Document:

Exhibit
10.2

    

    EXECUTION
VERSION

    

    PLEDGE
AND SECURITY AGREEMENT

    

    Dated
as of May 3, 2010

    

    among

    

    U.S.
Concrete, Inc.

    as
a Grantor

    

    and

    

    Each
Other Grantor

    From
Time to Time Party Hereto

    

    and

    

    JPMorgan
Chase Bank, N.A.

    as
Administrative Agent

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    
      
        
          
            
              	
                      TABLE
      OF CONTENTS

                    	
                       

                    
	
                      ARTICLE
      I          Defined
      Terms

                    	
                      2

                    
	
                      Section
      1.1

                    	
                      Definitions

                    	
                      2

                    
	
                      Section
      1.2

                    	
                      Certain
      Other Terms

                    	
                      6

                    
	
                      ARTICLE
      II         Grant
      of
      Security
      Interest

                    	
                      7

                    
	
                      Section
      2.1

                    	
                      Collateral

                    	
                      7

                    
	
                      Section
      2.2

                    	
                      Grant
      of Security Interest in Collateral

                    	
                      8

                    
	
                      Section
      2.3

                    	
                      Cash
      Collateral Account

                    	
                      9

                    
	
                      ARTICLE
      III       Representations
      and
      Warranties

                    	
                      9

                    
	
                      Section
      3.1

                    	
                      Title;
      No Other Liens

                    	
                      9

                    
	
                      Section
      3.2

                    	
                      Perfection
      and Priority

                    	
                      9

                    
	
                      Section
      3.3

                    	
                      Jurisdiction
      of Organization; Chief Executive Office

                    	
                      10

                    
	
                      Section
      3.4

                    	
                      Inventory
      and Equipment

                    	
                      10

                    
	
                      Section
      3.5

                    	
                      Pledged
      Collateral

                    	
                      10

                    
	
                      Section
      3.6

                    	
                      Accounts

                    	
                      11

                    
	
                      Section
      3.7

                    	
                      Intellectual
      Property

                    	
                      12

                    
	
                      Section
      3.8

                    	
                      Deposit
      Accounts; Securities Accounts

                    	
                      12

                    
	
                      Section
      3.9

                    	
                      Commercial
      Tort Claims

                    	
                      12

                    
	
                      Section
      3.10

                    	
                      Letter-of-Credit
      Rights and Chattel Paper

                    	
                      13

                    
	
                      Section
      3.11

                    	
                      Filing
      Requirements

                    	
                      13

                    
	
                      Section
      3.12

                    	
                      No
      Financing Statements, Security Agreements

                    	
                      13

                    
	
                      ARTICLE
      IV       Covenants

                    	
                      13

                    
	
                      Section
      4.1

                    	
                      Generally

                    	
                      13

                    
	
                      Section
      4.2

                    	
                      Maintenance
      of Perfected Security Interest; Further Documentation

                    	
                      13

                    
	
                      Section
      4.3

                    	
                      Changes
      in Locations, Name, Etc.

                    	
                      14

                    
	
                      Section
      4.4

                    	
                      Pledged
      Collateral

                    	
                      15

                    
	
                      Section
      4.5

                    	
                      Accounts

                    	
                      16

                    
	
                      Section
      4.6

                    	
                      Inventory
      and Equipment

                    	
                      18

                    
	
                      Section
      4.7

                    	
                      Delivery
      of Instruments and Chattel Paper

                    	
                      18

                    
	
                      Section
      4.8

                    	
                      Intellectual
      Property

                    	
                      18

                    
	
                      Section
      4.9

                    	
                      Vehicles

                    	
                      20

                    
	
                      Section
      4.10

                    	
                      Notice
      of Commercial Tort Claims

                    	
                      20

                    

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  Section
      4.11

                	
                  Disposition
      of Collateral and Liens

                	
                  21

                
	
                  Section
      4.12

                	
                  Letter-of-Credit
      Rights

                	
                  21

                
	
                  Section
      4.13

                	
                  Federal,
      State or Municipal Claims

                	
                  21

                
	
                  Section
      4.14

                	
                  Insurance

                	
                  21

                
	
                  Section
      4.15

                	
                  Collateral
      Access Agreements

                	
                  22

                
	
                  ARTICLE
      V         Remedial
      Provisions

                	
                  22

                
	
                  Section
      5.1

                	
                  Code
      and Other Remedies

                	
                  22

                
	
                  Section
      5.2

                	
                  Pledged
      Collateral

                	
                  23

                
	
                  Section
      5.3

                	
                  Proceeds
      to be Turned Over To Administrative Agent

                	
                  24

                
	
                  Section
      5.4

                	
                  Registration
      Rights

                	
                  24

                
	
                  Section
      5.5

                	
                  Deficiency

                	
                  25

                
	
                  Section
      5.6

                	
                  Waivers

                	
                  25

                
	
                  ARTICLE
      VI       The
      Administrative
      Agent

                	
                  25

                
	
                  Section
      6.1

                	
                  Administrative
      Agent’s Appointment as Attorney-in-Fact

                	
                  25

                
	
                  Section
      6.2

                	
                  Duty
      of Administrative Agent

                	
                  27

                
	
                  Section
      6.3

                	
                  Authorization
      of Financing Statements

                	
                  28

                
	
                  Section
      6.4

                	
                  Authority
      of Administrative Agent

                	
                  28

                
	
                  ARTICLE
      VII      Miscellaneous

                	
                  28

                
	
                  Section
      7.1

                	
                  Amendments
      in Writing

                	
                  28

                
	
                  Section
      7.2

                	
                  Notices

                	
                  29

                
	
                  Section
      7.3

                	
                  No
      Waiver by Course of Conduct; Cumulative Remedies

                	
                  29

                
	
                  Section
      7.4

                	
                  Successors
      and Assigns

                	
                  29

                
	
                  Section
      7.5

                	
                  Counterparts

                	
                  29

                
	
                  Section
      7.6

                	
                  Severability

                	
                  29

                
	
                  Section
      7.7

                	
                  Section
      Headings

                	
                  30

                
	
                  Section
      7.8

                	
                  Entire
      Agreement

                	
                  30

                
	
                  Section
      7.9

                	
                  Governing
      Law

                	
                  30

                
	
                  Section
      7.10

                	
                  Additional
      Grantors

                	
                  30

                
	
                  Section
      7.11

                	
                  Release
      of Collateral

                	
                  30

                
	
                  Section
      7.12

                	
                  Termination.

                	
                  31

                
	
                  Section
      7.13

                	
                  Reinstatement

                	
                  31

                
	
                  Section
      7.14

                	
                  Interim
      Order and Final Order

                	
                  31

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annexes and
Schedules

    

    
      	
              Annex
      I

            	
              Form of Pledge
  Amendment

            
	
              Annex
      II

            	
              Form of Joinder
  Agreement

            
	
              Annex
      III

            	
              Form of Short Form Intellectual
      Property Security Agreement

            
	 
      	 
      
	
              Schedule 1

            	
              Jurisdiction of Organization;
      Principal Executive Office

            
	
              Schedule 2

            	
              Pledged
Collateral

            
	
              Schedule 3

            	
              Filings

            
	
              Schedule 4

            	
              Location of Inventory and
      Equipment

            
	
              Schedule 5

            	
              Intellectual
    Property

            
	
              Schedule 6

            	
              Bank Accounts; Control
      Accounts

            
	
              Schedule 7

            	
              Commercial Tort
      Claims

            
	
              Schedule
      8

            	
              Letter
      of Credit Rights and Chattel Paper

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

      Witnesseth:

      

      Whereas,
on April 29, 2010, the
Debtors (such term and other capitalized terms used in these preliminary
statements being used with the meanings given to such terms in Section 1.1)
filed voluntary petitions with the Bankruptcy Court initiating the Cases and
have continued in the possession of their assets and in the management of their
businesses pursuant to Bankruptcy Code Sections 1107 and
1108;

       

      Whereas,
the Lenders are making available to the Borrower a $80,000,000
debtor-in-possession term loan and revolving credit facility pursuant to the
Revolving Credit, Term Loan and Guarantee Agreement, dated as of May 3, 2010 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Credit
Agreement”), among the Borrower, each of the direct and indirect Domestic
Subsidiaries of the Borrower signatory thereto, the Lenders and JPMorgan Chase
Bank, N.A., as Administrative Agent and Issuer;

       

      Whereas,
pursuant to the Credit Agreement, the Lenders and Issuers have severally agreed
to make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;

       

      Whereas,
the Grantors other than the Borrower have guaranteed the Obligations pursuant to
Article XI of the Credit Agreement;

       

      Whereas,
it is a condition precedent to the obligation of the Lenders and Issuers to make
their respective extensions of credit to the Borrower under the Credit Agreement
that the Debtors shall have granted a Lien on certain of the Debtors’ assets and
properties pursuant to Sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code,
in each case as more fully set forth in the Orders, and that the Specified
Non-Filers shall have granted a lien on certain of the Specified Non-Filers’
assets pursuant to this Agreement; and

       

      Whereas,
to supplement the Orders without in any way diminishing or limiting the effect
of the Orders or the Liens granted thereunder, the parties hereto desire to more
fully set forth their respective rights in connection with the Liens granted
under the Orders;

       

      Now,
therefore,
in consideration of the premises and to induce the Lenders and Issuers to make
their respective extensions of credit to the Borrower under the Credit Agreement
and for other good and valuable consideration the receipt of which is hereby
acknowledged, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Secured Parties, as follows:

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                ARTICLE I

              	
                Defined
      Terms

              

      

       

      
        
          	 	
                  Section1.1

                	
                  Definitions

                

        

      

       

      (a)           Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
have the meanings given to them in the Credit Agreement.

       

      (b)           Terms
used herein without definition that are defined in the UCC have the meanings
given to them in the UCC, including the following terms (which are capitalized
herein):

       

      “Account
Debtor”

       

      “Account”

       

      “Certificated
Security”

       

      “Chattel
Paper”

       

      “Commercial
Tort Claim”

       

      “Commodity
Account”

       

      “Control
Account”

       

      “Deposit
Account”

       

      “Documents”

       

      “Electronic
Chattel Paper”

       

      “Entitlement
Holder”

       

      “Entitlement
Order”

       

      “Equipment”

       

      “Financial
Asset”

       

      “Fixtures”

       

      “General
Intangible”

       

      “Goods”

       

      “Instruments”

       

      “Inventory”

       

      “Investment
Property”

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      “Letter-of-Credit
Right”

       

      “Proceeds”

       

      “Securities
Account”

       

      “Securities
Intermediary”

       

      “Security”

       

      “Security
Entitlement”

       

      (c)           The
following terms shall have the following meanings:

       

      “Additional Pledged
Collateral” means any Pledged Collateral acquired by any Grantor after
the date hereof and in which a security interest is granted pursuant to Section 2.2, including,
to the extent a security interest is granted therein pursuant to Section 2.2,
(i) all Stock and Stock Equivalents of any Person that are acquired by any
Grantor after the date hereof, together with all certificates, instruments or
other documents representing any of the foregoing and all Security Entitlements
of any Grantor in respect of any of the foregoing, (ii) all additional
Indebtedness from time to time owed to any Grantor by any obligor on the Pledged
Debt Instruments and the Instruments evidencing such Indebtedness and
(iii) all interest, cash, Instruments and other property or Proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any of the foregoing.  “Additional Pledged
Collateral” may be General Intangibles, Instruments or Investment
Property.

       

      “Agreement” means this Pledge
and Security Agreement.

       

      “Collateral” has the meaning
specified in Section 2.1.

       

      “Collateral Access Agreement”
means any landlord waiver or other agreement, in form and substance reasonably
satisfactory to the Administrative Agent, between the Administrative Agent and
any third party (including any bailee, consignee, customs broker, or other
similar Person) in possession of any Collateral or any landlord of any Loan
Party for any real property where any Collateral is located, as such landlord
waiver or other agreement may be amended, restated, supplemented or otherwise
modified from time to time.

      

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

      

      “Copyright Licenses” means any
written agreement naming any Grantor as licensor or licensee granting any right
under any Copyright, including the grant of any right to copy, publicly perform,
create derivative works, manufacture, distribute, exploit or sell materials
derived from any Copyright.

       

      “Copyrights” means
(a) all copyrights and works of authorship arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof, and
(b) the right to obtain all renewals thereof.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      “Deposit Account Control
Agreement” means a letter agreement, in form and substance reasonably
satisfactory to the Administrative Agent, executed by the Grantor, the
Administrative Agent and the relevant financial institution.

       

      “Designated Collateral” means
(a) leasehold interests in Real Property and (b) certificates of title for
vehicles of the Loan Parties that do not constitute Borrowing Base
Collateral.

       

      “Excluded Property” means,
collectively, (i) Excluded Stock, (ii) any permit, lease, license contract or
other agreement held by any Grantor to the extent that any Requirement of Law
applicable thereto prohibits the creation of a Lien thereon, but only, in each
case, to the extent, and for so long as, such prohibition is not terminated or
rendered unenforceable or otherwise deemed ineffective by the UCC or any other
Requirement of Law, (iii) Equipment owned by any Grantor that is subject to
a purchase money Lien or a Capital Lease permitted pursuant to the terms of the
Credit Agreement, but only for so long as the contract or other agreement in
which such Lien is granted (or in the documentation providing for such Capital
Lease) prohibits or requires the consent of any Person other than the Borrower
and its Affiliates as a condition to the creation of any other Lien on such
Equipment and only to the extent such prohibition or requirement is not rendered
unenforceable or otherwise deemed ineffective by the UCC or any other
Requirement of Law, (iv) any Trademark application filed on an "intent-to-use"
basis, prior to the
filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an
“Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with
respect thereto, solely to the extent that, and solely during the period in
which, the grant of a security interest would impair the validity and
enforceability of any registration that issues from such intent-to-use
application under applicable federal law, (v) the Excluded Collateral and
(vi) only with respect to the Specified Non-Filers, any permit, lease, license,
contract, instrument or other agreement held by any Grantor that prohibits or
requires the consent of any Person other than the Borrower and its Affiliates as
a condition to the creation by such Grantor of a Lien thereon and only for so
long as, such prohibition is not terminated or rendered unenforceable or
otherwise deemed ineffective by the UCC or any other Requirement of Law; provided, however, “Excluded Property”
shall not include any Proceeds, substitutions or replacements of Excluded
Property (unless such Proceeds, substitutions or replacements would constitute
Excluded Property).

       

      “Intellectual Property” means,
collectively, all rights, priorities and privileges of any Grantor relating to
intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including Copyrights, Copyright Licenses, Patents,
Patent Licenses, Trademarks, Trademark Licenses, trade secrets and Internet
domain names, and all rights to sue at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom.

       

      “Intercompany Note” means any
promissory note evidencing loans made by any Grantor or any of its Subsidiaries
to any of its Subsidiaries or another Grantor.

       

      “LLC” means each limited
liability company in which a Grantor has an interest, including those set forth
on Schedule 2.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      “LLC Agreement” means each
operating agreement with respect to a LLC, as each agreement has heretofore
been, and may hereafter be, amended, restated, supplemented or otherwise
modified from time to time.

       

      "Material Intellectual
Property" means Intellectual Property owned by or licensed to a Grantor
and material to the conduct of any Grantor's business.

       

      “Partnership” means each
partnership in which a Grantor has an interest, including those set forth on
Schedule 2.

       

      “Partnership Agreement” means
each partnership agreement governing a Partnership, as each such agreement has
heretofore been, and may hereafter be, amended, restated, supplemented or
otherwise modified.

       

      “Patents” means (a) all
letters patent of the United States, any other country or any political
subdivision thereof and all reissues and extensions thereof, (b) all
applications for letters patent of the United States or any other country and
all divisions, continuations and continuations-in-part thereof and (c) all
rights to obtain any reissues or extensions of the foregoing.

       

      “Patent License” means all
agreements, whether written or oral, providing for the grant by or to any
Grantor of any right to manufacture, have manufactured, use, import, sell or
offer for sale any invention covered in whole or in part by a
Patent.

       

      “Permitted Liens” has the
meaning assigned to such term in Section 3.1.

       

      “Pledged Certificated Stock”
means all Certificated Securities and any other Stock and Stock Equivalent of a
Person evidenced by a certificate, Instrument or other equivalent document, in
each case owned by any Grantor, including all Stock listed on Schedule 2.

       

      “Pledged Collateral” means,
collectively, the Pledged Stock, Pledged Debt Instruments, any other Investment
Property of any Grantor, all chattel paper, electronic chattel paper,
certificates or other Instruments representing any of the foregoing and all
Security Entitlements of any Grantor in respect of any of the
foregoing.  Pledged Collateral may be General Intangibles, Instruments
or Investment Property.

       

      “Pledged Debt Instruments”
means all right, title and interest of any Grantor in Instruments evidencing any
Indebtedness owed to such Grantor, including all Indebtedness described on Schedule 2, issued by
the obligors named therein.

       

      “Pledged Stock” means all
Pledged Certificated Stock and all Pledged Uncertificated Stock.  For
purposes of this Agreement, the term “Pledged Stock” shall not
include any Excluded Stock.

       

      “Pledged Uncertificated Stock”
means any Stock or Stock Equivalent of any Person that is not a Pledged
Certificated Stock, including all right, title and interest of any Grantor as a
limited or general partner in any Partnership or as a member of any LLC and all
right, title and interest of any Grantor in, to and under any Partnership
Agreement or LLC Agreement to which it is a party.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

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

      

      “Securities Account Control
Agreement” means a letter agreement, in form and substance reasonably
satisfactory to the Administrative Agent, executed by the relevant Grantor, the
Administrative Agent and the relevant Approved Securities
Intermediary.

       

      “Securities Act” means the
Securities Act of 1933, as amended.

       

      “Trademark License” means any
agreement, whether written or oral, providing for the grant by or to any Grantor
of any right to use any Trademark.

       

      “Trademarks” means
(a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers, and, in each case, all goodwill associated
therewith, whether now existing or hereafter adopted or acquired, all
registrations and recordings thereof and all applications in connection
therewith, in each case whether in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any state thereof or
any other country or any political subdivision thereof, or otherwise, and all
common-law rights related thereto, and (b) the right to obtain all renewals
thereof.

       

      “UCC” means the Uniform
Commercial Code as from time to time in effect in the State of New York; provided, however, that, in the event
that, by reason of mandatory provisions of law, any of the attachment,
perfection or priority of the Administrative Agent’s and the Secured Parties’
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such attachment, perfection or priority and for
purposes of definitions related to such provisions.

       

      “Vehicles” means all vehicles
covered by a certificate of title law of any state.

       

      
        	
                 
      

              	
                Section 1.2

              	
                Certain
      Other Terms

              

      

       

      (a)           In
this Agreement, in the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but
excluding” and the word “through” means “to and
including.”

       

      (b)           The
terms “herein,” “hereof,” “hereto” and “hereunder” and similar terms
refer to this Agreement as a whole and not to any particular Article, Section,
subsection or clause in this Agreement.

       

      (c)           References
herein to an Annex, Schedule, Article, Section, subsection or clause refer to
the appropriate Annex or Schedule to, or Article, Section, subsection or clause
in this Agreement.

       

      (d)           The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      (e)           Where
the context requires, provisions relating to any Collateral, when used in
relation to a Grantor, shall refer to such Grantor’s Collateral or any relevant
part thereof.

       

      (f)           Any
reference in this Agreement to a Loan Document shall include all appendices,
exhibits and schedules thereto, and, unless specifically stated otherwise all
amendments, restatements, supplements or other modifications thereto, and as the
same may be in effect at any time such reference becomes operative.

       

      (g)           The
term “including” means
“including without limitation” except when used in the computation of time
periods.

       

      (h)           The
terms “Lender,” “Issuer,” “Administrative Agent” and
“Secured Party” include
their respective successors.

       

      (i)           References
in this Agreement to any statute shall be to such statute as amended or modified
and in effect from time to time.

       

      (j)           All
references to “knowledge” of any Grantor means the actual knowledge of a
Responsible Officer.

       

      (k)           The
words “asset” and “property” shall be construed as having the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including, without limitation, cash, securities, accounts and
contract rights.

       

      (l)           Any
reference herein to any Person shall be construed to include such Person’s
permitted successors and assigns.

       

      
        	
                 
      

              	
                ARTICLE II

              	
                Grant
      of
      Security
      Interest

              

      

       

      
        	
                 
      

              	
                Section 2.1

              	
                Collateral

              

      

       

      For the
purposes of this Agreement, all of the following property now owned or at any
time hereafter acquired by a Grantor or in which a Grantor now has or at any
time in the future may acquire any right, title or interests is collectively
referred to as the “Collateral”:

       

      (a)           all
Accounts;

       

      (b)           all
Chattel Paper;

       

      (c)           all
Deposit Accounts;

       

      (d)           all
Documents;

       

      (e)           all
Equipment;

       

      (f)           
all Fixtures;

       

      (g)           all
General Intangibles;

       

      (h)           all
Instruments;

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      (i)           all
Intellectual Property;

       

      (j)           all
Inventory;

       

      (k)          all
Investment Property;

       

      (l)           all
Letter-of-Credit Rights;

       

      (m)         all
Vehicles;

       

      (n)          the
Commercial Tort Claims described on Schedule 7 and on any
supplement thereto received by the Administrative Agent pursuant to Section 4.10;

       

      (o)          all
cash or Cash Equivalents

       

      (p)          all
books and records pertaining to the other property described in this Section 2.1;

       

      (q)          all
property of any Grantor held by the Administrative Agent or any other Secured
Party, including all property of every description, in the possession or custody
of or in transit to the Administrative Agent or such Secured Party for any
purpose, including safekeeping, collection or pledge, for the account of such
Grantor or as to which such Grantor may have any right in or power to transfer
such property;

       

      (r)           all
other Goods and real and personal property of such Grantor, whether tangible or
intangible and wherever located; and

       

      (s)           to
the extent not otherwise included, all Proceeds;

       

      provided, however, that
“Collateral” (and each
defined term used in the definition of Collateral) shall not include any
Excluded Property; and provided, further, that if and when any
property shall cease to be Excluded Property, such property shall be deemed at
all times from and after the date hereof to constitute Collateral.

       

      
        	
                 
      

              	
                Section 2.2

              	
                Grant
      of Security Interest in Collateral

              

      

       

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

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 2.3

              	
                Cash
      Collateral Account

              

      

       

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

       

      
        	
                 
      

              	
                ARTICLE
III

              	
                Representations
      and
      Warranties

              

      

       

      To induce
the Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement, each Grantor hereby represents and warrants each of the following to
the Administrative Agent, the Lenders, the Issuers and the other Secured Parties
for itself only and its property:

       

      
        	
                 
      

              	
                Section 3.1

              	
                Title;
      No Other Liens

              

      

       

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

       

      
        	
                 
      

              	
                Section 3.2

              	
                Perfection
      and Priority

              

      

       

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

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 3.3

              	
                Jurisdiction
      of Organization; Chief Executive
Office

              

      

       

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

       

      
        	
                 
      

              	
                Section 3.4

              	
                Inventory
      and Equipment

              

      

       

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

       

      
        	
                 
      

              	
                Section 3.5

              	
                Pledged
      Collateral

              

      

       

      (a)          The
Pledged Stock pledged hereunder by such Grantor is listed on Schedule 2 and
constitutes that percentage of the issued and outstanding equity of all classes
of each issuer thereof as set forth on Schedule 2.

       

      (b)          All
of the Pledged Stock pledged by such Grantor (to the extent such concepts are
relevant with respect to such Pledged Stock) has been duly authorized, validly
issued and is fully paid and nonassessable.

       

      (c)           Each
of the Pledged Stock pledged by such Grantor constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, and general equitable
principles (whether considered in a proceeding in equity or at
law).

       

      (d)          All
Pledged Collateral pledged by such Grantor and, if applicable, its Additional
Pledged Collateral, consisting of Certificated Securities or Instruments has
been delivered to the Administrative Agent in accordance with Section 4.4(a) and
Section 7.12 of the Credit Agreement.

       

      (e)           All
Pledged Collateral pledged by such Grantor held by a Securities Intermediary in
a Securities Account is in a Control Account, provided that the Borrower
may maintain a Securities Account with Merrill Lynch which is not a Control
Account in accordance with Section 7.13(f) of the Credit
Agreement.

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

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

       

      
        	
                 
      

              	
                Section 3.6

              	
                Accounts

              

      

       

      (a)           No
amount payable to such Grantor under or in connection with its Account is
evidenced by any Instrument or Chattel Paper that has not been delivered to the
Administrative Agent, properly endorsed for transfer, to the extent delivery is
required by Section 4.4.

       

      (b)           The
names of the obligors, amounts owing, due dates and other information with
respect to its Accounts and Chattel Paper are and will be correctly stated in
all material respects in the records of such Grantor relating thereto and in all
invoices and Collateral Reports with respect thereto furnished to the
Administrative Agent by such Grantor from time to time and such Accounts or
Chattel Paper, as the case may be, and all records relating thereto, are genuine
and in all material respects what they purport to be.

       

      (c)           With
respect to its Accounts, except as specifically disclosed on the most recent
Collateral Report, (i) all Accounts are Eligible Receivables; (ii) all Accounts
represent bona fide sales of Inventory or rendering of services to Account
Debtors in the ordinary course of such Grantor’s business and are not evidenced
by a judgment, Instrument or Chattel Paper; (iii) to such Grantor’s knowledge,
there are no setoffs, claims or disputes existing or asserted against such
Grantor with respect thereto and such Grantor has not made any agreement with
any Account Debtor for any extension of time for the payment thereof, any
compromise or settlement for less than the full amount thereof, any release of
any Account Debtor from liability therefor, or any deduction therefrom except an
extension, discount or allowance allowed by such Grantor in the ordinary course
of its business or as deemed necessary by such Grantor in its reasonable credit
judgment (exercised in good faith) for prompt payment; (iv) to such Grantor’s
knowledge, there are no facts, events or occurrences which materially impair the
validity or enforceability thereof or could reasonably be expected to materially
reduce the amount payable thereunder as shown on such Grantor’s books and
records and any invoices, statements and Collateral Reports with respect
thereto; and (v) such Grantor has not received any notice of proceedings or
actions which are reasonably believed in good faith to be threatened or pending
against any Account Debtor which might result in any material adverse change in
such Account Debtor’s financial condition.

       

      (d)           In
addition, with respect to all of its Accounts, except as specifically disclosed
on the most recent Collateral Report, (i) the amounts shown on all invoices,
statements and Collateral Reports with respect thereto are actually and
absolutely owing to such Grantor as indicated thereon and are not in any way
contingent; (ii) no payments have been or shall be made thereon except payments
delivered to a Deposit Account subject to a Deposit Account Control Agreement
pursuant to the Credit Agreement; and (iii) to such Grantor’s knowledge, all
Account Debtors have the capacity to contract.

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 3.7

              	
                Intellectual
      Property

              

      

       

      (a)           Schedule 5 lists all
Material Intellectual Property of such Grantor on the date hereof, separately
identifying that owned by such Grantor and that licensed to such
Grantor.  The Material Intellectual Property set forth on Schedule 5 for such
Grantor constitutes all of the intellectual property rights necessary to conduct
its business except to the extent the failure to so maintain or have rights
thereto could not reasonably be expected to have a Material Adverse
Effect.

       

      (b)           All
Material Intellectual Property owned by such Grantor is valid, subsisting,
unexpired and enforceable, has not been adjudged invalid and has not been
abandoned and the use thereof in the business of such Grantor does not infringe,
misappropriate, dilute or violate the intellectual property rights of any other
Person.

       

      (c)           Except
as set forth in Schedule 5, none of the
Material Intellectual Property owned by such Grantor on the date hereof is the
subject of any licensing or franchise agreement pursuant to which such Grantor
is the licensor or franchisor.

       

      (d)           No
holding, decision or judgment has been rendered by any Governmental Authority
that would limit, cancel or question the validity of, or such Grantor’s rights
in, any Material Intellectual Property that could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

       

      (e)           No
action or proceeding seeking to limit, cancel or question the validity of any
Material Intellectual Property owned by such Grantor or such Grantor’s ownership
interest therein is pending or, to the knowledge of such Grantor, threatened
that could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.  There are no claims, judgments or
settlements to be paid by such Grantor relating to the Material Intellectual
Property that could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

       

      
        	
                 
      

              	
                Section 3.8

              	
                Deposit
      Accounts; Securities Accounts

              

      

       

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

       

      
        	
                 
      

              	
                Section 3.9

              	
                Commercial
      Tort Claims

              

      

       

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

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 3.10

              	
                Letter-of-Credit
      Rights and Chattel Paper

              

      

       

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

       

      
        	
                 
      

              	
                Section 3.11

              	
                Filing
      Requirements

              

      

       

      None of
the Collateral owned by it is of a type for which security interests or liens
may be perfected by filing under any federal statute except for (a) the
Vehicles, (b) Patents, Trademarks and Copyrights held by such Grantor and
described on Schedule 5 and (c) with respect to Receivables subject to the
Federal Assignment of Claims Act.

       

      
        	
                 
      

              	
                Section 3.12

              	
                No
      Financing Statements, Security
Agreements

              

      

       

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

       

      
        	
                 
      

              	
                ARTICLE IV

              	
                Covenants

              

      

       

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

       

      
        	
                 
      

              	
                Section 4.1

              	
                Generally

              

      

       

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

       

      
        	
                 
      

              	
                Section 4.2

              	
                Maintenance
      of Perfected Security Interest; Further
  Documentation

              

      

       

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

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

      (b)           Such
Grantor shall furnish to the Administrative Agent from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail and in form and substance
reasonably satisfactory to the Administrative Agent.

       

      (c)           At
any time and from time to time, upon the reasonable written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor
shall promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further action as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including the filing of any financing or continuation statement under the UCC
(or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby and the execution and, subject to Sections
7.13(a) and (f) of the Credit Agreement,  delivery of Deposit Account
Control Agreements and Securities Account Control Agreements with respect to the
Collateral required pursuant to the terms of the Credit Agreement.

       

      (d)           Such
Grantor will not authorize the filing of any financing statement naming it as
debtor covering all or any portion of the Collateral owned by it, except as
permitted pursuant to the terms of this Agreement and the Credit
Agreement.  Such Grantor acknowledges that it is not authorized to
file any financing statement or amendment or termination statement with respect
to any financing statement without the prior written consent of the
Administrative Agent, subject to such Grantor's rights under Section 9-509(d)(2)
of the UCC.

       

      (e)           Such
Grantor will not (i) maintain any Collateral (other than Inventory and Equipment
(w) in transit, (x) out for repair or refurbishment, (y) maintained at a
customer location or (z) in the possession of employees of the Grantors or any
Subsidiary in the ordinary course of business) owned by it at any location other
than those locations listed on Schedule 4 or (ii) otherwise
change, or add to, such locations without promptly sending notice to the
Administrative Agent.

       

      
        	
                 
      

              	
                Section 4.3

              	
                Changes
      in Locations, Name, Etc.

              

      

       

      (a)           Except
upon 15 days’ prior written notice to the Administrative Agent and delivery to
the Administrative Agent of all additional financing statements and other
documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein,
such Grantor shall not do any of the following:

       

      (i)           change
its jurisdiction of organization or its location, in each case from that
referred to in Section 3.3;
or

       

      (ii)           change
its legal name or organizational identification number, if any, or corporation,
limited liability company or other organizational structure to such an extent
that any financing statement filed in connection with this Agreement would
become misleading.

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

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

       

      
        	
                 
      

              	
                Section 4.4

              	
                Pledged
      Collateral

              

      

       

      (a)           Such
Grantor shall (i) deliver to the Administrative Agent, all certificates and
Instruments representing or evidencing any of its Pledged Collateral (including
Additional Pledged Collateral), whether now existing or hereafter acquired, in
suitable form for transfer by delivery or, as applicable, accompanied by such
Grantor’s endorsement, where necessary, or duly executed instruments of transfer
or assignment in blank, all in form and substance reasonably satisfactory to the
Administrative Agent, together, in respect of any Additional Pledged Collateral,
with a Pledge Amendment, duly executed by the Grantor, in substantially the form
of Annex I, an
acknowledgment and agreement to a Joinder Agreement duly executed by the
Grantor, in substantially the form of Annex II, or such other
documentation reasonably acceptable to the Administrative Agent and (ii)
maintain all other Pledged Collateral constituting Investment Property in a
Control Account. Such Grantor authorizes the Administrative Agent to attach each
Pledge Amendment to this Agreement. Upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall have the
right, at any time in its discretion and without notice to the Grantor, to
transfer to or to register in its name or in the name of its nominees any
Pledged Collateral. During the continuance of an Event of Default, the
Administrative Agent shall have the right upon reasonable request to exchange
any certificate or instrument representing or evidencing any Pledged Collateral
for certificates or instruments of smaller or larger denominations.

       

      (b)           Except
as provided in Article
V, such Grantor shall be entitled to receive all cash dividends paid in
respect of the Pledged Collateral (other than liquidating or dissolution
dividends) with respect to its Pledged Collateral. Upon the occurrence and
during the continuance of an Event of Default, any sums paid upon or in respect
of any Pledged Collateral upon the liquidation or dissolution of any issuer of
any Pledged Collateral, any distribution of capital made on or in respect of any
Pledged Collateral or any property distributed upon or with respect to any
Pledged Collateral pursuant to the recapitalization or reclassification of the
capital of any issuer of Pledged Collateral or pursuant to the reorganization
thereof shall, unless otherwise subject to a perfected security interest in
favor of the Administrative Agent, be delivered to the Administrative Agent to
be held by it hereunder as additional collateral security for the Obligations.
Upon the occurrence and during the continuance of an Event of Default, if any
sum of money or property so paid or distributed in respect of any Pledged
Collateral shall be received by such Grantor, such Grantor shall, until such
money or property is paid or delivered to the Administrative Agent, hold such
money or property in trust for the Administrative Agent, segregated from other
funds of such Grantor, as additional security for the Obligations.

       

      (c)           Except
as provided in Article
V, such Grantor shall be entitled to exercise all voting, consent and
corporate, partnership, limited liability company and similar rights with
respect to its Pledged Collateral; provided, however, that no vote shall
be cast, consent given or right exercised or other action taken by such Grantor
that would result in any violation of any provision of the Credit Agreement,
this Agreement or any other Loan Document or, without prior notice to the
Administrative Agent, enable or permit any issuer of Pledged Collateral to issue
any Stock or other equity Securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any Stock or other equity Securities of any nature of any issuer of Pledged
Collateral.

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

       

      (d)           Such
Grantor shall not grant “control” (within the meaning of such term under Article
9-106 of the UCC) over any Investment Property to any Person other than the
Administrative Agent.

       

      (e)           In
the case of each Grantor that is an issuer of Pledged Collateral, such Grantor
agrees to be bound by the terms of this Agreement relating to the Pledged
Collateral issued by it and shall comply with such terms insofar as such terms
are applicable to it.  In the case of any Grantor that is a holder of
any Stock or Stock Equivalent in any Person that is an issuer of Pledged
Collateral, such Grantor consents to (i) the exercise of the rights granted
to the Administrative Agent hereunder (including those described in Section 5.2), and (ii) the
pledge by each other Grantor, pursuant to the terms hereof, of the Pledged Stock
in such Person and to the transfer of such Pledged Stock to the Administrative
Agent or its nominee and to the substitution of the Administrative Agent or its
nominee as a holder of such Pledged Stock with all the rights, powers and duties
of other holders of Pledged Stock of the same class and, if the Grantor having
pledged such Pledged Stock hereunder had any right, power or duty at the time of
such pledge or at the time of such substitution beyond that of such other
holders, with all such additional rights, powers and duties.  Such
Grantor agrees to execute and deliver to the Administrative Agent such
certificates, agreements and other documents as may be reasonably necessary to
evidence, formalize or otherwise give effect to the consents given in this clause (e).

       

      (f)           Such
Grantor shall not, without the consent of the Administrative Agent, agree to any amendment of
any Constituent Document that in any way adversely affects the perfection of the
security interest of the Administrative Agent in the Pledged Collateral pledged
by such Grantor hereunder, including any amendment electing to treat any
membership interest or partnership interest that is part of the Pledged
Collateral as a “security” under Section 8-103 of the UCC, or any election
to turn any previously uncertificated Stock that is part of the Pledged
Collateral into certificated Stock.

       

      (g)           Except
to the extent permitted by the Credit Agreement, such Grantor will not (i)
permit or suffer any issuer of Stock constituting Pledged Collateral owned by it
to dissolve, merge, liquidate, retire any of its Stock or other Instruments or
Securities evidencing ownership, reduce its capital, sell or encumber all or
substantially all of its assets (except for Permitted Liens and sales of assets
permitted pursuant to Section 4.11) or merge or consolidate with any other
entity or (ii) vote any such Pledged Collateral in favor of any of the
foregoing.

       

      
        	
                 
      

              	
                Section 4.5

              	
                Accounts

              

      

       

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

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

       

      (b)           Such
Grantor will deliver to the Administrative Agent immediately upon its request
after the occurrence and during the continuance of an Event of Default duplicate
invoices with respect to each Account owned by it bearing such language of
assignment as the Administrative Agent shall specify.

       

      (c)           Subject
to Section 7.13 of the Credit Agreement, any payment of Accounts or payment in
respect of General Intangibles, when collected by any Grantor, shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent, in an Approved Deposit Account or a Cash Collateral
Account, subject to withdrawal by the Administrative Agent as provided in Section 5.3.  Until
so turned over or turned over, such payment shall be held by such Grantor in
trust for the Administrative Agent.

       

      (d)           At
the Administrative Agent’s request, at any time during the continuance of an
Event of Default, each Grantor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions that gave rise to its Accounts or payments in respect of its
General Intangibles.

       

      (e)           The
Administrative Agent may, without notice, at any time during the continuance of
an Event of Default,  limit or terminate the authority of a Grantor to
collect its Accounts or amounts due under General Intangibles or any
thereof.

       

      (f)           Upon
the request of the Administrative Agent, at any time during the continuance of
an Event of Default, each Grantor shall notify Account Debtors that its Accounts
or General Intangibles have been collaterally assigned to the Administrative
Agent and that payments in respect thereof shall be made directly to the
Administrative Agent.  In addition, the Administrative Agent may
enforce such Grantor’s rights against such Account Debtors and obligors of
General Intangibles.

       

      (g)           Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Accounts and payments in respect of General Intangibles to observe
and perform all the conditions and obligations to be observed and performed by
it thereunder, all in accordance with the terms of any agreement giving rise
thereto.  Unless expressly assumed, neither the Administrative Agent
nor any other Secured Party shall have any obligation or liability under any
agreement giving rise to an Account or a payment in respect of a General
Intangible by reason of or arising out of this Agreement or the receipt by the
Administrative Agent nor any other Secured Party of any payment relating
thereto, nor shall the Administrative Agent nor any other Secured Party be
obligated in any manner to perform any obligation of any Grantor under or
pursuant to any agreement giving rise to an Account or a payment in respect of a
General Intangible, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts that
may have been assigned to it or to which it may be entitled at any time or
times.

       

      (h)           At
the request of the Administrative Agent, such Grantor shall promptly take all
steps necessary to grant the Administrative Agent control of all electronic
chattel paper valued in excess of $100,000 in accordance with the UCC and all
“transferable records” as defined in each of the Uniform Electronic Transactions
Act and the Electronic Signatures in Global and National Commerce
Act.

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

       

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

       

      
        	
                 
      

              	
                Section 4.6

              	
                Inventory
      and Equipment

              

      

       

      (a)           Such
Grantor will do all things commercially reasonable to maintain, preserve,
protect and keep its Inventory and the Equipment necessary in the conduct of its
business in good repair and working and saleable condition, except for damaged
or defective goods arising in the ordinary course of such Grantor’s business and
except for ordinary wear and tear, casualty and condemnation in respect of the
Equipment, except where failure to do so could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

       

      (b)           Such
Grantor shall not permit any Equipment to become a fixture with respect to real
property or to become an accession with respect to other personal property with
respect to which real or personal property the Administrative Agent does not
have a Lien.

       

      
        	
                 
      

              	
                Section 4.7

              	
                Delivery
      of Instruments and Chattel Paper

              

      

       

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

       

      
        	
                 
      

              	
                Section 4.8

              	
                Intellectual
      Property

              

      

       

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

       

      (b)           Such
Grantor (either itself or through licensees) shall not do any act, or omit to do
any act, whereby any Patent that is Material Intellectual Property may become
forfeited, abandoned or dedicated to the public if such event could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

       

      (c)           Such
Grantor (either itself or through licensees) (i) shall not (and shall not
permit any licensee or sublicensee thereof to) do any act or omit to do any act
whereby any portion of the Copyrights that is Material Intellectual Property may
become invalidated or otherwise impaired and (ii) shall not (either itself
or through licensees) do any act whereby any portion of the Copyrights that is
Material Intellectual Property may fall into the public domain, except in each
case where such action or omission could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

       

      (d)           Such
Grantor (either itself or through licensees) shall not do any act, or omit to do
any act, whereby any trade secret that is Intellectual Property may become
publicly available or otherwise unprotectable, except in each case where such
action or omission could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.

       

      (e)           Such
Grantor (either itself or through licensees) shall not  knowingly
infringe, misappropriate, or violate the intellectual property rights of any
other Person.

       

      (f)         
  Such Grantor shall notify the Administrative Agent immediately if it
knows, or has reason to know, that any application or registration relating to
any Material Intellectual Property may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in any country) regarding such Grantor’s
ownership of, right to use, interest in, or the validity of, any Material
Intellectual Property or such Grantor’s right to register the same or to own and
maintain the same, in each case to the extent the same could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.

       

      (g)           Whenever
such Grantor, either by itself or through any agent, licensee or designee, shall
file an application for the registration of any Intellectual Property with the
United States Patent and Trademark Office, the United States Copyright Office or
any similar office or agency within or outside the United States or register any
Internet domain name, such Grantor shall report such filing to the
Administrative Agent within five Business Days after the last day of the fiscal
quarter in which such filing occurs.  Upon request of the
Administrative Agent, such Grantor shall promptly execute and deliver, and have
recorded, all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent’s security
interest in any Copyright, Patent, Trademark or Internet domain name and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby.

       

      (h)           Except
as determined by such Grantor in its reasonable business judgment (exercised in
good faith), such Grantor shall take all reasonable actions necessary or
requested by the Administrative Agent, including in any proceeding before the
United States Patent and Trademark Office, the United States Copyright Office or
any similar office or agency and any Internet domain name registrar, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of any Copyright, Trademark, Patent or Internet
domain name that is Material Intellectual Property, including filing of
applications for renewal, affidavits of use, affidavits of incontestability and
opposition and interference and cancellation proceedings.

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

       

      (i)           In
the event that any Intellectual Property is or has been infringed upon or
misappropriated or diluted by a third party in a manner which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, such Grantor shall notify the Administrative Agent promptly
after such Grantor obtains knowledge thereof.  Such Grantor shall take
appropriate action in response to such infringement, misappropriation of
dilution, including promptly bringing suit for infringement, misappropriation or
dilution and to recover all damages for such infringement, misappropriation of
dilution, and shall take such other actions may be appropriate in its reasonable
judgment under the circumstances to protect such Material Intellectual
Property.

       

      (j)           Unless
otherwise agreed to by the Administrative Agent, such Grantor shall execute and
deliver to the Administrative Agent for filing in (i) the United States
Copyright Office a short-form copyright security agreement in the form attached
hereto as Annex III, (ii) in
the United States Patent and Trademark Office and with the Secretary of State of
all appropriate States of the United States a short-form patent security
agreement in the form attached hereto as Annex III,
(iii) the United States Patent and Trademark Office a short-form trademark
security agreement in form attached hereto as Annex III and
(iv) with the appropriate Internet domain name registrar, a duly executed
form of assignment of such Internet domain name to the Administrative Agent
(together with appropriate supporting documentation as may be requested by the
Administrative Agent) in form and substance reasonably acceptable to the
Administrative Agent.  In the case of clause (iv) above, such
Grantor hereby authorizes the Administrative Agent to file such assignment in
such Grantor’s name and to otherwise perform in the name of such Grantor all
other necessary actions to complete such assignment, and each Grantor agrees to
perform all appropriate actions deemed necessary by the Administrative Agent for
the Administrative Agent to ensure such Internet domain name is registered in
the name of the Administrative Agent.

       

      
        	
                 
      

              	
                Section 4.9

              	
                Vehicles

              

      

       

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

       

      
        	
                 
      

              	
                Section 4.10

              	
                Notice
      of Commercial Tort Claims

              

      

       

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

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 4.11

              	
                Disposition
      of Collateral and Liens

              

      

       

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

       

      
        	
                 
      

              	
                Section 4.12

              	
                Letter-of-Credit
      Rights

              

      

       

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

      

      
        	 	
                Section 4.13
      

              	
                Federal,
      State or Municipal Claims 

              

      

       

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

      

      
        	 	
                Section 4.14

              	
                Insurance

              

      

       

      (a)           
All insurance policies required hereunder and under Section 4.13 of the Credit
Agreement shall name the Administrative Agent (for the benefit of the
Administrative Agent and the Lenders) as an additional insured or as loss payee,
as applicable, and shall contain loss payable clauses or mortgagee clauses,
through endorsements in form and substance reasonably satisfactory to the
Administrative Agent, which provide that such policy and loss payable or
mortgagee clauses may be canceled, amended, or terminated only upon at least
thirty days prior written notice given to the Administrative Agent.

       

      (b)           All
premiums on any such insurance shall be paid when due by such
Grantor.  If such Grantor fails to obtain any insurance as required by
this Section, the Administrative Agent may obtain such insurance at the
Borrower’s expense after the occurrence and during the continuance of an Event
of Default. By purchasing such insurance, the Administrative Agent shall not be
deemed to have waived any Default arising from the Grantor's failure to maintain
such insurance or pay any premiums therefor.

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 4.15

              	
                Collateral
      Access Agreements

              

      

       

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

       

      
        	
                 
      

              	
                ARTICLE V

              	
                Remedial
      Provisions

              

      

       

      
        	
                 
      

              	
                Section 5.1

              	
                Code
      and Other Remedies

              

      

       

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

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 5.2

              	
                Pledged
      Collateral

              

      

       

      (a)           During
the continuance of an Event of Default and subject to the terms of the Orders,
upon notice by the Administrative Agent to the relevant Grantor or Grantors,
(i) the Administrative Agent shall have the right to receive any Proceeds
of the Pledged Collateral and make application thereof to the Obligations in the
order set forth in the Credit Agreement and (ii) the Administrative Agent
or its nominee may exercise (A) any voting, consent, corporate and other
right pertaining to the Pledged Collateral at any meeting of shareholders,
partners or members, as the case may be, of the relevant issuer or issuers of
Pledged Collateral or otherwise and (B) any right of conversion, exchange
and subscription and any other right, privilege or option pertaining to the
Pledged Collateral as if it were the absolute owner thereof (including the right
to exchange at its discretion any of the Pledged Collateral upon the merger,
amalgamation, consolidation, reorganization, recapitalization or other
fundamental change in the corporate or equivalent structure of any issuer of
Pledged Stock, the right to deposit and deliver any Pledged Collateral with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it; provided, however, that the
Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.

       

      (b)           In
order to permit the Administrative Agent to exercise the voting and other
consensual rights that it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions that it may be entitled to receive
hereunder, (i) each Grantor shall promptly execute and deliver (or cause to
be executed and delivered) to the Administrative Agent all such proxies,
dividend payment orders and other instruments as the Administrative Agent may
from time to time reasonably request, which proxies shall be effective only
during the continuance of an Event of Default and (ii) without limiting the
effect of clause (i)
above, such Grantor hereby grants to the Administrative Agent an
irrevocable proxy to vote all or any part of the Pledged Collateral and to
exercise all other rights, powers, privileges and remedies to which a holder of
the Pledged Collateral would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case may
be, and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any Pledged
Collateral on the record books of the issuer thereof) by any other person
(including the issuer of such Pledged Collateral or any officer or agent
thereof), during the continuance of an Event of Default and which proxy shall
only terminate upon the payment in full of the Obligations.

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

       

      (c)           Each
Grantor hereby expressly authorizes and instructs each issuer of any Pledged
Collateral pledged hereunder by such Grantor to (i) comply with any
instruction received by it from the Administrative Agent in writing that
(A) states that an Event of Default has occurred and is continuing and
(B) is otherwise in accordance with the terms of this Agreement, without
any other or further instructions from such Grantor, and each Grantor agrees
that such issuer shall be fully protected in so complying and (ii) unless
otherwise expressly permitted hereby or Section 8.10 of the Credit Agreement,
pay any dividend or other payment with respect to such Pledged Collateral
directly to the Administrative Agent.

       

      (d)           After
the Administrative Agent acknowledges that all Events of Default have been cured
or waived in accordance with the provisions of the Credit Agreement, and so long
as the Obligations shall not have been accelerated, each Grantor shall have the
right to exercise the voting and other consensual rights and powers that it
would have otherwise been entitled to pursuant to Section 4.4(c), and
receive dividends and other distributions it would have been authorized to
receive pursuant to Section 4.4(b).  After the Administrative
Agent acknowledges that all Events of Default have been cured or waived in
accordance with the provisions of the Credit Agreement, any dividend or
distribution theretofore paid to the Administrative Agent shall upon the request
of the Grantors (except to the extent theretofore applied to the Obligations)
promptly be returned to the Grantors.

       

      
        	
                 
      

              	
                Section 5.3

              	
                Proceeds
      to be Turned Over To Administrative
Agent

              

      

       

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

       

      
        	
                 
      

              	
                Section 5.4

              	
                Registration
      Rights

              

      

       

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

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

       

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

       

      
        	
                 
      

              	
                Section 5.5

              	
                Deficiency

              

      

       

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

       

      
        	
                 
      

              	
                Section 5.6

              	
                Waivers

              

      

       

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

       

      
        	
                 
      

              	
                ARTICLE VI

              	
                The
      Administrative
      Agent

              

      

       

      
        	
                 
      

              	
                Section 6.1

              	
                Administrative
      Agent’s Appointment as
Attorney-in-Fact

              

      

       

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

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

       

      (i)           in
the name of such Grantor or its own name, or otherwise, take possession of and
indorse and collect any check, draft, note, acceptance or other instrument for
the payment of moneys due under any Account or General Intangible or with
respect to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any such moneys due under any
Account or General Intangible or with respect to any other Collateral whenever
payable;

       

      (ii)          in
the case of any Intellectual Property, execute and deliver, and have recorded,
any agreement, instrument, document or paper as the Administrative Agent may
request to evidence the Administrative Agent’s security interest in such
Intellectual Property and the goodwill and General Intangibles of such Grantor
relating thereto or represented thereby;

       

      (iii)         pay
or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repair or pay any insurance called for by the terms of
this Agreement (including all or any part of the premiums therefor and the costs
thereof);

       

      (iv)         execute,
in connection with any sale provided for in Section 5.1 or 5.4, any endorsement,
assignment or other instrument of conveyance or transfer with respect to the
Collateral; or

       

      (v)          (A) direct
any party liable for any payment under any Collateral to make payment of any
moneys due or to become due thereunder directly to the Administrative Agent or
as the Administrative Agent shall direct, (B) ask or demand for, collect,
and receive payment of and receipt for, any moneys, claims and other amounts due
or to become due at any time in respect of or arising out of any Collateral,
(C) sign and indorse any invoice, freight or express bill, bill of lading,
storage or warehouse receipt, draft against debtors, assignment, verification,
notice and other document in connection with any Collateral, (D) commence
and prosecute any suit, action or proceeding at law or in equity in any court of
competent jurisdiction to collect any Collateral and to enforce any other right
in respect of any Collateral, (E) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral, (F) settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent may deem
appropriate, (G) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Trademark pertains) throughout the
world for such term or terms, on such conditions, and in such manner as the
Administrative Agent shall in its sole discretion determine, including the
execution and filing of any document necessary to effectuate or record such
assignment and (H) generally, sell, transfer, pledge and make any agreement
with respect to or otherwise deal with any Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes, and do, at the Administrative Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things that the
Administrative Agent deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent’s and the other Secured Parties’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.

       

      Anything
in this clause (a) to
the contrary notwithstanding, the Administrative Agent agrees that it shall not
exercise any right under the power of attorney provided for in this clause (a) unless an Event of
Default shall be continuing and subject to the terms of the
Orders.

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

       

      (b)           If
any Grantor fails to perform or comply with any of its agreements contained
herein, the Administrative Agent, at its option, but without any obligation so
to do, upon one Business Day’s prior notice, may perform or comply, or otherwise
cause performance or compliance, with such agreement.

       

      (c)           The
expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 6.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Loans that are CBFR Loans
under the Credit Agreement, from the date of payment by the Administrative Agent
to the date reimbursed by the relevant Grantor, shall be payable by such Grantor
to the Administrative Agent on written demand.

       

      (d)           Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof.  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released

       

      
        	
                 
      

              	
                Section 6.2

              	
                Duty
      of Administrative Agent

              

      

       

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

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 6.3

              	
                Authorization
      of Financing Statements

              

      

       

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

       

      
        	
                 
      

              	
                Section 6.4

              	
                Authority
      of Administrative Agent

              

      

       

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

       

      
        	  	
                ARTICLE
      VII

              	
                Miscellaneous

              

      

       

      
        	
                 
      

              	
                Section 7.1

              	
                Amendments
      in Writing

              

      

       

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

       

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 7.2

              	
                Notices

              

      

       

      All
notices, requests and demands to or upon the Administrative Agent or any Grantor
hereunder shall be effected in the manner provided for in Section 13.7 of the
Credit Agreement; provided, however, that any such
notice, request or demand to or upon any Grantor shall be addressed to the
Borrower’s notice address set forth in such Section 13.7.

       

      
        	
                 
      

              	
                Section 7.3

              	
                No
      Waiver by Course of Conduct; Cumulative
Remedies

              

      

       

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

       

      
        	
                 
      

              	
                Section 7.4

              	
                Successors
      and Assigns

              

      

       

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

       

      
        	
                 
      

              	
                Section 7.5

              	
                Counterparts

              

      

       

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

       

      
        	
                 
      

              	
                Section 7.6

              	
                Severability

              

      

       

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

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 7.7

              	
                Section
      Headings

              

      

       

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

       

      
        	
                 
      

              	
                Section 7.8

              	
                Entire
      Agreement

              

      

       

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

       

      
        	
                 
      

              	
                Section 7.9

              	
                Governing
      Law

              

      

       

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

       

      
        	
                 
      

              	
                Section 7.10

              	
                Additional
      Grantors

              

      

       

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

       

      
        	
                 
      

              	
                Section 7.11

              	
                Release
      of Collateral

              

      

       

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

       

      (b)           If
any of the Collateral (including the Capital Stock of such Grantor) shall be
sold, transferred or otherwise disposed of by any Grantor in a transaction
permitted by the Credit Agreement, such Collateral shall be automatically
released from the Lien created hereby.  In connection therewith, the
Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral.

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                Section 7.12

              	
                Termination.

              

      

       

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

       

      
        	
                 
      

              	
                Section 7.13

              	
                Reinstatement

              

      

       

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

       

      
        	
                 
      

              	
                Section 7.14

              	
                Interim
      Order and Final Order

              

      

       

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

       

      [Signature
Pages Follow]

      
        
           

        

        
          31

          
            

          

        

        
           

        

      

      

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

       

      
        
          
            
              	 
      	
                      Grantors:

                    
	 
      	 
      
	 
      	
                      U.S.
      Concrete, Inc.

                    
	 	 
	 
      	
                      By:

                    	
                      /s/ Robert D. Hardy

                    
	 
      	 
      	
                      Name: 
      Robert D. Hardy

                    
	 
      	 
      	
                      Title:   
      Executive Vice President and Chief

                    
	 
      	 
      	
                       Financial
      Officer

                    
	 	 	 
	 
      	
                      ALBERTA
      INVESTMENTS, INC.

                    
	 
      	
                      ALLIANCE
      HAULERS, INC.

                    
	 
      	
                      AMERICAN
      CONCRETE PRODUCTS, INC.

                    
	 
      	
                      ATLAS
      REDI-MIX, LLC

                    
	 
      	
                      ATLAS-TUCK
      CONCRETE, INC.

                    
	 
      	
                      BEALL
      CONCRETE ENTERPRISES, LLC

                    
	 
      	
                      BEALL
      INDUSTRIES, INC.

                    
	 
      	
                      BEALL
      INVESTMENT CORPORATION,INC.

                    
	 
      	
                      BEALL
      MANAGEMENT, INC.

                    
	 
      	
                      BUILDERS’
      REDI-MIX, LLC

                    
	 
      	
                      BWB,
      INC. OF MICHIGAN

                    
	 
      	
                      CENTRAL
      CONCRETE SUPPLY CO., INC.

                    
	 
      	
                      CENTRAL
      PRECAST CONCRETE, INC.

                    
	 
      	
                      HAMBURG
      QUARRY LIMITED LIABILITY 

                      COMPANY

                    
	 
      	
                      INGRAM
      CONCRETE, LLC

                    
	 
      	
                      MG,
      LLC

                    
	 
      	
                      REDI-MIX
      CONCRETE, L.P.

                    
	 
      	
                      REDI-MIX
      GP, LLC

                    
	 
      	
                      REDI-MIX,
      LLC

                    
	 
      	
                      SAN
      DIEGO PRECAST CONCRETE, INC.

                    
	 
      	
                      SIERRA
      PRECAST, INC.

                    
	 
      	
                      SMITH
      PRE-CAST, INC.

                    
	 
      	
                      SUPERIOR
      CONCRETE MATERIALS, INC.

                    
	 
      	
                      U.S.
      CONCRETE ON-SITE, INC.

                    
	 
      	
                      USC
      MANAGEMENT CO., LLC

                    
	 
      	
                      USC
      PAYROLL, INC.

                    
	 
      	
                      USC
      TECHNOLOGIES, INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Curt M. Lindeman

                    
	 
      	 
      	
                      Name:
      Curt M. Lindeman

                    
	 
      	 
      	
                      Title:  Vice
      President and
Secretary

                    

            

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 
      	
                                      KURTZ
      GRAVEL COMPANY

                                    
	 
      	
                                      SUPERIOR
      HOLDINGS, INC.

                                    
	 
      	
                                      TITAN
      CONCRETE INDUSTRIES, INC.

                                    
	 
      	 
      	 
      
	 
      	
                                      By:

                                    	
                                       /s/ Robert D.
Hardy

                                    
	 
      	 
      	
                                      Name:
      Robert D. Hardy

                                    
	 
      	 
      	
                                      Title:  
      Vice President and Secretary

                                    
	 
      	 
      	 
      
	 
      	
                                      BRECKENRIDGE
      READY MIX, INC

                                    
	 
      	 
      	 
      
	 
      	
                                      By:

                                    	
                                       /s/ Robert D.
Hardy

                                    
	 
      	 
      	
                                      Name:
      Robert D. Hardy

                                    
	 
      	 
      	
                                      Title:  
      Vice President

                                    
	 
      	 
      	 
      
	 
      	
                                      RIVERSIDE
      MATERIALS, LLC

                                    
	 
      	 
      	 
      
	 
      	
                                      By:

                                    	
                                       /s/ Robert D.
Hardy

                                    
	 
      	 
      	
                                      Name:
      Robert D. Hardy

                                    
	 
      	 
      	
                                      Title:  
      President and Secretary

                                    
	 
      	 
      	 
      
	 
      	
                                      EASTERN
      CONCRETE MATERIALS, INC.

                                    
	 
      	 
      	 
      
	 
      	
                                      By:

                                    	
                                       /s/ Robert D.
Hardy

                                    
	 
      	 
      	
                                      Name:
      Robert D. Hardy

                                    
	 
      	 
      	
                                      Title:  
      President and Secretary

                                    
	 
      	 
      	 
      
	 
      	
                                      LOCAL
      CONCRETE SUPPLY & EQUIPMENT, LLC

                                    
	 
      	
                                      MASTER
      MIX CONCRETE, LLC

                                    
	 
      	
                                      MASTER
      MIX, LLC

                                    
	 
      	
                                      NYC
      CONCRETE MATERIALS, LLC

                                    
	 
      	
                                      PEBBLE
      LANE ASSOCIATES, LLC

                                    
	 
      	 
      	 
      
	 
      	
                                      By:

                                    	
                                       /s/ Curt M.
  Lindeman

                                    
	 
      	 
      	
                                      Name:
      Curt M. Lindeman

                                    
	 
      	 
      	
                                      Title:  
      President and
Secretary

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      	 
      	
                                                                                              CONCRETE
      XXXIII ACQUISITION, INC.

                                                                                            
	 
      	
                                                                                              CONCRETE
      XXXIV ACQUISITION, INC.

                                                                                            
	 
      	
                                                                                              CONCRETE
      XXXV ACQUISITION, INC.

                                                                                            
	 
      	
                                                                                              CONCRETE
      XXXVI ACQUISITION, INC.,

                                                                                            
	 
      	 
      	 
      
	 
      	
                                                                                              By:

                                                                                            	
                                                                                               /s/ Curt M.
  Lindeman

                                                                                            
	 
      	 
      	
                                                                                              Name:
      Curt M. Lindeman

                                                                                            
	 
      	 
      	
                                                                                              Title:  
      President

                                                                                            

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

        

        	 
      	
                CONCRETE
      ACQUISITION III, LLC

              
	 
      	
                SITION
      IV, LLC

              
	 
      	
                CONCRETE
      ACQUISITION V, LLC

              
	 
      	
                CONCRETE
      ACQUISITION VI, LLC

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                 /s/ Curt M.
  Lindeman

              
	 
      	 
      	
                Name:
      Curt M. Lindeman

              
	 
      	 
      	
                Title:  
      President

              
	 
      	 
      	 
      
	 
      	
                USC
      ATLANTIC, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                 /s/ Sean Gore

              
	 
      	 
      	
                Name:
      Sean Gore

              
	 
      	 
      	
                Title:  
      Vice President and Secretary

              
	 
      	 
      	 
      
	 
      	
                USC
      MICHIGAN, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                 /s/ Michael W.
  Harlan

              
	 
      	 
      	
                Name:
      Michael W. Harlan

              
	 
      	 
      	
                Title:  
      Vice President and Secretary

              

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      
        
          	
                  Accepted
      and Agreed

                	 
      
	
                  as
      of the date first above written:

                	 
      
	 
      	 
      
	
                  JPMorgan
      Chase
      Bank,
      N.A.,

                	 
      
	
                  as
      Administrative Agent

                	 
      
	 
      	 
      	 
      
	
                  By:

                	
                  /s/ Mario Quintanilla

                	 
      
	 
      	
                  Name:  Mario
      Quintanilla

                	 
      
	 
      	
                  Title:  
       Vice PresidentUnassociated Document

     

    
       

      CERTIFICATE
OF DESIGNATION

      of
the

      PREFERENCES,
RIGHTS, LIMITATIONS, QUALIFICATIONS AND RESTRICTIONS

      of
the

      SERIES A
CONVERTIBLE PREFERRED STOCK

      of

      KUN RUN
BIOTECHNOLOGY, INC.

      

      KUN RUN
BIOTECHNOLOGY, INC. (the “Corporation”), a corporation organized and existing
under Chapter 78 of the Nevada Revised Statutes, as amended (the "NRS"), hereby
certifies that, pursuant to the authority conferred upon the Board of Directors
of the Corporation (the “Board”) by its Amended and Restated Articles of
Incorporation, filed with the Secretary of State of the State of Nevada (the
"Articles of Incorporation"), and pursuant to the provisions of the NRS, the
Board adopted the following resolution providing for the authorization of
6,800,000 shares of the Corporation's Series A Convertible Preferred Stock,
$0.001 par value per share (the "Series A Preferred Stock"):

      

      RESOLVED,
that pursuant to the authority vested in the Board by the Corporation’s Articles
of Incorporation, the Board hereby establishes the Series A Preferred Stock of
the Corporation, authorizes 6,800,000 shares of Series A Preferred Stock and
determines the designation, preferences, rights, qualifications, limitations and
privileges of Series A Preferred Stock of the Corporation as
follows:

      

      1. Voting
Rights.

      

      (a) Except as otherwise provided herein
or as required by law, the Series A Preferred Stock shall be entitled,
notwithstanding any provision hereof, to notice of any stockholders' meeting in
accordance with the Bylaws of the Corporation and shall vote together with the
Corporation's common stock, $0.001 par value per share (the "Common Stock"), as
a single class at any annual or special meeting of stockholders of the
Corporation and may act by written consent in the same manner as the Common
Stock, in either case upon the following basis: each holder of shares of Series
A Preferred Stock (each, a "Holder" and collectively, the "Holders") shall be
entitled to such number of votes as shall be equal to the whole number of shares
of Common Stock into which such Holder’s aggregate number of shares of Series A
Preferred Stock are convertible pursuant to Section 3 below immediately after
the close of business on the record date fixed for such meeting or the effective
date of such written consent.

      

      (b) The Series A Preferred Stock shall
have the following class voting rights (in addition to the voting rights set
forth in Section 1(a) hereof). So long as any shares of the Series A Preferred
Stock remain outstanding, the Corporation shall not, without the affirmative
vote or consent of the holders of a majority of the shares of the Series A
Preferred Stock outstanding at the time (the “Required Holders”), given in
person or by proxy, either in writing or at a meeting in which the holders of
the Series A Preferred Stock vote separately as a class:

      

      (i) increase or decrease the authorized
amount of the Common Stock or any class or series of Preferred
Stock;

      

      (ii) Any authorization or any
designation, whether by reclassification or otherwise, of any new class or
series of stock or any other securities convertible into equity securities of
the Corporation ranking on a parity with or senior to the Series A Preferred
Stock in right of redemption, liquidation preference, voting or dividend rights
or any increase in the authorized or designated number of any such new class or
series;;

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      (iii) amend, alter or repeal the
provisions of the Series A Preferred Stock, whether by merger, consolidation,
filing of a certificate of designation or otherwise, so as to adversely affect
any right, preference, privilege or voting power of the Series A Preferred
Stock; provided, however, that any creation and issuance of other classes and
series of equity securities of the Corporation which by their terms do not rank
pari passu or senior to the Series A Preferred Stock (“Junior Stock”) shall not
be deemed to adversely affect such rights, preferences, privileges or voting
powers;

      

      (iv) consummate an Acquisition or Asset
Transfer as defined in Section 2(c) herein;

      

      (v) repurchase or redeem shares of
Common Stock (other than as permitted by Section 5(b) hereof);

      

      (vi) amend or waive any provision of
the Articles of Incorporation or By-Laws of the Corporation so as to affect
materially and adversely any right, preference, privilege or voting power of the
Series A Preferred Stock; provided, however, that any creation and issuance of
another series of Junior Stock shall not be deemed to adversely affect such
rights, preferences, privileges or voting powers;

      

      (vii) increase or decrease the
authorized size of the Corporation’s Board of Directors;

      

      (viii) pay or declare dividends on or
make any distribution to any shares of Common Stock or any class or series of
Preferred Stock; or

      

      (ix) issue debt in excess of $250,000
(unless such issuance of debt has been approved by a majority of the
Corporation’s Board of Directors).

      

      (c)           Election
of Board of Directors.

      

      (i)           The
holders of Common Stock and Series A Preferred Stock, voting together as a
single class on an as-if-converted basis, shall be entitled to elect all members
of the Corporation’s Board of Directors at each meeting or pursuant to each
consent of the Corporation’s stockholders for the election of directors, and to
remove from office such directors and to fill any vacancy caused by the
resignation, death or removal of such directors.

      

      2.
Liquidation Rights.

      

      (a) Upon any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary (a
“Liquidation Event”), after payment or provision for payment of debts and other
liabilities of the Corporation, before any distribution or payment shall be made
to the holders of any other equity securities of the Corporation by reason of
their ownership thereof, the Holders of Series A Preferred Stock shall first be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders an amount with respect to each share of Series
A Preferred Stock equal to $1.53 (the “Original Series A Issue Price”), plus any
declared and accrued but unpaid dividends thereon (collectively, the “Series A
Liquidation Value”).

      

      (b) After payment has been made to the
Holders of the Series A Preferred Stock of the full amount of the Series A
Liquidation Value, any remaining assets of the Corporation  (or the
consideration received by the Corporation or its stockholders in such
Acquisition or Asset Transfer) shall be distributed
ratably to the holders of the Corporation's Common Stock and Series A Preferred
Stock (on an as-if-converted to Common Stock basis) .

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      (c) In the case of any merger,
consolidation, business combination, reorganization or recapitalization of the
Corporation (other than any merger effected solely for the purpose of changing
the domicile of the Corporation) in which the Corporation is not the surviving
entity or in which the stockholders of the Corporation immediately prior to such
transaction own capital stock representing less than 50% of the Corporation’s
voting power immediately after such transaction or any transaction or series of
related transactions in which capital stock representing in excess of 50% of the
Corporation’s voting power is transferred (each, an “Acquisition”) or a sale,
conveyance, transfer, lease, exclusive license or other disposition of all or
substantially all of the assets of the Corporation (each, an “Asset Transfer”),
the Holders of the Series A Preferred Stock shall be entitled to receive the
amount of cash, securities or other property which such Holders would be
entitled to receive in a Liquidation Event pursuant to sections 2(a) and
2(b).

      

      (d) If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
shall be insufficient to make payment in full to all Holders of Series A
Preferred Stock, then such assets shall be distributed among the Holders of
Series A Preferred Stock at the time outstanding, ratably in proportion to the
full amounts to which they would otherwise be respectively
entitled.

      

      (e) Whenever any distribution provided
for in this Section 2 shall be payable in securities or property other than
cash, the value of such distribution shall be the fair market value thereof as
determined in good faith by the Board.

      

      3.
Conversion Rights.  The Holders of Series A Preferred Stock shall have
the following rights with respect to the conversion of Series A Preferred Stock
into shares of Common Stock pursuant to this Section 3:

      

      (a) Conversion.  Subject to
and in compliance with the provisions of this Section 3, any shares of Series A
Preferred Stock may, at the option of the Holder thereof, be converted at any
time into fully paid and nonassessable shares of Common Stock.  The
number of shares of Common Stock to which a Holder of Series A Preferred Stock
shall be entitled upon conversion shall be the product obtained by multiplying
the number of shares of Series A Preferred Stock being converted by the
then-effective Series A Conversion Rate (determined in accordance with Section
3(b) below).

      

      (b) Series A Conversion
Rate.  The conversion rate in effect at any time for conversion of the
Series A Preferred Stock (the "Series A Conversion Rate") shall be the quotient
obtained by dividing the Series A Liquidation Value by the then-effective Series
A Conversion Price (determined in accordance with Section 3(c)
below).

      

      (c) Series A Conversion
Price.  The conversion price for Series A Preferred Stock (the “Series
A Conversion Price”) initially shall be the Original Series A Issue
Price.  The Series A Conversion Price is subject to adjustment as
provided in Section 3(d) and all references herein to the Series A Conversion
Price shall mean the Series A Conversion Price as so adjusted.

      

      (d) Adjustment to the Series A
Conversion Price.

      

      (i) If, at any time or from time to
time after the filing of this Certificate of Designation with the Secretary of
State of the State of Nevada (the "Original Series A Filing Date"), the
Corporation shall issue, or is deemed to issue by the express provisions of this
Section 3(d),  any Additional Stock (as defined below) without
consideration or for consideration per share less than the Series A Conversion
Price in effect immediately prior to the issuance of such Additional Stock, then
and in such event (except as otherwise provided in this Section 3(d)) the
Conversion Price of the Series A Preferred Stock shall be reduced, concurrently
with such issue, to the lowest price at which any of the Additional Stock are
issued.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      (ii) No adjustment of the Series A
Conversion Price for any Series A Preferred Stock shall be made in an amount
less than one cent per share; provided that any adjustments which are not
required to be made by reason of this sentence shall be carried forward and
shall be taken into account in any subsequent adjustment made prior to three
years from the date of the event giving rise to the adjustment being carried
forward.  No adjustment of such Series A Conversion Price pursuant to
this Section 3(d) shall have the effect of increasing the Series A Conversion
Price above the Series A Conversion Price in effect immediately prior to such
adjustment.

      

      (iii) In the case of the issuance of
Additional Stock for cash, the consideration shall be deemed to be the amount of
cash paid therefor before deducting any reasonable discounts, commissions or
other expenses allowed, paid or incurred by the Corporation for any underwriting
or otherwise in connection with the issuance and sale thereof.

      

      (iv) In the case of the issuance of the
Additional Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair value thereof as
determined in good faith by the Board of the Corporation .

      

      (v) Additional Stock; Certain Issues
Excepted. For the purpose of making any adjustment to the Conversion Price of
the Series A Preferred Stock required under this Section 3(d), “Additional
Stock” shall mean all shares of Common Stock issued by the Corporation or deemed
to be issued pursuant to this Section 3 (including shares of Common Stock
subsequently reacquired or retired by the Corporation), other than the
following, for which, anything herein to the contrary notwithstanding, the
Corporation shall not be required to make any adjustment to the Conversion Price
upon: (A) a bona fide firm underwritten public offering of the Corporation; (B)
issuance of securities pursuant to a bona fide acquisition of another business
entity or business segment of any such entity by the Corporation pursuant to a
merger, purchase of substantially all the assets or any type of
reorganization  provided that (1) the Corporation will own more than
fifty percent (50%) of the voting power of such business entity or business
segment of such entity and (2) such transaction is approved by the Board of
Directors; (C) securities issued pursuant to the conversion or exercise of
convertible or exercisable securities issued or outstanding on or prior to the
Original Series A Filing Date or issued pursuant to the Securities Purchase
Agreement dated April 17, 2010 entered into by and among the Corporation, the
Purchasers (as defined therein) and the Key Stockholder (as defined therein) (so
long as the terms governing the conversion or exercise price of such securities
are not amended to lower such price and/or adversely affect the holders of the
Series A Preferred Stock); (D) securities issued in connection with bona fide
strategic license agreements or other partnering arrangements so long as such
issuances are not for the primary purpose of raising capital and are approved by
the Board of Directors; (E) Common Stock issued or the issuance or grants of
options to purchase Common Stock, in each case, at no less than the
then-applicable fair market value, pursuant to equity incentive plans that are
adopted and approved by the Corporation’s Board of Directors; (F) securities
issued at no less than the then-applicable fair market value to advisors or
consultants (including, without limitation, financial advisors and investor
relations firms) in connection with any engagement letter or consulting
agreement, provided that any such issuance is approved by the Board of
Directors; (G) securities issued to financial institutions or lessors in
connection with reasonable commercial credit arrangements, equipment financings
or similar transactions, provided that any such issue is approved by
the Board of Directors).

      

      (vi) In the event the Corporation at
any time or from time to time after the Original Series A Filing Date fixes a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or entitling the
holder thereof to receive directly or indirectly, additional shares of
Common Stock ("Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Series A Conversion Price shall be appropriately decreased so that the
number of shares of Common Stock issuable on conversion of each share of Series
A Preferred Stock shall be increased in proportion to such increase of the
aggregate of shares of Common Stock outstanding and those issuable with respect
to such Common Stock Equivalents with the number of shares issuable with respect
to Common Stock Equivalents determined from time to time in the manner provided
for deemed issuances in Section 3(d)(v).

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      (vii) If the number of shares of Common
Stock outstanding at any time after the Original Series A Filing Date is
decreased by a combination of the outstanding shares of Common Stock, then,
following the record date of such combination, the Series A Conversion Price
shall be appropriately increased so that the number of shares of Common Stock
issuable on conversion of each share of Series A Preferred Stock shall be
decreased in proportion to such decrease in outstanding shares.

      

      (viii)           For
the purpose of the adjustment required under this Section 3(d), if the
Corporation issues or sells (x) preferred stock or other stock, options,
warrants, purchase rights or other securities convertible into, Additional Stock
(such convertible stock or securities being herein referred to as “Convertible
Securities”) or (y) rights or options for the purchase of Additional Stock or
Convertible Securities and if the Effective Price  (as defined below)
of such Additional Stock is less than the Series A Preferred Stock Conversion
Price, in each case the Corporation shall be deemed to have issued at the time
of the issuance of such rights or options or Convertible Securities the maximum
number of Additional Stock issuable upon exercise or conversion thereof and to
have received as consideration for the issuance of such shares an amount equal
to the total amount of the consideration, if any, received by the Corporation
for the issuance of such rights or options or Convertible Securities
plus:

      

      (A)           in
the case of such rights or options, the minimum amounts of consideration, if
any, payable to the Corporation upon the exercise of such rights or options;
and

      

      (B)           in
the case of Convertible Securities, the minimum amounts of consideration, if
any, payable to the Corporation upon the conversion thereof (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities); provided that if the minimum amounts of such consideration cannot
be ascertained, but are a function of antidilution or similar protective
clauses, the Corporation shall be deemed to have received the minimum amounts of
consideration without reference to such clauses.

      

      (C)           If
the minimum amount of consideration payable to the Corporation upon the exercise
or conversion of rights, options or Convertible Securities is reduced over time
or on the occurrence or non-occurrence of specified events other than by
reason of antidilution adjustments, the Effective Price shall be recalculated
using the figure to which such minimum amount of consideration is reduced;
provided further, that if the minimum amount of consideration payable to the
Corporation upon the exercise or conversion of such rights, options or
Convertible Securities is subsequently increased, the Effective Price shall be
again recalculated using the increased minimum amount of consideration payable
to the Corporation upon the exercise or conversion of such rights, options or
Convertible Securities.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      (D)           No
further adjustment of the Series A Preferred Stock Conversion Price, as adjusted
upon the issuance of such rights, options or Convertible Securities, shall be
made as a result of the actual issuance of Additional Stock or the exercise of
any such rights or options or the conversion of any such Convertible
Securities.  If any such rights or options or the conversion privilege
represented by any such Convertible Securities shall expire without having been
exercised, the Series A Preferred Stock Conversion Price as adjusted upon the
issuance of such rights, options or Convertible Securities shall be readjusted
to the Series A Preferred Stock Conversion Price which would have been in effect
had an adjustment been made on the basis that the only Additional Stock so
issued were the Additional Stock, if any, actually issued or sold on the
exercise of such rights or options or rights of conversion of such Convertible
Securities, and such Additional Stock, if any, were issued or sold for the
consideration actually received by the Corporation upon such exercise, plus the
consideration, if any, actually received by the Corporation for the granting of
all such rights or options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted,
plus the consideration, if any, actually received by the Corporation (other than
by cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion of such Convertible Securities, provided that such
readjustment shall not apply to prior conversions of Series
Preferred.

      

      The
“Effective Price” of Additional Stock shall mean the quotient determined by
dividing the total number of shares of Additional Stock issued or sold, or
deemed to have been issued or sold by the Corporation under this Section 3, into
the aggregate consideration received, or deemed to have been received by the
Corporation for such issue under this Section 3, for such shares of
Additional Stock.  In the event that the number of shares of
Additional Common Stock or the Effective Price cannot be ascertained at the time
of issuance, such Additional Stock shall be deemed issued immediately upon the
occurrence of the first event that makes such number of shares or the Effective
Price, as applicable, ascertainable.

      

      (e) Other Distributions.  In
the event the Corporation shall declare a distribution payable in securities of
other persons, evidences of indebtedness issued by the Corporation or other
persons, assets (excluding cash dividends), securities or options or rights not
referred to in Section 3(d), then, in each such case for the purpose of this
Section 3(e), the Holders of the Series A Preferred Stock shall be entitled to a
proportionate share of any such distribution as though they were the holders of
the number of shares of Common Stock into which their shares of Series A
Preferred Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.

      

      (f) Recapitalizations.  If at
any time or from time to time there shall be a recapitalization of the Common
Stock (other than a subdivision, combination, merger or sale of assets
transaction provided for elsewhere in this Section 3 or Section 2) provision
shall be made so that the Holders of the Series A Preferred Stock shall
thereafter be entitled to receive upon conversion of the Series A Preferred
Stock the number of shares of stock or other securities or property of the
Corporation or otherwise, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such recapitalization.  In any
case, appropriate adjustment shall be made in the application of the provisions
of this Section 3 with respect to the rights of the Holders of the Series A
Preferred Stock after the recapitalization to the end that the provisions of
this Section 3 (including adjustment of the Series A Conversion Price then in
effect and the number of shares purchasable upon conversion of the Series A
Preferred Stock) shall be applicable after that event as nearly equivalent as
may be practicable.

      

      (g) Treasury Shares.  The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Corporation, if any, and the
disposition of any shares so owned or held shall be considered an issue or sale
of Common Stock.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      (h) No Impairment.  The
Corporation shall not, by the amendment of its Articles of Incorporation or
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but at all times shall in
good faith assist in the carrying out of all the provisions of this Section 3
and in the taking of all such action as may be necessary or appropriate in
order to protect the conversion rights of the Holders of the Series A Preferred
Stock, against impairment.

      

      (i) Mechanics of
Conversion.  Before any Holder of Series A Preferred Stock shall be
entitled to convert the same into shares of Common Stock, such Holder shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the Corporation or of any transfer agent for the Series A Preferred Stock,
and shall give written notice to the Corporation at its principal corporate
office of the election to convert the same and shall state therein the name or
names in which the certificate or certificates for shares of Common Stock are to
be issued.  The Corporation shall, as soon as practicable thereafter,
issue and deliver at such office to such Holder of Series A Preferred Stock, or
to the nominee or nominees of such Holder, a certificate or certificates for the
number of shares of Common Stock to which such Holder shall be entitled as
aforesaid, together with any cash dividends declared but unpaid on such shares
of Series A Preferred Stock.  In case the number of shares of Series A
Preferred Stock represented by the certificate or certificates surrendered
pursuant to Section 3(a) above exceeds the number of shares converted, the
Corporation shall, upon conversion, execute and deliver to the Holder (at the
expense of the Corporation) a new certificate or certificates for the number of
shares of Series A Preferred Stock surrendered but not
converted.  Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of such Series A Preferred Stock to be converted, and the person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock as of such date.  If the conversion is in
connection with an underwritten offering of securities registered pursuant to
the Securities Act of 1933, as amended, the conversion may, at the option of any
Holder tendering such Series A Preferred Stock for conversion, be conditioned
upon the closing with the underwriters of the sale of securities pursuant to
such offering, in which event the person(s) entitled to receive Common Stock
upon conversion of such Series A Preferred Stock shall not be deemed to have
converted such Series A Preferred Stock until immediately prior to the closing
of such sale of securities.

      

      (j) Certificate of
Adjustment.  In each case of an adjustment or readjustment of the
Series A Conversion Price or the number of shares of Common Stock or other
securities issuable upon conversion of the Series A Preferred Stock, the
Corporation, at its expense, shall compute such adjustment or readjustment in
accordance with the provisions of this Section 3, prepare a certificate showing
such adjustment or readjustment and furnish such certificate to each registered
Holder of Series A Preferred Stock.  Such certificate shall set forth
such adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (A) the
consideration received or deemed to be received by the Corporation for any
additional shares of Common Stock issued or sold or deemed to have been issued
or sold, (B) the Series A Conversion Price in effect before and after such
adjustment, (C) the number of additional shares of Common Stock issued or sold
or deemed to have been issued or sold and (D) the type and amount, if any, of
other property which at the time would be received upon conversion of the Series
A Preferred Stock.

      

      (k) Notices of Record
Date.  Upon (i) any taking by the Corporation of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution or (ii)
any Acquisition, Asset Transfer or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, in each case the Corporation shall
furnish to each Holder of Series A Preferred Stock at least 20 days prior to the
record date specified therein a notice specifying (1) the date on which any such
record is to be taken for the purpose of such dividend or distribution and a
description of such dividend or distribution, (2) the date on which any such
Acquisition, Asset Transfer, dissolution, liquidation or winding up is expected
to become effective and (3) the date, if any, that is to be fixed for
determining the holders of record of Common Stock (or other securities) that
shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such Acquisition, Asset
Transfer, dissolution, liquidation or winding up.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      (l) Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series A Preferred
Stock, such number of its shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all outstanding shares of Series A
Preferred Stock; and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of all
then outstanding shares of Series A Preferred Stock, in addition to such other
remedies as shall be available to the holder of such Series A Preferred Stock,
the Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes,
including, without limitation, engaging in best efforts to obtain the requisite
stockholder approval of any necessary amendment to the Articles of
Incorporation.

      

      (m) Fractional Shares.  No
fractional shares of Common Stock shall be issued upon conversion of Series A
Preferred Stock.  All shares of Common Stock (including fractions
thereof) issuable upon conversion of more than one share of Series A Preferred
Stock by a Holder thereof shall be aggregated for purposes of determination
whether the conversion would result in the issuance of any fractional
share.  If, after such aggregation, the conversion would result in the
issuance of any fractional share, in lieu of issuing any fractional share, the
Corporation shall round the number of shares of Common Stock to be issued to the
nearest whole number.

      

      4.  Dividend
Rights.

      

      (a)           Holders
of Series A Preferred Stock, in preference to the holders of Common Stock, shall
be entitled to receive, when, as and if declared by the Board of Directors (the
“Board”), but only out of funds that are legally available therefor, cash
dividends at the rate of six percent (6%) of the Original Series A Issue Price
per annum on each outstanding share of Series A Preferred Stock.  Such
dividends shall be payable only when, as and if declared by the Board and shall
be non-cumulative.

      

      (b)           So
long as any shares of Series A Preferred Stock are outstanding, the Corporation
shall not pay or declare any dividend, whether in cash or property, or make any
other distribution on the Common Stock, or purchase, redeem or otherwise acquire
for value any shares of Common Stock until all dividends as set forth in Section
5(a) above on the Series Preferred shall have been paid or declared and set
apart, except for:

      

      (i)           acquisitions
of Common Stock by the Corporation pursuant to agreements which permit the
Corporation to repurchase such shares at cost (or the lesser of cost or fair
market value) upon termination of services to the Corporation;

      

      (ii)           acquisitions
of Common Stock in exercise of the Corporation’s right of first refusal to
repurchase such shares; or

      

      (iii)           distributions
to holders of Common Stock in accordance with Section 2.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      (c)           In
the event dividends are paid on any share of Common Stock, the Corporation shall
pay an additional dividend on all outstanding shares of Series A Preferred Stock
in a per share amount equal (on an as-if-converted to Common Stock basis) to the
amount paid or set aside for each share of Common Stock.

      

      

      5.
Transferability. The Series A Preferred Stock and any shares of Common Stock
issued upon conversion thereof, may only be sold, transferred, assigned, pledged
or otherwise disposed of ("Transfer") in accordance with state and federal
securities laws.  The Corporation shall keep at its principal office a
register of the Series A Preferred Stock.  Upon the surrender of any
certificate representing Series A Preferred Stock at such place, the
Corporation, at the request of the record Holder of such certificate, shall
execute and deliver (at the Corporation’s expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares represented by the surrendered certificate.  Each such new
certificate shall be registered in such name and shall represent such number of
shares as is requested by the Holder of the surrendered certificate and
shall be substantially identical in form to the surrendered
certificate.

      

      6.
Amendment and Waiver.  This Certificate of Designation shall not be
amended, either directly or indirectly or through merger or consolidation with
another entity, in any manner that would alter or change the powers, preferences
or special rights of the Series A Preferred Stock so as to affect them
materially and adversely without the affirmative vote of the Required
Holders.  Any amendment, modification or waiver of any of the terms or
provisions of the Series A Preferred Stock by the Required Holders, whether
prospectively or retroactively effective, shall be binding upon all Holders of
Series A Preferred Stock.

      

      7.
Replacement.  Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered Holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing shares of Series A Preferred Stock, and in the case of any such loss,
theft or destruction upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the Holder is a financial institution or other
institutional investor its own agreement shall be satisfactory) or in the case
of any such mutilation upon surrender of such certificate, the Corporation, at
its expense, shall execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of shares of such class
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.

      

      8.
Notices.  Any notice required by the provisions of this Certificate of
Designation shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified; (ii) when sent by confirmed
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day; (iii) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt.  All notices to the
Corporation shall be addressed to the Corporation’s Chief Executive Officer at
the Corporation’s principal place of business on file with the Secretary of
State of the State of Nevada.  All notices to stockholders shall be
addressed to each holder of record at the address of such holder appearing on
the books of the Corporation.

      

      * * * *
*

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to
be executed by Xiaoqun Ye, an Executive Officer of the Corporation, this 26th day of
April, 2010.

      

      
        	 
      	
                By:

              	
                 /s/
      Xiaoqun Ye

              
	 
      	
                Name:

              	
                Xiaoqun
      Ye

              
	 
      	
                Title:

              	
                Chief
      Executive Officer

              

      

       

      
        
           

        

        
          10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}]]