower may make Restricted Payments in respect of the Spin-Off Transaction.
  

          Nothing in this Section 7.06 shall prohibit any transaction among the Borrower and its Subsidiaries that is expressly permitted under Sections 7.02, 7.03 or 7.04.

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          7.07    Change in Nature of Business.  Engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the date hereof or any business substantially related or incidental thereto.

          7.08    Transactions with Affiliates.  Except for the Spin-Off Transaction, enter into any transaction of any kind with any Affiliate of the Borrower (other than a Wholly-Owned Subsidiary), whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate.

          7.09    Burdensome Agreements.  Enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to the Borrower or any Guarantor or to otherwise transfer property to the Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee the Debt of the Borrower or (iii) of the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that the restrictions above shall not (A) prohibit any negative pledge incurred or provided (x) in favor of any holder of Debt permitted under Section 7.03(e) solely to the extent any such negative pledge relates to the property financed by or the subject of such Debt or (y) with respect to the 2005 Senior Notes,
(B) apply to restrictions and conditions relating to the sale of a Subsidiary pending such sale, provided such restrictions or conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder and (C) apply to customary provisions in leases and other contracts restricting the assignment thereof; or (b) requires the grant of a Lien other than a Permitted Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.

          7.10    Use of Proceeds.  Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

          7.11    Financial Covenants.

	
  
 
  	
  
          (a)          Senior   Secured Leverage Ratio.  Permit   the Senior Secured Leverage Ratio as of the end of any fiscal quarter of the   Borrower to be greater than 3.00 to 1.00.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Debt   to Capitalization Ratio.  Permit   the Debt to Capitalization Ratio as of the end of any fiscal quarter of the   Borrower to be greater than 0.50 to 1.00.
  
	
  
 
  	
  
 
  
	
   
  	
  
          (c)          Interest   Coverage Ratio.  Permit the   Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower   to be less than 2.50 to 1.00.
  

          7.12    Sale and Leaseback.  Enter into any arrangement whereby it sells or transfers any of its assets, and thereafter rents or leases such assets.

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          7.13    Sale or Discount of Receivables.  Sell, with or without recourse, for discount or otherwise, any notes or accounts receivable, other than bad debts sold in accordance with regular collection procedures.

          7.14    Debt Modifications.  Amend, modify, supplement, waive compliance with, or assent to noncompliance with, any term, provision or condition of any of the documents governing or evidencing any Subordinated Debt, the 2005 Senior Notes or any Debt permitted pursuant to Section 7.03(l), which the Required Lenders deem material (including, without limitation, relating to events of default, acceleration rights, interest rates, maturity date, subordination and covenants, placing any further restrictions on the Borrower or any Subsidiary, increasing the obligations of the Borrower or any Subsidiary thereunder, or conferring on the holders thereof any additional rights).

          7.15    Debt Payments.  Prepay, pay, redeem, purchase in any manner, or make any payment in respect of, or transfer any property in payment of or as security for the payment of, or establish any sinking fund, reserve or analogous fund for the redemption, retirement, prepayment or repayment of, any principal of, interest on, or any fees or other amounts related to any Subordinated Debt, the 2005 Senior Notes or any Debt permitted pursuant to Section 7.03(l) (collectively, “Restricted Debt Payments”), except (a) regularly scheduled payments of interest in respect of the 2005 Senior Notes and Debt permitted pursuant to Section 7.03(l), (b) regularly scheduled payment of interest in respect of any Subordinated Debt, provided that immediately before and after giving effect thereto there is no Default, (c) provided that
immediately before and after giving effect thereto there is no Default, any other Restricted Debt Payments during any Unlimited Amount Period, and (d) provided that (i) immediately before and after giving effect thereto there is no Default, and (ii) after giving effect thereto Availability is not less than $100,000,000, any other Restricted Debt Payments during all Limited Amount Periods, not to exceed $50,000,000 in aggregate amount during all such Limited Amount Periods.

          7.16    Capital Expenditures.  Make or become legally obligated to make any Capital Expenditures, except for Capital Expenditures not exceeding, in the aggregate for the Borrower and its Subsidiaries during each fiscal year set forth below, the amount set forth opposite such fiscal year:

	
  
Fiscal Year
  	
  
 
  	
  
Amount
  	
  
 
  
	
  

  	
  
 
  	
  

  	
  

  	
  
 
  
	
  
2006
  	
  
 
  	
  
$
  	
  
225,000,000
  	
  
 
  
	
  2007
  	
  
 
  	
  
$
  	
  
250,000,000
  	
  
 
  
	
  
2008 and each fiscal year   thereafter
  	
  
 
  	
  
$
  	
  
45,000,000;
  	
  
 
  

provided, however, that so long as no Default has occurred and is continuing or would result from such Capital Expenditure, any portion of the amount set forth above, if not expended in the fiscal year for which it is permitted above, may be carried over for expenditure in the next following fiscal year.

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          7.17    Centralized Cash Management Program.  Permit the Centralized Cash Management Program to exist after the earlier of (i) the distribution of Chaparral to the Borrower’s shareholders and (ii) September 30, 2005.

ARTICLE VIII.
 EVENTS OF DEFAULT AND REMEDIES

	
   
  	
  
8.01   Events of   Default.  Any of the   following shall constitute an Event of Default:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          Non-Payment.  The Borrower or any other Loan Party fails   to pay (i) when and as required to be paid herein, any amount of   principal of any Loan or any L/C Obligation, or (ii) within three days   after the same becomes due, any interest on any Loan or on any L/C   Obligation, or any fee due hereunder, or (iii) within five days after   the same becomes due, any other amount payable hereunder or under any other   Loan Document; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Specific   Covenants.  The Borrower or any   Subsidiary, as applicable, fails to perform or observe any term, covenant or   agreement contained in any of Section 6.03(a), 6.10, 6.11   or 6.12 or Article VII, or any default exists under the   Guaranty; or
  
	
  
 
  	
  
 
  
	
   
  	
  
          (c)          Other   Defaults.  The Borrower or any   Subsidiary, as applicable, fails to perform or observe any other covenant or   agreement (not specified in subsection (a) or (b) above) contained in   any Loan Document on its part to be performed or observed and such failure   continues for 30 days; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          Representations   and Warranties.  Any representation,   warranty, certification or statement of fact made or deemed made by or on   behalf of the Borrower or any Subsidiary herein, in any other Loan Document,   or in any document delivered in connection herewith or therewith shall be   incorrect or misleading in any material respect when made or deemed made; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          Cross-Default.  (i) The Borrower or any Subsidiary   (A) fails to make any payment when due (whether by scheduled maturity,   required prepayment, acceleration, demand, or otherwise) in respect of any   Debt or Guarantee (other than Debt hereunder and Debt under Swap Contracts)   having an aggregate principal amount (including amounts owing to all   creditors under any combined or syndicated credit arrangement) of more than   $10,000,000, or (B) fails to observe or perform any other agreement or   condition relating to any such Debt or Guarantee or contained in any   instrument or agreement evidencing, securing or relating thereto, or any   other event occurs, the effect of which default or other event is to cause,   or to permit the holder or holders of such Debt or the beneficiary or   beneficiaries of such
Guarantee (or a trustee or agent on behalf of such   holder or holders or beneficiary or beneficiaries) to cause, with the giving   of notice if required, such Debt to be demanded or to become due or to be   repurchased, prepaid, defeased or redeemed (automatically or otherwise), or   an offer to repurchase, prepay, defease or redeem such Debt to be made, prior   to its stated maturity, or such Guarantee to become payable or cash   collateral in respect thereof to be demanded; or (ii) there occurs under   any Swap Contract an Early Termination Date (as defined in such Swap   Contract) resulting from (A) any event of default under such Swap   Contract as to which the Borrower or any Subsidiary is the Defaulting Party   (as defined in such Swap Contract) or (B) any Termination Event (as so   defined) under such Swap Contract as to which the Borrower or any Subsidiary   is an Affected Party (as so defined) and, in either event, the Swap   Termination Value owed by the Borrower or such
Subsidiary as a result thereof   is greater than $10,000,000; or
  

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          (f)          Insolvency   Proceedings, Etc.  The Borrower or   any Subsidiary institutes or consents to the institution of any proceeding   under any Debtor Relief Law, or makes an assignment for the benefit of   creditors; or applies for or consents to the appointment of any receiver,   trustee, custodian, conservator, liquidator, rehabilitator or similar officer   for it or for all or any material part of its property; or any receiver,   trustee, custodian, conservator, liquidator, rehabilitator or similar officer   is appointed without the application or consent of such Person and the   appointment continues undischarged or unstayed for 60 calendar days; or any   proceeding under any Debtor Relief Law relating to any such Person or to all   or any material part of its property is instituted without the consent of   such Person and continues
undismissed or unstayed for 60 calendar days, or an   order for relief is entered in any such proceeding; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (g)          Inability   to Pay Debts; Attachment.    (i) The Borrower or any Subsidiary becomes unable or admits in   writing its inability or fails generally to pay its debts as they become due,   or (ii) any writ or warrant of attachment or execution or similar   process is issued or levied against all or any material part of the property   of any such Person and is not released, vacated or stayed within 30 days   after its issue or levy; or
  
	
   
  	
  
 
  
	
  
 
  	
  
          (h)          Judgments.  There is entered against the Borrower or   any Subsidiary (i) a final judgment or order for the payment of money in   an aggregate amount exceeding $5,000,000 (to the extent not covered by   independent third-party insurance as to which the insurer does not dispute   coverage), or (ii) any one or more non-monetary final judgments that   have, or could reasonably be expected to have, individually or in the   aggregate, a Material Adverse Effect and, in either case, (A) enforcement   proceedings are commenced by any creditor upon such judgment or order, or   (B) there is a period of 30 consecutive days during which a stay of   enforcement of such judgment, by reason of a pending appeal or otherwise, is   not in effect; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)          ERISA.  (i) An ERISA Event occurs with   respect to a Pension Plan or Multiemployer Plan which has resulted or could   reasonably be expected to result in liability of the Borrower under   Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in   an aggregate amount in excess of $5,000,000, or (ii) the Borrower or any   ERISA Affiliate fails to pay when due, after the expiration of any applicable   grace period, any installment payment with respect to its withdrawal liability   under Section 4201 of ERISA under a Multiemployer Plan in an aggregate   amount in excess of $5,000,000; or
  

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          (j)          Invalidity   of Loan Documents.  Any Loan   Document, at any time after its execution and delivery and for any reason   other than as expressly permitted hereunder or thereunder or satisfaction in   full of all the Obligations, ceases to be in full force and effect; or any   Loan Party or any other Person contests in any manner the validity or   enforceability of any Loan Document; or any Loan Party denies that it has any   or further liability or obligation under any Loan Document, or purports to   revoke, terminate or rescind any Loan Document; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (k)          Change   of Control.  There occurs any   Change of Control; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (l)          Investments   and Debt.  During any Unlimited   Amount Period, the Borrower or any Subsidiary makes any Acquisition pursuant   to Section 7.02(h) or other Investment pursuant to Section 7.02(i)   or incurs any Debt pursuant to Sections 7.03(e), (f) or (k)   or makes any Restricted Debt Payment pursuant to Section 7.15(c)   which, after giving effect thereto, results in a Leverage Ratio greater than   or equal to 3.00 to 1.00; or
  
	
   
  	
  
 
  
	
  
 
  	
  
          (m)          Restricted   Payments.  During any Unlimited   Restricted Payment Period, the Borrower or any Subsidiary makes a Restricted   Payment pursuant to Section 7.06(d) which, after giving effect   thereto, results in a Leverage Ratio greater than or equal to 3.00 to 1.00 or   a Senior Secured Leverage Ratio greater than or equal to 1.50 to 1.00.
  

          8.02    Remedies Upon Event of Default.  If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

	
  
 
  	
  
          (a)          declare   the commitment of each Lender to make Loans and any obligation of the L/C   Issuer to make L/C Credit Extensions to be terminated, whereupon such   commitments and obligation shall be terminated;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          declare   the unpaid principal amount of all outstanding Loans, all interest accrued   and unpaid thereon, and all other amounts owing or payable hereunder or under   any other Loan Document to be immediately due and payable, without   presentment, demand, protest or other notice of any kind, all of which are   hereby expressly waived by the Borrower;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)          require   that the Borrower Cash Collateralize the L/C Obligations (in an amount equal   to the then Outstanding Amount thereof); and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          exercise   on behalf of itself and the Lenders all rights and remedies available to it   and the Lenders under the Loan Documents;
  

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

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          8.03    Application of Funds.  After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order: 

	
  
 
  	
  
          First,   to payment of that portion of the Obligations constituting fees, indemnities,   expenses and other amounts (including fees, charges and disbursements of   counsel to the Administrative Agent and amounts payable under Article III)   payable to the Administrative Agent in its capacity as such;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          Second,   to payment of that portion of the Obligations constituting fees, indemnities   and other amounts (other than principal, interest, Letter of Credit Fees and   Cash Management Obligations) payable to the Lenders and the L/C Issuer   (including fees, charges and disbursements of counsel to the respective   Lenders and the L/C Issuer (including fees and time charges for attorneys who   may be employees of any Lender or the L/C Issuer) and amounts payable under Article III),   ratably among them in proportion to the respective amounts described in this   clause Second payable to them;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          Third,   to payment of that portion of the Obligations, (other than Obligations with   respect to Swap Contracts and Cash Management Obligations), constituting   accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C   Borrowings and other Obligations ratably among the Lenders and the L/C Issuer   in proportion to the respective amounts described in this clause Third   payable to them;
  
	
   
  	
  
 
  
	
  
 
  	
  
          Fourth,   to payment of that portion of the Obligations, constituting obligations in   the amount of the Termination Value with respect to Swap Contracts, unpaid   principal of the Loans and L/C Borrowings, ratably among the Lenders and the   L/C Issuer in proportion to the respective amounts described in this clause Fourth   held by them;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          Fifth,   to the Administrative Agent for the account of the L/C Issuer, to Cash   Collateralize that portion of L/C Obligations comprised of the aggregate   undrawn amount of Letters of Credit; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          Sixth,   to payment of remaining portion of the Obligations (including Cash Management   Obligations), ratably among the Lenders in proportion to the respective   amounts described in this clause Sixth held by them; and
  
	
  
 
  	
  
 
  
	
   
  	
  
          Last,   the balance, if any, after all of the Obligations have been indefeasibly paid   in full, to the Borrower or as otherwise required by Law.
  

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.

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ARTICLE IX.
 ADMINISTRATIVE AGENT

          9.01    Appointment and Authority.  

          Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

          9.02    Rights as a Lender.  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

          9.03    Exculpatory Provisions.  The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

	
  
 
  	
  
          (a)          shall   not be subject to any fiduciary or other implied duties, regardless of   whether a Default has occurred and is continuing;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          shall   not have any duty to take any discretionary action or exercise any   discretionary powers, except discretionary rights and powers expressly   contemplated hereby or by the other Loan Documents that the Administrative   Agent is required to exercise as directed in writing by the Required Lenders   (or such other number or percentage of the Lenders as shall be expressly   provided for herein or in the other Loan Documents), provided that the   Administrative Agent shall not be required to take any action that, in its   opinion or the opinion of its counsel, may expose the Administrative Agent to   liability or that is contrary to any Loan Document or Applicable Law; and
  
	
  
 
  	
  
 
  
	
   
  	
  
          (c)          shall   not, except as expressly set forth herein and in the other Loan Documents,   have any duty to disclose, and shall not be liable for the failure to disclose,   any information relating to the Borrower or any of its Affiliates that is   communicated to or obtained by the Person serving as the Administrative Agent   or any of its Affiliates in any capacity.
  

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          The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender or the L/C Issuer.  The Administrative Agent shall promptly request any report, letter, statement or other information under Section 6.02(b) or (c) which any Lender requests the Administrative Agent to obtain.

          The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

          9.04    Reliance by Administrative Agent.  

          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or
the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

          9.05    Delegation of Duties.  The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

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          9.06    Resignation of Administrative Agent.  The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative
Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any Collateral held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such Collateral until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was
acting as Administrative Agent.

          Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer and Swing Line Lender.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of
Credit.

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          9.07    Non-Reliance on Administrative Agent and Other Lenders.  Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

          9.08    No Other Duties, Etc.  Anything herein to the contrary notwithstanding, neither the Arranger, Syndication Agent nor any Co-Documentation Agent listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.

          9.09    Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise

	
  
 
  	
  
          (a)          to   file and prove a claim for the whole amount of the principal and interest owing   and unpaid in respect of the Loans, L/C Obligations and all other Obligations   that are owing and unpaid and to file such other documents as may be   necessary or advisable in order to have the claims of the Lenders, the L/C   Issuer and the Administrative Agent (including any claim for the reasonable   compensation, expenses, disbursements and advances of the Lenders, the L/C   Issuer and the Administrative Agent and their respective agents and counsel   and all other amounts due the Lenders, the L/C Issuer and the Administrative   Agent under Sections 2.03(i) and (j), 2.09 and 10.04)   allowed in such judicial proceeding; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          to   collect and receive any monies or other property payable or deliverable on   any such claims and to distribute the same;
  

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

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          Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

          9.10    Collateral and Guaranty Matters.  The Lenders and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion,

	
  
 
  	
  
          (a)          to   release any Lien on any property granted to or held by the Administrative   Agent under any Loan Document (i) upon termination of the Aggregate   Commitments and payment in full of all Obligations (other than contingent   indemnification obligations) and the expiration or termination of all Letters   of Credit, (ii) that is sold or Disposed of or to be sold or Disposed of   as part of or in connection with any Disposition permitted hereunder or under   any other Loan Document, or (iii) subject to Section 10.01,   if approved, authorized or ratified in writing by the Required Lenders;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          to   subordinate any Lien on any property granted to or held by the Administrative   Agent under any Loan Document to the holder of any Lien created to secure   Debt permitted by Section 7.03(d); and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          to   release any Guarantor from its obligations under the Guaranty (i) if   such Person ceases to be a Subsidiary as a result of a transaction permitted   hereunder or (ii) subject to Section 10.01, if approved,   authorized or ratified in writing by the Required Lenders.
  

          Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

ARTICLE X.
 MISCELLANEOUS

          10.01  Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

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          (a)          waive   any condition set forth in Section 4.01(a) without the written   consent of each Lender;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          extend   or increase the Commitment of any Lender (or reinstate any Commitment   terminated pursuant to Section 8.02) without the written consent   of such Lender;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          postpone   any scheduled date fixed by this Agreement or any other Loan Document for any   payment (it being understood that the mandatory prepayments under Section 2.05   do not provide for a scheduled date fixed for payment), of principal,   interest, fees or other amounts due to the Lenders (or any of them) hereunder   or under any other Loan Document without the written consent of each Lender   directly affected thereby;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)          reduce   the principal of, or the rate of interest specified herein on, any Loan or   L/C Borrowing, or (subject to clause (v) of the second proviso to this Section 10.01)   any fees or other amounts payable hereunder or under any other Loan Document,   without the written consent of each Lender directly affected thereby; provided,   however, that only the consent of the Required Lenders shall be   necessary to amend the definition of “Default Rate” or to waive any   obligation of the Borrower to pay interest or Letter of Credit Fees at the   Default Rate;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          change   Section 2.13 or Section 8.03 in a manner that would   alter the pro rata sharing of payments required thereby without the written   consent of each Lender;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          change   any provision of this Section or the definition of “Required Lenders” or any   other provision hereof specifying the number or percentage of Lenders   required to amend, waive or otherwise modify any rights hereunder or make any   determination or grant any consent hereunder without the written consent of   each Lender;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (g)          release   all or substantially all of the value of the Guaranty without the written   consent of each Lender; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (h)          release   all or substantially all of the Collateral in any transaction or series of   related transactions without the written consent of each Lender, unless   otherwise permitted by clause (i) or (ii) of Section 9.10(a);
  

and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) Section 10.06(h) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are
being funded by an SPC at the time of such amendment, waiver or other modification; and (v) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

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          10.02  Notices; Effectiveness; Electronic Communication.  

	
  
 
  	
  
          (a)          Notices   Generally.  Except in the case of   notices and other communications expressly permitted to be given by telephone   (and except as provided in subsection (b) below), all notices and other   communications provided for herein shall be in writing and shall be delivered   by hand or overnight courier service, mailed by certified or registered mail   or sent by telecopier as follows, and all notices and other communications   expressly permitted hereunder to be given by telephone shall be made to the   applicable telephone number, as follows:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (i)          if   to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line   Lender, to the address, telecopier number, electronic mail address or   telephone number specified for such Person on Schedule 10.02; and
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (ii)         if   to any other Lender, to the address, telecopier number, electronic mail   address or telephone number specified in its Administrative Questionnaire.
  

	
  
 
  	
  
Notices sent   by hand or overnight courier service, or mailed by certified or registered   mail, shall be deemed to have been given when received; notices sent by   telecopier shall be deemed to have been given when sent (except that, if not   given during normal business hours for the recipient, shall be deemed to have   been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic   communications to the extent provided in subsection (b) below, shall be   effective as provided in such subsection (b).
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          Electronic   Communications.  Notices and other   communications to the Lenders and the L/C Issuer hereunder may be delivered   or furnished by electronic communication (including e-mail and Internet or   intranet websites) pursuant to procedures approved by the Administrative   Agent, provided that the foregoing shall not apply to notices to any   Lender or the L/C Issuer pursuant to Article II if such Lender or   the L/C Issuer, as applicable, has notified the Administrative Agent that it   is incapable of receiving notices under such Article by electronic   communication.  The Administrative   Agent or the Borrower may, in its discretion, agree to accept notices and   other communications to it hereunder by electronic communications pursuant to   procedures approved by it, provided that approval of
such procedures   may be limited to particular notices or communications.
  

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          Unless   the Administrative Agent otherwise prescribes, (i) notices and other   communications sent to an e-mail address shall be deemed received upon the   sender’s receipt of an acknowledgement from the intended recipient (such as   by the “return receipt requested” function, as available, return e-mail or   other written acknowledgement), provided that if such notice or other   communication is not sent during the normal business hours of the recipient,   such notice or communication shall be deemed to have been sent at the opening   of business on the next business day for the recipient, and (ii) notices   or communications posted to an Internet or intranet website shall be deemed   received upon the deemed receipt by the intended recipient at its e-mail   address as described in the foregoing clause (i) of notification that   such notice or communication is
available and identifying the website address   therefor.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          THE   PLATFORM.  THE PLATFORM IS   PROVIDED “AS IS” AND “AS AVAILABLE.”    THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR   COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND   EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER   MATERIALS.  NO WARRANTY OF ANY KIND,   EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,   FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR   FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN   CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  IN NO EVENT SHALL THE ADMINISTRATIVE AGENT   OR ANY OF ITS RELATED PARTIES (COLLECTIVELY, THE “AGENT PARTIES”) HAVE   ANY LIABILITY TO THE BORROWER, ANY LENDER,
THE L/C ISSUER OR ANY OTHER PERSON   FOR LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES OF ANY KIND (WHETHER IN   TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE   ADMINISTRATIVE AGENT’S TRANSMISSION OF BORROWER MATERIALS THROUGH THE   INTERNET, EXCEPT TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES   OR EXPENSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY A FINAL   AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR   WILLFUL MISCONDUCT OF SUCH AGENT PARTY; PROVIDED, HOWEVER, THAT   IN NO EVENT SHALL ANY AGENT PARTY HAVE ANY LIABILITY TO THE BORROWER, ANY   LENDER, THE L/C ISSUER OR ANY OTHER PERSON FOR INDIRECT, SPECIAL, INCIDENTAL,   CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES).
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)          Change   of Address, Etc.  Each of the   Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender   may change its address, telecopier or telephone number for notices and other   communications hereunder by notice to the other parties hereto.  Each other Lender may change its address,   telecopier or telephone number for notices and other communications hereunder   by notice to the Borrower, the Administrative Agent, the L/C Issuer and the   Swing Line Lender.  In addition, each   Lender agrees to notify the Administrative Agent from time to time to ensure   that the Administrative Agent has on record (i) an effective address,   contact name, telephone number, telecopier number and electronic mail address   to which notices and other communications may be sent and (ii) accurate   wire
instructions for such Lender.
  

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          (e)          Reliance   by Administrative Agent, L/C Issuer and Lenders.    The Administrative Agent, the L/C Issuer and the Lenders   shall be entitled to rely and act upon any notices (including telephonic   Revolving Loan Notices and Swing Line Loan Notices) purportedly given by or   on behalf of the Borrower even if (i) such notices were not made in a   manner specified herein, were incomplete or were not preceded or followed by   any other form of notice specified herein, or (ii) the terms thereof, as   understood by the recipient, varied from any confirmation thereof.  The Borrower shall indemnify the   Administrative Agent, the L/C Issuer, each Lender and the Related Parties of   each of them from all losses, costs, expenses and liabilities resulting from   the reliance by such Person on each notice purportedly
given by or on behalf   of the Borrower.  All telephonic   notices to and other telephonic communications with the Administrative Agent   may be recorded by the Administrative Agent, and each of the parties hereto   hereby consents to such recording.
  

          10.03  No Waiver; Cumulative Remedies.  No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

          10.04  Expenses; Indemnity; Damage Waiver.  

	
  
 
  	
  
          (a)          Costs   and Expenses.  The Borrower shall   pay (i) all reasonable out-of-pocket expenses incurred by the   Administrative Agent and its Affiliates (including the reasonable fees,   charges and disbursements of counsel for the Administrative Agent), in   connection with the syndication of the credit facilities provided for herein,   the preparation, negotiation, execution, delivery and administration of this   Agreement and the other Loan Documents or any amendments, modifications or   waivers of the provisions hereof or thereof (whether or not the transactions   contemplated hereby or thereby shall be consummated), (ii) all   reasonable out-of-pocket expenses incurred by the L/C Issuer in connection   with the issuance, amendment, renewal or extension of any Letter of Credit or   any demand for payment thereunder and
(iii) all out-of-pocket expenses   incurred by the Administrative Agent, any Lender or the L/C Issuer (including   the reasonable fees, charges and disbursements of any counsel for the   Administrative Agent, any Lender or the L/C Issuer), and shall pay all   reasonable legal fees and time charges for attorneys who may be employees of   the Administrative Agent, any Lender or the L/C Issuer, in connection with   the enforcement or protection of its rights (A) in connection with this   Agreement and the other Loan Documents, including its rights under this   Section, or (B) in connection with the Loans made or Letters of Credit issued   hereunder, including all such out-of-pocket expenses incurred during any   workout, restructuring or negotiations in respect of such Loans or Letters of   Credit.
  

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          (b)          Indemnification   by the Borrower.  The Borrower   shall indemnify the Administrative Agent (and any sub-agent thereof), each   Lender and the L/C Issuer, and each Related Party of any of the foregoing   Persons (each such Person being called an “Indemnitee”) against, and   hold each Indemnitee harmless from, any and all losses, claims, damages,   liabilities and related expenses (including the reasonable fees, charges and   disbursements of any counsel for any Indemnitee), and shall indemnify and   hold harmless each Indemnitee from all reasonable fees and time charges and   disbursements for attorneys who may be employees of the Indemnitee, incurred   by any Indemnitee or asserted against any Indemnitee by any third party or by   the Borrower or any other Loan Party arising out of, in connection with, or   as a
result of (i) the execution or delivery of this Agreement, any   other Loan Document or any agreement or instrument contemplated hereby or   thereby, the performance by the parties hereto of their respective   obligations hereunder or thereunder, the consummation of the transactions   contemplated hereby or thereby, or, in the case of the Administrative Agent   (and any sub-agent thereof) and its Related Parties only, the administration   of this Agreement and the other Loan Documents, (ii) any Loan or Letter   of Credit or the use or proposed use of the proceeds therefrom (including any   refusal by the L/C Issuer to honor a demand for payment under a Letter of   Credit if the documents presented in connection with such demand do not   strictly comply with the terms of such Letter of Credit), (iii) any   actual or alleged presence or release of Hazardous Materials on or from any   property owned or operated by the Borrower or any of its Subsidiaries, or any   Environmental Liability
related in any way to the Borrower or any of its   Subsidiaries, or (iv) any actual or prospective claim, litigation,   investigation or proceeding relating to any of the foregoing, whether based   on contract, tort or any other theory, whether brought by a third party or by   the Borrower or any other Loan Party, and regardless of whether any   Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING,   IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE   OF THE INDEMNITEE; provided that such indemnity shall not,   as to any Indemnitee, be available to the extent that such losses, claims,   damages, liabilities or related expenses (x) are determined by a court   of competent jurisdiction by final and nonappealable judgment to have   resulted from the gross negligence or willful misconduct of such Indemnitee   or (y) result from a claim brought by the Borrower or any other Loan   Party against an Indemnitee for breach in
bad faith of such Indemnitee’s   obligations hereunder or under any other Loan Document, if the Borrower or   such Loan Party has obtained a final and nonappealable judgment in its favor   on such claim as determined by a court of competent jurisdiction.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)          Reimbursement   by Lenders.  To the extent that   the Borrower for any reason fails to indefeasibly pay any amount required   under subsection (a) or (b) of this Section to be paid by it to the   Administrative Agent (or any sub-agent thereof), the L/C Issuer or any   Related Party of any of the foregoing, each Lender severally agrees to pay to   the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related   Party, as the case may be, such Lender’s Applicable Percentage (determined as   of the time that the applicable unreimbursed expense or indemnity payment is   sought) of such unpaid amount, provided that the unreimbursed expense   or indemnified loss, claim, damage, liability or related expense, as the case   may be, was incurred by or asserted against the Administrative Agent (or any   such
sub-agent) or the L/C Issuer in its capacity as such, or against any   Related Party of any of the foregoing acting for the Administrative Agent (or   any such sub-agent) or L/C Issuer in connection with such capacity.  The obligations of the Lenders under this   subsection (c) are subject to the provisions of Section 2.11(d).
  

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          (d)          WAIVER   OF CONSEQUENTIAL DAMAGES, ETC.    TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER SHALL   NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNITEE, ON ANY   THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES   (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH,   OR AS A RESULT OF, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT   OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS CONTEMPLATED HEREBY OR   THEREBY, ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS   THEREOF.  NO INDEMNITEE REFERRED TO IN   SUBSECTION (b) ABOVE SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE   USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS   DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION
 TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN   DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (e)          Payments.  All amounts due under this Section shall   be payable not later than ten Business Days after demand therefor.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          Survival.  The agreements in this Section shall   survive the resignation of the Administrative Agent and the L/C Issuer, the   replacement of any Lender, the termination of the Aggregate Commitments and   the repayment, satisfaction or discharge of all the other Obligations.
  

          10.05  Payments Set Aside.  To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

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          10.06  Successors and Assigns.

	
  
 
  	
  
          (a)         Successors   and Assigns Generally.  The   provisions of this Agreement shall be binding upon and inure to the benefit   of the parties hereto and their respective successors and assigns permitted   hereby, except that neither the Borrower nor any other Loan Party may assign   or otherwise transfer any of its rights or obligations hereunder without the   prior written consent of the Administrative Agent and each Lender and no   Lender may assign or otherwise transfer any of its rights or obligations   hereunder except (i) to an Eligible Assignee in accordance with the   provisions of subsection (b) of this Section, (ii) by way of   participation in accordance with the provisions of subsection (d) of   this Section, (iii) by way of pledge or assignment of a security   interest subject to the restrictions of
subsection (f) of this Section,   or (iv) to an SPC in accordance with the provisions of subsection (h)   of this Section (and any other attempted assignment or transfer by any party   hereto shall be null and void).    Nothing in this Agreement, expressed or implied, shall be construed to   confer upon any Person (other than the parties hereto, their respective   successors and assigns permitted hereby, Participants to the extent provided   in subsection (d) of this Section and, to the extent expressly   contemplated hereby, the Related Parties of each of the Administrative Agent,   the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim   under or by reason of this Agreement.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)         Assignments   by Lenders.  Any Lender may at any   time assign to one or more Eligible Assignees all or a portion of its rights   and obligations under this Agreement (including all or a portion of its   Commitment and the Loans (including for purposes of this subsection (b),   participations in L/C Obligations and in Swing Line Loans) at the time owing   to it); provided that
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
           (i)          except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of
an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the Commitment is not then
in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000, unless each of the Administrative Agent and, so long as
no Event of Default has   occurred and is continuing, the Borrower otherwise consents (each such   consent not to be unreasonably withheld or delayed); provided, however,   that concurrent assignments to members of an Assignee Group and concurrent   assignments from members of an Assignee Group to a single Eligible Assignee   (or to an Eligible Assignee and members of its Assignee Group) will be   treated as a single assignment for purposes of determining whether such   minimum amount has been met;
  

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           (ii)        each   partial assignment shall be made as an assignment of a proportionate part of   all the assigning Lender’s rights and obligations under this Agreement with   respect to the Loans or the Commitment assigned, except that this   clause (ii) shall not apply to rights in respect of Swing Line Loans;
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
           (iii)      any   assignment of a Commitment must be approved by the Administrative Agent, the   L/C Issuer and the Swing Line Lender unless the Person that is the proposed   assignee is itself a Lender (whether or not the proposed assignee would   otherwise qualify as an Eligible Assignee); and
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
           (iv)        the   parties to each assignment shall execute and deliver to the Administrative   Agent an Assignment and Assumption, together with a processing and   recordation fee in the amount, if any, required as set forth in Schedule   10.06, and the Eligible Assignee, if it shall not be a Lender, shall deliver   to the Administrative Agent an Administrative Questionnaire.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
Subject to   acceptance and recording thereof by the Administrative Agent pursuant to   subsection (c) of this Section, from and after the effective date specified   in each Assignment and Assumption, the Eligible Assignee thereunder shall be   a party to this Agreement and, to the extent of the interest assigned by such   Assignment and Assumption, have the rights and obligations of a Lender under   this Agreement, and the assigning Lender thereunder shall, to the extent of   the interest assigned by such Assignment and Assumption, be released from its   obligations under this Agreement (and, in the case of an Assignment and   Assumption covering all of the assigning Lender’s rights and obligations   under this Agreement, such Lender shall cease to be a party hereto) but shall   continue to be entitled to the benefits of Sections 3.01, 3.04,   3.05, and 10.04 with respect to facts and circumstances   occurring prior to the
effective date of such assignment.  Upon request, the Borrower (at its   expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of   rights or obligations under this Agreement that does not comply with this   subsection shall be treated for purposes of this Agreement as a sale by such   Lender of a participation in such rights and obligations in accordance with   subsection (d) of this Section.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)          Register.  The Administrative Agent, acting solely   for this purpose as an agent of the Borrower, shall maintain at the   Administrative Agent’s Office a copy of each Assignment and Assumption   delivered to it and a register for the recordation of the names and addresses   of the Lenders, and the Commitments of, and principal amounts of the Loans   and L/C Obligations owing to, each Lender pursuant to the terms hereof from   time to time (the “Register”).    The entries in the Register shall be conclusive, and the Borrower, the   Administrative Agent and the Lenders may treat each Person whose name is   recorded in the Register pursuant to the terms hereof as a Lender hereunder   for all purposes of this Agreement, notwithstanding notice to the   contrary.  The Register shall be   available for
inspection by each of the Borrower and the L/C Issuer at any   reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request   for a consent for a material or substantive change to the Loan Documents is   pending, any Lender may request and receive from the Administrative Agent a   copy of the Register.
  

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          (d)          Participations.  Any Lender may at any time, without the   consent of, or notice to, the Borrower or the Administrative Agent, sell   participations to any Person (other than a natural person or the Borrower or   any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”)   in all or a portion of such Lender’s rights and/or obligations under this   Agreement (including all or a portion of its Revolving Commitment and/or the   Loans (including such Lender’s participations in L/C Obligations and/or Swing   Line Loans) owing to it); provided that (i) such Lender’s   obligations under this Agreement shall remain unchanged, (ii) such   Lender shall remain solely responsible to the other parties hereto for the   performance of such obligations and (iii) the
Borrower, the   Administrative Agent, the Lenders and the L/C Issuer shall continue to deal   solely and directly with such Lender in connection with such Lender’s rights   and obligations under this Agreement.
  
	
   
  	
  
 
  
	
  
 
  	
  
          Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any  provision of
this Agreement; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant.  Subject to subsection
(e) of this Section, the Borrower agrees that each Participant shall be entitled
to the benefits of Sections 3.01, 3.04 and 3.05 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section.  To the extent permitted by
law, each Participant also shall be entitled to the benefits of
Section 10.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.13 as though it were a
Lender.
 
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          Limitations
upon Participant Rights.  A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 3.01(e)
as though it were a Lender.
 
	
   
  	
  
 
  
	
  
 
  	
  
          (f)          Certain   Pledges.  Any Lender may at any   time pledge or assign a security interest in all or any portion of its rights   under this Agreement (including under its Note, if any) to secure obligations   of such Lender, including any pledge or assignment to secure obligations to a   Federal Reserve Bank; provided that no such pledge or assignment shall   release such Lender from any of its obligations hereunder or substitute any   such pledgee or assignee for such Lender as a party hereto.
  

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          (g)          Electronic   Execution of Assignments.  The   words “execution,” “signed,” “signature,” and words of like import in any   Assignment and Assumption shall be deemed to include electronic signatures or   the keeping of records in electronic form, each of which shall be of the same   legal effect, validity or enforceability as a manually executed signature or   the use of a paper-based recordkeeping system, as the case may be, to the   extent and as provided for in any Applicable Law, including the Federal   Electronic Signatures in Global and National Commerce Act, the New York State   Electronic Signatures and Records Act, or any other similar state laws based   on the Uniform Electronic Transactions Act.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (h)          Special   Purpose Funding Vehicles.    Notwithstanding anything to the contrary contained herein, any Lender   (a “Granting Lender”) may grant to a special purpose funding vehicle   identified as such in writing from time to time by the Granting Lender to the   Administrative Agent and the Borrower (an “SPC”) the option to provide   all or any part of any Loan that such Granting Lender would otherwise be   obligated to make pursuant to this Agreement; provided that (i)   nothing herein shall constitute a commitment by any SPC to fund any Loan, and   (ii) if an SPC elects not to exercise such option or otherwise fails to make   all or any part of such Loan, the Granting Lender shall be obligated to make   such Loan pursuant to the terms hereof or, if it fails to do so, to make such   payment
to the Administrative Agent as is required under Section 2.12(b)(ii).  Each party hereto hereby agrees that (i)   neither the grant to any SPC nor the exercise by any SPC of such option shall   increase the costs or expenses or otherwise increase or change the   obligations of the Borrower under this Agreement (including its obligations   under Section 3.04), (ii) no SPC shall be liable for any indemnity or   similar payment obligation under this Agreement for which a Lender would be   liable, and (iii) the Granting Lender shall for all purposes, including the   approval of any amendment, waiver or other modification of any provision of   any Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder   shall utilize the Commitment of the Granting Lender to the same extent, and   as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party hereto hereby   agrees (which agreement shall survive the
termination of this Agreement)   that, prior to the date that is one year and one day after the payment in   full of all outstanding commercial paper or other senior debt of any SPC, it   will not institute against, or join any other Person in instituting against,   such SPC any bankruptcy, reorganization, arrangement, insolvency, or   liquidation proceeding under the laws of the United States or any State   thereof.  Notwithstanding anything to   the contrary contained herein, any SPC may (i) with notice to, but without   prior consent of the Borrower and the Administrative Agent and with the   payment of a processing fee in the amount of $2,500, assign all or any   portion of its right to receive payment with respect to any Loan to the   Granting Lender and (ii) disclose on a confidential basis any non-public   information relating to its funding of Loans to any rating agency, commercial   paper dealer or provider of any surety or Guarantee or credit or liquidity   enhancement to such
SPC.
  

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          (i)          Resignation   as L/C Issuer or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary   contained herein, if at any time Bank of America assigns all of its   Commitment and Loans pursuant to subsection (b) above, Bank of America may,   (i) upon 30 days’ notice to the Borrower and the Lenders, resign as L/C   Issuer and/or (ii) upon 30 days’ notice to the Borrower, resign as Swing Line   Lender.  In the event of any such   resignation as L/C Issuer or Swing Line Lender, the Borrower shall be   entitled to appoint from among the Lenders a successor L/C Issuer or Swing   Line Lender hereunder; provided, however, that no failure by   the Borrower to appoint any such successor shall affect the resignation of   Bank of America as L/C Issuer or Swing Line Lender, as the case may
be.  If Bank of America resigns as L/C Issuer,   it shall retain all the rights, powers, privileges and duties of the L/C   Issuer hereunder with respect to all Letters of Credit outstanding as of the   effective date of its resignation as L/C Issuer and all L/C Obligations with   respect thereto (including the right to require the Lenders to make Base Rate   Loans or fund risk participations in Unreimbursed Amounts pursuant to Section   2.03(c)).  If Bank of America   resigns as Swing Line Lender, it shall retain all the rights of the Swing   Line Lender provided for hereunder with respect to Swing Line Loans made by   it and outstanding as of the effective date of such resignation, including   the right to require the Lenders to make Base Rate Loans or fund risk   participations in outstanding Swing Line Loans pursuant to Section 2.04(c).  Upon the appointment of a successor L/C   Issuer and/or Swing Line Lender, (a) such successor shall succeed to and   become
vested with all of the rights, powers, privileges and duties of the   retiring L/C Issuer or Swing Line Lender, as the case may be, and   (b) the successor L/C Issuer shall issue letters of credit in   substitution for the Letters of Credit, if any, outstanding at the time of   such succession or make other arrangements satisfactory to Bank of America to   effectively assume the obligations of Bank of America with respect to such   Letters of Credit.
  

         10.07  Treatment of Certain Information; Confidentiality.  Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by Applicable Laws or regulations or by any subpoena or similar legal
process, (d) to any other party hereto, (e) as reasonably required in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower.

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          For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own
confidential information.

          Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including Federal and state securities Laws.

          10.08  Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C Issuer, irrespective of whether or not such Lender or the
L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or such Loan Party may be owed to a branch or office of such Lender or the L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness.  The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have.  Each Lender and the L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

          10.09  Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the Highest Lawful Rate.  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Highest Lawful Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Highest Lawful Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

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          10.10  Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

          10.11  Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligations hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

          10.12  Severability.  If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

          10.13  Replacement
of Lenders.  If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, or if any Lender is a Defaulting Lender or
if any other circumstance exists hereunder that gives the Borrower the right to
replace a Lender as a party hereto, then the Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in, and consents required by,
Section 10.06), all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:

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          (a)          the   Borrower shall have paid to the Administrative Agent the assignment fee   specified in Section 10.06(b);
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          such   Lender shall have received payment of an amount equal to the outstanding   principal of its Loans and L/C Advances, accrued interest thereon, accrued   fees and all other amounts payable to it hereunder and under the other Loan   Documents (including any amounts under Section 3.05) from the   assignee (to the extent of such outstanding principal and accrued interest   and fees) or the Borrower (in the case of all other amounts);
  
	
   
  	
  
 
  
	
  
 
  	
  
          (c)          in   the case of any such assignment resulting from a claim for compensation under   Section 3.04 or payments required to be made pursuant to Section 3.01,   such assignment will result in a reduction in such compensation or payments   thereafter; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          such   assignment does not conflict with applicable Laws.
  

          A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

          10.14  Governing Law; Jurisdiction; Etc.  

	
  
 
  	
  
          (a)          GOVERNING   LAW.  THIS AGREEMENT SHALL   BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF   TEXAS.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          SUBMISSION   TO JURISDICTION.  THE   BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,   FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS   OF THE STATE OF TEXAS SITTING IN DALLAS COUNTY AND OF THE UNITED STATES   DISTRICT COURT OF THE NORTHERN DISTRICT OF TEXAS, AND ANY APPELLATE COURT   FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO   THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT   OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND   UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR   PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE COURT OR, TO THE   FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A   FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY   BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER   MANNER PROVIDED BY LAW.  NOTHING IN THIS   AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE   ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO   BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN   DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN   THE COURTS OF ANY JURISDICTION.
  

-100-

	
  
 
  	
  
          (c)          WAIVER   OF VENUE.  THE BORROWER AND   EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST   EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR   HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT   OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT   REFERRED TO IN PARAGRAPH (b) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE   FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT   FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)          SERVICE   OF PROCESS.  EACH PARTY   HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR   NOTICES IN SECTION 10.02.    NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO   SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
  

          10.15  Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

-101-

          10.16  USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act.

          10.17  ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

-102-

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

	
  
 
  	
  
TEXAS INDUSTRIES, INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ RICHARD M. FOWLER
  
	
   
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Richard M.   Fowler
  
	
  
 
  	
  
Title:
  	
  
Executive   Vice President – Finance
  
	
  
 
  	
  
 
  	
  
and CFO
  

S-1

	
  
 
  	
  
BANK   OF AMERICA,   N.A., as Administrative Agent
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By:
  	
  
/s/ PAUL FOLINO
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Paul Folino
  
	
  
 
  	
  
Title:
  	
  
Assistant   Vice President
  

S-2

	
  
 
  	
  
BANK   OF AMERICA, N.A., as a   Lender, L/C Issuer and Swing Line Lender
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By:
  	
  
/s/ DAVID MCCAULEY
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
David   McCauley
  
	
  
 
  	
  
Title:
  	
  
Vice   President
  

S-3

	
  
 
  	
  
UBS SECURITIES   LLC, as Syndication Agent
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By:
  	
  
/s/ LAUREN CLANCY
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Lauren   Clancy
  
	
  
 
  	
  
Title:
  	
  
Director
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ BARBARA S. WANG
  
	
  
 
  	
  
 
  	
  

  
	
   
  	
  
Name:
  	
  
Barbara S.   Wang
  
	
  
 
  	
  
Title:
  	
  
Director and   Counsel Regions Americas Legal
  

S-4

	
  
 
  	
  
UBS LOAN   FINANCE,   as a Lender
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ WILFRED V. SAINT
  
	
  
 
  	
  
 
  	
  

  
	
   
  	
  
Name:
  	
  
Wilfred V.   Saint
  
	
  
 
  	
  
Title:
  	
  
Director,   Banking Product Services, US
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ RICHARD L. TAVROW
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Richard L.   Tavrow
  
	
  
 
  	
  
Title:
  	
  
Director,   Banking Product Services, US
  

S-5

	
  
 
  	
  
JPMORGAN CHASE   BANK, N.A.,   as Co-Documentation Agent and as a Lender
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ MICHAEL J. LISTER
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Michael J.   Lister
  
	
  
 
  	
  
Title:
  	
  
JPMorgan   Chase Bank, N.A.
  

S-6

	
  
 
  	
  
WELLS FARGO   BANK, NATIONAL ASSOCIATION,   as Co-Documentation Agent and as a Lender
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ ZACH JOHNSON
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Zach Johnson
  
	
   
  	
  
Title:
  	
  
Vice   President
  

S-7

	
  
 
  	
  
SUNTRUST BANK,   as Co-Documentation Agent and as a Lender
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ DANIEL S. KOMITOR
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Daniel S.   Komitor
  
	
   
  	
  
Title:
  	
  
Director
  

S-8

	
  
 
  	
  
COMERICA BANK,   as a Lender
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ GERALD R. FINNEY,   JR.
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Gerald R.   Finney, Jr.
  
	
   
  	
  
Title:
  	
  
Vice   President
  

S-9

	
  
 
  	
  
U.S. BANK   NATIONAL ASSOCIATION, as a Lender
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ KEVIN S. MCFADDEN
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Kevin S.   McFadden
  
	
   
  	
  
Title:
  	
  
Vice   President
  

S-10

	
  
 
  	
  
HIBERNIA NATIONAL   BANK,   as  a Lender
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ THOMAS BLAKE
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Thomas Blake
  
	
   
  	
  
Title:
  	
  
Vice   President
  

S-11

	
  
 
  	
  
GENERAL ELECTRIC   CAPITAL CORPORATION, as a Lender
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ BRIAN P. SCHWINN
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
Brian P.   Schwinn
  
	
   
  	
  Title:
  	
  Duly   Authorized Signatory
  

S-12

SCHEDULE 1.01

EXISTING LETTERS OF CREDIT

	
  
1.
  	
  
Applicant:
  	
  
Texas   Industries, Inc.
  
	
  
 
  	
  
Issuer:
  	
  
Bank of   America, N.A.
  
	
  
 
  	
  
Original   Issuance Date:
  	
  
October 25,   1993
  
	
  
 
  	
  
Beneficiary:
  	
  
National   Union Fire Insurance Company of Pittsburgh, PA
  
	
  
 
  	
  
Renewal/Expiry   Date:
  	
  
April 1
  
	
   
  	
  
Last   Amended:
  	
  
February 22,   2005 (Amendment No. 2)
  
	
  
 
  	
  
LC Number:
  	
  
133443
  
	
  
 
  	
  
Current   Aggregate Amount:
  	
  
$1,220,196.00
  
	
  
 
  	
  
 
  	
  
 
  
	
  
2.
  	
  
Applicant:
  	
  
Texas   Industries, Inc.
  
	
  
 
  	
  
Issuer:
  	
  
Bank of   America, N.A.
  
	
  
 
  	
  
Original   Issuance Date:
  	
  
March 20,   1998
  
	
   
  	
  
Beneficiary:
  	
  
Liberty Mutual   Insurance Company
  
	
  
 
  	
  
Renewal/Expiry   Date:
  	
  
March 31
  
	
  
 
  	
  
Last   Amended:
  	
  
July 15,   2004 (Amendment No. 3)
  
	
  
 
  	
  
LC Number:
  	
  
973042
  
	
  
 
  	
  
Current   Aggregate Amount:
  	
  
$258,000.00
  
	
  
 
  	
  
 
  	
  
 
  
	
  
3.
  	
  
Applicant:
  	
  
Texas   Industries, Inc.
  
	
   
  	
  
Issuer:
  	
  
Bank of   America, N.A.
  
	
  
 
  	
  
Original   Issuance Date:
  	
  
July 14,   1999
  
	
  
 
  	
  
Beneficiary:
  	
  
Reliance   National Indemnity Company
  
	
  
 
  	
  
Renewal/Expiry   Date:
  	
  
April 1
  
	
  
 
  	
  
Last   Amended:
  	
  
May 18, 2004   (Amendment No. 4)
  
	
  
 
  	
  
LC Number:
  	
  
1148
  
	
  
 
  	
  
Current   Aggregate Amount:
  	
  
$1,752,604.00
  
	
   
  	
  
 
  	
  
 
  
	
  
4.
  	
  
Applicant:
  	
  
Texas   Industries, Inc.
  
	
  
 
  	
  
Issuer:
  	
  
Bank of   America, N.A.
  
	
  
 
  	
  
Original   Issuance Date:
  	
  
July 6, 2000
  
	
  
 
  	
  
Beneficiary:
  	
  
Old Republic   Insurance Company
  
	
  
 
  	
  
Renewal/Expiry   Date:
  	
  
April 1
  
	
  
 
  	
  
Last   Amended:
  	
  
February 8,   2005 (Amendment No. 8)
  
	
   
  	
  
LC Number:
  	
  
3027320
  
	
  
 
  	
  
Current   Aggregate Amount:
  	
  
$23,843,362.00
  

Schedule 1.01

SCHEDULE 2.01

COMMITMENTS
 AND APPLICABLE PERCENTAGES

	
  
Lender
  	
   
 	
  
Commitment
  	
   
 	
  
Applicable   Percentage
  	
   
 
	
  

  	
   
  	
  

  	
  

  	
  
 
  	
  

  	
  

  	
  
 
  
	
  
Bank of America, N.A.
  	
  
 
  	
  
$
  	
  
32,500,000
  	
  
 
  	
  
 
  	
  
16.250000000
  	
  
%
  
	
  
UBS Loan Finance
  	
  
 
  	
  
$
  	
  
24,500,000
  	
  
 
  	
  
 
  	
  
12.250000000
  	
  
%
  
	
  JPMorgan Chase Bank, N.A.
  	
  
 
  	
  
$
  	
  
24,500,000
  	
  
 
  	
  
 
  	
  
12.250000000
  	
  
%
  
	
  
Wells Fargo Bank, National   Association
  	
  
 
  	
  
$
  	
  
24,500,000
  	
  
 
  	
  
 
  	
  
12.250000000
  	
  
%
  
	
  
SunTrust Bank
  	
  
 
  	
  
$
  	
  
24,500,000
  	
  
 
  	
  
 
  	
  
12.250000000
  	
  
%
  
	
  Comerica Bank
  	
  
 
  	
  
$
  	
  
24,500,000
  	
  
 
  	
  
 
  	
  
12.250000000
  	
  
%
  
	
  
U.S. Bank National   Association
  	
  
 
  	
  
$
  	
  
20,000,000
  	
  
 
  	
  
 
  	
  
10.000000000
  	
  
%
  
	
  
Hibernia National Bank
  	
  
 
  	
  
$
  	
  
15,000,000
  	
  
 
  	
  
 
  	
  
7.500000000
  	
  
%
  
	
  General Electric Capital   Corporation
  	
  
 
  	
  
$
  	
  
10,000,000
  	
  
 
  	
  
 
  	
  
5.000000000
  	
  
%
  
	
  
Total
  	
  
 
  	
  
$
  	
  
200,000,000
  	
  
 
  	
  
 
  	
  
100.000000000
  	
  
%
  

Schedule 2.01

SCHEDULE 5.05

SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS

Schedule 5.05

SCHEDULE 5.13

SUBSIDIARIES,
 OTHER EQUITY INVESTMENTS
 AND EQUITY INTERESTS IN THE BORROWER

PART (a)          SUBSIDIARIES

	
  
Subsidiaries to be Owned After the Spin-Off Transaction
  	
  
 
  	
  
State of   Incorporation
   or Organization
  
	
  

  	
  
 
  	
  

  	
  

  
	
  
Brookhollow   Corporation
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Brookhollow   of Alexandria, Inc.
  	
  
 
  	
  
 
  	
  
Louisiana
  
	
  Brook Hollow   Properties, Inc.
  	
  
 
  	
  
 
  	
  
Texas
  
	
  
Brookhollow   of Virginia, Inc.
  	
  
 
  	
  
 
  	
  
Virginia
  
	
  
Southwestern   Financial Corporation
  	
  
 
  	
  
 
  	
  
Texas
  
	
  
Creole   Corporation
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Pacific   Custom Materials, Inc.
  	
  
 
  	
  
 
  	
  
California
  
	
  
Riverside   Cement Company (1)
  	
  
 
  	
  
 
  	
  
California
  
	
  Partin   Limestone Products, Inc.
  	
  
 
  	
  
 
  	
  
California
  
	
  
Riverside   Cement Holdings Company
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Texas   Industries Holdings, LLC (formerly Texas Industries Holdings, Inc.)
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Texas   Industries Trust
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
TXI   Aviation, Inc.
  	
  
 
  	
  
 
  	
  
Texas
  
	
  
TXI   California Inc.
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  TXI Capital   Trust I
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
TXI Cement   Company
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
TXI LLC   (formerly TXI Corp. and formerly TXI Texas, Inc.)
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
TXI Operating   Trust
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
TXI   Operations, LP (2)
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
TXI Power   Company
  	
  
 
  	
  
 
  	
  
Texas
  
	
  TXI   Riverside Inc.
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
TXI   Transportation Company
  	
  
 
  	
  
 
  	
  
Texas
  

Indirect subsidiaries of the Borrower are indented and listed following their direct parent company, with subsidiaries with multiple direct owners as follows:

	
  

  
	
  
(1)   California general partnership: TXI California Inc. and TXI Riverside Inc.,   general  partners
  
	
  
(2) Delaware   limited partnership: TXI Operating Trust, general partner; Texas Industries   Trust, limited partner
  

Schedule 5.13

PART (b) OTHER EQUITY INVESTMENTS

Subsidiaries to be Owned on the Closing Date but Divested in the Spin-Off Transaction:

	
   
 	
   
  	
  
State or   Other Jurisdiction
   of Incorporation or
   Organization
  
	
  
 
  	
  
 
  	
  

  
	
  
Chaparral   Steel Company
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Chaparral (Virginia) Inc.
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
American Materials Transport, Inc.
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Chaparral Steel Investments, Inc. (formerly Chaparral Steel Company)
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  Chaparral Steel Texas, LLC (formerly Chaparral Steel Texas, Inc.)
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Chaparral Steel Holdings, LLC (formerly Chaparral Steel Holdings,   Inc.)
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Chaparral Steel Trust
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Chaparral Steel Midlothian, LP (1)
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
TXI Star Recycling LP (formerly Star 2000 LP) (1)
  	
  
 
  	
  
 
  	
  
Delaware
  
	
  
Aceros Chaparral, S. de R. L.   de C. V. (2)
  	
  
 
  	
  
 
  	
  
Mexico
  
	
  Servicios Chaparral, S. de R.   L. de C. V. (3)
  	
  
 
  	
  
 
  	
  
Mexico
  

Indirect subsidiaries of Chaparral Steel Company are indented and listed following their direct parent company, with subsidiaries with multiple direct owners as follows:

	
  

  
	
  
(1)
  	
  
Delaware   limited partnership: Chaparral Steel Texas, LLC is 1% general partner and   Chaparral Steel Trust is 99% limited partner.
  
	
  
(2)
  	
  
Mexico   limited liability company: Chaparral Steel Investments, Inc. and Chaparral   Steel Midlothian, LP, owners.
  
	
  
(3)
  	
  
Mexico   limited liability company: Aceros Chaparral, S. de R. L. de C. V. and   Chaparral Steel Midlothian, LP, owners
  

Minority Interests

Minority interest in Oaks Bank & Trust - $447,197.38
 Minority interest in Twelve TX, LLC - $197,348.00

Schedule 5.13

SCHEDULE 7.01

EXISTING LIENS

Referred to in Subparagraph (h) of the definition of “Permitted Liens”

	
  
1.
  	
  
Liens and   security interests granted by various Loan Parties in favor of Bank of   America, as administrative agent under the Existing Credit Agreement that   secure such Loan Parties’ obligations under such credit agreement or under   guaranties thereof.  All such liens   and security interests will be released as part of the transactions occurring   on or about the Closing date.
  
	
  
 
  	
  
 
  
	
  
2.
  	
  
Interest of   Deere Credit, Inc. in specified excavating equipment and associated rights   and property.  The related financing   statements appear to be precautionary filings for a lease of this equipment   but the financing statements also cover “all general intangibles associated   therewith [i.e., with the equipment], including, without limitation, all   warranty rights; all accounts arising therefrom.”
  
	
  
 
  	
  
 
  
	
  3.
  	
  
Interest of   William Scotsman Mobile Offices in a 74”x14” mobile office located in   Midlothian, TX.  The related financing   statement characterizes the underlying agreement as a “lease/purchase” rather   than only as a lease.
  
	
  
 
  	
  
 
  
	
  
4.
  	
  
Interests of   UnionBanCal Leasing Corporation, the original lessor of certain equipment, in   all rights of Borrower in a sublease of such equipment from Borrower to TXI   Operations, LP.
  
	
  
 
  	
  
 
  
	
  
5.
  	
  
Interests of   BTM Capital Corporation, the original lessor of certain equipment, in all   rights of Borrower in a sublease of such equipment from Borrower to TXI   Operations, LP.
  
	
  
 
  	
  
 
  
	
  
6.
  	
  
Interests of   the following parties in the following items of property (and associated   rights and property), which may or may not be held under true leases:
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
a.
  	
  
Interests of   Darr Equipment Operating Co. LP. in the following equipment:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
1 Used   Caterpillar Model 980G Wheel Loader
  
	
  
 
  	
  
 
  	
  
1 Used   Caterpillar Model 345BL Hydraulic Excavator
  
	
  
 
  	
  
 
  	
  
1 New   Caterpillar  Model 345B Excavator
  
	
  
 
  	
  
 
  	
  
1 New   Caterpillar Model 330B Hydraulic Excavator
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
b.
  	
  
Interests of   CitiCorp Del Lease, Inc., dba CitiCorp Dealer Finance, in the following   equipment:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
2 new   Caterpillars Model #GP25KLP
  
	
  
 
  	
  
 
  	
  
188”N   Triplex at 1134 Pioneer Plant Road, Eagle Lake, Colorado, TX
  
	
  
 
  	
  
 
  	
  
2   Sideshifters, one at Colorado, one at Romayor, TX
  
	
  
 
  	
  
 
  	
  
42” Forks   Equipment at 1134 Pioneer Plant Road
  
	
  
 
  	
  
 
  	
  
31” Simplex   at 13 Mile E Highway 787, Romayor, TX
  

Schedule 7.01

	
  
 
  	
  
c.
  	
  
Interests of   The CIT Group / Equipment Financing Inc. in the following equipment:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
1 2003   Skytrak Legacy 10054 Handler
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
d.
  	
  
Interests of   Hyster Credit Company in the following equipment:
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
2 Hyster   H80XM Lift Trucks, and all proceeds thereof
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
e.
  	
  
Interests of   T-K-O Equipment Co. in the following equipment:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
2 Used   Caterpillar 815F Compactors
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
f.
  	
  
Interests of   Norwest Financing Leasing Inc. in the following equipment:
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
1 Sharp   ARC150 Copier with accessories
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
g.
  	
  
Interests of   Continental Equipment Company L.P. in the following equipment:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
1 New   Komatsu WA500-3 Wheel loader, with all attachments
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
h.
  	
  
Interests of   Minolta Business Systems in the following equipment:
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
1 Minolta   2001 Copier #2942856
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
i.
  	
  
Interests of   De Lage Landen Financial Services, Inc. in the following equipment:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
1   Trackmobile Model 4150TM
  

Schedule 7.01

SCHEDULE 7.02(d)

EXISTING INVESTMENTS

Investments listed in PART (b) of Schedule 5.13

Obligations with respect to letters of credit listed on Schedule 1.01 and guarantees listed on Schedule 7.03(c), to the extent constituting Investments

Schedule 7.02(d)

SCHEDULE 7.03(c)

EXISTING DEBT

Debt under the 2003 Senior Notes.  Over $599,000,000 of this Debt has been tendered and will be retired at the time of funding of the 2005 Senior Notes and the initial Credit Extension; to the extent any of the remaining Debt is not tendered it will remain outstanding until purchased, called or paid.

Debt under the Existing Credit Agreement, to be retired at the time of funding of the 2005 Senior Notes and the initial Credit Extension.

$2,495,000 Pollution Control Bonds, due through 2007.

Aggregate of certain future contractual payments due to retirees or their beneficiaries under the Financial Security Plan, which may constitute “Debt” as defined.  The aggregate future contractual payments equal $386,856.06

Guarantee by Texas Industries, Inc. to Virginia Power Company for payment of electric power purchases by Chaparral (Virginia), Inc.  Expected to be terminated by the time of the funding of the 2005 Senior Notes and the initial Credit Extension; will be terminated by the time of the Spin-Off Transaction.

Guarantee by Texas Industries, Inc. to Sims Group USA Corporation for payment of scrap purchases from and any payment required upon early termination of lease by Chaparral (Virginia), Inc.  Expected to be extinguished by the time of the funding of the 2005 Senior Notes and the initial Credit Extension; will be terminated by the time of the Spin-Off Transaction.

Schedule 7.03

SCHEDULE 10.02

ADMINISTRATIVE AGENT’S OFFICE;
 CERTAIN ADDRESSES FOR NOTICES

THE BORROWER:

Texas Industries, Inc.
1341 West Mockingbird Lane, 7th Floor
 Dallas, Texas 75247
 Attention:  Kenneth R. Allen, Vice President and Treasurer
 Telephone:  (972) 647-6730
 Telecopier:  (972) 674-3964
 Electronic Mail:  kallen@txi.com
 Website Address:  www.txi.com

ADMINISTRATIVE AGENT:

Administrative Agent’s Office
 (for payments and Requests for Credit Extensions):
 Bank of America, N.A.
 901 Main Street
 Mail Code: TX1-492-14-14
 Dallas, Texas  75202

Primary
 Attention:       Monica Barnes
 Telephone:     214-209-9289
 Telecopier:     214-290-9442
 Electronic Mail:  monica.t.bartnes@bankofamerica.com

Secondary
 Attention:       Deanna Betik
 Telephone:     214-209-3259
 Telecopier:     214-290-9414
 Electronic Mail:  deanna.betik@bankofamerica.com

Account No.:  129-2000-883
 Ref:  Texas Industries, Inc.
 ABA# 111000012
 Attn: Credit Services

Schedule 10.02 - 1

Other Notices as Administrative Agent:
 Bank of America, N.A.
 Agency Management
 Street Address: 231 South LaSalle Street
 Mail Code: IL1-231-08-30
 City, State ZIP Code: Chicago, Illinois 60604

Primary
 Attention:  Linda Lov
 Telephone:  (312) 828-8010
 Telecopier:  (877) 206-1766
 Electronic Mail:  linda.k.lov@BankofAmerica.com

Secondary
 Attention:  David A. Johanson
 Telephone:  (312) 828-7933
 Telecopier:  (877) 206-8410
 Electronic Mail:  david.johanson @BankofAmerica.com

L/C ISSUER:

Standby Letters of Credit
Bank of America, N.A.
 Trade Operations – Scranton
 1 Fleetway
 Mail Code:  PA6-580-02-30
 Scranton, PA 18507
 Attention: Alfonso (Al) Malave
 Asst. Vice President and Operations Manager
 Telephone:  (570) 330-4212
 Facsimile:   (570) 330-4186

Commercial Letters of Credit
Bank of America, N.A.
 Trade Operations – Charlotte
 121 W. Trade St.
 Mail Code:  NC1-005-21-01
 Charlotte, NC 28255
 Attention: Bette Stover
 Asst. Vice President and Operations Manager
 Telephone:  (704) 386-8617
 Facsimile:   (704) 386-0706

Schedule 10.02 - 2

SWING LINE LENDER:

Bank of America, N.A.
 901 Main Street
 Mail Code: TX1-492-14-14
 Dallas, Texas  75202

Primary
 Attention:       Monica Barnes
 Telephone:     214-209-9289
 Telecopier:     214-290-9442
 Electronic Mail:  monica.t.barnes@bankofamerica.com

Secondary
 Attention:       Deanna Betik
 Telephone:     214-209-3259
 Telecopier:     214-290-9414
 Electronic Mail:  deanna.betik@bankofamerica.com

Account No.:  129-2000-883
 Ref:  Texas Industries, Inc.
 ABA# 111000012
 Attn: Credit Services

Schedule 10.02 - 3

SCHEDULE 10.06

PROCESSING AND RECORDATION FEES

          The Administrative Agent will charge a processing and recordation fee (an “Assignment Fee”) in the amount of $2,500 for each assignment; provided, however, that in the event of two or more concurrent assignments to members of the same Assignee Group (which may be effected by a suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), the Assignment Fee will be $2,500 plus the amount set forth below:

	
  
Transaction
  	
   
 	
  
Assignment   Fee
  
	
  

  	
  
 
  	
  

  
	
  
First four   concurrent assignments or suballocations to members of an Assignee Group (or   from members of an Assignee Group, as applicable)
  	
  
 
  	
  
-0-
  
	
  
 
  	
  
 
  	
   
 
	
  Each   additional concurrent assignment or suballocation to a member of such   Assignee Group (or from a member of such Assignee Group, as applicable)
  	
  
 
  	
  
$500
  

Schedule 10.06

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

          This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

          For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including, without limitation, the Letters of Credit and the Swing Line Loans included in such facilities) and (ii) to the extent permitted to be assigned under Applicable Law, all claims, suits, causes of

action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

	
  
1.
  	
  
Assignor:   ______________________________
  
	
  
 
  	
  
 
  
	
  
2.
  	
  
Assignee:   ______________________________ [and is an Affiliate/Approved Fund of [identify   Lender]1]
  
	
  
 
  	
  
 
  
	
  
3.
  	
  
Borrower(s):   Texas Industries, Inc..
  
	
  
 
  	
  
 
  
	
  
4.
  	
  
Administrative   Agent:  Bank   of America, N.A., as the administrative agent under the Credit Agreement
  

	
  

  
	
   
  	
  
1          Select   as applicable.
  

A - 1
 Form of Assignment and Assumption

	
  
5.
  	
  
Credit   Agreement:  Credit Agreement, dated as   of June 30,   2005, among Texas Industries, Inc., the Lenders from time to time party   thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer, and   Swing Line Lender
  
	
  
 
  	
  
 
  
	
  
6.
  	
  
Assigned   Interest:
  

	
  Aggregate
   Amount of
   Commitment
   for all Lenders*
  	
   
 	
  
Amount of
   Commitment/
   Assigned*
  	
   
 	
  
Percentage
   Assigned of
   Commitment2
  	
   
 	
  
CUSIP
   Number
  
	
  

  	
  
 
  	
  

  	
  
 
  	
  

  	
  
 
  	
  

  
	
  
$____________
  	
   
 	
  
$_____________
  	
   
 	
  
__________%
  	
  
 
  	
  
 
  
	
  $____________
  	
   
 	
  
$_____________
  	
   
 	
  
__________%
  	
  
 
  	
  
 
  
	
  
$____________
  	
   
 	
  
$_____________
  	
   
 	
  
__________%
  	
  
 
  	
  
 
  

[7.           
Trade Date:          __________________]3

Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

          The terms set forth in this Assignment and Assumption are hereby agreed to:

	
   
  	
  
ASSIGNOR
  
	
  
 
  	
  
[NAME OF   ASSIGNOR]
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
ASSIGNEE
  
	
  
 
  	
  
[NAME OF   ASSIGNEE]
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	 	 	

	
  
 
  	
  
Title:
  	
  
 
  

	
  

  
	
  
          *Amount   to be adjusted by the counterparties to take into account any payments or   prepayments made between the Trade Date and the Effective Date.
  
	
  
   

	
  
            2   Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of   all Lenders thereunder.

	
  
   

	
            3   To be completed if the Assignor and the Assignee intend that the minimum   assignment amount is to be determined as of the Trade Date.
  

A - 2
 Form of Assignment and Assumption

[Consented to and]
4 Accepted:

BANK OF AMERICA, N.A., as
  Administrative Agent

	
  
By:
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
Title:
  	
  
 
  	
  
 
  

[Consented to:]5

	
  By:
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
Title:
  	
  
 
  	
  
 
  

	
  

  
	
  
          4          To   be added only if the consent of the Administrative Agent is required by the   terms of the Credit Agreement.
  
	
  
 
  
	
  
          5          To   be added only if the consent of the Borrower and/or other parties (e.g. Swing   Line Lender, L/C Issuer) is required by the terms of the Credit Agreement.
  

A - 3
 Form of Assignment and Assumption

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR
 ASSIGNMENT AND ASSUMPTION

          1.          Representations and Warranties.

                       1.1.          Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder,
(iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

                       1.2.          Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform

in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

          2.          Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

A - 4
 Form of Assignment and Assumption

          3.          General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of Texas.

A - 5
 Form of Assignment and Assumption

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:  ____________,

To:    Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

          Reference is made to that certain Credit Agreement, dated as of June 30, 2005 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Texas Industries, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

          The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                                                         of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

          1.          Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

          1.          Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date.  Such financial statements fairly present the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

          2.          The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by the attached financial statements.

          3.          A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and

B - 1
 Form of Compliance Certificate

[select one:]

          [to the knowledge of the undersigned during such fiscal period, the Borrower performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

--or--

          [the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

          4.          The representations and warranties of the Borrower contained in Article V of the Agreement, and any representations and warranties of any Loan Party that are contained in any document furnished at any time under or in connection with the Loan Documents, are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in connection with
which this Compliance Certificate is delivered.

          5.          The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the date of this Certificate.

          This Certificate is executed by the undersigned in his capacity as an officer of the Borrower and not in any individual capacity.

          IN WITNESS WHEREOF, the undersigned has executed this Certificate as of ______________, ____

	
  
 
  	
  
TEXAS INDUSTRIES,   INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
   
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  

B - 2
 Form of Compliance Certificate

For the Quarter/Year ended ___________________(“Statement Date”)

SCHEDULE 2
 to the Compliance Certificate
 ($ in 000’s)

[TO BE COMPLETED]

EXHIBIT C

FORM OF GUARANTY

C - 1
 Form of Guaranty

EXHIBIT D

OPINION MATTERS

          The matters contained in the following Sections of the Credit Agreement should be covered by the legal opinion:

	
  
 
  	
  
•
  	
  
Section   5.01(a), (b) and (c)
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
•
  	
  
Section 5.02
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
•
  	
  
Section 5.03
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
•
  	
  
Section 5.04
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
•
  	
  
Section 5.06
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
•
  	
  
Section   5.14(b)
  

D
 Opinion Matters

EXHIBIT E

FORM OF REVOLVING LOAN NOTE

	
  
$                                    
  	
  
July 6, 2005
  

          FOR VALUE RECEIVED, Texas Industries, Inc., a Delaware corporation (the “Borrower”), hereby promises to pay to the order of ___________________________ (the “Lender”), on the Maturity Date (as defined in the Credit Agreement referred to below) the principal amount of __________________ Dollars ($____________), or such lesser principal amount of Revolving Loans (as defined in such Credit Agreement) due and payable by the Borrower to the Lender on the Maturity Date under that certain Credit Agreement, dated as of June 30, 2005 (as amended, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among the Borrower, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line
Lender.

          The Borrower promises to pay interest on the unpaid principal amount of each Revolving Loan from the date of such Revolving Loan until such principal amount is paid in full, at such interest rates, and at such times as are specified in the Agreement.  All payments of principal of and interest on this Note shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent’s Office.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

          This Note is one of the Revolving Loan Notes referred to in the Agreement, is entitled to the benefits thereof and is subject to optional and mandatory prepayment in whole or in part as provided therein.   This Note is also entitled to the benefits of the Guaranty  and is secured by the Collateral.  Upon the occurrence of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement.  Revolving Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business.  The Lender may also attach schedules to this Note and endorse thereon the date, amount, Type and maturity of its Revolving Loans and payments with respect thereto.

          The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and, except for notices for which provision is expressly made in the Loan Documents, notice of protest, demand, intent to accelerate, acceleration, dishonor and non-payment of this Note.

E - 1
 Form of Revolving Loan Note

          THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

	
  
 
  	
  
TEXAS INDUSTRIES,   INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
   
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  

E - 2
 Form of Revolving Loan Note

REVOLVING LOANS AND PAYMENTS WITH RESPECT THERETO

	
  Date
  	
   
 	
  
Type of   Loan Made
  	
   
 	
  
Amount of   Loan Made
  	
   
 	
  
End of   Interest Period
  	
   
 	
  
Amount of   Principal or Interest Paid This Date
  	
   
 	
  
Outstanding   Principal Balance This Date
  	
   
 	
  
Notation   Made By
  	
   
 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 

E - 3
 Form of Revolving Loan Note

EXHIBIT F

FORM OF REVOLVING LOAN NOTICE

Date:  ___________, _____

To:     Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

          Reference is made to that certain Credit Agreement, dated as of June 30, 2005 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Texas Industries, Inc.., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

          The undersigned hereby requests (select one):

	
  
 
  	
  
o
  	
  
A Borrowing   of Revolving Loans
  	
  
o
  	
  
A conversion   or continuation of Revolving Loans
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
1.
  	
  
On                                                                                     (a Business Day).
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
2.
  	
  
In the   amount of $                                              .
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
3.
  	
  
Comprised   of                                                       .
  
	
  
 
  	
  
 
  	
  
[Type of   Revolving Loan requested]
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
4.
  	
  
For   Eurodollar Rate Loans:  with an   Interest Period of          months.
  

          The Revolving Borrowing, if any, requested herein complies with the provisos to the first sentence of Section 2.01 of the Agreement.

	
   
  	
  
TEXAS INDUSTRIES,   INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  

F - 1
 Form of Revolving Loan Notice

EXHIBIT G

FORM OF SECURITY AGREEMENT

G - 1
 Form of Security Agreement

EXHIBIT H

FORM OF SWING LINE LOAN NOTICE

Date:  ___________, _____

	
  
To:
  	
  
Bank of   America, N.A., as Swing Line Lender
  
	
  
 
  	
  
Bank of   America, N.A., as Administrative Agent
  

Ladies and Gentlemen:

          Reference is made to that certain Credit Agreement, dated as of June 30, 2005 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Texas Industries, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

          The undersigned hereby requests a Swing Line Loan:

	
  
 
  	
  
1.
  	
  
On   _______________________________________ (a Business Day).
  
	 	 	 
	
  
 
  	
  
2.
  	
  
In the   amount of $_________________.
  

          The Swing Line Borrowing requested herein complies with the requirements of the provisos to the first sentence of Section 2.04(a) of the Agreement.

	
  
 
  	
  
TEXAS INDUSTRIES,   INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  

H - 1
 Form of Swing Line Loan Notice

EXHIBIT I

FORM OF SWING LINE NOTE

	
  
$                                                    
  	
  
July 6, 2005
  

          FOR VALUE RECEIVED, TEXAS INDUSTRIES, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to the order of BANK OF AMERICA, N.A. (“Swing Line Lender”), on the date when due in accordance with the Credit Agreement referred to below, the aggregate unpaid principal amount of each Swing Line Loan from time to time made by the Swing Line Lender to the Borrower under that certain Credit Agreement, dated as of June 30, 2005 (as amended, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among the Borrower, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

          The Borrower promises to pay interest on the unpaid principal amount of each Swing Line Loan from the date of such Swing Line Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement.

          All payments of principal of and interest on this Note shall be made to the Swing Line Lender in Dollars in immediately available funds at its Lending Office.

          If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

          This Note is the Swing Line Note referred to in the Agreement, is entitled to the benefits thereof and is subject to optional and mandatory prepayment in whole or in part as provided therein.  This Note is also entitled to the benefits of the Guaranty and is secured by the Collateral.  Upon the occurrence of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement.  Swing Line Loans made by the Swing Line Lender shall be evidenced by one or more loan accounts or records maintained by Swing Line Lender in the ordinary course of business.  The Swing Line Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of the Swing Line Loans and payments with respect thereto.

          The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand, and except for notices for which provision is expressly made in the Loan Documents, notice of protest, demand, intent to accelerate, acceleration, dishonor and non-payment of this Note.

I - 1
 Form of Swing Line Note

          THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

	
  
 
  	
  
TEXAS INDUSTRIES, INC.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  

I - 2
 Form of Swing Line Note

SWING LINE LOANS AND PAYMENTS WITH RESPECT THERETO

	
  
Date
  	
   
 	
  
Amount of   Loan
   Made
  	
   
 	
  
Amount of
   Principal or
   Interest Paid This
   Date
  	
   
 	
  
Outstanding   Principal
   Balance This Date
  	
   
 	
  
Notation   Made By
  
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  
	 	 	 	 	 	 	 	 	 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  

I - 3
 Form of Swing Line NoteExhibit 10.3

[EXECUTION]

SEPARATION AND DISTRIBUTION AGREEMENT

Dated as of  July 6, 2005

Between

TEXAS INDUSTRIES, INC.

and

CHAPARRAL STEEL COMPANY

TABLE OF CONTENTS

	
   
 	
   
 	
  
Page No.
  
	
   
 	
   
 	
  

  
	
  
Section
  	
   
 
	
  
 
  	
  
 
  	
   
 
	
  
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
  	
  
14
  
	
  
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
  	
  
25
  
	
  
 
  	
  
 
  	
   
 
	
  
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
  

iii

	
  
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
  	
  
35
  
	
  
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.
  

11

	
  
 
  	
  
(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 101⁄4% 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. 

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          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 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. 

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          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.
  

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(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 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.

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          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.
  

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(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.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
Financial Security Plan and Other Deferred Compensation.
  

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(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 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.

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          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 Party shall,without the payment of any further consideration therefor, assume such rights and obligations.

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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 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.
  

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(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
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.

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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. 

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          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 101⁄4% 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. 

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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
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.

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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.
  

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(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.
  

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          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
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.
  

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(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. 

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          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 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.
  

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(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. 

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          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

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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. 

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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
  

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