Unassociated Document


    Exhibit
4.4

                    


    PLEDGE
AND SECURITY AGREEMENT

     

    THIS
PLEDGE AND SECURITY AGREEMENT (as it may be amended, restated, supplemented or
modified from time to time, the “Agreement”)
is entered into as of August 31, 2010 by and among U.S. CONCRETE, INC., a
Delaware corporation (the “Issuer”
and a “Grantor”),
the domestic Subsidiaries of the Issuer identified on the signature pages hereto
as Grantors (each a “Grantor”,
and collectively with the Issuer, the “Grantors”),
and U.S. BANK NATIONAL ASSOCIATION, a national banking association, in its
capacity as noteholder collateral agent (the “Noteholder
Collateral Agent”) for the holders of the notes issued pursuant to the
Indenture referred to below.

     

    PRELIMINARY
STATEMENT

     

    The
Grantors, the Trustee and the Noteholder Collateral Agent are entering into an
Indenture dated as of August 31, 2010 (as it may be amended, restated,
supplemented or modified from time to time, the “Indenture”)
pursuant to which the Issuer will issue 9.5% Convertible Secured Notes due 2015
(the “Notes”).  Each
Grantor is entering into this Agreement in order to induce the purchase of the
Notes by the Holders and to secure the following (the “Secured Obligations”) (i) in
case of the Issuer, the Obligations under the Indenture and (ii) in the case of
the Grantors (other than the Issuer), the Obligations that the Grantors have
agreed to guarantee pursuant to Article Thirteen of the Indenture.

     

    ACCORDINGLY,
the Grantors and the Noteholder Collateral Agent, on behalf of the Noteholder
Secured Parties, hereby agree as follows:

     

    ARTICLE
I


     

    DEFINITIONS

     

    1.1          Terms Defined in
Indenture.  All
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Indenture.

     

    1.2          Terms Defined in
UCC.  Terms
defined in the UCC which are not otherwise defined in this Agreement are used
herein as defined in the UCC.

     

    1.3          Definitions of Certain Terms
Used Herein.  As
used in this Agreement, in addition to the terms defined in the Preliminary
Statement, the following terms shall have the following meanings:

     

    “ABL
Obligations Payment Date” shall have the meaning set forth in the
Intercreditor Agreement.

     

    “Accounts”
shall have the meaning set forth in Article 9 of the UCC.

     

    “Account
Debtors” means any Person obligated on an Account.


    
      
         


      

      
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    “Administrative
Agent” means JPMorgan Chase Bank, N.A., together with its successors and
assigns, in its capacity as administrative agent under the Credit Agreement,
dated as of the date hereof, between the Grantors, the Administrative Agent and
lenders party thereto (as it may be amended, restated, supplemented or modified
from time to time).

     

    “Article”
means a numbered article of this Agreement, unless another document is
specifically referenced.

     

    “As-Extracted
Collateral” shall have the meaning set forth in Article 9 of the
UCC.

     

    “Chattel
Paper” shall have the meaning set forth in Article 9 of the
UCC.

     

    “Closing
Date” means the date of the Indenture.

     

    “Collateral”
shall have the meaning set forth in Article
II.

     

    “Collateral
Access Agreement” means any landlord waiver or other agreement, in form
and substance reasonably satisfactory to the Noteholder Collateral Agent,
between the Noteholder Collateral Agent and any third party (including any
bailee, consignee, customs broker, or other similar Person) in possession of any
Collateral or any landlord of Issuer or any Restricted Subsidiary 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
Deposit Account” shall have the meaning set forth in Section
7.1(a).

     

    “Collateral
Report” means any certificate (including the Perfection Certificate or
certificate required pursuant to Section 4.1(a)), report or other document
delivered by any Grantor to the Noteholder Collateral Agent or any Noteholder
Secured Party with respect to the Collateral pursuant to the
Indenture.

     

    “Collection
Account” shall have the meaning set forth in Section
7.1(b).

     

    “Commercial
Tort Claims” means the commercial tort claims (as that term is defined in
Article 9 of the UCC), including, without limitation, those commercial tort
claims set forth on Exhibit
J.

     

    “Commodity
Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Noteholder Collateral Agent, among the Issuer or
any Restricted Subsidiary, a commodity intermediary holding the Issuer’s or any
Restricted Subsidiary’s assets, including funds and commodity contracts, and the
Noteholder Collateral Agent with respect to collection and control of all
deposits, commodity contracts and other balances held in a commodity account
maintained by any the Issuer or any Restricted Subsidiary with such commodity
intermediary.

     

    “Commodity
Accounts” shall have the meaning set forth in Article 9 of the
UCC.


    
      
         


      

      
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    “Concentration
Account” shall have the meaning set forth in the Credit
Agreement.

     

    “Control”
shall have the meaning set forth in Article 8 or, if applicable, in Section
9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

     

    “Control
Account” means a
Securities Account or Commodity Account that is the subject of an effective
Securities Account Control Agreement or Commodity Account Control Agreement and
that is maintained by the Issuer or any Restricted Subsidiary with a securities
or commodity intermediary.  “Control Account” includes all Financial
Assets held in a Securities Account or a Commodity Account and all certificates
and instruments, if any, representing or evidencing the Financial Assets
contained therein.

     

    “Copyrights”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following:  (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; (c) the right to sue for past, present, and future infringements of
any of the foregoing; and (d) all rights corresponding to any of the foregoing
throughout the world.

     

    “Default”
means any event or condition which constitutes an Event of Default or which upon
notice, lapse of grace period or both would, unless cured or waived, become an
Event of Default.

     

    “Deposit
Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Noteholder Collateral Agent, among the Issuer or
any Restricted Subsidiary, a banking institution holding the Issuer’s or any
Restricted Subsidiary’s funds, and the Noteholder Collateral Agent with respect
to collection and control of all deposits and balances held in a deposit account
maintained by the Issuer or any Restricted Subsidiary with such banking
institution.

     

    “Deposit
Accounts” shall have the meaning set forth in Article 9 of the
UCC.

     

    “Documents”
shall have the meaning set forth in Article 9 of the UCC.

     

    “Equipment”
shall have the meaning set forth in Article 9 of the UCC.

     

    “Event of
Default” has the meaning assigned to such term in the
Indenture.

     

    “Excluded
Assets” has the meaning assigned to such term in the
Indenture.


    
      
         


      

      
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    “Excluded
Deposit Accounts” means (i) the Permitted Utility Deposit Account, (ii)
payroll, withholding tax and other accounts for which the funds on deposit
therein pertain to Liens permitted under clause (4) of the definition of
“Permitted Liens” in the Indenture (provided that neither the Issuer nor any
Subsidiary may maintain funds in any such account in excess of amounts which are
actually accrued (or in the case of fiduciary accounts, otherwise required to be
maintained therein) to its employees or the relevant Governmental Authority or
other beneficiary of such account) and (iii) other deposit accounts (the “Other Excluded Deposit
Accounts”) so long as the following conditions are satisfied: (1) all
deposits into and balances maintained in the Other Excluded Deposit Accounts
shall be in the ordinary course of business and (2) to the extent the aggregate
balances in all Other Excluded Deposit Accounts at any time exceed $300,000 for
a period of longer than 3 Business Days the Issuer shall, or shall cause the
relevant Subsidiary to, either (A) cause such amounts in excess of $300,000 to,
within 3 Business Days, be transferred to a Deposit Account subject to a Deposit
Account Control Agreement or (B) cause one or more Other Excluded Deposit
Accounts to become subject to a Deposit Account Control Agreement so that, after
giving effect to the actions in clauses (A) and/or (B) the aggregate balance on
deposit in all Other Excluded Deposit Accounts shall not at any time exceed
$300,000 for a period longer than 3 Business Days.

     

    “Exhibit”
refers to a specific exhibit to this Agreement, unless another document is
specifically referenced.

     

    “Financial
Asset” has the meaning given to such term in the UCC.

     

    “Fixtures”
shall have the meaning set forth in Article 9 of the UCC.

     

    “General
Intangibles” shall have the meaning set forth in Article 9 of the
UCC.

     

    “Goods”
shall have the meaning set forth in Article 9 of the UCC.

     

    “Governmental
Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or function of or pertaining to government.

     

    “Instruments”
shall have the meaning set forth in Article 9 of the UCC.

     

    “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,
Licenses, Patents, Trademarks, 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 to
any of its Subsidiaries or another Grantor.

     

    “Intercreditor
Agreement” means that certain Intercreditor Agreement by and among the
Administrative Agent, the Noteholder Collateral Agent and the Grantors dated as
of August [31], 2010 (as amended, restated, supplemented or modified from time
to time).

     

    “Inventory”
shall have the meaning set forth in Article 9 of the UCC.


    
      
         


      

      
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    “Investment
Property” shall have the meaning set forth in Article 9 of the UCC and
shall include all Equity Interests in Subsidiaries regardless of whether such
Equity Interests are classified as “Investment Property” in Article 9 of the
UCC.

     

    “Letter-of-Credit
Rights” shall have the meaning set forth in Article 9 of the
UCC.

     

    “Licenses”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to (a) any and all licensing agreements or similar arrangements
in and to its Patents, Copyrights, or Trademarks, and (b) all rights to sue for
past, present, and future breaches thereof.

     

    “Lock
Boxes” shall have the meaning set forth in Section
7.1(a).

     

    “Lock Box
Agreements” shall have the meaning set forth in Section
7.1(a).

     

    “Patents”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to:  (e) any and all patents and patent applications;
(f) all inventions and improvements described and claimed therein; (g) all
reissues, divisions, continuations, extensions, and continuations-in-part
thereof; (h) all rights to sue for past, present, and future infringements
thereof; and (i) all rights corresponding to any of the foregoing throughout the
world.

     

    “Permitted
Utility Deposit Account” means any Deposit Accounts held by the Issuer or
any of its Subsidiaries that is funded in connection with a deposit provided to
any utility company as a result of the bankruptcy proceedings, provided that the
aggregate balance on deposit in all Permitted Utility Deposit Accounts shall not
at any time exceed $500,000.

     

    “Pledged
Collateral” means all Instruments, Securities and other Investment
Property of the Grantors, whether or not physically delivered to the Noteholder
Collateral Agent pursuant to this Agreement.

     

    “Receivables”
means the Accounts, Chattel Paper, Documents, Instruments and any other rights
or claims to receive money which are General Intangibles or which are otherwise
included as Collateral.

     

    “Required
Secured Parties” means, the Noteholder Collateral Agent acting at the
direction of the Holders of not less than a majority in principal amount of the
outstanding Notes.

     

    “Rolling
Stock Collateral” means all Trucks owned by the Grantors other than any
Trucks subject to a Lien permitted by clause (20) of the definition of
“Permitted Liens” of the Indenture or which do not otherwise constitute ABL
Priority Collateral.

     

    “Section”
means a numbered section of this Agreement, unless another document is
specifically referenced.


    
      
         


      

      
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    “Securities
Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Noteholder Collateral Agent, among the Issuer or
any Restricted Subsidiary, a securities intermediary holding the Issuer’s or any
Restricted Subsidiary’s assets, including funds and securities, and the
Noteholder Collateral Agent with respect to collection and control of all
deposits, securities and other balances held in a securities account maintained
by the Issuer or any Restricted Subsidiary with such securities
intermediary.

     

    “Securities
Accounts” shall have the meaning set forth in Article 8 of the
UCC.

     

    “Security”
shall have the meaning set forth in Article 8 of the UCC.

     

    "Specified
Equity Interests" means (i) certificate number 1 issued by Concrete
XXXIII Acquisition, Inc. for 1000 shares of common stock, (ii) certificate
number 1 issued by Concrete XXXIV Acquisition, Inc. for 1000 shares of common
stock, (iii) certificate number 1 issued by Concrete XXXV Acquisition, Inc. for
1000 shares of common stock, (iv) certificate number 1 issued by Concrete XXXVI
Acquisition, Inc. for 1000 shares of common stock (v) certificate number 4
issued by Titan Concrete Industries, Inc. for 1,000 shares of common stock and
(vi) certificate number 126 issued by Kurtz Gravel Company for 5,484 shares of
common stock.

     

    “Stock
Rights” means all dividends, instruments or other distributions and any
other right or property which the Grantors shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any Equity Interest constituting Collateral, any right to
receive an Equity Interest and any right to receive earnings, in which the
Grantors now have or hereafter acquire any right, issued by an issuer of such
Equity Interest.

     

    “Supporting
Obligations” shall have the meaning set forth in Article 9 of the
UCC.

     

    “Trademarks”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following:  (a) all trademarks (including
service marks), trade names, trade dress and trade styles and the registrations
and applications for registration thereof and the goodwill of the business
symbolized by the foregoing; (b) all renewals of the foregoing; (c) all rights
to sue for past, present, and future infringements of the foregoing, including
the right to settle suits involving claims and demands for royalties owing; and
(d) all rights corresponding to any of the foregoing throughout the
world.

     

    “Trucks”
means the ready-mix concrete trucks and the mixing drums affixed thereto owned
any Grantor.

     

    “UCC”
means the Uniform Commercial Code, as in effect from time to time, of the State
of New York or of any other state the laws of which are required as a result
thereof to be applied in connection with the attachment, perfection or priority
of, or remedies with respect to, Noteholder Collateral Agent’s or any Noteholder
Secured Party’s Lien on any Collateral.


    
      
         


      

      
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    The
foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

     

    1.4          Terms
Generally.  The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms.  The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.”  The word
“will” shall be construed to have the same meaning and effect as the word
“shall.”  Unless the context requires otherwise (a) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, amended and restated, supplemented or otherwise modified,
renewed, extended, replaced or refinanced, (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s permitted
successors and assigns and, in the case of any Governmental Authority, any other
Governmental Authority that shall have succeeded to any or all of the functions
thereof, (c) the words “herein,” “hereof” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights, (f) all references to
“knowledge” of the Issuer or any Restricted Subsidiary means the actual
knowledge of a Responsible Officer, (g) references to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting such Law (including by succession of comparable
successor laws).

     

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

     

    1.6          Timing of Payment of
Performance.  When
the payment of any obligation or the performance of any covenant, duty or
obligation is stated to be due or performance required on a day which is not a
Business Day, the date of such payment or performance shall extend to the
immediately succeeding Business Day.

     

    1.7          Certifications.  All
certifications to be made hereunder by an officer or representative of any
Grantor shall be made by such person in his or her capacity solely as an officer
or a representative of such Grantor, on such Grantor’s behalf and not in such
Person’s individual capacity.

     

    
      
         


      

      
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    ARTICLE
II


     

    GRANT OF SECURITY
INTEREST

     

    Each
Grantor hereby pledges, collaterally assigns and grants to the Noteholder
Collateral Agent, on behalf of and for the ratable benefit of the Noteholder
Secured Parties, a security interest in all of its right, title and interest in,
to and under the following personal property, whether now owned by or owing to,
or hereafter acquired by or arising in favor of such Grantor (including under
any trade name or derivations thereof), and whether owned or consigned by or to,
or leased from or to, such Grantor, and regardless of where located (all of
which will be collectively referred to as the “Collateral”):

     

    (a)          all
Accounts;

     

    (b)          all
Chattel Paper;

     

    (c)          all
Documents;

     

    (d)          all
Equipment (including all Trucks);

     

    (e)          all
Fixtures;

     

    (f)           all
General Intangibles;

     

    (g)          all
Goods;

     

    (h)          all
Instruments;

     

    (i)           all
Intellectual Property;

     

    (j)           all
Inventory (including As-Extracted Collateral);

     

    (k)           all
Investment Property (including all Capital Stock of Subsidiaries);

     

    (l)           all
cash or cash equivalents;

     

    (m)         all
letters of credit, Letter-of-Credit Rights and Supporting
Obligations;

     

    (n) 
        all Deposit Accounts with any
bank or other financial institution;

     

    (o)          all
Commodity Accounts;

     

    (p)          all
Securities Accounts;

     

    (q)          all
Commercial Tort Claims;

     

    
      
         


      

      
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    (r)           all
As-Extracted Collateral;

     

    (s)           and
all accessions to, substitutions for and replacements, proceeds (including Stock
Rights), insurance proceeds and products of the foregoing, together with all
books and records, customer lists, credit files, computer files, programs,
printouts and other computer materials and records related thereto and any
General Intangibles at any time evidencing or relating to any of the
foregoing;

     

    to secure
the prompt and complete payment and performance of the Secured Obligations;
provided, however, that “Collateral” (and each
defined term used in the definition of Collateral) shall not include any
Excluded Assets; and provided, further, that if and when any
property shall cease to be an Excluded Assets, such property shall be deemed at
all times from and after such date to constitute Collateral.

     

    ARTICLE
III


     

    REPRESENTATIONS AND
WARRANTIES

     

    Each
Grantor represents and warrants to the Noteholder Collateral Agent and the
Noteholder Secured Parties that:

     

    3.1          Title, Perfection and
Priority.  Such
Grantor has good and valid rights in or the power to transfer the Collateral and
title to the Collateral with respect to which it has purported to grant a
security interest hereunder, free and clear of all Liens except for Liens
permitted under Section 4.1(e), and
has full organizational power and authority to grant to the Noteholder
Collateral Agent the security interest in such Collateral pursuant
hereto.  When financing statements have been filed in the appropriate
offices against such Grantor in the locations listed on Exhibit H and the
form security agreements attached as Exhibit K have been
timely filed with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, and the payment of all filing and
recordation fees associated therewith, the Noteholder Collateral Agent will,
except as set forth in and subject to the terms, conditions and provisions of
the Intercreditor Agreement, have a fully perfected first priority security
interest in that Collateral of the Grantor in which a security interest may be
perfected by filing, subject only to Liens permitted under Section 4.1(e);
provided, however, that additional filings may be necessary to perfect the
Noteholder Collateral Agent’s security interest in any Intellectual Property
acquired after the date hereof.  Notwithstanding the foregoing,
nothing in this Agreement shall require any Grantor to make any filings or take
any actions to record or perfect the Noteholder Collateral Agent’s security
interest in any Intellectual Property outside the United States.

     

    3.2          Type and Jurisdiction of
Organization, Organizational and Identification Numbers.  The
type of entity of such Grantor, its state of organization, the organizational
number issued to it by its state of organization and its federal employer
identification number as of the Closing Date are set forth on Exhibit
A.

     

    
      
         


      

      
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    3.3          Principal
Location.  Such
Grantor’s mailing address and the location of its place of business (if it has
only one) or its chief executive office (if it has more than one place of
business), as of the Closing Date is disclosed in Exhibit
A.

     

    3.4          Collateral
Locations.  All
of such Grantor’s locations where tangible Collateral is located as of the
Closing Date are listed on Exhibit A (other than
Inventory and Equipment in transit, Equipment out for repair or refurbishment,
Inventory and Equipment maintained at a customer location, and Inventory and
Equipment in the possession of employees or Subsidiaries in the ordinary course
of business).  As of the Closing Date, all of said locations are owned
by such Grantor except for locations (a) which are leased by the Grantor as
lessee or sublessee and designated in Annex A of Exhibit A and (b) at
which Inventory is held in a public warehouse or is otherwise held by a bailee
or on consignment as designated in Annex A of Exhibit
A.

     

    3.5          Deposit Accounts, Commodity
Accounts and Securities Accounts.  All
of such Grantor’s Deposit Accounts, Commodity Accounts and Securities Accounts
as of the Closing Date are listed on Exhibit
B.

     

    3.6          Exact
Names.  Such
Grantor’s name in which it has executed this Agreement is the exact name as it
appears in such Grantor’s organizational documents, as amended, as filed with
such Grantor’s jurisdiction of organization.  Except as set forth on
Exhibit
A, as of the Closing Date, such Grantor has not, during the past five
years, been known by or used any other legal name, or currently is not known by
or does not use any other corporate or fictitious name.

     

    3.7          Letter-of-Credit Rights and
Chattel Paper.  Exhibit C lists all
Letter-of-Credit Rights and Chattel Paper valued individually in excess of
$100,000 of such Grantor as of the Closing Date.  All action by such
Grantor necessary to protect and perfect the Noteholder Collateral Agent’s Lien
on each item listed on Exhibit C (including,
subject to the Intercreditor Agreement, the delivery of all originals and the
placement of a legend on all Chattel Paper as required hereunder) has been duly
taken to the extent requested by the Noteholder Collateral
Agent.  Upon taking of all such actions, the Noteholder Collateral
Agent will have a fully perfected second priority security interest in the
Collateral listed on Exhibit C, subject
only to the prior Lien of the Administrative Agent and to Liens permitted under
Section
4.1(e).

     

    3.8          Accounts and Chattel
Paper.

     

    (a)           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 all records of such Grantor relating thereto and in all
invoices and Collateral Reports with respect thereto furnished to the Noteholder
Collateral Agent by such Grantor from time to time.  As of the time
when each Account or each item of Chattel Paper arises, such Grantor shall be
deemed to have represented and warranted that such Account 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.  For the avoidance of
doubt, subsequent Collateral Reports may qualify records, invoices and other
information previously furnished to the Noteholder Collateral
Agent.

     

    
      
         


      

      
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    (b)           With
respect to its Accounts, except as specifically disclosed on the most recent
Collateral Report, (i) RESERVED; (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; and (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 a discount or allowance
allowed by such Grantor in the ordinary course of its business for prompt
payment and disclosed to the Noteholder Collateral Agent.

     

    (c)           In
addition, with respect to all of its Accounts, (i) no payments have been or
shall be made thereon except payments immediately delivered to a Lock Box or a
Collateral Deposit Account as required pursuant to Section 7.1;
and (ii) to such Grantor’s knowledge, all Account Debtors have the capacity to
contract.

     

    3.9          Inventory.  With
respect to any of its Inventory scheduled or listed on the most recent
Collateral Report, (a) such Inventory (other than Inventory (i) in transit, (ii)
maintained at a customer location and (iii) in the possession of employees or
Subsidiaries in the ordinary course of business) is located at one of such
Grantor’s locations set forth on Exhibit
A, (b) no Inventory (other than Inventory (i) in transit, (ii)
maintained at a customer location and (iii) in the possession of employees or
Subsidiaries in the ordinary course of business) is now, or shall at any time or
times hereafter be stored at any other location except as permitted by Section
4.1(g),
(c) such Grantor has good and merchantable title to such Inventory and such
Inventory is not subject to any Lien or security interest or document whatsoever
except for the Lien granted to the Noteholder Collateral Agent, for the benefit
of the Noteholder Collateral Agent and the Noteholder Secured Parties, and
except for Liens permitted by Section
4.1(e),
(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 such third parties pursuant to such agreements upon
such sale or other disposition, (e) such Inventory has been produced in
accordance with the Federal Fair Labor Standards Act of 1938, as amended, and
all rules, regulations and orders thereunder and (f) the completion of
manufacture, sale or other disposition of such Inventory by the Noteholder
Collateral Agent following an Event of Default shall not require the consent of
any Person (other than consents applicable to Noteholder Collateral Agent
generally and not as a result of this Agreement, landlord consents to the extent
not otherwise obtained and any consents applicable under the Intercreditor
Agreement) and shall not constitute a breach or default under any contract or
agreement to which such Grantor is a party or to which such property is
subject.


    
      
         


      

      
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    3.10        Intellectual
Property.  As
of the date hereof, such Grantor does not own any patents, patent applications,
trademark applications or registrations or copyright registrations except as set
forth in Exhibit
D.  This Agreement is effective to create a valid and
continuing Lien and, upon the timely filing of appropriate financing statements
in the offices listed on Exhibit H and this
Agreement (or other short form security agreements attached as Exhibit K) with the
United States Copyright Office and the United States Patent and Trademark
Office, and the payment of all filing and recordation fees associated therewith,
fully perfected and, subject only to the Liens permitted by Section 4.1(e), first
priority security interests in favor of the Noteholder Collateral Agent on such
Grantor’s Patents, Trademarks and Copyrights; provided that additional filings
may be necessary to perfect the Noteholder Collateral Agent’s security interest
in any Intellectual Property acquired after the date hereof; except as set forth
in the terms, conditions and provisions of the Intercreditor Agreement, such
perfected security interests are enforceable (subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law) as such as against any and all
creditors of and purchasers from such Grantor; and (subject to the
qualifications set forth in Section 3.1 and this
Section 3.10)
all action necessary to protect and perfect the Noteholder Collateral Agent’s
Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly
taken.  Notwithstanding the foregoing, nothing in this Agreement shall
require any Grantor to make any filings or take any actions to record or perfect
the Noteholder Collateral Agent’s security interest in any Intellectual Property
outside the United States.

     

    3.11        Filing
Requirements.  As
of the Closing Date, all Rolling Stock Collateral is described on Part I of Exhibit
E.  As of the Closing Date, 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 Patents, Trademarks and Copyrights held by
such Grantor and described in Exhibit
D.  The legal description, county and street address of each
property on which any Inventory constituting As-Extracted Collateral as of the
Closing Date are located is set forth in Exhibit F together
with the name and address of the record owner of each such
property.

     

    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 Noteholder Collateral Agent on
behalf of the Noteholder Secured Parties as the secured party, (b) as to which a
duly authorized termination statement relating to such financing statement or
other instrument has been delivered to the Noteholder Collateral Agent on the
Closing Date and (c) as permitted by Section
4.1(e).

     

    
      
         


      

      
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      3.13        Pledged
Collateral.
                                        


    

    (a)           Exhibit G sets forth
a complete and accurate list of all Pledged Collateral which constitute Equity
Interests owned by such Grantor or which represents Indebtedness owed to such
Grantor.  Such Grantor is the direct, sole beneficial owner and sole
holder of record of such Pledged Collateral as being owned by it, free and clear
of any Liens, except for Liens permitted by Section
4.1(e).  Such Grantor further represents and warrants that (i)
all Pledged Collateral owned by it constituting an Equity Interest has been (to
the extent such concepts are relevant with respect to such Pledged Collateral)
duly authorized, validly issued, are fully paid and non-assessable, (ii) with
respect to any certificates delivered to the Noteholder Collateral Agent
representing an Equity Interest, either such certificates are Securities as
defined in Article 8 of the UCC as a result of actions by the issuer or
otherwise, or, if such certificates are not Securities, such Grantor has so
informed the Noteholder Collateral Agent so that it may take steps to perfect
its security interest therein as a General Intangible, (iii) all such Pledged
Collateral held by a securities intermediary is covered by a control agreement
among such Grantor, the securities intermediary and the Noteholder Collateral
Agent pursuant to which the Noteholder Collateral Agent has Control (subject to
the terms, conditions and provisions of the Intercreditor Agreement) and (iv) to
such Grantor’s knowledge and except as otherwise disclosed to the Noteholder
Collateral Agent, all Pledged Collateral which represents Indebtedness owed to
such Grantor has been duly authorized, authenticated or issued and delivered by
the issuer of such Indebtedness, is the legal, valid and binding obligation of
such issuer and such issuer (subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law) is not in default thereunder; provided that,
with regard to clause (iii) above, the Issuer may maintain a Securities Account
with Merrill Lynch which is not a Control Account for the sole purpose of
depositing therein deferred compensation payments on behalf of its employees and
officers in accordance with the Issuer’s existing incentive plan for which
accounts are maintained at Merrill Lynch (or any of its Affiliates) (the “Merrill
Lynch Account”); provided further that the aggregate amount from time to
time on deposit therein shall not exceed and amount equal to (x) $500,000 minus
all distributions or withdrawals made from the Merrill Lynch Account on or after
the Closing Date plus (y) the amount, if any, earned on the amounts on deposit
in the Merrill Lynch Account.

     

    (b)           Except
as set forth on Exhibit
G as of the Effective Date, (i) none
of the Pledged Collateral owned by it has been issued or transferred in
violation in any material respect of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such issuance or
transfer may be subject, (ii) there are existing no options, warrants, calls or
commitments of any character whatsoever relating to such Pledged Collateral and
(iii) no consent, approval, authorization, or other action by, and no giving of
notice, filing with, any governmental authority or any other Person is required
for the pledge by such Grantor of such Pledged Collateral pursuant to this
Agreement or for the execution, delivery and performance of this Agreement by
such Grantor, or for the exercise by the Noteholder Collateral Agent of the
voting or other rights provided for in this Agreement or for the remedies in
respect of the Pledged Collateral pursuant to this Agreement, except as may be
required in connection with such disposition by laws affecting the offering and
sale of securities generally, those that have been obtained or made and are in
full force and effect and except as set forth in the terms, conditions and
provisions of the Intercreditor Agreement.


    
      
         


      

      
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    (c)           Except
as set forth in Exhibit G, as of the
Closing Date, such Grantor owns 100% of the issued and outstanding Equity
Interests which constitute Pledged Collateral owned by it and none of the
Pledged Collateral which represents Indebtedness owed to such Grantor (other
than any Intercompany Note) is subordinated in right of payment to other
Indebtedness or subject to the terms of an indenture.

     

    ARTICLE
IV


     

    COVENANTS

     

    From the
date of this Agreement, and thereafter until this Agreement is terminated in
accordance with Section 8.14, each
Grantor agrees that:

     

    4.1          General.

     

    (a)           Collateral Records;
Collateral Reports.  Such Grantor will maintain complete and
accurate books and records with respect to the Collateral owned by
it.  Each year, at the time of delivery of the annual financial
statements with respect to the preceding fiscal year, the Issuer shall deliver
to the Trustee a certificate of a financial officer setting forth the
information required pursuant to the Perfection Certificate or confirming that
there has been no change in such information since the date of the prior
delivered Perfection Certificate.

     

    (b)           Authorization
to File Financing Statements; Ratification.  Such Grantor
hereby authorizes the Noteholder Collateral Agent to file, and if requested will
promptly deliver to the Noteholder Collateral Agent, all financing statements
and other documents and take such other actions as may from time to time be
requested by the Noteholder Collateral Agent in order to maintain a perfected
(subject to the qualifications in Section
3.1) and, except as set forth in the terms, conditions and
provisions of the Intercreditor Agreement, first priority security interest in
and, if applicable, Control of, the Collateral owned by such Grantor, subject to
Liens permitted under Section
4.1(e).  Any financing statement filed by the
Noteholder Collateral Agent may be filed in any filing office in any UCC
jurisdiction and may (i) indicate such Grantor’s Collateral (A) as “all assets”
of the Grantor or words of similar effect, regardless of whether any particular
asset comprised in the Collateral falls within the scope of Article 9 of the UCC
or such jurisdiction, or (B) by any other description which reasonably describes
the Collateral, and (ii) contain any other information required by part 5 of
Article 9 of the UCC for the sufficiency or filing office acceptance of any
financing statement or amendment, including (A) whether such Grantor is an
organization, the type of organization and any organization identification
number issued to such Grantor, and (B) in the case of a financing statement
filed as a fixture filing or indicating such Grantor’s Collateral as
As-Extracted Collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates.  In respect of financing
statements indicating each Grantor’s Collateral as As-Extracted Collateral
located in the State of New Jersey, the Grantors hereby agree to deliver to the
Noteholder Collateral Agent within 15 days after the date hereof a legal opinion
in form substantially as that delivered to the Administrative Agent and which
opinion relates to the perfection of such financing statements.  Such
Grantor also agrees to furnish any such information to the Noteholder Collateral
Agent promptly upon its reasonable request therefor.  Such Grantor
also ratifies its authorization for the Noteholder Collateral Agent to have
filed in any UCC jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof.  Notwithstanding the
authorization provided to the Noteholder Collateral Agent in this Section
4.1(b), each Grantor shall be responsible for filing (and in furtherance of such
obligation, each Grantor is hereby authorized to file) any and all financing
statements or continuations thereof or amendments thereto and shall promptly
furnish copies of the filed statements to the Noteholder Collateral
Agent.


    
      
         


      

      
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    (c)           Further
Assurances.  Such Grantor will, promptly following the
Noteholder Collateral Agent’s reasonable request, furnish to the Noteholder
Collateral Agent, as often as the Noteholder Collateral Agent requests,
statements and schedules further identifying and describing the Collateral owned
by it and such other reports and information in connection with its Collateral
as the Noteholder Collateral Agent may reasonably request, all in such detail as
the Noteholder Collateral Agent may specify.  Such Grantor also agrees
to take any and all actions necessary to defend title to the Collateral against
all persons and to defend the security interest of the Noteholder Collateral
Agent in its Collateral and the priority thereof against any Lien not expressly
permitted hereunder.

     

    (d)           Disposition of
Collateral.  Such Grantor will not sell, lease or otherwise
dispose of the Collateral owned by it except for dispositions permitted pursuant
to Section 6.11 of the Indenture (or consented to in writing pursuant to Section
11.06 of the Indenture).

     

    (e)           Liens.  Such
Grantor will not create, incur, or suffer to exist any Lien on the Collateral
owned by it except (i) the security interest created by this Agreement, and (ii)
other Liens permitted pursuant to Section 6.10 of the Indenture.

     

    (f)           Other Financing
Statements.  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 by Section
4.1(e).  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 Noteholder
Collateral Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of
the UCC.

     

    (g)           Locations.  Such
Grantor will not maintain any Collateral (other than (i) Inventory and Equipment
in transit, (ii) Equipment out for repair or refurbishment, (iii) Inventory and
Equipment maintained at a customer location, and (iv) Inventory and Equipment in
the possession of employees or Subsidiaries in the ordinary course of business)
owned by it at any location other than those locations listed on Exhibit
A or otherwise disclosed to the
Noteholder Collateral Agent in accordance with Section 4.15.

    
    

    
      
         


      

      
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      4.2          Receivables.

    

     

    (a)           Certain Agreements on
Receivables.  Such Grantor will not make or agree to make any
discount, credit, rebate or other reduction in the original amount owing on a
Receivable or accept in satisfaction of a Receivable less than the original
amount thereof, except that, prior to the occurrence and continuance of an Event
of Default, such Grantor may or agree to reduce the amount of Accounts arising
from the sale of Inventory in accordance with its present policies and in the
ordinary course of business.

     

    (b)           Collection of
Receivables.  Except as otherwise provided in this Agreement,
such Grantor will do all things commercially reasonable to collect and enforce,
at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor
under the Receivables owned by it.

     

    (c)           Delivery of
Invoices.  Such Grantor will deliver to the Noteholder
Collateral 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 collateral assignment as the
Noteholder Collateral Agent shall specify.

     

    (d)           [Reserved.]

     

    (e)           Electronic Chattel
Paper.  Within three Business Days of obtaining such electronic
chattel paper, such Grantor shall take all steps necessary to grant the
Noteholder Collateral Agent Control of all electronic chattel paper valued
individually 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.

     

    4.3          Inventory and
Equipment.

     

    (a)           Maintenance of
Goods.  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 and casualty
and condemnation in respect of the Equipment, except where failure to do so
could not reasonably be expected to have a material adverse effect on the Issuer
and the Grantors, taken as a whole.

     

    (b)           [Reserved.]

     

    (c)           [Reserved.]

     

    (d)           Equipment  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 Noteholder Collateral Agent does
not have a Lien.

     

    
      
         


      

      
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    (e)           Titled
Vehicles.  Within 60 days following the acquisition of any
Rolling Stock Collateral (or, if the deadline under the corresponding provision
of the ABL Collateral Documents is extended, such later deadline), such Grantor
will give the Noteholder Collateral Agent and the Administrative Agent (or any
of its agents) notice of its acquisition of any Rolling Stock Collateral covered
by a Certificate of Title and provide and/or file all documents or instruments
necessary to have the Lien of the Noteholder Collateral Agent noted on any such
Certificate of Title or with the appropriate state office.

     

    4.4          Delivery of Instruments,
Securities, Chattel Paper and Documents.  Each
Grantor will (a) deliver to the Noteholder Collateral Agent (i) immediately upon
execution of this Agreement the originals of all Securities constituting
Collateral owned by it (other than the Specified Equity Interests), including
Certificated Securities representing Equity Interests in any Subsidiary of the
Issuer (other than the Specified Equity Interests) and (ii) within fifteen days
after the date hereof the Specified Equity Interests, or any replacements
thereof, together with a legal opinion from outside counsel to the Issuer, in
substantially the same form as delivered on the date hereof regarding the
perfection of the Noteholder Collateral Agent's security interest with respect
to the Specified Equity Interests, or any replacements thereof, (b) hold in
trust for the Noteholder Collateral Agent upon receipt and promptly thereafter
deliver to the Noteholder Collateral Agent any such Securities constituting
Collateral, (c) subject to the terms, conditions and provisions of the
Intercreditor Agreement, within three Business Days of the Noteholder Collateral
Agent’s request, deliver to the Noteholder Collateral Agent (and thereafter hold
in trust for the Noteholder Collateral Agent upon receipt and immediately
deliver to the Noteholder Collateral Agent) any document evidencing or
constituting Collateral and (d) upon the Noteholder Collateral Agent’s request,
deliver to the Noteholder Collateral Agent a duly executed amendment to this
Agreement, in substantially the form of Exhibit I hereto (the
“Amendment”),
pursuant to which such Grantor will pledge such additional
Collateral.  Such Grantor hereby authorizes the Noteholder Collateral
Agent to attach each Amendment to this Agreement and agrees that all additional
Collateral owned by it set forth in such Amendments shall be considered to be
part of the Collateral.

     

    
      4.5          Uncertificated Pledged
Collateral.  Subject
to the terms, conditions and provisions of the
Intercreditor Agreement, such Grantor will permit the Noteholder Collateral
Agent from time to time to cause the appropriate issuers (and, if held with a
securities intermediary, such securities intermediary) of uncertificated
securities or other types of Pledged Collateral owned by it not represented by
certificates to mark their books and records with the numbers and face amounts
of all such uncertificated securities or other types of Pledged Collateral not
represented by certificates and all rollovers and replacements therefor to
reflect the Lien of the Noteholder Collateral Agent granted pursuant to this
Agreement.  With respect to any Pledged Collateral owned by it, upon
the Noteholder Collateral Agent’s reasonable request, such Grantor will take any
actions necessary to cause (a) the issuers of uncertificated securities which
are Pledged Collateral and (b) any securities intermediary which is the holder
of any such Pledged Collateral (other than the Merrill Lynch Account), to cause
the Noteholder Collateral Agent to have and retain Control over such Pledged
Collateral (subject to the terms, conditions and provisions of the Intercreditor
Agreement).  Without limiting the foregoing, such Grantor will, with
respect to any such Pledged Collateral held with a securities intermediary
(other than the Merrill Lynch Account), cause such securities intermediary to
enter into a Securities Control Agreement with the Noteholder Collateral Agent,
(subject to the terms, conditions and provisions of the Intercreditor
Agreement).

    

     

    
      
         


      

      
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    4.6          Pledged
Collateral.

     

    (a)           Changes in
Capital Structure of Issuers.  Except to the extent permitted
by the terms of the Indenture, such Grantor will not (i) permit or allow any
Subsidiary, the Equity Interests of which constitute Pledged Collateral owned by
it, to dissolve, merge, liquidate, retire any of its Equity Interests or other
Instruments or Securities evidencing ownership, reduce its capital, sell or
encumber all or substantially all of its assets (except for Liens permitted
pursuant to Section
4.1(e) and sales of assets permitted pursuant to Section
4.1(d)), or (ii) vote any such Pledged Collateral in favor of any
of the foregoing.

     

    (b)           Registration
of Pledged Collateral.  Subject to the terms, conditions and
provisions of the Intercreditor Agreement, upon the occurrence and during the
continuance of  an Event of Default, such Grantor will permit any
registerable Pledged Collateral owned by it to be registered in the name of the
Noteholder Collateral Agent or its nominee at any time at the option of the
Required Secured Parties.

     

    (c)           Exercise of
Rights in Pledged Collateral.

     

    (i)           Without
in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise
all voting rights or other rights relating to the Pledged Collateral owned by it
for all purposes not in violation of this Agreement, the Indenture, the
Intercreditor Agreement or any other Loan Document; provided
however, that no vote or
other right shall be exercised or action taken for the purpose of impairing the
enforcement rights of the Noteholder Collateral Agent in respect of such Pledged
Collateral except as may be incidental to actions otherwise permitted under such
documents.

     

    (ii)           Such
Grantor will permit the Noteholder Collateral Agent or its nominee at any time
after the occurrence and during the continuance of an Event of Default, and with
prior notice, to exercise all voting rights or other rights relating to the
Pledged Collateral owned by it, including, without limitation, exchange,
subscription or any other rights, privileges, or options pertaining to any
Equity Interest or Investment Property constituting such Pledged Collateral as
if it were the absolute owner thereof.


    
      
         


      

      
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    (iii)           Such
Grantor shall be entitled to collect and receive for its own use all dividends,
distributions and interest paid in respect of the Pledged Collateral owned by it
to the extent not in violation of the Indenture other than, upon the
occurrence and during the continuance of an Event of Default, any of the
following distributions and payments (collectively referred to as the “Excluded
Payments”):  (A) dividends and interest paid or payable other
than in cash in respect of such Pledged Collateral, and instruments and other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral; (B) dividends and other distributions paid
or payable in cash in respect of such Pledged Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in capital of an issuer; and (C) cash paid,
payable or otherwise distributed, in respect of principal of, or in redemption
of, or in exchange for, such Pledged Collateral; provided however, that until
actually paid, all rights to such distributions shall remain subject to the Lien
created by this Agreement; and

     

    (iv)           All
Excluded Payments in respect of any of the Pledged Collateral owned by such
Grantor, whenever paid or made, shall, subject to the terms, conditions and
provisions of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, be delivered to the Noteholder Collateral
Agent to hold as Pledged Collateral and shall, if received by such Grantor, be
received in trust for the benefit of the Noteholder Collateral Agent, be
segregated from the other property or funds of such Grantor, and, subject to the
terms, conditions and provisions of the Intercreditor Agreement, be forthwith
delivered to the Noteholder Collateral Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).

     

    (v)           After
the Noteholder Collateral Agent acknowledges that all Events of Default have
been cured or waived in accordance with the provisions of the Indenture, and so
long as the Secured 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 this Section
4.6, and receive dividends and other distributions it would
have been authorized to receive pursuant to this Section
4.6.  After the Noteholder Collateral Agent
acknowledges that all Events of Default have been cured or waived in accordance
with the provisions of the Indenture, any dividend or distribution paid to the
Noteholder Collateral Agent shall upon the request of the Grantors (except to
the extent theretofore applied to the Secured Obligations) promptly be returned
to the Grantors.

     

    4.7          Intellectual
Property.

     

    (a)           Subject
to the terms set forth in the Intercreditor Agreement, such Grantor will use its
commercially reasonable efforts to secure all consents and approvals necessary
or appropriate for the assignment to or benefit of the Noteholder Collateral
Agent of any License held by such Grantor and to enforce the security interests
granted hereunder.

     

    
      
         


      

      
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    (b)           Such
Grantor shall notify the Noteholder Collateral Agent promptly after a
Responsible Officer of such Grantor has actual knowledge that any application or
registration for any material Patent, Trademark or Copyright (now or hereafter
existing) owned by such Grantor may become abandoned (except for Patents,
Trademarks or Copyrights expiring at the end of their statutory terms), or of
any adverse determination in any proceeding (other than office actions issued in
the ordinary course of prosecution of any patent application or application to
register any other Intellectual Property) against such Grantor regarding such
Grantor’s ownership of any material Patent, Trademark or Copyright, its right to
register the same, or to keep and maintain the same, in each case, to the extent
the same could reasonably be expected to have, individually or in the aggregate,
a material adverse effect on the Grantors, taken as a whole.

     

    (c)           If
such Grantor, either directly or through any agent, employee, licensee or
designee, files an application for the registration of any Patent, Trademark or
Copyright with the United States Patent and Trademark Office or the United
States Copyright Office, such Grantor shall promptly give the Noteholder
Collateral Agent written notice thereof concurrently with the delivery of a
Compliance Certificate under the Indenture, and, upon request of the Noteholder
Collateral Agent, such Grantor shall execute and deliver any and all security
agreements as the Noteholder Collateral Agent may request to evidence the
Noteholder Collateral Agent’s first priority security interest on such Patent,
Trademark or Copyright.

     

    (d)           Except
as determined by such Grantor in its reasonable business judgment (exercised in
good faith), such Grantor shall take all actions that are necessary or requested
by the Noteholder Collateral Agent to pursue each application (and to obtain the
relevant registration) and to maintain the validity and enforceability of each
registration of its material Patents, Trademarks and Copyrights (now or
hereafter existing) owned by such Grantor.

     

    (e)           Such
Grantor shall, unless it shall reasonably determine that such Patent, Trademark
or Copyright is not material to the conduct of its business or operations, take
all actions deemed appropriate under the circumstances in the exercise of its
reasonable business judgment (exercised in good faith) to protect such Patent,
Trademark or Copyright owned by such Grantor, including if appropriate under the
circumstances bringing suit and recovering all damages therefor.  In
the event that such Grantor institutes suit because any of its Patents,
Trademarks or Copyrights constituting Collateral is infringed upon, or
misappropriated or diluted by a third party, such Grantor shall comply with
Section
4.8.

     

    4.8          Commercial Tort
Claims.  Such
Grantor shall promptly, and in any event within five Business Days after a
Responsible Officer of such Grantor has actual knowledge of such commercial tort
claim, notify the Noteholder Collateral Agent of any commercial tort claim (as
defined in the UCC) individually in excess of $100,000 acquired by it and,
unless the Noteholder Collateral Agent otherwise consents, such Grantor shall
enter into an amendment to this Agreement, substantially in the form of Exhibit I hereto,
granting to Noteholder Collateral Agent a second priority security interest
(subject to Liens permitted by Section 4.1(e)) in
such commercial tort claim.

       

    
      
         


      

      
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    4.9          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 three Business Days after becoming a beneficiary, notify the
Noteholder Collateral Agent thereof and use commercially reasonable efforts to
cause the issuer and/or confirmation bank to (a) consent to the assignment of
any Letter-of-Credit Rights to the Noteholder Collateral Agent and (b) agree to
direct all payments thereunder to a Deposit Account at the Noteholder Collateral
Agent or subject to a Deposit Account Control Agreement for application to the
Secured Obligations, in accordance with Section 6.11 of the Indenture, all in
form and substance reasonably satisfactory to the Noteholder Collateral
Agent.

     

    4.10        Federal, State or Municipal
Claims.  Such
Grantor will promptly notify the Noteholder Collateral 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.

     

    4.11        No
Interference.  Such
Grantor agrees that it will not interfere with any right, power and remedy of
the Noteholder Collateral Agent provided for in this Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by the Noteholder Collateral Agent of any
one or more of such rights, powers or remedies.

     

    4.12        Insurance.

     

    (a)           In
the event any Collateral is located in any area that has been designated by the
Federal Emergency Management Agency as a “Special Flood Hazard Area”, such
Grantor shall purchase and maintain flood insurance on such Collateral
(including any personal property which is located on any real property leased by
such Loan Party within a “Special
Flood Hazard Area”).  The amount of flood insurance required by
this Section shall be the amount maintained by the Grantors on the Effective
Date or such other amount as the Noteholder Collateral Agent may reasonably
request.

     

    (b)           All
insurance policies required hereunder and under Section 6.21 of the Indenture
shall name the Noteholder Collateral Agent (for the benefit of the Noteholder
Collateral Agent and the Noteholder Secured Parties) as an additional insured or
as loss payee, as applicable, and commencing no later than September 20, 2010
shall contain loss payable clauses or mortgagee clauses, through endorsements in
form and substance reasonably satisfactory to the Noteholder Collateral Agent,
which provide that: (i) subject to the terms, conditions and provisions of the
Intercreditor Agreement, all proceeds thereunder with respect to any Collateral
shall be payable to the Noteholder Collateral Agent; (ii) no such insurance
shall be affected by any act or neglect of the insured or owner of the property
described in such policy; and (iii) such policy and loss payable or mortgagee
clauses may be canceled, amended, or terminated only upon at least thirty days
prior written notice (ten days in the case of non-payment of premium) given to
the Noteholder Collateral Agent.

     

    
      
         


      

      
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    (c)           All
premiums on any such insurance shall be paid when due by such Grantor, and
copies of the policies delivered to the Noteholder Collateral
Agent.  If such Grantor fails to obtain any insurance as required by
this Section, the Noteholder Collateral Agent may obtain such insurance at the
Borrower’s expense.  By purchasing such insurance, the Noteholder
Collateral 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.

     

    4.13        Collateral Access
Agreements.  Such Grantor shall use commercially reasonable
efforts for a period not to exceed 90 days to obtain 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 (other than any (i) worksite or customer location or
(ii) location leased by a Grantor on the date hereof solely to the extent that
in respect of such location (a) collateral access agreement has been executed by
such lessor, mortgagee, bailee or consignee in favor of the Administrative Agent
or (b) such Grantor has expended commercially reasonable efforts within the 30
days prior to the date hereof to obtain a collateral access agreement in favor
of the Administrative Agent from such lessor, mortgagee, bailee or consignee)
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, and shall otherwise be reasonably satisfactory in form and
substance to the Noteholder Collateral Agent.  Such Grantor shall
timely and fully pay and perform its obligations under all leases and other
agreements (subject to any grace periods therein) with respect to each leased
location or third party warehouse where any Collateral with a value exceeding
$250,000 is or may be located.

     

    4.14        Control
Agreements.  Such
Grantor will provide to the Noteholder Collateral Agent upon the Noteholder
Collateral Agent’s reasonable request, (a) a Commodity Account Control Agreement
duly executed on behalf of each commodities intermediary holding a Commodity
Account of such Grantor as set forth in the Agreement, (b) a Securities Account
Control Agreement duly executed on behalf of each securities intermediary
holding a Securities Account (other than the Merrill Lynch Account) of such
Grantor as set forth in the Agreement and (c) a Deposit Account Control
Agreement duly executed on behalf of each financial institution holding a
Deposit Account (other than an Excluded Deposit Account and, so long as the
Control Representative (as defined in the Intercreditor Agreement) enters into a
Deposit Account Control Agreement with respect thereto, any Deposit Accounts
located at JP Morgan Chase Bank, N.A.) of such Grantor; provided that,if the
Administrative Agent decides to forego obtaining a Deposit Account Control
Agreement, Commodity Account Control Agreement or Securities Account Control
Agreement with respect to any Deposit Account, Commodity Account or Securities
Account, as applicable, then such Grantor shall be deemed to have no obligation
to obtain a Deposit Account Control Agreement, Commodity Account Control
Agreement or Securities Acccount Control Agreement hereunder.


    
      
         


      

      
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    4.15        Change of Name or Location;
Change of Fiscal Year.  Such
Grantor shall not change its chief executive office, principal place of
business, mailing address, corporate offices or warehouses or locations at which
Collateral is held or stored, or the location of its records concerning the
Collateral as set forth in the Agreement unless the Noteholder Collateral Agent
shall have received at least 15 days prior written notice of such change; provided, that any new
location shall be in the continental U.S.  Such grantor shall not (a)
change its name as it appears in official filings in the state of its
incorporation or organization, (b) change the type of entity that it is, (c)
change its organization identification number, if any, issued by its state of
incorporation or other organization, or (d) change its state of incorporation or
organization, in each case, unless the Noteholder Collateral Agent shall have
received at least 15 days prior written notice of such change.

     

    4.16        New
Subsidiaries.  Pursuant
to Sections 6.14 and 6.15 of the Indenture, any new direct or indirect domestic
Subsidiary (whether by acquisition, creation or designation) of the Issuer is
required to enter into this Agreement by executing and delivering in favor of
the Noteholder Collateral Agent an instrument in the form of Annex
I.  Upon the execution and delivery of Annex I by such new
domestic Subsidiary, such domestic Subsidiary shall become a Grantor hereunder
with the same force and effect as if originally named as a Grantor
herein.  The execution and delivery of any instrument adding an
additional Grantor as a party to this Agreement shall not require the consent of
any Grantor hereunder (except to the extent obtained on or prior to the date of
its execution and delivery of such Instrument).  The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor hereunder.

     

    ARTICLE
V


     

    EVENTS OF DEFAULT AND
REMEDIES

     

    5.1          Remedies.

     

    (a)           Upon
the occurrence and during the continuance of an Event of Default, the Noteholder
Collateral Agent may, subject to the terms, conditions and provisions of the
Indenture and the Intercreditor Agreement, exercise any or all of the following
rights and remedies:

     

    (i)           those
rights and remedies provided in this Agreement, the Indenture, the Intercreditor
Agreement or any other Note Document; provided that, this Section
5.1(a)
shall not be understood to limit any rights or remedies available to the
Noteholder Collateral Agent and the Noteholder Secured Parties prior to an Event
of Default;

     

    (ii)          those
rights and remedies available to a secured party under the UCC (whether or not
the UCC applies to the affected Collateral) or under any other applicable law
(including, without limitation, any law governing the exercise of a bank’s right
of setoff or bankers’ lien) when a debtor is in default under a security
agreement;

     

    
      
         


      

      
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      (iii)         give
notice of sole control or any other instruction under any Deposit Account
Control Agreement or and other control agreement with any securities
intermediary and take any action therein with respect to such
Collateral;

    

          


    (iv)         without
notice (except as specifically provided in Section 8.1 or
elsewhere herein), demand or advertisement of any kind to any Grantor or any
other Person, peaceably enter the premises of any Grantor where any Collateral
is located (through self-help and without judicial process) to collect, receive,
assemble, process, appropriate, sell, lease, assign, grant an option or options
to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or
any part thereof in one or more parcels at public or private sale or sales
(which sales may be adjourned or continued from time to time with or without
notice and may take place at any Grantor’s premises or elsewhere), for cash, on
credit or for future delivery without assumption of any credit risk, and upon
such other terms as the Noteholder Collateral Agent may deem commercially
reasonable; and

     

    (v)          immediately
after written notice to the applicable Grantor, transfer and register in its
name or in the name of its nominee the whole or any part of the Pledged
Collateral, to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger
denominations, to exercise the voting and all other rights as a holder with
respect thereto, to collect and receive all cash dividends, interest, principal
and other distributions made thereon and to otherwise act with respect to the
Pledged Collateral as though the Noteholder Collateral Agent was the outright
owner thereof.

     

    (b)           The
Noteholder Collateral Agent, on behalf of the Noteholder Secured Parties, may
comply with any applicable state or federal law requirements in connection with
a disposition of the Collateral and compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the
Collateral.

     

    (c)           The
Noteholder Collateral Agent shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of the Noteholder Collateral Agent and the
Noteholder Secured Parties, the whole or any part of the Collateral so sold,
free of any right of equity redemption, which equity redemption the Grantor
hereby expressly releases.

     

    (d)           Until
the Noteholder Collateral Agent is able to effect a sale, lease, or other
disposition of Collateral, the Noteholder Collateral Agent shall have the right
to hold or use Collateral, or any part thereof, to the extent that it deems
appropriate for the purpose of preserving Collateral or its value or for any
other purpose deemed appropriate by the Noteholder Collateral
Agent.  The Noteholder Collateral Agent may, if it so elects, seek the
appointment of a receiver or keeper to take possession of Collateral and to
enforce any of the Noteholder Collateral Agent’s remedies (for the benefit of
the Noteholder Collateral Agent and Noteholder Secured Parties), with respect to
such appointment without prior notice or hearing as to such
appointment.

     

    
      
         


      

      
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    (e)           Notwithstanding
the foregoing, except as required by applicable law, neither the Noteholder
Collateral Agent nor the Noteholder Secured Parties shall be required to (i)
make any demand upon, or pursue or exhaust any of their rights or remedies
against, any Grantor, any other obligor, guarantor, pledgor or any other Person
with respect to the payment of the Secured Obligations or to pursue or exhaust
any of their rights or remedies with respect to any Collateral therefor or any
direct or indirect guarantee thereof, (ii) marshal the Collateral or any
guarantee of the Secured Obligations or to resort to the Collateral or any such
guarantee in any particular order, or (iii) effect a public sale of any
Collateral.

     

    (f)           Each
Grantor recognizes that the Noteholder Collateral Agent may be unable to effect
a public sale of any or all the Pledged Collateral and may be compelled to
resort to one or more private sales thereof in accordance with clause (a)
above.  Each Grantor also acknowledges that any private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private.  The
Noteholder Collateral Agent shall be under no obligation to delay a sale of any
of the Pledged Collateral for the period of time necessary to permit any Grantor
or the issuer of the Pledged Collateral to register such securities for public
sale under the Securities Act of 1933, as amended, or under applicable state
securities laws, even if the applicable Grantor and the issuer would agree to do
so.

     

    5.2          Grantor’s Obligations Upon
Default.  Upon
the request of the Noteholder Collateral Agent after the occurrence and during
the continuance of an Event of Default, subject to the terms, conditions and
provisions of the Intercreditor Agreement, each Grantor will:

     

    (a)           assemble
and make available to the Noteholder Collateral Agent the tangible Collateral
and all books and records relating thereto at any place or places specified by
the Noteholder Collateral Agent, whether at a Grantor’s premises or elsewhere;
and

     

    (b)           permit
the Noteholder Collateral Agent, by the Noteholder Collateral 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.

     

    
      
         


      

      
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      (c)           furnish
to the Noteholder Collateral Agent, or cause an issuer of Pledged Collateral to
furnish to the Noteholder Collateral Agent, any information regarding the
Pledged Collateral in such detail as the Noteholder Collateral Agent may
specify; and

    

                                   


    (d)           at
its own expense, cause the independent certified public accountants then engaged
by each Grantor to prepare and deliver to the Noteholder Collateral Agent and
each Noteholder Secured Party, at any time, and from time to time, promptly upon
the Noteholder Collateral Agent’s request, the following reports with respect to
the applicable Grantor:  (i) a reconciliation of all Accounts; (ii) an
aging of all Accounts; (iii) trial balances; and (iv) a test verification of
such Accounts.

     

    5.3          Grant of Intellectual
Property License.  For
the purpose of enabling the Noteholder Collateral Agent to exercise the rights
and remedies under this Article V at and
during the continuance of such time as the Noteholder Collateral Agent shall be
lawfully entitled to exercise such rights and remedies in accordance with the
Intercreditor Agreement, each Grantor hereby (a) grants to the Noteholder
Collateral Agent, for the benefit of the Noteholder Collateral Agent and the
Noteholder Secured Parties, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to any Grantor) to use, license
or sublicense any Intellectual Property rights now owned or hereafter acquired
by such Grantor, and wherever the same may be located, and including in such
license access to all media in which any of the licensed items may be recorded
or stored and to all computer software and programs used for the compilation or
printout thereof and (b) irrevocably agrees that the Noteholder Collateral Agent
may sell any of such Grantor’s Inventory directly to any person, including
without limitation persons who have previously purchased the Grantor’s Inventory
from such Grantor and in connection with any such sale or other enforcement of
the Noteholder Collateral Agent’s rights under this Agreement, may sell
Inventory which bears any Trademark owned by or licensed to such Grantor and any
Inventory that is covered by any Copyright owned by or licensed to such Grantor
and the Noteholder Collateral Agent may finish any work in process and affix any
Trademark owned by or licensed to such Grantor and sell such Inventory as
provided herein.

     

    5.4          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 Noteholder Collateral Agent of any rights or
remedies granted to it pursuant to this Agreement.  Without limiting
the generality of the foregoing, (a) 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.,
(b) 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 (c) U.S. Concrete, Inc. and Superior Holdings, Inc. hereby waive any
transfer restriction on the stock of Superior Holdings, 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 Holdings,
Inc.

     

    
      
         


      

      
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    ARTICLE
VI


     

    ACCOUNT VERIFICATION;
ATTORNEY IN FACT; PROXY

     

    6.1          Account
Verification.  Subject
to the terms, conditions and provisions of the Intercreditor Agreement, the
Noteholder Collateral Agent may at any time, in the Noteholder Collateral
Agent’s own name, in the name of a nominee of the Noteholder Collateral Agent,
or in the name of any Grantor communicate (by mail, telephone, facsimile or
otherwise) with the Account Debtors of any such Grantor, parties to contracts
with any such Grantor  and obligors in respect of Instruments of any
such Grantor to verify with such Persons, to the Noteholder Collateral Agent’s
reasonable satisfaction, the existence, amount, terms of, and any other matter
relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or
other Receivables.

     

    6.2          Authorization for Secured
Party to Take Certain Action.

     

    (a)           Subject
to the terms, conditions and provisions of the Intercreditor Agreement, each
Grantor irrevocably authorizes the Noteholder Collateral Agent at any time and
from time to time in the sole discretion of the Noteholder Collateral Agent and
appoints the Noteholder Collateral Agent as its attorney in fact, subject to
clause (b) of this Section 6.2, (i) to
execute on behalf of such Grantor as debtor and to file financing statements
necessary or desirable in the Noteholder Collateral Agent’s sole discretion to
perfect (subject to the qualifications set forth in Section 3.1) and to
maintain the perfection and priority of the Noteholder Collateral Agent’s
security interest in the Collateral, (ii) to endorse and collect any cash
proceeds of the Collateral, (iii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Collateral as a financing statement and to file any other financing statement or
amendment of a financing statement (which does not add new collateral or add a
debtor) in such offices as the Noteholder Collateral Agent in its sole
discretion deems necessary or desirable to perfect (subject to the
qualifications set forth in Section 3.1) and to
maintain the perfection and priority of the Noteholder Collateral Agent’s
security interest in the Collateral, (iv) to contact and enter into one or more
agreements with the issuers of uncertificated securities which are Pledged
Collateral or with securities intermediaries holding Pledged Collateral as may
be necessary or advisable to give the Noteholder Collateral Agent Control over
such Pledged Collateral, subject to the terms set forth in the Intercreditor
Agreement, (v) to apply the proceeds of any Collateral received by the
Noteholder Collateral Agent to the Secured Obligations as provided in Section 7.3, (vi)
upon five Business Days’ prior notice, to discharge past due taxes, assessments,
charges, fees or Liens on the Collateral (except for such Liens as are
specifically permitted hereunder), (vii) to contact Account Debtors for any
reason, (viii) to demand payment or enforce payment of the Receivables in the
name of the Noteholder Collateral Agent or such Grantor and to endorse any and
all checks, drafts, and other instruments for the payment of money relating to
the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of
lading relating to the Receivables, drafts against any Account Debtor of the
Grantor, assignments and verifications of Receivables, (x) to exercise all of
such Grantor’s rights and remedies with respect to the collection of the
Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend
or renew the Receivables, (xii) to settle, adjust or compromise any legal
proceedings brought to collect Receivables, (xiii) to prepare, file and sign
such Grantor’s name on a proof of claim in bankruptcy or similar document
against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such
Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables, (xv) to change the address
for delivery of mail addressed to such Grantor to such address as the Noteholder
Collateral Agent may designate and to receive, open and dispose of all mail
addressed to such Grantor, and (xvi) to do all other acts and things necessary
to carry out this Agreement; and such Grantor agrees to reimburse the Noteholder
Collateral Agent promptly following written demand (including documentation
reasonably supporting such request) for any reasonable payment made or any
reasonable out-of-pocket expense incurred by the Noteholder Collateral Agent in
connection with any of the foregoing; provided that, this
authorization shall not relieve such Grantor of any of its obligations under
this Agreement or under the Indenture.

     

    
      
         


      

      
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    (b)           All
acts of said attorney or designee are hereby ratified and
approved.  The powers conferred on the Noteholder Collateral Agent,
for the benefit of the Noteholder Collateral Agent and Noteholder Secured
Parties, under this Section 6.2 are
solely to protect the Noteholder Collateral Agent’s interests in the Collateral
and shall not impose any duty upon the Noteholder Collateral Agent or any
Noteholder Secured Party to exercise any such powers.  The Noteholder
Collateral Agent agrees that, except for the powers granted in Sections 6.2(a)(i),
(a)(iii), and
(a)(v), , it
shall not exercise any power or authority granted to it under the power of
attorney  unless an Event of Default has occurred and is
continuing.

     

    6.3          Proxy.  SUBJECT
TO THE TERMS, CONDITIONS AND PROVISIONS OF THE INTERCREDITOR AGREEMENT, EACH
GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE NOTEHOLDER COLLATERAL
AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE)
WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED
COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO.  IN ADDITION TO
THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE NOTEHOLDER
COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO
EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF
SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING
WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND
VOTING AT SUCH MEETINGS).  SUCH PROXY SHALL BE EFFECTIVE,
AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF
ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY
PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT
THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT.

     

    
      
         


      

      
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    6.4          Nature of Appointment;
Limitation of Duty.  THE
APPOINTMENT OF THE NOTEHOLDER COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN
THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE
DATE ON WHICH THIS AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION
8.14.  NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE
NOTEHOLDER COLLATERAL AGENT, NOR ANY NOTEHOLDER SECURED PARTY, NOR ANY OF THEIR
RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES
SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR
OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO
SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE TO
THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT (OR THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES) AS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY
SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGES OF ANY
KIND WHATSOEVER (INCLUDING, BUT  NOT LIMITED TO, LOSS OF PROFIT)
IRRESPECTIVE OF WHETHER THE NOTEHOLDER COLLATERAL AGENT OR OTHER NOTEHOLDER
SECURED PARTY HAS BEEN ADVISED OF THE LIKELIHOOD OF SUCH LOSS OR DAMAGE AND
REGARDLESS OF THE FORM OF ACTION.

     

    ARTICLE
VII


     

    COLLECTION AND APPLICATION
OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS

     

    7.1          Collection of
Accounts.  Subject
to the terms, conditions and provisions of the Intercreditor
Agreement:

     

    (a)           On
or before the Closing Date, each Grantor shall (i) execute and deliver to the
Noteholder Collateral Agent Deposit Account Control Agreements for each Deposit
Account (other than Excluded Deposit Accounts) maintained by such Grantor into
which all cash, checks or other similar payments relating to or constituting
payments made in respect of Accounts will be deposited (a “Collateral
Deposit Account”), which Collateral Deposit Accounts (as of the Closing
Date) are identified as such on Exhibit B, and (ii) establish lock box service
(the “Lock
Boxes”) with the bank(s) set forth in Exhibit B, which lock boxes shall
be subject to irrevocable lockbox agreements in the form provided by or
otherwise acceptable to the Noteholder Collateral Agent (subject to the terms,
conditions and provisions of the Intercreditor Agreement) and shall be
accompanied promptly upon request of the Notes Collateral Agent by an
acknowledgment by the bank where the Lock Box is located of the Lien of the
Noteholder Collateral Agent granted hereunder and of irrevocable instructions to
wire all amounts collected therein to the Collection Account (a “Lock Box
Agreement”).  After the Closing Date, each Grantor will comply
with the terms of Section
7.2.

     

    
      
         


      

      
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    (b)           Each
Grantor shall direct all of its Account Debtors to forward payments directly to
Lock Boxes subject to Lock Box Agreements.  Subject to the terms,
conditions and provisions of the Intercreditor Agreement, the Noteholder
Collateral Agent shall have access to the Lock Boxes at all times and each
Grantor shall take all actions necessary to grant the Noteholder Collateral
Agent such access.  At no time shall any Grantor remove any item from
a Lock Box or from a Collateral Deposit Account without the Noteholder
Collateral Agent’s prior written consent (subject to the terms, conditions and
provisions of the Intercreditor Agreement).  If any Grantor should
refuse or neglect to promptly notify any Account Debtor to forward payments
directly to a Lock Box subject to a Lock Box Agreement after written notice from
the Administrative Agent, the Noteholder Collateral Agent shall, notwithstanding
the language set forth in Section
6.2(b) be entitled to make such notification directly to
such Account Debtor.  If notwithstanding the foregoing instructions,
any Grantor receives any proceeds of any Receivables, such Grantor shall receive
such payments as the Noteholder Collateral Agent’s trustee (subject to the
terms, conditions and provisions of the Intercreditor Agreement), and shall
immediately deposit all cash, checks or other similar payments related to or
constituting payments made in respect of Receivables received by it to a
Collateral Deposit Account.  All funds deposited into any Lock Box
subject to a Lock Box Agreement or a Collateral Deposit Account will be swept on
a daily basis into a collection account maintained by the Company with the
Administrative Agent or, upon the ABL Obligations Payment Date, at any other
depositary bank (so long as such collection account is subject to a springing
Deposit Account Control in favor of the Noteholder Collateral Agent), as the
case may be in accordance with the terms, conditions and provisions of the
Intercreditor Agreement (the “Collection
Account”).

     

    (c)           Notwithstanding
anything to the contrary contained herein, in no event shall the Grantors be
required to deposit any amounts received in respect of the Notes Collateral in
any Collateral Deposit Account or Collection Account or otherwise direct such
amounts or proceeds to a Lockbox.

     

    7.2          Covenant Regarding New
Deposit Accounts; Lock Boxes.  Before opening or replacing any
Collateral Deposit Account, other Deposit Account, or establishing a new Lock
Box (other than Excluded Deposit Accounts), each Grantor shall cause each bank
or financial institution in which it seeks to open (i) a Deposit Account, to
enter into a Deposit Account Control Agreement with the Noteholder Collateral
Agent in order to give the Noteholder Collateral Agent Control of such Deposit
Account, or (ii) a Lock Box, to enter into a Lock Box Agreement with the
Noteholder Collateral Agent in order to give the Noteholder Collateral Agent
Control of the Lock Box.  In the case of Deposit Accounts or Lock
Boxes maintained with Noteholder Secured Parties and their Affiliates, the terms
of such letter shall be subject to the provisions of the Indenture regarding
setoffs.

     

    
      
         


      

      
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      7.3          Application of Proceeds;
Deficiency.

    

     

    (a)           All
amounts deposited in the Collection Account shall be deemed received by the
Noteholder Collateral Agent and shall, after having been credited to the
Collection Account, be applied (and allocated) by in accordance with the
Intercreditor Agreement. Subject to the terms, conditions and provisions of the
Intercreditor Agreement, the Noteholder Collateral Agent shall require all other
cash proceeds of the Collateral, which are not required to be applied to the
Secured Obligations or the ABL Obligations pursuant to Intercreditor Agreement,
to be deposited in a special non-interest bearing cash collateral account with
the Noteholder Collateral Agent and held there as security for the Secured
Obligations.  No Grantor shall have any control whatsoever over said
cash collateral account.  Any such proceeds of the Collateral shall be
applied in the order set forth in the Intercreditor Agreement unless a court of
competent jurisdiction shall otherwise direct.  Subject to the terms,
conditions and provisions of the Intercreditor Agreement, the balance, if any,
after all of the Secured Obligations have been satisfied, shall be deposited by
the Noteholder Collateral Agent into the Company’s general operating
account.  The Grantors shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are insufficient to pay
all Secured Obligations, including any attorneys’ fees and other expenses
incurred by the Noteholder Collateral Agent or any Noteholder Secured Party to
collect such deficiency.

     

    (b)           Upon
the ABL Obligations Payment Date, (i) the provisions in Section 7.3(a) above
shall automatically terminate, (ii) the Noteholder Collateral Agent agrees to
terminate any Deposit Account Control Agreements applicable to the Concentration
Account and any other Deposit Account set up for full cash dominion and (iii)
the Noteholder Collateral Agent shall enter into one or more new springing cash
dominion Deposit Account Control Agreements with respect to the Concentration
Account and any such other Deposit Account that is set up for full cash
dominion.

     

    
      
        ARTICLE
VIII


         

        GENERAL
PROVISIONS

        
        

                      


        8.1          Waivers.  To
the extent permitted by Applicable Law, each Grantor hereby waives
notice of the time and place of any public sale or the time after which any
private sale or other disposition of all or any part of the Collateral may be
made.  To the extent such notice may not be waived under applicable
law, any notice made shall be deemed reasonable if sent to the Grantors,
addressed as set forth in Article IX, at least
ten days prior to (a) the date of any such public sale or (b) the time after
which any such private sale or other disposition may be made.  To the
maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against the Noteholder Collateral Agent or any Noteholder
Secured Party arising out of the repossession, retention or sale of the
Collateral, except to the extent such as arise out of the gross negligence or
willful misconduct of the Noteholder Collateral Agent or such Noteholder Secured
Party (or any of their respective affiliates, officers, directors, employees,
agents or representatives) as finally determined by a court of competent
jurisdiction.  To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of,
and covenants not to assert against the Noteholder Collateral Agent or any
Noteholder Secured Party, any valuation, stay, appraisal, extension, moratorium,
redemption or similar laws and any and all rights or defenses it may have as a
surety now or hereafter existing which, but for this provision, might be
applicable to the sale of any Collateral made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this
Agreement, or otherwise.  Except as otherwise specifically provided
herein, each Grantor hereby waives presentment, demand, protest or any notice
(to the maximum extent permitted by applicable law) of any kind in connection
with this Agreement or any Collateral.

      

    

    
    

    
      
         


      

      
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      8.2          Limitation on
Noteholder Collateral Agent’s and Noteholder Secured Parties’ Duty with Respect
to the Collateral.  The
Noteholder Collateral Agent shall have no obligation
to clean-up or otherwise prepare the Collateral for sale.  The
Noteholder Collateral Agent and each Noteholder Secured Party shall use
reasonable care with respect to the Collateral in its possession or under its
control.  Neither the Noteholder Collateral Agent nor any Noteholder
Secured Party shall 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
Noteholder Collateral Agent or such Noteholder Secured Party other than to
account for money received, or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining
thereto.  To the extent that applicable law imposes duties on the
Noteholder Collateral Agent to exercise remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable
for the Noteholder Collateral Agent (a) to fail to incur expenses deemed
significant by the Noteholder Collateral 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, (b) 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, (c) 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, (d) 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, (e) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (f) 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, (g) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (h) 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, (i) to dispose of assets
in wholesale rather than retail markets, (j) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (k) to purchase insurance or
credit enhancements to insure the Noteholder Collateral Agent against risks of
loss, collection or disposition of Collateral or to provide to the Noteholder
Collateral Agent a guaranteed return from the collection or disposition of
Collateral, or (l) to the extent deemed appropriate by the Noteholder Collateral
Agent, to obtain the services of other brokers, investment bankers, consultants
and other professionals to assist the Noteholder Collateral Agent in the
collection or disposition of any of the Collateral.  Each Grantor
acknowledges that the purpose of this Section
8.2
is to provide non-exhaustive indications of what actions or omissions by the
Noteholder Collateral Agent would be commercially reasonable in the Noteholder
Collateral Agent’s exercise of remedies against the Collateral and that other
actions or omissions by the Noteholder Collateral Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this Section
8.2.  Without
limitation upon the foregoing, nothing contained in this Section
8.2 shall
be construed to grant any rights to any Grantor or to impose any duties on the
Noteholder Collateral Agent that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this Section
8.2.

    

     

    
      
         


      

      
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    8.3          Compromises and Collection
of Collateral.  The
Grantors and the Noteholder Collateral Agent recognize that setoffs,
counterclaims, defenses and other claims may be asserted by obligors with
respect to certain of the Accounts, that certain of the Accounts may be or
become uncollectible in whole or in part and that the expense and probability of
success in litigating a disputed Account may exceed the amount that reasonably
may be expected to be recovered with respect to a Account.  In view of
the foregoing, each Grantor agrees that, subject to the terms, conditions and
provisions of the Intercreditor Agreement, the Noteholder Collateral Agent may
at any time and from time to time, if an Event of Default has occurred and is
continuing, compromise with the obligor on any Account, accept in full payment
of any Account such amount as the Noteholder Collateral Agent in its sole
discretion shall determine or abandon any Account, and any such action by the
Noteholder Collateral Agent shall be commercially reasonable so long as the
Noteholder Collateral Agent acts in good faith based on information known to it
at the time it takes any such action.

     

    8.4          Secured Party Performance of
Debtor Obligations.  Subject
to the terms, conditions and provisions of the Intercreditor Agreement, without
having any obligation to do so, upon the occurrence and during the continuance
of an Event of Default, and upon prior notice to the extent required under this
Agreement, the Noteholder Collateral Agent may perform or pay any obligation
which any Grantor has agreed to perform or pay in this Agreement and the
Grantors shall reimburse the Noteholder Collateral Agent for any amounts paid by
the Noteholder Collateral Agent pursuant to this Section
8.4.  The Grantors’ obligation to reimburse the Noteholder
Collateral Agent pursuant to the preceding sentence shall be a Secured
Obligation payable promptly upon written demand (including documentation
reasonably supporting such request).

     

    
      8.5          Specific
Performance of Certain Covenants.  Each
Grantor acknowledges and agrees
that a breach of any of the covenants contained in Section
4.1(d),
Section
4.1(e),
Section
4.4,
Section
4.5,
Section
4.6,
Section
4.7,
Section
4.8,
Section
4.9,
Section
4.10,
Section
4.12,
Section
4.13,
Section
4.14,
Section
4.15,
Section
4.16, Section
5.2,
or Section
8.7
or in Article
VII will cause irreparable injury to the Noteholder Collateral Agent
and the Noteholder Secured Parties, that the Noteholder Collateral Agent and the
Noteholder Secured Parties have no adequate remedy at law in respect of such
breaches and therefore agrees, without limiting the right of the Noteholder
Collateral Agent or the Noteholder Secured Parties to seek and obtain specific
performance of other obligations of the Grantors contained in this Agreement,
that the covenants of the Grantors contained in the Sections referred to in this
Section
8.5
shall be specifically enforceable against the
Grantors.

    

     

    
      
         


      

      
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    8.6          Dispositions Not
Authorized.  No
Grantor is authorized to sell or otherwise dispose of the Collateral except as
set forth in Section
4.1(d) and notwithstanding any course of dealing between any Grantor and
the Noteholder Collateral Agent or other conduct of the Noteholder Collateral
Agent, no authorization to sell or otherwise dispose of the Collateral (except
as set forth in Section 4.1(d)) shall
be binding upon the Noteholder Collateral Agent or the Noteholder Secured
Parties unless such authorization is in accordance with Section 12.03 of the
Indenture.

     

    8.7          No Waiver; Amendments;
Cumulative Remedies.  No
delay or omission of the Noteholder Collateral Agent or any Noteholder Secured
Party to exercise any right or remedy granted under this Agreement shall impair
such right or remedy or be construed to be a waiver of any Default or an
acquiescence therein, and any single or partial exercise of any such right or
remedy shall not preclude any other or further exercise thereof or the exercise
of any other right or remedy.  No waiver, amendment or other variation
of the terms, conditions or provisions of this Agreement whatsoever shall be
valid unless in writing signed by the Noteholder Collateral Agent with the
concurrence or at the direction of the Noteholder Secured Parties required under
Section 11.02 of the Indenture and then only to the extent in such writing
specifically set forth.  All rights and remedies contained in this
Agreement or by law afforded shall be cumulative and all shall be available to
the Noteholder Collateral Agent and the Noteholder Secured Parties until the
Secured Obligations have been paid in full (other than unasserted contingent
indemnification obligations).

     

    8.8          Limitation by Law;
Severability of Provisions.  All
rights, remedies and powers provided in this Agreement may be exercised only to
the extent that the exercise thereof does not violate any applicable provision
of law, and all the provisions of this Agreement are intended to be subject to
all applicable mandatory provisions of law that may be controlling and to be
limited to the extent necessary so that they shall not render this Agreement
invalid, unenforceable or not entitled to be recorded or registered, in whole or
in part.  Any provision in this Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.

     

    
      
         


      

      
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      8.9          Reinstatement.  This
Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against any Grantor for liquidation
or reorganization, should any Grantor become insolvent or make an assignment for
the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of any Grantor’s assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a
“voidable preference,” “fraudulent conveyance,” or otherwise, all as though such
payment or performance had not been made.  In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

    

     

    8.10        Benefit of
Agreement.  The
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of the Grantors, the Noteholder Collateral Agent and the Noteholder
Secured Parties and their respective permitted successors and assigns (including
all persons who become bound as a debtor to this Agreement), except that no
Grantor shall have the right to assign its rights or delegate its obligations
under this Agreement or any interest herein, without the prior written consent
of the Noteholder Collateral Agent.  No sales of participations,
assignments, transfers, or other dispositions of any agreement governing the
Secured Obligations or any portion thereof or interest therein shall in any
manner impair the Lien granted to the Noteholder Collateral Agent, for the
benefit of the Noteholder Collateral Agent and the Noteholder Secured Parties,
hereunder.

     

    8.11        Survival of
Representations.  All
representations and warranties of the Grantors contained in this Agreement shall
survive the execution and delivery of this Agreement.

     

    8.12        Taxes and
Expenses.  Any
taxes (including income taxes) payable or ruled payable by Federal or State
authority in respect of this Agreement shall be paid by the Grantors, together
with interest and penalties, if any.  The Grantors shall reimburse the
Noteholder Collateral Agent (and in respect of enforcement of this Agreement,
any other Noteholder Secured Party) for any and all reasonable and out-of-pocket
expenses (including reasonable and out-of-pocket attorneys’, auditors’,
accounts’, experts or other agents fees and expenses) paid or incurred by the
Noteholder Collateral Agent in connection with (i) the preparation, execution,
delivery, administration, collection and enforcement of this Agreement and in
the audit, analysis, administration, custody, collection, preservation, use or
operation, or sale of, collection from or other realization upon, the Collateral
(including the expenses and charges associated with any periodic or special
audit of the Collateral) or (ii) the failure by the Grantors to perform or
observe any of the provisions of this Agreement.
Any and all costs and expenses incurred by the Grantors in the performance of
actions required pursuant to the terms hereof shall be borne solely by the
Grantors.

     

    8.13        Headings.  The
title of and section headings in this Agreement are for convenience of reference
only, and shall not govern the interpretation of any of the terms and provisions
of this Agreement.

     

    8.14        Termination and
Release.  Subject
to the terms, conditions and provisions of the Intercreditor
Agreement.

     

    
      
         


      

      
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    (a)           This
Agreement shall continue in effect (notwithstanding the fact that from time to
time there may be no Secured Obligations outstanding) until the Indenture has
terminated pursuant to its express terms and all of the Secured Obligations
(other than unasserted contingent indemnification obligations) have been paid in
full whereupon the security interest created hereunder shall automatically
terminate and be released.

     

    (b)           Any
Subsidiary shall automatically be released from its obligations hereunder and
the security interest in the Collateral of such Subsidiary shall be
automatically released upon (i) the consummation of any transaction permitted by
the Indenture (or consented to in writing pursuant to Section 9.02 of the
Indenture) as a result of which such Subsidiary ceases to be a Subsidiary of the
Issuer or (ii) the effectiveness of any written consent to the release in
accordance with Section 12.03 of the Indenture.

     

    (c)           Upon
(i) any sale, transfer or other disposition by any Grantor of Collateral that is
permitted under the Indenture (other than to another Grantor), (ii) the
effectiveness of any written consent to the release of security interest granted
hereby in any Collateral pursuant to Section 12.03 of the Indenture or (iii) any
release of Liens pursuant to Section 4.2 of the Intercreditor Agreement, the
security interest of the Noteholder Collateral Agent in such Collateral and any
other security interests granted hereby in such Collateral shall be
automatically released.

     

    (d)           Upon
the termination or release of any security interest created hereunder or release
of Collateral, the Noteholder Collateral Agent will, upon request by and at the
expense of any Grantor, execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence the termination of the
security interest created hereunder or the release of such Collateral, as the
case may be.  Upon any release of Collateral pursuant to this Section 8.14, none of
the Noteholder Secured Parties shall have any continuing right or interest in
such Collateral or the Proceeds of such Collateral.

     

    8.15        Entire
Agreement.  This
Agreement embodies the entire agreement and understanding between the Grantors
and the Noteholder Collateral Agent relating to the Collateral and supersedes
all prior agreements and understandings between the Grantors and the Noteholder
Collateral Agent relating to the Collateral.

     

    8.16        CHOICE OF
LAW.  THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     

    
      
         


      

      
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    8.17        CONSENT TO
JURISDICTION.  EACH
GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S.
FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT.  EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE NOTEHOLDER COLLATERAL AGENT OR ANY
NOTEHOLDER SECURED PARTY TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS
OF ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY ANY GRANTOR
AGAINST THE NOTEHOLDER COLLATERAL AGENT OR ANY NOTEHOLDER SECURED PARTY OR ANY
AFFILIATE OF THE AGENT OR ANY NOTEHOLDER SECURED PARTY INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
NEW YORK, NEW YORK.

     

    8.18        WAIVER OF JURY
TRIAL.  EACH
GRANTOR, THE NOTEHOLDER COLLATERAL AGENT AND EACH NOTEHOLDER SECURED PARTY
HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.

     

    8.19        Indemnity.  Each
Grantor hereby agrees to indemnify the Noteholder Collateral Agent and the
Noteholder Secured Parties, and their respective successors, assigns, agents and
employees (each, an “Indemnitee”), from
and against any and all liabilities, damages, penalties, suits, costs, and
expenses of any kind and nature (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Noteholder Collateral
Agent or any Noteholder Secured Party is a party thereto) imposed on, incurred
by or asserted against the Noteholder Collateral Agent or the Noteholder Secured
Parties, or their respective successors, assigns, agents and employees, in any
way relating to or arising out of this Agreement, or the manufacture, purchase,
acceptance, rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of any Collateral (including,
without limitation, latent and other defects, whether or not discoverable by the
Noteholder Collateral Agent or the Noteholder Secured Parties or any Grantor,
and any claim for Patent, Trademark or Copyright infringement); provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, penalties, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or such Indemnitee’s Related Parties or (y) arise from any
dispute solely among Indemnitees.  WITHOUT LIMITATION OF THE FOREGOING
BUT SUBJECT TO ANY LIMITATION CONTAINED THEREIN, IT IS THE INTENTION OF EACH
GRANTOR AND EACH GRANTOR AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO
EACH INDEMNITEE WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES
AND RELATED EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION
OR PREPARATION THEREFOR), WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT
OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNITEE.

     

    
      
         


      

      
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    8.20        Counterparts.  This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart.  Delivery of
an executed counterpart of a signature page of this Agreement by facsimile or
other electronic communication (including via email PDF) shall be effective as
delivery of a manually executed counterpart of this Agreement.

     

    8.21        Intercreditor
Agreement.  Notwithstanding
anything to the contrary contained in this Agreement, the Liens, security
interests and rights granted pursuant to this Agreement shall be subject to the
terms, provisions and conditions of (and the exercise of any right or remedy by
the Noteholder Collateral Agent hereunder or thereunder shall be subject to the
terms and conditions of), the Intercreditor Agreement.  In the event
of any conflict between this Agreement and the Intercreditor Agreement, the
Intercreditor Agreement shall control, and no right, power, or remedy granted to
the Noteholder Collateral Agent hereunder shall be exercised by the Noteholder
Collateral Agent, and no direction shall be given by the Noteholder Collateral
Agent in contravention of, the Intercreditor Agreement.  To the extent
that any covenants, representations or warranties set forth in this Agreement
are untrue or incorrect solely as a result of the delivery to, or grant of
possession or control to, the Noteholder Collateral Agent in accordance with
this Section
8.21, such representation or warranty shall not be deemed to be untrue or
incorrect for purposes of this Agreement.

     

    8.22        Force
Majeure. In no
event shall the Noteholder Collateral Agent be responsible or liable for any
failure of delay in the performance of its obligations under this Agreement
arising out of or caused by, directly or indirectly, forces beyond its
reasonable control, including without limitation strikes, work stoppages,
accidents, acts of war or terrorism, civil or military disturbances, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunction of
utilities, communication, or computer (software or hardware)
services.

    


    8.23        Perfection in Certain
Collateral.  Notwithstanding anything herein to the contrary,
the Noteholder Collateral Agent agrees with the Grantors that, if and for so
long as, in the reasonable judgment of the Required Secured Parties (confirmed
in writing by notice delivered by the Noteholder Collateral Agent to the
Issuer), the cost of perfecting the Noteholder Collateral Agent’s Lien in any
item of Collateral shall be excessive in view of the benefits to be obtained by
the Noteholder Secured Parties from such perfection, the Grantors shall be
excused from the requirement that the Noteholder Collateral Agent’s Lien in such
item of Collateral be perfected until such time as the Required Secured Parties
shall confirm in writing to the Issuer that, in their reasonable judgment, such
situation no longer exists.  The Required Secured Parties may, but
shall not be obligated to, grant extensions of time for the perfection of
security interests in particular items of Collateral (including extensions
beyond the Closing Date for the perfection of security interests in any item of
Collateral existing on such date) where the Required Secured Parties reasonably
determine, in consultation with the Issuer, that perfection of the Noteholder
Collateral Agent’s Lien in such item of Collateral cannot be accomplished
without undue efforts or expense within the time or times provided therefor or
otherwise required by this Agreement or the other Note Documents.

     

    
      
         


      

      
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    8.24        ABL Priority
Collateral.
Notwithstanding anything to the contrary contained in this Agreement, if any
deadline with respect to ABL Priority Collateral to provide any information, any
agreements with third parties or a perfected security interest to the
Administrative Agent under the ABL Collateral Documents is extended or waived,
then any such corresponding deadline hereunder (if any) shall also be
automatically extended or waived, as applicable, hereunder.

    


    ARTICLE
IX


     

    NOTICES

     

    9.1          Sending
Notices.  Any
notice required or permitted to be given under this Agreement shall be sent by
United States mail, telecopier, personal delivery or nationally established
overnight courier service, and shall be deemed received (a) when received, if
sent by hand or overnight courier service, or mailed by certified or registered
mail notices or (b) when sent, if sent by telecopier (except that, if not given
during normal business hours for the recipient, shall be deemed to have been
given at the opening of business on the next Business Day for the recipient), in
each case addressed to the Grantors at the notice address set forth on Exhibit A, and to the
Noteholder Collateral Agent and the Noteholder Secured Parties at the addresses
set forth in accordance with Section 14.02 of the Indenture.

     

    9.2          Change in Address for
Notices.  Each
of the Grantors, the Noteholder Collateral Agent and the Noteholder Secured
Parties may change the address for service of notice upon it by a notice in
writing to the other parties.

     

    ARTICLE
X


     

    THE NOTEHOLDER COLLATERAL
AGENT

     

    U.S. Bank
National Association has been appointed Noteholder Collateral Agent for the
Noteholder Secured Parties hereunder pursuant to Article Nine and Section 12.10
of the Indenture.  It is expressly understood and agreed by the
parties to this Agreement that any authority conferred upon the Noteholder
Collateral Agent hereunder is subject to the terms of the delegation of
authority made by the Noteholder Secured Parties to the Noteholder Collateral
Agent pursuant to the Indenture, and that the Noteholder Collateral Agent has
agreed to act (and any successor Noteholder Collateral Agent shall act) as such
hereunder only on the express conditions contained in such Article Nine and
Section 12.10 of the Indenture.  Any successor Noteholder Collateral
Agent appointed pursuant to Article Nine of the Indenture shall be entitled to
all the rights, interests and benefits of the Noteholder Collateral Agent
hereunder.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

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        40

        
          

        

      

      
         


      

    

    


    IN
WITNESS WHEREOF, the Grantors and the Noteholder Collateral Agent have executed
this Agreement as of the date first above written.

     

    
      
        
          
            	
                    GRANTORS:

                  
	 
      
	
                    U.S.
      CONCRETE, INC., a Delaware corporation

                  
	 
      
	
                    By:

                  	
                    /s/ Michael W. Harlan

                  
	 
      	
                    Name: 
      Michael W. Harlan

                  
	 
      	
                    Title:   
      Chief Executive Officer and President

                  
	 
      	 
      
	
                    ALBERTA
      INVESTMENTS, INC.

                  
	
                    ALLIANCE
      HAULERS, INC.

                  
	
                    ATLAS
      REDI-MIX, LLC

                  
	
                    ATLAS-TUCK
      CONCRETE, INC.

                  
	
                    BEALL
      CONCRETE ENTERPRISES, LLC

                  
	
                    BEALL
      INDUSTRIES, INC.

                  
	
                    BEALL
      INVESTMENT CORPORATION, INC.

                  
	
                    BEALL
      MANAGEMENT, INC.

                  
	
                    HAMBURG
      QUARRY LIMITED LIABILITY COMPANY

                  
	
                    REDI-MIX
      CONCRETE, L.P.

                  
	
                    REDI-MIX
      GP, LLC

                  
	
                    REDI-MIX,
      LLC

                  
	 
      	 
      
	
                    By:

                  	
                    /s/ Michael W. Harlan

                  
	 
      	
                    Name:  Michael
      W. Harlan

                  
	 
      	
                    Title:    President

                  
	 
      	 
      
	
                    KURTZ
      GRAVEL COMPANY 

                    SUPERIOR
      HOLDINGS,
      INC.

                  
	
                    TITAN
      CONCRETE INDUSTRIES, INC.

                  
	
                    USC
      ATLANTIC, INC.

                  
	
                    USC
      MICHIGAN, INC.

                  
	 
      	 
      
	
                    By:

                  	
                    /s/ Michael W. Harlan

                  
	 
      	
                    Name: 
      Michael W. Harlan

                  
	 
      	
                    Title:   
      Vice President and
Secretary

                  


          

        

      

    

    


    
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                  EASTERN
      CONCRETE MATERIALS, INC.

                
	 
      	 
      
	
                  By:

                	
                  /s/ Michael W. Harlan

                
	 
      	
                  Name: 
      Michael W. Harlan

                
	 
      	
                  Title:  
       President and
Secretary

                


        

      

    

         

    
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                AMERICAN
      CONCRETE PRODUCTS, INC.

              
	
                BRECKENRIDGE
      READY MIX, INC.

              
	
                BUILDERS’
      REDI-MIX, LLC

              
	
                BWB,
      INC. OF MICHIGAN

              
	
                CENTRAL
      CONCRETE SUPPLY CO., INC.

              
	
                CENTRAL
      PRECAST CONCRETE, INC.

              
	
                INGRAM
      CONCRETE, LLC

              
	
                MG,
      LLC

              
	
                SAN
      DIEGO PRECAST CONCRETE, INC.

              
	
                SMITH
      PRE-CAST, INC.

              
	
                SIERRA
      PRECAST, 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

              
	 
      	 
      
	
                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
      ACQUISITION III, LLC

              
	
                CONCRETE
      ACQUISITION IV, LLC

              
	
                CONCRETE
      ACQUISITION V, LLC

              
	
                CONCRETE
      ACQUISITION VI, LLC

              
	
                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

              


      

    

    
         


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                RIVERSIDE
      MATERIALS, LLC

              
	 
      	 
      
	
                By:

              	
                /s/ Wallace H. Johnson

              
	 
      	
                Name: 
      Wallace H. Johnson

              
	 
      	
                Title:   
      President and Secretary

              


      

    

    
        


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                U.S.
      BANK NATIONAL ASSOCIATION, 

                as
      Noteholder Collateral Agent

              
	 
      	 
      
	
                By:

              	
                /s/ Wally Jones

              
	 
      	
                Name:  Wally
      Jones

              
	 
      	
                Title:    Vice
      President

              


      

    

    


    
      Signature
Page to Notes Pledge and Security Agreement