Exhibit 10.2

EXECUTION VERSION

PLEDGE AND SECURITY AGREEMENT

Dated as of May 3, 2010

among

U.S. Concrete, Inc.
as a Grantor

and

Each Other Grantor
From Time to Time Party Hereto

and

JPMorgan Chase Bank, N.A.
as Administrative Agent

 
 

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TABLE OF CONTENTS
TABLE OF CONTENTS
 
ARTICLE I          Defined Terms
2
Section 1.1
Definitions
2
Section 1.2
Certain Other Terms
6
ARTICLE II         Grant of Security Interest
7
Section 2.1
Collateral
7
Section 2.2
Grant of Security Interest in Collateral
8
Section 2.3
Cash Collateral Account
9
ARTICLE III       Representations and Warranties
9
Section 3.1
Title; No Other Liens
9
Section 3.2
Perfection and Priority
9
Section 3.3
Jurisdiction of Organization; Chief Executive Office
10
Section 3.4
Inventory and Equipment
10
Section 3.5
Pledged Collateral
10
Section 3.6
Accounts
11
Section 3.7
Intellectual Property
12
Section 3.8
Deposit Accounts; Securities Accounts
12
Section 3.9
Commercial Tort Claims
12
Section 3.10
Letter-of-Credit Rights and Chattel Paper
13
Section 3.11
Filing Requirements
13
Section 3.12
No Financing Statements, Security Agreements
13
ARTICLE IV       Covenants
13
Section 4.1
Generally
13
Section 4.2
Maintenance of Perfected Security Interest; Further Documentation
13
Section 4.3
Changes in Locations, Name, Etc.
14
Section 4.4
Pledged Collateral
15
Section 4.5
Accounts
16
Section 4.6
Inventory and Equipment
18
Section 4.7
Delivery of Instruments and Chattel Paper
18
Section 4.8
Intellectual Property
18
Section 4.9
Vehicles
20
Section 4.10
Notice of Commercial Tort Claims
20

 
 
 

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Section 4.11
Disposition of Collateral and Liens
21
Section 4.12
Letter-of-Credit Rights
21
Section 4.13
Federal, State or Municipal Claims
21
Section 4.14
Insurance
21
Section 4.15
Collateral Access Agreements
22
ARTICLE V         Remedial Provisions
22
Section 5.1
Code and Other Remedies
22
Section 5.2
Pledged Collateral
23
Section 5.3
Proceeds to be Turned Over To Administrative Agent
24
Section 5.4
Registration Rights
24
Section 5.5
Deficiency
25
Section 5.6
Waivers
25
ARTICLE VI       The Administrative Agent
25
Section 6.1
Administrative Agent’s Appointment as Attorney-in-Fact
25
Section 6.2
Duty of Administrative Agent
27
Section 6.3
Authorization of Financing Statements
28
Section 6.4
Authority of Administrative Agent
28
ARTICLE VII      Miscellaneous
28
Section 7.1
Amendments in Writing
28
Section 7.2
Notices
29
Section 7.3
No Waiver by Course of Conduct; Cumulative Remedies
29
Section 7.4
Successors and Assigns
29
Section 7.5
Counterparts
29
Section 7.6
Severability
29
Section 7.7
Section Headings
30
Section 7.8
Entire Agreement
30
Section 7.9
Governing Law
30
Section 7.10
Additional Grantors
30
Section 7.11
Release of Collateral
30
Section 7.12
Termination.
31
Section 7.13
Reinstatement
31
Section 7.14
Interim Order and Final Order
31

 
 
 

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Annexes and Schedules

Annex I
Form of Pledge Amendment
Annex II
Form of Joinder Agreement
Annex III
Form of Short Form Intellectual Property Security Agreement
   
Schedule 1
Jurisdiction of Organization; Principal Executive Office
Schedule 2
Pledged Collateral
Schedule 3
Filings
Schedule 4
Location of Inventory and Equipment
Schedule 5
Intellectual Property
Schedule 6
Bank Accounts; Control Accounts
Schedule 7
Commercial Tort Claims
Schedule 8
Letter of Credit Rights and Chattel Paper

 
 
 

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Pledge and Security Agreement, dated as of May 3, 2010 by U.S. Concrete, Inc.
(the “Borrower”), which is a debtor and debtor-in-possession in a case pending
under Chapter 11 of the Bankruptcy Code, each of the other direct and indirect
Domestic Subsidiaries of the Borrower signatory hereto ((such Subsidiaries and,
collectively with the Borrower, but excluding the Specified Non-Filers (as
defined below), the “Debtors” and each a “Debtor”), together with each other
Subsidiary that becomes a party hereto pursuant to Section 7.10, each a
“Grantor” and, collectively, the “Grantors”), in favor of JPMorgan Chase Bank,
N.A. (“JPMorgan”), as agent  (in such capacity, together with its successors and
permitted assigns, the “Administrative Agent”) for the Secured Parties (as
defined in the Credit Agreement referred to below).
Witnesseth:

Whereas, on April 29, 2010, the Debtors (such term and other capitalized terms
used in these preliminary statements being used with the meanings given to such
terms in Section 1.1) filed voluntary petitions with the Bankruptcy Court
initiating the Cases and have continued in the possession of their assets and in
the management of their businesses pursuant to Bankruptcy Code Sections 1107 and
1108;
 
Whereas, the Lenders are making available to the Borrower a $80,000,000
debtor-in-possession term loan and revolving credit facility pursuant to the
Revolving Credit, Term Loan and Guarantee Agreement, dated as of May 3, 2010 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the Borrower, each of the direct and
indirect Domestic Subsidiaries of the Borrower signatory thereto, the Lenders
and JPMorgan Chase Bank, N.A., as Administrative Agent and Issuer;
 
Whereas, pursuant to the Credit Agreement, the Lenders and Issuers have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
 
Whereas, the Grantors other than the Borrower have guaranteed the Obligations
pursuant to Article XI of the Credit Agreement;
 
Whereas, it is a condition precedent to the obligation of the Lenders and
Issuers to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Debtors shall have granted a Lien on certain of the
Debtors’ assets and properties pursuant to Sections 364(c)(2) and 364(c)(3) of
the Bankruptcy Code, in each case as more fully set forth in the Orders, and
that the Specified Non-Filers shall have granted a lien on certain of the
Specified Non-Filers’ assets pursuant to this Agreement; and
 
Whereas, to supplement the Orders without in any way diminishing or limiting the
effect of the Orders or the Liens granted thereunder, the parties hereto desire
to more fully set forth their respective rights in connection with the Liens
granted under the Orders;
 
Now, therefore, in consideration of the premises and to induce the Lenders and
Issuers to make their respective extensions of credit to the Borrower under the
Credit Agreement and for other good and valuable consideration the receipt of
which is hereby acknowledged, each Grantor hereby agrees with the Administrative
Agent, for the ratable benefit of the Secured Parties, as follows:

 
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ARTICLE I
Defined Terms

 

 
Section1.1
Definitions

 
(a)           Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein have the meanings given to them in the Credit
Agreement.
 
(b)           Terms used herein without definition that are defined in the UCC
have the meanings given to them in the UCC, including the following terms (which
are capitalized herein):
 
“Account Debtor”
 
“Account”
 
“Certificated Security”
 
“Chattel Paper”
 
“Commercial Tort Claim”
 
“Commodity Account”
 
“Control Account”
 
“Deposit Account”
 
“Documents”
 
“Electronic Chattel Paper”
 
“Entitlement Holder”
 
“Entitlement Order”
 
“Equipment”
 
“Financial Asset”
 
“Fixtures”
 
“General Intangible”
 
“Goods”
 
“Instruments”
 
“Inventory”
 
“Investment Property”

 
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“Letter-of-Credit Right”
 
“Proceeds”
 
“Securities Account”
 
“Securities Intermediary”
 
“Security”
 
“Security Entitlement”
 
(c)           The following terms shall have the following meanings:
 
“Additional Pledged Collateral” means any Pledged Collateral acquired by any
Grantor after the date hereof and in which a security interest is granted
pursuant to Section 2.2, including, to the extent a security interest is granted
therein pursuant to Section 2.2, (i) all Stock and Stock Equivalents of any
Person that are acquired by any Grantor after the date hereof, together with all
certificates, instruments or other documents representing any of the foregoing
and all Security Entitlements of any Grantor in respect of any of the foregoing,
(ii) all additional Indebtedness from time to time owed to any Grantor by any
obligor on the Pledged Debt Instruments and the Instruments evidencing such
Indebtedness and (iii) all interest, cash, Instruments and other property or
Proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any of the foregoing.  “Additional Pledged
Collateral” may be General Intangibles, Instruments or Investment Property.
 
“Agreement” means this Pledge and Security Agreement.
 
“Collateral” has the meaning specified in Section 2.1.
 
“Collateral Access Agreement” means any landlord waiver or other agreement, in
form and substance reasonably satisfactory to the Administrative Agent, between
the Administrative Agent and any third party (including any bailee, consignee,
customs broker, or other similar Person) in possession of any Collateral or any
landlord of any Loan Party for any real property where any Collateral is
located, as such landlord waiver or other agreement may be amended, restated,
supplemented or otherwise modified from time to time.

“Collateral Report” means any certificate (including any Borrowing Base
Certificate), report or other document delivered by any Grantor to the
Administrative Agent or any Lender with respect to the Collateral pursuant to
any Loan Document.

“Copyright Licenses” means any written agreement naming any Grantor as licensor
or licensee granting any right under any Copyright, including the grant of any
right to copy, publicly perform, create derivative works, manufacture,
distribute, exploit or sell materials derived from any Copyright.
 
“Copyrights” means (a) all copyrights and works of authorship arising under the
laws of the United States, any other country or any political subdivision
thereof, whether registered or unregistered and whether published or
unpublished, all registrations and recordings thereof and all applications in
connection therewith, including all registrations, recordings and applications
in the United States Copyright Office or in any foreign counterparts thereof,
and (b) the right to obtain all renewals thereof.

 
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“Deposit Account Control Agreement” means a letter agreement, in form and
substance reasonably satisfactory to the Administrative Agent, executed by the
Grantor, the Administrative Agent and the relevant financial institution.
 
“Designated Collateral” means (a) leasehold interests in Real Property and (b)
certificates of title for vehicles of the Loan Parties that do not constitute
Borrowing Base Collateral.
 
“Excluded Property” means, collectively, (i) Excluded Stock, (ii) any permit,
lease, license contract or other agreement held by any Grantor to the extent
that any Requirement of Law applicable thereto prohibits the creation of a Lien
thereon, but only, in each case, to the extent, and for so long as, such
prohibition is not terminated or rendered unenforceable or otherwise deemed
ineffective by the UCC or any other Requirement of Law, (iii) Equipment owned by
any Grantor that is subject to a purchase money Lien or a Capital Lease
permitted pursuant to the terms of the Credit Agreement, but only for so long as
the contract or other agreement in which such Lien is granted (or in the
documentation providing for such Capital Lease) prohibits or requires the
consent of any Person other than the Borrower and its Affiliates as a condition
to the creation of any other Lien on such Equipment and only to the extent such
prohibition or requirement is not rendered unenforceable or otherwise deemed
ineffective by the UCC or any other Requirement of Law, (iv) any Trademark
application filed on an "intent-to-use" basis, prior to the filing of a
“Statement of Use” pursuant to Section 1(d) of the Lanham Act or an “Amendment
to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect thereto,
solely to the extent that, and solely during the period in which, the grant of a
security interest would impair the validity and enforceability of any
registration that issues from such intent-to-use application under applicable
federal law, (v) the Excluded Collateral and (vi) only with respect to the
Specified Non-Filers, any permit, lease, license, contract, instrument or other
agreement held by any Grantor that prohibits or requires the consent of any
Person other than the Borrower and its Affiliates as a condition to the creation
by such Grantor of a Lien thereon and only for so long as, such prohibition is
not terminated or rendered unenforceable or otherwise deemed ineffective by the
UCC or any other Requirement of Law; provided, however, “Excluded Property”
shall not include any Proceeds, substitutions or replacements of Excluded
Property (unless such Proceeds, substitutions or replacements would constitute
Excluded Property).
 
“Intellectual Property” means, collectively, all rights, priorities and
privileges of any Grantor relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses, trade secrets and Internet domain names, and all rights to sue at law
or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
 
“Intercompany Note” means any promissory note evidencing loans made by any
Grantor or any of its Subsidiaries to any of its Subsidiaries or another
Grantor.
 
“LLC” means each limited liability company in which a Grantor has an interest,
including those set forth on Schedule 2.

 
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“LLC Agreement” means each operating agreement with respect to a LLC, as each
agreement has heretofore been, and may hereafter be, amended, restated,
supplemented or otherwise modified from time to time.
 
"Material Intellectual Property" means Intellectual Property owned by or
licensed to a Grantor and material to the conduct of any Grantor's business.
 
“Partnership” means each partnership in which a Grantor has an interest,
including those set forth on Schedule 2.
 
“Partnership Agreement” means each partnership agreement governing a
Partnership, as each such agreement has heretofore been, and may hereafter be,
amended, restated, supplemented or otherwise modified.
 
“Patents” means (a) all letters patent of the United States, any other country
or any political subdivision thereof and all reissues and extensions thereof,
(b) all applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part thereof and
(c) all rights to obtain any reissues or extensions of the foregoing.
 
“Patent License” means all agreements, whether written or oral, providing for
the grant by or to any Grantor of any right to manufacture, have manufactured,
use, import, sell or offer for sale any invention covered in whole or in part by
a Patent.
 
“Permitted Liens” has the meaning assigned to such term in Section 3.1.
 
“Pledged Certificated Stock” means all Certificated Securities and any other
Stock and Stock Equivalent of a Person evidenced by a certificate, Instrument or
other equivalent document, in each case owned by any Grantor, including all
Stock listed on Schedule 2.
 
“Pledged Collateral” means, collectively, the Pledged Stock, Pledged Debt
Instruments, any other Investment Property of any Grantor, all chattel paper,
electronic chattel paper, certificates or other Instruments representing any of
the foregoing and all Security Entitlements of any Grantor in respect of any of
the foregoing.  Pledged Collateral may be General Intangibles, Instruments or
Investment Property.
 
“Pledged Debt Instruments” means all right, title and interest of any Grantor in
Instruments evidencing any Indebtedness owed to such Grantor, including all
Indebtedness described on Schedule 2, issued by the obligors named therein.
 
“Pledged Stock” means all Pledged Certificated Stock and all Pledged
Uncertificated Stock.  For purposes of this Agreement, the term “Pledged Stock”
shall not include any Excluded Stock.
 
“Pledged Uncertificated Stock” means any Stock or Stock Equivalent of any Person
that is not a Pledged Certificated Stock, including all right, title and
interest of any Grantor as a limited or general partner in any Partnership or as
a member of any LLC and all right, title and interest of any Grantor in, to and
under any Partnership Agreement or LLC Agreement to which it is a party.

 
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“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property,
Instruments and any other rights or claims to receive money which are General
Intangibles to the extent relating to or arising out of any of the foregoing.

“Securities Account Control Agreement” means a letter agreement, in form and
substance reasonably satisfactory to the Administrative Agent, executed by the
relevant Grantor, the Administrative Agent and the relevant Approved Securities
Intermediary.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Trademark License” means any agreement, whether written or oral, providing for
the grant by or to any Grantor of any right to use any Trademark.
 
“Trademarks” means (a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and, in each case, all goodwill
associated therewith, whether now existing or hereafter adopted or acquired, all
registrations and recordings thereof and all applications in connection
therewith, in each case whether in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any state thereof or
any other country or any political subdivision thereof, or otherwise, and all
common-law rights related thereto, and (b) the right to obtain all renewals
thereof.
 
“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York; provided, however, that, in the event that, by reason of
mandatory provisions of law, any of the attachment, perfection or priority of
the Administrative Agent’s and the Secured Parties’ security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
 
“Vehicles” means all vehicles covered by a certificate of title law of any
state.
 
 
Section 1.2
Certain Other Terms

 
(a)           In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding” and the
word “through” means “to and including.”
 
(b)           The terms “herein,” “hereof,” “hereto” and “hereunder” and similar
terms refer to this Agreement as a whole and not to any particular Article,
Section, subsection or clause in this Agreement.
 
(c)           References herein to an Annex, Schedule, Article, Section,
subsection or clause refer to the appropriate Annex or Schedule to, or Article,
Section, subsection or clause in this Agreement.
 
(d)           The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

 
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(e)           Where the context requires, provisions relating to any Collateral,
when used in relation to a Grantor, shall refer to such Grantor’s Collateral or
any relevant part thereof.
 
(f)           Any reference in this Agreement to a Loan Document shall include
all appendices, exhibits and schedules thereto, and, unless specifically stated
otherwise all amendments, restatements, supplements or other modifications
thereto, and as the same may be in effect at any time such reference becomes
operative.
 
(g)           The term “including” means “including without limitation” except
when used in the computation of time periods.
 
(h)           The terms “Lender,” “Issuer,” “Administrative Agent” and “Secured
Party” include their respective successors.
 
(i)           References in this Agreement to any statute shall be to such
statute as amended or modified and in effect from time to time.
 
(j)           All references to “knowledge” of any Grantor means the actual
knowledge of a Responsible Officer.
 
(k)           The words “asset” and “property” shall be construed as having the
same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including, without limitation, cash, securities, accounts
and contract rights.
 
(l)           Any reference herein to any Person shall be construed to include
such Person’s permitted successors and assigns.
 
 
ARTICLE II
Grant of Security Interest

 
 
Section 2.1
Collateral

 
For the purposes of this Agreement, all of the following property now owned or
at any time hereafter acquired by a Grantor or in which a Grantor now has or at
any time in the future may acquire any right, title or interests is collectively
referred to as the “Collateral”:
 
(a)           all Accounts;
 
(b)           all Chattel Paper;
 
(c)           all Deposit Accounts;
 
(d)           all Documents;
 
(e)           all Equipment;
 
(f)            all Fixtures;
 
(g)           all General Intangibles;
 
(h)           all Instruments;

 
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(i)           all Intellectual Property;
 
(j)           all Inventory;
 
(k)          all Investment Property;
 
(l)           all Letter-of-Credit Rights;
 
(m)         all Vehicles;
 
(n)          the Commercial Tort Claims described on Schedule 7 and on any
supplement thereto received by the Administrative Agent pursuant to
Section 4.10;
 
(o)          all cash or Cash Equivalents
 
(p)          all books and records pertaining to the other property described in
this Section 2.1;
 
(q)          all property of any Grantor held by the Administrative Agent or any
other Secured Party, including all property of every description, in the
possession or custody of or in transit to the Administrative Agent or such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of such Grantor or as to which such Grantor may have any right in or
power to transfer such property;
 
(r)           all other Goods and real and personal property of such Grantor,
whether tangible or intangible and wherever located; and
 
(s)           to the extent not otherwise included, all Proceeds;
 
provided, however, that “Collateral” (and each defined term used in the
definition of Collateral) shall not include any Excluded Property; and provided,
further, that if and when any property shall cease to be Excluded Property, such
property shall be deemed at all times from and after the date hereof to
constitute Collateral.
 
 
Section 2.2
Grant of Security Interest in Collateral

 
Each Grantor, as collateral security for the full, prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations of such Grantor, hereby mortgages, pledges and
hypothecates to the Administrative Agent for the benefit of the Secured Parties,
and grants to the Administrative Agent for the benefit of the Secured Parties a
lien on and security interest in, all of its right, title and interest in, to
and under the Collateral of such Grantor; provided, however,  that, if and when
any property that at any time constituted Excluded Property becomes Collateral,
the Administrative Agent shall have, and at all times from and after the date
hereof be deemed to have had, a security interest in such property.
 

 
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Section 2.3
Cash Collateral Account

 
The Administrative Agent has established a Deposit Account at JPMorgan Chase
Bank, N.A., designated as “JPMorgan Chase Bank, NA.. – U.S. Concrete, Inc.
Concentration Account”.  Such Deposit Account shall be a Cash Collateral
Account.
 
 
ARTICLE III
Representations and Warranties

 
To induce the Lenders, the Issuers and the Administrative Agent to enter into
the Credit Agreement, each Grantor hereby represents and warrants each of the
following to the Administrative Agent, the Lenders, the Issuers and the other
Secured Parties for itself only and its property:
 
 
Section 3.1
Title; No Other Liens

 
Except for the Lien granted to the Administrative Agent pursuant to this
Agreement, any other Loan Document and the Orders and the other Liens permitted
to exist on the Collateral under the Credit Agreement (“Permitted Liens”), such
Grantor (a) is the record and beneficial owner of the Pledged Collateral pledged
by it hereunder constituting Instruments or Certificated Securities, (b) is the
Entitlement Holder of all such Pledged Collateral constituting Investment
Property held in a Securities Account pledged by it and (c) has rights in or the
power to transfer each other item of Collateral in which a Lien is granted by it
hereunder, free and clear of any other Lien.
 
 
Section 3.2
Perfection and Priority

 
Upon entry of the Interim Order (or the Final Order, as applicable) by the
Bankruptcy Court (in the case of the Debtors only), the security interest
granted pursuant to this Agreement shall constitute a valid and continuing
perfected security interest in favor of the Administrative Agent in the
Collateral for which perfection is governed by the UCC or filing with the United
States Copyright Office or the United States Patent and Trademark Office upon
(i) in the case of all Collateral in which a security interest may be perfected
by filing a financing statement under the UCC, the completion of the filings and
other actions specified on Schedule 3 (which, in the case of all filings and
other documents referred to on such schedule (which shall not include any
filings or actions with respect to Designated Collateral), have been delivered
to the Administrative Agent in completed and duly executed form), (ii) the
delivery to the Administrative Agent of all Collateral consisting of Instruments
and Certificated Securities, in each case properly endorsed for transfer to the
Administrative Agent or in blank, (iii) the execution of Securities Account
Control Agreements with respect to Investment Property not in certificated form,
(iv) the execution of Deposit Account Control Agreements with respect to all
Deposit Accounts of a Grantor and (v) all appropriate filings having been made
with the United States Copyright Office or the United States Patent & Trademark
Office, in each case, to the extent required by this Agreement. Such security
interest shall be prior to all other Liens on the Collateral except for
Customary Permitted Liens having priority over the Administrative Agent’s Lien
by operation of law or otherwise as permitted under the Credit Agreement and the
Orders.

 
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Section 3.3
Jurisdiction of Organization; Chief Executive Office

 
Such Grantor’s jurisdiction of organization, legal name, organizational
identification number, if any, and the location of such Grantor’s chief
executive office or sole place of business, in each case as of the date hereof,
is specified on Schedule 1 and such Schedule 1 also lists all jurisdictions of
incorporation, legal names and locations of such Grantor’s chief executive
office or sole place of business for the five years preceding the date hereof.
 
 
Section 3.4
Inventory and Equipment

 
With respect to its Inventory and Equipment, except as specifically disclosed in
the most recent Collateral Report, (a) such Inventory and Equipment (other than
Inventory and Equipment (w) in transit, (x) out for repair or refurbishment, (y)
maintained at a customer location or (z) in the possession of employees of the
Grantors or any Subsidiary in the ordinary course of business) is located at one
of such Grantor’s locations set forth on Schedule 4, (b) no Inventory or
Equipment (other than Inventory and Equipment (w) in transit, (x) out for repair
or refurbishment, (y) maintained at a customer location or (z) in the possession
of employees of the Grantors or any Subsidiary in the ordinary course of
business) is now, or shall at any time or times hereafter be stored at any other
location except the Grantors may (i) make sales or other dispositions in
accordance with Section 8.4 of the Credit Agreement and (ii) as permitted by
Section 4.2, (c) such Grantor has good and merchantable title to leasehold
interests or rights in such material Inventory and Equipment, (d) such Inventory
is not subject to any licensing, patent, royalty, trademark, trade name or
copyright agreements with any third parties which would require any consent of
any third party upon sale or disposition of that Inventory or the payment of any
monies to any third party upon such sale or other disposition, (e) such
Inventory is Eligible Inventory of good and merchantable quality, free from any
defects and (f) such Inventory has been produced in accordance in all material
respects with the Federal Fair Labor Standards Act of 1938, as amended, and all
rules, regulations and orders thereunder.
 
 
Section 3.5
Pledged Collateral

 
(a)          The Pledged Stock pledged hereunder by such Grantor is listed on
Schedule 2 and constitutes that percentage of the issued and outstanding equity
of all classes of each issuer thereof as set forth on Schedule 2.
 
(b)          All of the Pledged Stock pledged by such Grantor (to the extent
such concepts are relevant with respect to such Pledged Stock) has been duly
authorized, validly issued and is fully paid and nonassessable.
 
(c)           Each of the Pledged Stock pledged by such Grantor constitutes the
legal, valid and binding obligation of the obligor with respect thereto,
enforceable in accordance with its terms, subject to the effects of applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law).
 
(d)          All Pledged Collateral pledged by such Grantor and, if applicable,
its Additional Pledged Collateral, consisting of Certificated Securities or
Instruments has been delivered to the Administrative Agent in accordance with
Section 4.4(a) and Section 7.12 of the Credit Agreement.
 
(e)           All Pledged Collateral pledged by such Grantor held by a
Securities Intermediary in a Securities Account is in a Control Account,
provided that the Borrower may maintain a Securities Account with Merrill Lynch
which is not a Control Account in accordance with Section 7.13(f) of the Credit
Agreement.

 
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(f)           Other than Pledged Stock pledged by such Grantor constituting
General Intangibles, there is no Pledged Collateral other than that represented
by Certificated Securities or Instruments in the possession of the
Administrative Agent or that consist of Financial Assets held in a Control
Account.
 
 
Section 3.6
Accounts

 
(a)           No amount payable to such Grantor under or in connection with its
Account is evidenced by any Instrument or Chattel Paper that has not been
delivered to the Administrative Agent, properly endorsed for transfer, to the
extent delivery is required by Section 4.4.
 
(b)           The names of the obligors, amounts owing, due dates and other
information with respect to its Accounts and Chattel Paper are and will be
correctly stated in all material respects in the records of such Grantor
relating thereto and in all invoices and Collateral Reports with respect thereto
furnished to the Administrative Agent by such Grantor from time to time and such
Accounts or Chattel Paper, as the case may be, and all records relating thereto,
are genuine and in all material respects what they purport to be.
 
(c)           With respect to its Accounts, except as specifically disclosed on
the most recent Collateral Report, (i) all Accounts are Eligible Receivables;
(ii) all Accounts represent bona fide sales of Inventory or rendering of
services to Account Debtors in the ordinary course of such Grantor’s business
and are not evidenced by a judgment, Instrument or Chattel Paper; (iii) to such
Grantor’s knowledge, there are no setoffs, claims or disputes existing or
asserted against such Grantor with respect thereto and such Grantor has not made
any agreement with any Account Debtor for any extension of time for the payment
thereof, any compromise or settlement for less than the full amount thereof, any
release of any Account Debtor from liability therefor, or any deduction
therefrom except an extension, discount or allowance allowed by such Grantor in
the ordinary course of its business or as deemed necessary by such Grantor in
its reasonable credit judgment (exercised in good faith) for prompt payment;
(iv) to such Grantor’s knowledge, there are no facts, events or occurrences
which materially impair the validity or enforceability thereof or could
reasonably be expected to materially reduce the amount payable thereunder as
shown on such Grantor’s books and records and any invoices, statements and
Collateral Reports with respect thereto; and (v) such Grantor has not received
any notice of proceedings or actions which are reasonably believed in good faith
to be threatened or pending against any Account Debtor which might result in any
material adverse change in such Account Debtor’s financial condition.
 
(d)           In addition, with respect to all of its Accounts, except as
specifically disclosed on the most recent Collateral Report, (i) the amounts
shown on all invoices, statements and Collateral Reports with respect thereto
are actually and absolutely owing to such Grantor as indicated thereon and are
not in any way contingent; (ii) no payments have been or shall be made thereon
except payments delivered to a Deposit Account subject to a Deposit Account
Control Agreement pursuant to the Credit Agreement; and (iii) to such Grantor’s
knowledge, all Account Debtors have the capacity to contract.

 
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Section 3.7
Intellectual Property

 
(a)           Schedule 5 lists all Material Intellectual Property of such
Grantor on the date hereof, separately identifying that owned by such Grantor
and that licensed to such Grantor.  The Material Intellectual Property set forth
on Schedule 5 for such Grantor constitutes all of the intellectual property
rights necessary to conduct its business except to the extent the failure to so
maintain or have rights thereto could not reasonably be expected to have a
Material Adverse Effect.
 
(b)           All Material Intellectual Property owned by such Grantor is valid,
subsisting, unexpired and enforceable, has not been adjudged invalid and has not
been abandoned and the use thereof in the business of such Grantor does not
infringe, misappropriate, dilute or violate the intellectual property rights of
any other Person.
 
(c)           Except as set forth in Schedule 5, none of the Material
Intellectual Property owned by such Grantor on the date hereof is the subject of
any licensing or franchise agreement pursuant to which such Grantor is the
licensor or franchisor.
 
(d)           No holding, decision or judgment has been rendered by any
Governmental Authority that would limit, cancel or question the validity of, or
such Grantor’s rights in, any Material Intellectual Property that could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
 
(e)           No action or proceeding seeking to limit, cancel or question the
validity of any Material Intellectual Property owned by such Grantor or such
Grantor’s ownership interest therein is pending or, to the knowledge of such
Grantor, threatened that could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.  There are no claims, judgments
or settlements to be paid by such Grantor relating to the Material Intellectual
Property that could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
 
 
Section 3.8
Deposit Accounts; Securities Accounts

 
The only Deposit Accounts or Securities Accounts maintained by such Grantor on
the date hereof are those listed on Schedule 6, which sets forth such
information separately for such Grantor.
 
 
Section 3.9
Commercial Tort Claims

 
The only Commercial Tort Claims of such Grantor existing on the date hereof
(regardless of whether the amount, defendant or other material facts can be
determined and regardless of whether such Commercial Tort Claim has been
asserted, threatened or has otherwise been made known to the obligee thereof or
whether litigation has been commenced for such claims) are those listed on
Schedule 7, which sets forth such information separately for such Grantor.

 
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Section 3.10
Letter-of-Credit Rights and Chattel Paper

 
Schedule 8 lists all Letter-of-Credit Rights arising in respect of letters of
credit having a face or stated amount in excess of $100,000 and Chattel Paper
with a value in excess of $100,000 of such Grantor existing on the date
hereof.  All action by such Grantor necessary or desirable to protect and
perfect the Administrative Agent's Lien on each item listed on Schedule 8 has
been duly taken. The Administrative Agent will have a fully perfected first
priority security interest in the Collateral listed on Schedule 8, subject only
to Permitted Liens and the terms of the Orders.
 
 
Section 3.11
Filing Requirements

 
None of the Collateral owned by it is of a type for which security interests or
liens may be perfected by filing under any federal statute except for (a) the
Vehicles, (b) Patents, Trademarks and Copyrights held by such Grantor and
described on Schedule 5 and (c) with respect to Receivables subject to the
Federal Assignment of Claims Act.
 
 
Section 3.12
No Financing Statements, Security Agreements

 
No financing statement or security agreement describing all or any portion of
the Collateral which has not lapsed or been terminated naming such Grantor as
debtor has been filed or is of record in any jurisdiction except (a) for
financing statements or security agreements naming the Administrative Agent (on
behalf of the Secured Parties) as the secured party or as to which a duly
authorized termination statement relating to such financing statement or other
instrument has been delivered to the Administrative Agent on the Closing Date
and (b) Permitted Liens.
 
 
ARTICLE IV
Covenants

 
Each Grantor agrees with the Administrative Agent to the following, as long as
any Obligation or Commitment remains outstanding and, in each case, unless the
Requisite Lenders otherwise consent in writing (for itself and its property
only):
 
 
Section 4.1
Generally

 
Such Grantor shall (a) not use or knowingly permit its Collateral to be used
unlawfully or in violation of any provision of this Agreement, any other Loan
Document, any Requirement of Law (except, in each case, to the extent such
violation could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect) or any policy of insurance covering the
Collateral, (b) not enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any Collateral (except to the extent permitted under Section 8.10 of
the Credit Agreement) and (c) promptly notify the Administrative Agent of its
entry into any material agreement or assumption of undertaking that restricts
the ability to sell, assign or transfer any Collateral in a manner adverse to
the Administrative Agent.
 
 
Section 4.2
Maintenance of Perfected Security Interest; Further Documentation

 
(a)           Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest (subject to the entry of the Interim
Order (or the Final Order, as applicable) and other than with respect to
perfection of the Designated Collateral) having at least the priority described
in Section 3.2, Section 2.2 and the Orders, if applicable, and shall defend such
security interest and such priority against the claims and demands of all
Persons except to the extent such claims and demands are permitted to persist
under the Loan Documents.

 
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(b)           Such Grantor shall furnish to the Administrative Agent from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail and in
form and substance reasonably satisfactory to the Administrative Agent.
 
(c)           At any time and from time to time, upon the reasonable written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor shall promptly and duly execute and deliver, and have recorded,
such further instruments and documents and take such further action as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including the filing of any financing or continuation statement
under the UCC (or other similar laws) in effect in any jurisdiction with respect
to the security interest created hereby and the execution and, subject to
Sections 7.13(a) and (f) of the Credit Agreement,  delivery of Deposit Account
Control Agreements and Securities Account Control Agreements with respect to the
Collateral required pursuant to the terms of the Credit Agreement.
 
(d)           Such Grantor will not authorize the filing of any financing
statement naming it as debtor covering all or any portion of the Collateral
owned by it, except as permitted pursuant to the terms of this Agreement and the
Credit Agreement.  Such Grantor acknowledges that it is not authorized to file
any financing statement or amendment or termination statement with respect to
any financing statement without the prior written consent of the Administrative
Agent, subject to such Grantor's rights under Section 9-509(d)(2) of the UCC.
 
(e)           Such Grantor will not (i) maintain any Collateral (other than
Inventory and Equipment (w) in transit, (x) out for repair or refurbishment, (y)
maintained at a customer location or (z) in the possession of employees of the
Grantors or any Subsidiary in the ordinary course of business) owned by it at
any location other than those locations listed on Schedule 4 or (ii) otherwise
change, or add to, such locations without promptly sending notice to the
Administrative Agent.
 
 
Section 4.3
Changes in Locations, Name, Etc.

 
(a)           Except upon 15 days’ prior written notice to the Administrative
Agent and delivery to the Administrative Agent of all additional financing
statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests
provided for herein, such Grantor shall not do any of the following:
 
(i)           change its jurisdiction of organization or its location, in each
case from that referred to in Section 3.3; or
 
(ii)           change its legal name or organizational identification number, if
any, or corporation, limited liability company or other organizational structure
to such an extent that any financing statement filed in connection with this
Agreement would become misleading.

 
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(b)           Such Grantor shall keep and maintain at its own cost and expense
satisfactory and complete records in all material respects of its Collateral,
including a record of all payments received and all credits granted with respect
to the Collateral and all other dealings with the Collateral.  If requested by
the Administrative Agent, the security interest of the Administrative Agent
shall be noted on the certificate of title of each Vehicle (other than Vehicles
constituting Designated Collateral).
 
 
Section 4.4
Pledged Collateral

 
(a)           Such Grantor shall (i) deliver to the Administrative Agent, all
certificates and Instruments representing or evidencing any of its Pledged
Collateral (including Additional Pledged Collateral), whether now existing or
hereafter acquired, in suitable form for transfer by delivery or, as applicable,
accompanied by such Grantor’s endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent, together, in respect of any
Additional Pledged Collateral, with a Pledge Amendment, duly executed by the
Grantor, in substantially the form of Annex I, an acknowledgment and agreement
to a Joinder Agreement duly executed by the Grantor, in substantially the form
of Annex II, or such other documentation reasonably acceptable to the
Administrative Agent and (ii) maintain all other Pledged Collateral constituting
Investment Property in a Control Account. Such Grantor authorizes the
Administrative Agent to attach each Pledge Amendment to this Agreement. Upon the
occurrence and during the continuance of an Event of Default, the Administrative
Agent shall have the right, at any time in its discretion and without notice to
the Grantor, to transfer to or to register in its name or in the name of its
nominees any Pledged Collateral. During the continuance of an Event of Default,
the Administrative Agent shall have the right upon reasonable request to
exchange any certificate or instrument representing or evidencing any Pledged
Collateral for certificates or instruments of smaller or larger denominations.
 
(b)           Except as provided in Article V, such Grantor shall be entitled to
receive all cash dividends paid in respect of the Pledged Collateral (other than
liquidating or dissolution dividends) with respect to its Pledged Collateral.
Upon the occurrence and during the continuance of an Event of Default, any sums
paid upon or in respect of any Pledged Collateral upon the liquidation or
dissolution of any issuer of any Pledged Collateral, any distribution of capital
made on or in respect of any Pledged Collateral or any property distributed upon
or with respect to any Pledged Collateral pursuant to the recapitalization or
reclassification of the capital of any issuer of Pledged Collateral or pursuant
to the reorganization thereof shall, unless otherwise subject to a perfected
security interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. Upon the occurrence and during the continuance of
an Event of Default, if any sum of money or property so paid or distributed in
respect of any Pledged Collateral shall be received by such Grantor, such
Grantor shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the
Administrative Agent, segregated from other funds of such Grantor, as additional
security for the Obligations.
 
(c)           Except as provided in Article V, such Grantor shall be entitled to
exercise all voting, consent and corporate, partnership, limited liability
company and similar rights with respect to its Pledged Collateral; provided,
however, that no vote shall be cast, consent given or right exercised or other
action taken by such Grantor that would result in any violation of any provision
of the Credit Agreement, this Agreement or any other Loan Document or, without
prior notice to the Administrative Agent, enable or permit any issuer of Pledged
Collateral to issue any Stock or other equity Securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any Stock or other equity Securities of any nature of any issuer of
Pledged Collateral.

 
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(d)           Such Grantor shall not grant “control” (within the meaning of such
term under Article 9-106 of the UCC) over any Investment Property to any Person
other than the Administrative Agent.
 
(e)           In the case of each Grantor that is an issuer of Pledged
Collateral, such Grantor agrees to be bound by the terms of this Agreement
relating to the Pledged Collateral issued by it and shall comply with such terms
insofar as such terms are applicable to it.  In the case of any Grantor that is
a holder of any Stock or Stock Equivalent in any Person that is an issuer of
Pledged Collateral, such Grantor consents to (i) the exercise of the rights
granted to the Administrative Agent hereunder (including those described in
Section 5.2), and (ii) the pledge by each other Grantor, pursuant to the terms
hereof, of the Pledged Stock in such Person and to the transfer of such Pledged
Stock to the Administrative Agent or its nominee and to the substitution of the
Administrative Agent or its nominee as a holder of such Pledged Stock with all
the rights, powers and duties of other holders of Pledged Stock of the same
class and, if the Grantor having pledged such Pledged Stock hereunder had any
right, power or duty at the time of such pledge or at the time of such
substitution beyond that of such other holders, with all such additional rights,
powers and duties.  Such Grantor agrees to execute and deliver to the
Administrative Agent such certificates, agreements and other documents as may be
reasonably necessary to evidence, formalize or otherwise give effect to the
consents given in this clause (e).
 
(f)           Such Grantor shall not, without the consent of the Administrative
Agent, agree to any amendment of any Constituent Document that in any way
adversely affects the perfection of the security interest of the Administrative
Agent in the Pledged Collateral pledged by such Grantor hereunder, including any
amendment electing to treat any membership interest or partnership interest that
is part of the Pledged Collateral as a “security” under Section 8-103 of the
UCC, or any election to turn any previously uncertificated Stock that is part of
the Pledged Collateral into certificated Stock.
 
(g)           Except to the extent permitted by the Credit Agreement, such
Grantor will not (i) permit or suffer any issuer of Stock constituting Pledged
Collateral owned by it to dissolve, merge, liquidate, retire any of its Stock or
other Instruments or Securities evidencing ownership, reduce its capital, sell
or encumber all or substantially all of its assets (except for Permitted Liens
and sales of assets permitted pursuant to Section 4.11) or merge or consolidate
with any other entity or (ii) vote any such Pledged Collateral in favor of any
of the foregoing.
 
 
Section 4.5
Accounts

 
(a)           Such Grantor shall not, other than in the ordinary course of
business consistent with its past practice or as deemed necessary by such
Grantor in its reasonable credit judgment (exercised in good faith), (i) grant
any extension of the time of payment of any Account, (ii) compromise or settle
any Account for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Account, (iv) allow any
credit or discount on any Account or (v) amend, supplement or modify any Account
in any manner that could adversely affect the value thereof.

 
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(b)           Such Grantor will deliver to the Administrative Agent immediately
upon its request after the occurrence and during the continuance of an Event of
Default duplicate invoices with respect to each Account owned by it bearing such
language of assignment as the Administrative Agent shall specify.
 
(c)           Subject to Section 7.13 of the Credit Agreement, any payment of
Accounts or payment in respect of General Intangibles, when collected by any
Grantor, shall be forthwith (and, in any event, within two Business Days)
deposited by such Grantor in the exact form received, duly indorsed by such
Grantor to the Administrative Agent, in an Approved Deposit Account or a Cash
Collateral Account, subject to withdrawal by the Administrative Agent as
provided in Section 5.3.  Until so turned over or turned over, such payment
shall be held by such Grantor in trust for the Administrative Agent.
 
(d)           At the Administrative Agent’s request, at any time during the
continuance of an Event of Default, each Grantor shall deliver to the
Administrative Agent all original and other documents evidencing, and relating
to, the agreements and transactions that gave rise to its Accounts or payments
in respect of its General Intangibles.
 
(e)           The Administrative Agent may, without notice, at any time during
the continuance of an Event of Default,  limit or terminate the authority of a
Grantor to collect its Accounts or amounts due under General Intangibles or any
thereof.
 
(f)           Upon the request of the Administrative Agent, at any time during
the continuance of an Event of Default, each Grantor shall notify Account
Debtors that its Accounts or General Intangibles have been collaterally assigned
to the Administrative Agent and that payments in respect thereof shall be made
directly to the Administrative Agent.  In addition, the Administrative Agent may
enforce such Grantor’s rights against such Account Debtors and obligors of
General Intangibles.
 
(g)           Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Accounts and payments in respect of
General Intangibles to observe and perform all the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise thereto.  Unless expressly assumed, neither the
Administrative Agent nor any other Secured Party shall have any obligation or
liability under any agreement giving rise to an Account or a payment in respect
of a General Intangible by reason of or arising out of this Agreement or the
receipt by the Administrative Agent nor any other Secured Party of any payment
relating thereto, nor shall the Administrative Agent nor any other Secured Party
be obligated in any manner to perform any obligation of any Grantor under or
pursuant to any agreement giving rise to an Account or a payment in respect of a
General Intangible, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts that
may have been assigned to it or to which it may be entitled at any time or
times.
 
(h)           At the request of the Administrative Agent, such Grantor shall
promptly take all steps necessary to grant the Administrative Agent control of
all electronic chattel paper valued in excess of $100,000 in accordance with the
UCC and all “transferable records” as defined in each of the Uniform Electronic
Transactions Act and the Electronic Signatures in Global and National Commerce
Act.

 
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(i)           Each Grantor agrees that the Administrative Agent may at any time
and from time to time, during the continuance of an Event of Default, compromise
with the obligor on any Receivable, accept in full payment of any Receivable
such amount as the Administrative Agent in its sole discretion shall determine
or abandon any Receivable, and any such action by the Administrative Agent shall
be commercially reasonable so long as the Administrative Agent acts in good
faith based on information known to it at the time it takes any such action.
 
 
Section 4.6
Inventory and Equipment

 
(a)           Such Grantor will do all things commercially reasonable to
maintain, preserve, protect and keep its Inventory and the Equipment necessary
in the conduct of its business in good repair and working and saleable
condition, except for damaged or defective goods arising in the ordinary course
of such Grantor’s business and except for ordinary wear and tear, casualty and
condemnation in respect of the Equipment, except where failure to do so could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
 
(b)           Such Grantor shall not permit any Equipment to become a fixture
with respect to real property or to become an accession with respect to other
personal property with respect to which real or personal property the
Administrative Agent does not have a Lien.
 
 
Section 4.7
Delivery of Instruments and Chattel Paper

 
If any amount in excess of $100,000 payable under or in connection with any
Collateral owned by such Grantor shall be or become evidenced by an Instrument
or Chattel Paper, such Grantor shall promptly deliver such Instrument or Chattel
Paper to the Administrative Agent, duly indorsed in a manner reasonably
satisfactory to the Administrative Agent, or, if consented to by the
Administrative Agent, shall mark all such Instruments and Chattel Paper with the
following legend:  “This writing and the obligations evidenced or secured hereby
are subject to the security interest of JPMorgan Chase Bank, N.A., as
Administrative Agent”.
 
 
Section 4.8
Intellectual Property

 
(a)           Except as determined by such Grantor in its reasonable business
judgment (exercised in good faith), such Grantor (either itself or through
licensees) shall (i) continue to use each Trademark that is Material
Intellectual Property in order to maintain such Trademark in full force and
effect with respect to each class of goods for which such Trademark is currently
used, free from any claim of abandonment for non-use, (ii) maintain as in the
past the quality of products and services offered under such Trademark,
(iii) use such Trademark with the appropriate notice of registration and all
other notices and legends required by applicable Requirements of Law, (iv) not
adopt or use any mark that is confusingly similar or a colorable imitation of
such Trademark unless the Administrative Agent shall obtain a perfected security
interest in such mark pursuant to this Agreement and (v) not (and not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby such Trademark (or any goodwill associated therewith) may become
destroyed, invalidated, impaired or harmed in any way.
 
(b)           Such Grantor (either itself or through licensees) shall not do any
act, or omit to do any act, whereby any Patent that is Material Intellectual
Property may become forfeited, abandoned or dedicated to the public if such
event could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

 
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(c)           Such Grantor (either itself or through licensees) (i) shall not
(and shall not permit any licensee or sublicensee thereof to) do any act or omit
to do any act whereby any portion of the Copyrights that is Material
Intellectual Property may become invalidated or otherwise impaired and
(ii) shall not (either itself or through licensees) do any act whereby any
portion of the Copyrights that is Material Intellectual Property may fall into
the public domain, except in each case where such action or omission could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
 
(d)           Such Grantor (either itself or through licensees) shall not do any
act, or omit to do any act, whereby any trade secret that is Intellectual
Property may become publicly available or otherwise unprotectable, except in
each case where such action or omission could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
 
(e)           Such Grantor (either itself or through licensees) shall
not  knowingly infringe, misappropriate, or violate the intellectual property
rights of any other Person.
 
(f)            Such Grantor shall notify the Administrative Agent immediately if
it knows, or has reason to know, that any application or registration relating
to any Material Intellectual Property may become forfeited, abandoned or
dedicated to the public, or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor’s ownership of, right to use, interest in, or the validity of, any
Material Intellectual Property or such Grantor’s right to register the same or
to own and maintain the same, in each case to the extent the same could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
 
(g)           Whenever such Grantor, either by itself or through any agent,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency within or outside
the United States or register any Internet domain name, such Grantor shall
report such filing to the Administrative Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs.  Upon request of
the Administrative Agent, such Grantor shall promptly execute and deliver, and
have recorded, all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent’s security
interest in any Copyright, Patent, Trademark or Internet domain name and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby.
 
(h)           Except as determined by such Grantor in its reasonable business
judgment (exercised in good faith), such Grantor shall take all reasonable
actions necessary or requested by the Administrative Agent, including in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency and any Internet domain
name registrar, to maintain and pursue each application (and to obtain the
relevant registration) and to maintain each registration of any Copyright,
Trademark, Patent or Internet domain name that is Material Intellectual
Property, including filing of applications for renewal, affidavits of use,
affidavits of incontestability and opposition and interference and cancellation
proceedings.

 
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(i)           In the event that any Intellectual Property is or has been
infringed upon or misappropriated or diluted by a third party in a manner which
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, such Grantor shall notify the Administrative Agent
promptly after such Grantor obtains knowledge thereof.  Such Grantor shall take
appropriate action in response to such infringement, misappropriation of
dilution, including promptly bringing suit for infringement, misappropriation or
dilution and to recover all damages for such infringement, misappropriation of
dilution, and shall take such other actions may be appropriate in its reasonable
judgment under the circumstances to protect such Material Intellectual Property.
 
(j)           Unless otherwise agreed to by the Administrative Agent, such
Grantor shall execute and deliver to the Administrative Agent for filing in
(i) the United States Copyright Office a short-form copyright security agreement
in the form attached hereto as Annex III, (ii) in the United States Patent and
Trademark Office and with the Secretary of State of all appropriate States of
the United States a short-form patent security agreement in the form attached
hereto as Annex III, (iii) the United States Patent and Trademark Office a
short-form trademark security agreement in form attached hereto as Annex III and
(iv) with the appropriate Internet domain name registrar, a duly executed form
of assignment of such Internet domain name to the Administrative Agent (together
with appropriate supporting documentation as may be requested by the
Administrative Agent) in form and substance reasonably acceptable to the
Administrative Agent.  In the case of clause (iv) above, such Grantor hereby
authorizes the Administrative Agent to file such assignment in such Grantor’s
name and to otherwise perform in the name of such Grantor all other necessary
actions to complete such assignment, and each Grantor agrees to perform all
appropriate actions deemed necessary by the Administrative Agent for the
Administrative Agent to ensure such Internet domain name is registered in the
name of the Administrative Agent.
 
 
Section 4.9
Vehicles

 
Such Grantor shall promptly file all applications for certificates of title or
ownership indicating the Administrative Agent’s first priority security interest
in each Vehicle covered by a certificate and file any other necessary
documentation, in each office in each jurisdiction that the Administrative Agent
shall deem advisable to perfect its security interests in each of the Vehicles;
provided, however, that such Grantor shall not be required to perfect any
security interest in any Vehicle included within Designated Collateral.
 
 
Section 4.10
Notice of Commercial Tort Claims

 
Such Grantor agrees that, if it shall acquire any interest in any Commercial
Tort Claim valued in excess of $100,000 (whether from another Person or because
such Commercial Tort Claim shall have come into existence), (i) such Grantor
shall, promptly upon such acquisition, deliver to the Administrative Agent, in
each case in form and substance reasonably satisfactory to the Administrative
Agent, a notice of the existence and nature of such Commercial Tort Claim and
deliver a supplement to Schedule 7 containing a specific description of such
Commercial Tort Claim, (ii) the provisions of Section 2.1 shall apply to such
Commercial Tort Claim and (iii) such Grantor shall execute and deliver to the
Administrative Agent, in each case in form and substance reasonably satisfactory
to the Administrative Agent, any certificate, agreement and other document, and
take all other action, deemed by the Administrative Agent to be reasonably
necessary or appropriate for the Administrative Agent to obtain, on behalf of
the Lenders, a first-priority, perfected security interest in all such
Commercial Tort Claims. Any supplement to Schedule 7 delivered pursuant to this
Section 4.10 shall, after the receipt thereof by the Administrative Agent,
become part of Schedule 7 for all purposes hereunder other than in respect of
representations and warranties made prior to the date of such receipt.
 
 
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Section 4.11
Disposition of Collateral and Liens

 
Such Grantor will not (i) sell, lease or otherwise dispose of the Collateral
owned by it except for dispositions specifically permitted pursuant to Section
8.4 of the Credit Agreement and (ii) create, incur, or suffer to exist any Lien
on the Collateral owned by it except Permitted Liens.
 
 
Section 4.12
Letter-of-Credit Rights

 
If such Grantor is or becomes the beneficiary of a letter of credit, having a
face or stated amount individually in excess of $100,000, it  shall promptly,
and in any event within five Business Days after becoming a beneficiary, notify
the Administrative Agent thereof and use commercially reasonable efforts to
cause the issuer and/or confirmation bank to (i) consent to the assignment of
any Letter-of-Credit Rights to the Administrative Agent and (ii) agree, subject
to Section 7.13 of the Credit Agreement, to direct all payments thereunder to
the Cash Collateral Account for application to the Obligations, in accordance
with Section 2.8(d) of the Credit Agreement, all in form and substance
reasonably satisfactory to the Administrative Agent.

 
Section 4.13
Federal, State or Municipal Claims

 
Such Grantor will promptly notify the Administrative Agent upon obtaining
knowledge of any Collateral with a value in excess of $100,000 which constitutes
a claim against the United States government or any state or local government or
any instrumentality or agency thereof, the assignment of which claim is
restricted by federal, state or municipal law.

 
Section 4.14
Insurance

 
(a)            All insurance policies required hereunder and under Section 4.13
of the Credit Agreement shall name the Administrative Agent (for the benefit of
the Administrative Agent and the Lenders) as an additional insured or as loss
payee, as applicable, and shall contain loss payable clauses or mortgagee
clauses, through endorsements in form and substance reasonably satisfactory to
the Administrative Agent, which provide that such policy and loss payable or
mortgagee clauses may be canceled, amended, or terminated only upon at least
thirty days prior written notice given to the Administrative Agent.
 
(b)           All premiums on any such insurance shall be paid when due by such
Grantor.  If such Grantor fails to obtain any insurance as required by this
Section, the Administrative Agent may obtain such insurance at the Borrower’s
expense after the occurrence and during the continuance of an Event of Default.
By purchasing such insurance, the Administrative Agent shall not be deemed to
have waived any Default arising from the Grantor's failure to maintain such
insurance or pay any premiums therefor.
 
 
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Section 4.15
Collateral Access Agreements

 
Such Grantor shall use commercially reasonable efforts to obtain within 45 days
following the Closing Date, a Collateral Access Agreement, from the lessor of
each leased property, mortgagee of owned property or bailee or consignee with
respect to any warehouse, processor or converter facility or other location
where Collateral is stored or located, which agreement or letter shall provide
access rights, contain a waiver or subordination of all Liens or claims that the
landlord, mortgagee, bailee or consignee may assert against the Collateral at
that location, or otherwise be reasonably satisfactory in form and substance to
the Administrative Agent.  With respect to such locations or warehouse space
leased as of the Closing Date and thereafter, if the Administrative Agent has
not received a Collateral Access Agreement within 30 days following the Closing
Date (or, if later, within 30 days following the date such location is acquired
or leased), each Grantors’ Eligible Inventory at that location may be subject to
such Availability Reserves as may be established by the Administrative Agent in
accordance with the terms of the Credit Agreement.
 
 
ARTICLE V
Remedial Provisions

 
 
Section 5.1
Code and Other Remedies

 
(a)           During the continuance of an Event of Default and subject to the
terms of the Orders, the Administrative Agent may exercise, in addition to all
other rights and remedies granted to it in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the UCC or any other applicable
law. Subject to the terms of the Orders, without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon any Collateral, and may forthwith sell, lease,
assign, give option or options to purchase, or otherwise dispose of and deliver
any Collateral (or contract to do any of the foregoing), in one or more parcels
at public or private sale or sales, at any exchange, broker’s board or office of
the Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by the UCC and other applicable law and the
Orders, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption of any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, (i) at the Administrative Agent’s request, to assemble the
Collateral and make it available to the Administrative Agent at places that the
Administrative Agent shall reasonably select, whether at such Grantor’s premises
or elsewhere and (ii) to permit the Administrative Agent, by the Administrative
Agent's representatives and agents, to enter, occupy and use any premises where
all or any part of the Collateral, or the books and records relating thereto, or
both, are located, to take possession of all or any part of the Collateral or
the books and records relating thereto, or both, to remove all or any part of
the Collateral or the books and records relating thereto, or both, and to
conduct sales of the Collateral, without any obligation to pay the Grantor for
such use and occupancy. The Administrative Agent shall apply the net proceeds of
any action taken by it pursuant to this Section 5.1(a), after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any Collateral or in any way relating
to the Collateral or the rights of the Administrative Agent and any other
Secured Party hereunder, including reasonable attorneys’ fees and disbursements
to the extent required under Section 13.2 of the Credit Agreement, to the
payment in whole or in part of the Obligations, in such order as the Credit
Agreement shall prescribe, and only after such application and after the payment
by the Administrative Agent of any other amount required by any provision of
law, need the Administrative Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any other Secured Party arising out of the exercise by them of any rights
hereunder except to the extent such liability is determined in a final,
non-appealable judgment in a court of competent jurisdiction to have resulted
primarily from such Person’s (or any of their representative’s or agent’s) gross
negligence or willful misconduct. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition.

 
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Section 5.2
Pledged Collateral

 
(a)           During the continuance of an Event of Default and subject to the
terms of the Orders, upon notice by the Administrative Agent to the relevant
Grantor or Grantors, (i) the Administrative Agent shall have the right to
receive any Proceeds of the Pledged Collateral and make application thereof to
the Obligations in the order set forth in the Credit Agreement and (ii) the
Administrative Agent or its nominee may exercise (A) any voting, consent,
corporate and other right pertaining to the Pledged Collateral at any meeting of
shareholders, partners or members, as the case may be, of the relevant issuer or
issuers of Pledged Collateral or otherwise and (B) any right of conversion,
exchange and subscription and any other right, privilege or option pertaining to
the Pledged Collateral as if it were the absolute owner thereof (including the
right to exchange at its discretion any of the Pledged Collateral upon the
merger, amalgamation, consolidation, reorganization, recapitalization or other
fundamental change in the corporate or equivalent structure of any issuer of
Pledged Stock, the right to deposit and deliver any Pledged Collateral with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it;
provided, however, that the Administrative Agent shall have no duty to any
Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
 
(b)           In order to permit the Administrative Agent to exercise the voting
and other consensual rights that it may be entitled to exercise pursuant hereto
and to receive all dividends and other distributions that it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Administrative Agent all such proxies,
dividend payment orders and other instruments as the Administrative Agent may
from time to time reasonably request, which proxies shall be effective only
during the continuance of an Event of Default and (ii) without limiting the
effect of clause (i) above, such Grantor hereby grants to the Administrative
Agent an irrevocable proxy to vote all or any part of the Pledged Collateral and
to exercise all other rights, powers, privileges and remedies to which a holder
of the Pledged Collateral would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case may
be, and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any Pledged
Collateral on the record books of the issuer thereof) by any other person
(including the issuer of such Pledged Collateral or any officer or agent
thereof), during the continuance of an Event of Default and which proxy shall
only terminate upon the payment in full of the Obligations.

 
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(c)           Each Grantor hereby expressly authorizes and instructs each issuer
of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with
any instruction received by it from the Administrative Agent in writing that
(A) states that an Event of Default has occurred and is continuing and (B) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that such issuer
shall be fully protected in so complying and (ii) unless otherwise expressly
permitted hereby or Section 8.10 of the Credit Agreement, pay any dividend or
other payment with respect to such Pledged Collateral directly to the
Administrative Agent.
 
(d)           After the Administrative Agent acknowledges that all Events of
Default have been cured or waived in accordance with the provisions of the
Credit Agreement, and so long as the Obligations shall not have been
accelerated, each Grantor shall have the right to exercise the voting and other
consensual rights and powers that it would have otherwise been entitled to
pursuant to Section 4.4(c), and receive dividends and other distributions it
would have been authorized to receive pursuant to Section 4.4(b).  After the
Administrative Agent acknowledges that all Events of Default have been cured or
waived in accordance with the provisions of the Credit Agreement, any dividend
or distribution theretofore paid to the Administrative Agent shall upon the
request of the Grantors (except to the extent theretofore applied to the
Obligations) promptly be returned to the Grantors.
 
 
Section 5.3
Proceeds to be Turned Over To Administrative Agent

 
Unless otherwise expressly provided in the Credit Agreement, all Proceeds
received by the Administrative Agent hereunder in cash or Cash Equivalents shall
be held by the Administrative Agent in a Cash Collateral Account. All Proceeds
while held by the Administrative Agent in a Cash Collateral Account (or by such
Grantor in trust for the Administrative Agent) shall continue to be held as
collateral security for the Obligations and shall not constitute payment thereof
until applied as provided in the Credit Agreement.
 
 
Section 5.4
Registration Rights

 
(a)           Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any Pledged Collateral by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise or may determine that a public sale is impracticable or not
commercially reasonable and, accordingly, may resort to one or more private
sales thereof to a restricted group of purchasers that shall be obliged to
agree, among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any Pledged Collateral for
the period of time necessary to permit the issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such issuer would agree to do so.

 
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(b)           Each Grantor agrees to use its commercially reasonable efforts to
do or cause to be done all such other acts as may be necessary to make such sale
or sales of all or any portion of the Pledged Collateral pursuant to this
Section 5.4 valid and binding and in compliance with all other applicable
Requirements of Law; provided that such Grantor is not required to file a
registration statement in connection with any of its Pledged Collateral under
the Securities Act or otherwise if the Administrative Agent, in its sole
discretion, determines that a private sale is practicable and commercially
reasonable.  Each Grantor further agrees that a breach of any covenant contained
in this Section 5.4 will cause irreparable injury to the Administrative Agent
and other Secured Parties, that the Administrative Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 5.4 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees, to the extent permitted by law, not to assert any defense against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred under the Credit Agreement.
 
 
Section 5.5
Deficiency

 
Each Grantor shall remain liable for any deficiency if the proceeds of any sale
or other disposition of the Collateral are insufficient to pay the Obligations
and the fees and disbursements of any attorney employed by the Administrative
Agent or any other Secured Party to collect such deficiency.
 
 
Section 5.6
Waivers

 
Each Grantor hereby waives any and all rights that it may otherwise have
(whether any such right is contractual or exists pursuant to the articles of
incorporation or bylaws of any relevant entity or under applicable law) that
would interfere with this Agreement or the exercise by the Administrative Agent
of any rights or remedies granted to it pursuant to this Agreement.  Without
limiting the generality of the foregoing, (i) U.S. Concrete, Inc. and Beall
Industries, Inc. hereby waive any transfer restriction on the stock of Beall
Industries, Inc., including, without limitation, any right of first refusal or
right of first offer set forth in Section 6.10 of the Bylaws of Beall
Industries, Inc., (ii) U.S. Concrete, Inc. and Central Precast Concrete, Inc.
hereby waive any transfer restriction on the stock of Central Precast Concrete,
Inc., including, without limitation, any right of first refusal or right of
first offer set forth in Section 4 of the Articles of Incorporation of Central
Precast Concrete, Inc., and (iii) U.S. Concrete, Inc. and Superior Materials,
Inc. hereby waive any transfer restriction on the stock of Superior Materials,
Inc., including, without limitation, any right of first refusal or right of
first offer set forth in Article V of the Articles of Incorporation of Superior
Materials, Inc.
 
 
ARTICLE VI
The Administrative Agent

 
 
Section 6.1
Administrative Agent’s Appointment as Attorney-in-Fact

 
(a)           Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any appropriate action and to execute any document or
instrument that may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Administrative Agent the power and right, on behalf of such
Grantor, without notice or  assent by such Grantor, to do any of the following:

 
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(i)           in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any check, draft, note, acceptance or
other instrument for the payment of moneys due under any Account or General
Intangible or with respect to any other Collateral and file any claim or take
any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any such
moneys due under any Account or General Intangible or with respect to any other
Collateral whenever payable;
 
(ii)          in the case of any Intellectual Property, execute and deliver, and
have recorded, any agreement, instrument, document or paper as the
Administrative Agent may request to evidence the Administrative Agent’s security
interest in such Intellectual Property and the goodwill and General Intangibles
of such Grantor relating thereto or represented thereby;
 
(iii)         pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any repair or pay any insurance called for by the
terms of this Agreement (including all or any part of the premiums therefor and
the costs thereof);
 
(iv)         execute, in connection with any sale provided for in Section 5.1 or
5.4, any endorsement, assignment or other instrument of conveyance or transfer
with respect to the Collateral; or
 
(v)          (A) direct any party liable for any payment under any Collateral to
make payment of any moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct, (B) ask or
demand for, collect, and receive payment of and receipt for, any moneys, claims
and other amounts due or to become due at any time in respect of or arising out
of any Collateral, (C) sign and indorse any invoice, freight or express bill,
bill of lading, storage or warehouse receipt, draft against debtors, assignment,
verification, notice and other document in connection with any Collateral,
(D) commence and prosecute any suit, action or proceeding at law or in equity in
any court of competent jurisdiction to collect any Collateral and to enforce any
other right in respect of any Collateral, (E) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral,
(F) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate, (G) assign any Copyright, Patent or Trademark (along
with the goodwill of the business to which any such Trademark pertains)
throughout the world for such term or terms, on such conditions, and in such
manner as the Administrative Agent shall in its sole discretion determine,
including the execution and filing of any document necessary to effectuate or
record such assignment and (H) generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any Collateral as fully and
completely as though the Administrative Agent were the absolute owner thereof
for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things that
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent’s and the other Secured Parties’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
 
Anything in this clause (a) to the contrary notwithstanding, the Administrative
Agent agrees that it shall not exercise any right under the power of attorney
provided for in this clause (a) unless an Event of Default shall be continuing
and subject to the terms of the Orders.

 
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(b)           If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, upon one Business Day’s prior notice, may
perform or comply, or otherwise cause performance or compliance, with such
agreement.
 
(c)           The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Revolving Loans that are CBFR Loans under the Credit
Agreement, from the date of payment by the Administrative Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on written demand.
 
(d)           Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof.  All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released
 
 
Section 6.2
Duty of Administrative Agent

 
The Administrative Agent shall have no obligation to clean-up or otherwise
prepare the Collateral for sale. The Administrative Agent shall use reasonable
care with respect to the Collateral in its possession or under its control. The
Administrative Agent shall not have any other duty as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
the Administrative Agent, or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining thereto. The
Administrative Agent and the other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their respective officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct. To the
extent that applicable law imposes duties on the Administrative Agent to
exercise remedies in a commercially reasonable manner, each Grantor acknowledges
and agrees that it is commercially reasonable for the Administrative Agent (i)
to fail to incur expenses deemed significant by the Administrative Agent to
prepare Collateral for disposition or otherwise to transform raw material or
work in process into finished goods or other finished products for disposition,
(ii) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against Account Debtors or other Persons obligated on Collateral or to
remove Liens on or any adverse claims against Collateral, (iv) to exercise
collection remedies against Account Debtors and other Persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) to contact other Persons, whether or not in the
same business as such Grantor, for expressions of interest in acquiring all or
any portion of such Collateral, (vii) to hire one or more professional
auctioneers to assist in the disposition of Collateral, whether or not the
Collateral is of a specialized nature, (viii) to dispose of Collateral by
utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Administrative Agent against risks of loss,
collection or disposition of Collateral or to provide to the Administrative
Agent a guaranteed return from the collection or disposition of Collateral, or
(xii) to the extent deemed appropriate by the Administrative Agent, to obtain
the services of other brokers, investment bankers, consultants and other
professionals to assist the Administrative Agent in the collection or
disposition of any of the Collateral. Each Grantor acknowledges that the purpose
of this Section 6.2 is to provide non-exhaustive indications of what actions or
omissions by the Administrative Agent would be commercially reasonable in the
Administrative Agent's exercise of remedies against the Collateral and that
other actions or omissions by the Administrative Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section 6.2. Without limitation upon the foregoing, nothing contained in this
Section 6.2 shall be construed to grant any rights to any Grantor or to impose
any duties on the Administrative Agent that would not have been granted or
imposed by this Security Agreement or by applicable law in the absence of this
Section 6.2.

 
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Section 6.3
Authorization of Financing Statements

 
Each Grantor authorizes the Administrative Agent and its Affiliates, counsel and
other representatives, at any time and from time to time, to file or record
financing statements, amendments to financing statements, and other filing or
recording documents or instruments with respect to the Collateral in such form
and in such offices as the Administrative Agent reasonably determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement, and such financing statements and amendments may described the
Collateral covered thereby as “all assets of the debtor”, “all personal property
of the debtor” or words of similar effect.  Each Grantor hereby also authorizes
the Administrative Agent and its Affiliates, counsel and other representatives,
at any time and from time to time, to file continuation statements with respect
to previously filed financing statements.  A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
 
 
Section 6.4
Authority of Administrative Agent

 
JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the
Lenders hereunder pursuant to Article X of the Credit Agreement.  It is
expressly understood and agreed by the parties to this Agreement that any
authority conferred upon the Administrative Agent hereunder is subject to the
terms of the delegation of authority made by the Lenders to the Administrative
Agent pursuant to the Credit Agreement, and that the Administrative Agent has
agreed to act (and any successor Administrative Agent shall act) as such
hereunder only on the express conditions contained in such Article X.  Any
successor Administrative Agent appointed pursuant to Article X of the Credit
Agreement shall be entitled to all the rights, interests and benefits of the
Administrative Agent hereunder.
 

  
ARTICLE VII
Miscellaneous

 
 
Section 7.1
Amendments in Writing

 
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except in accordance with Section 13.1 of the
Credit Agreement; provided, however, that annexes to this Agreement may be
supplemented (but no existing provisions may be modified and no Collateral may
be released) through Pledge Amendments and Joinder Agreements, in substantially
the form of Annex I and Annex II respectively, in each case duly executed by the
Administrative Agent and each Grantor directly affected thereby.
 
 
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Section 7.2
Notices

 
All notices, requests and demands to or upon the Administrative Agent or any
Grantor hereunder shall be effected in the manner provided for in Section 13.7
of the Credit Agreement; provided, however, that any such notice, request or
demand to or upon any Grantor shall be addressed to the Borrower’s notice
address set forth in such Section 13.7.
 
 
Section 7.3
No Waiver by Course of Conduct; Cumulative Remedies

 
Neither the Administrative Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 7.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default.  No failure to exercise,
nor any delay in exercising, on the part of the Administrative Agent or any
other Secured Party, any right, power or privilege hereunder shall operate as a
waiver thereof.  No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.  A waiver by the Administrative Agent or
any other Secured Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Administrative
Agent or such other Secured Party would otherwise have on any future
occasion.  The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
 
 
Section 7.4
Successors and Assigns

 
This Agreement shall be binding upon the successors and assigns of each Grantor
and shall inure to the benefit of the Administrative Agent and each other
Secured Party and their successors and permitted assigns; provided, however,
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
 
 
Section 7.5
Counterparts

 
This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts (including by telecopy or email), each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.  Signature pages may be
detached from multiple counterparts and attached to a single counterpart so that
all signature pages are attached to the same document.  Delivery of an executed
counterpart by telecopy or email shall be effective as delivery of a manually
executed counterpart.
 
 
Section 7.6
Severability

 
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 
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Section 7.7
Section Headings

 
The Article and Section titles contained in this Agreement are, and shall be,
without substantive meaning or content of any kind whatsoever and are not part
of the agreement of the parties hereto.
 
 
Section 7.8
Entire Agreement

 
This Agreement together with the other Loan Documents represents the entire
agreement of the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof.
 
 
Section 7.9
Governing Law

 
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.
 
 
Section 7.10
Additional Grantors

 
If, pursuant to Section 7.12 of the Credit Agreement, the Borrower shall be
required to cause any Subsidiary that is not a Grantor to become a Grantor
hereunder, such Subsidiary shall execute and deliver to the Administrative Agent
a Joinder Agreement substantially in the form of Annex II and shall thereafter
for all purposes be a party hereto and have the same rights, benefits and
obligations as a Grantor party hereto on the Closing Date.
 
 
Section 7.11
Release of Collateral

 
(a)           At such time as the Loans and the other Obligations (other than
contingent indemnification and contingent expense reimbursement obligations)
shall have been paid in full in cash or otherwise satisfied in accordance with
the Credit Agreement or the applicable order of the Bankruptcy Court and the
Commitments have been terminated or expired, the Collateral shall be released
from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of the Administrative
Agent and each Grantor hereunder shall automatically terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors.  At the request and sole
expense of any Grantor following any such termination, the Administrative Agent
shall deliver to such Grantor any Collateral of such Grantor held by the
Administrative Agent hereunder and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
 
(b)           If any of the Collateral (including the Capital Stock of such
Grantor) shall be sold, transferred or otherwise disposed of by any Grantor in a
transaction permitted by the Credit Agreement, such Collateral shall be
automatically released from the Lien created hereby.  In connection therewith,
the Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral.

 
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Section 7.12
Termination.

 
This Security Agreement shall continue in effect (notwithstanding the fact that
from time to time there may be no Obligations outstanding) until (i) the Credit
Agreement has terminated pursuant to its express terms and (ii) all of the
Obligations (other than contingent indemnification obligations and contingent
reimbursement obligations) have been paid in full (or with respect to any
outstanding Letters of Credit, a cash deposit or has been delivered to the
Administrative Agent as required by the Credit Agreement) and the Commitments of
the Lenders have been terminated.
 
 
Section 7.13
Reinstatement

 
Each Grantor further agrees that, if any payment made by any Loan Party or other
Person and applied to the Obligations is at any time annulled, avoided, set
aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of Collateral are
required to be returned by any Secured Party to such Loan Party, its estate,
trustee, receiver or any other party, including any Grantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, any Lien or other Collateral securing
such liability shall be and remain in full force and effect, as fully as if such
payment had never been made or, if prior thereto the Lien granted hereby or
other Collateral securing such liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender), such Lien or other
Collateral shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect any Lien or other Collateral securing the obligations of any
Grantor in respect of the amount of such payment.
 
 
Section 7.14
Interim Order and Final Order

 
The terms and conditions hereunder shall be subject in all respects to the terms
and conditions of the Interim Order or the Final Order, as applicable.
 
[Signature Pages Follow]

 
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In witness whereof, each of the undersigned has caused this Pledge and Security
Agreement to be duly executed and delivered as of the date first above written.
 

 
Grantors:
     
U.S. Concrete, Inc.
     
By:
/s/ Robert D. Hardy
   
Name:  Robert D. Hardy
   
Title:    Executive Vice President and Chief
   
 Financial Officer
       
ALBERTA INVESTMENTS, INC.
 
ALLIANCE HAULERS, INC.
 
AMERICAN CONCRETE PRODUCTS, INC.
 
ATLAS REDI-MIX, LLC
 
ATLAS-TUCK CONCRETE, INC.
 
BEALL CONCRETE ENTERPRISES, LLC
 
BEALL INDUSTRIES, INC.
 
BEALL INVESTMENT CORPORATION,INC.
 
BEALL MANAGEMENT, INC.
 
BUILDERS’ REDI-MIX, LLC
 
BWB, INC. OF MICHIGAN
 
CENTRAL CONCRETE SUPPLY CO., INC.
 
CENTRAL PRECAST CONCRETE, INC.
 
HAMBURG QUARRY LIMITED LIABILITY
COMPANY
 
INGRAM CONCRETE, LLC
 
MG, LLC
 
REDI-MIX CONCRETE, L.P.
 
REDI-MIX GP, LLC
 
REDI-MIX, LLC
 
SAN DIEGO PRECAST CONCRETE, INC.
 
SIERRA PRECAST, INC.
 
SMITH PRE-CAST, INC.
 
SUPERIOR CONCRETE MATERIALS, INC.
 
U.S. CONCRETE ON-SITE, INC.
 
USC MANAGEMENT CO., LLC
 
USC PAYROLL, INC.
 
USC TECHNOLOGIES, INC.
       
By:
/s/ Curt M. Lindeman
   
Name: Curt M. Lindeman
   
Title:  Vice President and Secretary

 

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KURTZ GRAVEL COMPANY
 
SUPERIOR HOLDINGS, INC.
 
TITAN CONCRETE INDUSTRIES, INC.
       
By:
 /s/ Robert D. Hardy
   
Name: Robert D. Hardy
   
Title:   Vice President and Secretary
       
BRECKENRIDGE READY MIX, INC
       
By:
 /s/ Robert D. Hardy
   
Name: Robert D. Hardy
   
Title:   Vice President
       
RIVERSIDE MATERIALS, LLC
       
By:
 /s/ Robert D. Hardy
   
Name: Robert D. Hardy
   
Title:   President and Secretary
       
EASTERN CONCRETE MATERIALS, INC.
       
By:
 /s/ Robert D. Hardy
   
Name: Robert D. Hardy
   
Title:   President and Secretary
       
LOCAL CONCRETE SUPPLY & EQUIPMENT, LLC
 
MASTER MIX CONCRETE, LLC
 
MASTER MIX, LLC
 
NYC CONCRETE MATERIALS, LLC
 
PEBBLE LANE ASSOCIATES, LLC
       
By:
 /s/ Curt M. Lindeman
   
Name: Curt M. Lindeman
   
Title:   President and Secretary

 
 

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CONCRETE XXXIII ACQUISITION, INC.
 
CONCRETE XXXIV ACQUISITION, INC.
 
CONCRETE XXXV ACQUISITION, INC.
 
CONCRETE XXXVI ACQUISITION, INC.,
       
By:
 /s/ Curt M. Lindeman
   
Name: Curt M. Lindeman
   
Title:   President

  

 
CONCRETE ACQUISITION III, LLC
 
SITION IV, LLC
 
CONCRETE ACQUISITION V, LLC
 
CONCRETE ACQUISITION VI, LLC
       
By:
 /s/ Curt M. Lindeman
   
Name: Curt M. Lindeman
   
Title:   President
       
USC ATLANTIC, INC.
       
By:
 /s/ Sean Gore
   
Name: Sean Gore
   
Title:   Vice President and Secretary
       
USC MICHIGAN, INC.
       
By:
 /s/ Michael W. Harlan
   
Name: Michael W. Harlan
   
Title:   Vice President and Secretary

 
 

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Accepted and Agreed
 
as of the date first above written:
     
JPMorgan Chase Bank, N.A.,
 
as Administrative Agent
       
By:
/s/ Mario Quintanilla
   
Name:  Mario Quintanilla
   
Title:    Vice President
 

 
 

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